Arresting decision

SHIP arrest has become a hot topic in recent years. Indeed, it is the only type of work that some lawyers get. So a recent decision of the federal court of Australia, which has significant ramifications for all parties looking to arrest ships in Australia, will be of interest.

The ‘Cape Moreton’ was arrested by cargo interests in Port Kembla in June 2004 following a dispute over cargo damage, the arresting party obtaining a certificate from the vessel’s registry showing that Freya Navigation was the owner. But, a few days after the arrest, another company, Alico Marine Ltd, applied to the federal court to set aside the writ on the grounds that it, rather than Freya, was the owner of the vessel.

By agreement between the parties and the federal court, the full court was asked to determine whether the fact that a party is registered as an owner with an international ship registry satisfied the criteria of ‘owner’ under the Australian Admiralty Act. The act says that the vessel has to be owned by the same party at the time of the arrest as it was at the time the damage was sustained to the cargo. The court held that there had been a transfer of proprietary ownership in the vessel to Alico before the arrest, and that therefore the arrest could not stand.

The decision may make it more difficult to arrest vessels in Australia. At the very least, it will make people think twice.