[1978] 1 All ER 1169

Early in 1973 a Cuban state enterprise, Cubazucar, agreed to sell to a Chilean company a quantity of sugar to be delivered in monthly instalments between January and October 1973. The August instalment was despatched on two ships, the Playa Larga and the Marble Islands. Both ships were under voyage charter to Cubazucar from Mambisa, another Cuban state enterprise, which was substantially under the control of the Cuban government. Mambisa was described in the charterparty as the owner of the Playa Larga and the demise charterer of the Marble Islands. On 11 September, while the Playa Larga was in the course of discharging her cargo at Valparaiso, Chile, and the Marble Islands was still on the high seas bound for Chile, the government of President Allende in Chile, which had been on friendly terms with the Cuban government, was overthrown and replaced by a new government formed by President Pinochet. The Cuban government found the new regime in Chile politically repugnant. It decided to have no further commercial dealings with Chile and diplomatic relations between the two countries were severed. The Cuban government ordered the Playa Larga to leave Valparaiso immediately and the Marble Islands not to go to Chile. The Playa Larga returned to Cuba with the remainder of her cargo and the Marble Islands went to North Vietnam. The cargo on both ships was then disposed of by Mambisa. In September 1975 Mambisa, acting on behalf of the Republic of Cuba, took delivery at Sunderland of a new ship, the Congreso. She was an ordinary trading ship registered in the name of the Republic of Cuba. She was operated and managed by Mambisa within limits permitted by the Cuban government. After Mambisa had taken delivery of her, the owners of the cargo lately laden on board the Marble Islands brought an action in rem against the owners of the Congreso claiming, inter alia, damages for conversion and/or breach of contract for non-delivery of the cargo. The affidavit in support of the warrant of arrest identified Mambisa as the defendant and, after stating that the action was1169 brought pursuant to s 3(4)^a of the Administration of Justice Act 1956, claimed that Mambisa was at the time the cause of action arose the disponent owner or charterer or in possession or control of the Marble Islands and would be liable to the cargo owners in an action in personam, and further claimed that Mambisa was at the date of the issue of the writ the beneficial owner of the Congreso as respects all the shares therein. The Congreso was arrested at Sunderland. Thereafter two notices of motion were issued seeking an order that the writ and all subsequent proceedings be set aside. The first notice of motion was issued by the Republic of Cuba alleging that the Congreso was the property of the republic, a recognised foreign independent state, and that the English courts should not implead a foreign sovereign state by permitting the arrest of an ordinary trading ship in its ownership where the claim on which the arrest was based either arose from an exercise of sovereign or public or governmental power, prerogative or right, or had no substantial connection with the territorial jurisdiction of the English courts. The second notice of motion was issued by Mambisa, alleging that the Congreso was not beneficially owned by it as respects all the shares therein, within the meaning of s 3(4) of the 1956 Act. The owners of the cargo lately laden on board the Marble Islands brought a second action in rem against the owners of the Congreso similar to the first action but omitting the claim for breach of contract and alleging that the Republic of Cuba would be liable to them in an action in personam. The Republic of Cuba issued a notice of motion in the same terms as that issued in the first action. The owners of the cargo lately laden on board the Playa Larga brought an action in rem against the owners of the Congreso claiming, inter alia, damages for conversion and/or breach of contract, and alleging that either Mambisa or the Republic of Cuba would be liable to them in an action in personam. Notices of motion were issued in respect of that action by the Republic of Cuba and by Mambisa in the same terms as those issued in the earlier actions. At the hearing of the motions, the cargo owners contended, inter alia, that in the circumstances the Republic of Cuba was not entitled to rely on the doctrine of sovereign immunity.

Held - (i) Where a foreign sovereign state claimed immunity from the court's jurisdiction on the ground of its alleged interest in the property which was the subject of the proceedings it did not have to prove its title to the property even in the case of the arrest of an ordinary trading vessel; it need only show that its claim was not merely illusory nor founded on a title manifestly defective. On the evidence the republic's claim to ownership was not illusory or manifestly defective: the republic had been at all material times the owner of the Congreso. Accordingly, since the republic was at the time when the first action was brought the owner of the Congreso and since no claim in personam was advanced against it, it was entitled to have the writ and all subsequent proceedings in the first action set aside (see p 1185 g to p 1186 c, p 1187 j to p 1188 a and p 1189 h j, post); Juan Ysmael & Co Inc v Government of the Republic of Indonesia [1954] 3 All ER 236 applied.
   (ii) In international law a foreign sovereign state was entitled to invoke the doctrine of sovereign immunity in cases where an action in rem was brought against an ordinary trading ship owned by it if the act as a result of which the claims in the action arose was of its own character a governmental act, notwithstanding that it had occurred in the context of a commercial transaction. Since international law was part1170 of English law, by virtue of the doctrine of incorporation, it had to be applied by the court. On the evidence the claims of the cargo owners arose from the governmental acts of the Republic of Cuba in preventing, on grounds of foreign policy, the delivery to the cargo owners of the cargo on board the Marble Islands and the balance of the cargo on board the Playa Larga. It followed that the republic was entitled to invoke the doctrine of sovereign immunity in all three actions and to have the writs and all subsequent proceedings set aside (see p 1184 g to j, p 1190 e, p 1192 j, p 1194 c d f, p 1195 d and p 1196 g to j, post); The owners of the ship Philippine Admiral v Wallen Shipping (Hong Kong) Ltd [1976] 1 All ER 78 and Trendtex Trading Corpn Ltd v Central Bank of Nigeria [1977] 1 All ER 881 applied: The Porto Alexandre [1918-19] All ER Rep 615 not followed.
   (iii) On the true construction of s 3(4) of the 1956 Act, the words 'beneficially owned as respects all the shares therein' referred only to equitable ownership, whether or not it was accompanied by legal ownership; they did not include possession and control, without ownership, however full and complete such possession and control might be. It followed that, since Mambisa was not the legal or equitable owner of the Congreso at the time when the first and the third actions were brought but was merely in possession of her as operator and manager subject to control by the Cuban government, the cargo owners were not entitled to invoke the Admiralty jurisdiction of the High Court by actions in rem against her in which Mambisa was identified as the defendant under s 3(4). Accordingly the writ and all subsequent proceedings in those two actions would be set aside on Mambisa's motions (see p 1189 a to c, p 1200 b, p 1201 b to e p 1202 f and p 1204 b c g and h, post); The Andrea Ursula [1971] 1 All ER 821 not followed.
   Per Curiam. It is difficult to accept that, in an appropriate case, the English courts should not assert jurisdiction by an action in rem against a state-owned ordinary trading ship where the claim on which the arrest is based has no substantial connection with the territorial jurisdiction of the English courts, e g in a case arising from a collision with another foreign ship on the high seas or in a case concerned with the carriage of cargo pursuant to a contract which has no connection with the territorial jurisdiction of the English courts. Jurisdiction asserted by means of an arrest of a ship is not an exorbitant jurisdiction. By allowing his ships to trade, a foreign sovereign must be taken to have exposed his ships to the possibility of arrest (see p 1197 g to p 1198 a, post); dicta of Lord Denning in Rahimtoola v Nizam of Hyderabad [1957] 3 All ER at 461, 464 and in Thai-Europe Tapioca Service Ltd v Government of Pakistan [1975] 3 All ER at 966, 967 considered.

Notes
For sovereign immunity from suit, see 8 Halsbury's Laws (4th Edn) para 410, and for cases on the subject, see 1 Digest (Repl) 54-61, 406-450.
   For sovereign immunity in Admiralty proceedings, see 1 Halsbury's Laws (4th Edn) para 304, and for cases on the subject, see 1 Digest (Repl) 128-131, 143-166.
   For the Administration of Justice Act 1956, s3(4), see 1 Halsbury's Statutes (3rd Edn) 26.

1171

1172

1173

Motions
By a writ issued on 9 September 1975 the owners of the cargo lately laden on board the vessel Marble Islands ('the cargo owners') brought an action in rem against the owners of the vessel I Congreso del Partido ('the Congreso'). The writ claimed the return of the cargo or its value and damages for its detention, alternatively damages for the wrongful conversion thereof and/or damages for breach of duty and/or contract in respect of the non-delivery of the cargo. The affidavit in support of the warrant of arrest identified the defendants as Empresa de Navegaci—n Mambisa ('Mambisa') and, after stating that the action was brought by the cargo owners pursuant to s 3(4) of the Administration of Justice Act 1956, claimed that Mambisa were at the time when the cause of action arose the disponent owners or charterers or in possession or control of the Marble Islands and would be liable to the cargo owners in an action in personam and were also at the date of the issue of the writ the beneficial owners of the Congreso as respects all the shares therein. The Congreso was arrested at Sunderland on 12 September. By notice of motion dated 25 September, the Republic of Cuba applied for an order that the writ and all subsequent proceedings be set aside on the grounds that the Congreso was the property of the republic, a recognised foreign independent state, and that the government of Cuba had declined to sanction the institution of proceedings in the Admiralty Court. By notice of motion, also dated 25 September, Mambisa applied for an order that the writ and all subsequent proceedings be set aside on the ground that the Congreso was not at the time when the action was brought beneficially owned as respects all the shares therein by them. The cargo owners were given leave to issue a writ in a second action in rem against the owners of the Congreso and to arrest the Congreso. They claimed the return of the cargo or its value and damages for its detention, alternatively damages for the wrongful conversion thereof and/or damages for breach of duty with respect thereto, and alleged that the Republic of Cuba would be liable to them in an action in personam. By a notice of motion dated 6 November, the Republic of Cuba applied for an order that the writ and all subsequent proceedings be set aside on the same grounds as in the first action.
   By a writ dated 12 December, the owners of the cargo lately laden on board the vessel Playa Larga brought an action in rem against the owners of the Congreso, claiming the return of the balance of the cargo carried on board the vessel or its value and damages for its detention, alternatively damages for breach of duty and/or contract in respect of the non-delivery and/or misdelivery of the balance of the cargo. The affidavit in support of the warrant of arrest claimed that Mambisa or the Republic of Cuba were the owners or charterers or in possession or control of the Playa Larga in respect of the voyage and that, by reason of the Playa Larga sailing away with the balance of the cargo due for delivery in Chile, the cargo owners had a claim for the loss of such cargo by detinue, conversion or other breach of duty or alternatively for breach of contract under the bills of lading. By notices of motion dated 5 January 1976, the Republic of Cuba and Mambisa applied for an order that the writ and all subsequent proceedings be set aside on the same grounds on which they had relied in their earlier notices of motion. The facts are set out in the judgment.

28 January 1977. The following judgment was delivered.

ROBERT GOFF J read the following judgment. I have before me motions to set aside the writs and all subsequent proceedings in three actions in rem, all brought against the ship or vessel I Congreso del Partido ('the Congreso'). In all three actions, the Republic of Cuba ask for the writ and subsequent proceedings1174 to be set aside on the ground that the Congreso is the property of the republic, a recognised foreign independent state, and that the government of the republic declines to sanction the institution of these proceedings in this court. In two of the actions Empresa de Navegaci—n Mambisa ('Mambisa'), which is identified as defendant in those proceedings, asks for the writ and subsequent proceedings to be set aside on the ground that the Congreso was not at the time when these actions were brought beneficially owned by Mambisa as respects all the shares therein.
   These motions raise issues of some importance and complexity, and the proceedings have taken a somewhat unusual course. This judgment will inevitably be of some length. I propose to deal with the matter as follows. I shall first set out the background facts which are prima facie established by the affidavit evidence before me. I shall next describe the nature of the proceedings, and the course which they have taken. I shall then consider the status of the decision of the Court of Appeal in The Porto Alexandre and make my findings with regard to the ownership, possession and control of the Congreso. I shall then consider the motions of the Republic of Cuba. Finally I shall consider the motions of Mambisa.

The background facts
   In February 1973, when the government of President Allende was still in power in Chile, a contract was entered into between Empresa Exportadora de Azucar ('Cubazucar'), a Cuban state enterprise for the export of sugar, and Industria Azucarera Nacional SA ('Iansa'), a Chilean company in which a majority of the shares are held by a Chilean state trading corporation known as Corfo, for the sale of Cuban sugar by Cubazucar to Iansa. The contract was dated 28 February 1973, and under it Cubazucar agreed to sell to Iansa 128,395 metric tons of Cuban raw sugar, five per cent more or less at seller's option, at a price of US $176á53 per metric ton c & f free out Chilean port. Payment was to be made in US dollars under a letter of credit. The contract incorporated the rules of the Sugar Association of London. By virtue of those rules, the contract contained a London arbitration clause, submitting disputes to the Sugar Association of London for solution in accordance with the arbitration rules of the association. The arbitration rules provided that, for the purpose of all proceedings in arbitration, the contract should be deemed to have been made in England, England should be regarded as the place of performance and all disputes should be settled according to English law.
   The contract provided for monthly shipments between January and October 1973. Following a number of earlier shipments, two shipments were made in August 1973. The first of these shipments, of about 10,500 metric tons, was made on the Playa Larga which sailed from Cuba on some unspecified date in August; the second shipment, of about 11,000 metric tons, was made on the Marble Islands which sailed from Cuba on 30 August. The Playa Larga flew the Cuban flag and was chartered to Cubazucar, under a voyage charter in the Havana Cuba Sugar form, by Mambisa, another Cuban state enterprise, described in the charterparty as the owners of the vessel. In fact, the vessel was probably owned by the Republic of Cuba but was in the possession of and operated by Mambisa. The Marble Islands, at the time of the shipment, flew the Somali flag and was owned by Blue Seas Shipping Co Ltd, a Liechtenstein corporation; she was under demise charter to Mambisa, and Mambisa as disponent owners had sub-chartered her to Empresa Cubana de Fletes (yet another Cuban state enterprise) on behalf of Cubazucar, under a voyage charter again in the Havana Cuba Sugar form. Both voyage charters were typical commercial contracts of this type, making provision for the voyage, for freight and for demurrage, and incorporating the United States clause paramount. Although both charters were in the English language and provided for payment of freight and demurrage in sterling, neither was governed by English law; indeed both charters contained a1175 Cuban arbitration clause and, by English choice of law rules, were probably governed by Cuban law.
   Bills of lading were issued in respect of both shipments. They were in Mambisa's standard form, but were in each case signed by the master and contained the following provision:

Mambisa were however in possession of both ships. They were in possession of the Playa Larga as operators and managers; but the master may have had authority from the Cuban government, the owners of the ship, to sign bills of lading on behalf of the government, in which event the bill of lading contracts in respect of the cargo on that ship could have taken effect as contracts with the government. In the case of the Marble Islands, however, Mambisa were in possession as demise charterers, and it is highly unlikely that the master had the authority of the Liechtenstein owners to sign the bills of lading on their behalf, so that the bill of lading contracts in respect of the cargo on that ship probably took effect as contracts with Mambisa as disponent owners. The bills are in the English language and are typical bills of lading, incorporating the United States Carriage of Goods by Sea Act 1936, and limitations and exceptions derived from the law of the United States. The bills of lading are not governed by English law; by English choice of law rules, the governing law was probably the law of Cuba. The bills each contained (in cl 2) a deviation clause in very wide terms and (in cl 8) a lien clause.
   The bills of lading were negotiated to Iansa, payment of the price being made (as I shall describe hereafter) under letters of credit which had previously been established under the sale contract. Iansa in turn sold both shipments on to Compania de Refineria de Azucar de Vina del Mar ('Crav'), a Chilean private stock company in which the shares are held by individual stockholders.
   On 11 September 1973 a revolution took place in Chile. The government of President Allende was overthrown, and was replaced by a new government formed by President Pinochet. At the time when the revolution took place, the Playa Larga was in the course of discharging her cargo at the Chilean port of Valparaiso; rather more than 2,500 metric tons of her cargo had already been discharged. The Marble Islands was on the high seas, on her way to Chile. The government of President Allende had been on friendly terms with the Cuban government. At the time of the revolution some shooting took place in the vicinity of the Cuban Embassy at Santiago. On the affidavit evidence before me there was a dispute (which I am unable to resolve) whether this shooting was initiated by persons within the Cuban Embassy or by members of the Chilean armed forces. At all events, the Cuban ambassador and all members of his embassy staff left Chile at the ambassador's request. They (together with other Cuban nationals in Chile and certain other persons) proceeded to Santiago airport on the evening of 12 September in a convoy, escorted by Chilean military personnel, and left for Peru in a Soviet aircraft early in the morning of 13 September. Diplomatic and consular relations between the two countries were severed. There was a dispute on the affidavit evidence (which again I am unable to resolve) as to the precise circumstances in which the severance of relations took place, it being stated by a Chilean witness that the departure of the Cuban mission marked the close of relations between Cuba and Chile, as was recognised by a formal note from the new Chilean government which was handed to the Cuban ambassador at the airport before his departure, whereas it was stated by the Cuban ambassador that he made his decision to depart in consequence of a public announcement on 11 September by the new Chilean government that it had severed diplomatic relations with Cuba.
   Although shooting took place in Santiago on 11 September, the situation at Valparaiso remained calm, the new government having established control early that1176 morning without being challenged. Throughout the period from 11 September onwards, ships from Eastern European countries continued to arrive and discharge their cargoes at, and sail from, Chilean ports without trouble. Five such ships which had arrived at Chilean ports (including three at Valparaiso) before 11 September remained there and sailed on dates between 12 and 20 September; 12 such ships arrived at Chilean ports (including five at Valparaiso) during the remaining days of September after the revolution. On 11 September the Playa Larga was lying at anchor in the harbour at Valparaiso, having been shifted from her discharging berth on the previous day to make way for a priority cargo of raw material to be discharged from a United States merchant ship. There was some dispute on the affidavit evidence as to the events which then occurred.
   The following account is taken from the affidavit evidence of the Chilean witnesses. Early in the morning of 11 September, the harbour patrol took back to the Playa Larga three members of her crew, who had stayed on shore the night before. At about 11.00 hours a harbour pilot (Commander Videla) boarded the Playa Larga to shift her to a new anchorage within the harbour; this operation was duly carried out. When he went on board Commander Videla was accompanied by another pilot and by an officer of the Maritime Administration, Lieutenant Vidal, who informed the master that she should remain at her anchorage until further orders, but that she would be returning shortly to her berth to complete her discharge. On the same occasion another member of the crew, who had failed to return in time after shore leave the previous evening, was returned to the ship. At about 16.30 hours, Lieutenant Vidal again visited the ship to check how much cargo remained to be unloaded, and to repeat the order that the vessel was not to leave her anchorage pending return to her berth to complete her discharge. No guard was placed on board the ship. Nevertheless later that evening, at about 18.00 hours, in defiance of such orders and contrary to Chilean law (which like other ports in the world required port clearance before departure of a ship), and ignoring repeated radio telephone warnings to stop, the Playa Larga weighed anchor and sailed from the port. She was pursued by a helicopter and by a destroyer, the Blanca Encelada, which attempted to bring the vessel back to port by firing warning shots; however she persisted in her course, and the destroyer returned to port, permitting her to proceed on her way. Those on board the destroyer did not think that she had suffered any damage; if she did it was accidental. If the destroyer had wished to stop the vessel by disabling her, she could easily have done so. All the events occurred within the limits of Chile's maritime jurisdiction, which extends for 200 miles from her coast.
   The affidavit evidence of the Cuban witnesses concerning these events was to the following effect. On 11 September, it was learned in Havana that a right wing coup had started in Chile, in which the Cuban embassy and Cuban nationals had come under attack. The Ministry of Merchant Marine and Ports became concerned about the safety of the Playa Larga, which was then discharging her cargo at Valparaiso; a decision was taken that for her safety she should leave Chilean waters, and this decision was communicated to Mambisa. There was no evidence of any prior communication with the vessel, about the state of affairs at Valparaiso or at all, before this decision was taken. The ship's log, which was verified by the master on affidavit, recorded that at 16.30 hours that day the ship received a cable from Mambisa ordering the ship to proceed with her exit from Valparaiso. The ship's log went on to record that, at a meeting of the ship's officers held half an hour later, the officers unanimously approved the decision and order to leave the port immediately 'for lack of security for the ship and for the crew, and for the country is in civil war and for the local authorities do not have total control of the situation'. The decision was recorded as having been taken 'in consideration of the fact that the naval authorities have detained and mistreated on land the chief only because he is Cuban and also because they have expressed a deep hatred for our country and our government'. No prior entry in the log refers to any disorder in the port, nor is there any prior entry relating to the return1177 of any member of the crew to the ship, nor to any member of the crew having been in any way mistreated. The ship weighed anchor at 17.35 hours and sailed soon after. No reference is made in the log to any warning not to leave. There follow a series of entries, describing numerous attacks on the ship by aircraft and by a Chilean warship (the destroyer Blanca Encelada) with planes flying by, one of which fired at the ship with a machine gun; helicopters firing bullets and depth charges very close to the ship, one depth charge exploding in the prow; the warship firing at the ship at various times between 20.43 hours and 22.33 hours, the ship being hit on four occasions; the warship trying to collide with the ship, but failing to do so; finally, other moves having failed, the warship withdrawing towards the Chilean coast. On the following day, inspection of the ship revealed holes in hold no 1. The Cuban Ministry of Merchant Marine and Ports decided that the Marble Islands, which was nearby, should escort the Playa Larga to Peru where an appreciation of the situation could be made in safety, and where emergency repairs could be carried out to the Playa Larga.
   At all events, the Playa Larga met the Marble Islands at sea at 22.00 hours on 12 September. They proceeded together to the Peruvian port of Callao, which they reached on the afternoon of 15 September. Meanwhile the Chilean Embassy in Lima received instructions to have the cargoes on both vessels discharged at Callao together with certain unloading equipment belonging to Crav which was still on board the Playa Larga. Captain Alarcon, the Chilean naval attache in Peru, was given the task of seeing that this was done. The Peruvian authorities declined to assist, because they had not then recognised the new Chilean government. However the Swiss ambassador, at the request of the Chilean chargŽ d'affaires, approached the Cuban ambassador in Lima; after meeting him, the Swiss ambassador informed the Chilean embassy that the Cuban embassy had told him that under no circumstances would the Cuban ships unload the Chilean cargo in Callao, both captains having categorically refused to do so. There were ample facilities for discharging the cargo at Callao.
   On 20 September the Playa Larga left Callao with the remainder of her cargo and the unloading equipment still on board. Before she sailed a Lloyd's surveyor examined the ship, and discovered two shell holes in her shell plating, one on the port side and one on the starboard side, with some damage also to her lower 'tween-deck and upper 'tween-deck plating, and to her central longitudinal bulkhead. Temporary repairs were carried out at a cost of US $2,200 to enable her proceed to Cuba. She returned to Cuba, presumably via the Panama Canal, and discharged her cargo there on 5 October. Subsequently, on 1 October 1974, a director of Mambisa, purporting to act on behalf of the lawful owners of the cargo, sold the cargo to the Cuban Directorate of Cereals and Flour for domestic consumption, claiming that he was acting in accordance with the Cuban Commercial Code and cll 1 and 8 of the bills of lading.
   On 27 September 1973 the Marble Islands left Callao bound for Balbao in Panama, on her way to Cuba. She reached Balbao; but following an attempted arrest of the ship there, she abandoned her attempt to pass through the Panama Canal and headed for North Vietnam. She reached Haiphong on 6 November. On arrival there, her cargo was discharged. By a sale contract dated 22 November, the master of the Marble Islands acting on behalf of Mambisa sold the cargo to another Cuban state enterprise, known as Alimport. The cargo was then presented by Alimport to the people of Vietnam as a gift. The master, in discharging the cargo at Haiphong and in selling the cargo to Alimport, claimed that he was acting in accordance with the Cuban Commercial Code and cll 2 and 8 of the bills of lading. On 13 October 1973, while the Marble Islands was on her way to Haiphong, she was purchased from her Liechtenstein owners by the Republic of Cuba.
   I am satisfied, on the evidence before me, that the balance of the cargo on the Playa Larga and the cargo on the Marble Islands could in fact have been discharged without any difficulty at either Valparaiso or at Callao. I am further satisfied that the1178 failure or refusal of the masters of the ships to discharge the cargo at Callao was the result of a political decision taken by the Cuban government. So far as the events at Valparaiso are concerned, I am to some extent faced with conflicting affidavit evidence. Clearly, however, the decision that the Playa Larga should sail from Valparaiso without completing her discharge was a decision taken by the Cuban government, as was the decision that the Marble Islands should proceed to Callao without calling at Valparaiso. My conclusion is that the decision by the Cuban government that the Playa Larga should leave Valparaiso was taken out of concern for the safety of the ship, in the uncertain state of affairs following reports of the revolution and of the events in Santiago; and that the government's decision that the Marble Islands should not enter Valparaiso was taken on the same ground with the additional factor that reports may by then have been received in Havana of the action taken by the Chilean destroyer when the Playa Larga left the port. On the other hand, I am satisfied that the decision not to discharge the cargoes at Callao and to return them to Cuba was, despite assertions in the documents that the cargoes were subsequently discharged and disposed of in accordance with cll 2 and 8 of the bills of lading, taken on political grounds, viz that the Cuban government refused to have any further commercial dealings with Chile under a regime which it found politically repugnant. Dr Amat, who at the relevant time held the office of director in charge of the Department of Regional Policy IV (Latin America) in the Cuban Foreign Ministry, stated in his affidavit that, by virtue of the new Chilean regime deciding to terminate its diplomatic and consular relations with the Cuban government (which decision was taken at latest on 12 September), the diplomatic, consular and commercial relations between both countries were broken off in fact and in law; and that-

   Furthermore on 27 September 1973 there was enacted in Cuba Law No 1256, which was expressed to take effect as from 11 September 1973. The law recited the events in Chile, referring to the events of 11 September as a 'coup of a fascist and pro-imperialist character which, through violence, exerted with merciless cruelty, has prevented the continuity of the legitimate government of that nation' and referring to the new Chilean government as a 'military junta which pretends to set itself up as Government of the Republic of Chile [but] lacks the legitimate title to do so'. The law then recited the resolution of the Cuban government not to recognise the 'military junta' or any other body which succeeded it in the future as a 'mere substitute thereof', and the need to freeze certain property until a legitimate government, acknowledgeable as such, emerged in Chile. The law further recited the damage suffered by the Cuban embassy and embassy personnel and by the Playa Larga, and that the property so frozen should constitute collateral for the compensation for such damages. Articles 1 and 2 of the law then provided as follow:

   Although this law was not passed until 27 September 1973, the Playa Larga sailed from Callao bound for Cuba on 20 September and the Marble Islands sailed for the same destination on 27 September. The decision to refuse discharge at Callao and to return the cargoes to Cuba must therefore have been taken before Law No 1256 was passed; but I am satisfied that such refusal was due to a direction by the Cuban government, made as a result of a decision of policy, arising from their detestation of the new Chilean regime, to have no further commercial dealings with Chile until a new government more acceptable to the Cuban government came into power in Chile. The same policy is reflected in Law No 1256; although on a strict construction there may be some doubt whether that law, concerned as it is with the freezing of assets located or enforceable in Cuban territory in which the Chilean state was directly or indirectly interested, could have been effective to authorise the refusal to discharge the cargoes at Callao and the decision then taken to return them to Cuba, having regard to the facts that (1) neither of the cargoes was in Cuban territory unless a Cuban ship is to be regarded as such, (2) the Marble Islands was not then a Cuban ship, and (3) the property in the cargoes may have passed from Iansa to Crav, a company which was owned by private stockholders.
   The proceeds of sale of both cargoes were credited to accounts at the National Bank of Cuba in favour of Iansa or whoever might be the lawful owners of the cargoes, but with express reservations on behalf of Mambisa in respect of expenses, freight or other amounts which might be due. Presumably this deposit was intended to be made in pursuance of the provisions of Law No 1256.
   Both the cargo on the Playa Larga and the cargo on the Marble Islands had been paid for by the Chilean purchasers, Cubazucar having drawn on letters of credit opened with the Banco Central de Chile under the sale contract of February 1973. The price for the Playa Larga cargo was apparently paid before 11 September 1973, since discharge of the cargo began before that date. So far as the Marble Islands cargo was concerned, it appears from documentary evidence before me that it was actually on 11 September 1973 that Cubazucar through the Banco Nacional de Cuba drew on the letter of credit; and that it was on 14 September 1973 that the Banco Nacional de Cuba was credited with and accepted payment of the price for the cargo, which was £883,168á69. At least by the time the shipping documents had been released, the property in the goods must have passed to the buyers. The price paid for both cargoes has been retained by Cubazucar.
   In November 1974 Iansa commenced arbitration proceedings against Cubazucar before the Sugar Association in London. In these proceedings Iansa is claiming damages in respect of the non-delivery of the cargo on the Marble Islands and of the balance of the cargo on the Playa Larga, and in respect of the undelivered balance of sugar due for shipment under the sale contract of February 1973.
   On 24 June 1975 a new ship was launched at the yard of Austin & Pickersgill Ltd in Sunderland. She bore the yard number 450, and was being built under a building contract dated 14 April 1973. The building contract was originally between Austin & Pickersgill Ltd and Centa Shipping Ltd of Monrovia, Liberia; but by an agreement dated 20 May 1974, a novation took place and the rights and obligations of Centa Shipping Ltd under the building contract became vested in Mambisa. On 5 September 1975 Mambisa took delivery of the ship which had at first been called Maisi but was by then called I Congreso del Partido (which, as I have said, I shall refer to as 'the Congreso'). According to affidavit evidence before me Mambisa, both in entering into the novation agreement dated 20 May 1974 and in taking delivery of the Congreso, were acting on behalf of the Republic of Cuba; and on the day of her delivery, 5 September 1975, she was entered in the Cuban Registry in the1180 name of the Republic of Cuba as owners. Later in this judgment I shall consider in more detail the evidence relating to the ownership, possession and control of the Congreso.

The proceedings
   On 9 September 1975 proceedings were commenced by an action in rem (the first action) brought by the owners of cargo lately laden on board the Marble Islands against the owners of the Congreso. The writ claimed the return of the consignment of sugar shipped on the Marble Islands or its value and damages for its detention, alternatively damages for its wrongful conversion, and/or damages for breach of duty and/or contract in respect of the non-delivery of the consignment. The affidavit to lead the warrant of arrest of the Congreso (sworn on the same day, 9 September 1975) identified the defendants as Mambisa and, stating that the action was brought by the plaintiffs pursuant to s 3(4) of the Administration of Justice Act 1956, claimed that Mambisa were at the time when the cause of action arose the disponent owners or charterers or in possession or in control of the Marble Islands, and would be liable to the plaintiffs in an action in personam, and were also, at the date of the issue of the writ, the beneficial owners of the Congreso as respects all the shares therein. The Congreso was arrested at Sunderland on 12 September.
   On 25 September two notices of motion were issued asking for an order that the writ and all subsequent proceedings in the past action be set aside. The first notice of motion was issued by the Republic of Cuba, the ground of the application being that the Congreso was the property of the Republic of Cuba, a recognised foreign independent state, and that the government of the Republic of Cuba declined to sanction the institution of these proceedings in this court. The second notice of motion was issued by Mambisa, the ground of the application being that the Congreso was not, at the time when the action was brought, beneficially owned by Mambisa as respects all the shares therein.
   The hearing of these two motions began on 29 October. On the second day of the hearing, leave was given to the owners of the cargo lately laden on the Marble Islands to issue a writ in a second action in rem against the owners of the Congreso, and to arrest the Congreso. The principal difference between the claims in the second action and the first action was that, whereas in the first action it had been alleged that Mambisa would be liable to the plaintiffs in an action in personam, in the second action it was alleged that the Republic of Cuba would be so liable; furthermore, in the indorsement on the writ, there was no claim for breach of contract, the claim being for the return of the consignment on the Marble Islands or its value and damages for its detention, alternatively damages for the wrongful conversion thereof, and/or for damages for breach of duty with respect thereto. The second action was no doubt begun because of the Republic of Cuba's assertion of title to the Congreso in the first action. The second action was mentioned to me on 30 October and I was informed that it was the intention of the Republic of Cuba to issue a notice of motion in this action asking for an order that the writ and all subsequent proceedings be set aside on the same ground as the first action. I was told that such a notice of motion would be issued and served as soon as possible; and it was agreed between all parties that, as the contentions of the parties were substantially the same in the Republic of Cuba's motions in both actions, I should deal with the motion in the second action without further argument. The Congreso having been re-arrested, the Republic of Cuba's notice of motion in the second action was issued on 6 November.
   The submissions advanced on behalf of the Republic of Cuba in support of their motions in both actions were as follows. First it was submitted on the facts that, on the affidavit evidence before me, it was established with a sufficient degree of probability for present purposes that, at the date of the assertion of sovereign immunity, the Republic of Cuba was the owner of the Congreso, was in possession of her or had the right to possess her and was in control of her; and further that she was1181 destined for uses regarded by the Cuban government as public. Second, it was submitted on the law: (1) that the English courts will not, as a general rule, implead a foreign sovereign; (2) that a foreign government is impleaded by an action in rem against its property, a fortiori if it is in possession of, or has a right to possess, or is in control of, its property; (3) that (if, contrary to the Cuban government's submission, the Congreso was to be regarded as an ordinary trading ship) there was no exception to the general rule in respect of trading ships, reliance being placed on The Porto Alexandre; (4) that in any event the English courts will not assume jurisdiction where an action in rem does not arise out of services rendered to the res here, and does not arise out of a straightforward commercial dispute properly within the territorial jurisdiction of the English courts, and has no real connection with England.
   On this basis it was submitted that the writs and all subsequent proceedings in both actions should be set aside as impleading a foreign sovereign. Later in this judgment I shall set out the submissions advanced on behalf of Mambisa.
   The argument on these submissions was completed on 31 October. The linchpin in the argument of the Republic of Cuba was the decision of the Court of Appeal in The Porto Alexandre. The plaintiffs sought to escape the consequences of that decision by arguing that the Republic of Cuba had not sufficiently established its title to the Congreso, or alternatively could not rely on the decision because they were not in possession of her, nor in control of her, nor had they the immediate right to possess her. In the alternative, they argued that The Porto Alexandre was decided per incuriam, and that I was not bound to follow the decision and should decline to do so. It became obvious in the course of argument that the plaintiffs, who did not then have the benefit of the decision of the Court of Appeal in Trendtex Trading Corpn Ltd v Central Bank of Nigeria, faced formidable difficulties on both of these submissions.
   At the close of the argument, I reserved my judgment. Five days later, on 5 November, the advice of the Privy Council was delivered in The Philippine Admiral. In that case, which was concerned with an appeal from the Full Court of the Supreme Court of Hong Kong, the Privy Council after full argument on the point decided not to follow The Porto Alexandre. It became clear that further argument was necessary on the motions before me; and counsel for the Republic of Cuba asked that in the circumstances he should have leave to call further evidence in order to develop his fourth submission. I indicated that, in order to ensure that the matter was properly dealt with on all facts likely to be relevant in the new circumstances which had arisen, I was minded to admit such evidence, but that I was unwilling to allow any further delay for this purpose unless the Republic of Cuba was prepared to co-operate in allowing the Congreso to be released from arrest by providing appropriate security. Orders to this effect were made on 11 November and 16 December, and shortly before Christmas 1975, security having been provided, the Congreso was released. That step removed the urgency from the matter; and in the outcome the motions were not restored for hearing before me until 14 December 1976.
   There are however two other events which I must mention, one of which occurred before the release of the Congreso from arrest and the other after her release. First, on 12 December 1975, a third action in rem was started against the owners of the Congreso. The plaintiffs were the owners of the cargo lately laden on the Playa Larga; and their claim, as indorsed on the writ, was for the return of the balance of the consignment of sugar carried on board the ship or its value and damages for its detention, or alternatively damages for the wrongful conversion thereof, and/or for damages for breach of duty and/or breach of contract in respect of the non-delivery and/or misdelivery of the said balance of the said consignment. In the affidavit sworn to lead the warrant of arrest, it was claimed that Mambisa or the Republic of Cuba1182 were the owners or charterers or in possession or control of the Playa Larga in respect of the voyage; and it was further claimed that by reason of the vessel sailing away with the balance of the plaintiffs' cargo due for delivery in Chile, the plaintiffs had a claim for the loss of such cargo by detinue, conversion or other breach of duty or alternatively for breach of contract under the bills of lading. The Congreso was re-arrested in the third action before her release; after her release, on 5 January 1976, notices of motion were issued in the third action by the Republic of Cuba and by Mambisa in the same form as in the first and second actions. The notices of motion in the third action raise substantially the same issues as in the other actions, with the difference that the claim relates to the balance of the cargo on the Playa Larga rather than to the cargo on the Marble Islands.
   Second, on 19 July 1976 an application was made to me regarding the admissibility of evidence of foreign law in relation to the Republic of Cuba's claim to sovereign immunity. I shall refer later in this judgment to the order which I made on that application.
   Fresh affidavit evidence having been filed in the Republic of Cuba's motions in all three actions, both by the plaintiffs and by the Republic of Cuba, the hearing of the motions was resumed on 14 December 1976. There was no real change in the submissions on Mambisa's motion in the first action, although the plaintiffs did develop their argument on that motion in one respect which I shall refer to later. So far as Mambisa's motion in the third action was concerned, the arguments were treated as identical to those on their motion in the first action. However the arguments on the Republic of Cuba's motions in all three actions were radically different from those originally advanced on their motion in the first action, as a result of the decision of the Privy Council in The Philippine Admiral.
   On behalf of the Republic of Cuba it was conceded on the renewed hearing that the Congreso should, for the purposes of the motions before me, be regarded as an ordinary trading vessel. Furthermore counsel for the Republic of Cuba joined forces with counsel for the plaintiffs in urging me to hold that, following the decision of the Privy Council, I was no longer bound by the decision of the Court of Appeal in The Porto Alexandre. Counsel for the Republic of Cuba submitted that even so I should set aside the writs in all three actions, on the ground that the Republic of Cuba was thereby impleaded. His submission was that an English court will not implead a foreign sovereign by permitting the arrest of an ordinary trading vessel in his ownership, where the claim on which the arrest is based either (1) arises from an exercise of sovereign or public or governmental power, prerogative or right (actus jure imperii), or (2) has no substantial connection with the territorial jurisdiction of the English court. He further submitted that the claims of the plaintiffs in all three actions arose from an actus jure imperii of the Republic of Cuba, viz the decision taken by the government of Cuba to have no further commercial dealings with Chile following the revolution of 11 September 1973, and in any event had no substantial connection with the territorial jurisdiction of the English court. On either ground, therefore, he asked for the writs in all three actions to be set aside as impleading a foreign sovereign.

The status of The Porto Alexandre
   Since it must affect the whole nature of my judgment on the Republic of Cuba's motions, I propose to deal immediately with the question whether I am still bound to follow the decision of the Court of Appeal in The Porto Alexandre. In that case the ship, which was a Portuguese ship, ran aground at the entrance to the River Mersey and salvage services were rendered to her by three Liverpool tugs. A writ in rem was issued in respect of these services against the owners of the ship, her cargo and freight. 1183A notice of motion was issued to set aside the writ and all subsequent proceedings as against the owners and freight on the ground that the ship and freight 'were and are the public national property of and/or requisitioned by and in possession and public use and service of the Portuguese Government'. Hill J concluded that it had been established that the ship was the property of the Portuguese government at the time of her arrest, and was still their property; and, although he was prepared to find, if necessary, that the Porto Alexandre was being used in ordinary commerce, he concluded (though with the greatest reluctance) that he was bound, on the principle established in The Parlement Belge, to accede to the application of the Portuguese government, no matter how the property was being employed. His decision was affirmed by the Court of Appeal, each one of the members of the court concluding that the case was covered by the decision in The Parlement Belge, irrespective of the use to which the ship was being put.
   The decision of the Court of Appeal in The Porto Alexandre has been subjected to a growing body of criticism; and this has culminated in the advice delivered by the Judicial Committee of the Privy Council in The Philippine Admiral. In that case the Judicial Committee, accepting the analysis of The Parlement Belge made by MacKenna J in Swiss Israel Trade Bank v Government of Salta, concluded that The Parlement Belge decided only (a) that a foreign sovereign cannot be sued in personam and (b) that an action in rem cannot be brought against his ship if that ship is being used substantially for public purposes. On this analysis, the Court of Appeal were not bound by The Parlement Belge to reach the conclusion which they reached in The Porto Alexandre. Furthermore the Judicial Committee ([1976] 1 All ER 78 at 95, [1977] AC 373 at 402) decided that they would not follow the decision in The Porto Alexandre; in doing so, they emphasised that 'the trend of opinion in the world outside the Commonwealth since the last war has been increasingly against the application of the doctrine of sovereign immunity to ordinary trading transactions'.
   In the argument on the resumed hearing, the question canvassed before me was whether, after The Philippine Admiral, I was bound to follow The Porto Alexandre. However these proceedings have been fated to be overtaken, between argument and judgment, by decisions of the appellate courts; and after completion of the argument on the resumed hearing, the Court of Appeal gave judgment in Trendtex Trading Corpn Ltd v Central Bank of Nigeria. The case was concerned with a claim under a letter of credit issued by the defendant bank. The bank claimed sovereign immunity, but their claim was rejected by the Court of Appeal. One of the two rationes decidendi of that case is that international law forms part of English law, by virtue of the doctrine of incorporation, that doctrine being preferred to the doctrine of transformation. Under the doctrine of incorporation, 'the rules of international law are incorporated into English law automatically and considered to be part of English law unless they are in conflict with an Act of Parliament': per Lord Denning MR ([1977] 1 All ER 881 at 888, [1977] QB 529 at 553). Applying the doctrine of incorporation, both Lord Denning MR and Shaw LJ rejected the absolute doctrine of sovereign immunity and gave effect to the restricted doctrine, although the case involved an action in personam. I am bound by this decision; and I must in the present case likewise give effect to the rules of international law, irrespective of any previous English decision to the contrary. The Philippine Admiral provides me with the clearest guidance that, in an action in rem against an ordinary trading ship, the rules of international law require me to give effect to the restricted doctrine of sovereign immunity. I must therefore give effect to that doctrine in the present case, disregarding the decision of the Court of Appeal in The Porto Alexandre.

1184

   I should add that, before the decision in Trendtex Trading Corpn Ltd v Central Bank of Nigeria had been reported, I had already concluded that I was not bound to follow The Porto Alexandre and should not do so. I need not now set out my reasons in any detail. It is enough for me to say that I would have adopted the reasoning of Lord Parker CJ in Smith v Leech Brain & Co Ltd ([1961] 3 All ER 1159 at 1162, [1962] 2 QB 405 at 415, 416) concerning the status of Re Polemis and Furness, Withy & Co Ltd. In Overseas Tankship (UK) Ltd v Morts Dock & Engineering Co Ltd (The Wagon Mound), on an appeal from New South Wales, the Judicial Committee of the Privy Council, after full argument, had expressly declined to follow Re Polemis. So far as I have been able to discover, Re Polemis has never been overruled by the House of Lords; yet since The Wagon Mound the legal profession has acted on the basis that the law was as stated in that case and that Re Polemis was no longer good law. In Smith v Leech Brain & Co Ltd Lord Parker CJ, sitting as a judge of first instance, stated obiter that he would if necessary follow The Wagon Mound rather than Re Polemis. He said ([1961] 3 All ER 1159 at 1162, [1962] 2 QB 405 at 415):

   I respectfully agree with every word in that passage from Lord Parker CJ's judgment which, in my judgment, is equally applicable to the present status of The Porto Alexandre; and for the reasons stated by Lord Parker CJ, I would, in any event, have felt myself at liberty to disregard the decision in The Porto Alexandre.
   I therefore proceed to consider the remaining issues on the Republic of Cuba's motions on the basis that The Porto Alexandre is not binding on me and that, for the reasons given in The Philippine Admiral, I should not follow it.

Ownership, possession and control of the Congreso
   The next matter I have to consider is whether, for the purposes of their claim to sovereign immunity, the Republic of Cuba has established a sufficient title to the Congreso. In Juan Ysmael & Co Inc v Government of the Republic of Indonesia it was established that a foreign sovereign invoking sovereign immunity on the ground that it was indirectly impleaded because its interest in property would be affected by the judgment need not prove its title to the property, but need only produce evidence to satisfy the court that its claim was not merely illusory, nor founded on a title1185 manifestly defective. It was submitted by counsel for the plaintiffs that this principle had no application in the present case; he submitted that the principle was developed in the context of a doctrine of absolute immunity and did not apply where, as in the case of an arrest of an ordinary trading ship, the doctrine of sovereign immunity was restricted. I cannot accept this submission. I can find no indication in the speech of Earl Jowitt, who delivered the Board's judgment in the Juan Ysmael ([1954] 3 All ER 236 at 239 [1955] AC 72 at 87) case, that the principle established in that case was dependent on the sovereign invoking a doctrine of absolute immunity. On the contrary, it derived from the practical difficulty that 'if the foreign government is required as a condition of obtaining immunity to prove its title to the property in question, the immunity ceases to be of any practical effect'. In my judgment, exactly the same applies where the immunity invoked is not absolute but restricted; and accordingly the test which has to be fulfilled by the Republic of Cuba in the motions before me is the test laid down in the Juan Ysmael case. With this test in mind, I turn to the facts which have prima facie been established on the affidavit evidence before me on the questions of ownership and possession.
   As I have already stated, the Congreso was built by Austin & Pickersgill Ltd under a building contract dated 14 July 1973 with Centa Shipping Ltd, but by the novation agreement dated 20 May 1974 the rights and obligations of Centa Shipping Ltd became vested in Mambisa. Since cl 10 of the building contract provides that 'the vessel ... shall immediately after payment of the first instalment become the property of the Purchasers ... ' and the first instalment of the purchase price had already been paid, it followed that the rights acquired under the novation agreement included the property in the vessel as then so far constructed, and in all goods and materials thereafter incorporated into the vessel. Mr Manfugas (Chairman of Anglo-Caribbean Shipping Co Ltd, the London agents of Mambisa) stated in his affidavit that by agreement (presumably the novation agreement) the Republic of Cuba, through Mambisa, took over the building contract. There is nothing in the novation agreement to indicate that in so doing Mambisa was in fact acting on behalf of the Republic of Cuba, and no document was produced authorising Mambisa to enter into the novation agreement on behalf of the Republic. Nevertheless, subsequent events provide ample confirmation for Mr Manfugas's statement. First, resolution 28/75 of the Cuban Minister of Mercantile Marine and Ports dated 14 August 1975, which appointed Mambisa operator and manager of certain vessels under construction at Austin & Pickersgill Ltd's yard (including new building 450, later to be called the Congreso), referred to the vessels as being 'under construction for the Cuban State'. The first four paragraphs of the resolution provide as follows:

   Mr Manfugas further stated that, acting under the authority of this resolution, he took delivery of the Congreso from Austin & Pickersgill Ltd on 5 September 1975, and that, in so doing, he was acting on behalf of Mambisa who were acting for the Republic of Cuba. The delivery certificate of that date states only that Mr Manfugas was acting on behalf of Mambisa; but having regard to the terms of resolution 28/75, there is ample evidence that Mambisa were acting on behalf of the Republic of Cuba. Further confirmation is provided by the fact that, on the application of Mr Manfugas made the previous day (4 September), provisional registration of the Congreso as a Cuban vessel was granted by the Cuban Embassy in London on 5 September 1975 in a decree which recited that Mr Manfugas 'by a sworn declaration asserts that no one apart from the Cuban State has the least share in the ownership of the vessel'; on the same day, 5 September, the vessel was entered in the registry of the harbourmaster's office at Havana in Cuba, the owner's name being entered as 'Republic of Cuba to be operated by Emp Navegaci—n Mambisa'. Furthermore, by resolution 29/75 dated 4 September 1975 (whereby the Cuban Minister of Mercantile Marine and Ports appointed the master, first officer and chief engineer of the Congreso), the vessel was again described as being 'owned by the Cuban State'. That Mambisa should have been acting on behalf of the Republic of Cuba in taking delivery of the Congreso is also consistent with the fact that, as stated by Mr Soto (the Cuban ambassador to Great Britain) and by Dr Balmaseda (a Cuban lawyer) in their affidavits, the Republic of Cuba is by Cuban law the owner of all cargo vessels registered in Cuba.
   It was argued by counsel on behalf of the plaintiffs that I should not, on the evidence, hold that the Republic of Cuba was the owner of the Congreso or even had a more than illusory title to her. The steps in his argument were as follows. (1) The building contract and the novation agreement were both governed by English law, and the res was at all times situated in this country; accordingly the law governing the transfer was English law. (2) Under English law, having regard to the terms of the building contract and the novation agreement, the property in the Congreso vested in Mambisa, and was in Mambisa on the date of her delivery (5 September). (3) Mr Manfugas's statement that Mambisa was acting on behalf of the Republic of Cuba in entering into the novation agreement was a bare assertion unsupported by any document, and was moreover inconsistent with the terms of the novation agreement. (4) Resolution 28/75 and the subsequent provisional registration of the Congreso in London and registration in Havana, were made on an assumption, erroneous in English law, that the Congreso was the property of the Republic of Cuba.
   I cannot accept this argument. This case is not concerned with a question whether the property passed from Austin & Pickersgill Ltd to a Cuban entity; indeed it is not concerned with conflicting claims at all, since (not surprisingly) Mambisa and the Cuban government are at one that, at all material times, the latter was the owner. By English law, the property in the ship was effectively passed to Mambisa; and if (as the evidence shows) Mambisa was at the material times acting as agent for the Republic of Cuba (even if the latter was an undisclosed principal so far as Austin & Pickersgill Ltd were concerned), I can see no reason why the property should not have passed through Mambisa to the Republic of Cuba. I can see nothing in the novation agreement inconsistent with this; so far as it is relevant, the agreement was concerned only to preserve the personal rights of Austin & Pickersgill Ltd against Mambisa and their possessory lien over the ship. In any event, once the ship had been delivered, there is overwhelming evidence that both Mambisa and the Cuban government regarded the Congreso as the property of the latter, and this common intention cannot be vitiated by any error as to English law as now alleged. I accordingly conclude, not merely that the Republic of Cuba has asserted a claim to the1187 ownership of the Congreso which is not illusory or manifestly defective, but that the evidence before me indicates that the Republic of Cuba was at all material times her owner.
   I turn next to the question of possession and control. Mambisa (which by resolution 28/75 was appointed operator and manager of the Congreso) is a Cuban state enterprise, which was brought into existence by a ministerial resolution AEE-85 of 27 June 1961. Its object, as stated in the first paragraph of the resolution, is:

   Mambisa has a corporate personality of its own, and is capable of suing, being sued, contracting and otherwise acting in its own name. As a state enterprise in a socialist state, Mambisa operates within the framework of the Cuban national economic plan as promulgated each year by the highest authorities in the state; the task allotted to Mambisa under that plan is of course obligatory on it. Furthermore, Mambisa is subject in every respect to the direction and control of the Cuban Minister of Merchant Marine and Ports, in the sense that the Minister, through his Ministry, has the power to give directions regarding anything that Mambisa does; and in particular the Minister personally appoints the senior personnel of Mambisa, and the senior officers of all Cuban owned vessels operated by Mambisa. Examples of the direction and control exercised by the Minister are these (1) the Ministry has laid down detailed provisions relating to the running of Cuban owned vessels operated by Mambisa, including maintenance, classification and surveys which are not day-to-day maintenance (Mr Manfugas stated that the carrying out of all such matters must be referred to the Ministry in advance for approval); (2) every intended use of the Cuban owned vessels by Mambisa, and every cargo to be carried on them, is subject to the advance approval of the Ministry; apparently, operating schedules prepared by Mambisa are regularly submitted to the Ministry for approval.
   Mambisa is a self-supporting state enterprise, in the sense that it is intended to make a profit. Even so, all funds needed for its operation are provided by the Cuban government through the Banco Nacional de Cuba, any income received by Mambisa being paid into a separate income account and automatically credited to the account of the national budget. If at the end of each calendar year there exists any balance of the funds made available by the Banco Nacional de Cuba for the operation of Mambisa, such balance is cancelled by the bank. However, subject to these limits, it appears that the management and administration of Mambisa are the responsibility of the director of Mambisa, who as one of the senior personnel is appointed by the Minister (and can be removed by him). On the evidence before me, I have no reason to believe that, within the limits imposed by the national economic plan and such directions as the Minister may choose to give, the director and his staff do not have a reasonably free hand in the day-to-day management and administration of the enterprise, including the operation and management of Cuban-owned ships which are designated to Mambisa. Furthermore, although the senior officers (master, first officer and chief engineer) of such ships are appointed by the Minister, and although I had no clear evidence on the matter, I infer that the remainder of the crew of such ships are appointed by Mambisa and that all the officers and crew are paid by Mambisa (no doubt out of the funds made available by the Cuban government) and are, so far as the day-to-day running of the ships is concerned, subject to the orders of Mambisa.

1188

   In the light of the foregoing evidence I conclude that the Congreso, as a Cuban owned vessel operated and managed by Mambisa, was after her delivery on 5 September 1975 in the possession of Mambisa, although the Cuban government could at any time repossess themselves of her simply by passing the appropriate ministerial resolution. So far as control is concerned, she was subject to control by the Cuban government in the sense that she could only be operated by Mambisa within the framework of its obligations under the national economic plan and on such voyages and carrying such cargoes as the Minister might approve, and subject to such future directions as the Minister might choose to give, and had to be maintained in accordance with the directions given by the Minister; but within these limits, the ship was in the control of Mambisa.

The Republic of Cuba's motions
   I turn now to the substance of the Republic of Cuba's motions, and counsel for the government of Cuba's new submissions on these motions. It was common ground between the parties that, where a plaintiff proceeds by way of an action in rem against an ordinary trading ship, then even though such vessel is the property of a foreign sovereign he cannot have the writ set aside on the ground of sovereign immunity where the claim arises out of the ordinary operations of the vessel as a trading vessel. This proposition is derived from the decision of the Privy Council in The Philippine Admiral; and that case provides examples of claims arising out of ordinary trading operations, viz claims for payment for goods supplied and disbursements made for the ship, and an ordinary claim for damages for breach of a charterparty. It must also follow (and I did not understand it to be seriously contested) that the position would be the same if the vessel arrested was an ordinary trading vessel in the ownership of a foreign sovereign, and that vessel was the sister ship of another ordinary trading vessel in the same ownership out of whose ordinary trading operations the claim arose. Of course, in a sister ship case both ships must be ordinary trading ships; for example, a warship cannot be arrested for a damage to cargo claim against an ordinary trading ship, nor an ordinary trading ship for a collision claim against a warship. But the question which arises in the present case, and did not arise in The Philippine Admiral, is this: what if the claim, in respect of which an ordinary trading vessel belonging to a foreign sovereign is arrested, arises as a result of a governmental act of that sovereign? In those circumstances, should the English court set aside the proceedings on the ground that the foreign sovereign is impleaded?
   Before I consider that question, I can quickly dispose of the Republic of Cuba's motion in the first action. In that action, it is not alleged that the Republic of Cuba is liable to the plaintiffs in an action in personam; on the contrary, the defendants are identified as Mambisa, and the allegation is that Mambisa, who indeed were at the time when the alleged cause of action arose charterers and in possession of the Marble Islands, were liable in an action in personam and were also, at the time when the action was brought, beneficial owners of all the shares in the Congreso. Since I have held that the republic has established not merely a sufficient title to the Congreso for the purpose of a claim to sovereign immunity, but has established on the evidence that it was when the action was brought the owners of the Congreso, and since no claim in personam is advanced against the republic in this action, it follows that the republic should be entitled to succeed in its motion in this action. It cannot be right that a plaintiff should be able to implead a foreign sovereign by an action in rem against his ship, even an ordinary trading ship, without alleging against him any cause of action in personam at all.
   The second action is, of course, different. That action was brought for the very reason that the Republic of Cuba was claiming to be owner of the Congreso, and no1189 cause of action in personam had been alleged against the republic in the first action. In the second action, which was brought by the owners of the cargo on the Marble Islands, the cause of action in personam alleged is in tort, being for the return of the cargo or its value, and damages for detention, alternatively damages for conversion or breach of duty. In the third action, brought by the owners of the cargo on the Playa Larga, the defendants are identified as either Mambisa or the Republic of Cuba, and the alleged causes of action in personam are in contract and in tort, the alleged torts being of the same nature as in the second action, and the alleged breach of contract being apparently breach of the contracts contained in or evidenced by the bills of lading. In the second action, the claim is presumably intended to fall within para (g) of s 1(1) of the Administration of Justice Act 1956 and in the third action, presumably within para (g) or (h) of that subsection.
   Counsel for the government of Cuba submits that, in these actions too, the English court should set aside the proceedings, because the alleged tort or breach of contract in both cases arose as a result of a governmental act of the Republic of Cuba. A governmental act is, he submits, an actus jure imperii. The mere fact that it may result in a breach of a trading contract will not deprive it of that status: the English court will never allow a foreign sovereign to be impleaded in respect of such an act. Counsel for the plaintiffs submits that even in such a case the proceedings should not be set aside. He puts his case in two ways. First he submits that, once the ship arrested has been categorised as an ordinary trading ship, there can be no plea of sovereign immunity in respect of an action in rem against that ship, provided the claim arose in respect of that ship or in respect of a sister ship which is also an ordinary trading ship. Second he submits that, where the act complained of takes place in the context of a commercial transaction, eg, if it is a claim for damages for breach of an ordinary trading contract, then it matters not that the purpose or motive for the act complained of was a matter of state policy; an action in rem against an ordinary trading ship will not in such circumstances be set aside on the ground of sovereign immunity. It will be observed that the basis of counsel for the plaintiffs' two submissions is really the same. As he put it, once the sovereign has descended into the market place, he can no longer invoke sovereign immunity.
   Counsel were unable to find any relevant English authority directly bearing on these points. The reason is not far to seek; it is that, until The Philippine Admiral, English law was committed to the absolute doctrine of sovereign immunity. Furthermore, so far as I have been able to discover, the point was not taken in Trendtex Trading Corpn Ltd v Central Bank of Nigeria. I have therefore to consider the point as one of first impression. Indeed, since the resolution of the point depends on how the principle of sovereign immunity is to be applied in actions in rem in the new situation which has arisen following The Philippine Admiral the arguments of counsel tended to take the form quite simply of contrary assertions as to the form which that principle should now take.
   Obviously, my first task is to look to The Philippine Admiral itself for guidance. I have to recognise, however, that the point does not appear to have been considered, even indirectly, in that case. Furthermore, the very nature of the decision in that case presented a particular difficulty. The decision was concerned only with an action in rem, recognising an exception to the principle of sovereign immunity in the case of ordinary trading ships. The Privy Council in no way sought to suggest any departure from the absolute doctrine of sovereign immunity in the case of actions in personam; on the contrary, the Board considered it unlikely that the House of Lords would depart from the absolute doctrine in such cases ([1976] 1 All ER 78 at 95, [1977] AC 373 at 402). In reaching this conclusion, the Board recognised that the resulting decision might be somewhat anomalous. This1190 is indeed the case, because actions in rem and actions in personam cannot be conveniently segregated into separate compartments. Invocation of the Admiralty jurisdiction by an action in rem presupposes the existence of a claim in personam against the person who, at the time when the action is brought, is the owner of the ship (see s 3(4) of the 1956 Act). If the owner of the ship is a foreign sovereign, he is inevitably impleaded by the action in rem, because he must either fight the case or surrender his ship. 'To implead an independent sovereign in such a way is to call upon him to sacrifice either his property or his independence': The Parlement Belge ((1880) 5 PD 197 at 219, [1874-80] Al ER 104 at 117), per curiam. If he chooses not to surrender his ship, he will effectively be fighting the claim in personam, although in addition his property will be at stake. The practical effect of the decision in The Philippine Admiral is therefore that, in cases concerned with ordinary trading ships, foreign sovereigns may be forced to contest claims in personam in this country, although only where the claim falls within the Admiralty jurisdiction as defined by s 1 of the 1956 Act, and in respect of which an action in rem can be commenced in accordance with s 3 of that Act.
   The result of the decision in The Philippine Admiral appears, therefore, to have been that the law was committed to two irreconcilable propositions. The first proposition was that, in the case of actions in personam, a foreign sovereign is absolutely entitled to invoke the doctrine of sovereign immunity. The second proposition was that, in the case of actions in rem against an ordinary trading ship, a foreign sovereign who owns the ship may, through execution on his property, effectively be held liable on a claim in personam.
   The anomaly can only be entirely avoided in one of two ways; either, as in English law before The Philippine Admiral, by adopting the absolute doctrine of sovereign immunity in respect of both actions in personam and actions in rem, or, as in most foreign jurisdictions (many of which, though they distinguish between rights in rem and rights in personam, do not have separate categories of actions in rem and actions in personam), by applying the restrictive doctrine to all actions, limiting sovereign immunity to the case of an actus jure imperii as opposed to an actus jure gestionis. The result of Trendtex Trading Corpn Ltd v Central Bank of Nigeria is that, subject to any appeal to the House of Lords, the restrictive doctrine of sovereign immunity is now applicable in all cases, and so the anomaly has been removed.
   In actions in rem, therefore, the position now is that a foreign sovereign may be impleaded in respect of certain claims in personam, viz those which fall within paras (d) to (r) inclusive as listed in s 1(1) of the 1956 Act, provided these proceedings can be brought by an action in rem against an ordinary trading ship. Counsel for the plaintiffs sought to justify an absolute exclusion of sovereign immunity in such a case as follows. He submitted that, once the sovereign has descended from his throne and entered the market place, he has divested himself of his sovereign status and is therefore no longer immune to the domestic jurisdiction of the courts of other countries; and one way in which a sovereign may take this step is by permitting a ship in his ownership to proceed on the high seas as an ordinary trading ship. I find counsel for the plaintiffs' justification difficult to accept. As a statement of principle, it is at once too narrow and too broad. In the first place (which may be irrelevant for the purposes of the present case) it is too narrow, because it is possible to conceive of circumstances in which a sovereign may equally be regarded as having divested himself of his sovereign status and yet not have entered the market place; the principle, if it applies at all, should apply to all circumstances, commercial or otherwise, in which a sovereign acts as any private citizen may act. There are many statements of principle in foreign authorities to this effect; for a particularly clear statement, 1191see the decision of the Italian Corte di Cassazione in Ditta Campione v Ditta Peti Nitrogenmuveh and Popular Hungarian Republic. The expression actus jure gestionis, though useful as a label, can sometimes be misleading. Second, and more important, it is too broad because, even where a sovereign acts in a private capacity, he does not cease to be a sovereign. His action as a private citizen does not detract from his status, and he may thereafter find it necessary to act in a public capacity. A sovereign may, as a private citizen can, sell wheat, charter a ship, or promise to marry; he may thereafter, as a private citizen cannot, decide as sovereign that he should not deliver the wheat (e g because his own subjects are in desperate need of wheat), or take delivery of the ship (e g because the shipowner is a citizen of a state with which he has severed all relations), or marry (e g because his own council of state has forbidden the marriage). I find it difficult to accept that the exercise by a foreign court of jurisdiction over such acts is consistent with the principle on which the doctrine of sovereign immunity is based; to adopt the words of Marshall CJ in The Schooner Exchange v McFaddon ((1812) 7 Cranch 116 at 144), 'such interference cannot take place without affecting [the] power and [the ] dignity' of the foreign sovereign. In The Parlement Belge ((1880) 5 PD 197 at 214, 215, [1874-80] All ER Rep 104 at 115) the doctrine was stated to be 'a consequence of the absolute independence of every sovereign authority, and of the international comity which induces every sovereign state to respect the independence and dignity of every other sovereign state' per curiam. That principle requires, in my judgment, that even where a sovereign, as counsel for the plaintiffs puts it, 'descends into the market place' by permitting one of his ships to sail as an ordinary trading ship his sovereign acts in relation to that ship should be afforded the respect due to his independence and dignity as sovereign. It is not enough to say that he can, if necessary, plead act of state by way of defence. Such a plea will in any event depend on the extent to which the defence is recognised in the relevant jurisdiction; but, more important, the whole purpose of the doctrine of sovereign immunity is that the domestic courts of a foreign state should not even take cognisance of a dispute in which a foreign sovereign is impleaded.
   In the second action, the claim against the Republic of Cuba is framed purely in tort. No question of the character of the transaction arises in such a case. It must be unusual for a foreign sovereign to be unable to invoke sovereign immunity in an action in personam, where the claim is so framed. It is understandable that, where an ordinary trading ship is involved in a collision on the high seas, the sovereign owner should usually be unable to invoke immunity, because he is then acting as a private citizen can act. But, to take a rather extreme hypothetical example, suppose that the sovereign should, for reasons of state, order one of his trading ships to intercept some other ship on the high seas and a collision should result, it would be very surprising if in such circumstances immunity could not be claimed in respect of a claim arising out of the collision. Let me take another example, a little closer to the facts of this case. Suppose that a foreign sovereign, whose country is threatened with invasion, seizes strategic materials which are being carried on some of his ordinary trading ships. Again, it is difficult to believe that the sovereign could not claim immunity in respect of a claim for conversion of the goods; indeed, even if the sovereign was a party to the contracts of affreightment under which the goods were being carried on his ships, and such contracts could be characterised as acta jure gestionis, he should surely be entitled to immunity. To assert jurisdiction in the case of such claims would be inconsistent with the power and dignity of the sovereign. The claims would be more appropriately dealt with through diplomatic channels, than through the courts of another country. Such an act is an actus jure imperii; it is not just that the purpose or motive of the act is to serve the purposes of the state, but that the act is of its own character a governmental act, as opposed to an act which any private citizen can perform.

1192

   Counsel for the plaintiffs sought to justify his submission on the ground that the exception which permits a foreign court to exercise jurisdiction over a sovereign in respect of an actus jure gestionis has been established to give contracting parties the same certainty in commercial transactions as they have when contracting with private citizens; from that he inferred that, once a sovereign had entered the market place, he was bound to perform his contract and could not escape the consequences by a plea of sovereign immunity. To this proposition there are, in my judgment, two answers. First, it provides no answer in the case where there is no commercial transaction; still less does it do so where there is no transaction at all, as for example where a sovereign's ordinary trading ship is involved in a collision at sea, or is rendered salvage services in an emergency without request. Second, and more fundamentally, certainty in commercial transactions is not in my judgment the true reason why in certain circumstances the doctrine of sovereign immunity is restricted. The true reason is that it is restricted where the foreign sovereign does not act as such, ie where he acts as any private citizen may act. I should add that, insofar as the introduction into international law of the restrictive doctrine of sovereign immunity is due to a desire that contracting parties should not be deprived of their reasonable business expectations in commercial transactions, it would not be inconsistent with recognition of such expectations to qualify the doctrine by permitting the sovereign to invoke immunity where the alleged breach of contract arose from an actus jure imperii, e g an act performed as a matter of national defence or of foreign policy, especially when it is borne in mind that a sovereign cannot ordinarily plead force majeure (as other parties can) in respect of governmental intervention, when it is itself the government which has intervened.
   In the course of the argument before me, I was referred to a considerable number of foreign authorities. It is clear that, in a case such as the present, which is concerned with a doctrine of public international law, it is proper that I should be so referred: see Compania Naviera Vascongada v Steamship Cristina ([1938] 1 All ER 719 at 725, [1938] AC 485 at 497), per Lord Macmillan. I have before me not only judicial decisions of foreign courts but affidavits sworn by a number of distinguished foreign lawyers. On a summons on 19 July 1976, I was invited by the plaintiffs to rule such affidavit evidence inadmissible. I did not feel able to do so, for three reasons: first, because, if decisions of foreign courts were to be cited by English counsel, I feared that (particularly where they were decisions of courts outside common law jurisdictions) I might, without the guidance of a qualified lawyer, form an erroneous view of such decisions; second, because the sources of law in foreign jurisdictions are not necessarily restricted, as they are in this country, to statutes and judicial decisions; and third, because I must also have regard to practice in foreign jurisdictions. Of course, the opinion of a foreign lawyer as to the way in which the present case would be decided in accordance with his own system of law is not something to which I could have regard as such. In fact, I have found this affidavit evidence of considerable assistance when evaluating the authorities cited to me. But in the end these authorities provided no direct guidance on the central issue which I have to decide. It is clear that in most jurisdictions no distinction is drawn between actions in rem and actions in personam as is drawn in this country; but it is also clear that, in most jurisdictions, a restrictive doctrine of sovereign immunity is applied in all actions, the doctrine being applicable in the case of an actus jure imperii but not in the case of an actus jure gestionis. Indeed, the evidence before me reveals only too clearly the isolated position which was until very recently occupied by this country in adhering to the absolute doctrine of sovereign immunity in the case of actions in personam. However, there appears to be no consensus as to where the dividing line should be drawn between the two categories of actus jure imperii and actus jure gestionis. Differences of opinions were revealed in relation to contracts for public purposes. In a case of that kind, courts generally look to the nature of the1193 contract, rather than to its purpose, in deciding whether or not the contract is to be characterised as jure gestionis or jure imperii; and counsel for the plaintiffs relied on these cases in support of his submission that, once the sovereign has entered the market place, he cannot invoke sovereign immunity in respect of a breach of contract even where such breach arises from a governmental act. But in my judgment the cases only demonstrate that, in the case of a contractual claim, the nature of the contract will be relevant, not that it will necessarily be decisive of the question whether or not the case is concerned with an actus jure imperii. If the nature of the contract is such that it is itself an actus jure imperii, then any claim under it may be the subject of sovereign immunity. If it is itself an actus jure gestionis, then an ordinary breach of the contract cannot be the subject of a claim to immunity, but the character of the contract cannot necessarily preclude a breach from being held to result from an actus jure imperii, in which event sovereign immunity may be claimed in respect of such breach.
   Although I have found no direct guidance on this question in the foreign authorities cited to me, there are statements of principle to be found in those authorities which are consistent with the view that regard must be had, not only to the nature of the transaction (if any) between the parties, but also to the nature of the act complained of. For example, in the Claim against the Empire of Iran Case ((1963) 45 ILR 57 at 62), the Constitutional Court of the Federal Republic of Germany stated:

   Similarly, in the Italian case of Consorzio Agrario di Tripolitania v Federazione Italiana Consorzi Agrari the question was said by the Italian Corte di Cazzazione to depend on whether 'the act in respect of which the controversy has arisen has been enacted in the exercise of sovereign powers'. In the present case the act complained of, viz the diversion of the two cargoes from Valparaiso to Cuba and Vietnam and their disposal there, was essentially an act of foreign policy. Such an act must surely be characterised as an actus jure imperii: see eg Victory Transport Inc v Comisaria General de Abastecimientos y Transportes ((1964) 336 F 2 d 345 at 360), where 'acts concerning diplomatic activity' are listed among those acts in respect of which sovereign immunity may be invoked.
   There are however two matters on which counsel for the plaintiffs particularly relied, and to which I must refer. First, he submitted that s III of the opinion of the Supreme Court of the United States in Alfred Dunhill of London Inc v Republic of Cuba supported his submission that, once a sovereign has entered into a commercial transaction which is to be categorised as an actus jure gestionis he cannot invoke sovereign immunity in respect of any breach of that transaction. I do not think that it would be right to burden this already long judgment with an analysis of that case; it is enough for me to record that I do not accept counsel for the plaintiffs' interpretation of s III (which in any event contained the views of only four out of the nine members of the court).
   Second, counsel for the plaintiffs relied on the provisions of the International Convention for the Unification of certain Rules concerning the Immunity of State-owned Ships signed at Brussels on 10 April 1926 (the Brussels Convention of 1926)^b, 1194and in particular on arts 1, 2 and 3 of the Convention. Counsel for the plaintiffs submitted that the effect of these provisions was that the immunity of state-owned ships depended solely on the nature of the ship, or the use to which it was being put; and that in the case of ships falling outside those specified in art 3, a sovereign could not invoke sovereign immunity, even where the act complained of either was or arose by reason of a governmental act. It is however to be observed that art 1 which, subject to art 3, permits claims in respect of state-owned ships and cargoes, and cargoes and passengers carried on them, applies only to 'claims in respect of the operation of such ships or in respect of the carriage of such cargoes' and the article is therefore open to the interpretation that it excludes claims where the act complained of arises from a governmental act. On the evidence before me relating to the laws of countries which have ratified the convention (which this country has not), there is certainly no consensus as to the interpretation favoured by counsel for the plaintiffs. On the contrary, the Supreme Court of Sweden (a country which has ratified the convention and enacted it into Swedish law) expressed the opinion, in the leading case of The Charente, that (in summary) art 1 of the convention (as enacted into Swedish law) had no application in the case of an actus jure imperii; and the travaux preparatoires of the convention, if regard is to be had to them, provide considerable support for this view. I do not therefore consider that the plaintiffs can derive much support for their argument from the convention.

   For the above reasons, I reject the plaintiffs' main submissions on the law on this aspect of the case. However, before reaching any conclusion on the Republic of Cuba's notices of motion, there are certain subsidiary submissions advanced by the plaintiffs which I must deal with. The first of these submissions is that since, by invoking the doctrine of sovereign immunity, the Republic of Cuba is claiming to invoke a principle of international law, it should not be allowed to do so in respect of acts which offend against other principles of international law. It is further submitted that, in the present case, the acts in respect of which the Republic of Cuba is invoking sovereign immunity offend against international law in two respects; first, because they are contrary to international good faith and, second, because they are discriminatory. They are said to be contrary to good faith because the Cubans were or are at the same time taking the benefit of a trading contract (by drawing on the letters of credit) and failing to discharge the burden of that contract (by refusing to deliver the goods). They are said to be discriminatory, because they are directed against the citizens of a particular country, Chile. I am unable to accept either of these submissions. They cannot of course be rejected on the ground of novelty, because the acceptance until so recently in this country of the absolute doctrine of sovereign immunity has hitherto precluded ventilation of matters of this kind in the English courts. But the suggestion that sovereign immunity may not be invoked in cases where there is a breach of international good faith is certainly not supported, on the material before me, by any evidence of consensus among the laws of other nations, the only authority cited being the judgment of the District Court of Frankfurt in Nada Trust v Central Bank of Nigeria. Moreover the submission appears to run contrary to the whole principle of sovereign immunity: the sovereign is immune from process precisely because the domestic court will not adjudicate on his actions. Furthermore, on the facts of the present case, the submission appears to confuse the actions of Cubazucar and the actions of the Republic of Cuba. It was Cubazucar which drew on the letters of credit, while it is the Republic of Cuba which is invoking sovereign immunity. True, Cubazucar is a state enterprise; but it appears to have the same status as Mambisa. No sovereign immunity is claimed in respect of Mambisa; and, on the evidence before me, Mambisa appears to be an independent state enterprise, of which examples exist in Western countries as well as in socialist countries 1195(cf the recent decision of Kerr J in C Czarnikow Ltd v Centrala Handlu Zagranicznego 'Rolimpex' (Affirmed p 88, ante, CA)). There is no evidence before me that Cubazucar was drawing on the letters of credit otherwise than in the ordinary course of business. I do not consider that its action in so doing prevents the Republic of Cuba from claiming sovereign immunity in respect of its acts in preventing delivery of the goods to the Chilean buyers. So far as concerns the submission that the Cuban action was discriminatory, once again I cannot see why, if this was the case, it should prevent the Republic of Cuba from invoking the principle of sovereign immunity; but in any event, since there is no question of the Republic of Cuba having treated persons in like positions differently, or having treated persons in different positions alike, I do not see how the Cuban action can be described as discriminatory. I therefore reject this submission.
   The second of these subsidiary submissions is that, if I should hold (as the plaintiffs submit) that there is a reasonable argument that Mambisa are the owners of the Congreso and that the issue whether Mambisa are the owners should therefore be tried as an issue in any of the actions, I should not in any event accede to the Republic of Cuba's application to strike out such actions, because in respect of the claim against Mambisa any dictates of the Cuban government are irrelevant. In my judgment, this submission is misconceived. As will appear hereafter, in my judgment there can be no possibility of the question of Mambisa's title being decided as an issue in any of the actions; it must be decided now, on Mambisa's motions, which raise a question of jurisdiction which falls to be decided before it can be known whether the actions can proceed at all against Mambisa. But further, once the Republic of Cuba has established, on the principle in the Juan Ysmael case, a not illusory title to the Congreso, the Republic of Cuba has been impleaded by the action in rem against that vessel; and if there is no other valid objection to a claim of sovereign immunity by the Republic the action in rem against that ship must be struck out.
   The third of these subsidiary submissions is that the Republic of Cuba was not in possession of the Congreso at the time when the actions were brought, nor did the Republic then have an immediate right to possess the ship; and that possession, or at least an immediate right of possession, is a prerequisite to a claim of sovereign immunity in the case of an action in rem against the ship. It is true that, on the evidence before me, the republic was not when the actions were brought in possession of the ship: it was Mambisa which was in possession. But, although a different view has been taken in the United States (see Republic of Mexico v Hoffman), on the English authorities possession is not a prerequisite to a claim of sovereign immunity in an action in rem (see The Philippine Admiral ([1976] 1 All ER 78 at 96, [1977] AC 373 at 404), applying United States of America v Dolfus Mieg et Compagnie SA). On the evidence before me, the Republic of Cuba has in my judgment established an immediate right to possession of the Congreso at the time when the actions were brought; accordingly, if such a right is a prerequisite to a claim to sovereign immunity, it has been satisfied.
   I have already reached the conclusion, on the evidence before me, that the Republic of Cuba has established a sufficient title to the Congreso, and that the claims of the plaintiffs which are the subject-matter of the three actions arise from governmental acts of the Republic of Cuba in preventing, on grounds of foreign policy, the delivery to the plaintiffs of the cargo on the Marble Islands and the balance of the cargo on the Playa Larga. Both claims, therefore, arise from an actus jure imperii of the Republic of Cuba; accordingly, for the reasons I have given, the republic is entitled to invoke the principle of sovereign immunity in all three actions.

1196

   I now turn to counsel for the government of Cuba's alternative submission, viz that the Republic of Cuba can, despite the fact that the Congreso was an ordinary trading vessel, invoke the doctrine of sovereign immunity because the claim on which the arrest is based has no substantial connection with the territorial jurisdiction of the English court. Although it is not necessary for my decision in this case to reach any conclusion on this second point, I feel that I should deal with it, albeit briefly, because the point was argued before me and the case may well go further.
   In support of his submission, counsel for the government of Cuba relied on passages in judgments of Lord Denning in Rahimtoola v HEH the Nizam of Hyderabad ([1957] 3 All ER 441 at 461, 464, [1958] AC 379 at 418, 422) and in Thai-Europe Tapioca Services Ltd v Government of Pakistan ([1975] 3 All ER 961 at 966, 967, [1975] 1 WLR 1485 at 1492). In the latter case, Lord Denning MR said:

   In the present case the claims do not (apart from the arrest of the Congreso in this country) arise within the territorial jurisdiction of our courts. The claims are concerned with the conversion of goods on board foreign ships on the high seas or in foreign countries, and with non-delivery under contracts of affreightment which are not governed by English law. If the principle stated by Lord Denning MR in the above cases is applicable in the present case, this too would be a good ground for declining jurisdiction. (I should observe in parenthesis that on the evidence before me there appears to be no international consensus on the requirement of territorial connection; for an example of the opposite view see the decision of the Frankfurt Court in the Nada Trust v Central Bank of Nigeria case.) However, in neither the Rahimtoola case nor the Thai-Europe case was the court directly concerned with an assertion of jurisdiction arising out of the arrest of an ordinary trading ship. The arrest of ships is a procedure widely recognised throughout the world, though the court may thereafter decline to proceed with the case on the ground that there exists elsewhere a more appropriate forum for the trial of the dispute, or on some other more limited principle of a similar kind (see e g The Atlantic Star). The possibility of arrest of state-owned ships is expressly recognised by the Brussels Convention of 1926^c: claims arising from the operation of such ships are within art 1 of the convention and presumably include claims arising from collisions on the high seas. I find it difficult to accept that, in an appropriate case, the English courts should not assert jurisdiction in an action in rem against a state-owned ordinary trading ship in a case arising from a collision with another foreign ship on the high seas. Furthermore, art 1 of the convention contemplates the possibility of arrest in a case concerned with carriage of cargo; once again, I find it difficult to accept that the English courts should not be able to assert jurisdiction in an action in rem against a foreign state-owned trading ship in such a case, even though the contract of carriage had no connection with the1197 territorial jurisdiction of the English court. Jurisdiction asserted by means of an arrest of a ship is not an exorbitant jurisdiction. By allowing his ships to trade, a foreign sovereign must be taken to have exposed his ships to the possibility of arrest, a procedure which is widely accepted among maritime nations and which is regulated to some extent by international convention, in the case of state-owned ships by the Brussels Convention of 1926^d, and in the case of other sea-going ships by the Brussels Convention of 1952^e. For these reasons, which I have stated very briefly, I would not be prepared to accept counsel for the government of Cuba's second submission. However, as I have already held, counsel is entitled to succeed on his first submission.

Mambisa's motions
   I turn next to Mambisa's motions in the first and third actions, under which they ask for an order that the writ and all subsequent proceedings should be set aside as against them on the ground that the actions do not fall within s 3(4) of the Administration of Justice Act 1956, pursuant to which they were brought, because the Congreso was not, at the time when the action was brought, beneficially owned as respects all the shares therein by Mambisa.
   Mambisa's first submission is that, on the evidence before me, they were not the owners, at law or in equity, of the Congreso at the time when the actions were brought. This submission raises the question of the manner in which, on Mambisa's notices of motion, the question of ownership should be decided. It was common ground between Mambisa and the plaintiffs that, since Mambisa are not invoking the doctrine of sovereign immunity, the test established in the Juan Ysmael case does not apply. However on the resumed hearing of the motions it was submitted by counsel on behalf of the plaintiffs that, on the evidence before me, there was at least a reasonably arguable case whether Mambisa or the Republic of Cuba were the owners of the Congreso, and that in these circumstances it would be wrong for me to decide the point on affidavit evidence without affording the plaintiffs the opportunity of having the issue tried on oral evidence with cross-examination of witnesses. My proper course, he submitted, was to allow the actions to proceed against Mambisa, but to order the question of Mambisa's title to be tried as an issue in the actions. In this connection, he relied on The St Elefterio ([1957] 2 All ER 374 at 376, 377, [1957] P 179 at 185, 186) per Willmer J, Vitkovice Horni a Hutni Tezirstvo v Korner and The Jupiter (No 2).
   In my judgment, counsel for the plaintiffs' submission that I should order that the question of Mambisa's title should be tried as an issue in the actions is one to which I cannot accede. The question raised by Mambisa's motions is one of jurisdiction. Jurisdiction in Admiralty actions is statutory, and is defined by the Administration of Justice Act 1956. Section 3 of that Act lays down the circumstances in which an action in rem may be brought; if the case is not within the section, then the court has no jurisdiction in respect of an action in rem, and the writ and all subsequent proceedings should be set aside. It follows that, if the defendant wishes to have the writ and all subsequent proceedings set aside, he must apply to do so before entering an unconditional appearance. Any question of irregularity in the issue of the writ cannot be pleaded as a defence; indeed, by entering an unconditional appearance, the defendant will waive any irregularity in the issue of the writ (see RSC Ord 2, r 2(1), and Ord 12, r 8). It follows as a matter of principle that any question of jurisdiction, such as the question in the present motions, must be dealt with on the motions, and cannot be dealt with as an issue in the actions. Of course, on the hearing of such a1198 motion, evidence will be admitted. Usually, that evidence will be in the form of affidavits, although in theory oral evidence, for example by cross-examination of deponents of affidavits, might be allowed. There has however been no application in the present case for any such oral evidence to be admitted. On the evidence admitted, which in the present case is purely affidavit evidence, the question of jurisdiction has to be decided, and it cannot be right for the decision on that question to be allowed to depend on the decision of some issue to be tried in the actions. If there is no jurisdiction as against Mambisa, they should not be troubled with the actions at all; indeed it cannot be decided whether the actions can be allowed to proceed until the question of jurisdiction has been determined.
   The cases cited by counsel for the plaintiffs do not, in my judgment, assist him. In The St Elefterio, on a motion to set aside the writ and all subsequent proceedings in an action in rem, the question arose whether the plaintiff was required to prove at the outset that he had a good cause of action in personam. Willmer J held that he was not. The applicable statutory provision was s 3(4) of the 1956 Act, which requires (inter alia) that 'the person who would be liable on the claim in an action in personam was, when the cause of action arose, the owner or charterer of, or in possession or in control of, the ship ... ' Willmer J pointed out ([1957] 2 All ER 374 at 377, [1957] P 179 at 186) that the words used were 'the person who would be liable', not 'the person who is liable', and that they were intended to refer to the person who would be liable on the assumption that the action succeeded. In contrast, the subsection goes on also to require that, for the purposes of an action in rem against a ship, such ship is when the action is brought beneficially owned by that person as respects all the shares therein. This shows clearly, in my judgment, that the question of ownership of the res, if in issue, has to be decided on the motion to set aside the writ in an action in rem. Again, I do not consider that it assists counsel to rely by way of analogy on cases under RSC Ord 11; because under that order the standard of proof that the case falls within RSC Ord 11 is expressly provided for in r 4(2) of that order, and is that no leave shall be granted unless it shall be made sufficiently to appear to the court that the case is a proper one for service out of the jurisdiction under the order: see e g Vitkovice Horni a Hutni Tezirstvo v Korner ([1951] 2 All ER 334 at 340, [1951] AC 869 at 883), per Lord Radcliffe. Nor in my judgment does he gain any assistance from those cases where the question is whether the solicitors purporting to act for the plaintiff had authority from him to commence proceedings. In such cases, the proper course is for the defendant to issue a summons to strike out, not to raise the matter by way of defence: see Russian Commercial and Industrial Bank v Comptoir d'Escompte de Mulhouse. On the application to strike out, the parties are the defendant and the plaintiff's solicitors: see Carl-Zeiss-Stiftung v Rayner and Keeler Ltd (No 2). Such an issue cannot therefore be decided as an issue in the action; it must be decided on the application to strike out: see Banco de Bilbao v Ray, Banco de Bilbao v Sancha ([1938] 2 All ER 253 at 256, [1938] 2 KB 176 at 192), per curiam. A similar issue arose in The Jupiter (No 2) where the Court of Appeal, although recognising that the point was not a matter of plea but one to be decided on the motion, nevertheless took the unusual course of referring that part of the motion to the Admiralty Court. It apparently took the course because the decision on that part of the motion depended on the determination of facts which were not then before the court. Certainly Hill J (the Admiralty judge who dealt with the matter) appears to have treated it as an issue in the motion which had been referred to him: The Jupiter (No 3) ([1927] P 122 at 127, [1927] All ER Rep 237 at 240). Indeed it is difficult to see how, in all the circumstances, such an action1199 can be allowed to proceed until the question of the solicitors' authority to sue has been determined: see the Carl-Zeiss-Stiftung case ([1966] 2 All ER 536 at 571, [1967] 1 AC 853 at 944), per Lord Upjohn. Similarly, on an application for a stay of proceedings under the Arbitration Acts the court has to decide, on an application for a stay, whether there is an effective arbitration clause: see Modern Building Wales Ltd v Limmer & Trinidad Co Ltd.
   For these reasons I have come to the conclusion that I have to decide the question of jurisdiction on the evidence before me. For the reasons I have already given, I am satisfied on the evidence before me that Mambisa were not, at the time when either the first action or the second action was brought, the owners in law or in equity of the Congreso.
   I turn therefore to the main question which arises on Mambisa's motions, which is whether the Congreso, although not owned by Mambisa at law or in equity, was nevertheless to be regarded as 'beneficially owned as respects all the shares therein' by Mambisa, within the meaning of s 3(4)(b) of the 1956 Act, on the basis that those words have a wider meaning than equitable ownership and are wide enough to embrace the relationship of Mambisa to the Congreso.
   On this point I have the guidance of the decision of Brandon J in The Andrea Ursula. In that case, it was held that the plaintiff ship repairers who had carried out repairs to the Andrea Ursula at the request of demise charterers of that ship, and who claimed the cost of the repairs under s 1(1)(n) of the 1956 Act, were entitled to proceed by an action in rem against the ship under s 3(4)(a) of the Act on the basis that at the time when the action was brought the demise charterers were, as such, beneficial owners of the ship as respects all the shares therein. Brandon J therefore construed the words 'beneficially owned as respects all the shares therein' as not being restricted to legal or equitable ownership, but as being wide enough to include such 'ownership' as is conferred by a demise charter. The reasoning of Brandon J, which led him to reach this conclusion, was as follows. (1) The expression 'beneficially owned' in s 3(4) is capable of more than one meaning: either owned by someone who, whether he is the legal owner or not, is in any case the equitable owner; or 'beneficially owned by a person who, whether he was the legal or equitable owner or not, lawfully had full possession and control of her, and, by virtue of such possession and control, had all the benefit and use of her which a legal or equitable owner would ordinarily have' ([1971] 1 All ER 821 at 824, [1973] QB 265 at 269). An example of the latter would be such 'ownership' as was conferred by a demise charter. A demise charterer has, because of the extent of his possession and control, often been described as the owner pro hac vice or the temporary owner. (2) Since the meaning of the words 'beneficially owned' is not clear, the court can and should look at the terms of the Brussels Convention of 1952^f, s 3 of the 1956 Act being intended to give effect to art 3 of the convention; and having done so the court should so construe the statute as to give effect, so far as possible, to the presumption that Parliament intended to fulfil, rather than to break, its international obligations. If s 3(4) of the 1956 Act is to give full effect to art 3, the expression 'beneficially owned' in the section must be given the second of the two meanings of which it is capable, which embraces not only a demise charterer, but also any other person with similar complete possession and control. (3) Although Hewson J had reached a different conclusion in The St Merriel, Brandon J felt justified in declining to follow that decision having regard in particular to two points. First, Hewson J had not been invited to look at the convention, because at that time it was commonly thought1200 that it was not permissible to do so unless the statute contained an express reference to the convention. Second, the view accepted by Hewson J in The St Merriel was not different in principle from one which was discussed and rejected by Lord Atkinson in Sir John Jackson Ltd v Blanche (Owners), The Hopper No 66.

   Counsel for Mambisa, to whose argument I am much indebted, has however urged me not to follow The Andrea Ursula. The decision in that case is not binding on me and, while of course I have the greatest respect for any decision of Brandon J, I have reconsidered the matter and, having done so, I have reached the conclusion that the words 'beneficially owned as respects all the shares therein' refer only to cases of equitable ownership, whether or not accompanied by legal ownership, and are not wide enough to include cases of possession and control without ownership, however full and complete such possession and control may be. Since I have reached a different conclusion to Brandon J, I think it right to point out that I have had the benefit of a full argument by counsel for the defendants in this case, whereas The Andrea Ursula came before Brandon J on a motion by plaintiffs for judgment in default of appearance, on which the defendants were not represented.
   My approach to the case before me is as follows. I start with the 1956 Act, and the words with which I am particularly concerned, and which I have to construe in the context of the Act, are 'beneficially owned as respects all the shares therein'. In my judgment, the natural and ordinary meaning of these words is that they refer only to such ownership as is vested in a person who, whether or not he is the legal owner of the vessel, is in any case the equitable owner; in other words, the first of the two meanings of which Brandon J thought the words to be capable. Furthermore, on the natural and ordinary meaning of the words, I do not consider them apt to apply to the case of a demise charterer or indeed any other person who has only possession of the ship, however full and complete such possession may be, and however much control over the ship he may have. Generally speaking, the essential characteristic of a demise charter is that it constitutes a contract of hire of the ship, under which the possession of the ship passes to the charterer, the master of the ship being the servant of the charterer, not of the owner. It is to be compared with the ordinary form of time charter, which is not a contract of hire but a contract for services, under which the possession remains in the owner, and the master is the servant of the owner (see Re Sea and Land Securities Ltd and William Dickinson & Co Ltd's Arbitration, The Alresford ([1942] 1 All ER 503 at 503, 504, [1942] 2 KB 65 at 69, 70), per MacKinnon LJ, and Scrutton on Charterparties^g). It is true that a demise charterer has in the past been described variously as 'owner pro hac vice' (see eg Frazer v Marsh ((1811) 13 East 238 at 239), per Lord Ellenbrough CJ, The Lemington ((1875) 32 LT 69 at 72), per Sir Robert Phillimore, and The Tasmania ((1888) 13 PD 110 at 118), per Sir James Hannen P), or as a person who is 'for the time the owner of the vessel' (see Sandeman v Scurr ((1866) LR 2 QB 86 at 96), per Cockburn CJ), or as a person with 'special and temporary ownership' (The Hopper No 66 ([1908] AC 126 at 136), per Lord Atkinson)I doubt however if such language is much in use today; and its use should not be allowed to disguise the true legal nature of a demise charter. Furthermore, no case has been drawn to my attention (and I am aware of none) in which a demise charterer had been described as a beneficial owner', still less as a 'beneficial owner as respects all the shares in the vessel'. Indeed any reference in this context to ownership 'as respects all the shares in the vessel' is, in my judgment, inapt to describe1201 the possession of a demise charterer; such words are only appropriate when describing ownership in the ordinary sense of the word, and not possession which is concerned with a physical relationship with the vessel founded on control and has nothing to do with shares in the vessel. A demise charterer has, within limits defined by contract, the beneficial use of the ship; he does not however have the beneficial ownership as respects all the shares in the ship. Furthermore I can find nothing in the remainder of the 1956 Act to cause me to reject the natural and ordinary meaning of the words: certainly I would not construe other references in the Act to 'ownership' (as in s 1(1)(a)) or 'co-owner' (as in s 1(1)(b)) as referring in any way to demise charterers. Indeed in Part V of the Act (which is concerned with Admiralty jurisdiction and arrestment of ships in Scotland) the equivalent provision (s 47(1)(b)) requires that 'all the shares in the ship are owned by the defender ... ' This provision (to which I can properly have regard: see, The Jade, The Eschersheim, per Lord Diplock), reinforces my conclusion that s 3(4) of the 1956 Act is concerned with title, the word 'beneficial' being introduced to allow for the peculiar English institution of the trust. I for my part do not feel persuaded to any different conclusion by the speech of Lord Atkinson in The Hopper No 66 ([1908] AC 126 at 135, 136). In that case, the House of Lords was considering the proper construction of the words 'The owner of a British sea-going ship, or any share therein', and the words 'The owner of every sea-going ship or share therein', as used in ss 502 and 503 respectively of the Merchant Shipping Act 1894(which provide for limitation of liability), and concluded that in that context the words 'owner of a ... ship' should be read to include a demise charterer. But this construction of these words does not, in my judgment, require a construction to be placed on the different words in s 3(4) of the 1956 Act, viz 'beneficially owned as respects all the shares therein', which is inconsistent with those words. I note in passing that ss 56, 57 and 58 of the 1894 Act are the relevant parts of the Act concerned with trusts and equitable rights and the liability of beneficial owner; and that where in these sections reference is made to an equitable interest in a ship, or to a person having such an equitable interest, the words used are 'beneficial interest' and 'beneficially interested', and it would be at least consistent to construe the words 'beneficially owned' in s 3(4) of the 1956 Act in a similar manner.

   Accordingly, I do not myself regard the words 'beneficially owned as respects all the shares therein' as being capable of more than one meaning; in the absence of ambiguity this is not, on the principles established by the Court of Appeal in Saloman v Customs and Excise Comrs, Post Office v Estuary Radio Ltd and by the House of Lords in The Jade, The Eschersheim, an appropriate case in which to have recourse to the convention. Even so, out of respect for the views of Brandon J, I propose to examine the convention. The relevant parts of art 3 of the Brussels Convention of 1952^h provide as follows:

1202

   As I read the convention, art 3(1) (which is expressed to be subject to art 3(4)) provides for the arrest of either the particular ship in respect of which the maritime claim arose, or (except in certain specified cases) any other ship which is owned by the person who was, at the time when the maritime claim arose, owner of the particular ship. Furthermore, despite the argument of counsel for the plaintiffs to the contrary, in this context I read the word 'owner' as bearing its ordinary meaning, ie the person with title to the ship, and I am confirmed in this view by the provision relating to ownership in art 3(2), and by the fact that art 3(4) (to which art 3(1) is expressed to be subject) makes special provision for the case of the demise charterer and others. It is to be observed that, if one puts art 3(4) on one side, the draftsman of the 1956 Act appears to have been seeking to give effect to art 3(1) and (2) of the convention, subject to the fact that he appears to have been concerned to extend the word 'ownership' by the addition of the adjective 'beneficial', very possibly to take account of the special English institution of the trust which may form no part of the domestic laws of other signatories to the convention. But the same cannot, I consider, be said of art 3(4). First, this paragraph makes express provision for the case of a charter by demise; it is very difficult to believe that, had the draftsman of the 1956 Act intended to give effect to this provision, he would not have done so in far more explicit terms than by use of the expression 'beneficial ownership'. Second, the paragraph in its last sentence appears to extend the right of arrest in para (4) to 'any case in which a person other than the registered owner of a ship is liable in respect of a maritime claim relating to that ship', a provision which is wide enough to include maritime claims against time charterers and even voyage charterers; on no view can the 1956 Act be said to give effect to this part of the convention. Third, art 3(4) makes it plain that, in the case of a claim against a demise chartered ship, no other ship in the ownership of the registered owner shall be liable to arrest, but, if s 3(4) of the 1956 Act is construed as the plaintiffs contend, then other ships in the same registered ownership may be liable to arrest if they are demise chartered to the same demise charterer before the action is brought, since on the construction adopted in The Andrea Ursula such ships would be beneficially owned by the demise charterer as respects all the shares therein. Fourth, art 3(4) provides that, in the case of demise charters, the power of arrest applies to the demise chartered ship 'or any other ship in the ownership of the charterer by demise'; s 3(4) of the 1956 Act, if intended to give effect to art 3(4), has not done so in this respect because, if the demise charterer before the time when the action is brought demise charters out another ship in his ownership, that ship cannot be arrested under s 3(4)(b) because it will not then (on the construction contended for by the plaintiffs) be beneficially owned by him. For these reasons, when I place art 3 of the convention alongside s 3 of the 1956 Act, I discern a clear intention on the part of Parliament not to give effect to art 3(4) of the convention; and I do not think it would be right to impose some special construction on the words of s 3(4) of the 1956 Act in an attempt to give effect to one part (though not to others) of art 3(4) of the convention.
   Of course I recognise that, as a matter of policy, it might be desirable to provide for the arrest of a demise chartered ship, or even a time chartered ship, when for example necessaries have been supplied to the ship at the request of the charterer. 1203But the question whether such a policy should be adopted is a matter for Parliament; and, as I read the 1956 Act, Parliament has decided not to adopt that policy. As I read s 3(4), the intention of Parliament in adding the word 'beneficially' before the word 'owned' in that subsection was simply to take account of the institutions of the trust, thus ensuring that, if a ship was to be operated under the cloak of a trust, those interested in the ship would not thereby be able to avoid the arrest of the ship. A comparable result was achieved by s 58 of the 1894 Act concerned with the liability of the beneficial owner, to which I have already referred.
   I accordingly decide that I should not follow The Andrea Ursula; and since, as I have already concluded on the affidavit evidence before me, Mambisa were not in any sense the owners of the Congreso at the time when the first action was brought, but were simply in possession of her as her operators and managers, I am prepared on this ground alone to accede to the application of Mambisa.
   However, in case this matter should be taken further, and the reasoning of Brandon J in The Andrea Ursula should be preferred to my own, it is right that I should deal with the second submission advanced on behalf of Mambisa, which is that Mambisa did not at the time when the first action was brought have full possession and control of the Congreso and cannot therefore be said, on the principle stated in The Andrea Ursula, to have been at that time beneficial owners of the Congreso as respects all the shares therein. The actual words used by Brandon J are 'a person who, whether he was the legal or equitable owner or not, lawfully had full possession and control of her, and, by virtue of such possession and control, had all the benefit and use of her which a legal and equitable owner would ordinarily have' ([1971] 1 All R 821 at 824, [1973] QB 265 at 269). These words are apt to describe the position of a demise charterer (indeed they appear to derive from the speech of Lord Herschell LC in Baumwoll Manufactur von Carl Scheibler v Furness ([1893] AC 8 at 18), a case concerned with a demise charterer) but they are not so easy to apply in other cases where possession has been transferred to another. For example, where a shipowner entrusts his yacht to a yachting agent for sale, and she breaks free through the negligence of the servants of the yachting agent and collides with another ship, it has been held that the owners of the other ship may proceed in rem against the yacht (see The Ruby Queen), although here the yachting agent has full possession and control, but little or no benefit from or use of her. I find it particularly difficult to apply the words of Brandon J to the case of Mambisa, a state enterprise in a socialist state, which has possession of the Congreso as operator and manager but whose use and maintenance are substantially within the control of the Cuban government. However, doing the best I can, I conclude that the present case does not fall within the principle stated in The Andrea Ursula. On the evidence before me, although Mambisa has physical possession of the Congreso, the limits within which Mambisa exercise control of her are so confined that I do not consider that it can be said that Mambisa has 'full possession and control' of her; accordingly if (contrary to my view) the principles stated in The Andrea Ursula are the applicable principles, I nevertheless conclude that Mambisa were not, at the time when the first and third actions were brought, the beneficial owners as respects all the shares in the Congreso and that the plaintiffs were not therefore entitled to invoke the Admiralty jurisdiction of the High Court by an action in rem against her, in which Mambisa are identified as the defendants, under s 3(4) of the 1956 Act.

Solicitors: Bischott & Co (for the plaintiffs); Coward Chance & Co (for the Republic of Cuba and Mambisa).