Time Extensions in Admiralty Claims - Distinctions between in rem and in personam claims

In the recent case of Owners of the Stolt Kestrel v Owners of the Niyazi S [2015] EWCA Civ 1035 the Court of Appeal has ruled that the mandatory extension of time under Section 190(6) Merchant Shipping Act 1995 for the issue of proceedings in admiralty matters is only applicable to claims in rem. It does not apply to claims in personam.

It has also confirmed that the inclusion of a shipowner’s name and address on an in rem claim form is insufficient to also commence an in personam claim. If a claimant wishes to bring both in rem and in personam claims separate claim forms must be issued.

Background

This case concerned an appeal of a decision of the Admiralty Court in relation to an application for an extension of time for commencing in personam proceedings and for permission for the in personam claim form to be served out of the jurisdiction.

The claimant sought to bring an in rem action against the vessel "Niyazi S" for damage caused to its vessel whilst it was berthed in Ramsgate Harbour. On the claim form, the claimant named the defendant as "The owners and/or bareboat charterers of the vessel ‘Niyazi S’" and included the name and address of the company that owned the vessel at the time of the incident. The claimant however encountered difficulty arresting and serving the vessel within the jurisdiction as the vessel had been sold, renamed and was said to be trading exclusively offshore in West Africa.

It therefore sought to also bring a claim in personam against the company that owned the vessel at the time of the incident. However, the relevant period for bringing a claim in relation to the collision had expired.

The claimant applied to the court for a further extension of time for the service of the in rem claim form (it had made similar applications previously). It also applied for an extension of time for the issue of in personam proceedings along with permission to serve the in personam claim form on the ex-owners of the "Niyazi S" out of the jurisdiction.

The defendant made a cross application for, inter alia, a stay of the in personam claim on ground that the claim was time barred. It also asked the court to set aside a previous order which granted the claimant permission to serve the in rem claim form out of the jurisdiction at its registered address. It argued that an in rem claim form can only be served on a vessel, not a vessel owner directly.

The Admiralty Court granted the extension of time for the service of the in rem claim form on the ground that there had been no reasonable opportunity to serve the vessel within the jurisdiction. It however found that there were insufficient merits to grant an extension of time for the issue of the in personam proceedings. It also agreed with the defendant that the in rem claim form could only be served on the vessel and was incapable of being served on the vessel’s owners directly.

The claimant appealed the decision of the Admiralty Court.

The Appeal

The claimant’s first ground of appeal was that the Admiralty Court should have applied the mandatory time extension provided for by section 190(6) of the Merchant Shipping Act 1995 which reads as follows:

"Any such court, if satisfied that there has not been during any period allowed for bringing proceedings any reasonable opportunity of arresting the defendant ship within –

(a) the jurisdiction of the court, or

(b) the territorial sea of the country to which the plaintiff's ship belongs or in which the plaintiff resides or has his principal place of business,

shall extend the period allowed for bringing proceedings to an extent sufficient to give a reasonable opportunity of so arresting the ship".

It argued that this provision was applicable to both in rem and in personam proceedings and that an extension of time must be granted because, as required by the section, the claimant had not had a reasonable opportunity to arrest the vessel within the jurisdiction.

The claimant’s second ground of appeal was that the admiralty court was wrong to hold that the in personam claim was brought outside of the relevant limitation period and that it should have held that the bringing of proceedings in rem protected time for the purpose of the in personam proceedings. The claimant argued that it intended that the in rem claim form to be a "hybrid claim form" that brought both in rem and in personam proceedings.

Ruling of the Court of Appeal

The Court of Appeal dismissed the claimant’s appeal and agreed with the decisions of the Admiralty Court.

In relation to the first ground of appeal, the Court of Appeal unanimously found that the mandatory time extension provided by section 190(6) of the Merchant Shipping Act 1995 for circumstances where a claimant has no reasonable opportunity of arresting a wrongdoing vessel within the jurisdiction only applies to in rem actions. The Court found that the words of the statute and reference to "arresting the ship" clearly intended to address only in rem proceedings. The section was not intended to apply to in personam proceedings.

Lord Justice Tomlinson expressed in his judgment that "it would be bizarre if a claimant could be excused from acting diligently in issuing in personam proceedings just because there had been no opportunity to arrest a wrongdoing ship".

In regard to the second ground of appeal, the Court of Appeal also agreed with the Admiralty Court that two separate claim forms were required to issue both in rem and in personam proceedings. Including the name and address of a shipowner on an in rem claim form did not amount to the issue or bringing of an in personam claim. The practice direction to Part 61 of the Civil Procedure Rules makes it clear that different claim forms are to be used to commence in rem and in personam proceedings (ADM1 and ADM1A respectively).

Therefore, it was irrelevant that in rem proceedings were brought within time. The claimant had failed to properly bring separate in personam proceedings. The Court of Appeal agreed with the Admiralty Court that the claimant’s mistaken belief that its in rem claim somehow included an in personam claim was not a good reason to grant a time extension.

The claimant was therefore refused the requested time extension.

Conclusion/comments

This judgment confirms that section 190(6) of the Merchant Shipping Act only assists claimants that struggle to issue and/or serve in rem proceedings due to the subject vessel being out of the jurisdiction. It does not provide a mandatory ground for an extension for in personam proceedings.

It also clarifies the correct procedural requirements should a claimant seek to bring a claim both in rem and in personam. Two different sets of proceedings will need to be commenced which will no doubt increase costs dramatically.

This case is another example of the strict approach of the court to applications for extensions of time. It demonstrates again that the court will only be willing to grant a time extension if the claimant can show a very good reason for the delay. The court has made it clear that error or mistaken belief as to the correct procedure is not a good enough reason.