2004 PLP 695 (CLD)

Loannis (or John) Baxevanos. Loannis (or John) Baxevanos. Registered ostensible) owner: Assimina Maritime Ltd. Andros Maritime Ltd. Beneficial owners: Adamantions Polemis and Spyridon Polemis. Adamantions Polemis and Spyridon Polemis. Directors John Baxevanos. John Baxevanos. Business Address 89, Akti Miaouli Piraeus, Greece. 89, Akti Miaouli Piraeus, Greece. P and I Insurer American Steamship

20. To further strengthen the fact that the commonality of certain factors can lead to the common ownership of the defendants Nos. 1 and 2, certain portions at pages 4 and 5 of Maritime Law in South Africa supra which read as under were referred:‑‑ " It is not possible to establish with certainty who it is that beneficially owns any particular vessel, the South African Courts will decide on a balance of probabilities. This means that there are a number of ways in which a person wishing to establish an associations can go out the task. It may be sufficient, for instance, to demonstrate cross‑mortgages between vessels or that a particular person has been the Signatory consistently to documents, which would be relevant to the control of the affairs of a company or the like. In order to establish an association between vessels, it is often not possible to obtain direct evidence of share holdings of holding and owning companies. In those cases, a picture must be created of the association to satisfy the Court on probabilities that the guilty ship and vessel to be arrested are associated. Some typical evidence other than common shareholders, which can assist to create such picture, would include:‑‑ (1) Cross‑collateralization vessels. (2) Common signatories to financing or security documentation. (3) Common signatories to important agreements (e.g. M.O.A.s ). (4) Common attorneys‑in fact. (5) Similar or related ship names. (6) Common guarantors of mortgage finance obligations. (7) Fleet entries with P & I Clubs. (8) Common manager. (9) Common operators. (10) Common Directors and officers. (11) Common funnel or fleet markings. (12) Public statements about ownership or group financial results. (13) Common nominee shareholders. (14) Shares street business addresses and telephone numbers. (15) Public data‑base information (e.g. Lioyds. Fairplay. etc.). (16) Investigator's evidence (e.g. MRC reports). (17) State‑owned enterprises. (18) Same‑fleet vessels substituted in charter‑parties. None of these on its own would necessarily be sufficient to discharge the onus of proof, but the more that are available the greater the probabilities of association. There is no hard and fast rule about what is sufficient and each case will depend on its own facts."

21. A perusal of the above common factors of the defendants Nos. 1 and 2 and the test laid down in Maritime Law in South Africa and recorded herein above gives an impression supporting the contention of the plaintiffs. However, at page (6) of Principles of Maritime Law supra referred to by Mr. Naeem which read as under:‑‑ "Under English law, a ship is notionally divided into 64 shares or parts. No one has yet adequately traced the origins of this figure. It is of little importance and therefore, needs no further comment. Statutory confirmation of this structural arrangement is to .be found in Regulation 2(5) of the Merchant Shipping (Registration of Ships) Regulations 1993, which reads:‑‑ (a) The property in ship shall be divided into 64 shares; (b) not more than 64 person shall be entitled to be registered at the same time as owners of any one ship; (c) a person shall not be entitled to be registered as owner of a part of share; but any number of persons not exceeding five may be registered as joint owners of a ship or of any share or shares in a ship; (d) Joint owners shall be considered as constituting one person only as regards the person entitled to be registered and shall not be entitled to dispose in severally of any interest in a ship or in any share in a ship in respect of which they are registered." "What must be clearly understood is that shares in a ship shares in a company that owns a ship are two distinct and unrelated concepts. The individual shareholders of a company do not own the ship or any part of it, even if the ship is the only asset of it and if the sole and only purpose of the company itself being in existence is to own, manage, control and operate that one ship."

22. This view is supported by Evpo Agnic supra referred by Mr. Naeem wherein para (1) at page 415 ibid Court while answering to the arguments of the plaintiff observed as under:‑‑ " In real commercial life registered owners, even when they are one ship companies, are not bare legal owners. They are both legal and beneficial, owners of all the shares in the ship and any division between legal and equitable interests occurs in relation to the registered owner itself, which is almost always a juridical person. The legal property in its shares may well be held by and the equitable property by B, but that does not affect the ownership of the ship or of the shares in that ship. They are the legal and equitable property of the company." (Italic for emphasis).

23. In view of the above, the irresistible conclusion is that the defendants Nos.3 and 4 i.e. the companies are the respective registered as well as beneficial owners of the defendants Nos.1 and 2 and so the beneficial owners thereof. Being the companies, defendants Nos.3 and 4 have their independent legal entities and can own and disown their properties. The natural persons own the shares of the company whereas the company own the properties. Even if it is traced out as to who owns defendants Nos. 3 and 4 the legal position will be that defendants Nos.3 and 4 are the owners of the defendants Nos. 1 and 2 and not persons/ individuals who own the shares of defendants Nos. 3 and

4. Unveiling of the incorporation would only be required if there is an allegation of fraud and deceit on the part of any of the defendants Nos. 1 to

4. In the present case the plaintiffs have not made any such allegation. The plaintiffs also admitted that the defendants Nos.3 and 4 were the registered owners of the defendants Nos. 1 and

2. In presence of the admission on the part of the plaintiffs and the admission by defendants Nos.3 and 4 that they are the registered owners of the defendants Nos.1 and 2 no further investigation would be required to ascertain the ownership /beneficial ownership of the defendants Nos. 1 and

2. It will not be just and legal to discard and ignore the admitted position and rely upon the common factors of the defendants Nos. 1 to 4.

24. The upshot of the above is that the defendant No. 2 is not the sister ship of defendant No. 1, therefore, the application pertaining to defendant No.2 is dismissed with no order as to cost.

25. The order of arrest of defendant No.2 is vacated.

26. As far as the arrest order of defendant No. 1 and its implications are concerned those are not discussed here for the reason that it has been turned into a wreck/scrap and has been ordered to be sold as observed above. This question is left open to be decided at the time of the final hearing of the suit. M.H./C‑3/K Order accordingly.