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Anti-Suit Injunction Granted in Maritime Case
Published in the July 2010 issue of Transportation Notes - View Article
In a recent decision, the Federal Court outlined conduct that it held was oppressive and vexatious in the context of a maritime seizure case.
The Sarah Desgagnés, a Canadian-flagged product carrier, owned by Transport Desgagnés Inc. was, at all material times, under subtime charter to Martima Fluviale Di Navigazione SpA of Genoa, Italy (MFN).
It was the charterer’s obligation to, among other things, furnish and pay for fuel. There was a special rider that made it clear that in no circumstances were the time charterers to purport to grant a lien on the ship.
MFN had other ships under time charters and regularly ordered bunkers from Alpha Grading Monaco (“Alpha”).
Under Alpha’s trading conditions, MFN purported to contract on its own behalf and also on behalf of the shipowners. The contract was governed by Italian law.
The ship was under time charter to MFN from December 2008 through to July 2009; during this time, bunkers were taken on board on eleven occasions at various ports.
In December 2009, a statement of claim was filed with the Registry of the Federal Court, and the ship was arrested in Montreal pursuant to a warrant. The claim alleged eleven unpaid invoices for fuel supplied in various countries for an amount totalling about US$1.5M.
The ship was released on a personal undertaking by the owners to provide security in amount to be agreed or directed by the Court. As the parties negotiated the amount for security, counsel for Alpha advised counsel for the ship’s owners that he would be amending the claim to pursue only one claim in Canada for bunkers delivered at Corpus Christi, Texas. The invoice was for about US$138,0000. Security was requested and tendered into Court in the amount of US$185,000. Unbeknownst to the ship’s owners, in January 2010, Alpha took an action in personam against MFN in Italy with respect to the same ten invoices except for the Corpus Christi invoice.
Alpha then issued a fresh action in personam in Canada against the ship’s owner for the ten invoices which originally formed part of the action in rem and were then withdrawn. In May 2010, Alpha applied for and obtained a conservatory seizure of the ship in Belgium to secure its claim against MFN under the Italian action.
The Court noted that the reason for Alpha’s split efforts was due to the distinctions between Canadian and Belgian maritime law. Under the former, a necessaries man such as a bunker supplier does not enjoy a maritime lien. Instead. he has a statutory right in rem against the ship to which necessaries were supplied, or a sistership, only if ownership has not changed and her owners are personally liable.
There is a rebuttable presumption that necessaries were delivered on the ship’s credit; apart from maritime liens or statutory equivalent, a ship cannot be arrested to secure a claim against a time charterer.
Canada is not a party to the 1952 Convention on the Arrest of Sea-going Ships. Belgium is a party to that Convention and the Court accepted that Belgium has interpreted it in such a way that a ship may be arrested to secure a claim against time charterers who ordered bunkers, even absent a maritime lien and absent personal liability on the owner. In contrast, bail need only be given in Canada to secure a claim against the ship and her owners, and never the claim against a time charterer.
The owners had brought various unsuccessful motions in Belgium to have the ship released and the only way they could release the ship there was to post bail to cover the indebtedness of MFN.
The ship’s owners brought a motion in Canada for anti-suit injunction, which restrains a party from continuing proceedings in another jurisdiction. The Court held that Alpha invoked the jurisdiction of the Court and attorned to it by serving a statement of claim in rem on the ship and arresting her on all eleven invoices. It then agreed to release her against a promise of security by the owners for all eleven invoices. Therefore, it held that there was just one cause of action (ie: one for the eleven invoices) and to amend the statement of claim to delete ten invoices and to bring them back under another alleged cause of action was unacceptable. The Court noted that it could not clearly be said that Canada is a more suitable forum; although the owners were domiciled in Quebec and the ship flagged in Canada, she engaged in international trade and took on bunkers worldwide. However, the Court found that the plaintiff acted oppressively by securing a claim advance by taking action against MFN in Italy, while it had already sued MFN in personam in Canada. Further, having made its election to sue in Canada and to take security for it, Alpha must be held to its election. Alpha was therefore ordered to release the ship in Belgium, to refrain for re-arresting it in any jurisdiction except Canada, and to post bail for the plaintiff’s claim.
Alpha Trading Monaco Sam v. “Sarah Desgagnes” (The), 2010 CarswellNat 1846 (F.C.).