Australia: Ship Arrest And The Sheep Trade: Recent Cases From The Wild West

Last Updated: 18 November 2008
Article by John Farquharson

The Federal Court sitting in Western Australia handed down three decisions in rapid succession last month dealing with AM SA's attempt to impose loading restrictions on a foreign flagged, live sheep export vessel and movement of a vessel under arrest. In their different ways, the cases illustrate the commerciality of the Courts' approach in reaching decisions that facilitate trade.

Vessel requirements and the live export trade

On 3 October 2008, the owner/operator of a Kuwaiti flagged vessel, the 'Al Messilah' came before the Federal Court in Western Australia (Livestock Transport & Trading v Australian Maritime Safety Authority [2008] FCA 1569). The owner/operator sought an injunction to stop the Australian Maritime Safety Authority (AMSA) from preventing the vessel from loading livestock until the vessel complied with section 6.6 of Appendix 4 of Marine Orders Pt 43 Issue 6 (Marine Orders).

The Marine Orders require that:

'For all new ships, and existing ships after 27 September 2008, a holding tank or treatment plant is to be provided, complying with Annex IV of MARPOL 73/78, to treat, store and discharge effluent in accordance with that Annex...'

Annex IV of MARPOL (the International Convention on the Prevention of Pollution from Ships 1973) (Annex IV) deals with the prevention of sewage pollution and has been enacted into Australian law by Division 12C of Part IV of the Navigation Act 1912 (Cth) (Act).

The owner/operator of the vessel argued that Div 12C of Part IV of the Act draws a distinction between Australian flagged vessels and foreign flagged vessels. Therefore, it argued, although AMSA has the power to impose upon Australian flagged vessels the requirements necessary to give effect to Annex IV, AMSA does not have the same power in respect of foreign flagged vessels.

Justice Siopis believed that there was a serious question to be tried, and listed the matter for urgent hearing just 10 days later. However, his Honour did not consider that an injunction should be granted as an injunction would not make lawful any loading activities carried out by the Al Messilah between the hearings if it transpired that AMSA's notice was in fact valid.

The matter came back before Justice Siopis on 13 October 2008 for hearing proper in Livestock Transport & Trading v Australian Maritime Safety Authority (No 2) [2008] FCA 1544.

Justice Siopis reviewed the provisions of the Act that give effect to Annex IV and noted that Div 12C of Part IV of the Act distinguishes between Australian and foreign flagged vessels. Justice Siopis also noted that AMSA's power to deal with foreign flagged vessels in Australian waters which AMSA considers are not constructed in accordance with Annex IV, is limited to giving directions only where the vessel poses a risk to the environment. The Act does not give AMSA the power to direct that the structure of the vessel be changed so that it complies with the provisions of Annex IV.

Further, section 425(5C) of the Act provides that where an order (made by AMSA) is inconsistent with the Act, the Act shall prevail and the order shall, to the extent of the inconsistency, be of no force or effect.

On this basis, Justice Siopis found that by making its order against the Al Messilah, AMSA was attempting to enforce the requirements of Annex IV against a foreign flagged vessel, and to the extent it attempted to do so, AMSA's order was inconsistent with the legislative scheme set up by Div 12C of the Act. Accordingly, AMSA's order against the Al Messilah was set aside.


This case highlights two competing interests in international trade from Australia. This first is the need to promote trade with foreign countries by not imposing our law extra-territorially, and in that respect this decision will be welcomed by Australian livestock exporters and foreign traders with Australia. However, the case also highlights the difficulty associated with attempting to implement locally what is widely considered to be an international pollution prevention regime where the vessels involved are foreign flagged, even though those vessels are benefiting from their use of Australian ports and from traversing Australian waters.

Movement of an arrested vessel

Once arrested, a vessel is impounded and prevented from sailing. The obvious purpose of this procedure is to prevent a vessel that is the subject of a maritime claim, from making a break for the high seas and sailing off into the sunset, never to seen or heard from again and never to satisfy the claim against it.

However, on 16 October 2008 the Federal Court sitting in Western Australia permitted a vessel under arrest in Port Hedland to sail to the Port of Dampier, approximately 260km away (Tai Shing Maritime Co South Australia v The Ship 'Samsun Veritas' as surrogate for the ship 'Tai Hawk' [2008] FCA 1546). The voyage required the vessel to leave the territorial waters for part of the journey.

The vessel, 'Samsun Veritas' was fully laden with 140,000 tonnes of iron ore when it was arrested late in the afternoon of 15 October 2008. During the night between the vessel's arrest and the hearing before Justice McKerracher the next morning, the vessel's keel had less than half a metre draught from the ocean bed, and there was a real risk that due to the variable spring tides, the vessel would run aground.

In the early hours of the morning on 16 October 2008, Justice McKerracher heard an application from the Federal Court Admiralty Marshal seeking directions on the movement of the vessel to an anchorage point outside Port Hedland's area and beyond the territorial waters of Australia.

The owner of the berth, at which the Samsun Veritas was berthed, advised the Court that if the vessel was unable to leave the port that day, the movement of the tides would mean that the vessel would be unable to leave for at least another week. In order to leave port on the day of the 16th, the vessel had to depart by 9am.

The Court heard that the cargo value of four other ships that were waiting to berth at the berth occupied by the Samsun Veritas was A$12 million per day with the total estimated loss in a week estimated at US$86 million. Justice McKerracher noted that although safety was the primary consideration, the financial issues were significant.

Although the Admiralty Marshal did not oppose the vessel travelling to Dampier so long as adequate security arrangements were made, the Court was clearly concerned with allowing a vessel under arrest to leave territorial waters and as such, venture outside the Court's jurisdiction.

Justice McKerracher noted that there was a jurisdictional issue regarding the making of orders which purported to take effect in part beyond territorial waters. However, noting that the vessel could not stay where it was for safety reasons, nor could it be ordered to anchor outside the 12 mile limit, his Honour held that there were urgent and paramount public interest considerations which meant that any orders attempting to prevent the vessel from leaving Port Hedland for Dampier would be inappropriate.

Accordingly, the Samsun Veritas, while still under arrest, sailed for Dampier on the morning of 16 October 2008.

The Court gave permission for the claimant in the arrest proceedings to place a representative on board for the duration of the voyage. It also permitted the Admiralty Marshal to place a representative on board for the purpose of retaining safe custody and control of the vessel to prevent its departure from anchor in the Port of Dampier.


This decision illustrates that the Courts may take a more flexible approach in determining the appropriate course of action for an arrested vessel that poses a safety and financial risk to the port where it is berthed.

Phillips Fox has changed its name to DLA Phillips Fox because the firm entered into an exclusive alliance with DLA Piper, one of the largest legal services organisations in the world. We will retain our offices in every major commercial centre in Australia and New Zealand, with no operational change to your relationship with the firm. DLA Phillips Fox can now take your business one step further − by connecting you to a global network of legal experience, talent and knowledge.

This publication is intended as a first point of reference and should not be relied on as a substitute for professional advice. Specialist legal advice should always be sought in relation to any particular circumstances and no liability will be accepted for any losses incurred by those relying solely on this publication.

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