Sister ship arrest requires prima facie common ownership; separate incorporation cannot be ignored without evidence of fraud or sham structure.

A vessel cannot be arrested as a sister ship unless the claimant makes a prima facie case of legally relevant common ownership. The Court held that separate incorporation could not be ignored merely because different companies were ultimately linked to the same foreign State, since shareholding or common governmental interest does not by itself establish ownership of the ships. On the materials before it, there was no prima facie showing of fraud, sham structure, or grounds to lift the corporate veil, so the arrest was not sustainable and the order refusing to vacate it was set aside.

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Issues: Whether arrest of the vessel as a sister ship was justified on the basis of alleged common governmental ownership, and whether the corporate veil could be lifted to treat ships registered in the names of different companies as belonging to the same owner.

Analysis: The arrest of a ship in admiralty proceedings has serious consequences and cannot rest on vague pleadings or assumptions about ultimate control. The registered documents and other materials showed that the vessels were owned by different companies and were separately registered, while the allegation that both were merely owned and controlled by the same foreign government was not supported by any prima facie showing of fraud or sham corporate structure. A company is a separate juristic entity, and the shareholders, even if the State, do not become owners of its assets merely by reason of shareholding. The principle of sister ship arrest requires common ownership in law, and a common beneficiary or common governmental interest, without more, is insufficient to justify arrest of a different vessel.

Conclusion: The arrest was not sustainable, as no prima facie case for treating the vessels as sister ships was established and the corporate veil could not be lifted on the materials before the Court.

Final Conclusion: The appeal succeeded and the order refusing to vacate the arrest was set aside.

Ratio Decidendi: A vessel cannot be arrested as a sister ship unless the claimant makes a prima facie case of legally relevant common ownership, and separate incorporation cannot be disregarded merely because the companies have the same State as a shareholder or ultimate beneficiary.

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