Source: http://archive-sg.com/sg/s/singaporelaw.sg/2016-01-30_7413359_69/The_amp_quot_Damavand_amp_quot_1993_2_SLR_717_1993_SGCA_44/
Timestamp: 2017-09-25 07:59:11
Document Index: 560571666

Matched Legal Cases: ['art 28', 'art 3', 'art 3', 'art 3', 'art 15', 'art 3', 'art 15', 'art 15', 'art 15', 'art 28', 'art 28', 'art 28', 'arty 19', 'Art 160']

archive-sg.com: singaporelaw.sg - The &quot;Damavand&quot;[1993] 2 SLR 717; [1993] SGCA 44
The &quot;Damavand&quot;[1993] 2 SLR 717; [1993] SGCA 44
rather than against the Berny simply on the ground that the sister ship writ was issued first and the Berny writ second 12 These passages of the judgment were relied upon by the appellants in support of the submission that the respondents having elected irrevocably to pursue their claims which included the Bisoton claim against the Minab 4 had exhausted the remedy in rem in respect of those claims They had irrevocably elected to proceed against the Minab 4 and therefore could not amend the claims by deleting the Bisoton claim and invoke the admiralty jurisdiction again by taking out a writ in rem with an endorsement of the Bisoton claim against a sister ship such as the Damavand We are unable to accept this argument These passages of the judgment of Brandon J must be understood in their proper context The learned judge was referring to the situation where a claimant had an option to proceed by an action in rem either against the offending ship or against a sister ship in respect of one and the same claim In such a situation once the claimant had served the writ on the offending ship or the sister ship as the case may be he had elected irrevocably to invoke the jurisdiction in rem against that ship and he cannot concurrenlty pursue the same claim by another action in rem against the sister ship Brandon J did not say that where a writ with an endorsement of several claims or causes of action was served on the ship in question the plaintiff has thereby irrevocably elected to pursue all those claims or causes of action against that ship and is precluded subsequently from amending the endorsement by deleting one or more of the claims and thereafter pursuing such claims by a fresh action in rem against a sister ship 13 The situation in this case is quite different from that prevailing in The Berny Here the respondents had multiple claims or causes of action against the appellants and took out a writ in rem with an endorsement of all these claims On the day immediately following the date of service of the writ on the Minab 4 the Bisoton claim was deleted from the writ and thenceforth the Minab 4 action ceased to be an action in rem for that claim At that point of time there was nothing to prevent the respondents from invoking the admiralty jurisdiction by an action in rem against a sister ship for the Bisoton claim That they did Such an action does not violate or infringe the single ship arrest rule There was at all material times only one ship against which an action in rem was invoked for the claim or claims in question The Berny is not an authority to the effect that the respondents could not amend the writ in the Minab 4 action by deleting the Bisoton claim and immediately thereafter institute the Damavand action for the Bisoton claim Karthigesu J in his judgment said at p 1064 I see no reason in principle why a plaintiff should not amend his indorsement of claim by removing therefrom a part of his claim provided it is severable and can survive as a separate cause of action from the remainder of the claim even after a writ in rem has been served and the ship arrested provided always that it is done before the time limited for an appearance to be entered has expired to enable him to issue another writ in rem against another sister ship in respect of that cause of action No authority was cited as to why this could not be done A plaintiff may always amend the writ once at any time before the pleadings in the action begun by writ are deemed closed without the leave of the court see O 20 r 1 of the RSC In the Minab 4 proceedings International Paint amended the indorsement by removing the cause of action against the Bisoton one day after service and thus well before the time limited for an appearance to be entered had expired thus enabling them to commence another in rem action against the Damavand in respect of the claim arising from the cause of action against the Bisoton The position as I see it is that by acting timeously Internationl Paint have effectively one action in rem against the Minab 4 in respect of their causes of action against the Alamoot Khark 2 Shir Kooh and Taftan grouped together as one claim and were at liberty to commence another action in rem against the Damavand which they did in respect of their claim against the Bisoton which was entirely a separate cause or causes of action from their claim against the Minab 4 14 We respectfully agree with the learned judge on this passage of his judgment except the limitation he placed in his proviso namely that the amendment must be made prior to the expiry of the time limited for an appearance to be entered For reasons which we shall give in a moment we do not think that such a limitation is warranted 15 Before we move to the next point it is necessary to dispose of a submission made on behalf of the respondents based on the decision of this court in The Permina Samudra XIV Martropico Compania Naviera SA v Owners of Permina Samudra XIV that decision was also considered by Karthigesu J to be apposite in this case In The Permina Samudra XIV the plaintiffs had a claim against charterers of the ship the Ibnu for unpaid charter hire in the sum of US 7 230 711 48 On 24 July 1976 a sister ship of the Ibnu the Permina 108 was arrested in respect of the claim On the same day the plaintiffs also issued a writ in rem and executed a warrant of arrest against another sister ship the Permina Samudra XIV this arrest taking place some 15 minutes after the arrest of the Permina 108 Both the writs contained identical endorsements of claim which were as follows The plaintiffs claim against the defendants is for non payment of charter hire due under a charterparty dated the 1st day of September 1970 in respect of the vessel Ibnu The defendants applied to set aside the writ in rem and the warrant of arrest in the latter case In the meantime the appellants filed their statements of claim one in respect of the action in rem against the Permina 108 for instalment payments amounting to US 3 418 521 41 and the other in respect of the action in rem against the Permina Samudra XIV for different instalment payments amounting to US 3 812 190 07 The statements of claim listed the separate instalments and the dates when they fell due There were four instalments named in each writ making a total of eight unpaid instalments The High Court allowed the motion and set aside writ and the warrant of arrest On appeal the Court of Appeal reversed the decision and accepted the plaintiffs contention that there was no distinction between claim and cause of action and held that the arrests were in respect of two claims each of which was founded on a different cause of action as appeared in the two statements of claim Wee Chong Jin CJ delivering the judgment of the court said at p 49 He Mr Stone for the defendants submits that in s 4 4 there is a distinction between the expression claim and the expression cause of action Mr Thomas for the plaintiffs contends that these two expressions must have the same meaning and that the word maritime is not found in the Act He contends that the arrests of the Permina 108 and the Permina Samudra XIV were in respect of two claims each of which arises out of the list in s 3 1 and each of which is founded on a different cause of action as appears in the two statements of claim He contends that if Mr Stone is correct it would lead to injustice On the facts of the present case it is conceded that the appellants could have issued separate writs in rem each time an instalment was not paid when due and in respect of each action a ship could be arrested But where the appellants as now did not institute proceedings on each failure to pay an instalment and thus gives the respondents an indulgence Mr Stone says that the appellants can institute only one action in rem and thus can arrest only one ship because there is only one claim even though they have more than one cause of action against the respondents 16 The learned Chief Justice then went to distinguish The Banco thus In our opinion Monte Ulia Owners v Banco and Ors Owners The Banco supra is distingishable In that case it was decided that where there is a claim based on a single cause of action the jurisdiction in rem cannot be invoked by a single writ addressed to and served upon more than one vessel whereas in the present case the facts are that two separate writs have been issued based on separate and distinct causes of action and each writ names only one ship and has been served on only one ship the ship named in the writ 17 On the basis of that decision it was contended on behalf of the respondents that they had no less than 35 causes of action since there were 35 orders for the respondents goods and materials from the appellants and in principle they could have issued 35 writs against 35 ships belonging to the appellants Alternatively they could have grouped the causes of action and arrested a smaller number of ships Therefore it was argued that at the time the writ was served on the Minab 4 the respondents had not committed themselves to deciding which of the 35 causes of action were meant to be included in that writ It was still open to the respondents to issue a second writ for claims in respect of the goods supplied to the Bisoton which claim could cover for example all but one of the Bisoton invoices If the respondents had issued two writs both in respect of goods and materials supplied to the Bisoton they would have been entitled to arrest both the Minab 4 and the Damavand It therefore follows that there can be no question of want of jurisdiction when each writ was founded on different causes of action On this line of argument we have one general observation It is technically correct that where a plaintiff has multiple causes of action he can take out multiple writs in rem against multiple ships of the defendant But such actions if taken may well amount to an abuse of court process and would probably not be allowed More specifically we find that there are two difficulties in the way of this contention First the respondents had admitted in the affidavit sworn to by their solicitor on 1 March 1990 that the writ of summons and warrant of arrest issued in the Minab4 action were in respect of the claims for the supply of various paint products to the defendants ships or vessels Alamoot Bisoton Khark 2 Shir Kooh and Taftan at various ports in Portugal United Arab Emirates Holland and Singapore respectively which claims were supported by copies of a full set of invoices annexed to the affidavit There was therefore an admission that notwithstanding the general endorsement on the writ the respondents had intended to invoke the admiralty jurisdiction of the court in respect of all the claims or causes of action Secondly unlike The Permina Samudra XIV the writ in the Minab 4 action originally contained a claim for inter alia supplies to the Bisoton and was served upon the Minab 4 Even if that did not crystallize the respondents claim in respect of all the causes of action arising from supplies to the Bisoton because they were not particularized the fact remains that at that time the claim endorsed on the writ must bite upon at least one of the invoices on the Bisoton claim The writ in the Damavand action was taken out for the supply of various products to the ship or vessel Bisoton and from the affidavit of the solicitor it was for the entire Bisoton claim Hence if this writ was served on the Damavand before the amendment to the endorsement of the claim in the Minab 4 action the Damavand action would have fallen foul of the single ship arrest rule In our opinion The Permina Samudra XIV does not support the case of the espondents 18 We now turn to an alternative line of argument advanced by counsel for the appellants which is this It is settled law that an action in rem operates only against the res and if the defendant namely the owner or party interested in the res does not enter an appearance a judgment obtained in such action is limited to the value of the res or the bail which represents the res Once the defendant enters an appearance he submits to the jurisdiction of the court and from then onwards the action continues as an action in rem and in personam and judgment may be entered and enforced against the defendant to the full extent of the amount awarded to the plaintiff and is not limited to the value of the res or the bail which represents the res see The Dictator and The Gemma Therefore on these authorities so counsel submitted the respondents by deleting the Bisoton claim from the writ in the Minab 4 action and immediately thereafter instituting the Damavand action for the Bisoton claim contravened this rule Karthigesu J appeared to accept this argument in principle but held that in this case the rule had not been breached since the right to abandon the vessel had not yet accrued Thus he held that it was crucial that any amendment to the claim must be effected before the time limited for entry of appearance expired since it was then that the right accrued The learned judge in his judgment said at p 1066 the amendment to the indorsement of claim in the Minab 4 proceedings was made well before the time limited for appearance had expired In my view International Paint were well within their rights both legally and procedurally to amend the indorsement of claim in the Minab 4 proceedings by reducing it in the way they did or for that matter by adding to it 19 With this passage of the judgment we entirely agree But the learned judge added the following qualification provided and this is crucial provided that the amendment is effected before the time limited for an appearance has expired Once that time has expired and having regard to such authorities as The Dictator 1892 P 304 The Gemma 1899 P 285 The Dupleix 1912 P 8 and Castrique v Imrie 1870 LR 4 HL 414 at p 432 such amending of claim would be an abuse of the process of the court since then the right of abandonment of the arrested ship the Minab 4 to International Paint would have accrued to the defendants and any judgment entered thereafter in default of appearance on the amended claim would be to the detriment of the defendants 20 With respect we are unable to accept this qualification In our respectful view the authorities referred to do not support it In The Dictator the plaintiffs instituted an action in rem against the ship the Dictator her cargo and freight claiming 5 000 for salvage services rendered The solicitors for the owners of the ship gave an undertaking to enter an appearance for the defendants and to put in bail in an amount not exceeding 5 000 in consequence of which the ship was not arrested The action was subsequently tried and a sum of 7 500 was awarded and the plaintiffs with leave of the court amended the claim by increasing the amount to 8 500 The defendants paid the costs and offered to pay 5 000 for which they had undertaken to put in bail but that sum the plaintiffs declined to accept The question which eventually arose was whether execution could be issued against the owners of the salved ship her cargo and freight for more than 5 000 and costs It was held by Jeune J that the plaintiffs were entitled in the action to issue a writ of fieri facias to enforce payment of the full amount awarded The learned judge in the course of his lengthy judgment said at pp 320 321 In The Parlement Belge 1880 5 PD 197 it was said that The Bold Buccleugh 1851 7 Moo PCC 267 decides that an action in rem is a different action from one in personam and has a different result But I do not think it follows or that the Privy Council or the Court of Appeal intended to lay down that an action in rem could affect only the res It may well be that if the owners do not appear the action only enforces the lien on the res but that when they do the action in rem not only determines the amount of the liability and in default of payment enforces it on the res but is also a means of enforcing against the appearing owners if they could have been made personally liable in the admiralty court the complete claim of the plaintiff so far as the owners are liable to meet it It appears to me consonant with common sense that if the owners have had no personal notice and are not save in the sense indicated in The Parlement Belge before the court
Original URL path: http://www.singaporelaw.sg/sglaw/laws-of-singapore/case-law/cases-in-articles/shipping/1408-the-quot-damavand-quot-1993-2-slr-717-1993-sgca-44 (2016-01-30)
The &quot;Trade Resolve&quot;[1999] 4 SLR 424; [1999] SGHC 109
security of the coastal State Such passage shall take place in conformity with these articles and with other rules of international law 5 Passage of foreign fishing vessels shall not be considered innocent if they do not observe such laws and regulations as the coastal State may make and publish in order to prevent these vessels from fishing in the territorial sea 24 Having regard to the above it was clear to me that if the foreign ship had assumed or incurred any obligations or liabilities when it was within the territorial waters of Singapore then the vessel could be arrested even though it might be innocently passing through Singapore s territorial sea This gave the coastal State sovereignty over matters arising within its territorial jurisdiction But if the obligations or liabilities were not assumed or incurred by the ship in the course or for the purpose of its innocent passage through Singapore s territorial waters ie they were antecedent liabilities assumed or incurred prior to the vessel s entry into territorial waters no arrest of the vessel making an innocent passage through the territorial waters of Singapore ought to be allowed by the court However if the foreign ship had stopped or anchored within the territorial waters of Singapore and was thus no longer continuing its innocent passage through the territorial waters then the vessel could be lawfully arrested for the purpose of any civil proceedings because the interest of the coastal state had reassumed its importance and there was no need in such an instance to balance the countervailing necessity to keep sea lanes of communication as open as possible But where the stopping or anchoring was reasonably incidental to ordinary navigation or was rendered necessary by force majeure or by distress then the vessel should not be arrested as that stopping or anchoring would be regarded as an integral part of the vessel s innocent passage through the territorial sea of Singapore 25 For completeness I might add here that the above limitations stated in art 28 of UNCLOS concerning execution and arrest of a foreign vessel within territorial waters would not be applicable if the vessel was within the internal waters of Singapore as defined in UNCLOS 26 On the facts of this case the foreign vessel was already at anchor and was in fact performing blending operations whilst at anchor Obviously its innocent passage whether through the territorial sea or not had been completed by the time of its arrest If the vessel was anchored under these circumstances within the territorial sea of Singapore it could be lawfully arrested without any breach of Singapore s international obligations but not if it was outside Singapore s territorial sea It was thus important to decide this question Was the vessel arrested and the writ in rem served outside Singapore s territorial waters 27 The plaintiffs contended that the vessel was anchored within Singapore s territorial waters Hence both the service of the writ in rem and the execution of the warrant of arrest were proper Were they The starting point for this analysis would be the UK Territorial Waters Jurisdiction Act 1878 which was not disputed was applicable to the United Kingdom and all other parts of Her Majesty s dominions at that time of which Singapore was one Section 7 provides The territorial waters of Her Majesty s dominions in reference to the sea means such part of the sea adjacent to the coast of the United Kingdom or the coast of some other part of Her Majesty s dominions as is deemed by international law to be within the territorial sovereignty of Her Majesty and for the purpose of any offence declared by this Act to be within the jurisdiction of the Admiral any part of the open sea within one marine league of the coast measured from low water mark shall be deemed to be open sea within the territorial waters of Her Majesty s dominions 28 The latter part of s 7 above dealt with the jurisdiction for criminal offences which extended to one marine league from the low water mark of the coastline Counsel informed me that one marine league was equivalent to 3 nautical miles But for non criminal matters the territorial waters under that Act would be that part of the adjacent sea as was deemed by international law to be within the territorial sovereignty of Her Majesty Thus the present limits of the territorial waters of Singapore is such part of the sea adjacent to the coast of Singapore as is deemed by current international law to be within the territorial sovereignty of Singapore 29 With UNCLOS successfully concluded in 1982 which saw numerous countries being signatories to it including Singapore Malaysia and Indonesia I would for the present purposes be guided by UNCLOS in my determination of the current state of international law in relation to the delimitation of the territorial waters of Singapore I agreed with counsel for the plaintiffs that it was legitimate to regard UNCLOS as reflective if not already an embodiment of customary international law 30 Under art 3 of UNCLOS Singapore had the right to establish the breadth of its territorial sea up to a limit not exceeding 12 nautical miles from the low water line along the coast defined as the normal baseline in UNCLOS I noted that art 3 had not deemed that every state would have a territorial sea extending to 12 nautical miles UNCLOS left each coastal state to decide for itself whether to extend the breath of its territorial sea 31 The next important question was whether Singapore had in fact exercised its right under art 3 to extend its territorial sea up to 12 nautical miles Counsel for the plaintiffs submitted that Singapore had already done so He relied on the following pre UNCLOS press release dated 15 September 1980 from the Ministry of Foreign Affairs Exclusive Economic Zone The Resumed Ninth Session of the Third United Nations Conference on the Law of the Sea has just ended at Geneva From the results of the Session it would appear that the Conference is now drawing to a close and a new Convention on the Law of the Sea is likely to be concluded soon One of the trends emerging from the Conference is the endorsement of a 12 nautical mile limit for the territorial sea with assurances of unimpeded transit passage through straits and for a 200 nautical mile Exclusive Economic Zone beyond the territorial sea where coastal States will have jurisdiction and rights over resources The practice of States in recent years has also been consistent with this trend Among others Malaysia and Indonesia have already declared a 12 nautical mile territorial sea and a 200 nautical mile Exclusive Economic Zone Since 1878 Singapore has adhered to the concept of a three nautical mile territorial sea In certain areas Singapore can extend its territorial sea beyond three nautical miles and can also claim an Exclusive Economic Zone In the light of the said international developments Singapore will exercise its rights to extend its territorial sea limit up to a maximum of 12 nautical miles Likewise Singapore will also establish an Exclusive Economic Zone The precise coordinates of any extensions of the territorial sea and the establishment of any Exclusive Economic Zone will be announced at an appropriate time Should such extensions and the establishment of an Exclusive Economic Zone overlap with claims of neighbouring countries Singapore will negotiate with these countries with a view to arriving at an agreed delimitation in accordance with international law 32 Where the separation between the coastal states was less than 24 nautical miles the 12 mile territorial seas of the adjacent coastal states would be delimited as follows under art 15 of UNCLOS which provided that Where the coasts of two States are opposite or adjacent to each other neither of the two States is entitled failing agreement between them to the contrary to extend its territorial sea beyond the median line every point of which is equidistant from the nearest points on the baselines from which the breadth of the territorial seas of each of the two States is measured The above provision does not apply however where it is necessary by reason of historic title or other special circumstances to delimit the territorial seas of the two States in a way which is at variance therewith 33 It was not disputed that the vessel was anchored more than 3 but less than 12 nautical miles from the nearest land mass sovereign to Singapore The vessel was 4 05 nautical miles from Sultan Shoal Lighthouse Singapore territory and 4 61 nautical miles from Tanjung Piai Malaysian territory at the time of her arrest Article 15 was thus relevant Since the vessel was on the nearer side of the median line to Singapore and within 12 nautical miles plaintiffs counsel submitted that the vessel was therefore arrested within Singapore s territorial waters although it was off port limits I was given to understand that port limits at that location was 3 nautical miles from Singapore 34 Plaintiffs counsel further relied on the presence on numerous occasions of Singapore Police Coast Guard vessels patrolling in this area outside port limits which he submitted demonstrated that Singapore had been exercising its rights of sovereignty in that area Hence he argued that Singapore s territorial sea extended to the waters where the vessel was anchored In my view the presence or absence per se of these Singapore Police Coast Guard vessels in these waters could not and did not establish if Singapore s territorial sea according to international law extended to where these coast guard vessels were sighted 35 It was not disputed and I assumed that counsel had checked their facts that no announcements had been made by the Government of Singapore of the precise coordinates of the extensions of the territorial sea in the area where the vessel was anchored Counsel could not show me documents evidencing any agreed delimitation with Malaysia for the waters in the area in question Counsel for the plaintiffs relied exclusively on the press release by the Ministry of Foreign Affairs to show that Singapore had in effect declared an extension of its territorial sea to 12 nautical miles 36 On reading the press announcement issued by the Ministry of Foreign Affairs it did not appear to me to constitute a declaration of the extension of our territorial waters to the 12 nautical mile limit or to the median line at the points where the separation between the baselines of Singapore and neighbouring states was less than 24 nautical miles It was simply an announcement that Singapore would in the future exercise its rights to extend its territorial sea limit to a maximum of 12 nautical miles the precise coordinates of which would be announced at some appropriate time in the future Should Singapore s claim of a territorial sea limit of 12 nautical miles overlap with the claims of neighbouring countries Singapore would in future negotiate with these countries to reach an agreed delimitation in accordance with international law The announcement was merely a declaration of an intention to exercise its rights In any event it could not amount to any actual exercise of Singapore s rights pursuant to art 3 of UNCLOS as the September 1980 press announcement in fact preceded the date 10 December 1982 when UNCLOS was opened for signature at Montego Bay Jamaica 37 If Singapore had not subsequently exercised the rights available to it under UNCLOS and under international law to extend its territorial sea from 3 nautical miles to 12 nautical miles then its territorial sea must have remained at 3 nautical miles It did not follow however that because Singapore had failed to exercise its rights neighbouring states who were also signatories to UNCLOS had therefore an increased right under UNCLOS or international law to extend the limits of their territorial sea beyond the median line to the full extent of 12 nautical miles in waters where the separation between the baselines of the neighbouring states and Singapore was less than 24 nautical miles It mattered not that Singapore had not declared an extension of its territorial sea to 12 nautical miles 38 In fact art 15 specifically prohibited any extension in the absence of agreement by a neighbouring state of its territorial limit beyond the median line unless the very limited exceptions in art 15 applied I did not see any of the exceptions being applicable to the area where the vessel was anchored Thus it was my opinion that the waters between the 3 nautical mile limit and the median line at that location where the vessel was anchored must be regarded as open sea or high sea and not the territorial waters either of Malaysia or Singapore 39 The prohibition under art 15 made perfect sense to me as it would prevent a mad scramble by neighbouring states to declare a 12 nautical miles territorial sea If the first in time to declare a 12 nautical miles limit could go beyond the median line at the expense of the state who was later in time to declare the 12 miles limit the situation would be inimical to friendly relations between neighbouring states as disputes could easily arise Regularity of service of the writ 40 It is trite law that a writ in rem can be served on a vessel anywhere within the port limits or the internal waters of Singapore What about service of a writ in rem on a vessel within Singapore s territorial sea but outside these waters I noted that art 28 of UNCLOS had not placed any limits on the service of a writ in rem on a foreign vessel passing innocently through the territorial sea Article 28 only restricted the coastal state s right to levy execution against or arrest a ship during its innocent passage through the state s territorial sea As the mere service of a writ on the ship would not amount to an execution or arrest a plaintiff could therefore validly invoke the admiralty jurisdiction in rem of the Singapore court against a particular ship by serving the writ in rem on that ship although it might be on an innocent passage through Singapore s territorial sea 41 It was also clear that unlike a writ in an action in personam which could be served outside Singapore provided the Rules of Court relating to service of process out of jurisdiction were complied with an admiralty writ in an action in rem could not be served outside the territorial waters of Singapore O 70 r 3 3 of the Rules of Court The service would be bad and must be set aside It was not a mere irregularity which could be waived by the defendants It was a nullity Hence the admiralty in rem jurisdiction of the court could not have been validly invoked against the vessel by the plaintiffs service of the writ in rem out of jurisdiction and it necessarily followed that the court would not have any jurisdiction to try the action as an action in rem nor give a judgment in rem against the vessel Procedure to dispute jurisdiction 42 A defendant could dispute the court s jurisdiction under O 12 r 7 1 a read with O 70 r 2 of the Rules of Court by entering an appearance and applying to set aside the service of the writ in rem on the vessel If the vessel had also been wrongfully arrested the defendants could apply to have the arrest set aside and the vessel released under O 12 r 7 1 e Service of the writmight be bad and the arrest might still be proper Vice versa service of the writ might be proper but the arrest could still be wrongful The facts would have to be examined 43 Hence in a case where the writ in rem was properly issued and validly served on a vessel whilst on an innocent passage through Singapore s territorial sea but the subsequent arrest was wrongful as the arrest took place when the vessel had not entered Singapore s internal waters at all the security purportedly taken by seizing the vessel would be treated as having been wrongfully obtained Consequently the plaintiffs would be ordered to release the vessel even if the vessel had been forcefully moved into Singapore s internal waters or port limits following the wrongful arrest outside these internal waters in contravention of art 28 of UNCLOS Should the vessel subsequently re enter Singapore s internal waters of its own accord the plaintiffs would of course be entitled to re arrest the vessel This example illustrated a situation where there was no irregularity in the service of a writ in rem but the arrest was wrongful With this in mind I would now examine if there was necessarily any inconsistency or inherent contradiction when the defendants decided to enter an appearance to the action in rem and waive the irregularity concerning the service of the writ in rem but take objections to the execution of the warrant 44 The defendants applied only to set aside the arrest but not the service of the writ in rem although both the writ and warrant of arrest were served at the same time beyond the limits of Singapore s territorial waters Counsel for the defendants said that they wanted the court to determine the merits of the action concerning the lien including the issue on the validity of the vessel s arrest and hence they decided to waive any irregularity concerning the service of the writ in rem but not the irregularity of the arrest If they took objections to the writ and have the court set it aside then the whole action would not be heard That was not what the defendants wanted So they entered an appearance submitted to the jurisdiction of the court and prevented the plaintiffs from obtaining a judgment in default but made clear in their correspondence with the defendants solicitors that they reserved their right to challenge the validity and lawfulness of the arrest 45 Plaintiffs counsel objected strenuously that once the defendants had waived the irregularity of the service of the writ in rem out of jurisdiction and submitted to the court s in rem jurisdiction they must be deemed to have concurrently waived any irregularity in the vessel s arrest outside of Singapore s territorial waters He contended that the defendants could no longer challenge the warrant of arrest on the ground that there was no in rem jurisdiction The defendants basically could not take contradictory positions However he had to concede that one could serve a writ in rem without arresting the vessel although he said that it was most unusual In my view the action in rem could still be tried and a judgment in rem obtained In The Nautik 1895 P 121 the writ in rem was duly served on the ship within the jurisdiction Before the ship could be arrested the ship sailed out of jurisdiction Judgment in rem against the ship was given for the plaintiffs 46 I could understand why it was unusual not to arrest the vessel because there would be a real risk of the vessel clandestinely sailing away the moment the vessel was served with the writ in rem A plaintiff naturally would want to ensure that the vessel was kept under arrest within the jurisdiction as security to meet his claim A judgment in rem might well be a paper judgment if the vessel was no longer available in the jurisdiction for execution Waiting for the vessel to return to the jurisdiction to be arrested to enforce that judgment in rem would not be of much use Enforcing a judgment in rem out of jurisdiction against the vessel would not be that straightforward 47 By way of comparison in an enforcement in Singapore of a foreign judgment given in an action in rem against a vessel the foreign court would be deemed to have had jurisdiction if the vessel was situated in that foreign country at the time of the proceedings in that foreign court s 5 2 b Reciprocal Enforcement of Foreign Judgments Act Cap 265 If the foreign country where the vessel could be found had laws on enforcement of foreign judgments similar to ours then the Singapore court would not be deemed to have jurisdiction to try the action in rem and give a judgment in rem against the vessel should the vessel not be within Singapore s territorial waters at the time of the proceedings It might well be necessary then to prove during the foreign enforcement proceedings of a Singapore court s judgment in rem that the Singapore court in fact had the jurisdiction to hear the action in rem although the vessel was not or no longer situated within the internal waters or the territorial waters of Singapore at the time of the proceedings but had left the jurisdiction after service of the writ in rem But these difficulties would not inmy opinion mean that a Singapore court could never try the action and give a judgment in rem against a vessel when the admiralty jurisdiction to try and hear an action in rem had been invoked by a proper service of the writ in rem within jurisdiction on the vessel although the vessel was not subsequently arrested and kept within the jurisdiction throughout the period of the Singapore proceedings That judgment in rem would in any event be enforceable by way of arrest should the vessel come into the internal waters of Singapore 48 The fact that the serving of a writ in rem and execution of a warrant of arrest were substantively different matters consequently meant that the position taken by the defendants was not inherently contradictory But as the decided facts were that the vessel was served with the writ in rem and warrant of arrest outside jurisdiction I had to examine more closely whether the defendants by doing what they did had submitted only to the in personam jurisdiction or had they submitted both to the in personam and in rem admiralty jurisdiction of the court 49 The High Court will have jurisdiction to hear and try any action in personam when the defendant submits to the jurisdiction of the court s 16 1 b of the Supreme Court of Judicature Act In a case falling within s 5 1 to 3 of the High Court Admiralty Jurisdiction Act where under certain circumstances the court will not entertain an action in personam to enforce a claim these provisions are made inapplicable when the defendant submits to the jurisdiction of the court See s 5 4 of the High Court Admiralty Jurisdiction Act Hence where the court would otherwise not have been able to hear an action in personam the aforesaid statutes have enabling provisions to confer on the court the jurisdiction to do so when the defendant submits to the court s jurisdiction But I could find no equivalent statutory provision which allowed a defendant to submit to and confer on the court the jurisdiction to hear an action in rem where there was otherwise no such jurisdiction In the absence of a statutory provision I did not think that would be possible GP Selvam JC as he then was said at p 638 of his judgment in The Ohm Mariana 1992 2 SLR 623 that It is settled law that where a statute confers a limited and circumscribed jurisdiction it cannot be enlarged by parties by agreement or otherwise One can overcome an irregularity but not a nullity Where a court exercises jurisdiction which it does not possess the proceedings amount to nothing see A G v Lord Hotham and Re Dulles Settlement Trusts Dulles v Vidler Further it is the duty of counsel to take jurisdiction points and if they do not do so it is for the court to take them per Lawton LJ in Third Chandris Shipping Corp v Unimarine SA at p 659 In Heyting v Dupont Plowman J said that he regarded it his duty to consider on his own initiative whether he had the jurisdiction to adjudicate the claims before him and held that parties by consent cannot impose jurisdiction on the court 50 In my view only after the admiralty jurisdiction to hear an action in rem is properly invoked by a proper service of a writ in an action in rem within Singapore s territorial waters or by a proper and lawful arrest in territorial waters without contravention of art 28 of UNCLOS or in inland waters then the court will be vested with the necessary admiralty jurisdiction to hear and try an action in rem and to give a judgment in rem against the vessel if the claim is proved 51 On the facts since both the service of the writ in rem and the arrest were outside jurisdiction ie outside territorial waters any submission to jurisdiction would only be to the extent of the jurisdiction of the court against the defendants in an action in personam Thus the court could still determine the merits of the lien and the action and award a judgment in personam against the defendants if the plaintiffs proved their claim Enforcement of such a judgment was a separate matter But the court would not by the submission to jurisdiction by the defendants and by the defendants waiver of the irregularity of service of the writ in rem outside jurisdiction be conferred the jurisdiction to hear the action as an action in rem against the vessel although it might exercise its admiralty jurisdiction to hear the matter as an action in personam In other words the lack of jurisdiction to hear the action as an action in rem would not be cured either by the submission to jurisdiction or the waiver of the irregular service of the writ in rem out of jurisdiction Neither would an arrest out of jurisdiction confer any in rem jurisdiction on the court The court would only have admiralty jurisdiction to hear the action as an action in personam against the defendants The vessel must therefore be released from its wrongful arrest and be free to leave Singapore 52 In conclusion by the defendants entry of an appearance and their submission to the court s jurisdiction to determine the merits of the plaintiffs claim and their claim to the lien they had submitted personally to the jurisdiction of the court Under the unusual circumstances of this case where both the writ and warrant were served out of jurisdiction the action would nonetheless continue and proceed as an action only in personam and if judgment in personam was entered for the plaintiffs the defendants would become liable for the full amount of the plaintiffs proved claim even though the judgment sum might eventually exceed the value of the vessel However I would not regard the in rem jurisdiction of the court as having been invoked despite the waiver of the bad service of the writ out of jurisdiction for the reasons I had given 53 In reaching the above conclusion I was much guided by the decision of the Court of Appeal in The Fierbinti where the court held at pp 870 872 that An action in rem once commenced against the ship is an action against the ship itself and continues as such even though it may also be an action in personam against the owner thereof If the owner does not enter an appearance and the judgment is obtained the judgment is enforceable only against the ship and to the extent of the value of the ship If however the owner enters an appearance the action will continue as an action in rem against the ship and an action in personam against the owner and if judgment is obtained it is enforceable against the ship and also against the owner to the full extent of the judgment see The Gemma at pp 291 292 The August 8 at p 456 and The Kusu Island at pp 260 261 It has been held in The Kusu Island that although an action in rem is one against the res the defendant to the action is the owner of the res and not the res itself see pp 261 262 Such a construction of O 70 r 7 1 and 2 which is based on the express wordings thereof is wholly consistent with the established rule that in order to invoke the in rem jurisdiction against a res the res in question must be within the jurisdiction In The Freccia Del Nord at p 392 Sheen J said I must add that the court cannot have jurisdiction over a ship which does not come within its jurisdiction Many a writ in rem has been issued in the hope or expectation that the ship against which the plaintiff has brought his action will come within the jurisdiction Frequently that hope or expectation has been frustrated or thwarted by a change of orders to the master of the ship In The Good Herald Sheen J said at p 238 The concept of an action in rem is that the writ is issued against a ship The action is commenced by service of the writ on that ship and is enforced by the arrest of the ship If the owner acknowledges service of the proceedings and thereby submits to the jurisdiction an action in personam is grafted on to the action in rem against the ship Reverting to the facts in this case we do not think that the appearance so entered by the defendants solicitors has any effect or significance at all on the issue whether or not the in rem jurisdiction has been invoked against the Fierbinti The effect of the entry of appearance was that thenceforth the action which started as an in rem action would proceed and continue as an action in personam against the owners of the Fierbinti but as the writ has not been served on the ship the in rem character of that action remained 54 I would attempt to draw an analogy with the facts in The Fierbinti The service of the writ in rem on the vessel out of jurisdiction in this case was equivalent to having no service at all on the vessel although the in rem character of the action remained But the effect of the entry of appearance by the defendants though having no effect on whether the in rem jurisdiction had been invoked against the vessel was that the action which started as an in rem action could still proceed and continue as an action in personam against the defendants as the owners of the vessel By entering an appearance the writ in rem would be deemed to have been duly served not on the vessel but on the defendants in person by virtue of O 70 r 7 2 read with O 10 r 1 3 Hence the court would have jurisdiction to hear and determine the merits of the action regarding the lien and a give judgment in personam against the defendants if the plaintiffs succeed in proving their claim although there was no proper service of the writ in rem on the vessel within jurisdiction or b dismiss both the plaintiffs and interveners claims if the defendants succeed in establishing their lien 55 Having reached the conclusion that there was jurisdiction for me to hear the action as an action in personam I proceeded to determine the rights of the parties with respect to the alleged lien over the blended oil cargo remaining on board the vessel Terms of the bill of lading and exercise of the lien 56 The plaintiffs and the interveners basically contended that the lien exercised by the defendants did not bind them and accordingly they refused to pay all or any of the demurrage and detention charges incurred 57 The defendants relied on the decision of the Queen s Bench Division in The Miramar 1983 2 Lloyd s Rep 319 where Mustill J had occasion to consider a bill of lading prepared on a form stipulated for use in conjunction with an Exxonvoy charterparty The bill of lading provided that the freight was payable as per the charterparty and it stipulated that This shipment is carried under and pursuant to the terms of the charter dated 19 May 1980 and SEA Petrochem Limited Singapore charterer and all the terms whatsoever of the said charter except the rate and payment of freight specified therein apply to and govern the rights of the parties concerned in this shipment 58 The charterparty was on the terms of the Exxonvoy form which contained inter alia the following lien clause 21 LIEN The Owner shall have an absolute lien on the cargo for all freight deadfreight demurrage and costs including attorney fees of recovering the same which lien shall continue after delivery of the cargo into the possession of the Charterer or of holders of any Bills of Lading covering the same or of any storageman 59 The difficulty was in the construction of the demurrage clause in the charterparty which imposed a liability to pay demurrage only on the charterer but not on the holder of the bill of lading That clause began as follows DEMURRAGE Charterer shall pay demurrage at the rate specified in Part I for all time that loading and discharging and used lay time exceeds the allowed lay time elsewhere herein specified 60 The court had to consider whether the incorporating words in the bill of lading could be given any meaning at all without transmuting the Charterer in the charterparty into the bill of lading holder when embodying them in their new context Mustill J went on to say I am of the opinion that cl 21 lien clause can be incorporated into the bill of lading contract without any strain If this is so the incorporating words have produced a really useful practical result The results which the shipowner most wishes to preserve are those relating to his freight dead freight and demurrage In theory a power to sue the consignee directly in respect of the indebtedness will be of value In practice however the shipowner is not really interested in litigating for his freight and demurrage For practical purposes what he needs is the capacity to enforce his claim on the spot and for this purpose the lien is what matters If the incorporating words of the bill of lading ensure that the shipowner s lien is good against the bill of lading holder this is sufficient to meet the shipowner s requirements and for the reasons I will state in a moment I shall hold that the lien is good against the bill of lading holder in the circumstances of the present case 61 The reasons for the learned judge s decision were as follows Looking first at the presumed intention of the draftsman one sees that the clause is designed to create a lien over the cargo It is only in a minority of cases that the cargo belongs to the charterer himself throughout the transit and it follows that if the clause is to be useful it must be understood as creating rights against third parties A clause in the charter cannot do this directly and it must therefore have been intended that the clause would operate by way of incorporation into the bills of lading Since the clause is of a type which most intimately concerns the interests of the consignee in the carriage and delivery of the cargo even the most general form of incorporating words would in principle be sufficient to
Original URL path: http://www.singaporelaw.sg/sglaw/laws-of-singapore/commercial-law/chapter-25?id=1417 (2016-01-30)
The &quot;Fierbinti&quot;[1994] 3 SLR 864; [1994] SGCA 74
The Good Herald an order giving leave to serve the writ on the ship by substituted service upon the defendants solicitors was set aside In accepting the defendants submission that the court could not order substituted service of the res in an action in rem Sheen J said at p 238 15 The concept of an action in rem is that the writ is issued against a ship The action is commenced by service of the writ on that ship and is enforced by the arrest of the ship If the owner acknowledges service of the proceedings and thereby submits to the jurisdiction an action in personam is grafted on to the action in rem against the ship 16 Later the learned judge said at p 238 Unless a solicitor acting on behalf of the owner of a ship endorses on the writ a statement that he accepts service of the writ in accordance with O 10 r 1 4 or a defendant acknowledges service of a writ in accordance with O 10 r 1 5 despite the fact that the writ has not been duly served a writ in rem must be served on the property against which the action is brought in accordance with O 75 r 11 An order for substituted service is inappropriate to a writ in rem There are two main reasons for that First unless the property against which the writ has been issued is within the jurisdiction and can be served with the writ that property cannot be arrested The process in rem would be frustrated Secondly O 65 r 4 which deals with orders for substituted service applies only to a document which is required to be served personally It does not apply to a writ in rem 17 The next question is the effect of the entry of appearance by the solicitors for the defendants as owners of the Fierbinti It was the contention of the appellants that by reason of the following namely i that the writ was deemed to have been duly served on the defendant owners and ii that their solicitors had entered an appearance for the owners of the Fierbinti the in rem jurisdiction had been invoked against that ship We find the contention untenable Such a contention if accepted would effectively give to the defendants a choice of determining the ship against which the respondents would be treated as having invoked the in rem jurisdiction This is contrary to the provision of s 4 4 of the High Court Admiralty Jurisdiction Act That provision gives to the respondents a choice to invoke the in rem jurisdiction against either the offending ship or any other ship in the same ownership The weakness of the appellants contention is even more vividly demonstrated by the operation of O 10 r 1 3 Under that rule a defendant to an action in rem may enter an appearance gratis ie without the writ having been served on him and upon entering such appearance the writ is deemed to have been duly served on him on the date he entered the appearance It follows that if the arguments of the appellants were to prevail then in a case where a writ in rem has been taken out against a number of ships as in this case the defendant by entering an appearance as the owner of one ship gratis under O 10 r 1 3 would be able to foist upon the plaintiff a ship against which the in rem jurisdiction would then be treated as having been invoked and thereafter the defendant may or would take steps to keep that ship away from the jurisdiction On this point it is helpful to refer to the observation made by Cons J as he then was in Mobil Sales and Supply Corp v Owners of the Ship or Vessel Pacific Bear He said at p 129 I should notice here an argument put forward by the plaintiffs A writ is deemed to be served if appearance is entered before service is actually effected in the present instance the defendants entered conditional appearances before any move was made against any ship except in A17 978 therefore all the other writs are deemed to have been served and the plaintiffs may continue against all or any ship as they choose This argument is in principle at variance with the one ship doctrine laid down in The Banco For that reason alone I think it cannot have any validity Furthermore by judicious choice of ships a defendant might be able to emasculate the new found remedy of the plaintiffs Only one ship may be arrested The defendant would enter appearance for that one of his ships least likely to call within the jurisdiction and the others could then continue to call with impunity To my mind that cannot be right The Act gives the choice to the plaintiff It must be the fact of arrest or similar action and not the fact of service which demonstrates the exercise of that choice 18 In that case the defendants were a company incorporated in the United States of America and owned four ships They ran into financial difficulties Their ships however continued to call at Hong Kong Eight creditors including the plaintiff commenced proceedings against the defendants and issued a writ in rem against one or two or all four ships Conditional appearances were entered to all the writs The defendants then applied to set aside the writs on the ground that the court lacked jurisdiction or alternatively they sought a stay in view of the American proceedings The Hong Kong High Court rejected the arguments that the court had no jurisdiction but granted a stay in view of the concurrent proceedings in the United States of America 19 Reverting to the facts in this case we do not think that the appearance so entered by the defendants solicitors has any effect or significance at all on the issue whether or not the in rem jurisdiction has been invoked against the Fierbinti The effect of the entry of appearance was that thenceforth the action which started as an in rem action would proceed and continue as an action in personam against the owners of the Fierbinti but as the writ has not been served on the ship the in rem character of that action remained In this connection we find of assistance the case of The Lloydiana There the plaintiffs took out a writ in rem against the defendants in respect of the wet damage and short delivery of their cargo of sugar laden on board the Fair Liza The bills of lading for the carriage of the cargo were issued by the defendants and they were described as carriers But the Fair Liza was chartered to another company Nigerian National Shipping Line The defendants vessel Lloydiana was expected to arrive in London and the plaintiffs solicitors threatened to arrest her To avoid the arrest the defendants through P and I Club provided a guarantee But Fair Liza was not a sister ship of Lloydiana and the plaintiffs could not have an action in rem against the latter The writ was served on the solicitors for the defendants Subsequently the defendants applied to court for an order that the writ be struck out and the service of the writ be set aside The application was dismissed as the court held that it had jurisdiction to hear and determine any claim for loss or damage to goods in a ship This was grounded on the fact that the solicitors for the defendants had accepted service and it was therefore unnecessary to proceed in rem and the action thenceforth proceeded as one in personam although it was commenced as an action in rem Sheen J said at p 318 In this case the defendants instructed solicitors to accept service of the writ It was unnecessary to serve the ship and arrest her Put in another way it was unnecessary to proceed in rem The action has proceeded as an action in personam against Lloyd Triestino whose solicitors agreed to accept service They have done so and they have acknowledged service 20 For the reasons we have given we cannot subscribe to the view that where an action in rem is commenced the in rem jurisdiction is invoked when there is a deemed service of the writ on the defendants In our judgment in this case the in rem jurisdiction has not been invoked against the Fierbinti Expiry of the writ 21 We now turn to the first part of the second issue whether the in rem jurisdiction could in the circumstances be invoked against the Mehedinti The appellants have placed at the forefront of this issue their argument that the in rem jurisdiction could not be invoked on the date of arrest of the Mehedinti on the ground that the writ as a writ in rem was not served on her or for that matter on any of the 19 ships within the period of one year and the writ had therefore expired at the date of arrest We find this argument misconceived The validity of the writ for the period of 12 months is only for the purpose of service Order 6 r 4 in so far as relevant provides a For the purpose of service a writ is valid in the first instance for 12 months beginning with the date of its issue b Where a writ has not been served on a Defendant the Court may by order extend the validity of the writ 22 The service of the writ is governed by O 10 r 1 and O 70 r 7 1 and 2 Under r 7 1 the writ must be served on res ie one of the ships named in the writ However the writ was served on the owners solicitors who had acknowledged that they accepted service of the writ on behalf of the defendants and under O 10 r 1 2 the writ was deemed to have been duly served on the defendants and in consequence the service of the writ on any of those ships had been dispensed with under O 70 r 7 2 As the writ has been properly served in accordance with the rules the expiry of the writ under O 6 r 4 has been spent No question of invalidity of the writ on that ground therefore arises In rem jurisdiction against the Mehedinti 23 The remaining issue is whether the in rem jurisdiction has been invoked against the Mehedinti upon arrest Connected with this issue is the all important question as to the precise moment when the admiralty jurisdiction in rem is invoked there are three points of time which are relevant i when the writ is issued ii when the writ is served on the ship or iii when the ship is arrested The leading case on this question is of course the English Court of Appeal decision in The Banco 9 In that case the plaintiffs vessel the Monte Ulia collided with a jetty in the Thames whilst taking emergency action to avoid the defendants vessel the Banco owing to alleged negligent navigation of the latter The collision caused damage to the plaintiffs vessel and to many other parties who then claimed against the plaintiffs The plaintiffs brought an admiralty action in rem against the defendants and the writ was served on the Banco and six other ships and they were arrested The defendants applied to set aside the service of the writ on the six sister ships and to discharge the warrant of arrest of those ships The first instance decision allowing the application was affirmed on appeal The members of the Court of Appeal however were unable to agree as to the precise moment when the in rem jurisdiction was invoked First Lord Denning MR was of the opinion that the in rem jurisdiction was invoked when the writ was served on the ship and the warrant of arrest executed He said at p 153 Mr Sheen said that if under s 3 4 the jurisdiction in rem can only be invoked against one ship it means that the action can only be brought against one ship and the writ can only be issued against one ship and that once it is invoked against one ship it cannot be invoked against any other ship Mr Sheen said that this would put the plaintiff in an intolerable difficulty for he would have to wait until one of the ships came within the jurisdiction the offending ship if she was still afloat or a sister ship and then issue a writ against her I can see the force of this point but I think that Mr Willmer gave the right answer When a plaintiff brings an action in rem the jurisdiction is invoked not when the writ is issued but when it is served on the ship and the warrant of arrest executed The reason is because it is an action in rem against the very thing itself and does not take effect until the thing is arrested This means that the practice is right The plaintiff is entitled as soon as his cause of action arises to issue his writ in rem against the offending ship and all other ships which at that time that is at the date of issue of the writ belong to the same owner That saves his time Then he can wait until he finds the one ship which he thinks most suitable to arrest Then he will serve her and execute a warrant of arrest against her That having been done he cannot go against the other ships and should strike them out of the writ 24 Next we come to the opinion of Megaw LJ and his opinion was that the in rem jurisdiction was invoked when the writ was served or was deemed to have been served He said at pp 158 159 I do not accept that the admiralty jurisdiction is invoked by an action in rem against a vessel merely by the issue of a writ which contains inter alia the name of that ship I agree with counsel for the defendants that for the purposes of this subsection the jurisdiction is not invoked merely by the issue of the writ That may be the start of the invocation but the invocation is not complete until the writ is served or it may be deemed to have been served as a result of the entry of appearance by the defendant before service is effected In my view whatever might be the technicalities otherwise the jurisdiction cannot properly be said to be invoked against the ship or equally of course against any other ship merely because a writ has been issued which names that ship amongst others but which cannot lawfully be served upon that ship until something further is done to the writ itself namely its amendment 25 Lastly Cairns LJ expressed yet another opinion on the same question and his opinion was that the in rem jurisdiction was invoked when the writ was issued Speaking on the practice whereby the plaintiff issues a writ naming more than one ship his Lordship said at p 161 The practice which has been adopted in the registry since the Act of 1956 was passed may have much to recommend it Mr Willmer suggested that it might still be used on the narrower construction of the subsection on the basis that the jurisdiction of the court is only invoked on service I find great difficulty in accepting this argument though it has found favour with my Lord I think any litigant who issues a writ is thereby invoking the jurisdiction But if this is so the practice that has prevailed cannot in any view be justified by the Act Either the plaintiff is entitled to name only one ship in his writ or else he is entitled to name several and to serve and arrest several 26 In fact the only common ground that the members of the Court of Appeal had was this that in respect of an in rem claim only against one ship may the in rem jurisdiction be invoked There were divergent views on when the in rem jurisdiction was invoked 27 The invocation of the in rem jurisdiction was also discussed in The Berny In that case the cargo owners issued first a writ against 18 sister ships of the Berny and then a writ against the Berny in respect of a claim for short delivery of sugar carried on board the Berny from Dunkirk to Dar es Salaam The writs were not served and were later renewed Subsequently service of the renewed writ in the action against the Berny was accepted on behalf of the shipowners who entered a conditional appearance The shipowners applied to dismiss the Berny action on the ground that when the action was begun the cargo owners had already invoked the court s jurisdiction in rem within the meaning of s 3 4 of the Administration of Justice Act 1956 by issuing the writ in the Berny action Brandon J held inter alia that the cargo owners could invoke the admiralty jurisdiction by an action in rem against either the Berny or a sister ship that the jurisdiction was not invoked until the writ was served and that following the existing practice where more than one writ against several ships had been issued they could elect to serve the writ on either the Berny or a sister ship Commenting on the practice of issuing plural writs that is a writ naming more than one ship the learned judge said at p 94 The practice is based on convenience When a plaintiff institutes proceedings which he will often have to do by a certain date in order
Original URL path: http://www.singaporelaw.sg/sglaw/laws-of-singapore/commercial-law/chapter-25?id=1411 (2016-01-30)
elected irrevocably to pursue their claims which included the Bisoton claim against the Minab 4 had exhausted the remedy in rem in respect of those claims They had irrevocably elected to proceed against the Minab 4 and therefore could not amend the claims by deleting the Bisoton claim and invoke the admiralty jurisdiction again by taking out a writ in rem with an endorsement of the Bisoton claim against a sister ship such as the Damavand We are unable to accept this argument These passages of the judgment of Brandon J must be understood in their proper context The learned judge was referring to the situation where a claimant had an option to proceed by an action in rem either against the offending ship or against a sister ship in respect of one and the same claim In such a situation once the claimant had served the writ on the offending ship or the sister ship as the case may be he had elected irrevocably to invoke the jurisdiction in rem against that ship and he cannot concurrenlty pursue the same claim by another action in rem against the sister ship Brandon J did not say that where a writ with an endorsement of several claims or causes of action was served on the ship in question the plaintiff has thereby irrevocably elected to pursue all those claims or causes of action against that ship and is precluded subsequently from amending the endorsement by deleting one or more of the claims and thereafter pursuing such claims by a fresh action in rem against a sister ship 13 The situation in this case is quite different from that prevailing in The Berny Here the respondents had multiple claims or causes of action against the appellants and took out a writ in rem with an endorsement of all these claims On the day immediately following the date of service of the writ on the Minab 4 the Bisoton claim was deleted from the writ and thenceforth the Minab 4 action ceased to be an action in rem for that claim At that point of time there was nothing to prevent the respondents from invoking the admiralty jurisdiction by an action in rem against a sister ship for the Bisoton claim That they did Such an action does not violate or infringe the single ship arrest rule There was at all material times only one ship against which an action in rem was invoked for the claim or claims in question The Berny is not an authority to the effect that the respondents could not amend the writ in the Minab 4 action by deleting the Bisoton claim and immediately thereafter institute the Damavand action for the Bisoton claim Karthigesu J in his judgment said at p 1064 I see no reason in principle why a plaintiff should not amend his indorsement of claim by removing therefrom a part of his claim provided it is severable and can survive as a separate cause of action from the remainder of the claim even after a writ in rem has been served and the ship arrested provided always that it is done before the time limited for an appearance to be entered has expired to enable him to issue another writ in rem against another sister ship in respect of that cause of action No authority was cited as to why this could not be done A plaintiff may always amend the writ once at any time before the pleadings in the action begun by writ are deemed closed without the leave of the court see O 20 r 1 of the RSC In the Minab 4 proceedings International Paint amended the indorsement by removing the cause of action against the Bisoton one day after service and thus well before the time limited for an appearance to be entered had expired thus enabling them to commence another in rem action against the Damavand in respect of the claim arising from the cause of action against the Bisoton The position as I see it is that by acting timeously Internationl Paint have effectively one action in rem against the Minab 4 in respect of their causes of action against the Alamoot Khark 2 Shir Kooh and Taftan grouped together as one claim and were at liberty to commence another action in rem against the Damavand which they did in respect of their claim against the Bisoton which was entirely a separate cause or causes of action from their claim against the Minab 4 14 We respectfully agree with the learned judge on this passage of his judgment except the limitation he placed in his proviso namely that the amendment must be made prior to the expiry of the time limited for an appearance to be entered For reasons which we shall give in a moment we do not think that such a limitation is warranted 15 Before we move to the next point it is necessary to dispose of a submission made on behalf of the respondents based on the decision of this court in The Permina Samudra XIV Martropico Compania Naviera SA v Owners of Permina Samudra XIV that decision was also considered by Karthigesu J to be apposite in this case In The Permina Samudra XIV the plaintiffs had a claim against charterers of the ship the Ibnu for unpaid charter hire in the sum of US 7 230 711 48 On 24 July 1976 a sister ship of the Ibnu the Permina 108 was arrested in respect of the claim On the same day the plaintiffs also issued a writ in rem and executed a warrant of arrest against another sister ship the Permina Samudra XIV this arrest taking place some 15 minutes after the arrest of the Permina 108 Both the writs contained identical endorsements of claim which were as follows The plaintiffs claim against the defendants is for non payment of charter hire due under a charterparty dated the 1st day of September 1970 in respect of the vessel Ibnu The defendants applied to set aside the writ in rem and the warrant of arrest in the latter case In the meantime the appellants filed their statements of claim one in respect of the action in rem against the Permina 108 for instalment payments amounting to US 3 418 521 41 and the other in respect of the action in rem against the Permina Samudra XIV for different instalment payments amounting to US 3 812 190 07 The statements of claim listed the separate instalments and the dates when they fell due There were four instalments named in each writ making a total of eight unpaid instalments The High Court allowed the motion and set aside writ and the warrant of arrest On appeal the Court of Appeal reversed the decision and accepted the plaintiffs contention that there was no distinction between claim and cause of action and held that the arrests were in respect of two claims each of which was founded on a different cause of action as appeared in the two statements of claim Wee Chong Jin CJ delivering the judgment of the court said at p 49 He Mr Stone for the defendants submits that in s 4 4 there is a distinction between the expression claim and the expression cause of action Mr Thomas for the plaintiffs contends that these two expressions must have the same meaning and that the word maritime is not found in the Act He contends that the arrests of the Permina 108 and the Permina Samudra XIV were in respect of two claims each of which arises out of the list in s 3 1 and each of which is founded on a different cause of action as appears in the two statements of claim He contends that if Mr Stone is correct it would lead to injustice On the facts of the present case it is conceded that the appellants could have issued separate writs in rem each time an instalment was not paid when due and in respect of each action a ship could be arrested But where the appellants as now did not institute proceedings on each failure to pay an instalment and thus gives the respondents an indulgence Mr Stone says that the appellants can institute only one action in rem and thus can arrest only one ship because there is only one claim even though they have more than one cause of action against the respondents 16 The learned Chief Justice then went to distinguish The Banco thus In our opinion Monte Ulia Owners v Banco and Ors Owners The Banco supra is distingishable In that case it was decided that where there is a claim based on a single cause of action the jurisdiction in rem cannot be invoked by a single writ addressed to and served upon more than one vessel whereas in the present case the facts are that two separate writs have been issued based on separate and distinct causes of action and each writ names only one ship and has been served on only one ship the ship named in the writ 17 On the basis of that decision it was contended on behalf of the respondents that they had no less than 35 causes of action since there were 35 orders for the respondents goods and materials from the appellants and in principle they could have issued 35 writs against 35 ships belonging to the appellants Alternatively they could have grouped the causes of action and arrested a smaller number of ships Therefore it was argued that at the time the writ was served on the Minab 4 the respondents had not committed themselves to deciding which of the 35 causes of action were meant to be included in that writ It was still open to the respondents to issue a second writ for claims in respect of the goods supplied to the Bisoton which claim could cover for example all but one of the Bisoton invoices If the respondents had issued two writs both in respect of goods and materials supplied to the Bisoton they would have been entitled to arrest both the Minab 4 and the Damavand It therefore follows that there can be no question of want of jurisdiction when each writ was founded on different causes of action On this line of argument we have one general observation It is technically correct that where a plaintiff has multiple causes of action he can take out multiple writs in rem against multiple ships of the defendant But such actions if taken may well amount to an abuse of court process and would probably not be allowed More specifically we find that there are two difficulties in the way of this contention First the respondents had admitted in the affidavit sworn to by their solicitor on 1 March 1990 that the writ of summons and warrant of arrest issued in the Minab4 action were in respect of the claims for the supply of various paint products to the defendants ships or vessels Alamoot Bisoton Khark 2 Shir Kooh and Taftan at various ports in Portugal United Arab Emirates Holland and Singapore respectively which claims were supported by copies of a full set of invoices annexed to the affidavit There was therefore an admission that notwithstanding the general endorsement on the writ the respondents had intended to invoke the admiralty jurisdiction of the court in respect of all the claims or causes of action Secondly unlike The Permina Samudra XIV the writ in the Minab 4 action originally contained a claim for inter alia supplies to the Bisoton and was served upon the Minab 4 Even if that did not crystallize the respondents claim in respect of all the causes of action arising from supplies to the Bisoton because they were not particularized the fact remains that at that time the claim endorsed on the writ must bite upon at least one of the invoices on the Bisoton claim The writ in the Damavand action was taken out for the supply of various products to the ship or vessel Bisoton and from the affidavit of the solicitor it was for the entire Bisoton claim Hence if this writ was served on the Damavand before the amendment to the endorsement of the claim in the Minab 4 action the Damavand action would have fallen foul of the single ship arrest rule In our opinion The Permina Samudra XIV does not support the case of the espondents 18 We now turn to an alternative line of argument advanced by counsel for the appellants which is this It is settled law that an action in rem operates only against the res and if the defendant namely the owner or party interested in the res does not enter an appearance a judgment obtained in such action is limited to the value of the res or the bail which represents the res Once the defendant enters an appearance he submits to the jurisdiction of the court and from then onwards the action continues as an action in rem and in personam and judgment may be entered and enforced against the defendant to the full extent of the amount awarded to the plaintiff and is not limited to the value of the res or the bail which represents the res see The Dictator and The Gemma Therefore on these authorities so counsel submitted the respondents by deleting the Bisoton claim from the writ in the Minab 4 action and immediately thereafter instituting the Damavand action for the Bisoton claim contravened this rule Karthigesu J appeared to accept this argument in principle but held that in this case the rule had not been breached since the right to abandon the vessel had not yet accrued Thus he held that it was crucial that any amendment to the claim must be effected before the time limited for entry of appearance expired since it was then that the right accrued The learned judge in his judgment said at p 1066 the amendment to the indorsement of claim in the Minab 4 proceedings was made well before the time limited for appearance had expired In my view International Paint were well within their rights both legally and procedurally to amend the indorsement of claim in the Minab 4 proceedings by reducing it in the way they did or for that matter by adding to it 19 With this passage of the judgment we entirely agree But the learned judge added the following qualification provided and this is crucial provided that the amendment is effected before the time limited for an appearance has expired Once that time has expired and having regard to such authorities as The Dictator 1892 P 304 The Gemma 1899 P 285 The Dupleix 1912 P 8 and Castrique v Imrie 1870 LR 4 HL 414 at p 432 such amending of claim would be an abuse of the process of the court since then the right of abandonment of the arrested ship the Minab 4 to International Paint would have accrued to the defendants and any judgment entered thereafter in default of appearance on the amended claim would be to the detriment of the defendants 20 With respect we are unable to accept this qualification In our respectful view the authorities referred to do not support it In The Dictator the plaintiffs instituted an action in rem against the ship the Dictator her cargo and freight claiming 5 000 for salvage services rendered The solicitors for the owners of the ship gave an undertaking to enter an appearance for the defendants and to put in bail in an amount not exceeding 5 000 in consequence of which the ship was not arrested The action was subsequently tried and a sum of 7 500 was awarded and the plaintiffs with leave of the court amended the claim by increasing the amount to 8 500 The defendants paid the costs and offered to pay 5 000 for which they had undertaken to put in bail but that sum the plaintiffs declined to accept The question which eventually arose was whether execution could be issued against the owners of the salved ship her cargo and freight for more than 5 000 and costs It was held by Jeune J that the plaintiffs were entitled in the action to issue a writ of fieri facias to enforce payment of the full amount awarded The learned judge in the course of his lengthy judgment said at pp 320 321 In The Parlement Belge 1880 5 PD 197 it was said that The Bold Buccleugh 1851 7 Moo PCC 267 decides that an action in rem is a different action from one in personam and has a different result But I do not think it follows or that the Privy Council or the Court of Appeal intended to lay down that an action in rem could affect only the res It may well be that if the owners do not appear the action only enforces the lien on the res but that when they do the action in rem not only determines the amount of the liability and in default of payment enforces it on the res but is also a means of enforcing against the appearing owners if they could have been made personally liable in the admiralty court the complete claim of the plaintiff so far as the owners are liable to meet it It appears to me consonant with common sense that if the owners have had no personal notice and are not save in the sense indicated in The Parlement Belge before the court the effect of its judgment should be limited to the res in its hand but that if the owners appear to contest or reduce their liability they should be placed in the same position as if they had been brought before the court
Original URL path: http://www.singaporelaw.sg/sglaw/laws-of-singapore/commercial-law/chapter-25?id=1408 (2016-01-30)
The &#039;Rainbow Spring&#039;[2003] 3 SLR 362; [2003] SGCA 31
1998 The questions that had to be considered were a whether the charter contract had been concluded by the exchange of correspondence on 8 or 9 January and b whether at all material times Oriental was acting as agent for RS Shipping who was the undisclosed principal The second question was one that was not argued before the judge and Admiral sought and obtained our leave to introduce this new argument at the appeal stage 14 We also had to consider the issue of non disclosure and the effect that such non disclosure if established would have on the warrant of arrest This was because in its respondent s case RS Shipping contended that in the alternative the arrest should be set aside on the ground of non disclosure of material facts on the part of Admiral when applying for the arrest First issue when was the charter contract made 15 On the first issue the relevant findings made by Ang JC were as follows Noting the established position that the burden was on Admiral to establish that RS Shipping was the person who was likely to be liable in personam on the claim she followed The Opal 3 ex Kuchino 1992 2 SLR 585 in stating that this burden would be discharged if Admiral showed that it had an arguable case She then held that the charter contract was concluded by the exchange of correspondence between the agents of the respective parties before the formal charter document was drawn up and signed In this connection she was satisfied that by its telex of 9 January 1998 Rodskog had confirmed conclusion of the charter on behalf of Admiral by using the phrase Very pleased we are now clean fixed The judge noted at 24 that The expression clean fixed in chartering parlance is used to signify a binding charterparty contract or concluded fixture At that stage Oriental had been named as the contracting party and this had been accepted by Admiral RS Shipping s stamp and signature on the contract document could not change that position 16 On appeal Admiral accepted that it had the burden of showing there was an arguable case that RS Shipping would be liable It argued that the finding that the contract had been concluded by the exchange of correspondence on 8 and 9 January 1998 was erroneous for four reasons a the expression clean fixed did not mean that there was a binding charterparty b in its telex Rodskog stated that there would be a recap later today and as by this it meant that later that day there would be a review of the terms agreed up till then there was no binding agreement at that time c the parties had not agreed on all the terms at the time and d the parties contemplated the contract would only be completed by the formal charterparty which was the reason why such a document was drawn up 17 The first argument put forward by Admiral that the expression clean fixed does not signify a concluded charterparty would come as a shock to most people in the ship chartering business More than that however it is not supported by the authorities Bes Chartering and Shipping Terms 11th Ed 1992 at p 66 defines fixture in the following terms Fixture To fix a ship is to determine or settle a contract the Charterparty for its employment Fixture is the word that indicates the contract has been made and the negotiations to charter the ship have been concluded In Shipping Practice by Stevens and Butterfield 11th Ed 1981 at p 39 it is stated that The arrangement of a charterparty is known as fixing a charter and when completed the vessel is termed fixed Therefore if a charterparty is fixed it is concluded The word clean simply means that the relevant document has no detrimental effect on those directly and indirectly concerned in the business contents see Sullivan The Marine Encyclopaedic Dictionary 5th Ed 1996 at p 92 These texts and the cases of Granit SA v Benship International Inc 1994 1 Lloyd s Rep 526 and The Mexico 1 1988 2 Lloyd s Rep 149 amply supported the judge s conclusion that t he expression clean fixed in chartering parlance is used to signify a binding charterparty contract or concluded fixture There was no substance in this point 18 The second argument ie that there was no agreement at the time of Rodskog s telex because it stipulated that there would be a recap recapitulation following the telex was also weak No authority was cited for the proposition that a recapitulation of terms is an essential precondition to the conclusion of a contract In shipping parlance in fact the opposite appears to be the case in that the recapitulation only takes place after the contract has been concluded This appears also from Bes Chartering and Shipping Terms which states at p 66 that once the negotiations about the chartering of a vessel have resulted in the fixture of the ship a letter may be drawn up containing a summary of the main terms and conditions of the charterparty Such a letter may be sent out electronically as a recap message by telex or facsimile It is clear from the commentary that such a document is a record of the contract only rather than the document that brings the contract into existence The process of recapitulation is strictly unnecessary when the terms of the charterparty have already been agreed but is often undertaken as a formality It cannot change terms already agreed upon Therefore even if the recapitulation is not done the charterparty remains concluded 19 Admiral s third and fourth points can be considered together The third point was that not all the contractual terms had been agreed on by the exchanges on 8 and 9 January 1998 In particular the following matters were outstanding a Kingstar had indicated that the proposed cl 45 was acceptable to shipowners subject to the approval of their Protection Indemnity P I club b Rodskog had stated that regarding cl 29 they were awaiting owners confirmation that they could deliver the vessel with sufficient bunkers to enable it to reach Vancouver and also regarding the price of the bunkers and c there was an outstanding issue on line 99 of the NYPE charter form relating to the cessation of hire in relation to time lost for various reasons Admiral submitted that since these matters remained outstanding there could not have been a clean fixed agreement as at 9 January 1998 The fourth point was related in that it was contended that the parties intention was not to be bound until a formal charter contract had been drawn up and signed 20 It is established law that negotiating parties may conclude a contract that binds each of them even though there are some terms that are yet to be agreed The important question is whether the parties by their words and conduct have made it clear objectively that they intend to be bound despite the unsettled terms See Chitty On Contracts Vol 1 28th Ed 1999 at para 2 105 and Pagnan SpA v Feed Products Ltd 1987 2 Lloyd s Rep 601 at 611 per Bingham J giving judgment at first instance and at 619 per Lloyd LJ giving judgment on appeal In that case the court concluded that a contract of sale had been reached even though issues such as the loading port rate of loading and method of payment were still undecided because the essential terms of the product to be sold quantity price and period of shipment had already been agreed upon 21 In the present case the terms that were left to be decided were essentially minor terms The main terms chief among which were the vessel to be chartered the period of charter the charter hire and the time of delivery as well as many less important terms had been agreed The objective intentions of the parties as the same could be gleaned from the correspondence on the two days in question were that they would be bound Kingstar wanted a confirmation from charterers so that the owners could go ahead to make final preparations for the charter They were ready to be bound As for Admiral apart from employing the words clean fixed and recap Rodskog had also used other forms of expression indicating that Admiral s objective intention was to enter into a binding charterparty Rodskog stated that Admiral was looking forward to a pleasant co operation with owners and vessel and that they had noted that the owners were Oriental There was nothing in that telex to indicate that the contract was subject to the drawing up and signature of a formal charterparty Conversely when the working copy of the charterparty drawn up by Rodskog was sent to Kingstar on 19 January 1998 the heading of Rodskog s cover fax stated M V Rainbow Spring C P dated 8 1 1998 emphasis added The fact that the charterparty was to be dated 8 January 1998 showed that Admiral and its brokers themselves recognised that the contract had come into existence prior to the drawing up of the formal document which was to be executed by the parties It was Rodskog who inserted in that document the name of Oriental as the owners thus showing that it was quite clear as to which entity was contracting as the owners giving the vessel on charter to Admiral 22 The circumstances stated above made it plain that the parties had agreed to be bound on 9 January 1998 notwithstanding the minor terms relating to bunkers and deduction of expenses which remained to be settled The parties were not fazed by the absence of a document to be signed They were quite prepared to have the charterparty drawn up and signed subsequently to record the terms that had already been accepted a procedure that is common in the chartering business On 9 January 1998 there was a contract between Oriental and Admiral for the charter of the vessel by the former to the latter and this contract could not be altered by the placing of the RS Shipping stamp on the charterparty that was executed later Accordingly the judge s finding on this issue was plainly right and could not be faulted Second issue was RS Shipping the undisclosed principal of Oriental 23 Recognising that we might uphold the judge s decision on when the charterparty came into effect Admiral made the alternative argument that if it was concluded on about 8 or 9 January 1998 then Admiral had concluded the charter with RS Shipping as the undisclosed principal of Oriental 24 The legal principles relating to the existence and liabilities of undisclosed principals were not in dispute These principles as restated by the Privy Council in Siu Yin Kwan v Eastern Insurance Co Ltd 1994 2 WLR 370 were adopted by this court in Hongkong Shanghai Banking Corp v San s Rent A Car Pte Ltd 1994 3 SLR 593 For present purposes the following points were the relevant ones a an undisclosed principal may sue and be sued on a contract made by an agent on his behalf acting within the scope of his actual authority b in entering into the contract the agent must intend to act on behalf of the principal and c in any case the contract itself or the circumstances surrounding the contract may show that the agent is the true and only principal Applying these principles to the facts of this case we saw no merit in Admiral s contention that at all material times Oriental was acting as the undisclosed agent of RS Shipping 25 Admiral submitted that the fact that Oriental was named as the owners on 8 January 1998 did not mean that Oriental was acting on its own accord and that there was no undisclosed principal There was nothing wrong in that submission as far as it went The problem was that it did not go far enough to discharge the burden on Admiral in this respect To show that there was an undisclosed principal Admiral had to show that Oriental was acting as an agent and further that it was acting as an agent within the scope of its actual authority Admiral tried to show that Oriental was acting as an agent by pointing to various terms of the charterparty which it stated raised issues as to the identity of the contracting party in particular a term which provided for the owners right to sell the vessel a term that could only be utilised by RS Shipping and the fact that the P I Club named in the charterparty was the P I Club that RS Shipping belonged to and not the P I Club that Oriental belonged to Those discrepancies might have been some indication of Oriental acting as an agent but even if it had acted as an agent that would not be sufficient to make RS Shipping an undisclosed principal unless Oriental had had actual authority to enter the charter on behalf of RS Shipping It was incumbent on Admiral to show an arguable case of actual authority being vested in Oriental to contract on behalf of RS Shipping Yet no submissions on this requirement were made by Admiral nor was there any evidence that Oriental had intended to act on behalf of RS Shipping 26 Further the undisclosed agency argument ignored the inferences that had to be drawn from the existence of two other charter contracts relating to the vessel at the material time The evidence established a chain of charter contracts The head charter was between RS Shipping as owner and Emerald as demise charterer The next charter in the chain though signed only on 20 January 1998 was that between Emerald and Oriental who thereby became a sub charterer of the vessel The third charter was that between Oriental and Admiral since because of Oriental s position in the chain Admiral became a sub sub charterer although chronologically its charter preceded the Emerald Oriental contract 27 Once RS Shipping demise chartered the vessel to Emerald it had no power to charter the vessel to anyone else unless it had in turn taken a time or voyage charter from Emerald This did not happen Instead Emerald gave a time charter to Oriental So there was no way that RS Shipping could be a disponent owner vis à vis Admiral Both of these other charterparties were on the evidence genuine contracts The charter between RS Shipping and Emerald enabled the vessel to be registered in the Philippines and such registration was effected at no doubt some expense to either RS Shipping or Emerald The charter between Emerald and Oriental was a way of putting the vessel back under the management of Kingstar and no evidence was presented to impugn the validity of that contract 28 Oriental s role as charterer vis à vis Emerald was incompatible with any notion of it also being an agent for RS Shipping when it entered the sub charter with Admiral If on 8 or 9 January 1998 Oriental had been playing the part of RS Shipping s undisclosed agent it would not subsequently have signed the charterparty with Emerald The signing of that charterparty makes sense only if Oriental was serious about being the disponent owner under the charter with Admiral This fact showed that Oriental could not have intended to act as RS Shipping s agent when it contracted with Admiral In the circumstances the only logical inference was that Oriental acted throughout as a principal Material non disclosure 29 We dismissed the appeal since for the reasons given above we were of the view that Admiral was unable to establish an arguable case that RS Shipping would be the party liable in personam to it for breach of the charter The decision of the judge to set aside both the writ and the warrant of arrest was therefore upheld Strictly speaking this means that we need not deal with the alternative ground for setting aside the warrant of arrest put forward by RS Shipping that of material non disclosure by Admiral Since the judge did comment on the court s powers in such instances and since arguments on this have been addressed to us by RS Shipping it may be helpful however to set out our views on this issue 30 The issue of non disclosure arose mainly because the affidavit that Admiral filed in support of the application to arrest did not exhibit or mention the correspondence exchanged between Kingstar and Rodskog on 8 and 9 January 1998 The only contractual document referred to was the NYPE form charterparty signed by Mr Tam against the RS Shipping stamp RS Shipping asserted that this omission together with some others which we need not go into constituted a material non disclosure and that the warrant should be set aside because Admiral had failed in its duty to make full and frank disclosure of all material facts 31 On this issue the arguments canvassed below were first whether there was a duty of disclosure on applicants for an arrest warrant and secondly if such a duty existed whether it had been breached On the first issue the judge held that under Singapore law such a duty does exist She rejected an argument that amendments made to the Rules of Supreme Court in 1997 had done away with the duty because by reason of these amendments a warrant when issued would be issued by the plaintiff rather than the court This argument was based on the decision of the English Court of Appeal in The Varna 1993 2 Lloyd s Rep 253 that under O 75 r 5 1 of the English Rules of the Supreme Court it was the plaintiff in an action not
Original URL path: http://www.singaporelaw.sg/sglaw/laws-of-singapore/commercial-law/chapter-25?id=1425 (2016-01-30)
The &quot;Inai Selasih&quot; (ex &quot;Geopotes X&quot;)[2006] 2 SLR 181; [2006] SGCA 4
there be an order for damages against the appellant on the ground that the appellant had relied on a document the charterparty which was a sham Thus there was evidence of mala fides on the part of the appellant Issues 10 Before us the appellant contended that the judge erred in setting aside the Writ and the Warrant of Arrest and in ordering the payment of damages by the appellant to the respondent At this juncture we ought to clarify that there appeared to be a misunderstanding by the parties as to the order made by the judge They thought that the judge had struck out the Writ when she intended only to set aside the Writ This is apparent from a perusal of her Grounds of Decision reported at 2005 4 SLR 1 11 The appellant submitted that at the time the cause of action arose the respondent was the charterer of or was in possession or control of the Inai Seroja There was nothing bogus about the arrangement which the appellant and the respondent had entered into as reflected in the MOU As regards the question of damages the appellant argued that it had made full disclosures of the terms of the MOU to the court including the internal and external arrangements when it obtained the Warrant of Arrest against the Inai Selasih Nature of the arrangement 12 The relevant provisions of the Act read 3 1 The admiralty jurisdiction of the High Court shall be as follows that is to say jurisdiction to hear and determine any of the following questions or claims h any claim arising out of any agreement relating to the carriage of goods in a ship or to the use or hire of a ship 4 4 In the case of any such claim as is mentioned in section 3 1 d to q where b the person who would be liable on the claim in an action in personam referred to in this subsection as the relevant person was when the cause of action arose the owner or charterer of or in possession or in control of the ship an action in rem may whether or not the claim gives rise to a maritime lien on that ship be brought in the High Court against i that ship if at the time when the action is brought the relevant person is either the beneficial owner of that ship as respects all the shares in it or the charterer of that ship under a charter by demise or ii any other ship of which at the time when the action is brought the relevant person is the beneficial owner as respects all the shares in it 13 It was not in dispute that the basis of the claim of the appellant was that the MOU related to the use or hire of the Inai Seroja and that the respondent was the charterer or in possession of the Inai Seroja The judge quite rightly pointed out that for the appellant to bring the case under ss 3 1 h and 4 4 b of the Act the appellant must satisfy the following a that the claim arose out of an agreement relating to the use of the Inai Seroja b that the claim arose in connection with the Inai Seroja c that the respondent was liable on the claim in the action in personam d that when the cause of action arose the respondent was the charterer of the Inai Seroja and e that at the time when the Writ was issued the respondent was the beneficial owner of the Inai Selasih 14 The judge found against the appellant on point d She laid emphasis on the fact that the entire external framework as set out in the MOU was only for appearance s sake She said 10 supra at 21 W here the Charterparty was not intended to actually create a valid charter of the Inai Seroja as between the parties or be a basis for regulating their relationship which remained very much under the MOU the Charterparty being a sham gave rise to no legal rights and obligations That being the position it could not have the effect of conferring the status of charterer on the respondent Clearly the appellant could not use and rely on the written document as a basis for invoking s 4 4 of the Act for arresting the Inai Selasih So in the absence of chartering on the part of the respondent or possession or control on the part of the respondent the appellant was not entitled to assert its claim by proceeding in rem against the Inai Selasih I allowed the appeal and set aside the Writ of Summons and Warrant of Arrest since no in rem claim plainly lay against the respondent s vessel the Inai Selasih 15 We agreed with the above views expressed by the judge If we may put it quite bluntly this was a case where the external framework was created wholly to conceal the true position from the Malaysian authorities Several companies were created purely with a view to achieving the objective of giving an appearance of satisfying the requirement that the dredgers used for the works were Malaysian registered and Malaysian owned It was not a true charterparty that was entered into between the Labuan company and the respondent In this regard cl 2 of the MOU was of special significance It provided that Save insofar as expressly provided for to the contrary any and all provisions of this Agreement shall take precedence over any contrary provision s contained in any agreement s and or document s of any kind whatsoever referred to in this Agreement entered into and or made up pursuant to or in relation to this Agreement and or the object of the Cooperation emphasis added This clause again reinforced the basic premise of the MOU that any agreement or document that came into being pursuant to the external arrangement was only for show We could not see how in the light of this clause it could be argued that the charterparty was intended to have any real legal effect 16 We noted that in Snook v London and West Riding Investments Ltd 1967 2 QB 786 at 802 Diplock LJ said that F or acts or documents to be a sham with whatever legal consequences follow from this all the parties thereto must have a common intention that the acts or documents are not to create the legal rights and obligations which they give the appearance of creating The terms of the MOU clearly showed the parties knew exactly what they were doing and intended 17 In this appeal the appellant sought to rely on what the respondent s Head of Division for Group Management Mr Norazam bin Ramli Ramli said in his affidavit to the effect that all the arrangements under the MOU were entirely above board and that there was no dichotomy between external and internal positions It did seem strange to us as to why Ramli should make that assertion when the MOU clearly provided for what was the real arrangement set out in cl 3 and what was the external framework which was only for show However the respondent s counsel did very strenuously argue before the assistant registrar and the judge that the charterparty was a sham Perhaps Ramli was concerned about potential prosecution in Malaysia and wished to protect the respondent and maybe himself Whatever might have been the reason behind Ramli s statement the court was not obliged to accept it and should instead reject it when it was plainly wrong The parties did not disguise anything in the MOU They stated plainly what they had intended nothing was left to imagination or interpretation 18 In any event even if we were to take the charterparty between the Labuan company and the respondent at its face value the appellant could hardly have relied on it as in form the owner of the dredger Inai Seroja was not the appellant but the Labuan company The appellant was also not a party to the charterparty 19 We acknowledge that on the face of it the appellant did not sue the respondent pursuant to the charterparty but the MOU The indorsement to the Writ read The Plaintiffs claim against the Defendants who are the owners of the ship or vessel M V INAI SELASIH EX GEOPOTES X Port Klang Marine Registry Official No 330407 is for 1 Damages for breach of an agreement dated 29 th November 2002 entitled Memorandum of Understanding MOU relating to the use or hire of the Plaintiff s vessel s and or for outstanding charter hire due and payable from the Defendants in respect of INAI SEROJA 20 But the position became somewhat garbled when we looked at what was stated in para 4 of its affidavit in support of the application for the issue of a warrant of arrest against the Inai Selasih The Plaintiffs are the owners of the vessel INAI SEROJA which was bareboat chartered to the Defendants pursuant to a Charterparty entered into between Inai Kiara L Ltd and Inai Kiara Sdn Bhd IKSB on or about 28 April 2003 A copy of the Charterparty is attached at AR 1 21 The judge found that the MOU related to the use or hire of the Inai Seroja under s 3 1 h of the Act Because of this finding the appellant contended that the judge should consequently have also found that an owner charterer relationship was created by the MOU This was the crux of the matter what was the true nature of the arrangement set out in the MOU Was it a document for the hire or charter of two dredgers from the appellant to the respondent or was it in truth a joint venture arrangement involving the use of two dredgers 22 The MOU provided for the creation of an unincorporated co operation in which each party would have a 50 share We will at this juncture set out the provisions in the MOU which described in some detail how the dredgers were to be used by the Co operation and how payments were to be made by the respondent to the Co operation as well as by the appellant to the Co operation 3 2 The primary object of the Cooperation shall be the deployment of the Dredgers on dredging and or reclamation works carried out by the respondent or by any holding subsidiary or affiliated company of the respondent in Malaysia and or outside Malaysia under Malaysian government funding hereinafter referred to as the Work s and the respondent shall give first priority to the continuous and full deployment of both Dredgers on the Works 3 3 3 4 If the Parties agree on any and all terms and conditions of any contract for any Work on which either of the Dredgers or both as the case may be is are to be deployed then any and all rights interests liabilities obligations and risks and all net profits or net losses arising out of and or in relation to such contract or such part thereof on which either of the Dredgers or both as the case may be is are deployed shall accrue to or be for the account of the Cooperation In this event the compensation due and payable by the Cooperation to the Owner as defined in Sub Clause 4 1 i to the respondent and to Jan De Nul Malaysia Sdn Bhd shall be as set out in Appendix 2 Any and all mutually agreed upon third party costs and expenses of the kind as set out in Sub Clause 5 4 shall be for the account of the Cooperation 3 5 If the Parties fail to agree on any and all terms and conditions of any contract for any Work on which either of the Dredgers or both as the case may be is are to be deployed then any and all rights interests liabilities obligations and risks and all net profits or net losses arising out of such contract shall accrue to or be for the account of the respondent In this event the respondent shall charter the Dredger s from the Cooperation and the charter rate due and payable by the respondent to the Cooperation shall be the sum of a the compensation due and payable by the Cooperation to the Owner to the respondent and to Jan De Nul Malaysia Sdn Bhd as per Appendix 2 and b any and all mutually agreed upon third party costs and expenses of the kind as set out in Sub Clause 5 4 The respondent shall pay to the Cooperation in Euro such part of the charter rate which represents the compensation due and payable by the Cooperation to the Owner and to Jan De Nul Malaysia Sdn Bhd In addition the respondent shall pay to the Cooperation for the benefit of the Cooperation a fee in the amount of ten per cent 10 of the compensation due and payable by the Cooperation to the Owner as per Appendix 2 in respect of Depreciation and Interest The Cooperation and the respondent shall enter into a charter hire agreement on the basis of IADC s General Conditions of Contract and such Special Conditions of Contract as mutually agreed upon 3 6 If and when at any time during the continuance of the Cooperation and for any reason whatsoever either of the Dredgers or both as the case may be is are idle then any and all costs and expenses arising out of and or in relation thereto shall be for the account of the Cooperation In this event the compensation due and payable by the Cooperation to the Owner to the respondent and to Jan De Nul Malaysia Sdn Bhd shall be as set out in Appendix 2 Any and all mutually agreed upon third party costs and expenses of the kind as set out in Sub Clause 5 4 shall be for the account of the Cooperation 3 7 If and when at any time during the continuance of the Cooperation and for any reason whatsoever either of the Dredgers or both as the case may be is are idle then the appellant shall subject to the respondent s consent thereto be entitled to use such Dredger s for the deployment on any dredging and or reclamation works carried out by the appellant outside Malaysia In this event the appellant shall charter the Dredger s from the Cooperation and the charter rate due and payable by the appellant to the Cooperation shall be the sum of a the compensation due and payable by the Cooperation to the Owner to the respondent and to Jan De Nul Malaysia Sdn Bhd as per Appendix 2 The appellant shall pay to the Cooperation in Euro such part of the charter rate which represents the compensation due and payable by the Cooperation to the Owner and to Jan De Nul Malaysia Sdn Bhd The Cooperation and the appellant shall enter into a charter hire agreement on the basis of IADC s General Conditions of Contract and such Special Conditions of Contract as mutually agreed upon 23 In these clauses the term Owner referred to the Labuan company and Jan De Nul Malaysia Sdn Bhd was the company incorporated by the appellant in Malaysia for the purpose of providing the following services to the Co operation a provision of a production superintendent for each dredger and b recruitment of suitably qualified English speaking expatriate key crew for each dredger and responsibility for payroll social security pension insurance and administration and travelling arrangements for such crew 24 It would be seen that the arrangement established for the use of two dredgers was between the Co operation on the one hand and the participating parties namely the appellant and the respondent on the other In the light of these rather detailed provisions relating to how each dredger was to be used and how payments were to be made by the respondent to the Co operation and bearing particularly in mind the fact that cl 3 7 also provided for the chartering of the dredger by the appellant from the Co operation the MOU could hardly be viewed as an agreement between the appellant and the respondent for the chartering or hiring of dredgers In our judgment the MOU was in truth a joint venture agreement setting how the two parties should co operate in the use of two dredgers eventually only one was needed and the breach of which by one party would entitle the other to sue for damages Accordingly the appellant could not proceed in rem against the Inai Selasih The judge below was correct to set aside the admiralty Writ as well as the Warrant of Arrest 25 We should at this juncture add that the judge below also set aside the Warrant of Arrest which was obtained ex parte on the ground that there had been a failure on the part of the appellant to disclose a material fact The judge said 10 supra at 26 The status of the respondent as charterer was a very necessary ingredient for an arrest The external and internal arrangements which had a bearing on the appellant s assertion that the respondent was the charterer of the Inai Seroja would have been something the duty registrar would have wanted to know in deciding whether or not a warrant of arrest should be issued Those arrangements were not mentioned anywhere in the body of the affidavit Simply exhibiting the MOU was not good enough and did not count as compliance with its duty to disclose material facts 26 It seemed to us that the judge was in error in finding that there was a failure on the part of the appellant to
Original URL path: http://www.singaporelaw.sg/sglaw/laws-of-singapore/commercial-law/chapter-25?id=1434 (2016-01-30)
The &quot;Vasiliy Golovnin&quot;[2007] 4 SLR 277; [2007] SGHC 116
intention to record the change of the discharge port 32 In my view the banks had failed to disclose another material fact namely that the main purpose of switching the bills of lading was to change the port of discharge from Lome to Douala In the affidavit filed in support of the issuance of a warrant of arrest the banks had given the impression that there was an agreement to switch the bills of lading in order to cut them into different proportions 33 AR Ang pointed out at 41 of her grounds of decision that AR Lee was aware of the existence of the bills of lading and that there had been a request for the cargo to be discharged at Douala However the fact that the request was for the new bills of lading to change the port of discharge from Lome to Douala would have drawn AR Lee s attention to the fact that without the switch of bills FESCO had performed the terms of the contract of carriage as recorded in the bills of lading by carrying the cargo to Lome That was why it was important to have the bills of lading replaced by new ones In view of this the reason for the proposed switch of bills of lading is relevant and ought to have been disclosed to AR Lee Other allegations of non disclosure 34 As for FESCO s assertion that there were two other facts that ought to have been disclosed I see no reason to disagree with AR Ang s decision that this assertion was not substantiated First in regard to the contention that AR Lee had not been expressly informed that Lome was the contractual port of discharge AR Ang rightly noted that this was a material fact and AR Lee s attention had been drawn to the bills of lading at Tab 2 of the affidavit filed in support of the application for arrest As for the other fact which was that the banks had failed to mention that Banque Cantonale had sought FESCO s confirmation that the cargo would be discharged in Lome according to its instructions I agree with AR Ang s view in 44 of her grounds of decision that this was not a material non disclosure as it did not unequivocally point to Banque Cantonale desiring to take delivery in Lome but could just as well point to them making the best of the situation in the circumstances Conclusion on the issue of non disclosure 35 As the banks had failed to disclose three material facts at the ex parte hearing before AR Lee I agree with AR Ang that the warrant of arrest should be set aside on the ground of non disclosure Issue estoppel 36 The second ground relied on by AR Ang for setting aside the warrant of arrest was issue estoppel It is trite that a foreign judgment can give rise to an issue estoppel so as to prevent a party to that foreign action from vexing another party to that action by seeking to reopen an issue already resolved by the foreign court see House of Spring Gardens Ltd v Waite 1991 1 QB 241 In fact it is an abuse of process to ask a court to rule on an issue that has been resolved by a foreign court when the parties to both the actions are the same as in the foreign proceedings 37 The arrest in Singapore of a vessel which was previously released from arrest in another jurisdiction by a court order is without more not an abuse of process In The Tjaskemolen 1997 2 Lloyd s Rep 476 at 481 Clarke J explained how a second arrest may be an abuse of process as follows I do not think that the mere fact that a plaintiff has arrested a vessel which has previously been released by order of this Court or another Court of competent jurisdiction will amount to an abuse of the process of the Court All will depend upon the circumstances So for example if a plaintiff were to seek to arrest a vessel in respect of the same claim in one jurisdiction after another it might well be an abuse of process to permit an arrest here on the ground that to do so would be oppressive and vexatious and thus an abuse of the process emphasis added 38 There will thus be an abuse of process if a vessel is arrested on grounds in respect of which there is issue estoppel For issue estoppel to arise with respect to the arrest of the Vasiliy Golovnin in Singapore three requirements must be satisfied a The Lome court is one of competent jurisdiction and its judgment is final and conclusive and on the merits of the case b The parties to the action in Lome are the same as those in the present action c The issues before this court are identical to those considered by the Lome court 39 As for the first requirement it was not disputed that the Lome Release Order was a judgment of a court of competent jurisdiction Indeed the banks themselves invoked the jurisdiction of the Lome court to seek relief and they did not object to the Lome court determining whether or not they had the right to arrest the chartered vessel in Lome 40 As for whether a judgment is with respect to the merits of the case in The Sennar No 2 1985 1 WLR 490 at 499 Lord Brandon of Oakbrook helpfully explained the position as follows Looking at the matter negatively a decision on procedure alone is not a decision on the merits Looking at the matter positively a decision on the merits is a decision which establishes certain facts as proved or not in dispute states what are the relevant principles of law applicable to such facts and expresses a conclusion with regard to the effect of applying those principles to the factual situation concerned 41 In the present case the Lome court considered the merits of the case for an arrest of the chartered vessel and took note of the same arguments that were advanced by the parties in the present case before deciding to release the chartered vessel from arrest 42 For a judgment to be conclusive and final it must be one that cannot be reopened by the court that pronounced it The assertion by Mr Lawson Banku FESCO s Togolese lawyer that the Lome Release Order could only have been overturned by way of an appeal to the Lome Court of Appeal was not controverted by the banks Togolese lawyer Mr Adama Doe Bruce Mr Doe Bruce For whatever reason no appeal was lodged against the Lome Release Order As such the Lome Release Order is without more final and conclusive 43 The parties disagreed on the effect of the French words l execution provisoire in the Lome Release Order which were translated as provisional enforcement As AR Ang noted these words might at first blush suggest a lack of finality in the Lome Release Order These words were considered in The Irini A No 2 1999 1 Lloyd s Rep 189 at 193 by Tuckey J who said that they have a legal meaning the effect of which regard must be had to the evidence from Togolese lawyers submitted by the parties After considering the evidence his Lordship said as follows at 193 O n the facts I think that the decision of the Lome Court was final in the sense required to found issue estoppel It is incapable of revision by the Court which pronounced it It is enforceable and has been enforced That process is only provisional in the sense that if the Court of Appeal reverses the judgement the execution no longer stands That is no different from the position here where the fact that a judgement is under appeal does not mean that it is not final 44 It should be noted that in The Irini A No 2 an appeal had been filed against the Lome court s decision and was pending at the time the matter was considered by the English court In contrast in the present case no appeal against the Lome Release Order was lodged and the time within which an appeal may be lodged had long passed Furthermore the Lome Release Order contained a direction that the present ruling will be enforceable immediately notwithstanding all paths for appeal and before registration 45 In para 42 of his affidavit Mr Doe Bruce referred to Art 160 of the Togo Code of Civil Procedure which provides that provisional injunction rulings do not assume the nature of a final judgment they can be amended or resubmitted to the Court if fresh circumstances arise Whether or not he is correct there is no evidence of fresh circumstances The decision of the Lome Court of Appeal in relation to STC s right to a lien over the cargo in question has no bearing on the validity of the Lome Release Order and cannot constitute fresh circumstances As such I find that the decision of the Lome court that issued the Lome Release Order after a hearing on the merits of the case was conclusive and final for the purpose of issue estoppel 46 As for the second requirement of issue estoppel which is that the parties must be the same parties in both proceedings the banks and FESCO were parties to the Lome proceedings regarding the arrest of the chartered vessel and are parties to the present proceedings regarding the arrest of the chartered vessel s sister ship the Vasiliy Golovnin 47 As for the third requirement of issue estoppel which is that the issues before the court must be identical with those previously determined the banks contended that the issues were not identical because this court was only required to determine whether or not it was entitled to and ought to exercise its admiralty jurisdiction over the vessel intended to be arrested and that the merits of arrest were considered against the procedural and substantive requirements of each jurisdiction This is an unmeritorious argument that was rightly dismissed by AR Ang Indeed if the issue before the Singapore court was framed in the manner suggested by the banks no question of issue estoppel could ever arise in Singapore in the case of the arrest of a vessel and the arresting party could resurrect all the arguments in favour of an arrest in Singapore even though these had been exhaustively considered and decisively rejected by for instance an English court 48 FESCO s counsel rightly asserted that the parties arguments on the merits of the case had been considered by the Togolese court In fact when setting aside the arrest and ordering the banks to pay costs the Lome court made the following findings a The banks could not deal directly with FESCO without going through Rustal and STC and FESCO could only follow STC s instructions since Lome was stipulated as the port of discharge in a number of the bills of lading b FESCO had not been at fault in proceeding to Lome on STC s instructions since STC had control over the commercial management of the Chelyabinsk as charterers c Douala was not listed as a port of discharge on the bills of lading although the banks claimed that the cargo was bound for Douala d Sufficient security had been given for the claims for loss and damage to the cargo 49 Considering the arguments raised in the present case by the banks the inescapable conclusion is that the third requirement of identical issues for issue estoppel was satisfied Security for claim for damage to cargo 50 I now turn to the banks assertion during the hearing of the appeal that they were entitled to arrest the Vasiliy Golovnin as they required security for their claim for damage to cargo AR Ang did not deal with this issue at length for the simple reason that no such submission was made before her Even so she pointed out in her grounds of decision 26 supra at 16 d that the Lome court had found that sufficient security had been given for the claim for loss and damage of the cargo The Lome court took the view that security for the cargo damage had been provided by the UK P I Club in the form of a letter of undertaking dated 16 February 2006 The banks complained that this undertaking to pay not more than 113 411 00 was addressed to the cargo underwriters of the cargo on board the chartered vessel FESCO s counsel Mr Steven Chong SC pointed out that the banks were not disadvantaged by this as any loss resulting from cargo damage will first be claimed from the cargo insurers What is relevant to this court is that the Lome court had specifically declared that security for the damaged and missing goods ascertained during the loading had already been provided for Whether or not this court agrees or disagrees with the Lome court is irrelevant as this issue cannot be reopened in the absence of fresh circumstances This was the approach adopted in The Irini A No 2 43 supra by Tuckey J who stressed at 193 that whether the Togolese court had not done what an English court would have done and whether an English court might have reached a different conclusion were not relevant Reference may also be made to the following useful passage from P M North and J J Fawcett Cheshire and North s Private International Law Butterworths 13th Ed 1999 at 429 Erroneous judgments delivered by a foreign court are not void in England The merits of the case have been argued and determined and if one of the parties is discontented with the decision his proper course is to take appellate proceedings in the forum of the judgment The English tribunal in other words cannot sit as a Court of Appeal against a judgment pronounced by a court which was competent to exercise jurisdiction over the parties 51 To sum up issue estoppel prevents this court from considering whether the banks have a right to arrest the Vasiliy Golovnin No sustainable cause of action 52 AR Ang also set aside the warrant of arrest and struck out the in rem writ on the ground that the banks had no sustainable cause of action against FESCO 53 The banks arrest of the Vasiliy Golovnin was based on ss 3 1 g and 3 1 h of the High Court Admiralty Jurisdiction Act Cap 123 1985 Rev Ed which provide as follows The admiralty jurisdiction of the High Court shall be as follows that is to say jurisdiction to hear and determine any of the following questions or claims g any claim for loss of or damage to goods carried in a ship h any claim arising out of any agreement relating to the carriage of goods in a ship or to the use or hire of a ship 54 The court will not exercise its discretion to strike out a writ or pleading under O 18 r 19 of the Rules of Court Cap 322 R 5 2006 Rev Ed or under its inherent jurisdiction unless there is a very clear case for this to be done In Tan Eng Khiam v Ultra Realty Pte Ltd 1991 SLR 798 G P Selvam JC as he then was stated at 803 31 that t his is anchored on the judicial policy to afford a litigant the right to institute a bona fide claim before the courts and to prosecute it in the usual way and that the court will whenever possible let the plaintiff proceed with the action unless his case is wholly and clearly unarguable 55 At this juncture the banks endorsement of claim which is as follows ought to be noted The Plaintiffs claim is for damages for breach of written and or oral contracts evidenced by and or contained in various Bills of Lading dated in or around September and or October 2005 and or a Charterparty and or for conversion and or wrongful detention and or wrongful interference and or breach of bailment and or breach of duty and or negligence in and about the bailment loading handling custody care delivery and discharge of the Plaintiffs cargo of rice and the carriage thereof on board the ship or vessel CHELYABINSK from Nanjing China and Kakinanda India to Douala Cameroon during September December 2005 and or for a declaration for an indemnity and or for an indemnity for all loss and or liability suffered and or incurred and or injury to the Plaintiffs reversionary interests in the said cargo of which the Plaintiffs are or were owners and or lawful bills of lading holders and or insurers and or persons in possession and or entitled to immediate possession of the said cargo and or which was at their risk which resulted in loss and or damage and or delay and or expenses and or liability being suffered and or incurred emphasis added 56 AR Ang noted that when asserting that they had an arguable case against FESCO the banks relied on seven grounds As summarised by her at 29 of her grounds of decision 26 supra these related to FESCO s a purported breach of Art III r 2 of the Hague Visby Rules b purported breach of its duty as bailees of the cargo c purported breach of an agreement to discharge the cargo at Douala d alleged wrongful compliance with STC s instructions to proceed to Lome e refusal to comply with the banks instructions to discharge the cargo at Douala f failure to deliver the cargo to the banks as holders of the bills of lading and g alleged wrongful failure to discharge the cargo under the
Original URL path: http://www.singaporelaw.sg/sglaw/laws-of-singapore/commercial-law/chapter-25?id=1437 (2016-01-30)
The &ldquo;Bunga Melati 5&rdquo;
Bunga Melati 5 2010 SGHC 193 The Bunga Melati 5 AR at 60 55 In the following paragraphs we address each of these legal elements individually to explain why it could not be said at this stage that the appellant s claim in express representation was so plainly legally unsustainable that it ought to have been struck out 1 Could the alleged representation be said to have emanated from a person with the requisite authority 56 In its submissions the appellant argued that while the employee could not be specifically identified until the trial the employee being in the bunker unit must have had either actual or apparent authority to make the alleged representation note 28 The respondent argued on the contrary that any such representation would have been made only by one of its junior executives who would not have had the requisite authority to do so note 29 57 In our view there was simply insufficient evidence before us to determine if this legal element could be satisfied or not Given that the identity of the alleged employee remained unknown it was not possible to determine whether that alleged employee had actual or apparent authority The onus would be on the appellant to identify at trial the specific employee who had the requisite authority and did make the alleged representation It would therefore have been premature to conclude at this stage that this legal element could not be made out by the appellant 58 Moreover even if no employee in the bunker unit could be said to have the actual authority to make the alleged representation it still remains legally debatable whether the alleged employee s apparent authority could similarly have sufficed Although the Judge below appears to be of the view that only actual authority could suffice we noted the more nuanced view put forth by established authors in the law of agency that Peter Watts and FMB Reynolds Bowstead and Reynolds on Agency Thomson Reuters Legal Limited 19th Ed 2010 at para 8 021 see also Tan Cheng Han The Law of Agency Academy Publishing 2010 Tan Cheng Han at p 86 It seems correct in principle to say that an agent can have apparent authority to make representations as to the authority of other agents provided that his own authority can finally be traced back to a representation by the principal or to a person with actual authority from the principal to make it 59 Crucially at this early stage of the proceedings we hasten to add that we are neither endorsing nor disagreeing with the view of the learned academics cited above This remains the proper task of the trial judge The above view did suggest however that even if no employee in the respondent s bunker unit had actual authority to make the alleged representation the appellant s claim would still not be so legally unsustainable that it ought to have been struck out at this stage 2 Could the alleged representation made in 2006 be said to have remained operative for the Bunker Contracts concluded in 2008 60 On the second legal element of whether the alleged representation remained operative the Judge was of the opinion that it could not be satisfied because the alleged representation in 2006 referred to a completely different transaction from the Bunker Contracts entered into in 2008 Citing from K R Handley Spencer Bower Turner and Handley Actionable Misrepresentation Butterworths 4th Ed 2000 Actionable Misrepresentation at para 61 and Director of Public Prosecutions v Ray 1974 1 AC 370 the Judge held that a representation could only be said to be continuing if it was a representation made for the purpose of a particular transaction 61 In its submissions the appellant argued that it was precisely because the alleged representation was not restricted to a particular transaction but was in essence a general one ie that MAL was generally authorised to act as the respondent s agent note 30 that the authorities cited by the Judge should be distinguished Although the appellant did not cite any authority which positively established the proposition it sought to rely on ie that representations of a general nature can be continuing unless withdrawn as well we were unable to dismiss the proposition as being legally unsustainable summarily In our provisional view it would be surprising indeed should the law require a principal to make repetitive representations to a long term business counterparty as to the authority of the same agent for each separate transaction before agency by estoppel could be established 62 Crucially this provisional view of ours is not intended to be binding on any court least of all the trial court which would be hearing this case since we did not have the opportunity to hear the parties fully on this issue In our view even if the appellant should eventually be held to have been mistaken on this legal element the arguments it had mounted certainly sufficed to establish a point of law which require d serious argument Singapore Civil Procedure 2007 at para 18 19 6 Oh Thevesa v Sia Hok Chai 1992 1 MLJ 215 63 If our provisional view is correct then whether the representation was truly a continuing one would naturally depend on the exact words and context in which Mr Middleton claimed to have heard from the employee at the respondent s bunker unit a finding which could only be satisfactorily established at trial The same could also be said of the contested issue as to whether it was reasonable for Compass Marine to assume that the alleged representation even if it was continuing was still valid at 2008 note 31 Therefore it was in our view premature for the Judge to have struck out the appellant s claim on the basis that this legal element was unable to be satisfied 3 Could the appellant be said to have been induced by the alleged representation 64 For the final legal element it was the AR who had held that inducement was not made out because the alleged representation was made to Compass Marine and not to the appellant and no evidence was adduced by the appellant to show that it and not Compass Marine had acted in reliance on the alleged representation While the Judge did not offer an opinion on this issue both the appellant and the respondent made substantial written submissions on it before us disagreeing on whether or not the appellant had personally received the alleged representation and relied on it note 32 However our preliminary opinion is that the true legal position might appear to be somewhat different from how both parties and the AR understood it 65 In Feltham Hochberg Leech Spencer Bower The Law relating to estoppel by representation LexisNexis UK 4th Ed 2004 at pp 135 the learned authors wrote A representee may of course receive a representation by an agent but the principal must still if he is to raise an estoppel show that he was by himself or his agent actually or presumptively intended to act on it 66 The learned authors of Actionable Misrepresentation also stated the following proposition at para 165 The representation may also be made to A knowing that he is the agent of B with the intention of inducing A to act on it on behalf of B and A may do so without communicating it to B In such a case B is also a representee and can sue on it because it induced his agent A to act to his B s detriment 67 Therefore for the legal element of inducement to be shown it appeared to us to be unnecessary for the appellant to actually possess personal knowledge of the alleged representation as long as the representation was communicated to Compass Marine agent of the appellant with the intention of inducing Compass Marine to act on behalf of the appellant This understanding came across to us as a commercially sensible one for it encapsulated the very essence of an agency relationship between the appellant and Compass Marine that the latter had the authority to receive information and act on behalf of the former If this was the true legal position there were once again factual uncertainties as to the alleged representation in particular its scope and its underlying intention which would first need to be resolved at trial before the trial court could determine whether this legal element could be made out or not 68 At the risk of repetition our understanding of what we deem to be the true legal position on the requirement of inducement constitutes only a provisional view since the issue was not argued before us and the trial judge should be free to come to a different conclusion if he or she thinks otherwise For the purposes of this appeal however it was certainly not clear beyond question that the appellant could not satisfy the legal element of inducement simply because the representation was made to Compass Marine 4 Examples of actions that were or could have been struck out because they were legally unsustainable 69 At this juncture it might be appropriate for us to highlight previous instances where it could legitimately be said that a plaintiff s action was legally unsustainable In order to arrest a vessel beneficially owned by a party who on the face of the contract was not the contracting party claimants have often been tempted to mount a claim in agency It is thus not surprising that there exists a body of case law dealing with the setting aside striking out of a plaintiff s agency claim in the bunker trading context 70 Indeed there have been a number of instances where a bunker supplier albeit having contracted with a time charterer for the sale of bunkers has sought to argue that the ship owner or the demise charterer was the principal of the time charterer and should therefore be liable for the bunkers supplied We observe however that it is almost always the case that the plaintiff s action in such a context ends up being set aside or struck out by the courts see Lok Maheshwari The Yuta Bondarovskaya 1998 2 Lloyd s Rep 357 The Yuta Bondarovskaya The J Faster 2000 1 HKC 652 The J Faster The unifying theme in these three cases which originate from different jurisdictions appears to be this a claim that a ship owner or demise charterer is by its mere act of receiving the bunkers supplied representing that the time charterer is its agent is a legally unsustainable proposition This is because such a claim runs counter to the universally accepted underlying basis of a time charter The Yuta Bondarovskaya at 362 see also The J Faster at 656 that in time charters it is the charterer who is responsible for the provision and payment for fuel Stephen Girvin Carriage of Goods by Sea Oxford University Press 2nd Ed 2011 at para 33 31 However even this well recognised principle is subject to the principled exception that a plaintiff who had dealt directly with the master of the vessel with no knowledge whatsoever that the vessel was chartered could have an arguable case binding the ship owner to the contract The Tolla 1921 PD 22 Lok Maheshwari at 16 The MV 1996 4 MLJ 109 Clearly the present case before us is distinguishable from these other cases because MAL was not a time charterer but an independent third party thus the allegation that it had contracted on behalf of the respondent could be a legally sustainable proposition 71 We also pause to draw attention to the Singapore High Court decision in The AA V 1999 3 SLR R 664 The AA V which while containing facts quite similar to our present case serves as a good contrast why the appellant s action in our case was not legally unsustainable In The AA V the plaintiff bunker supplier claimed against the defendant tug owner for the balance sum owed for the supply of marine gas oil to the defendant s tug The defendant argued inter alia that it was not liable to the plaintiff in personam as the latter had contracted for the sale of the gas oil with a third party company New Acmes rather than with the defendant and that New Acmes was not the agent of the defendant Crucially in attempting to argue that New Acmes was the defendant s agent the plaintiff claimed that it had received a call from an employee Mr Lui of New Acmes claiming that New Acmes was the agent for the defendant for the purchase of marine gas oil 72 In setting aside the plaintiff s claim Prakash J relied on reasons that suggest the plaintiff s action in alleging that New Acmes was the defendant s agent was factually unsustainable Firstly the plaintiff had conducted a Portnet search which clearly revealed that another entity was the defendant s agent Secondly the plaintiff s claim did not square with the fact that most of the fuel bought by New Acmes did not even go into the defendant s tug Thirdly the plaintiff had always looked to New Acmes for payment and their efforts had partially been rewarded by part payment made by New Acmes not the defendant 73 More importantly it appears to us that Prakash J could also have relied on the ground that the plaintiff s action was legally unsustainable since the plaintiff s claim in agency was premised upon a representation allegedly made by an employee of the agent itself ie Mr Lui of New Acmes Leaving aside the fact that the plaintiff s account was strenuously denied by Mr Lui it is worth noting that even if all the facts alleged by the plaintiff were proved the plaintiff s case would still have collapsed upon the established principle in agency law that an agent cannot make a representation as to his own authority Skandinaviska CA at 38 Armagas Ltd v Mundogas S A The Ocean Frost 1986 AC 717 see also Tan Cheng Han at p 87 The plaintiff s claim in The AA V could therefore have been struck out on the ground that its action was legally unsustainable 74 In contrast the appellant s claim in agency by estoppel in our present case even if it appeared weak on the merits was at least legally sound and did not contradict any established common law principles unlike the plaintiffs in Lok Maheshwari The Yuta Bondarovskaya The J Faster and The AA V The present case before us was therefore distinguishable from the cited cases above where the plaintiffs claims in agency were or could have been struck out for being legally unsustainable 5 Conclusion on the legally unsustainable ground 75 To sum up there was insufficient evidence before us to determine if the three legal elements mentioned by the AR and Judge below could be satisfied or not While Mr Middleton s affidavit in and of itself might not satisfy all the above elements fully at this stage it did not follow that the appellant s action should be struck out for being legally unsustainable The court at an interlocutory stage should not speculate on the evidence that might or might not surface during trial where the parties would have had the benefit of the discovery interrogatory and cross examination processes An action should thus be held to be legally unsustainable at an interlocutory stage only if it is clear beyond question that certain legal elements of a plaintiff s claim based on its pleadings cannot be satisfied or if there is an obvious legal defence or principle in existence which will have defeated the plaintiff s claim even if all the facts alleged by the plaintiff are proved 76 In the present case the appellant was unable to fully satisfy the legal elements at this stage not because of any inherent legal deficiency in its claim but because of factual uncertainties which might be resolved at trial in the appellant s favour Moreover there also appeared to be knotty points of law requiring serious argument that should not be decided by a court exercising summary jurisdiction Therefore we were of the view that the AR and the Judge below had erred in striking out the appellant s claim in express representation on the ground pertaining to it being legally unsustainable Conclusion on the appellant s claim in agency by estoppel 77 For the reasons stated we were persuaded that the appellant s action in claiming that there was an express representation leading to agency by estoppel was not so factually or legally unsustainable that it ought to have been struck out We therefore allowed the appeal for the appellant s action to proceed to a full trial 78 In the result there was no need for us to address the appellant s alternative claim in unjust enrichment save as to mention that had the appellant s claim in express representation leading to agency by estoppel been struck out its claim in unjust enrichment would probably have met the same fate as well for the reasons given by the Judge below see the GD at 65 68 Issue estoppel 79 The respondent also attempted to rely on the ground of issue estoppel to strike out the appellant s action even though this ground had been rejected by both the AR and the Judge below The respondent submitted that a final and conclusive decision was reached in the US proceedings that the appellant had no prima facie case against the respondent note 33 and that the US proceedings thus constituted an issue estoppel against the appellant s present action 80 It was not disputed that in order to establish issue estoppel a party must show that see The Vasiliy Golovnin 2007 4 SLR R 277 The Vasiliy Golovnin HC at 38 D S V Silo Und Verwaltungsgesellschaft mbH v Owners of The Sennar and 13 Other Ships 1985 1 WLR 490 The Sennar No 2 at 499 per Lord Brandon of Oakbrook a the judgment in the earlier proceedings being relied on as creating an estoppel must have been given by a foreign court of competent jurisdiction b the judgment must have been final and conclusive on the merits c there must have been identity of parties in the two sets of proceedings and d there must have been identity of subject matter ie the issue decided by the foreign court must have been the same as that arising in the proceedings at hand 81 In this appeal the only dispute between the parties was on requirement b ie whether the US proceedings resulted in a judgment that was final and conclusive on the merits A judgment is final and conclusive on the merits if it is one which cannot be varied re opened or set aside by the court that delivered it The Sennar No 2 at 494 and also if it is a decision which The Sennar No 2 at 499 establishes certain facts as proved or not in dispute states what are the relevant principles of law applicable to such facts and expresses a conclusion with regard to the effect of applying those principles to the factual situation concerned 82 In our view the Judge below rightly held that there was ample evidence from the decision of the California District Court and the respondent s very own submissions before the Ninth Circuit Court of Appeals that the GD at 72 the US proceedings were only concerned with whether or not the Rule B attachment order was to be vacated and it was open to the courts in the United States to reach a different view on the same issues at the subsequent stage of considering the actual motion to dismiss the Verified Complaint This fact alone would have sufficed to show that the US judgment was not final and conclusive on the merits 83 However in its appeal before us the respondent attempted to rely on the decision in The Vasiliy Golovnin HC as supporting its stance note 34 In that case Tan Lee Meng J Tan J had affirmed the Assistant Registrar s AR Ang decision see The Vasiliy Golovnin 2006 SGHC 247 The Vasiliy Golovnin AR that the Lome Release Order at issue was final and conclusive with the result being that issue estoppel was established to bar the plaintiffs from re litigating on whether it had a right to arrest the defendant s ship before the Singapore courts AR Ang s decision to set aside the warrant of arrest on the ground of issue estoppel was therefore upheld by Tan J whose holding was also subsequently approved by this court in The Vasiliy Golovnin 2008 4 SLR R 994 The Vasiliy Golovnin CA 84 It was clear that the respondent was attempting to draw an analogy between the Lome Release Order in The Vasiliy Golovnin HC and the vacation of the Rule B attachment order in the present case such that if the former led to issue estoppel so should the latter too However we were of the view that this analogy would break down upon a closer analysis of The Vasiliy Golovnin HC and the differences between a Lome Release Order and the vacation of the US Rule B attachment order 85 In The Vasiliy Golovnin HC the plaintiffs had argued that the Lome Release Order at issue was not final and conclusive to give rise to an issue estoppel To this argument Tan J held to the contrary for the following reason at 43 The parties disagreed on the effect of the French words l execution provisoire in the Lome Release Order which were translated as provisional enforcement As AR Ang noted these words might at first blush suggest a lack of finality in the Lome Release Order These words were considered in The Irini A No 2 1999 1 Lloyd s Rep 189 at 193 by Tuckey J who said that they have a legal meaning the effect of which regard must be had to the evidence from Togolese lawyers submitted by the parties After considering the evidence his Lordship said as follows at 193 O n the facts I think that the decision of the Lome Court was final in the sense required to found issue estoppel It is incapable of revision by the Court which pronounced it It is enforceable and has been enforced That process is only provisional in the sense that if the Court of Appeal reverses the judgement the execution no longer stands That is no different from the position here where the fact that a judgement is under appeal does not mean that it is not final 86 In our view the decision of Tuckey J in The Irini A No 2 1999 1 Lloyd s Rep 189 The Irini A No 2 neatly explains why a Lome Release Order was not in any sense interim or provisional The Vasiliy Golovnin AR at 23 In determining whether a foreign judgment was final and conclusive Tuckey J held that the English courts must look not only at English law but also at what the foreign law itself says about the nature of the judgment The Irini A No 2 at 193 an approach earlier established by the seminal House of Lords decision in Carl Zeiss No 2 Stiftung v Rayner Keeler Ltd No 2 1967 1 AC 853 at 919 per Lord Reid We would highlight that this principled approach applies in the Singapore courts as well when determining whether a foreign judgment was final and conclusive see Alliance Entertainment Singapore Pte Ltd v Sim Kay Teck and another 2006 3 SLR R 712 Goh Nellie v Goh Lian Teck and others 2007 1 SLR R 453 at 28 Each determination must therefore turn on its own facts and the court must be extra sensitive in particular to the intention of the foreign judge in the earlier proceedings Singapore Court Practice 2009 Jeffrey Pinsler SC gen ed LexisNexis 2009 at para 18 19 14 87 It was thus precisely so that the Lome Release Order in both The Irini A No 2 and The Vasiliy Golovnin HC were intended by the Lome Court granting the order to have been final and conclusive notwithstanding that the French words l execution proviso ire were used Crucially the same could not be said of how the California District Court characterised the vacation of the Rule B attachment order in the present case As highlighted by the Judge below see the GD at 72 District Judge Valerie Baker Fairbank of the California District Court had in deciding to vacate the Rule B attachment order so held note 35 After considering your arguments and the evidence filed today the court s tentative sic will be the order of court At this time the court finds based upon the evidence before the court that the plaintiff failed to meet its burden of showing a prima facie admiralty claim against the defendant Similarly the court finds that the plaintiff did not meet its burden with respect to the quantum meruit cause of action I recognize that the plaintiff is not required to prove its case at this time and my rulings only pertain to this hearing emphasis added 88 In its subsequent appellate brief before the Ninth Circuit Court of Appeals the respondent had also accepted that the hearing to vacate the Rule B attachment order was not for a final determination of the merits of the appellant s underlying claim note 36 In short it was clear to us that the vacation of the Rule B attachment order in the present case was merely an interim order prior to the actual motion to dismiss the Verified Complaint Tan J s decision in The Vasiliy Golovnin HC that a Lome Release Order had given rise to an issue estoppel could therefore be clearly distinguished from the present case 89 In the result the US proceedings did not result in a judgment which was final and conclusive on the merits and as such were not capable of giving rise to an issue estoppel We therefore upheld the Judge s refusal to strike out the appellant s action on the basis of issue estoppel Invoking the admiralty jurisdiction of the court 90 The respondent s final string to its legal bow was to argue that the appellant s writ should have been set aside on the basis that the admiralty jurisdiction of the court under the HCAJA had been improperly or invalidly invoked against the Bunga Melati 5 The AR agreed holding that there was an independent requirement that the appellant show a good arguable case on the merits in order to invoke the court s admiralty jurisdiction based on his understanding of The Vasiliy Golovnin CA and that the appellant had failed to do so for the very same reasons why its action should be struck out under O 18 r 19 of the ROC The Judge disagreed with the AR s understanding of The Vasiliy Golovnin CA and held that there was to be no enquiry into the merits of a plaintiff s claim at the jurisdictional stage of invoking admiralty jurisdiction Before this court the respondent submitted that the merits requirement is built into section 4 4 of the HCAJA and does not exist independently of it note 37 citing this Court s decision in The Vasiliy Golovnin CA as authority for its submission 91 Having decided that the appellant s action should not have been struck out we have in effect determined that the appellant had met the good arguable case threshold This effectively disposed of the respondent s argument even if though we do not agree it was right in arguing that a merits requirement was implicit in s 4 4 of the HCAJA However we think it will be helpful to take this opportunity to comment on the Judge s elaborate and helpful discussion of the various steps and standards of proof involved in invoking admiralty jurisdiction under the HCAJA The decision of this court in The Vasiliy Golovnin CA 92 Section 4 4 of the HCAJA provides Mode of exercise of admiralty jurisdiction 4 1 4 In the case of any such claim as is mentioned in section 3 1 d to q where a the claim arises in connection with a ship and b the person who would be liable on the claim in an action in personam referred to in this subsection as the relevant person was when the cause of action arose the owner or charterer of or in possession or in control of the ship an action in rem may whether or not the claim gives rise to a maritime lien on that ship be brought in the High Court against i that ship if at the time when the action is brought the relevant person is either the beneficial owner of that ship as respects all the shares in it or the charterer of that ship under a charter by demise or ii any other ship of which at the time when the action is brought the relevant person is the beneficial owner as respects all the shares in it 93 In The Vasiliy Golovnin AR the plaintiffs had their arrest of the defendant s vessel set aside and their writ struck out by AR Ang on the basis that their claims were wholly unmeritorious and did not have an arguable case under ss 3 1 g and 3 1 h of the HCAJA at 27 28 When the case proceeded to the High Court upon the plaintiffs appeal Tan J focused specifically on whether the plaintiffs claims should have been struck out and in the process affirmed AR Ang s decision to strike out the plaintiffs unmeritorious claims see The Vasiliy Golovnin HC at 70 Dissatisfied the plaintiffs appealed against Tan J s decision by advancing the following argument before us see The Vasiliy Golovnin CA at 46 since the applications to set aside the arrest and to strike out the writ and the action were all premised on the ground that there had been a failure to comply with s 3 1 of the HCAJA a fundamental jurisdictional requirement this was the sole threshold issue that Tan J should have considered and made a definitive finding on Instead Tan J appeared to have omitted this step and proceeded to address the court s ability to strike out a claim under O 18 r 19 of the Rules of Court or under the inherent jurisdiction of the court Counsel for the plaintiffs vigorously submitted that Tan J seriously erred in this respect and should have first paused to address the issue of whether the jurisdictional requirements were met by deciding whether the claim fell within one of the provisions of s 3 1 of HCAJA 94 In our opinion a proper understanding of the context of the plaintiffs argument in The Vasiliy Golovnin CA will assist in understanding why this court in The Vasiliy Golovnin CA did not intend to introduce a new merits requirement for the invoking of admiralty jurisdiction Crucially as the quoted paragraph above shows the plaintiffs counsel in The Vasiliy Golovnin CA had advanced a very technical argument which if successful would have thrown into doubt the right of the court below ie The Vasiliy Golovnin HC to consider the sustainability of the plaintiffs cause of action under O 18 r 19 of the ROC or its inherent jurisdiction If we had accepted her argument that the court below should only have addressed the issue of whether the requirements of s 3 1 of the HCAJA had been satisfied it would have been tantamount to this Court holding that a court cannot strike out the plaintiff s cause of action unless the defendant specifically pleads that the plaintiff s action is wholly unsustainable on the merits of its claim while challenging admiralty jurisdiction 95 It was in response to this undesirable approach had the plaintiffs submission been accepted that this Court stated the following paragraphs in The Vasiliy Golovnin CA at 50 52 which may have given rise to the AR s confusion 50 Satisfying the requirements of s 3 1 of the HCAJA cannot be said to be the end all and be all when assessing the sustainability of an admiralty action Invoking the admiralty jurisdiction may be in one sense a procedural step but it also plainly attracts substantive considerations There are two requirements that claimants in every admiralty action must satisfy first the in rem jurisdiction must be established through inter alia ss 3 and 4 of the HCAJA Second the claim must if challenged also meet the requirement of being a good arguable case on the merits 51 The arrest of a vessel is never a trifling matter Arrest is a very powerful invasive remedy An arrest of a ship can lead to tremendous inconvenience financial distress and severe commercial embarrassment see also 120 below Even the briefest of delays can sometimes cause significant losses It can also in certain instances prejudice the livelihood of the ship s crew and the commercial fortunes of the shipowner Maritime arrests can when improperly executed sometimes be as destructive as Anton Piller orders and even as potentially ruinous as Mareva injunctions the two nuclear weapons of civil litigation As such a plaintiff must always remain cautious and rigorously ascertain the material facts before applying for a warrant of arrest While there is no need to establish a conclusive case at the outset there is certainly a need to establish a good arguable case before an arrest warrant can be issued This determination plainly requires a preliminary assessment of the merits of the claim 52 The standard to be applied in Singapore at this early stage of the matter if there is a challenge on the merits is indeed the good arguable case yardstick see also Karthigesu J s observations in The Jarguh Sawit 1997 3 SLR R 829 The Jarguh Sawit CA The plaintiff does not have to establish at this stage that he has a cause of action that might probably prevail in the final analysis Karthigesu J had rightly pointed out in The Jarguh Sawit CA that the plaintiff need only show that he has a good arguable case that his cause of action falls within one of the categories provided for in s 3 1 of the HCAJA The party invoking the arrest procedure must be prepared when challenged to justify that it was entitled right from the outset to invoke this remedy 96 In essence all that this court was opining in 50 52 in The Vasiliy Golovnin CA was that when a plaintiff s invoking of admiralty jurisdiction or its arrest of the defendant s vessel was subsequently challenged the plaintiff would need to show on top of the requirements of ss 3 and 4 of the HCAJA being satisfied a good arguable case on the merits of its claim as well in order to avoid having its claim struck out as being plainly or obviously unsustainable pursuant to the normal rules in civil procedure Should the plaintiff s cause of action be so unsustainable on the merits as was the case in The Vasiliy Golovnin HC a court would on an application being made have to strike out the plaintiff s action at an early stage under O 18 r 19 of the ROC or the inherent jurisdiction of the court It was on this basis that we had in The Vasiliy Golovnin CA disagreed with the plaintiffs argument that Tan J had somehow erred in The Vasiliy Golovnin HC by focusing on whether the plaintiffs claim should be struck out under O 18 r
Original URL path: http://www.singaporelaw.sg/sglaw/laws-of-singapore/case-law/free-law/court-of-appeal-judgments/14965-the-ldquo-bunga-melati-5-rdquo-2012-sgca-46 (2016-01-30)