Held, appeal dismissed. (1) Section 10(4) of the State Immunity Act 1978, which had to be interpreted on the basis that it was addressed to the maritime law of salvage, was concerned with claims in respect of state-owned cargo. Section 10(4)(a) dealt essentially with admiralty claims for salvage in rem against the cargo. The state retained immunity if the cargo was in, and intended for, sovereign use irrespective of the use or intended use of the ship. Property was not a recognised subject of salvage unless it was or had been cargo carried on board a ship at sea or in tidal waters, and concerned in a maritime adventure or circumstances. Paragraph (a) was intended to apply to ships and cargoes which had become wreck, so that “use” and “intended use” of both ship and cargo had to be construed in that context. The necessary identification of the point of time at which the use or intended use of the ship and cargo was to be assessed was the point of time at which the relevant aspect of the cause of action for salvage arose, and not when the cause of action was complete. That was directed to the circumstances before the salvage services were required and rendered. Thus “in use … for commercial purposes” was to be given its ordinary and natural meaning. The inquiry was also necessarily directed at the point of time when the cargo was a cargo being carried. “Use” of the cargo also necessarily had to look to its use prior to it becoming wreck and the commencement of salvage services, so that there was no sensible basis to inquire as to what might be the use of the cargo by the cargo owner at that stage. Use of the ship or vessel referred to its use by the cargo owner and not any use by the shipowner or its operator or the salvor. Once the vessel had become wreck, it had been abandoned without hope of recovery. The commercial use of a vessel by the cargo owner to carry its cargo which exposed it to the risk of having to pay for salvage should that arise was non-sovereign and did not attract immunity under customary international law. Thus, the circumstances of the claimant’s maritime law claim to salvage were no different when salvage began in 2017 than when the ship and its cargo sank in 1942. The use of the cargo by the defendant for commercial purposes consisted of it making arrangements for putting the silver on board the vessel for its carriage to South Africa by sea, by entering into a contract of purchase on f o b terms and entering into a contract with the owners of the vessel. Those aspects were non-sovereign activity under customary international law and were activity for commercial purposes. Use of cargo rather than its intended use was the essential focus for the provision of state-owned cargoes, and that addressed the nature of the activity and not its purpose. Since the court was concerned with cargo and its status as such, the inquiry was necessarily on the circumstances rendering it as such (paras 31–32, 37, 45, 57–58, 68–69, 70–86, 87–107, 109).

(2) On the question whether the receiver of wreck had power to determine if salvage was due, the word “due” in section 226 of the Merchant Shipping Act 1995 meant “is or may be due” and did not mean “is decided by the receiver to be due”. The foundation for the liability to pay salvage was an agreement between the parties or a decision by the courts. Such an interpretation enabled the receiver to act quickly. If the court had determined that a claim was barred, for instance because of state immunity or because no claim had been made within the applicable limitation period, the receiver was obliged to release the wreck since it could not have been the legislative intention to continue detention in those circumstances. Nor did section 239, which gave the receiver the express power to decide whether the owner had established a claim to the wreck, expressly give the receiver power to decide whether salvage was due or what salvage was due. The word “due” in that section meant “agreed to be due” or “decided by a court to be due”. Since the two sections were concerned with the enforcement of the putative salvor’s security before that security was lost by release of the wreck to its owner, they had to refer to salvage which had been agreed, or had been decided by a court, to be due. The receiver could detain the wreck as long as there was a realistic possibility salvage would be agreed or a court might decide it was due. Those provisions were not ambiguous and in their statutory context did not confer any power on the receiver by implication. The provisions did not require the receiver to continue to detain a wreck if a state successfully invoked state immunity in response to a claim for salvage (paras 108, 127, 202–207).

Per Elisabeth Laing LJ dissenting. A cargo is a cargo purely and simply because it is being carried on a ship. Whether something is a cargo is primarily a factual, not a legal question. I do not agree that, as a matter of ordinary language, a cargo of silver which was sitting in the hold of the ship was being used by the defendant for any purpose, commercial or otherwise. It was being carried, and that is all. It was the subject of commercial arrangements for its carriage, but that is not the relevant inquiry. The question posed by section 10(4)(a) read with section 3(3) of the 1978 Act concerns the use or intended use by the defendant of the cargo, and not the nature of the arrangements by which the cargo arrived in, and was carried in, the ship’s hold (paras 138, 142).