Corporate veil in admiralty can be pierced only on pleaded fraud or sham formation; sister-ship security claim failed.

A corporate veil in admiralty matters may be pierced only where fraud or sham formation is specifically pleaded with particulars and supported by material sufficient to sustain the allegation at trial; mere common ownership, common address, similar management, or board resolutions is insufficient, and the sister-ship claim failed. A plaint seeking arrest and continued security must also contain the requisite particulars of dishonesty, and later material cannot cure a foundational pleading defect; the plaintiff's failure to pursue its arbitration undertaking further undermined the claim. The motion succeeded, security was ordered to be returned, and costs were awarded against the plaintiff.

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Issues: (i) Whether the corporate veil could be pierced on the pleadings and material placed on record so as to treat the defendant vessel and the other vessel as sister ships and justify continuation of security. (ii) Whether the plaintiff had shown a sustainable case for arrest and security in the absence of pleaded fraud or underlying dishonesty, and despite the undertaking to commence arbitration.

Issue (i): Whether the corporate veil could be pierced on the pleadings and material placed on record so as to treat the defendant vessel and the other vessel as sister ships and justify continuation of security.

Analysis: The separate legal personality of a company cannot be ignored merely because there are common shareholders, common address, identical management arrangements, or similar board resolutions. To justify lifting the corporate veil, the pleading must disclose fraud or sham formation with particulars sufficient to sustain the allegation at trial. The material relied upon showed, at best, similarities between the entities, but did not establish that the companies were created to conceal the true owner or to commit fraud. In the absence of a properly pleaded and supported case of dishonesty, the vessels could not be treated as sister ships by piercing the corporate veil.

Conclusion: The case for piercing the corporate veil failed, and the defendant vessel could not be treated as a sister ship of the other vessel.

Issue (ii): Whether the plaintiff had shown a sustainable case for arrest and security in the absence of pleaded fraud or underlying dishonesty, and despite the undertaking to commence arbitration.

Analysis: The plaint did not contain the necessary particulars of fraud required by the pleading rules. The plaintiff also failed to act in accordance with its undertaking to commence arbitration and did not satisfactorily explain the omission. The attempt to support the claim by later material was not accepted as curing the foundational defect in the suit for arrest and security.

Conclusion: The plaintiff failed to establish entitlement to arrest and continued security.

Final Conclusion: The motion succeeded, the security was directed to be returned, and costs were awarded against the plaintiff.

Ratio Decidendi: A corporate veil in admiralty matters may be pierced only where fraud or sham formation is specifically pleaded with particulars and supported by material sufficient to sustain the allegation at trial; mere commonality of ownership-related features is insufficient.

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