CC998/06     2006    T     NO. 36

THE HIGH COURT OF SIERRA LEONE

COMMERCIAL AND ADMIRALTY DIVISION

 Transmarine Shipping and Trading Co Ltd                    - PLAINTIFF/ RESPONDENT

VS.

The Owners and / or Persons Interested

in the vessels "F/V Kawa", "F/V Nangbeto",

"F/V Amou", "F/VAmoulome", "F/V Kozah"

and "F/V Frosty"                                                          - DEFENDANTS/APPLICANTS

NICHOLAS C. BROWNE-MARKE                          - For The Plaintiff / Respondent

MUSTAPHAS. TURAY                                              - For the Defendants/Applicants

RULING DELIVERED THIS 18th DAY OF April 2007.

D.B. EDWARDS, J. By Notice of Motion dated 8th January, 2007 made under action intituled CC998/06 T. NO.36, the Defendant in this action attempted to apply to this Honourable Court to set aside the writ of summons and warrants of arrests in this action on the following grounds:

i). That on the 6th paragraph of the Agreement dated 30th May 2005 between the Plaintiff /Respondent herein and Red Sea Oil Suppliers Co SA with registered office in Panama, it was agreed that "any dispute arising between the parties in the execution of this agreement that cannot be resolved amicably, will be judged by the Greek courts of Justice and specifically by the Courts of Piraeus"

ii). That the Plaintiff does not have a cause of action against the Defendants/Applicants in that the Defendants /Applicants entered into a supply agreement with Red Sea Oil Supplies Co SA, an independent entity and not the plaintiff /respondent for which they have fully settled all indebtedness to Red Sea Oil Supplies Co SA.and that the defendants

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1.Applicants are therefore not indebted to Red Sea Oil suppliers Co SA or the Plaintiff /Respondent for that matter for the sums claimed or any part thereof or at all.

2.  Alternatively, that the action herein and all subsequent proceedings herein be stayed until the Plaintiff respondent pays into court and within such time as ordered by the court a reasonable sum as security for the costs of this action, on the grounds that the Plaintiff/ respondent is a foreign company registered in Greece and doing business outside Sierra Leone, and as such it will be impossible or extremely difficult to enforce the payment by the Plaintiff/ Respondent should they be ordered to pay the costs of this action.

3. That this court sets aside the writ of summons and the warrants of arrests in respect of the vessels F/V NANGBETO , F/V AMOU and F/V FROSTY for irregularity on the grounds that

i) The plaintiff's /Respondent's claim as stated in the writ of summons herein is against the Vessel F/V KAWA whose owners Taormina Shipping SA do not own the vessels F/V NANGBETO , F/V AMOU and F/V FROSTY which are vessels owned by Venezia Shipping SA .

ii) That if, at all, it was only F/V KAWA , F/V AMOU 1 AND F/V KOZAH that are sister vessels .

4.   That the arrest of F/V KAWA which is valued as between the region of US$220,000.00 and US$270,000.00 was enough to provide security to cover the claim which could not be more than US$50,000.00 as evinced from the writ of summons making the arrest of the vessels which the defendants even do consider as sister vessels, unnecessary, unjust and oppressive in the circumstances.

5. Further or other orders that this Honourable court may deem fit and just.

6. That the costs of this application be borne by the plaintiff/ respondent.

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The Application was supported by the affidavit of one ADAMTIOUS KANAKOUSAKIS Engineer for the Defendants / Applicants vessels sworn to on the 8th day of January 2007 together with the following exhibits attached thereto to wit exhibits EX"AK1" - EX "AK21"

The Plaintiff opposed the application, the grounds whereof I would care to mention as I go into the issues. The Plaintiff also filed an affidavit in opposition and exhibited thereto several documents, to wit, Exhibits NCBM1- NCBM3E.

The defendants filed a reply to the Affidavit in opposition to which they exhibited documents Ex MST1 - MST3. The plaintiff filed an additional affidavit sworn to on the 20th of February 2007

The contention of the Defendants/Applicants for making this application as could be gleaned from the defendants affidavit and arguments are as follows:

1. That the plaintiff's claim was expressly barred from the Sierra Leone courts in view of the Agreement dated 30th May 2005 between the Plaintiff/Respondent herein and Red Sea Oil Suppliers Co SA which expressly stipulated that "any dispute arising between the parties in the execution of this agreement that cannot be resolved amicably, will be judged by the Greek Courts of Justice and specifically by the Courts of Piraeus" and that in consequence thereof the writ of summons and warrant of arrest ought to be set aside.

2. That further more there was no contract existing between the Plaintiff and Defendants for the supply of oil, as the only contract for the supply of oil was between the Defendants/ Applicants and Red Sea Oil pursuant to an agreement dated the 16th February 2005 and not between the Defendants and Plaintiff as the plaintiff would want this court to believe and for which they were claiming sums as evinced in their writ of summons and affidavit leading onto the arrest of the defendants several vessels.

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3. That what was owed to Red Sea Oil by the defendants through their owners Taormina Shipping SA for Bunkering services rendered to one of its vessels F/V KAWA have been amply paid for by the Defendants/Applicants to Red Sea Oil Ltd, in consequence of which there was no claims outstanding at all.

4. That the circumstances of the case which included the fact that the plaintiff was a foreign registered Company in Greece and doing business out of Sierra Leone warranted the plaintiff given security for costs; for it will be difficult to enforce the payment if the Plaintiff/Respondent were to lose the action in consequence of which it was necessary that this Honourable court order that the plaintiff/ respondents are to pay security for costs within such time as this court may order.

5. The Plaintiff's/Respondent's claim as stated in the writ of summons herein is against the vessel F/V KAWA whose owners Taormina Shipping SA does not own the vessels F/V NANGBETO , F/V AMOU and F/V FROSTY which are vessels owned by Venezia Shipping SA but only F/V KAWA , F/V AMOU 1 AND F/V KOZAH and that it is these latter 3 Vessels that are sister vessels and not the six vessels as claimed, in consequence of which the writ of summons and the warrants of arrest in respect of F/V NANGBETO , F/V AMOU and F/V FROSTY should be set aside .

6. That the arrest of F/V KAWA which is valued as between the region of US$220,000.00 and US$270,000.00 was enough to provide security to cover the claim which could not be more than US$50,000.00 as evinced from the writ of summons making even the arrest of the other sister vessels viz F/V AMOU 1 AND F/V KOZAH apart from F/V KAWA of the 3 vessels which the defendants consider as the only sister vessels unnecessary, unjust and oppressive in the circumstances.

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The plaintiff's argument on 1 above was that the clause was not exclusive and that it merely purports to confer jurisdiction on the Greek courts for "any dispute arising between the parties in the execution of this agreement" and the Sierra Leone case law provides for the striking down of exclusive jurisdiction clauses where the circumstances of the case so warrants. I totally agree with the plaintiff on this subject. In the case of the Leone Mining CO Ltd Vs EUROAFRICAN IMPORT AND EXPORT COMPANY CC 1197/05 of 8th March 2007 at page 1&2 unreported, I had this to say on the subject and I am inclined to stick with same as the correct position on the subject.

"This matter concerns exclusive jurisdiction clauses and the inference which courts in this jurisdiction are to make of same. In particular under what circumstances it may or may not apply. Sierra Leone case law clearly provides for the striking down of exclusive jurisdiction clauses where the circumstances of the case so warrant proceedings being instituted in this jurisdiction. This follows from the common law where you cannot make an agreement ousting the jurisdiction of our courts . In the case of THE FEHMARN (1957) 2 LLOYDS REPORT 551AT P 555 PER LORD DENING stated the position thus:

"Then, the next question is whether the action ought to be staved because of the provision in the bill of lading that all disputes are to be judged by the Russian Courts . I do not regard the provision as equal to an arbitration clause , but I do say that the English courts are in charge of their own proceedings; and one of the rules which they apply is that a stipulation that all disputes should be judged by the tribunals of a particular country is not absolutely binding. It is matter to which the courts of this country will pay much regard and to which they will normally give effect, but it is subject to the overriding principle that no one , by his private stipulation, can oust these courts of their jurisdiction in a matter that properly belongs to them"

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The thrust of the defendants' argument as could be gleaned from paragraphs 25-26 of the Affidavit in support of the motion was not that there was a better forum (forum conveniens) but that the plaintiff should never have instituted proceedings in the Sierra Leone Court in view of this stipulation, in consequence of which, the writ of summons and warrants of arrests ought to be set aside .This cannot be. I should think that in view of the fact that you cannot oust the jurisdiction of our courts by a private stipulation this argument by the defendants fails. The stipulation without more cannot determine the jurisdiction where the case ought to be tried and since much has not been laid in their affidavit regarding factors that will force the court to accede to the stipulation in the said agreement of 30th May 2005 in terms of relative convenience as stated in the case of EL AMRIA (1981) 2 Lloyds report p 119-129 and the House of Lords decision of SPILIADA MARITIME CORPORATION VS CANSULEX LTD (1986) 3 ALL ER PAGE 843 this argument fails. That apart, need I point out that it is not Red Star Oil that has been impleaded at the suit of Transmarine in this case but the owners and/or persons interested in the KAWA and its alleged sister ships.

On the 2nd & 3rd contention which are interrelated, the plaintiff's solicitor deposed in paragraph 6 of the Affidavit in opposition and argued as follows "the Bunkers invoice exhibited thereto as Exhibit AK 15A is spurious and intended to mislead this Honourable Court . The time sheet, AK 15B and the Addax Bunker Receipt AK15C are those issued by Addax, the plaintiff's suppliers . They are in fact part of the documentation sent to him by courier, by Mr. PAPA the plaintiff Managing Director. Red Sea Oil never supplied oil to F/V KAWA or to any other vessel".

I must state that when the Plaintiff averred in the writ of summons and deposed in the affidavit in support of the arrest that between October 2005 and January 2006 in Freetown and elsewhere the plaintiff at the defendants' request rendered bunkering services to the defendants vessel F/V KAWA to the total of US$33,592/00 this court had an obligation to find out whether the said request was in writing, orally or by conduct as

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this was never disclosed. In other words whether the supposed agreement between Transmarine and Kawa for bunkering services was in writing, orally or by conduct.

The thrust of Plaintiff's solicitor's case it would seem to me was that there was a contract between Transmarine Ltd and KAWA for the rendering of bunkering services and that the same were effected through a company called Addax who the plaintiff's claim were the plaintiff's suppliers. This is so because I note that there was no written contract between Transmarine Ltd and KAWA but rather between Transmarine Ltd and Red Star Oil a company separate and distinct from Kawa which was a fishing vessel owned by Taormina Shipping SA. This being the case, since the law is that a Contract between A and B cannot impose liability on C, it stands to reason that there was no contract between Transmarine and Kawa. However this may be different if indeed ADDAX were actually the plaintiff's suppliers and did in fact supply KAWA on behalf of Transmarine Ltd. The fact that there were several invoices showing that deliveries were made to Kawa noting the plaintiff's claims that Addax was their suppliers would no doubt create the impression that KAWA were in fact supplied and infact accepted delivery of the bunkering services for which they were indebted to Transmarine. IN ANSONS LAW OF CONTRACT 28th EDITION AT PAGE 30 it is stated as follows:

"An agreement may also be inferred from the conduct alone ; the intention of the parties is a matter of inference from their conduct, and the inference is more or less easily drawn according to the circumstances of the case . In day to day contracts such inferences arc frequent. For example a person who boards a bus or who hires a taxi thereby undertakes to pay the fare to his destination even though he makes no express promise to do so."

In same vain there cannot be any doubt that a vessel who receives bunkering services from a company undertakes to pay the cost after supply has been made and where the owners of same fail to do so having been forwarded with the invoice, the owners and/ or persons interested in that vessel ought to be liable for the bunkering services rendered to their fishing vessel.

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This notwithstanding, I think there is strong case for not holding that KAWA entered into a contract by conduct with Transmarine Ltd or that KAWA owes Transmarine Ltd, as the case of the defendants negatives such impression being created. I say so, because it was the Addax Time Sheet and Addax Receipt that clearly showed when and how supply was made and which company actually supplied KAWA on the 28th of January 2006 and it clearly was not Transmarine as the plaintiff would want this court to believe . When the said documents were produced by the defendants as evidence of who they were indebted to and who actually supplied them Oil, it was at that stage that the plaintiff informed this court that Addax were the plaintiff's supposed suppliers and provided this court with exhibit NCBM1. This court finds it difficult to accept this for the following reasons. 1. In ex parte applications leading unto the arrest of a ship, the plaintiff is under a duty to disclose fully and frankly the grounds supporting his action to proceed to arrest the ship(s). The law on the subject as stated in the "THE VASSO" (1984) 1 Lloyds Report 235 is that as a matter of importance a party applying for the arrest of a shipping vessel must give full and frank disclosure of facts.

At P 243, Col; P 491 of the case of the VASSO, Lord Justice Robert Goff said this:

"It is axiomatic that in ex parte proceedings there should be full and frank disclosure to the Court of facts known to the applicant and that failure to make such disclosure may result in the discharge of any order made upon the ex parte application, even though that with full disclosure an order would have been, justified"

It seems to me that what this means is that a person who applies for a warrant of arrest to issue against a ship must place before the court all the requisite facts which will enable the court to satisfy itself that an application is a proper one in which a warrant of arrest ought in fact issue. From the above, it would appear that the essential and requisite facts were either not placed before the court or simply do not exist so as to enable it to satisfy

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itself that the application is a proper one in which a warrant of arrest should in fact have issued in the first place .

Secondly, there is no evidence before this court to suggest that Addax were agents of Transmarine Ltd or were performing services on behalf of Transmarine except the statement that "Addax were the plaintiff's suppliers" as deposed in the affidavit of Nicholas Browne Marke sworn to on the 13TH Day of December 2006 and exhibit NCBM 1 attached thereto.. plaintiff's suppliers pursuant to what?. If this were the case we would probably have had deposed in the affidavit leading to the arrest something along these lines viz.

1.Pursuant to an agreement between Addax and Transmarine made on the x (a particular) day Transmarine appointed Addax as it suppliers.

2. Pursuant to the said agreement, Addax supplied Kawa 40 metric ton of Oil. A copy of the receipt and time sheet whereof are herewith produced and shown to me marked A&B respectively. Or simply a full and frank disclosure in the affidavit leading onto the arrest that Addax are the plaintiff's suppliers and did on 28th January 2006 rendered bunkering services on behalf of Transmarine Ltd. This was never the case.

From the trend created by the plaintiff's affidavit in that no such foundation has been laid that Addax were the plaintiff's suppliers nothing short of a Transmarine receipt and Transmarine time sheet were expected but instead what has been produced and produced not by the plaintiff but defendants are ADDAX time sheet and ADDAX receipt. For these reasons I hold that Addax cannot be the plaintiff's suppliers and in the circumstances even the supposed contract or agreement by conduct is negatived. The effect therefore is that there was no contract between the plaintiff and the owners and /or persons interested in the defendants vessels whether written oral or by conduct. I also note that the documentary proof on the contract were invoices which had no basis in view of the fact that the back ground disclose no contract written oral or by conduct and that these invoices were sent to Red Sea Oil and Kalypso Fishing who are not the defendants in this matter.In the same vain I do not accept the suggestion of the Plaintiff in paragraph 6 that Red Star oil is paper company used by the defendants to avoid payment of taxes. There is

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no evidence of this before this court. Rather I accept the facts as deposed paragraphs 12-19 of the affidavit in Reply sworn to on the 17th of January 2007 :

For reasons as out lined I also accept paragraph 17 of the defendants affidavit in support of motion . I also note exhibit MST 3 which is an agreement dated 16th February 2005 between Red Sea Oil TAORMINA SA the former being the Seller and the latter being the Buyer. In the said Agreement there is provision for a Supplier who is separate and distinct from the Seller. In the said Agreement supplier means the party having marine fuels available at the port and requested by the seller RED SEA OIL to deliver to the buyer. It would appear to me that Addax was the supplier referred to in the Agreement dated 16th February 2005 requested by the seller Red Sea Oil to deliver to the buyer and that on the 28th of January 2006 it rendered bunkering services on behalf of RED SEA OIL to the KAWA. Red Sea Oil who were the actual suppliers through ADDAX presented an invoice on the 14th February 2006 for the said delivery and payment was effected on the 16th of February 2006 as evinced from exhibits AK15A, AK15B , AK15C and MST 2 respectively. I therefore hold there was no contract existing between the Plaintiff and Defendants for the supply of oil, as the only contract for the supply of Oil was between the Defendants/ Applicants and Red Sea Oil pursuant to an agreement dated the 16th February 2005 and not between the Defendants and Plaintiff as the plaintiff would want this court to believe and for which they were claiming sums as evinced in their writ of summons and affidavit leading onto the arrest of the defendants several vessels.

On the 4th contention of the defendants, the plaintiff argued that it is within the discretion of the courts to order security for costs when the circumstances so warrant but that in view of the fact that the defendants where claiming that the action was barred in this jurisdiction, the court had to first consider whether the matter was within its jurisdiction before it can so order. If the court were to hold that it had jurisdiction, there were several factors which the court should take into consideration and hence refuse security for costs .On this issue, it is clear that this court having decided that the claim fell within its jurisdiction, it was necessary to decide whether security for cost ought to be provided by

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the plaintiff. On this note, I would think that the Defendants/ Applicants having deposed to the fact that the plaintiff is a foreigner ordinarily and permanently resident abroad is in itself one of the reasons under which such security ought to be given but that since application for security for cost is subject to the discretion of the Court and the rule is purposefully vague and elastic, this must be weighed against other factors. The plaintiff have stated that in application for security for costs the requirement of the rules is that the applicant must provide evidence to substantiate his application . The plaintiff's solicitor refers the court to paragraphs 21, 22 and 23 of the defendants' affidavit. With respect to the learned counsel, the contents of those paragraphs may need to be substantiated but the application for security for costs was made on the fact as deposed in paragraphs 27 of the affidavit in support and paragraph 10 of the affidavit in opposition . These paragraphs show clearly that the plaintiff is a foreign company with no assets in Sierra Leone References to paragraphs 21, 22, and 23 were NOT made by the defendants and having been noted by the plaintiff could only go towards determining the actual quantum for security for cost-On the 5th contention that it is only F/V KAWA , F/V AMOU 1 AND F/V KOZAH. that are sister vessels and not the six vessels as claimed in that they are owned by Taormina Shipping SA and that F/V NANGBETO, F/V AMOU and F/V FROSTY are Vessels owned by Venezia Shipping SA the plaintiff stated as follows:

“I note however that though Mr. KANA claims that the two sets of vessels are owned by different companies , both companies have as their registered office or principal place of business , the same address 80 Broad Street, Monrovia. I note also , that Mr. KANA has not challenged the basis of my application for the arrest of the several vessels, that the beneficial ownership of all 6 vessels may well reside in one entity or person, though legal ownership may appear to reside in at least 2 companies. That not withstanding, it is my humble opinion that the arrest of not only KAWA, but also its sister ships was in accordance with the law and practice in Admiralty jurisdiction of this Honourable Court".

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The plaintiff's Solicitor agued that the plaintiff is authorized to arrest those vessels in respect of which the claim arose and also sister vessels which are vessels beneficially owned by the owners or persons interested in the KAWA. He further argued that the defendants have produced copies of registration certificates but no evidence that they are beneficially owned in the sense of owning shares in the ship .He refers to a passage from "THE BERNY" 1978 1 ALL ER AT PAGE 1075 PARA C and D in support of his argument thus:

" The practice is based on convenience . When a plaintiff institutes proceedings which he will often have to do by a certain date in order to preserve a time limit, he may well not know which of the various ships that he has an option to proceed against will be coming to a place within the jurisdiction so as to afford an opportunity for service or arrest, or when. By instituting proceedings concurrently in this way against all the ships concerned, he creates a situation in which , as soon as he learns that a suitable ship whose value is sufficient to provide adequate security for the claim) is coming or has come to a place within the jurisdiction, he can immediately amend the writ by striking out all other ships, and then serve the amended writ on , and at the same lime take steps to arrest, or threaten to arrest, the particular ship concerned                             

I quite appreciate the argument of the plaintiff in this matter but I am however not inclined to go by it because of the circumstances surrounding this particular case. This is so because while the Plaintiff has raised the issue of beneficial ownership quite implying that the owners of Kawa have shares in the 3 other ships he has not been able to state this emphatically with documentary proof or otherwise. Even in the Affidavit in opposition he only states that there may be that possibility by stating that the beneficial ownership of all 6 vessels may well reside in one entity or person, though legal ownership may appear to reside in at least 2 companies.

I would want to believe that the defendants were able to establish that legal ownership was residing in two separate companies and the plaintiff having raised the issue of

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beneficial ownership were bound to give reasons to support this assertion, and this they have not done. To say that the address of both companies is in 80 broad street Monrovia is a not good enough. I should think that the passage from "The BERNY" does lay credence to the fact that there are 3 other ships for which the plaintiff should drop action in view of their claim and the adequacy of security which the three vessels viz. F/V KAWA , F/V AMOU 1 AND F/V KOZAH provide. Where they have not done so, I think it is within this courts power to set aside the writ of summons and warrant of arrest in respect of the 3 other vessels which are not sister vessels to the Kawa viz. F/V NANGBETO, F/V AMOU and F/V FROSTY.

Similarly, on the 6th contention, not withstanding the contention of the plaintiff's solicitor in his additional affidavit discounting and /or reneging from what he has said in paragraph 7 of the Affidavit in Opposition when he stated that he is not in a position to verify or confirm the claims made therein as to the value of the defendants' several vessels but that as solicitor for the plaintiff he was prepared for the purposes of this application to accept the said valuation, and to accept for present purposes only security in the total sum of US45,000.00 by way of International Bank Guarantee, or a P&I club Guarantee, or payment into court to secure the release of the defendants", I am inclined to believe that again on the authourity of THE BERNY it would clearly be oppressive to continue to arrest the three vessels being actual sisters of Kawa by legal ownership for the purpose of security to the tune of just US$45,000.00.The cheapest of these vessels is at least US $ 220.000.00 and should be enough to cover security for this amount claimed. As stated earlier, however, it is clear to me that that claim has not be properly made out by the plaintiff . In the circumstances I feel constrained to set aside my own order of arrest. I therefore order as follows ;

l.That the Court Order of 15th December 2006 is set aside.

2.That the writ of summons and warrants of arrest in respect of the vessels F/ Kawa, F/V Kozah, F/V Nangbeto, F/V Amou, F/VAmoulome, and F/V Frosty now lying under arrest within the territorial waters of Sierra Leone be set aside and the said vessels are unconditionally released.

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3. That damages is hereby awarded to the defendant and that the same be assessed because of the plaintiff's failure to prove that the arrest was lawful in the circumstances. 4.. That the interim stay of all subsequent proceedings is lifted.

5. That the cost of this application is Le 10,000.000.00 (Ten Million Leones) to be paid by the plaintiff to the defendant.

Hon. Mr. Justice D.B. Edwards J.

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