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The Halcyon Isle Notes

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This is an extract of our The Halcyon Isle document, which we sell as part of our Conflict of Laws BCL Notes collection written by the top tier of Oxford students.

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THE HALCYON ISLE FACTS The appellants ("the mortgagees") are an English bank. They held a mortgage on a British ship the Halcyon Isle registered in London. It was dated April 27, 1973, and registered on May 8, 1974. The respondents ("the necessaries men") are ship-repairers carrying on business in New York. They executed repairs to the Halcyon Isle at their Brooklyn yard in New York State in March 1974. Under United States law a ship-repairer is entitled to a maritime lien for the price of repairs done to a ship. The Halcyon Isle was arrested in Singapore on September 5, 1974, in an action in rem brought in the High Court of Singapore by the mortgagees. On March 6, 1975, she was sold by order of the court, for a sum insufficient to satisfy in full the claims of all the creditors of her owners. The question of law directly involved in this appeal is whether in the distribution of the proceeds of sale the claim of the mortgagees should take priority over the claim of the necessaries men or vice versa. HOLDING LORD DIPLOCK At first sight, the answer to the question posed by this appeal seems simple. The priorities as between claimants to a limited fund which is being distributed by a court of law are matters of procedure which under English rules of conflict of laws are governed by the lex fori; so English law is the only relevant law by which the priorities as between the mortgagees and the necessaries men are to be determined; and in English law mortgagees take priority over necessaries men. In the case of a ship, however, the classification of claims against her former owners for the purpose of determining priorities to participate in the proceeds of her sale may raise a further problem of conflict of laws, since claims may have arisen as a result of events that occurred not only on the high seas but also within the territorial jurisdictions of a number of different foreign states. So the lex causae of one claim may differ from the lex causae of another, even though the events which gave rise to the claim in each of those foreign states are similar in all respects, except their geographical location, the leges causarum of various claims, of which under English conflict rules the "proper law" is that of different states, may assign different legal consequences to similar events. So the court distributing the limited fund may be faced, as in the instant case, with the problem of classifying the foreign claims arising under differing foreign systems of law in order to assign each of them to the appropriate class in the order of priorities under the lex fori of the distributing court.

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