Harms Bergung Transport and Heavylift GmbH & Co KG v Harms Offshore AHT 'Uranus' GmbH & Co KG & Ors

An in rem claim may be issued to obtain security for foreign arbitration or court proceedings, even where the underlying dispute is subject to an exclusive foreign forum clause. The court retains power to stay the claim where the statutory arbitration conditions are not met.

For Admiralty jurisdiction under section 20 of the Senior Courts Act 1981, the claimant must establish the relevant jurisdictional facts on the balance of probabilities and have the better argument that the pleaded claim falls within the statutory head of jurisdiction. A shareholder’s claim concerning a company which owns a vessel is not thereby a claim concerning ownership of the vessel or a question between vessel co-owners.

The claimant, a German ship management company, issued six in rem claims concerning the sale of six German-registered anchor-handling tugs. The ship management claims were subject to German arbitration agreements. The articles of association claims concerned alleged defects in company resolutions approving the sales and were linked to proceedings in Germany.

The defendants initially challenged the court’s jurisdiction over both claims. They later sought to accept English jurisdiction for the ship management claims, while maintaining their challenge to the articles of association claims. The court had to determine whether that conduct conferred jurisdiction, whether the claims should be stayed, and whether the articles of association claims fell within section 20(2)(a) or (b) of the Senior Courts Act 1981.

1. The defendants’ later attempt to submit to English jurisdiction did not create a binding jurisdiction agreement. The claimant’s statement that it was prepared to submit to English jurisdiction was conditional and, read in context, made clear that it was not seeking determination of the merits because the defendants had not agreed. In any event, the proposed acceptance did not correspond with the statement and had previously been rejected.

2. The issue of an in rem claim form solely to obtain security for foreign proceedings was legitimate. Articles 22, 23, 24 and 31 of the Brussels 1 Regulation were consistent with that conclusion. The court would ordinarily recognise both the foreign arbitration or jurisdiction agreement and the claimant’s right to obtain security.

3. Although the statutory requirements for a stay under section 9 of the Arbitration Act 1996 were not all engaged, the court had an inherent jurisdiction to stay the proceedings. The ship management claims were therefore stayed pending provision of appropriate security.

4. On a jurisdictional challenge under section 20 of the Senior Courts Act 1981, jurisdictional facts must be established on the balance of probabilities. The claimant must also have the better argument that the pleaded claim is of the type required by the relevant statutory provision. The court examines the pleaded claim and the jurisdictional basis, rather than deciding whether the claimant is likely to succeed on the merits.

5. The articles of association claims were claims for damages arising from the sale of the vessels and alleged breaches of company articles, tortious duties and statutory duties. They could not properly be characterised as claims to ownership or possession of a vessel or a share in a vessel under section 20(2)(a).

6. Section 20(2)(b) concerns co-ownership of vessels or shares in vessels. It does not extend to claims based on ownership of shares in companies or other legal entities which own vessels. The claimant therefore failed to establish Admiralty jurisdiction over the articles of association claims, and the defendants succeeded on that challenge.

Not stated in the judgment.