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Stolt Kestrel BV v Sener Petrol Denizcilik Ticaret AS AND CDE S.A. v Sure Wind Marine Limited

15th Oct 2015

Admiralty practitioners and other dedicated readers of the Lloyd’s Law Reports will be aware of a spree of recent decisions of the Admiralty Court concerning the 2-year time limitation period prescribed by section 190, Merchant Shipping Act 1995 for the commencement of collision actions.

Those cases are: CDE SA v Sure Wind Marine Ltd (The “Odyssee” and The “SB Seaguard”) [2015] 2 Lloyd’s Rep. 268; The Owners of the Ship “Stolt Kestrel” v The Owners of the Ship “Niyazi S” [2014] 2 Lloyd’s Rep. 483; and Owners of the Ship “Theresa Libra” v the Owners of the Ship “MSC Pamela” [2013] 2 Lloyd’s Rep 596. All of these cases were argued at first instance by 7KBW junior barrister, Richard Sarll, against QCs of significantly senior call. Richard has a strong interest in admiralty law, gained as a junior to Tim Brenton QC.

On 15 October 2015 the Court of Appeal handed down a combined judgment in the cases of Stolt Kestrel BV v Sener Petrol Denizcilik Ticaret AS and CDE S.A. v Sure Wind Marine Limited [2015] EWCA Civ 1035. Robert Bright QC and Richard Sarll appeared on behalf of the successful respondents in the Stolt Kestrel appeal.

In a careful judgment with which his fellow judges agreed, Tomlinson LJ confirmed that the test applicable to the exercise of the Court’s discretion to extend the period for bringing a collision action has 2 stages, whereby at the first stage the claimant will ordinarily have to show that there was good reason for not commencing proceedings in time. Since no good reason had been demonstrated, the Court of Appeal affirmed the decision of the Admiralty Court and dismissed the appeal.

In the course of his judgment, Tomlinson L.J. was also obliged to deal with an unsuccessful argument of the Appellants that in personam proceedings (which were commenced out of time) could be assimilated with in rem proceedings (which were commenced in time or else were separately capable of extension) by reason of the 1998 decision of the House of Lords in The Indian Grace (No.2). The speech of Lord Steyn in that case has caused controversy, since it has been understood by many commentators to lay down a general principle that an action in rem is an action against the owners from the moment that the Admiralty Court is seised with jurisdiction. Accepting the submissions of Robert Bright QC and Richard Sarll, and rejecting the views expressed by those commentators, Tomlinson LJ expressed the view that ‘the decision should be regarded as one only on the ambit of section 34 of the [Civil Jurisdiction and Judgments Act] 1982’, remarking that ‘Lord Steyn’s reasoning simply does not address a case such as the present.’
The decision therefore contains an important analysis of the true legal underpinnings of the admiralty action in rem, and serves as a reminder of the need to issue the proper form of proceedings in time.

To view the full judgment please click here.

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