A collision occurred between the Erkowit and the Dortmund in the Bay of Biscay, resulting in the holing of the Erkowit. Salvage operations were initiated, and the salvage tug Rotesand arrived on the scene. The master of the Erkowit, representing the shipowner and cargo interests, entered into a salvage agreement on Lloyd's Open Form (LOF) terms with the tug master of the Rotesand acting on behalf of the appellants, who were professional salvors.

Afterward, the Rotesand took the Erkowit in tow and made for the port of La Coruña. However, the tug master decided to beach the Erkowit on an exposed beach before reaching port. As a consequence, both the vessel and the cargo became a total loss. The Government of Spain also brought a suit for pollution against the owners of the Erkowit.

The Erkowit's shipowner, master, crew, and cargo interests filed claims against the salvors, alleging negligent performance of the salvage agreement. Since the salvors did not have a place of business in England where they could be served in personam, the Jade, another vessel belonging to the salvors, was arrested while in England. The writs were issued under s 3(4) of the Administration of Justice Act 1956 (the Act). The issue was whether any of the claims fell within s 1(1) of the Act, which gave domestic effect to the Arrest Convention 1952 in the UK. In the High Court, Brandon J struck out the master and crew's claims on the ground that they did not come within s 1(1), but allowed the remaining claims to stand. The Court of Appeal dismissed the salvors' appeal. The salvors appealed to the House of Lords.

Held: Appeal dismissed.

The purpose of the Arrest Convention 1952 was to create uniform rules for the arrest of seagoing ships by judicial process in order to secure a maritime claim against the shipowner. Article 1 defined the various incidents that constituted a 'maritime claim' for which an arrest could be made under the Convention. Articles 2 and 3 granted, and limited, the right of arrest to either: (a) the particular ship in relation to which a maritime claim fell within one or more of the instances defined in art 1; or (b) any other ship owned by the person who, at the time when the maritime claim arose, was the owner of the particular ship. Article 3 reflected a compromise between the extensive powers of arrest available in certain Civil Law jurisdictions like Scotland, where the jurisdiction to entertain claims against a defendant could be based on the presence of any property belonging to the defendant within the territorial jurisdiction, and the limited powers of arrest available in England and other Common Law jurisdictions. In the latter, the power to arrest was exercisable only for claims falling within the admiralty jurisdiction of the court and based on a presumed maritime lien over the specific ship involved in the claim.

The House clarified that the admiralty jurisdiction of the High Court has always been statutory. In 1875, when the High Court of Justice was newly created, it inherited the admiralty jurisdiction previously held by the High Court of Admiralty. The claims and questions falling under the High Court’s admiralty jurisdiction were outlined in s 22 of the Supreme Court of Judicature (Consolidated) Act 1925. These claims were essentially the same as the maritime claims mentioned in art 1 of the Arrest Convention.

To align Pt I of the Act with art 3 of the Convention, two actions were taken: a) a new list of claims falling within the admiralty jurisdiction of the High Court was substituted in s 1; and b) the right to initiate an action in rem against a ship was regulated based on the listed claims, as stipulated in s 3. Sections 22 and 33 of the 1925 Act were also repealed.

The House acknowledged that it had three lists of claims from which it could consider the right to arrest a ship in an action in rem: the English list in s 1 of the Act; the Scottish list in s 47 of the Act; and the international list in art 1 of the Arrest Convention. All three lists essentially covered the same claims, save for the inclusion of claims for 'damage received by a ship' and 'damage done by a ship' in English and Scottish law, and the inclusion of services rendered to aircraft in the English list, which is not included in the international list.

The House found that the rule of statutory construction established in Salomon v Customs & Excise Commissioners [1976] 2 QB 116 and Post Office v Estuary Radio Ltd [1968] 2 QB 740 should apply to the Act, since it was enacted to give effect to the international obligations under the Arrest Convention. According to this principle, if there were any dissimilarities between the language of the statutory provision and the corresponding international Convention, the former should be interpreted in line with the Convention, as long as the words reasonably allowed for such an interpretation. Additionally, as the Convention was intended to be ratified in all three jurisdictions of the United Kingdom, there was an assumption that the Act was intended to have the same consequences regarding the right of arrest of ships in Scotland as in England. Consequently, if the language of the Act permitted multiple interpretations, the interpretation consistent with the Scottish list should be preferred. The same considerations applied to the provisions of the Act and the Convention providing for the right of arrest of ships.

Article 1.2 of the Convention defined the term 'arrest' as 'the detention of a ship by judicial process to secure a maritime claim'. Article 2 limited the right of arrest to those maritime claims listed in art 1, and art 3 defined the subject of arrest as 'the particular ship in respect of which the maritime claim arose', or one of its sister ships. The corresponding statutory provisions for art 3 could be found in s 47(1) of the Scottish Act and s 3(4) of the English Act. These provisions made it clear that to enforce the arrest of a ship, it must be owned by the defendant in the action and must also be identifiable as the ship in connection with the claim made in the action or its sister ship. The 'connection' between the ship and the claim must have been intended to be the same as is expressed in the corresponding phrase in the Convention: 'the particular ship in respect of which the maritime claim arose'. Therefore, to identify the relevant ship in respect of which a claim of that description could arise, one must look at the description of each of the maritime claims included in the list. Furthermore, the maritime claims described in the relevant lists were not mutually exclusive. Article 1.1 itself recognised that a claim might fall under two or more of them.

The shipowner had classified its claims under paras (d), (e) and (h) of s 1(1) of the Act. The cargo interests had relied on paras (d), (g) and (h). Paragraph (h) covers 'any claim arising out of any agreement relating to the carriage of goods in a ship or to the use or hire of a ship'. The corresponding provision in art 1.1 of the Convention provides: 'a claim arising out of… (d) agreement relating to the use or hire of any ship whether by charterparty or otherwise; (e) agreement relating to the carriage of goods in any ship whether by charterparty or otherwise'.

There was no doubt that both the shipowner's and cargo interests' claims fell within s 1(1)(h). These claims were in connection with the Rotesand, and were therefore enforceable under s 3(4) by an action in rem against the Rotesand itself, or any of its sister ships. The relevant salvage agreement was entered into by the master of the Erkowit on behalf of the cargo interests and the shipowner. Furthermore, the salvage agreement was to be considered 'an agreement relating to the use of a ship'. The shipowner and cargo interests claimed damages for the negligent performance of that salvage agreement. Provided that the alleged negligence included averments that the Erkowit was towed by the Rotesand on a route that beached it on a dangerous shore, the claim arose from the negligent performance of that part of the agreement in which a ship was to be used.

The House found it unnecessary to decide whether the shipowner's and cargo interests' claims fell within s 1(1)(d) of the Act which pertains to 'damage done by a ship', or art 1.1.a of the Convention: 'damage caused by any ship either in collision or otherwise'. However, for the claims to fall within this category, the damage must be the direct result or natural consequence of something done by those engaged in the navigation of the ship, and the ship itself must be the actual instrument by which the damage was caused. Collision was the most common example of this type of claim, and was explicitly mentioned in the Convention, but physical contact between the ship and the damaged object was not essential. A ship could cause damage to another ship or property on shore by negligently causing a wash, for instance.

Here, the act of beaching the Erkowit on an exposed shore was carried out by those navigating the Rotesand, and there was an unbroken chain of causation between the beaching and the subsequent breaking up of the ship. As a consequence, the intervening failure of the appellants to take steps to avoid the risk of damage did not prevent the Rotesand from being considered the actual instrument by which the damage occurred after the beaching. The shipowner's and cargo interests' claims thus fell under s 1(1)(d).

The House further held that the cargo interests' claims fell within para (g), which reproduced art 1.1.f of the Convention almost identically. However, para (g) only permitted the arrest of the ship in which the damaged or lost goods were carried. It did not authorise the arrest of a sister ship. Therefore, the right to arrest a sister ship must be sought under some other para.

Regarding para (e), this had no counterpart in art 1.1 of the Convention. The description 'any claim for any damage received by a ship' describes a claim arising 'in connection with' the ship that receives the damage. In such a claim the owner of the ship that receives the damage would be the plaintiff. It cannot invoke the admiralty jurisdiction by an action in rem against its own ship; and any claim to arrest some other ship must be founded upon some para other than (e). Had the drafters of s 3(4) been meticulous, they would have omitted any reference to para (e) of s 1(1); but the other requirements of the subsection prevent any right of arrest arising under that para.