Could Head Owners "intercept" funds due to Disponent Owners from Sub-Charterers on the basis of a pending appeal against the vacation of a Rule B attachment?
This case arises from arbitration proceedings concerning the "CV STEALTH", details of which are described at 1 and 2 above. Lax & Co LLP acted for the First Defendant, Space Shipping Ltd (Disponent Owners); Clyde & Co LLP acted for the Claimant, ST Shipping and Transport Pte Ltd (Sub-Charterers) and others; Ince & Co LLP acted for the Second Defendant, Psara Energy Ltd (Head Owners).
(1) ST Shipping and Transport Pte Ltd (2) Glencore International AG (3) Glencore Plc v (1) Space Shipping Ltd (2) Psara Energy Ltd  EWHC 156 (Comm)
Sub-Charterers who owed over USD 9m in damages to Disponent Owners pursuant to various arbitration awards following the "CV STEALTH"'s detention in Venezuela commenced stakeholder proceedings under CPR Part 86 after the Head Owners asserted, inter alia, a lien over the sums in respect of unpaid bareboat hire at the same time that Disponent Owners sought payment under a guarantee issued by Glencore Plc on behalf of the Sub-Charterers.
The stakeholder proceedings were commenced against Disponent Owners and Head Owners on 20 November 2017, with the Sub-Charterers placing the disputed funds into Clyde & Co's client account.
A Rule B attachment in Connecticut had been obtained by Head Owners which attached the debts of Sub-Charterers to Disponent Owners. That Rule B attachment order was vacated on 20 November 2017. Head Owners sought to appeal the vacatur but they were unsuccessful in obtaining a stay pending appeal. Head Owners nevertheless maintained that they had a proprietary claim over the stakeholder funds arising from the Rule B attachment and sought a trial of this issue. Disponent Owners, who had already obtained a decision of the arbitration tribunal which dismissed Head Owners' claim for a lien, sought payment out of the funds held by Sub-Charterers' solicitors.
Mr Justice Teare considered whether the claim had been properly brought under CPR 86 by Sub-Charterers and heard argument for Disponent Owners that there were no competing claims as required under CPR86.1 (1). The Judge held that the stakeholder claim was properly issued. Despite Head Owners' adducing written expert evidence, Mr Justice Teare did not accept that the Rule B attachment represented any enforceable attachment of debt and found that the attachment was contingent on the appeal against the vacatur succeeding. He ordered that the sums held in the stakeholder account be paid to Disponent Owners save for sums covered by two Third Party Debt Orders which had been obtained by Head Owners in the High Court in connection with two arbitration awards for hire.
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May 14th, 2018