JUDGMENT

Chan Sek Keong J

At the conclusion of the hearing of the application by the plaintiffs for the continuation of a Mareva injunction obtained by them against the first defendant ('CNEA') and an application by the interveners to vary the terms of the injunction, I varied the injunction in terms of the interveners' application and, after reserving judgment for a short period, I discharged it altogether. The plaintiffs have appealed against both decisions. I now give my reasons.

On 5 November 1987, the plaintiffs issued an admiralty in personam writ against CNEA indorsed with a claim for: (1) damages for breach of charterparty; (2) loss and damage to the plaintiffs' cargo which was laden on board CNEA's vessel 'Salamis' during the voyage from Qinhuangdao and Hsinkang to Avonmouth and Liverpool between July and November 1986 sustained by reason of CNEA's breach of contract or duty or negligence in or about the carriage thereof; and (3) an account of extra freight and/or profits earned by CNEA in chartering out the plaintiffs' space on the said vessel.

On 23 November 1987, the plaintiffs obtained the injunction ex parte restraining CNEA until trial or further order, firstly, from removing its assets from the jurisdiction or disposing of or dealing with the same within the jurisdiction save in so far as such assets exceeded £650,000 and secondly, from drawing on its accounts in the name of the second defendant ('SSC'), the third defendant ('ESM') and the fourth defendant ('RC') at five named banks in Singapore so as to reduce the balance in such accounts to below £650,000.

The application for the injunction was supported by an affidavit sworn on 19 November 1987 by the plaintiffs' claims manager, JF Lester. The material allegations in the said affidavit were as follows:

(a) the plaintiffs chartered under a GENCON charterparty dated 8 July 1986 the entire vessel from CNEA for a voyage '1/2 SB Qinhuangdao completing 1/2 SB Xingang ... ' and '1/2 safe berths each 1/2 safe ports ... West Coast United Kingdom ... ' for a lump sum freight of $497,500 in terms which required the vessel to proceed directly to her destination unless ordered otherwise by the plaintiffs;

(b) the vessel loaded the plaintiffs' cargo of agricultural products at Qinhuangdao and Xingang between 20 July and 3 August 1986, then proceeded to Hong Kong for bunkering (which was permitted under the charterparty) and thereafter instead of proceeding to her contractual destination, deviated to the ports of Kota Kinabalu and Port Klang in Malaysia to load about 5,353 MT of sawn timber in the vessel's holds and on deck between 17 August and 12 September 1986;

(c) the vessel resumed her voyage on 14 September 1986 and on arrival off the west coast of Europe further deviated from her direct route in order to discharge the sawn timber at Rotterdam and Nantes contrary to the plaintiffs' order given on 7 October 1986;

(d) the unlawful deviations set out above resulted in at least four weeks delay in the performance of the charterparty;

(e) heating in hold No 3 was first detected in Kota Kinabalu and again in Port Klang; heating in hold No 3 was detected when the vessel passed Lisbon;

(f) on the vessel's arrival at Avonmouth on 31 October 1986, the plaintiffs' cargo in hold No 2 was reported to be on fire;

(g) as a result of the delay, claims by on-purchasers totalling £85,000 have been made against the plaintiffs; the plaintiffs' losses arising from deviation and damage to cargo were estimated at £650,000 inclusive of four years' interest and costs;

(h) the plaintiffs have failed to obtain security from CNEA and its underwriters;

(i) CNEA was incorporated in Panama with a capital of US$10,000 as a wholly-owned subsidiary of SSC; CNEA is a company of no substance and is properly to be regarded as a vehicle of SSC and/or ESM (which is an 80% subsidiary of SSC);

(j) there was a real risk of assets being removed before any award in an arbitration (which had been commenced in London on