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1.M.V .RAINBOWACE, aforeignflatvesselflyingtheflagofPanama alongwithherhull,gear,tackle,engine,machinery, bunkers,apparel,furnitureandfixturesandall appurtenancesandparaphernalia,presentlylying attheportofPipavav,Gujarat,withintheterritorial watersofIndiaandwithintheAdmiraltyJurisdiction ofthisHon'bleCourt,andallpersonsinterested inthesaidvessel; 2.WhimStarCharteringCo.Ltd. ACompanyincorporatedunderthelawsofHongKong, havingitsRegisteredofficeatRoomNo.904, 9/FWaysumCommercialBuilding,28, ConnaughtRoad,WestHongKong. ..Respondent/Orig.Defendants Mr.PrashantPratap,SeniorAdvocatewithMr.AshwiniSinha,Ms. TruptiAgarwali/byManojKhatri,AdvocatefortheAppellant.

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LufengShippingCompanyLtd. Acompanyincorporatedunderthe lawsofthePeople'sRepublicofChina, havingitsregisteredofficeatNo.24, PuJiShiRoad,Qingdao,China. ..Appellant/Orig.Plaintiff. Vs.

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INTHEHIGHCOURTOFJUDICATUREATBOMBAY ADMIRALTYANDVICEADMIRALTYJURISDICTION APPEALLODGINGNO.228OF2013 IN NOTICEOFMOTIONNO.235OF2013 IN ADMIRALTYSUITNO.29OF2013

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CORAM:MOHITS.SHAH,C.J.AND M.S.SANKLECHA,J. DATE:Reservedon17June2013 Pronouncedon02July2013

JUDGMENT:(PerM.S.SANKLECHA,J.) Thisappealchallengestheorderdated6May2013of the learned Single Judge vacating the order dated 28 January 2013(passedonanapplicationbytheappellant)arrestingM.V . RainbowAcerespondentNo.1vessel.Theimpugnedorderdated6 May2013vacatingthearrestofrespondentNo.1vesselwasonan applicationtakenoutbytheownerM/s.RainbowAceShipping S.A.Panama(applicant)ofrespondentNo.1vessel. 2) a) Factsleadingtothisappeal: TheappellantadmittedlyhasamaritimeclaimofUS$

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1,628,658.07 against the Whim Star Chartering Co. Ltd. (respondent No.2 company). This claim arises out of a voyage charterpartyagreementdated6April2011enteredintobetween theappellantasownersofavesselM.V .JTong andrespondent No.2companyasacharterer.

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Mr. Virag Tulzapurkar, Senior Advocate with Mr. Nikhil Sakhardande, Mr. Amitava Majumdar, Mr. Shiv Kumar Iyer, Mr. Sujan Malhotra, Mr. Nihal Shaikh i/by Bose & Mitra & Co. for RespondentNo.1/DefendantNo.1.

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company is coveredbyArticle 1(f)and(g) ofthe International Convention ofArrest ofShips1999(ArrestConvention 1999). Consequently, the appellant was entitled to secure its maritime claimbyproceedingagainstanyvesselintheregistered and/or ArrestConvention,1999. c) beneficialownershipofrespondentNo.2Companyintermsofthe

respondentNo.1vesselisalsothebeneficialownerofrespondent No.2Company. It is the case of the appellant that one Wang Wendong is the common beneficial owner of respondent No.1 vesselaswellasrespondentNo.2company.Theappellantshave sought to establish the common beneficial ownership of respondent No.1 vessel and respondent No.2 company in one WangWendongbysubmittingthefollowingchart:

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The appellant's claim is that the beneficial owner of

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b)

The appellant's maritime claim on respondent No. 2

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d)

On 28 January 2013, respondent No.1 vessel was

against respondent No.2 company. The case of the appellant as that it was in the beneficial ownership of respondent No. 2 company and that both respondent No.1 vessel and respondent No.2 company are in the common beneficial ownership of one WangWendongand/oroneShanBing. e)

On11February,2013,theapplicanttookoutanotice

ofmotionbeforethelearnedsinglejudgeseekingthatthearrestof vacated. In the application the applicant admit that it is beneficiallyownedbyWangWendong.However,itisdeniedthat respondent No.1 vessel is in the beneficial ownership of respondentNo.2companyandthatitsbeneficialowner Wang WendonghasanyinterestinrespondentNo.2companyandmuch lessbeingitsbeneficialowner.Thus,theallegedmaritimeclaimof theappellantonrespondentNo.2companycouldnotbesecured bythearrestofrespondentNo.1vessel. f)On6May2013,thelearnedSingleJudge,bytheimpugned ordervacatedtheorderofarrestdated28January2013inrespect ofrespondentNo.1vessel.Theimpugnedorderholdsthatthough respondentNo.1vesselwasbeneficiallyownedbyWangWendong

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respondent No.1 vessel by order dated 28 January 2013 be

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madeoutintheplaintforthearrestofrespondentNo.1vesselwas

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arrested attheinstanceoftheappellantforitsmaritimeclaim

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the respondent No. 2 company was not. Therefore respondent commonbeneficialownershipofWangWendong.Thusthearrest Order while disposing the application for vacation of arrest of respondent No.1vessel framed the following issues as arising beforehim: i)

ontheArrestofShips,1999canbeappliedtothe presentdispute? ii)

3(2)thereof,arrestofashipbeneficiallyownedby

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thepersonagainstwhomthereisamaritimeclaim inrespectofanothership,ispermissible? iii) Whetherthe1stDefendantvesselisof

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thebeneficialownershipofdefendantNo.2? f) Sofarasissues(i)and(ii)areconcerned,theywere

answeredintheaffirmativeandacceptedbyallthepartiestothe presentproceedings.Theonlyissuewhichhasbeenraisedinthe present appeal is with regard to question (iii) above being answered in the negative i.e. in favour of the respondent No.1

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WhethertheInternationalConvention

If yes, whether by virtue of Article

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of respondent No.1 vessel was not warranted. The impugned

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No.1 vessel and respondent No.2 company were not in the

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vessel and against the appellant. The learned single judge also appellant was not as raised in the plaint as formulated in respondentNo.1vesselandtherespondentNo.2companyarein the common beneficial ownership of one Wang Wendong. This submissionwhichisafacetoftheissueraisedin(iii)abovewas alsoansweredinthenegativei.e.respondentNo.2companyisnot inthebeneficialownershipofWangWendong. Submissions: 3)

appearing for the appellant challenges the impugned order vacatingthearrestofrespondentNo.1vesselandrespondentNo. 2companybyholdingthattheyarenotinthecommonbeneficial ownershipofWangWendong.Insupportoftheabovechallenge followingsubmissionsaremade:

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(a)

Admitted position is that respondent No. 1 vessel is

beneficially owned by Wang Wendong. Similarly, though not admittedbytherespondentsWangWendongisalsothebeneficial owner of respondent No.2 company. The respondent No. 2 company is owned 100% by one Cartier Investment Co. Ltd, Samoa(Cartier)whichinturnis100%ownedbyWangWendong. This beneficial ownership can be established by lifting the

Mr. Prashant Pratap, the learned Senior Counsel

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question(iii)abovebutthesubmissionbeforehimwasthatthe

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records the fact that the case canvassed before him by the

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corporate veil of Respondent No. 2 company and thereafter by wasestablishedbyCartier; (b)

InviewofthelawsintheStateofSamoa,thenames

ofshareholdersanddirectorsofacompanyincorporatedinSamoa arenotavailablefordisclosure.HowevertheownershipofWang Wendong of Cartier and in turn of respondent No. 2 company bythefollowingfactors: (i) alongwiththeownershipofrespondentNo.1vesselisestablished

of Cartier, respondent No.2company,WangWendong(as evident from his business card), of the applicant and its agent ZJHX Shipping Co. Ltd. as well as common fax numbers. (ii)

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Company called Whim Star Co. ltd. in which Wang

Wendongheld55%shareholdingwhichwasderegisteredon 12February2009 andtherespondentNo.2companyhad thesameaddressviz.SunshineTowers,Qingdao,China; (iii) ACommondirectorbythenameofLiHangwasinthe subsidiary of the applicant company and also in the respondentNo.2company;

Commonaddressi.e.SunshineTowerQingdao,China

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liftingthecorporateveilofCartierasrespondentNo.2company

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contracts of carriage entered into by the appellant with

samepersonhasalsosignedmortgagedocumentsonbehalf ofoneRainbowShippingLtd.whichisapartof Rainbow GroupCompaniesofwhichWangWendongistheowner. (v) The appellant has a long association with Wang Wendongsince1998.Theappellantshavestatedthatthey had met Wang Wendong at his office at China and withWangWendong,itsowner. (vi) The defunct Whim Star Co. Ltd., respondent No.2 company and the applicants along with its other group companieswereallhavingoneZJHXShippingCo.Ltd.as theircommonagent.Theagencyagreemententeredintoby thefirstrespondentvesselwithM/s.ZJHXShippingCo.Ltd. isdated1March2012wheninfactrespondentno.1vessel wasdeliveredon4September2012isalsoevidenceofthe factthattheyarealloneandthesame; (c) ReliancewasplaceduponthedecisionoftheDivision whenever they negotiated with Whim Star Group, it was

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Bench of this Court in the matter of Great Pacific Navigation

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respondentNo.2companyaswellasWinStarCo.Ltd.The

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(iv) CommonSignatureonvariousfixtureNoteswhichare

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(Holdings)CorporationLtd.vs.M.V .TongliYantairenderedon14 BenchofthisCourthadreversedtheorderofthelearnedSingle casesshouldbeappliedtothepresentcasealso;and (d)

That for purposes of the arrest of respondent No.1

vessel, the appellant has merely to establish an a reasonably Inthemeantime,respondentNo.1shouldbekeptunderarresttill therespondentssecurethemaritimeclaimtobetriedatthefinal hearing. 4)

On the other hand, Mr. Tulzapurkar, Senior Counsel

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appearingforrespondentNo.1vesselinsupportoftheimpugned ordersubmitsasunder: a) The arrest of the vessel in terms of Article3 of the

Arrest Convention 1999 is subject to the same being permitted under the laws of the state in which the arrest of the vessel is beingsought.Thereforethearrestofthevesselnotownedbythe personliableforthemaritimeclaimwouldbepermissibleonlyif thearrestissoughtofthevesselwhichisbeneficiallyownedby anotherperson.However,todeterminethebeneficialownershipit is not open to lift the corporate veil and contend that the

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arguablecasei.e.primafaciecasetobetriedatthefinalhearing.

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Judgevacatingthearrestofavesselinthatcase.Thustheabove

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October2011tocontendthatinalmostsimilarfactstheDivision

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shareholderofthecompanyisthe ownerofthepropertyofthe submissionthatasamatterofCorporatelawasexistinginIndia, identify of its shareholder. In the circumstances, the maritime claimavailableagainstrespondentNo.2doesnotbecomemaritime claimpayablebyitsallegedbeneficialownerWangWendong; b)

No.2isownedbyCartier whichinturnis ownedbyMr.Wang Wendong,thusmakingWangWendong thebeneficialownerof anaffidavitdated8February2013statingonoaththatheowns nointerestdirectlyorindirectlyinCartiernorinrespondentNo.2 companyandheisnotadirectorinanyofthetwocompaniesi.e. CartierandrespondentNo.2.Ontheface ofit,itisnotopento the appellant to allege that Wang Wendong is the ultimate beneficialownerofrespondentNo.2companyintheabsenceof theaffidavitbeingfoundtobefalse. c) The variouscircumstancesbeingrelied upon bythe respondentNo.2company.ThisissoasWangWendonghasfiled

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appellant such as common director, common address, common agent etc. alleged by the applicant do not establish that that Wang Wendong is the beneficial owner of respondent No. 2 company.Allthesefactorswereexplainedbytheappellantandthe

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The entirecaseoftheappellantis thatrespondent

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the identity of a company is different and distinct from the

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companyasisbeingsoughttobedonebytheappellant.Itishis

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learnedSingleJudgewassatisfiedwiththeexplanationofferedby respondentNo.1vesselisnotwarranted. d)

Therelianceplacedbytheappellantuponthedecision

oftheDivisionBenchofthisCourtinthematterofGreatPacific Navigation (Holdings) Corporation Ltd. vs. M.V . Tongli Yantai renderedon14October2011ismisplacedasthesamehasbeen setasidebytheApexCourtbyorderdated12December2012. Consideration: 5)

theappellanthadmovedtheCourtseekingtoarrestrespondent No.1vesselprimarily onthegroundthatitisinthebeneficial ownershipofrespondentNo.2company,ithadalsoallegedinits plaint that the common beneficial owner of respondent No. 1 vessel and respondent No.2 company is Wang Wendong and/or ShanBing. Therefore,theissueofcommonbeneficialownership ofWangWendongwasraisedbytheappellantwhilecomingtothe Courtanditwasnotanewcasemadeoutduringargumentsas contended by Mr. Tulzapurkar. The issue examined by the learned Single Judge was whether the common beneficial ownershipof therespondentNo.1vesselandrespondentNo.2 Company vest in one and the same person namely Wang Wendong. This is borne out in para 58 of the impugned order

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We have consideredthe submissions.We findthat though

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the applicant to conclude prima facie that the arrest of

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whereinitisrecorded: I nowproceedtoexaminewhethertheplaintiff has made out even a prima facie case that defendant No.1 vessel is in the same beneficial ownershipofdefendantNo.2.

6)

There is no dispute between the parties that the

appellanti.e.theownerofrespondentNo.1vesselisbeneficially disputinghisbeneficialownershipofrespondentNo.1vesselhas filedanaffidavitdated8February,2013beforethelearnedsingle judge denying that he is in any manner directly or indirectly throughthemediumofCartierorotherwisethebeneficialowner of respondent No.2 company. Notwithstanding the affidavit of Wang Wendong (which is not proved to be false/incorrect) the appellant seeks to establish the beneficial ownership of Wang Wendong in respondent No. 2 by seeking to lift not only the corporateveilofrespondentNo.2CompanybutalsoofCartier. 7) Beforeexaminingtheissueonfactsonewouldneedto

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examineasapurequestionoflaw,whetheritispermissibleunder theIndianlawtoupholdthesubmissionoftheappellantthatthe shareholderofanincorporatedcompanyhasproprietaryrightsin theassetsofanincorporatedcompanypermittingtheignoringof theseparateidentityofaCorporateentity.

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ownedby Wang Wendong.HoweverWangWendongwhile not

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particular,insubArticle1and2ofArticle3permitsthearrestof

Court in Liverpool andLondon S.P .& IAssociation Ltd.v.Sea Success2004(9)SCC512whileholdingthatArrestConvention 1999 would be applicable to India even though India is not a signatorytheretohasheldthatthesamewouldbesubjecttoa) domestic law which may be enacted by Parliament and b) for enforcement of the contract involving public law character. Therefore the issue to be examined is whether the Indian corporate law accepts the proposition that in the absence of allegationoffraud,itisopentoignoretheindependentcorporate identity of a limited company and to lift the corporate veil to identifytheshareholderasownerofthepropertyofthelimited company.

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9)

Whileinterpretingtheaboveprovision,the Supreme

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3. Notwithstanding the provisions of paragraphs1and2ofthisarticlethearrestofa shipwhichisnotownedbythepersonliablefor the claim shall be permissible only if, under the lawoftheStatewherethearrest appliedfor,a judgmentinrespectofthatclaimcanbeenforced againstthatshipbyjudicialofforcedsaleofthat ship.

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vehicleandalsoprovidesinsubArticle3thereofasunder:

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8)

Article 3 of the Arrest Convention 1999 and in

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10)

The Supreme Court in Indo wind Energy Ltd. V .

company incorporated under the Companies Act has a separate companies.Therefore,themerefactthatthetwocompanieshave common shareholders or common Board of Directors will not convert thetwocompaniesintoasingleentity.Similarlyasfar backasin1955SupremeCourtin BachaF.Guzdar,BombayVs. thereisnowarranttoassumethatshareholderwhobuyssharesof thecompaniesbuysanyinterestinthepropertyofthecompany. identitydifferentanddistinctfromthatofitsshareholders.The submissionoftheappellantthattheconceptofbeneficialownerby itself implies the concept of lifting the corporate veil and in supportofwhichrelianceisplaceduponthedecisionoftheApex Court in M.V . Elisabeth and ors. Vs. Harwan Investment and TradingPvt.Ltd.1993Supp.(2)SCC433aswellasthedecision inLiverpoolandLondonS.P .&IAssociationLtd.v.SeaSuccess (supra)andtheCalcuttaHighCourtdecisioninOwners&Parties InterestedintheVesselM.V .DongDoandanr.v.RameshKumar &Co.Ltd.2001(2000)1CALLT367(H.C.). 11) We find that the submission of the appellant on the This was on the basis that an incorporated company has an CommissionerofIncomeTax,BombayAIR1955SC74heldthat

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abovebasisisnotsustainableasinnoneofthecasesdidthecourt

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and distinct legal entity from its shareholders and other

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Wescare (India) Ltd. 2010(5) SCC 306 has held that each

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permittheliftingofthecorporateveiltomaketheshareholderof incorporatedcompany.InthecaseofM.V .Elisabeth(supra)the viz.whetherAndharaPradeshHighCourthadjurisdictioninits admiraltyjurisdictiontoproceedagainstaforeignshipownedbya foreign company not having a place of business in India. The arrestedvesselviz.M.V .Elizabethwasthevesselagainstwhicha arose.InthecourseofJudgmenttheApexCourthadobservedin Para46thereofthatthejurisdictioncanbeinvokedagainstasister casethearrestisbeingsoughtnotofasistershipi.e.ashipinthe ownershipofthesamepersonbutaship/vesselownedbyasister companyofthecompanyagainstwhichmaritimeclaimarose.In Liverpool and London S.P . & I Association Ltd. v. Sea Successc (supra) the issue for consideration was whether the non paymentofinsurancepremiumgaverisetoamaritimeclaim.The premiumwasnotpaidinrespectofvesselsSeaRangerandSea Glory. The vessels SeaRanger,SeaGlory andSeaSuccess were ownedbythesameowner.Thevesselarrestedwas SeaSuccess. Noissueofliftingthecorporateveilforthepurposeofarresting SeaSuccessarose. InthecaseofM.V .DongDo(supra)Calcutta High Court held that under the Indian Law, shareholders of a companyarenottheownersoftheassetsofthecorporateentity. shipi.e.ashipinthesamebeneficialownership.Inthepresent maritimeclaimhadarisenandnoissueofliftingthecorporateveil

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issuewhicharoseforconsiderationwasthequestionofjurisdiction

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an corporate entity the owner of a property belonging to the

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The Court set asidethe arrestofthe vesseleventhoughit was SocialistRepublicofVietnamthroughthemediumoftwolimited

beneficial ownership as extending to shareholders of an incorporatedentityandasanillustrationpointedoutthatinIndia various Government Companies are in existence who are independentofeachotherhavingadistinctidentity.Thereforea be a sister ship of a ship belonging to Oil & Natural Gas Commissiontoenablethearrestofshipownedbyonecompany forthemaritimeclaimarisinginrespectofanothercompany. 12) LearnedSingleJudgeofthisCourtinAdmiraltySuit shipbelongingtoShippingCorporationofIndiacannotbesaidto

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(L)No.3547of2008renderedon22December2008inPolestar MaritimeLimitedVs.M.V .QILINMenandothersobservedthat merelybecausetheshareholdersarecommonortheirholdingin twodifferentcompaniesarecommon/identicalwouldnotmake thetwocompaniesoneandthesameentity.Similarly,theGujarat HighCourtinthematterofCroftSalesandDistributionLtd.v.M.V . Basiland17ors.inCivilApplicationNo.73of2011inAdmiralty Suit No.10 of 2010 rendered on 17 February 2011 the Gujarat HighCourtheldthatshareholdersaredistinctanddifferentfrom the corporate entity and the two separate legal entities are so regardedasindependentofeachother,anditisonlyinexceptional

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companies. The Calcutta High Court negatived the aspect of

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alleged that both the vessels were ultimately owned by the

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circumstancessuchasfraudetc.thattheCourtwould examine

applicant company has been created so as to only defeat the maritime claims against the respondent No.2 company. In the presentfactsitisnotthecaseoftheappellantthattheapplicant companyisasubsidiaryofthe respondentNo.2companywhen beneficialownerofthesubsidiarycompany.Incaseswheretwo independent companiesare both 100%subsidiary of acommon holding company then it may be possible to contend that the beneficial owner of both the companies is the common holding company. These are not the facts in the present case as the applicant company and the respondent No.2 company are not subsidiariesofonecommonholdingcompanyorhavesubsidiary andholdingcompanyrelationshipinterse. 14) The above principle of a corporate identity being possibly it could be said that that the holding company is the

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distinct from its shareholders and its shareholders not being owners of the property of the company has been consistently followed/applied in Admiralty proceedings by British Courts as well. In the matter of The EVPO AGNIC (1988) 2 Lloyds Law Report411thecaseoftheplaintiffwasthatoneEvangelosorhis companyPothicosShippingCompanywastherealowneroftwo

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13)

Inthiscaseitisnotthecaseoftheappellantthatthe

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questionofliftingthecorporateveil.

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shipsoneSkipper1(maritimeclaimarose)andEvpoAgnic(ship independent companies though having the same mangers and companiesbeing foundtobeinEvangelosorhiscompany.The argumentoftheplaintiffwasthatonliftingthecorporateveilit wouldbefoundthatoneandthesamepersonwasthebeneficial ownerofthetwocompanies.Thissubmissionwasrejectedonthe companybutarrestcouldonlybemadeofthesistershipi.e.ship ofwhichtheownerswasthesameastheshipinrespectofwhich vessel Evpo Agnic holding that the ships are owned by two different limitedcompanies whichownthem. Itisthelimited companyandnotitsshareholderswhoarethelegalandequitable ownersoftheship. 15) Theappellantplacedrelianceuponthedecisionofthe the maritime claim arose. The court vacated the arrest of the groundthatthearrestcouldnotbemadeoftheshipofasister

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Division Bench of this Court in Great Pacific Navigation (Holdings)CorporationLtd.V .M.V .TongliYantairenderedon14 October2011onthegroundthatonsimilarfacts,thisCourthad allowed the appeal of the appellant therein and set aside the vacation of the arrest of the vessel. The aforesaid decision renderedbythisCourton14October2011hasbeensetasideby theApexCourtinCivilAppealNo.8988of2012inM.V .TongliVs.

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shareholders with the ultimate ownership of both the limited

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soughttobearrested).Theownershipofthetwoshipswereintwo

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Great Pacific Navigation (Holdings) Corporation Ltd. on 12 DivisionBenchofthisCourtdated14October2011hasbeenset been set aside. It is as though it never existed. In fact in RamchandraVishnuTendulkarandors.Vs.StateofMaharashtra andors.(1993)1Mah.L.J.892 thisCourthasheldthatoncea JudgmentoftheDivisionBenchwassetasidebytheApexCourt thathasbeensetasidecanbereliedupon.Consequently,reliance upontheaforesaiddecisioninthematterofM.V .Tongli(supra) nooccasiontoconsiderthesameforthedisposalofthisappealcan arise. 16) renderedon14October2011iscompletelymisplaced.Therefore, thenneithertheobservationsand/orconclusionofthejudgment

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Inthesecircumstances,thearrestofrespondentNo.1

vesselisnotjustifiedasamatteroflawandtheorderpassedby theleanedSingleJudgecannotbefoundfaultwith. 17) Inviewofourabovefindingthatarrestofrespondent

No.1vesselinthepresentfactsisnotwarrantedonan issueof lawtheconsiderationoftheothersubmissionsuchasacommon directorbetweentherespondentNo.2companyandasubsidiaryof the applicant company, common agent and common signature wouldallwarrantliftingthecorporateveiloftherespondentNo.

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aside,noreliancecanbeplaceduponthejudgment whichhas

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December 2012. In view of the fact that the decision of the

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2companytodetermineitsbeneficialownerwouldnotarise.The according to the appellant in view of the fact that 100% isacompanyincorporatedinSamoa.Howeverunderthelawsof Samoathenamesofthedirectors,shareholdersarenotrequiredto bedisclosed.Itissubmittedbytheappellantthatinviewofthe aforesaid peculiar situation that appellant is unable to establish throughitinrespondentNo.2company.Howeverthenecessityto examinethesurroundingcircumstancesandproceedonsuspicion companyisobviatedforthereasonthatWangWendongwhois allegedbytheappellanttobethebeneficialownerofrespondent No.2companyhasfiledanaffidavitdated8February2013before thelearnedSingleJudgewherein,heinteraliastatesasunder: 4.I state that I was never and I am not the DirectornorholdanysharesofM/s.WhimStar CharteringCo.Ltd.,theDefendantNo.2inthe captioned proceedings, at any given point of time.IfurtherstatethatIwasneverandIam not the Director nor hold any shares of M/s. ZJHX Shipping Co. Ltd. at any given point of time. 5. IalsostatethatIwasneverandIamnot theDirectornorholdanysharesofM/s.Cartier InvestmentCo.Ltd.atanygivenpointoftime. thatWangWendongisthebeneficialownerofrespondentNo.2 beyonddoubttheownershipoftheWangWendonginCartierand

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shareholdingofrespondentNo.2companyisheldbyCartierwhich

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entire basis for looking at surrounding circumstances arises

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InviewoftheabovecategoricalstatementsonoathofMr.Wang Wendong the reason to act on suspicious surrounding affidavititisimpossibletoacceptthesubmissionsoftheappellant thatthearrestofthevesselwhichadmittedlyisbeneficiallyowned byWangWendonghastobecontinuedtosecuretheappellants maritime claim against respondent No. 2 company. The learned singlejudgehasexaminedthevarioussurroundingcircumstances andreachedafindingthatthesamedoesnotestablishthatWang WendongisthebeneficialownerofrespondentNo.2. 18) InfactinthedecisionofQueen'sBenchDivision in circumstances cannot be sustained. In the face of the above

Mawan (1988) 2 LLYOD Law Reports 459, the argument on

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behalfoftheplaintiffwasthatifonelooksatalltheconnecting links between the shareholders, the directors, and the managementofthetwolimitedcompaniesitwouldbeclearthat the beneficialownershipofthetwoshipsisvestedinthe same personandtheyaretrulysistershipsevenifattemptismadeto concealthefact.TheCourtnegativedtheaforesaidsubmissionby holdingthattheapproachsuggestedinvolvesnotmerelyliftinga corporateveilbutalsosweepingasideallthecorporatestructure. Therefore, in the present facts, no fault can be found in the impugnedorderdated6May2013.

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19)

The appellant had also submitted that while

theCourtisrequiredtoconsidernotonlytheprimafaciecasebut

matter.Theabovepropositionisindisputable.However,aprima faciecasecannotbebuiltmerelyonsuspicion.Thearrestofthe vesselonthebasisofthesuspicionraised certainlycausesmore injury to a third party than the plaintiff. Thus, the balance of ofAventicum1978Vol.ILLOYD'sLawReports184Queen'sBench Division(AdmiraltyCourt)hasheldthatonusisupontheplaintiff Admiraltyjurisdictionisthepersonwhobeneficiallyownsboththe vesselinrespectofwhichmaritimeclaimhasarisenaswellas thevesselwhichissoughttobearrested. TheCourtfoundthat therewereanumberoffactorstoindicatethatthereisveryclose connectionbetweentwocompaniessuchascommonaddressetc. yettheCourtonthebasisoftheevidencebeforeitheldthatthere was no positive evidence produced by the plaintiff which could establish the beneficial ownership of the vessel sought to be arrestedisinthesamepersonasinrespectofthevesselinwhich maritimeclaimarose.Theappellanthasnotbeenabletoestablish that even prima facie that respondent No.2 vessel is in the beneficialownershipofWangWendong.Inthecircumstancesthe impugnedorderhastobeupheld. to show that the person against whom it is sought to invoke conveniencewouldbeagainstthearrestofthevessel.Inthecase

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balance of convenience and irreparable injury involved in the

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consideringtheapplicationforvacationofsaidarrestofthevessel,

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Appeal(L)228-13 (copy).doc

Conclusion: 20) Inviewoftheabove,weseenoreasontointerferewith thewellreasonedorderofthelearnedSingleJudgedated6May

2013 setting aside the arrest done on 28 January 2013 of respondentNo.1vessel.Accordingly,theappealis,dismissedwith noorderastocosts.

fortheappellantpraysforcontinuingtheadinterimstaygranted earlierinordertoenabletheappellanttohavefurtherrecoursein

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accordancewithlaw. In the facts and circumstances of the case, the ad

interimstaygrantedearlierwillcontinueforaperiodof2weeks fromtoday. CHIEFJUSTICE

Afterpronouncementofthejudgment,learnedCounsel

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CHIEFJUSTICE

M.S.SANKLECHA,J.

M.S.SANKLECHA,J.

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