Chimbusco Pan Nation Petro-Chemical Co. Ltd. V Owners and/or Demise Charterers of Decurion
Court of Appeal
Civil Appeal No 97 of 2012
Fok, Chu JJA and McWalters J
Admiralty
12 March, 12 April 2013

Whether defendants “in control of” other vessels — summons did not have to challenge jurisdiction on “all or nothing” basis

The plaintiff (“P”) agreed to sell to the defendants (“Ds”) bunkers for The Decurion, a vessel owned by Ds, and 10 other vessels which were chartered by an associated company of Ds (“C”). The bunkers were delivered but only partly paid for. Ds acknowledged service of the writ, a warrant of arrest for The Decurion was issued on the same day and the ship was subsequently sold by order of the Court.

However, as Ds were not the registered owners, charterers or in possession of the other 10 vessels, at issue was whether Ds were “in control of” them under Section 12B(4) of the High Court Ordinance (Cap. 4). The lower court thought not and P appealed, arguing that the judge had applied too narrow a meaning of the phrase “in control of”.

Held, dismissing the appeal, that, inter alia:

Section 12B(4) suggested that a person’s connection with the ship must involve either full possession or a contractual right of control and that the relationship to the ship could not be merely casual. Statutorily, the person need be in control of the ship, not in control of the company which was the charterer of the ship. The judge applied the correct, and rigorous test for control of a ship. In such a context, the courts did not generally lift the corporate veil.

A looser test equating control with “having a say in the operation of a vessel”, as P put forth, would widen the spectrum for maritime arrest but create a high degree of uncertainty that is commercially undesirable; this was not the intention of Section 12B(4).

The judge also correctly concluded here that Ds were not in control of the other vessels. They were chartered by C and while the companies were plainly associated with one another, there was no basis for lifting the corporate veil between each of them; nor for ignoring the service and agency agreements.
 

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