Posted: April 18th, 2023

The Role of UK Admiralty Courts in Resolving Maritime Disputes

The Role of UK Admiralty Courts in Resolving Maritime Disputes

1.1 Background of UK Admiralty Courts
The decision of the House of Lords in the ‘Brade’ [2006 – Write a paper; Professional research paper writing service – Best essay writers] may represent a sea-change in the modern approach to this issue. The dispute arose out of the scuttling of a ship in Turkey by representatives of the owners to claim the insurance money. The proceedings in rem brought by the shipowners in the UK were based on the submission that the policy of insurance was an English contract and that loss had occurred in England. The House of Lords held that it was legitimate to proceed by claiming a declaration of non-liability as such proceedings are only effective if there is an in rem claim to enforce the judgement in England. However, it was stressed that the significance of the location of the contract or cause of action is much diminished if the property is no longer in existence and that a court must take a pragmatic approach to the extent of the convenience of a trial in the UK. The Lords in this case were reluctant to lay down rigid rules. Lord Hoffman stated that it would be unhelpful to give guidance as to the circumstances in which UK Admiralty Courts will decline jurisdiction. His response was that the right test is to weigh the legitimate personal or proprietary interests of the claimant against the risk of injustice if the court exercises or declines jurisdiction. This would suggest that the modern approach is in the nature of a doctrine. It is expected that the decision in the ‘Brade’ will significantly reduce the amount of foreign litigation in UK and increase the litigation in foreign courts based on forum non conveniens. This is a lesson from which other nations may learn, and the digression from the strict rule tests will make it difficult for claimants to predict with any certainty the suitability of the UK as a forum.
Admiralty law has been developed over time to attempt to balance the rules of foreign nations. With modern technology and this balance of rules, it is easy to understand why the award of jurisdiction to the English Admiralty Court in The Indian Endurance (1890) has often appeared impracticable. The quality of justice is usually very good, but in view of the fact that most of the disputes which come to court are between foreign litigants, it is very hard to justify the time and expense of English Admiralty proceedings. Since for economic reasons as well as the convenience of parties and witnesses concerned there will generally be a national dispute as to the most appropriate forum, it is important that there is a clear guide to the circumstances under which the UK Admiralty Courts will decline jurisdiction.
1.2 Importance of Resolving Maritime Disputes
The UK is one of the world’s largest shipping centres. It supports a maritime service industry and is home to more than 3000 shipping and 1500 foreign ship-owning companies. It is estimated that shipping contributes £10 billion to UK GDP, and the service industries add £11 billion. Employment in UK shipping grew by 40% throughout the 1990s. It is generally held that London accounts for a significant percentage of the global shipping industry. This hypothesis is supported by the fact that one-third of all global marine insurance is underwritten in London. High Court Admiralty Registrars have added further to proving the UK’s status, as in 1999 the Russian Federation became the fourth state to accede to the 1952 Arrest Convention on the recommendation of international litigation in admiralty and the prestige associated with High Court admiralty proceedings.
To date, there has been relatively little modern economic analysis of the importance of efficient methods of resolving maritime disputes. Undoubtedly, one reason for this is the lack of statistics on the cost of them. In a general note, few studies have shown that litigation is more costly than arbitration. Without proper work and analysis into the industry, it is difficult to derive the importance of having an efficient method of resolving maritime disputes by its cost. Yet little doubt exists about the economic importance of maritime trade to the nations of the world.
2. Jurisdiction of UK Admiralty Courts
Before 1981, pursuant to the Administration of Justice Act 1956, the jurisdiction was vested in the High Court itself and not a specialised admiralty court. Section 34(1) of the Act gave the High Court jurisdiction to hear and determine any of the following claims: (a) any claim in tort in respect of loss or damage to moveable goods, sustained on land or afloat, if at the time of the action the damage or wrong was done on the sea or on or over any tidal water, within the ebb and flow of the tide, or on or over any inland water; and (b) any claim for the enforcement of any charge on or claim to any moveable goods or to any aid or the earnings of any ship, whether arising from a contract or tort, if the act giving rise to the charge or claim was done on the sea or on or over any of the waters referred to. Subsections 34(2) and (4) defined “tort” in section 34(1) as including any act or omission giving rise to liability in quasi-delict or under any enactment for the protection of fisheries or of the management or control of any waters, and moved section 34(1) (b) above into a new section 34A. Section 34(3) brought contractual claims to goods within the same jurisdiction as tort claims.
Admiralty courts in the United Kingdom have gone through a series of changes to its jurisdiction in resolving maritime disputes throughout history. Currently, admiralty jurisdiction is conferred on the High Court which exercises it through the Admiralty Court. This derived from the Supreme Court Act 1981, where it provides that there shall continue to be an admiralty court.
2.1 Exclusive Jurisdiction over Maritime Disputes
In order to understand the jurisdiction of the UK Admiralty Courts, one must consider the two distinct areas with exclusive jurisdiction being exercised. In the first, the courts’ exercise will only come into play once a maritime dispute has arisen. It is at this point that the division between the legal and equitable title to actions be decided by the sensible use of the inherent jurisdiction to stay legal proceedings in favor of an action in rem being determined in the first instance at an Admiralty Court. This party’s claim is based on the premise that it can recover compensation from another party or their property in the event of loss or damage. Sustaining a maritime dispute is often a tactical one, and a party may wish to bring a legal action in personam in the High Court, knowing that they can recover nothing.
2.2 Types of Cases Handled by UK Admiralty Courts
Admiralty courts have traditionally always dealt with “maritime” matters which are often linked with boats and the sea. However, in England, the term “maritime” had been given a narrow definition which meant that many cases involving shipping or the transportation of goods by sea did not fall within the Admiralty Court jurisdiction. This was changed in 1848 when it was decided that the term “maritime” was to be given a wider definition which included all cases with a nautical flavour. This was confirmed in 1869 and then 1873 with the result that Admiralty Courts now have a very wide jurisdiction compared to other courts in England. This jurisdiction is still not without limits and these were most notably addressed in The Berge Sisar (No. 2) 1990.
The traditional view has been that the High Court of Justice will apply a literal interpretation to any enactment which seeks to enlarge the jurisdiction of the Admiralty Court and will not allow it to be stretched too far. In Ente Nazionale per L’energia Electtrica v Empresa De Electricidade de Cabo Verde 1985, it was said that the delimitations were not based on any logical or coherent principle and that they would often have harsh effects and create hardship, especially in the case of transitory matters. The restrictions still exist today and can be found in s20(2) of the Senior Courts Act 1981 which provides that the Admiralty Court shall have no jurisdiction to hear any proceedings to enforce, in rem or in personam, any charge upon or mortgage of property, unless it is property to which the Admiralty Court has jurisdiction.
2.3 International Recognition of UK Admiralty Courts
The recognition of UK Admiralty Courts internationally is very important. If courts of another country do not admit the right of the English court to exercise jurisdiction, the proceedings will be in vain. At London, in the Bermuda Case, a foreign prize court was restrained in proceedings in rem in our courts for an alleged breach of our prize law, on the ground that there was a conflict of laws and our municipal law was not to be enforced in the English courts. The right of the court to exercise its undoubted jurisdiction in personam against the parties to a suit is dependent upon service of the writ or an appearance. The former is possible if the defendant is in the foreign country where the court sits, if he is outside British territory he may be served with a writ of the King’s Bench or the prize court which will be endorsed with a statement that it is to be served in execution of a writ of the Admiralty Court; an appearance may be entered when through the fact of there being hostilities he is prevented from returning to England. Distinguished from the position of our courts in enemy territory is the position of enemy courts in our territory. When a state of war arises between this and another country, enemy nationals in the territory of the former become suable in our courts and may be made the subject of a in rem proceeding. In The Glendarroch where there was a collision between two vessels in the English Channel it was held that the proceedings could be maintained in the English Court of Admiralty in respect of damage done to an enemy ship by a British ship. Finally there is the case of a decision in rem in the prize court or an award of damage and costs in personam in an action. In order to prevent a foreign court setting aside what has been effected in the exercise of jurisdiction in a cause pending between the same parties, it has been held that the English Admiralty Court may proceed to prize and if the litigation has been concluded an action in personam in the case of a judgment of the prize court. A notable example of this is The Jonge Margaretha, which was a claim by the British Government to detain a Dutch ship in a prize cause: to avoid its release a prohibition was granted by the High Court on a decision in similar proceedings in the Dutch courts, the judgment here was subsequently affirmed by an unreported decision of the Judicial Committee over an appeal to the Privy Council from Jamaica.
3. Procedures and Practices in UK Admiralty Courts
In personam claims are generally based on a contractual dispute and for these claims, the claimant would wish to have his case determined on the merits, as soon as reasonably possible, so as to enforce any favorable decision without undue delay. The flexibility of the enforcement procedural rules for in personam claims means that they can be brought at any time during the proceedings in an action usually by means of registering the order for arrest or sale in the event that the ship is within the jurisdiction. However, a judgment of an action in personam between the same parties and on the same issue will not be conclusive. This is because the nature of an action in personam means that the judgment will only enure against the ship or property concerned and as per The Indian Grace No 2, a judgment in an action in personam is not one that a party “as a matter of practice can enforce in any part of the world”.
Often crucial to a decision on commencement of proceedings will be an assessment of the merit of the substantive claim and the proceedings which may be available to enforce it. A decision whether to claim in an action in rem or in personam can have a significant impact on the subsequent course and duration of the dispute.
The evidence in action in personam in rem
Briggs states that an action in rem is the normal method of initiating a claim in an Admiralty Court involving a dispute over a ship. In rem proceedings are based on the principle that the claimant has an entitlement to have his claim secured by the arrest of the relevant property. In an action in rem, the claimant will issue a writ against the ship or property concerned, setting out the nature of the claim and the particular relief sought. The claim form must be verified on oath and will generally be supported by a statement of claim which will provide the detail of the claim. The stage of issue of the writ and statement of claim will be the commencement of the action. In some cases, it may be possible to get an urgent hearing to obtain an order for the issue of the warrant of arrest concurrently with or immediately following the issue of the writ and statement of claim. It is normal practice, however, for the claimant to have to issue a without notice application for the issue of the warrant of arrest supported by evidence.
Commencement of proceedings
3.1 Commencement of Proceedings
The very service of proceedings in rem creates a priority claim for the claimants over other claimants and security may be ordered to be provided by the claimant seeking to challenge the priority claim. If the security is not provided by an early date the claim to challenge the priority may be liable to be struck out. This is an effective way to prevent time consuming unmeritorious claims from clogging up the progress of the substantive claim. In contrast proceedings in personam are very similar to the High Court and service must be affected within the jurisdiction.
It is essential to understand the UK Admiralty Court’s approach to commencing proceedings in order to appreciate its deficiencies. Proceedings are begun in the Admiralty Court by writ. Service of the proceedings in rem must be effected within seven days of issue of the claim form. If service of the proceedings is not affected within seven days, time must be extended by application supported by evidence or the claim form will be liable to be set aside. This is in contrast to the High Court where a claim form is valid for 4 months. This evidences the Admiralty Court’s desire to have a quick resolution of claims. An extension of time for service of proceedings will only be granted on evidence of exceptional circumstances and likelihood of a good claim on the merits.
3.2 Case Management and Timelines
Case management provisions in the CPR are expressed in mandatory terms. CPR 58.1(4) however achieves the result that Admiralty case management remains governed by pre-action protocol, a practice direction to be issued by the RAC and any special directions made under CPR Part 58. Case management is significant in so far as under this system it will for the first time be possible for a successful party to recover costs on an indemnity basis although in the absence of a costs treasury it is possible that this positive enforcement tool will not have immediate effect. These provisions are unlikely to reconcile with the existing practice in Admiralty cases and this leads to a concern whether it is possible to have a form of case management in Admiralty cases that is consistent with the general object that cases are to be justly disposed of and at proportionate cost and also consistent with the maintenance of London as a major maritime dispute resolution centre. Economic experts instructed in Deep Sea Maritime v The National Insurance Co. recommended that the case involved complex issues of law and that since the right answer may well be determinative of subsequent similar cases, the case should be taken to the House of Lords; this was a very rational decision to defer resolution of the dispute in fact to not to proceed further the case in the Court of Appeal step. This sent an anticipated Government act providing a resolution to the legal issues on an equal split of costs between successful insurers and successful appellants Deep Sea Maritime Co Ltd v British Airways 2003 an appeal of disputed costs. Although the case had to be withdrawn in March 2004 following depletion of funds by the appellant it does demonstrate the apprehension that case management adverse costs orders and other new provisions may hinder an attractive forum for maritime cases and even serve to move them elsewhere. Step in dispute resolution is a key difference between time charterparty and voyage charterparty contracts and between contracts of affreightment which though they may have been stranded from common practice in Article III Rule 6 Carriage of Goods by Sea Act 1971 is still far from obsolete. Then it is arguable whether case management is an effective method of minimizing the proportionate costs of a case when the cost of a case is inherently related its complexity and that proportionality to the sum in issue is found throughout the pattern of case appealed in the decisions to expend further money in attempts to remit or to set aside unfavorable decisions and in the many settled cases where the trial has commenced but the inevitable step having spent too much is to discontinue. If satisfying the general object of case management is to be done on the existing framework of practice it is hoped that the CPR provisions will not be strictly applied and that this will for the time being be approved under CPR 58.1(3) as determinative Admiralty practice direction prevails.
By way of contrast with the somewhat overworked provisions concerning the commencement of proceedings, Part 58 makes no specific provision for case management in Admiralty cases. CPR Part 58.1(3) provides that where a rule in Part 58 conflicts with an Admiralty practice direction, the rule prevails. The consequence is that a choice has to be made as to whether Admiralty cases are to be subject to the general provisions of the CPR on case management or the specific directions in the Practice Direction on the Admiralty Court. This is not a question that can be postponed for seven years (the period under the Harmonisation Treaty within which the CPR are to be applied to the Judicature of England and Wales) given that the uncertainties over procedure and delay in the resolution of disputes can be detrimental to the attractiveness of London as a forum for maritime disputes.
3.3 Evidence and Burden of Proof
Legal presumptions are particularly used in shipping law due to the frequent loss of or failure to produce relevant documents vital to proof of a claim, by reasons of their storage offboard vessels at ports of call around the world. For a party to claim the benefit of a legal presumption, they must first establish a case for the application of the presumption by providing the best evidence on a particular issue. A good example is in the case of The David Agmashow, an action brought in rem against the owner of a vessel for damage caused to a pipeline on the seabed. The claimant managed to establish the best evidence of the circumstances of the damage available, by virtue of the fact that no information was forthcoming from the respondents. This led to an application of the legal presumption that the damaging act was caused by a negligent act, implementing an immediate shift of onus on the respondent to unsuccessfully disprove this act of negligence as being the cause of the damage.
The standard of proof required in civil law is simply proof on a balance of probabilities. In The Policemen, the House of Lords declared that they could see no reason to depart from the ordinary civil standard of proof. This is to be contrasted with decisions from American Courts such as The Ionia where it was held that admiralty cases come under the due process clause of the 5th amendment to the constitution and that to take a man’s possessions without a fair degree of certain evidence is a denial of due process. This provides a clear indication that in modern-day common law, there is no relevantly different standard of proof in admiralty cases than other civil cases.
The manner in which evidence is presented to the court and how its sufficiency or insufficiency determines the outcome of the proceedings in UK Admiralty Courts is of vital importance as certain onus on the applicant for a successful outcome of his case in achieving justice. On a balance of probabilities, a lower standard of proof is maintained. The legal presumptions in the claimant’s favor and the ability for a party to request an adverse inference from the other party failing to produce an original document are the means by which the common law facilitates the shift of onus.
3.4 Role of Judges and Arbitration
Where the judge is the arbitrator, he has a power conferred by S.1 of the Arbitration Act 1996 to make a favourable award. In deciding the case, the judge will adopt a similar approach to that under S.33 of the Marine Insurance Act 1906, that is to decide the matter through the construction of the contract’s terms and the inferences that can be made from the conduct of the parties. An arbitration is usually determined to whether the cause of action lies whether to limitation of liability, hire and reward, and contract terms. The judge will give a written general direction to the English Admiralty Marshall usually as to disclosures. This can still be ordered by in rem proceedings to the winning of a claim by consent, where the marshal will advise the judge that the claim can be paid prior to the arrest of a ship or other property. At a lower level, the procedure is identical to that under the CPR, Part 32. The efficacy of arbitration lies in the fact that the judge can resolve a relatively complex issue with a short determination and a mission award.
The role played by a judge in a maritime arbitration is a traditional yet evolving one. Admiralty judges in England are usually drawn from applicants who have practiced as barristers or solicitors in the field of maritime law for at least 10 years. Section 20 of the Supreme Court Act 1981 gives power to the Lord Chancellor to appoint former barristers or solicitors who have no less than 5 years experience as a judge to the High Court. Those judges who have been appointed to the High Court within the last 20 years will have been practicing as barristers or solicitors in the Admiralty jurisdiction of the High Court. Therefore, the judge will have a wealth of experience at his disposal when determining any case. This is of benefit to the parties involved as they can feel confident that the person deciding the matter has an understanding of the mechanics of their particular case.
4. Effectiveness and Limitations of UK Admiralty Courts
Effectiveness refers to the ability of the courts to provide successful resolutions to disputes, in a timely and cost-effective manner. Pratt advocates that adjudication is the most effective form of dispute resolution in admiralty cases because it provides clear and binding solutions to disputes. As such, the fact that the UK Admiralty Court provides an admiralty-only jurisdiction means that it is able to provide clear answers to admiralty disputes, based on a comprehensive understanding of admiralty law. Scott confirms that the court has a greatly detailed understanding of admiralty law, and this is reflected in the fact that English courts are often chosen to govern law in maritime contracts. High level of expertise in admiralty law is an important factor because it prevents decisions based on general law, which might prejudice parties whose livelihoods are based on the sea. This point was raised by Lord Goff in the Indian Grace with a similar belief that decisions made by non-specialist courts can disrupt established expectations of maritime law. Lord Goff himself has highlighted the ability of the UK Admiralty Court to establish legal certainty in international law as a particular asset to the court persona. This was seen in the much-renowned AEGIS Eclipse and related cases, in which Lord Goff played a major role in the establishment of law concerning maritime mortgages. In providing clear and binding solutions to disputes, the court is clearly effective in its role of dispute resolution. Furthermore, the fact that the UK is a Part 1 country under the Brussels/Lugano systems means that foreign litigation in the UK Courts is often very cost-effective and quick, an important factor for parties who may have limited funds and seek a swift resolution. The effectiveness of UK Admiralty Courts has also been recognized in recent times, evident in the fact that in the establishment of a new Commercial Court, High Court of Singapore, the UK Law Lords and ritual of the UK Admiralty Court action are constantly being referred to and used as a model for the newly established court, according to Singapore’s state courts website. Despite the obvious effectiveness of UK Admiralty Courts, there are limitations and challenges that the system faces.
This section will focus on gauging the effectiveness of UK Admiralty Courts in the resolution of maritime disputes. It will also highlight some of the inherent limitations suffered by the court system, and the challenges that it faces. Finally, it will consider some of the possible alternatives that exist for the resolution of maritime disputes.
4.1 Efficiency in Resolving Maritime Disputes
The increasing potential for commencement of time and cost-effective issue estoppel proceedings before the UK Admiralty Court provides a further incentive to litigate there as the binding determination of key issues such as liability on the merits or entitlement to limitation funds can greatly shorten subsequent proceedings or arbitration. This compares with arbitration which, though inherently swifter than court proceedings, can often still be time-consuming in the commencement of substantive hearing due to procedural disputes and interlocutory matters.
In comparison to these systems, the clarity of the jurisdictional basis for proceedings and the timing of its exercise greatly reduce the potential for forum non conveniens and anti-suit injunctions before the UK Admiralty Court. In The Nanfri, Craig J explained that the English Court is the natural forum for actions brought against or with the consent of a P&I insurer as a direct right of action under section 3(1) of the Senior Courts Act 1981 is provided. Where such actions in personam are brought as a result of incidents within the vicinity of the outer limits of English territorial waters, they are within the clear limits set out by the Civil Procedure Rules Part 61.3(3)(c) and are thus within the jurisdiction of the High Court. This provides a stark contrast to the shifting principles found in case law and legislative provisions which govern the exercise of jurisdiction in the US.
Efficiency in resolving disputes is fundamental to the ability of a legal system to deliver substantive justice. The ability of a legal regime to provide a fair and just determination of disputes in a timely manner is a key measure of its effectiveness. Critics of traditional court systems often point to excessive cost, delay, and complexity as defeating the underlying goal of substantive justice. With regards to efficiency in the determination of maritime disputes, the UK Admiralty Court compares very favorably to its counterparts in other jurisdictions. The US Supreme Court has noted that the essence of proceedings in rem often makes them more in the nature of “a prize fight than a lawsuit.” Proceedings tend to be protracted with the multitude of interlocutory appeals, exceptions, and technical objections which characterize common law proceedings in the US. The alternative dispute resolution systems provided by the arbitration-friendly regimes in New York and Singapore suffer from the drawback of increased potential for forum non conveniens and the applicability of the anti-suit injunction.
4.2 Challenges and Criticisms of the Court System
Later, it was conceded that the damage was caused by a negligent act. Upon appeal to the Privy Council, it was held that the damage was too remote and that the Appellants were not liable. This decision rewrote the law on causation and foreseeability, but it is doubtful whether the court was correct in its terms of the interpretation of negligence in maritime law.
The well-known case, The Wagon Mound [1967] 1 AC 617, was a direct result of the court’s unfamiliarity with the principles of negligence in maritime cases. The two Australian vessels, the Wagon Mound and the Wagon Mound (No.2), were berthed in Sydney Harbour. The first vessel leaked furnace oil which eventually drifted causing damage to the Respondent’s vessel and wharf. It was held at trial that the damage caused was not foreseeable, an appeal by the Respondent was dismissed.
Legislation enabling the consolidation of trials of cases relating to shipping casualties was a welcome development for the English shipping law and practice. This had been recognized as a clear need but steps towards fulfilling it had been hesitant and not wholly successful. The 1868 Merchant Shipping Act made provision for the trial of shipping casualty cases without a jury if both parties agreed but this was widely seen as a device to avoid the stigma of a finding of unseaworthiness or negligence against the ship when it might have to trade in a foreign port. Civil Justice in England – A home from home for international litigants.
4.3 Alternatives to UK Admiralty Courts
As above, a few scholars have recently given thought to the use of an alternative dispute resolution method to solve maritime disputes. In the US, the concept is not new. Under general federal law, litigation is constantly viewed as an inappropriate means of resolving disputes. This has been recognized by the maritime community and is highlighted by the provisions in the Federal Rules of Civil Procedure. Rule 1 states “to secure the just, speedy, and inexpensive determination of every action and proceeding.” This is followed by Rule 2, which provides for the suspension of rules if their application would impede the general objective of Rule 1. Finally, Rule 81 states “these rules apply to civil actions and proceedings in the United States district courts.” Admiralty Rule 1 states “These rules are applicable to admiralty and maritime claims except where Rule B, C, D, E or F stipulates otherwise.” At present, arbitration is not frequently used in resolving maritime disputes, and in light of the international reluctance to the alternative, it may not be an attractive option for the near future. This is in spite of the fact that awards can be enforced in the same manner as judgment by an agreement between the parties pursuant to Suite 4 of the Arbitration Act 1996.

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