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01 February 2006
An interim judgment was given recently in GM International Services Limited v MY Ilderim on whether items supplied to a yacht by the agent qualified as necessaries.
Under Maltese law the court has jurisdiction in rem over a vessel in the case of necessaries supplied to the vessel. The word 'necessaries' has traditionally been interpreted restrictively; however, existing case law on the issue has dealt with necessaries supplied to cargo vessels, rather than luxury yachts. In this case the agent of a luxury yacht had a running account with the yacht's owners, consisting of the cost of items he had supplied to the yacht. The account included champagne, the delivery of paintings and professional upholstery cleaning. For years the agent's accounts had always been paid punctually, but the last account remained unsettled. The agent commenced an action in rem against the vessel. The preliminary defence filed by the yacht was that the court did not have jurisdiction in rem against the yacht because the items supplied by the agent could not be considered as necessaries.
The agent successfully persuaded the court that, while it was clear that the court's jurisdiction was limited to the necessaries supplied, it could not look at the limited meaning of the word 'necessaries'. Instead, it had to distinguish between cases where necessaries were supplied to a cargo vessel and that where necessaries were supplied to a luxurious private yacht. The agent argued that the whole purpose of owning this type of a yacht is to provide the owner with the ultimate holiday and pleasure experience, and everything that was supplied to the yacht on the specific order of the owners had to be considered as necessary for that purpose.
The court held in favour of the agent. It held that, by considering that the word 'necessaries' should apply to all items ordered by the owners that were necessary for the service in which the yacht was engaged, the items for which the agent was claiming payment were indeed necessaries supplied to the vessel.
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