CASTELO INVESTMENTS LTD AND OTHERS v. THE OWNERS OF THE SHIP OR VESSEL "MICHELANGELO" (Licence No. 27489)

HCAJ260/2005

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ADMIRALTY ACTION NO.260 OF 2005

---------------------------

Admiralty action in rem against the ship or vessel
“MICHELANGELO” (Licence No. 27489)

---------------------------

-------------------------------

----------------------

J U D G M E N T

-----------------------

1. I have before me an application by the plaintiff for sale pendente lite, the vessel having been arrested pursuant to a Warrant of Arrest issued by the court.  The application is opposed, but in reality the dispute between the parties or the difference between the parties at the moment is over the quantum of security that should be furnished for the release of the vessel.  The defendants have offered security but not in the amount as demanded by the plaintiffs. 

2. At the hearing today, it would seem that really the parties have the difference over quantum which can be considered under three heads, that is, under the head of the amount of the claim, under the head of interests and under the head of costs. 

3. The principle to be applicable by the court on ordering the security is not in dispute.  In admiralty, it is well known that the plaintiffs are entitled to security on the basis of the best arguable case of the plaintiffs, and that applies to all three heads, namely, the amount of the claim, the best arguable case of the plaintiffs on the number of months and years it will take to have the case resolved, this is, of course, on the matter of interests and the best arguable case of the plaintiffs of the likely costs that is to be incurred by the plaintiffs in bringing the case to judgment.

4. Having heard both sides, I have come to the following conclusion but I will not go into finite details.  The best arguable case of the plaintiffs on the amount of the claim is, as reflected in paragraph 16 of the affidavit of Mr Horton, dated 7 March 2006, that is, in the sum of $1.455 million.  I have come to the view that in relation to the interests, three years as set out in Mr Horton’s affidavit seems to be somewhat high.  I will give it in no more than, may be, 1.5 years.  In terms of the costs, I think the best arguable case of the plaintiffs, having regard to the likely complexity of what is going to be disputed, should be in the region of about $400,000. 

5. It seems to me that in the circumstances the security that should be ordered, taking also into the account that the costs of arrest incurred already up-to-date, should be in the sum of $2 million.  My order, therefore, is provided that the defendant pays into court $1.4 million within 14 days, that is to say, by 4:00 pm on 29 March and that the balance of $600,000 is also paid into court within 14 days thereafter, that is to say, by 12 April at 4:00 pm, the order of sale will not take effect.  But upon failure to comply with either of the two conditions, order of sale will take effect.