HISSAN TRADING CO LTD v. ORKIN SHIPPING CORPORATION (A BODY CORPORATE)

1992 No. CL 39

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

COMMERCIAL LIST

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BETWEEN

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J U D G M E N T

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1. As questions of interest have arisen on these applications I am with the agreement of counsel delivering this judgment in Open Court.

2. 2 summonses lie before me for determination. They are both issued by the Defendant. The first is for a stay of the proceedings and the second is to set aside the Mareva injunction issued by Leonard J. on the 11th April 1992.

3. The claim is a cargo claim. The claim is made under a Bill of Lading for carriage of a cargo of gypsum from Thailand to Japan. The vessel carrying the cargo sank in March 1992 and the cargo was lost.

4. The application for the stay is made first on the ground that there is an agreement between the parties that any disputes which arise will be referred to arbitration and that the arbitration should be conducted in Japan. Should the Defendants be unable to succeed on this ground an alternative argument is mounted that there is an exclusive jurisdiction clause or alternatively it is argued that the doctrine of Forum non conveniens is applicable.

5. I will deal first with the question of arbitration. At the time in question there were 3 charterparties in existence, a Head Time Charterparty and 2 Voyage Charterparties. There was a provision in all of these charterparties that disputes should be referred to Arbitration in Japan. Also the Bill of Lading is governed by Japanese law. There is an endorsement on its face which reads "All terms, conditions and exceptions including Arbitration Clause of relevant Charterparty dated 6th February 1990 (sic) at Tokyo are herein fully incorporated".

6. There is one matter which I think I can dispose of very shortly. The Plaintiffs contended that this indorsement was defective by virtue of the fact that there is no Charterparty of the 6th February 1990. There is, however, a charterparty dated the 6th February 1992. It is quite clear from affidavits sworn on the Plaintiff's behalf that during the course of this litigation they accept that the charterparty being referred to is the charterparty of the 6th February 1992. I have no doubt that I am able to modify the date on the Bill of Lading and treat it as being the intention of the parties that it was the said charterparty which was being adopted. The authority for this being the Rena K 1979 1QB 377.

7. The next point raised by the Plaintiffs is much more difficult.

8. Article 7 of the Unicitral Model Law on International Commercial Arbitration is couched in these terms:

"Article 7. Definition and form of arbitration agreement

(1) "Arbitration agreement" is an agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not. An arbitration agreement may be in the form of an arbitration clause in a contract or in the form of a separate agreement.

(2) The arbitration agreement shall be in writing. An agreement is in writing if it is contained in a document signed by the parties or in an exchange of letters, telex, telegrams or other means of telecommunication which provide a record of the agreement, or in an exchange of statements of claim and defence in which the existence of an agreement is alleged by one party and not denied by another. The reference in a contract to a document containing an arbitration clause constitutes an arbitration agreement provided that the contract is in writing and the reference is such as to make that clause part of the contract."

9. The Plaintiffs argue that the definition in Article 7(2) does not extend to the instant Arbitration. The reason for this being that there is no agreement in writing signed by both parties. As I have already indicated the Bill of Laing adopted the arbitration clause in the manner I have described.

10. The authors of Hong Kong Arbitration Cases and Materials by Kaplan, Spruce and Cheng - Butterworth 1991 anticipate the difficulties which may arise in connection with Article 7(2) at p.187.

"(2) The arbitration agreement should be in writing. An agreement is in writing if it is contained in a document signed by the parties or in an exchange of letters, telex, telegrams or other means of telecommunication which provide a record of the agreement, or in an exchange of statements of claim and defence in which the existence of an agreement is alleged by one party and not denied by another. The reference is a contract to a document containing an arbitration clause constitutes an arbitration agreement provided that the contract is in writing and the reference is such as to make that clause part of the contract."

11. Mr. Ma submitted that the correct approach to interpreting Article 7(2) is to take the first sentence in the Article at its face value - namely that there is a requirement that the Arbitration Agreement must be in writing. The remainder of the Article should be treated as providing examples of the types of situation which would often be encountered. There was nothing in the Article to suggest that the examples cited were exhaustive or that the definition was limited to such agreements.

12. It was legitimate to consider 3 background documents when attempting to interpret the model law. These were

(1) The Report of the Secretary General dated the 25th March 1985 entitled "Analytical Commentary on Draft text on International Commercial Arbitration",

(2) The Report of Unicitral on the work of its 18th session, and

(3) The Report of the Law Reform Commission of Hong Kong on the adoption of the Model Law.

13. I regret that it is my impression that none of the material contained in any of these reports could be said to be conclusive one way or the other.

14. It is, however, possible to derive some assistance from "A Guide to Unicitral Model Law" by Holtzmaan and Neuhaus. Kluwer Law and Taxation Publishers Deventer Boston. It is evident from this work that a considerable amount of thought and discussions took place concerning the construction of Article 7(2) and more particularly whether the scope of the Article could be expanded so as to definitely embrace Bills of Lading incorporating arbitrations where one of the parties had not signed the Bill of Lading. It is apparent from the commentary that it was considered impossible to obtain unanimity of all interested countries if the definition was extended to include this.

15. Mr. Ma submitted that even if I was disposed to adopt a narrow view of Article 7(2) there was sufficient written evidence available to comply with the specific requirements referred to. He placed reliance upon the correspondence which had been exchanged between the parties solicitors prior to the commencement of the litigation. Having considered the relevant correspondence I do not think that this argument has any prospect of success. The whole tenor of the correspondence conducted by Clyde & Co for the Plaintiffs is inconsistent with a submission along these lines. Indeed at the conclusion of the correspondence Clyde & Co specifically deny the existence of such evidence. Even if there was merit in this argument I am of the view that the drafting of Article 7(2) precludes the adoption of memoranda in writing being relied upon which post date the Agreement to arbitrate.

16. Although the situation may be highly unsatisfactory I am satisfied that in the circumstances of this case that an application under Article 8 of the Unicitral Model Law has to be rejected on the ground of non compliance with the requirements of Article 7(2)

17. There are other reasons why I am unable to order a stay pending Arbitration.

18. Mr. Fok for the Plaintiffs argued most forcefully that there was no agreement to arbitrate made between the parties to this litigation and that the scope for manipulation of the wording of the relevant documentation to imply such an agreement between the parties was severely circumscribed.

19. There is a commentary in Article 34 of the 19th Edition of Scrutton on Charterparties on the considerations which need to be borne in mind when incorporating in Bills of Lading the terms of a charterparty.

"Article 34 - Incorporation of Charter in Bill of Lading - General

It is very common practice to inlude in bills of lading issued in respect of goods carried on a chartered ship, a provision purporting to incorporate into the bills some or all of the terms of the charterparty. There are numerous decisions on the effect of such provisions. It appears that in order to ascertain which, if any, terms of the charter are incorporated into the bills, an enquiry in three stages must be carried out

(1) The incorporating clause must be construed in order to see whether it is wide enough to bring about a prima facie incorporation of the relevant term. General words of incorporation will be effective to incorporate only those terms of the charterparty which relate to the shipment, carriage or discharge of the cargo or the payment of freight. Which of those terms are incorporated into the bill depends on the width of the incorporating provision. Where specific words of incorporation are used, either in the charter or in the bill, they are effective to bring about a prima facie incorporation even if the term in question does not relate to shipment, carriage or discharge. Where the intention is doubtful, the court will not hold that the term is incorporated.

(2) If it is found that the incorporating clause is wide enough to effect a prima facie incorporation, the term which is sought to be incorporated must be examined to see whether it makes sense in the context of the bill of lading; if it does not, it must be rejected. This process should be performed intelligently and not mechanically. Where the term relates to shipment, carriage or delivery, some degree of manipulation is permissible to make its words fit the bill of lading, but not where the term relates to other matters.

(3) Where there is an incorporation which is prima facie effective, the term in question must be examined to see whether it is consistent with the express terms of the bill. If it is not, it will be rejected."

20. Lord Diplock commented on this subject in his speech at p.682 of Miramar Maritime Corporation v. Holborn Oil Trading 1984 1AC 676.

    The Court of Appeal [1984] 1 Lloyd's Rep. 142 in a judgment delivered by. Sir John Donaldson M. R., upheld Mustill J.'s rejection of the personal liability of the consignees to the owners for demurrage although the reasons preferred by him for so doing differed somewhat, at any rate in emphasis, from those of Mustill J.

    Both judgments, however, took as their starting point what had been said by Russell L. J. in the Merak [1965] P. 223, 260, and restated by Lord Denning M.R. in The Annefield [1971] P. 168, 184. Those two cases were concerned with whether or not the presence of a clause expressed to incorporate the terms of the charterparty in the bill of lading annexed in The Merak to a charterparty in the Newbaltwood standard form and in The Annefield in the Centrocon standard form, was effective to make the arbitration clause in the charterparty binding upon a holder of the bill of lading other than the charterer himself. Although the incorporation clauses in the bills of lading used with the Newbaltwood, the Centrocon and the Exxonvoy 1969 charterparties respectively are not in identical words, there is no distinction to be drawn between them that is relevant to the instant appeal.

    In strictness, what was said by Russell L.J. and Lord Denning M.R. in The Merak [1965] P. 223 and. The Annefield [1971] P. 168 was obiter as respects the correct approach to the extent to which incorporation clauses in bills of lading issued in standard forms annexed to charterparties, are effective to impose upon the bill of lading holder personal liability for non-performance of obligations undertaken by the charterer that are contained in clauses of the charterparty, other than an arbitration clause. Nevertheless, those dicta drew a clear distinction as respect incorporation in the bill of lading between an arbitration clause in the charterparty and a clause therein "which is directly germane to the shipment, carriage and delivery of goods." A clause that falls within this latter category, it was said, is to be treated as incorporated in the bill of lading even though it may involve a degree of "manipulation" of the words in order to fit exactly a bill of lading.

    The manipulation in the instant case for which the owners argued was of the words "charterer" in the demurrage clause (clause 8) of Exxonvoy 1969, so as to sub6titute for it "consignee" or "bill of lading holder" when clause 8 was incorporated in the Exxonvoy bill of lading. Mustill J. and Sir John Donaldson M.R. were able to find reasons for holding such substitution impermissible notwithstanding that a demurrage clause is one which is germane to the shipment, carriage and delivery of goods.

    The owners application for leave to appeal from the Court of Appeal's judgment was refused by that court, but was subsequently granted by an appeal committee of this House. As was explained to the petitioners at the hearing of the petition, leave was granted not because their Lordships had, at that stage, reached a state of prima facie doubt as to the correctness of the result reached by the Court of Appeal, but in order to give this House an opportunity of dealing with the extent, if any, to which it is permissible to indulge in what in the dicta to which I have referred was described as "verbal manipulation" of clauses in charterparties in order, by means of an incorporation clause in a bill of lading, to impose upon the holder of the bill of lading personal liability for non-performance of obligations which under the express terms of the charterparty are undertaken by "the charterer" under that designation alone and are not therein referred to as being obligations of any other persons interested in the shipment."

21. These principles were considered by Gatehouse J. in The Nai Matteini 1988 1 Lloyds Reports 452 in the context of other cases and an attempt was made to reconcile the Law as it was at the 'time of that case. At p. 457 he says:

" There is, of course, one important difference between The Rena K and the present case. Although it is true that in both there is an express reference in the bills of lading to the incorporation of the arbitration clause, and in both the arbitration clause refers only to "disputes arising under the Charterparty", in The Rena K there was only one charter-party. Here, the Court has to go further, if it follows The Rena K, and decide which of the two charter-parties is referred to.

    That is the next problem, but I am at present concerned only with the question whether the decision in The Rena K and the dicta of Lord Justice Russell in The Merak as adapted by Lord Denning, M.R. in The Annefield, can still stand in the light of the House of Lords' decision in The Miramar. As made plain in Lord Diplock's speech, leave to appeal was given to the owners in that case for the specific purpose of giving the House:

... an opportunity of dealing with the extent, if any, to which it is permissible to indulge in what in the dicta to which I have referred was described as "verbal manipulation" of clauses in charter-parties in order, by means of an incorporation clause in a bill of lading, to impose upon the holder of the bill of lading personal liability for non-performance of obligations which under the express terms of the charter-party, are undertaken by "the charterer" under that designation alone, and are not therein referred to as being obligations of any other persons interested in the shipment.

    As phrased by Lord Diplock, the question is somewhat narrow, relating as it does to the liability of the holder of the bill of lading for non-performance of obligations undertaken by the charterer alone by the, express terms of the charter-party.

    And just as The Merak and The Annefield were decisions only as to the incorporation of arbitration clauses contained in the respective charter-parties, and the views of Lord Justice Russell and Lord Denning, M.R. were strictly obiter on the point before the House of Lords in The Miramar (see per Lord Diplock at pp. 131 and 683A-B), so it might be argued that the only point actually decided in The Miramar concerned the attempted "verbal manipulation" of the demurrage clause_. in the Exxonvoy 1969 form.

    In fact, the final emphatic passage in Lord Diplock's speech, at pp. 134 and 686D, beginning with the words "I regard it, however, as more important..." seems to me to lay down a rule which applies to all clauses in the incorporated charter-party which are directly germane to the shipment, carriage or delivery of goods and which impose obligations on "the charterers" under that description.

    Even so, an arbitration clause is not, on the authorities, such a clause, and it can be said that The Miramar does not directly affect decisions on the incorporation of arbitration clauses.

    But there is a significant passage in Lord Diplock's reasoning, at pp. 134 and 687. He points out, in effect, that of the 26 printed clauses in part II of the Exxonvoy form (which of course is the sub-charter in this case) only four do not contain express references to contractual rights and obligations of "the charterer" under that designation. I think it is clear that his Lordship must be referring to cll. 21, 22 and 23, although I am not sure which is the fourth; it may be the notice of readiness clause, cl. 6. But it seems clear to me that Lord Diplock was including, in the 22 clauses, cl. 24, which gives an express contractual right to the charterer to choose his arbitrator, and as to these 22 clauses, he says :

    For my part, I can see no business reason for verbal manipulation of that designation in any of those clauses so as to substitute for the words "the charterer" or to include within that expression "the consignee" or "holder of a bill of lading" even if the whole of Part II of Exxonvoy 1969 were set out verbatim in the Exxonvoy bill of lading issued pursuant to Clause 20.

He continues :

    In the instant case, however, every reference to "the charterer" by that designation in Exxonvoy 1969 although it would not necessarily affect directly legal obligations as between the owner and the consignee would nevertheless make perfectly good sense, when incorporated verbatim in the Exxonvoy bill of lading, if it meant the person designated as "the charterer" in the charter-party and no-one else.

And he continues in another significant passage:

    If further reasons were needed (and for my part I do not think that they are) for treating "the charterer" as meaning only the person referred to in the preamble to Exxonvoy 1969 as, the charterer and no-one else, a good semantic reason may be found in the fact that in four clauses in Part II, of which one is clause 8, the demurrage clause itself, and the other three are : cl. 10 "Pumping in and out", cl. 14 "Ice", and cl. 19 "General exceptions clause", there are specific references to "consignee" under that express designation in the very same sentence as a separate reference to "the charterer".

    That again seems to me to say, quite clearly and generally, that "the charterer", when that word is used in the Exxonvoy form, means the person referred to in the preamble, and no one else.

    The Rena K was not referred to in argument or in the leading speech in The Miramar. Nor, for that matter, had it featured as a relevant authority before Mr. Justice Mustill [1983] 2 Lloyd's Rep. 319, or the Court of Appeal [1984) 1 Lloyd's Rep. 142. All this, presumably, for the good reason that the issue in The Miramar case, according to owners' Counsel, was

    ...entirely different from that which arises when considering whether or not an arbitration clause in a charterparty has been incorporated into a bill of lading ([1984] A.C. 676 at p. 678G).

    That is not, I think, consistent with the reasoning of Lord Diplock which I have referred to.

    There is this further point: at p. 64 of the 19th ed. of Scrutton, the learned editors say

... Where the term relates to shipment, carriage or delivery, some degree of manipulation is permissible to make its words fit the bill of lading ...

relying in the footnote on The Annefield, but then they say: "Cf, The Miramar"; perhaps the footnote deserved slightly more forceful treatment than that, but I notice that the decision was reported only very shortly before the 19th ed. went to print "but not where the term relates to other matters" and the footnote there says

    This appears to be implicit in all the recent authorities prior to the Rena K ... where Brandon J. was prepared to manipulate so as to dive effect to the arbitration clause in a charterparty expressly mentioned by the incorporation clause in the bill of lading.

    It seems to me that the reasoning in The Miramar is inconsistent with the decision in The Rena K, and that I ought not to follow Mr. Justice Brandon's decision."

22. It will be noted from this that what is important is to try and discern what was the intention of the parties. Mr. Ma argued that there was no difficulty in the present case as specific reference had been made to the Arbitration in question. He also emphasised the fact that a typed clause would be likely to reflect the true intentions of the parties.

23. I do not think that this is a factor which weighs heavily in the balance. I consider that it is more important to have regard to the overall situation. I think that it is important that the introduction of the arbitration requirement would be in direct conflict with the exclusive jurisdiction clause. I am also concerned at the existence of the other charterparties and the effect that each may have on the other.

24. I think that the amount of manipulation which would be required in the present case is so substantial that it extends beyond what was contemplated in any of the cases which were referred to me.

25. For these reasons I am of the view that even if I had held that Article 7(2) had been complied with I would have decided that there was no binding agreement to arbitrate between these parties.

26. The next question for me to consider is whether I should order a stay by virtue of the exclusive jurisdiction clause. The principles to be applied in determining how the discretion reposed in me is to be exercised were laid down by Brandon J. as he then was in The Eleftheria [1970) P 94. They were conveniently encapsulated by him at p. 123 of "The El Amria" [1981] 2 Lloyds Reports 119.

" The Eleftheria was a decision of my own at first instance. I had been referred in the course of argument to some six authorities on this class of case, including The Fehmarn, and at pp. 242 and 99 I endeavoured to summarize what appeared to me to be the principles established by those authorities. I stated those principles in this way

(1) Where plaintiffs sue in England in breach of an agreement to refer disputes to a foreign Court, and the defendants apply for a stay, the English Court, assuming the claim to be otherwise within its jurisdiction, is not bound to grant a stay but has a discretion whether to do so or not.

(2) The discretion should be exercised by granting a stay unless strong cause for not doing so is shown.

(3) The burden of proving such strong cause is on the plaintiffs.

(4) In exercising its discretion the Court should take into account all the circumstances of the particular case.

(5) In particular, but without prejudice to (4), the following  matters, where they arise, may properly be regarded

    (a) In what country the evidence on the issues of fact is situated, or more readily available, and the effect of that on the relative convenience and expense of trial as between the English and foreign Courts.

    (b) whether the law of the foreign Court applies and, if so, whether it differs from English law in any material respects.

    (c) With what country either party is connected, and how closely.

    (d) Whether the defendants genuinely desire trial in the foreign country, or are only seeking procedural advantages.

    (e) Whether the plaintiffs would be prejudiced by having to sue in the foreign Court because they would: (i) be deprived of security for their claim; (ii) be unable to enforce any judgment obtained; (iii) be faced with a time-bar not applicable in England; or (iv) for political, racial, religious or other reasons be unlikely to get a fair trial."

27. As stated earlier in this judgment this is a cargo claim based on a Bill of Lading where the vessel is question has sunk. The nature of the evidence which will be available at a trial will thus be circumscribed. I accept the validity of the submission made by Mr. Fok that an important element in this litigation will be the way in which the vessel was managed prior to the disaster.

28. In this connection the ships managers are a Hong Kong Company Echoxa. The management agreement was prepared in Hong Kong and provides for Hong Kong jurisdiction to govern the Agreement.

29. I accept that the Defendant is a one ship Panamanian Company. However, it is clear that the persons exercising control over the Defendant are Hong Kong based. There is every reason to suppose that most if not all of the documentation relating to the issues which will be ventilated are presently in Hong Kong and are likely to be in the English language.

30. As against this the proper law governing the Bill of Lading is Japanese law. However, in this connection the Defendant has not raised any issues which would indicate that this is anything other than a simple cargo dispute. It seems unlikely that any complicated or difficult questions of law are likely to arise.

31. The only prejudice which the Plaintiff is able to demonstrate is that if the case is heard in Japan they would be unable to enforce any judgment in Hong Kong as there are no provisions for the reciprocal enforcement of judgments between Hong Kong and Japan. This could prove to be a serious matter in the light of the evidence which indicates that any assets available to satisfy any judgment obtained are likely to be in Hong Kong. It is, however, distinctly my impression that the existence of the Mareva injunction is a material factor so far as the Defendant is concerned. Although this type of injunction is not intended to furnish a security for claims made by Plaintiffs it would be unrealistic not to regard the existence of the injunction as an important matter in the litigation. I do not though consider it to be crucial in the present case because even if I were minded to grant a stay it could always be made conditional.

32. After considering all of the relevant factors and all of the evidence which is available I have come to the conclusion that the Plaintiffs have succeeded in showing that there is a strong cause for not granting a stay.

33. This then leads to the final matter on the stay application, namely, whether a stay should be ordered on the basis of forum non conveniens. I think that it is accepted by both counsel that if I am not prepared to order a stay on account of the exclusive jurisdiction clause it is unlikely that I would do so on this ground. This is correct.

34. The Defendant's application for a stay is accordingly dismissed.

35. That then leaves the question as to whether I should accede to the Defendants application to set aside the Mareva injunction.

36. Both counsel agreed that the Plaintiffs had made out a good arguable case. What is in dispute is whether they have succeeded in demonstrating that there is a real risk that assets will be dissipated if the relief is not granted or continued.

37. Mr. Ma submitted that no burden was imposed on his clients to prove anything. They had not been dishonest or evasive and there was no reason to suppose that any judgment which may be obtained would not be satisfied.

38. I regret that this would seem to me to be something of over simplification of the matter. I am satisfied that what I am required to do is to consider all the facts known to me and then endeavour to decide whether there is indeed a risk of dissipation. Lawton L.J. considered the matter in this way at p. 671 of Third Chandris Shipping Corpn. v. Unimarine S.A. [1979] 1QB 645.

" These appeals, however, are concerned with evidence. In all three cases the charterers say that there is no evidence whatever that there is any danger of their removing out of the jurisdiction such assets, if any, as they may have within it and that the present practice of the Commercial Court in granting Mareva injunctions against any defendant who happens to be a foreigner or a foreign corporation is wrong.

    The present practice of the Commercial Court, as recorded in Mustill J. 's judgment, goes further than what this court contemplated in the first two reported cases. The mere fact that a defendant having assets within the jurisdiction of the Commercial Court is a foreigner or a foreign corporation cannot, in my judgment, by itself justify the granting of a Mareva injunction. There must be facts from which the Commercial Court, like a prudent, sensible commercial man, can properly infer a danger of default if assets are removed from the jurisdiction. For commercial men, when assessing risks, there is no commercial equivalent of the Criminal Records office or Ruff's Guide to the Turf. What they have to do is to find out all they can about the party with whom they are dealing, including origins, business domicile, length of time in business, assets and the like; and they will probably be wary of the appearances of wealth which are not backed up by known assets. In my judgment the Commercial Court should approve applications for Mareva injunctions in the same way. Its judges have special experience of commercial cases and they can be expected to identify likely debt dodgers as well as, probably better than, most businessmen. They should not expect to be given proof of previous defaults or specific incidents of commercial malpractice. Further they should remember that affidavits asserting belief in, or the fear of, likely default have no probative value unless the sources and grounds thereof are set out: see R.S.C., Ord. 41, r.5(2). In my judgment an affidavit in support of a Mareva injunction should give enough particulars of the plaintiff's case to enable the court to assess its strength and should set out what inquiries have been made about the defendant's business and what information has been revealed, including that relating to its size, origins, business domicile, the location of its known assets and the circumstances in which the dispute has arisen. These facts should enable a commercial judge to infer whether there is likely to be any real risk of default. Default is most unlikely if the defendant is a long established, well known foreign corporation or is known to have substantial assets in countries where English judgments can easily be enforced either under the Foreign Judgments (Reciprocal Enforcement) Act 1933 or otherwise. But if nothing can be found out about the defendant, that by itself may be enough to justify a Mareva injunction.

    The affidavits used by all three owners in support of their ex parte applications for Mareva injunctions did not, in my judgment, give sufficient information to enable the commercial judge to exercise his discretion; but by the time Mustill J. had to consider whether the injunctions should be discharged and even more so when the cases got to this court there was enough evidence to enable decisions to be made on the merits.

    What this evidence came to was this. The charterers, Unimarine, presented themselves to the court through counsel as a large, prosperous corporation connected with even larger corporations. But what lies behind this image? They are registered as a corporation in Panama but they have no assets there. They have a large number of ships on charter, a substantial number of which are long time-charters. These charters may be profitable; but they may be commercial millstones round Unimarine's neck. There is no evidence of the existence or location of any specific assets. There is no evidence of the nature of the connection which they say they have with larger corporations. None of the deponents who have sworn affidavits on their behalf is one of their officers. Fairly recently they have been tardy in meeting an arbitration award; and in the case of the Genie, for no apparent reason, they have failed to pay a sum of £48,000. In my judgment on this evidence all three owners reasonably feared difficulty in getting paid if they succeeded in obtaining awards in their disputes with the charterers. Their fears may be groundless. The charterers could have shown both Mustill J. and this court solid evidence. For their own reasons they have chosen not to do so. In my judgment the charterers have presented an image of themselves made up of words, not facts.

    The only evidence which the owners produced of the existence of assets within the jurisdiction was that the charterers had an account with an English branch of a Luxembourg bank. The charterers claim, and their bankers support them in this, that when the Mareva injunction was granted this account was overdrawn. They submitted that without proof of assets within the jurisdiction a Mareva injunction should not be granted. I agree: but it does not follow that the existence of an overdraft establishes that there are no assets within the jurisdiction. Large overdrafts, such as commercial undertakings have, are almost always secured in some way. The collateral security may represent substantial assets. The charterers' evidence makes no reference to the existence or absence of collateral security. This omission leads me to conclude that the existence of the bank account, albeit in overdraft, is some evidence of assets within the jurisdiction."

39. I find myself largely in agreement with Mr. Fok's submission that this case was a classic Mareva situation.

40. As stated earlier the Defendant is a Panamanian one ship Co. It is unlikely to continue trading now that the vessel has sunk. The main asset is likely to be the proceeds of the Hull Insurance policy. I do not think that the existence of P & I cover is likely to make much difference in the overall circumstances of the case. I consider that the Plaintiffs fear that assets may be dissipated is well founded and I accept that they have discharged the burden on them to show this. I would not be prepared to order that the injunction be discharged.

41. Both counsel addressed interesting and helpful submissions to me on the question as to whether the court has jurisdiction to maintain an injunction when proceedings are being conducted in some other jurisdiction. As I have dismissed both of these summonses I do not consider that it would be helpful for me to make a determination on this question.

42. I will hear the parties on costs.