Federal Court


Plaintiff not entitled to arrest sister ship once it exercised right to arrest offending ship

Vessel hit marine terminal trestle owned by plaintiff. Berth was rendered unusable pending repairs causing loss to plaintiff estimated to be in excess of $60 million. Plaintiff brought action and obtained warrant for arrest of vessel. Parties negotiated release of vessel. Original letter of understanding (LOU) was for security of $26 million against plaintiff’s claim. Plaintiff asserted there was common mistake that amount of available security was capped at value of vessel and there was mistake that right to arrest sister ships was weak or they were of little or no value. Plaintiff asserted it was subject to economic duress in agreeing to accept LOU in order to minimize disruption to business and mitigate financial losses. Plaintiff sought determination of whether there was binding agreement under which plaintiff agreed to waive right to arrest sister ships of defendant ship. Plaintiff sought determination of whether plaintiff could arrest offending vessel and sister ship. Motion dismissed. There was binding agreement to which plaintiff waived right to arrest sister ships. Plaintiff could not arrest offending ship and sister ship. In bringing motion with respect to multiple arrests, plaintiffs themselves implicitly acknowledged that issue was not clear cut since they were seeking determination of that question by court. There was no mistake and there was no basis to set aside agreement on ground of mistake. Plaintiff’s argument about economic duress was ill-founded. Defendant was entitled to take position that vessel would not be moved until security was posted and usual consequence of arrest was that ship would not be moved in absence of court order or consent. There was no coercion of will but there was bargaining. Plaintiff was not entitled to arrest sister ship to vessel once it exercised right to arrest offending ship. Section 43(8), of Federal Courts Act (Can.), did not give right to multiple arrests. Inherent ambiguity in “any” or “de tout” in s. 43(8) of Act was resolved by reference to use of singular “ship” in English version and “navire” in French version. There was no evidence that Parliament intended to provide right to multiple arrests in domestic domain when Convention made it clear that only one ship could be arrested.

Westshore Terminals Limited Partnership v. Leo Ocean S.A. (Feb. 7, 2014, F.C., E. Heneghan J., File No. T-2259-12) 238 A.C.W.S. (3d) 281.

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