Admiralty Practice ie in rem actions

NOTE:1) Does the Claim invoke Admiralty Jurisdiction? Covered under s3 HC (Admiralty Jurisdiction) Act. Not all

claims are in rem. There can be in personam claims e.g. ktual claims.2) The Claimant wishes to get security before judgment. Look at Procedure provisions in s4 HC (AJ) Act

governing how to issue writ / arrest vessel. Difficulties of arrest.3) The shipowner whose ship has been arrested, needs to negotiate security for release 4) If the ship is arrested and sold off, what order of priorities do the competing claims on it follow. So some get

earlier bite of the cherry, some don’t.5) Eng decisions highly persuasive in sg but not binding on local court sthough tendency is to follow UK

decisions unless compelling reasons not to do so

Types Of Claims Falling Within The Admiralty Jurisdiction

- Section 3(1)

Admiralty jurisdiction of High Court3. —(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: (a) any claim to the possession or ownership of a ship or to the ownership of any share therein; (b) any question arising between the co-owners of a ship as to possession, employment or earnings of that ship; (c) any claim in respect of a mortgage of or charge on a ship or any share therein; (d) any claim for damage done by a ship; (e) any claim for damage received by a ship; (f) any claim for loss of life or personal injury sustained in consequence of any defect in a ship or in her apparel or equipment, or of the wrongful act, neglect or default of the owners, charterers or persons in possession or control of a ship or of the master or crew thereof or of any other person for whose wrongful acts, neglects or defaults the owners, charterers or persons in possession or control of a ship are responsible, being an act, neglect or default in the navigation or management of the ship, in the loading, carriage or discharge of goods on, in or from the ship or in the embarkation, carriage or disembarkation of persons on, in or from the ship; (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; (i) subject to section 168 of the Merchant Shipping Act (Cap. 179) (which requires salvage disputes to be determined summarily by a District Court in certain cases), any claim in the nature of salvage (including any claim arising under section 11 of the Air Navigation Act (Cap. 6) relating to salvage to aircraft and their apparel and cargo); (j) any claim in the nature of towage in respect of a ship or an aircraft; (k) any claim in the nature of pilotage in respect of a ship or an aircraft; (l) any claim in respect of goods or materials supplied to a ship for her operation or maintenance; (m) any claim in respect of the construction, repair or equipment of a ship or dock charges or dues; (n) any claim by a master or member of the crew of a ship for wages and any claim by or in respect of a master or member of the crew of a ship for any money or property which, under any of the provisions of the Merchant Shipping Act (Cap. 179) is recoverable as wages or in the Court and in the manner in which wages may be recovered; (o) any claim by a master, shipper, charterer or agent in respect of disbursements made on account of a ship; (p) any claim arising out of an act which is or is claimed to be a general average act; (q) any claim arising out of bottomry; (r) any claim for the forfeiture or condemnation of a ship or of goods which are being or have been carried, or have been attempted to be carried, in a ship, or for the restoration of a ship or any such goods after seizure, or for droits of admiralty, together with any other jurisdiction connected with ships or aircraft which may be vested in the Court apart from this section. (2) The jurisdiction of the High Court under subsection (1) (b) includes power to settle any account outstanding and unsettled between the parties in relation to the ship, and to direct that the ship, or any share thereof, shall be sold, and to make such other order as the Court thinks fit. (3) The reference in subsection (1) (i) to claims in the nature of salvage includes a reference to such claims for services rendered in saving life from a ship or an aircraft or in preserving cargo, apparel or wreck as, under

sections 166 and 167 of the Merchant Shipping Act or any regulations made under section 11 of the Air Navigation Act (Cap. 6), are authorised to be made in connection with a ship or an aircraft. (4) Subsections (1) to (3) shall apply — (a) in relation to all ships or aircraft, whether of Singapore or not and whether registered or not and wherever the residence or domicile of their owners may be; (b) in relation to all claims, wheresoever arising (including, in the case of cargo or wreck salvage, claims in respect of cargo or wreck found on land); and (c) so far as they relate to mortgages and charges, to all mortgages or charges, whether registered or not and whether legal or equitable, including mortgages and charges created under foreign law. (5) Nothing in subsection (4) shall be construed as extending the cases in which money or property is recoverable under any of the provisions of the Merchant Shipping Act (Cap. 179).

- Not all maritime claims give rise to in rem jurisdiction, only those falling within s3(1).- Creature of statute- s3(1) is exhaustive. Hence if claim doesn’t fall within, cannot proceed in rem, and it’s a mere in personam

claim against defendant (not against ship).- Note the importance of in rem jurisdiction. Historically, excepting the Mareva, this was the only way to get

security before judgment. The quantum of security over a ship is in millions of $.- Note:

– all claims in rem will be in personam– ie if claims are within 3.1 they will be in personam– but you can have in personam claims tt do not give rise to in rem cases

Identity of in rem defendant- Admiralty action in rem is against against the res (usu ship) but qn is whether it is inanimate obj or the

owner tt is def- Sg Ca decisions – ship owner is the def and NOT the ship

*Kusu island 1989 the fierbinti 1994 the capricorn 1999 the Indian grace 1998

The "Kusu Island"; Mv "Brani Island", Owners Of Cargo Laden On Board V Mv "Kusu Island", Owners Of (Hc, S’pore) - Facts: - This appeal involved the circumstances under which the name of a defendant in an admiralty in rem action

may be corrected under O 20 r 5(3) of the Rules of the Supreme Court 1970 and of the circumstances under which an admiralty writ in rem may be renewed under O 6 r 7(2). The appellants were the receivers and owners of certain bales of cotton sheets shipped under two bills of lading in the respondents` vessel known as Brani Island. The appellants found some damage to the goods giving rise to a claim of about $110,000. When negotiations for an amicable settlement failed the appellants commenced an admiralty in rem action for damages against the owners of the ship or vessel Brani Island. The writ was issued ten days before the expiry of the one-year limitation period which fell on 26 October 1980. On 21 April 1981, the appellants under O 20 r 1(1) amended the writ by deleting the name of the respondents and substituting therefor the words `The owners of the ships or vessels Brani Island, Senang Island, Kusu Island`.Leave was granted by the assistant registrar to renew the writ for a period of 12 months from 16 October 1981. On 24 October 1981, the writ after the usual deletions of the names of Brani Island and Senang Island, was served on Kusu Island. On 2 November 1981, the respondents entered a conditional appearance. The respondents applied for: (1) an order that the amendment on 21 April 1981 be struck out and service on the Kusu Island be set aside; and (2) an order that the order of court dated 23 October 1981 renewing the writ for a period of 12 months and the service thereof be set aside. The registrar granted the respondents` application and the appellants appealed to the judge-in-chambers.

- Held , allowing the appeal in respect of prayer (1): (3).An action in rem was not an action against the res itself but was merely a procedural device to obtain jurisdiction over the owner of the res . In a writ in rem, the defendant was not described simply as `the ship X` but as `The owners of the ship X`.

Principles in Cases

- The wide ambit of s3(1)(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”

Can there be a hybrid writ giving rise to some claims in rem and some in personam ? NO.

The Nagasaki Spirit [1994] 1 Slr 445 [SGHC : GP Selvam] - Facts : collision between tanker and container. P gets a Mareva pursuant to admiralty writ. tanker

collided into container vessel – explosion- Case stops previous practice that can mix claims in the same writ. Now parties can only proceed with 1 type

of claim, whether in personam or in rem.- If an action in rem continues as such there may be interveners who would not be concerned with the action

in personam. A combined writ therefore causes confusion and difficulties to all parties and court.- Hybrid writ (Mareva + admiralty) set aside.- if two sep claims, issue 2 separate writs- prior to this case, old eng cases suggested tt cld have hybrid- but case makes clear tt either go in personam route or in rem route- Principle; Hybrid writs (writ in rem and personam) are disallowed and invalidated in the Singapore Courts. - Facts: Plf applied for and were granted a Mareva pursuant to their Admiralty In Rem Suit No 164 of 1993 as

a result forming a ‘hybrid writ’. Defendants applied to set aside hybrid writ, claiming that it is improper and the whole action should be set aside

- Held: Selvam JC:

- Default procedures under the RSC (now the ROC), in the case of an action in rem are different from those applicable to an action in personam.

- Further if an action in rem continues as such there may be interveners who would not be concerned in the action in personam. A combined writ would therefore cause confusion and difficulties to all the parties and the court.

- Therefore the practice is disallowed and the writ set aside

Restrictive interpretation to limbs of s3.1(h) ->

The Sandrina [1985] Ac 255- CF contract of insurance is NOT connected sufficiently for s3(1)(h) to apply - Facts: respondent insurers sue for premiums for insurance over cargo of oil, arrests ship. - Held: for an agreement to come within section[in pari materia with s3(1)(h)], it must have a reasonably

direct connection with carriage of goods in a ship. Contract of insurance was not connected in sufficiently direct sense. Hence arrest of ship recalled.

The River Rima [1988] 2 Lloyd’s Rep 193- Container hire, to an unspecified ship, doesn’t fall within the meaning of s3(1)(L)- Principle:

· Courts would entertain in rem jurisdiction when the claims come within s3 of the Act. · Attempt to invoke s20(2)(m) of the Supreme Court Act 1981 (Singapore’s equivalent of s3(1)(l) of the

Act) failed as identity of the ship has to be specified to invoke that section. - Facts:

· Contract relating to hiring of containers. No provision that the containers hired should be used for carriage of cargo by any of the df’s ships.

· Containers were normally delivered direct to the shippers at specified ports and were used interchangeably on a number of vessels either owned or chartered by the dfs.

· Arrested one of dfs vessels when cargo was damaged, df appealed on the ground that plf’s claim was not within the jurisdiction of the Admiralty court.

- Held (Lord Brandon of Oakbrook): · Correct interpretation of s20(2)(m) of the Supreme Court Act requires that that the goods provided

were required for the use of a particular ship whose identity was specified in the contract or would be specified by the time the contract came to be performed.

· Since the contract was the supply of goods to the ship owners and not to a ship, court had no power to entertain an action in rem in respect of claim.

- Containers leased to Ship owner and not to ship. Specific container not specifically allocated to a ship the action should be carried out in personam against the ship owner and not in rem against the ship.

Wide interpretation of same limb but for different reasons -> Ie depending on sitn, law lords and our court shave adopted either restrictive or wide reading of subsection.

The Antonis P Lemos [1984] 1 Lloyd’s Rep 464- [held] A broad/liberal construction is given to the expression.

o The language of the provision was wide enough to cover claims whether in contract or in tort arising out of any agreement out of the carriage of goods in a vessel and that for such an agreement to come within (h) it was not necessary that the claim in question be directly connected with some agreement of the kinds referred to in it or that the agreement be one made b/w the two parties to the action themselves.

- Principle: o Liberal interpretation of s20(2)(h) of the Supreme Court Act 1981 (Singapore’s equivalent of s3(1)

(h) of the Act).o Plf could establish that his claim arose out of an agreement relating to the carriage of goods in a

ship notwithstanding that the agreement was not one between the plaintiff and ship-owner. - Facts:

o Plf entered into voyage charterparty with A to carry grain and loaded cargo onto ship. o However ship was unable to berth as it was too heavy and had to discharge its cargo into lighters. o Plf commenced an in rem action claiming damages against the df under s20(2)(h) of the Supreme

Court Act. o Df sought to set aside the writ on the ground the ground that it did not fall within Admiralty

jurisdiction as there was no agreement between the plf and dft. - Held (Parker LJ):

o No words of limitation restricting the ‘agreement’ to agreements between the plf and df pursuant to s20(s)(h) of the Supreme Court Act.

o As long as the plf could establish that his claim arose out of an agreement relating to the carriage of goods in a ship, it was a claim within the Admiralty jurisdiction of the High Court.

2 Categories Of Claims For Which Ships Can Be Arrested

1. Maritime Liens - not synonym for maritime claims- five categories – closed chapter- if donot come wthin, then cannot be maritime lien

– Claims arising from salvage– Claims arising from collision– Claims arising from Master / crew wages– Claims arising from Master’s disbursements– Claims arising from bottomry (arcade)

- Note necessaries is not a maritime lien Under Singapore Law, “Maritime Lien” is a term of art. This means that it has to be one of the above 5

claims, failing which it is not a maritime lien- Irrelevant whether owner has in personam liability. Law receives claim even if ship owner has no such

liability. Successful Claimant gets priority.- Lien attaches to ship, survives any change in ownership.- - Independent of in personam liability so long as a cause of action had arisen.

The Halcyon Isle [1981] Ac 221 Issue as to whether claim does or does not give rise to maritime lien to be determined by lex fori Claims in shipping usu cross border issues involved PC from Singapore- Question as to whether there was a maritime lien (i.e. the right to proceed in rem + priority) is to be decided

solely by the lex fori (law of the forum).

- This is because maritime lien is characterised as either procedural or remedial.- Hence if claim sought in Singapore, Singapore law applies.- Principle: - Question as to the right to proceed in rem against a ship as well as priorities in the distribution between

competing claimants of the proceeds of its sale in an action in rem in the High court of Singapore, fell to be determined by the lex fori as if the events that gave rose to the claim had occurred in Singapore.

- Facts: · Respondent (the necessaries men) asserted that claim for repairs executed on the Halcyon Isle carried a

maritime lien on the vessel under the laws of the US (where the repairs were carried out.)· Owner did not pay for claims. Under contract law, claims gave rise to maritime lien. Vessel arrested in

sg – owner in dire financial straits, therefore likely tt propceeds not sufficient ot meet all claims => proiroties become very impt

· Vessel subj t mortgage· Fight over lien· And the maritime lien gave them priority of payment on their claim over the appellants’ claim which

was that of a mortgagee of the vessel. - Held (Lord Diplock): · Maritime lien is characterised under Singapore law as either procedural or remedial therefore it is

solely governed by the lex fori. · The question whether or not in the instant case the necessaries men are entitled to priority over the

mortgagees in the proceeds of sale would depend on whether or not if the repairs to the ship had been done in Singapore, the repairers would have been entitled under the law of Singapore to a maritime lien.

· The answer is that they are not therefore the mortgagees take priority.

The Monica S [1968] P 741· Change of ownership of ship after issue of writ, but before service or arrest, did not defeat a right of action

in rem. Hence crucial time is when P issues the writ.

2. S tatutory Liens - whether

o claim falls within Section 3(1) of the Singapore High Court (Admiralty) Jurisdiction Act (Cap 123) (Similar to section 20(2) of the UK Supreme Court Act 1981)

o Whether have fulfilled reqts of s4(4) at time of lien issued- because lien does not arise when claim accrues- in rem writ must be validly issued against vessel

The Monica S [1968] P 741 (Above)- Maritime Lien also fell within the ambit of the UK Admiralty Jurisdiction Legislation. The case’s principles

hence equally apply to our s3 HC (AJ) Act

Maritime Claims For Ships Which Cannot Be Arrested- • Section 3 Of The High Court (Admiralty) Jurisdiction Act- Insurance Premiums

– 2 kinds. 1)Hull and machinery insurance, and 2)Protection & Indemnity Clubs

The Sandrina [1985] Ac 255 (Hol Decision)

- Principle: o Has to be sufficiently connected with the ship or with the carriage of goods in a ship before an

action in rem can be instituted. - Facts:

o Dispute over insurance premiums over a cargo of oil. o Whether insurance policies are considered to be arising out of damages relating to carriage of

goods in a ship. - Held (Lord Keith of Kinkel):

o Contracts of insurance are not connected with the carriage of goods in a ship in a sufficiently direct sense.

- MOA Disputes- Memorandum of agreement - disputes e.g. as to sale and purchase of ship. Disputes very common.- Concern sale of ships. Sometimes dispute arises between condition of vessel at time of sale and at time

of delivery.- Condition of vessel may deteriorate between date of MOA and date of delivery. Invariably, many

disputes over this issue have arisen.- Courts have held that MOA dispute only allows a claim for possession (owner taking back possession

of vessel) not a right to arrest.- Not subj matter of in rem proceedings because 3.1 only dispties f ownershipand possession, not

descriptn of vessels under sale and purchase agreement

- Container Hire- Unjust treatment?- Lease containers usu, not bought - Container operators cannot operate without containers – courts till mid 80s issued arrest warrants to

allow container leasing comp to arrest vessels but:

The Sandrina (1985)- Case doesn’t deal with container hire but deals with whether insurance premium which is critical for KT of

carriage is an agreement for the KT of carriage. - HL held it is not and overruled 1st instance decision which held that claim for container hire would fall

within HC(AJ)A.

The River Rima [1988] 2 Lloyd’s Rep 464 (Hl)- attempt to invoke UK equivalent of s3(1)(L) failed as identity of ship has to be specified, in kt or by time kt

is performed, in order to invoke that section.- For container hire normally no provision for specific ship, carried by a number of ships. Didn’t matter which

ship, hence no in rem, but mere in personam claim against owner. - Contract was the supply of goods to a “shipowner”, and not to a “ship” as in s3(1)(L). - Ie against person and not the vessel- Reason: Provision in s3.1 is any claim arising out of operation or maintenance of shopsuppled to a

ship- Containers are supplied to a ship owner, not a ship- HL held that its claim was for goods or materials supplied to the ship whereas containers supplied to the

ship owner because containers can be used by various ships, not used by particular ship.- Cases just illustrate that claim must fall squarely within s.3(1) to give rise to in rem action.- No local judgment on this point but because provisions in pari materia, these cases likely to be good law.

Advantages Of Commencing An In Rem Action

1. Security- Arrest procedure allows security to be obtained irrespective of what happens to the shipowner

defendant ie pre judgement - Arrest procedure allows security to be obtained irrespective to what happens to the shipowner

defendanto Only prereq is valid issuance of writo The mmt claim comes within s3 and properly issud under s4.4 – claim attaches to vessel

and entitled to arrest vessel fas of right- Until the development of the mareva, in rem claims were the only exception to the rule that fruits

cannot be reaped before judgment – otherwise, can only seize assets once judgment has been obtained.- Mareva – litigants can obt security even though x come within in rem security because denning

held tt unfair for litigant to wait for outcome of litigation tt cld take many yrs- Fear tt litigant will dissipate assets

The Hull No 308 (1991) Singapore CA

- The plaintiffs took out their writ in rem against the ship, after the commencement of the winding up of the defendants. They could not therefore be considered as secured creditors for the purpose of deciding whether or not the discretion under s 262(3) of the Companies Act should be exercised in their favour.

- However claimants who issued writs before WU but didn’t arrest until after WU, could still get security.- Facts:

o The plaintiffs had supplied certain equipment and engines to the defendants for the construction of, inter alia, a ship or vessel called Hull 308. Later, the receivers and managers of the defendants were appointed on application by Standard Chartered Bank. When a petition to wind up the defendants was presented by one of the defendants` creditors, the receivers and managers were discharged by order of court and provisional liquidators were appointed. The plaintiffs then took out a writ in rem against the Hull 308. After hearing the application, the High Court made an order giving the plaintiffs leave to serve the writ on the Hull 308 and to arrest her. Later, the court granted the defendants` application to set aside the plaintiffs` writ. Against this order, the plaintiffs appealed. The plaintiffs` first ground of appeal was that the court’s decision in favour of the defendants amounted to a rehearing of the plaintiffs` application and was therefore ineffective once the order in favour of the plaintiffs had been granted by the judge. Secondly, the plaintiffs claimed that the judge incorrectly allowed the defendants` application.

- Held , dismissing the appeal: o (1) The hearing of the defendants` application to set aside the plaintiffs` writ was not a rehearing of

the plaintiffs` application for leave to serve the writ. In the latter case, the main issue before the judge was whether the ship was a `vessel`, whereas, the issue in the former case was whether the writ in rem was properly issued. The defendants` application was entirely a different application altogether and was not in any way affected by the outcome of the plaintiffs` application.

o (2) The plaintiffs took out their writ in rem against the ship, after the commencement of the winding up of the defendants. They could not therefore be considered as secured creditors for the purpose of deciding whether or not the discretion under s 262(3) of the Companies Act (Cap 50) should be exercised in their favour.

o (3) If the plaintiffs had applied at the time the writ was issued for leave to commence the action under s 262(3) of the Companies Act (Cap 50), such leave would not have been granted. It would not be right and fair in the circumstances to exercise the court’s discretion under s 262(3) in favour of the plaintiffs as to do so would confer upon the plaintiffs a security on an asset of the defendants which the plaintiffs otherwise did not have and could not have.

2. Jurisdiction Claimant does not have to establish the usual grounds of founding jurisdiction. P does not have to establish the usual grounds of founding jurisdiction under O10/O11.

- doesn’t matter that D is regt is some strange city; has no assets in Singapore. Presence of ship in jurisdiction sufficient. Note however the port limits issue Note also that while jurisdiction may be present, claim may still be stayed due to forum non

conveniens etc.- Claimant does not have to establish the usual grounds of founding jurisdiction- This means that DF need not be domiciled in Singapore and COA needn’t have arisen in

Singapore.- Can even issue protective writ before the vessel arrives in Singapore. - May have nth to do with sg

3. Priority– Admiralty claims have priority over ordinary claimants. If winding up is commenced after writ in

rem filed, claimant is in the position of a secured creditor.– In other words ->

In Re Aro Co Ltd [1980] 1 Ch 196 Maj eco crisis in sg because of closure of pan electric which had diverse owning interests including

shipowning and ship repairs Arising fr financial debacle, vessels in var stages of completion in yards, some hulls already launched Provisional liquidators appted to safeguard assets of comp because a lot of litigation – secured and

unsecured

Only secured creditors can commence action – trying to preserve security and not pursuing claims for which wil not get remedy eventually – so comp x need to waste resources defednign claims

Court had to determine whether writs issued before and after apptment of liquidators Held:

o If had validly issued in rem writ against shipowner prior to commencement of winding up proceedings, become secured creditor because become statutory lienee

o Stat lien has priority in liquidation o A plaintiff who has issued his writ in rem before the commencement of winding up would be

regarded as a secured creditor. o Therefore wil have leave to proceed against company

When the writ in rem is issued, a statutory lien accrues in favour of the plaintiff entitling him to arrest the ship. Hence, they could have served it and could have arrested the vessel with the result that the vessel was effectively encumbered with their claim.

Contrast mareva:o If preserve assets of def in mareva injn and assets frozen and eventually prevail in judgmeent, have

no priority – frozen assets if for all parties to share, if unsecured creditor, then secured creditor will take in priority ot you

o Thi sis the main diff bet mareva and in rem action

Ship Watch And Renewal Of Writ(impt – time bar regimes – writ valid usu only for 1 yr and if oppty to effect service within 1 yr, then law will not allow renewal of writ -> risk management issue to bear in mind)

This is a term of art. It means issuing writ before ship in port Problematic area for Lawyers because many anchorages in Singapore. Usu not done by lawyers but clerks – Maritime claims have many time bars

o Cargo claims – 1 yr limitationo Collision – 2 yrso For personal injury claims vs. vessel – 2 years, loss of life (not fr collision)– 3 years, other

claims – 6 years; other claims not under CLA, HC(AJ)A, LA etc. covered by doctrine of laches.

o Lifespan of Admiralty writ is 12 months. If vessel doesn’t come to Singapore within validity period, can renew writ. This is significant because there are many time bar regimes. For cargo claims under HVR, time bar is 1 year.

E.g. if 12 month period, writ not served and renewal is sought, must file affidavit to say why writ not served…if vessel did in fact come into port and was not served, renewal might not be allowed if full disclosure made to Court. Maritime L can be sued for negligence in not serving writ.

o Will not be allowed to renew if limitation period already set in Thus, absolutely critical that if there is opportunity to serve the vessel, must do so otherwise lawyer can be

in deep shit. But shipwatch improved now by Portnet – can have daily updated search on vessels in port and will know

72 hrs beforehand if vessel coming into port.

Procedure to appoint someone to keep an eye on the vessel so that you can arrest the ship once it calls to port.

How to keep ship watch: Marinet – log in and they will contact you when ship comes in Proff ship watchers Daily shopping list Newapper shipping ads Port-Net ship movements data etc

Shipping has a whole host of time bars:

Types of Claim Time Bar

Cargo 1 year

Collisions & Injuries / Insurance 2 years

Personal Injury not from Collision 3 years

Claims arising from tort or contract 6 years

Serving vessel once it comes into port is governed by Carriage of Goods by Sea Ordinance subject to the Hague Rules. If writ expires, time bar would set in. If you have reasonable opportunity to serve the ship, difficult to give grounds for renewal or writ.

Every extra vessel you include in your writ, increases the opportunity to miss the ship. must appoint competent ship watch as you would be able to know 72 hrs before ship calls. Eg: Cargo claim against A, vessel owned by X, in rem against A if X in personam. X has other vessels, B

and C. Issues writ against A, B and C. Time bar would set in immediately upon issuance of writ. Cannot add vessel D, E and F also owned by X if time bar had already set in (although you only just found out that X also owned D, E and F).

*********note these 3 cases:************The Big Beacher [1984] 2 Mlj 4- “The principle governing the renewal of a Writ has been firmly settled by the decision in Heaven v Road

and Rail Wagons Ltd [1965] 2 QB 35 . It is this. Where an application to renew a writ is made after the expiry of the relevant period of limitation, the court should not exercise its discretion in favour of renewing the writ, the effect of which would be to deprive the defendants of an otherwise good defence to the claim, unless there were exceptional circumstances which amount to a good and sufficient cause for renewing the writ. Such circumstances, as a guide, were ably set out by Brandon J (as he then was) in The Berny [1977] 2 Ll R 533 .”

The Union Hodeidah [1987] 2 Mlj 561- Facts : P sues for loss of damage in goods on board D’s ship. At time of issue of writ D’s ship wasn’t in

port, P gets renewal of writ before expiry, but after limitation period. P arrests ship within extended time. D applies for renewed writ, and warrant of arrest, to be set aside.

- Question whether renewal should be allowed. Local professional ship watchers had been employed. Ship arrived in S’pore 6 times within first writ period, could have been arrested on 3 or 4 times, but not arrested. Writ could have been served if “reasonable diligence” and “reasonable steps” had been taken.

- P had not established any exceptional circumstances warranting renewal of the writ, where D is deprived of limitation defence. Renewal of Writ and arrest set aside.

- Facts: – The plaintiff on 30 December 1980 took out a writ of summon in rem against the defendants and

claimed damages for breach of contract and/or breach of duty and/or negligence on the part of the defendants, their servants or agents resulting in loss or damage to the plaintiff`s goods and/or short delivery of the said goods which were shipped on board the defendant`s vessel `Union Hodeidah` (the vessel) for carriage from Singapore to Jeddah.

– At the time of the issue of the writ, the vessel was not in port. The writ was not served within one year from the date of its issue; but prior to its expiry, the plaintiff applied for and obtained a renewal of the writ.

– On or about 16 April 1982 the vessel was at the port of Singapore and service of the renewed writ was effected and the Vessel was arrested. The defendants entered a conditional appearance on 29 April 1982 and on 10 May 1982 applied by notice of motion to set aside the writ, service thereof, and the warrant of arrest.

– The question before the court was whether the court should have exercised its discretion to renew the writ, as it did, as a result of which the defendants were deprived of a good defence to the claim.

- Held , allowing the motion: – The plaintiff had not established any exceptional circumstances warranting a renewal of the writ. – [ Editorial Note: This case was different from earlier reported cases of this kind in that here local

`professional ship watchers` were engaged on behalf of the plaintiff. Allegations of breakdown of the Port of the Singapore Authority computerised system of ships reporting were raised.]

The Kusu Island [1985] 1 Mlj 342, [1989] 3 Mlj 257- Issue: is it permissible to amend and add Vessel B, C and D to an in rem writ that was issued 6 months ago?- Held (CA): True Df in an in rem writ is the ship owner and not the ship. But this does not mean that an

amendment to add a new vessel is an amendment to add a new party. The application to add new vessels to an existing writ is not permissible

- Held , allowing the appeal in respect of prayer (1): o (5).Where an application to renew a writ was made after the expiry of the relevant period of

limitation, the court should not exercise its discretion in favour of renewing the writ, the effect of which would be to deprive the defendants of an otherwise good defence to the claim, unless there were exceptional circumstances which amounted to a good and sufficient cause for renewing the writ. The appellants in this case had not exercised due diligence. The vessels, the Senang Island and the Kusu Island, were within jurisdiction on so many occasions and there were ample opportunities for the appellants, if they had been more vigilant, to effect service of the writ on either of them. The registrar having been apprised of the visits of both the vessels, had properly exercised his discretion in setting aside the order renewing the writ.

[1985] 1 MLJ 342 (HC, Lai Kew Chai) Issue whether amendment to add new vessel to writ is adding a party or adding a particular. Time bar had set in so cannot add party. Mere variation of the name of respondent, not adding a party. Nonetheless, where cannot renew writ after expiry of limitation because P didn’t exercise due diligence to

arrest ship, had ample opportunities to do so but they didn’t.

[1989] 3 MLJ 257 (Singapore CA, Wee Chong Jin CJ)· Cannot amend pre-existing writ to circumvent limitation period. · Facts :- Appellants were owner of 3 ships, Brani Island, Senang Island and Kusu Island. · Respondents were owners of cargo shipped on Brani Island. Cargo was damaged and respondents started

an admiralty action in rem against owners of Brani Island. · Although writ was issued before limitation expired, 6 months after expiry of limitation period, respondents

amended their writ and included the vessels Senang Island and Kusu Island and managed to serve writ on Kusu Island when it called in port.

· (Held) Amendment was not a correction of the name of the appellants and nothing suggested that the omission to insert the names of the 2 sister ships, Brani Island and Kusu Island, at the commencement of the action was due to a mistake. No explanation was given. Amendment thus did not fall within O20 r5(3) of ROC.

· The amendment if allowed would enable the respondent to defeat the defence of the period of limitation which the appellant would have had. The respondents could not escape the limitation cause by seeking to add Kusu Island to a pre-existing action in rem.

· Unlike the HC, CA found that adding a ship was akin to adding a new party or new cause of action, which cannot be done after the expiry of limitation.

· Therefore the amendment ought to be struck out and arrest set aside.

Procedure For The Arrest Of Ships (impt risk management issue)

- • Documents Necessary To Effect An Arrest– Writ of Summons– Warrant of Arrest– Praecipe for service of Writ in Rem (request)– Praecipe for Warrant of Arrest– Undertaking to Sheriff to bear all charges & expenses incurred during the period of arrest

Borne by law firm and can be substantial because quantum depends on size of vessel and length of arrest period and other factors

– An affidavit in support of the Warrant of Arrest

- Usual expenses– Sheriff’s attendance – usu 150 to 200 per hr– Sheriff’s commission – comm is 500 plus 0.10 per ton of net registered tonnage of arrested vessel

per mth

– Guard charges plus launch hire to fery guard to and fr arrest vessel – 150 to 200 per day depending on locality of arrested vessel

– Fees for court papers (incl warrant of arrest and release) – abt 600

Differences Between A Statutory Lien And A Maritime Lien

1) Maritime lien – salvage, collision etc – arise irrespective of in personam liability of ship owner. It arise by operation of the law the momt expenses are incurred

- ML is independent of personal liability and can be enforced against owner so long as claimant is not time barred

- Eg salvage – maritime lien attaches to vessel irrespective of in pesonam liab- Eg wages of crew – does not matter who employed the crew; mmt services provided to vessel,

lien will attach to vessel -- Arises fr the day the claim arises- Does not matter whether writ issued- A ML, is a closed chapter…5 historical types of MLs, but 3 more common – salvage,

collisions, wages. Arise by operation of law. In different jurisdictions, MLs more extensive. 2) It does not matter if vessel is then sold – whatever the chain of ownership

- Lien attaches to vessel by operation of law the mmt claim arises Contrast:

- A SL is a creature of statute. It does not arise by operation of law. For Claimant to be SLienee, ingredients of statute (s.4(4) HC(AJ)A) to be satisfied.

- SL must have nexus with the owner

The Bold Buccleugh [1851] 7 Moo Pc 267 Maritime lien is an encumbrance or charge on maritime property.

Attaches to ship and follows it regardless. Binds any party who has an i/r in the ship even without notice or not liable personally for the claim.

It only encumbers the particular ship in connection with which the claim arises and does not operate against a sister ship for instance. The latter only gives rise to a statutory lien under s4(4)(b).

It accrues from the moment the cause of action comes into being, but is inchoate until an action is brought to enforce it.

It travels with the property secretively and unconditionally and is not extinguished even if the property is transferred to a bona fide purchaser for value without notice except where the transfer is the result of a judicial sale.

Its existence is independent of any agreement or possession It is enforced by an action in rem.

The Halcyon Isle [1980] 2 Mlj 217 (Above) - Facts:

– This was an appeal from the decision of the Court of Appeal of Singapore reported in [] SLR 297 . – The respondents contended that their claim for repairs done to the said vessel under the laws

of the United States of America carried a maritime lien on the vessel and hence over the said fund and they were entitled to priority of payment on their claim over the appellants` claim which was merely that of a mortgagee of the vessel.

- Held , by a majority allowing the appeal: – (1).In principle the question as to the right to proceed in rem against a ship as well as priorities in

the distribution between competing claimants of the proceeds of its sale in an action in rem in the High Court of Singapore, fell to be determined by the lex fori as if the events that gave rise to the claim had occurred in Singapore.

– (2).The English authorities supported the principle that, in the application of the English rules of conflict of laws, maritime claims were classified as giving rise to maritime liens which were enforceable in actions in rem in English courts where and only where the events on which the claim is filed would have given rise to a maritime lien in English law, if these events had occurred within the territorial jurisdiction of the English Court.

– (3) In principle, in accordance with long established English authorities and consistently with international comity as evidenced by the wide acceptance of the International Convention of 1952 on the Arrest of Sea-going ships, the question whether or not in the instant case the respondent (the

necessaries men) were entitled to priority over the appellants (the mortgagees) in the proceeds of sale of the Halcyon Isle depended on whether or not if the repairs to the ship had been done in Singapore the repairer would have been entitled under the law of Singapore to a maritime lien on the `Halcyon Isle` for the price of them. As the answer to that question was that they were not,

Requirements Under Section 4(4) Of The High Court (Admiralty Jurisdiction) Act – EXAMS!!!

Governs SL No application for ML This relates to next pt on problems with ship arrest

Mode of exercise of admiralty jurisdiction4 (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.

- • High Court Admiralty Jurisdiction In Respect Of Statutory Liens- must satisfy all reqts – EVERY one, not just any

- 1. Claim must fall under Section 3(1)(d) to (q)

- 2. Claim must be in connection with a ship – the offending ship (note sandrina and river)– appears simple, but unfortunately the claim might be in connection with the shipowner

instead. E.g. unique situation for container hire (see above River Rima)

- 3. Person liable must be the owner or charterer or in possession or control of the vessel:

- i) at the time cause of action arose. Does not have to show a sustainable cause of action from outset. 1. Issue arises because there is a difference between time cause of action arose, and when writ is issued.

Does not have to show a sustainable cause of action from outset. When this reqt is examined, time frame is when time of cause of action arose.

2. At this time, person liable in personam X need not be owner of offending vessel – he need not be owner of vessel; sufficient tt he is owner, charter or in possession or control of vessel

Threshold test: at the time of the contract entered into/tort occurred, the party liable in personam has to be either the owner, charterer or is in possession/ctrl of the vessel.

3. All the claimant has to do is to prove that he has a prima facie case on the merits. Do not need to prove that he will win eventually

best way to show is to show tt a) claim falls iwhtin s3.1 and b) person liable is either owner, charterer or in possession or control of vessel

The St Elefterio [1957] 1 Lloyd’s Rep 283- Principle:

Plf entitled to proceed in rem without first establishing a cause of action sustainable in law. - Facts:

Plf issued writ claiming ‘damaged arising out of bills of lading relating to the carriage of goods in the df’s steamship St Elefterio’ without stating the cause of action.

Warrant of arrest was issued and ship was arrested. Whether plf entitled to have their action tried.

- Held (Wilmer J):

True construction of s3(4) Administration of Justice Act 1956 (precedent of the Supreme Court Act 1981 and the Singapore High Court (Admiralty Jurisdiction) Act) was to confer a right to arrest the ship in respect of which the cause of action was alleged to have arisen of another ship in the same ownership.

Any reference to the person who would be liable in an action in personam was intended merely to identify the person whose ship could be arrested plf’s claim is not frivolous or vexatious and they were entitled to assert it by proceeding sin rem without first establishing that they had a cause of action sustainable in law.

The Wigwam [1983] 1 Mlj 148- Judgment (FA Chua J):

o Before a plf could proceed in rem in respect of a claim under s3(1) he need not prove at the outset that he had a cause of action substantial in law.

o There were numerous conflicting evidence and a number of difficult points in this case. Conflicting evidence could only be resolved after a full hearing of the case.

- Plf were entitled to bring the action and have it tried. Whether or not their claim turned out to be a good one, they were entitled to assert that claim by proceeding in rem.

- Facts: o The plaintiffs took out a writ against the owners of the Wigwam for $1,513,671.72 being for

goods and materials supplied to the defendants` vessels Wigwam and Wabasha during the period between 17 May 1980 and 30 June 1981. The Wigwam was arrested on the application of the plaintiffs` and on 14 July 1981 the owners of the Wigwam entered conditional appearance. They sought to set aside the writ in remand the warrant of arrest directed against their vessel.

- Held, dismissing the defendants` motion: o (1) The plaintiffs claimed under s 3(1)(l) and (m) of the High Court (Admiralty Jurisdiction) Act

(Cap 6). Before a plaintiff could proceed in rem in respect of a claim under the said s 3(1)(l) or (m), he need not prove at the outset that he had a cause of action substantial in law.

o (2) There were numerous conflicting evidence and a number of difficult points in this case. The conflicting evidence could only be resolved after a full hearing of the case. The plaintiffs were therefore entitled to bring the action and to have it tried and that, whether or not their claim turned out to be a good one, they were entitled to assert that claim by proceeding in rem

The Tanto Utama [1995] 1 Slr 767- Facts:

– The plaintiff arrested the vessel Tanto Utama in respect of their claim for price of bunkers supplied to it and barging charges. The owners applied to set aside the writ and all subsequent proceedings and for damages for wrongful arrest. Before the hearing, the claim was settled and the action was discontinued. The deputy registrar ordered the plaintiff to pay damages resulting from wrongful arrest. The plaintiff appealed. The owners alleged that the plaintiff knew that the owners were not the parties liable in personam at the time the cause of action arose because the plaintiff knew the contract for supply of bunkers was made with the charterers, PT Perintis Lines (`PPL`) and not the owners, PT Tanto Intim Lines (`PTIL`).

– At the relevant time, the charterparty between PPL and PTIL provided for PPL to be responsible for bunkers. The owner`s case was that the plaintiff had contracted with PTIL and dealt with them and their agents. The plaintiff`s case was the bunkers was supplied at the request of the master made on behalf of the owners.

- Facts: appeal against Registrar’s decision that P had to pay owners of ship for wrongful arrest. P arrested owners’ vessel, suing for price of bunkers. Owners argued that P knew that charterers were the parties liable in personam and not the owners. P argued that charterers were agents of owners.

issue here whether damages for wrongful arrest should be given. At this stage, court only had affidavit evidence that is not tested by cross-examination, and could

not tell if charterers were or were not agents. As such, the plaintiff may or may not fail at trial, but that it may fail is not sufficient to justify an order for damages.

Court will at this stage is not concerned with merits, merely look at face of docs to see if s4(4) is met. If so writ and arrest are good. Appeal allowed, no damages for wrongful arrest.

The plaintiff arrested the vessel Tanto Utama in respect of their claim for price of bunkers supplied to it and barging charges.

The owners applied to set aside the writ and all subsequent proceedings and for damages for wrongful arrest.

Before the hearing, the claim was settled and the action was discontinued. The deputy registrar ordered the plaintiff to pay damages resulting from wrongful arrest.

The plaintiff appealed. The owners alleged that the plaintiff knew that the owners were not the parties liable in

personam at the time the cause of action arose because the plaintiff knew the contract for supply of bunkers was made with the charterers, PT Perintis Lines (`PPL`) and not the owners, PT Tanto Intim Lines (`PTIL`).

At the relevant time, the charterparty between PPL and PTIL provided for PPL to be responsible for bunkers. The owner`s case was that the plaintiff had contracted with PTIL and dealt with them and their agents. The plaintiff`s case was the bunkers was supplied at the request of the master made on behalf of the owners.

Held: Just because, between the owners and charterers, the charterers were liable for the bunkers, it did not follow that as between the owners and the plaintiff, the owners could not be liable. The question was whether those who dealt with the plaintiff had the authority of the owners, actual or apparent, to do so and whether the plaintiff intended to contract with the owners.

- Held , allowing the appeal: - (1).Just because, between the owners and charterers, the charterers were liable for the bunkers,

it did not follow that as between the owners and the plaintiff, the owners could not be liable. The question was whether those who dealt with the plaintiff had the authority of the owners, actual or apparent, to do so and whether the plaintiff intended to contract with the owners.

- (2).The court could not come to any finding as to the master`s authority to pledge the owner`s credit at this stage of the proceedings and on the materials before the court.

- (3).The plaintiff may or may not succeed if the action proceeded to trial, but that it might fail was not by itself sufficient to justify an order for damages.

- [ Editorial Note : The defendants` appeal to the Court of Appeal vide CA 86/94 was dismissed (Karthigesu and LP Thean JJA and Chao Hick Tin J).]

ii) Beneficial ownership in rem case, law only interested in registered owner of vessel eg shipowner A, every ship tt he owns, he incorporates a different company – vessels 1, 2, 3, 4,5 – same shrs

and dirs but owned by diff companies – law says tt vessels not benef owned by same person because owned by sep legal entities

in rare exceptions, if can prove tt although vessel registered in A, A holds in trust for B by proving trust deeds

- in limited sitn, court will construe owner hwo is not registered owner as benef owner note REGISTERED OWNERSHIP usu encompasses benef ownership (EXAMs!!) note that this doesn’t always coincide with registered ownership. Beneficial ownership (property in the ship)

tends to pass according to the terms of the contract, whether at the time the contract is made, or when payment is made

in spate of actions arising fr demise of nationalised state owned shpping lines in former soviet bloc – HC sg in *kapitan temkin 1998 departed fr no of UK decisions and held tt benefit owner of vessel not state bur rather the state owned shpping line concerned

- court not constrined by ukranian law (state had claimed beneficial ownership of vessel) and in process able to side step many of troublesome aspects of foreign law characterising UK decisions

The Andre Bonifacio [1993] 3 Slr 521 The registered owner, the relevant person was actually holding the ship on constructive trust for a wholly

owned subsidiary and thus not the beneficial owner for the purposes of the section.

The Skaw Prince [1994] 3 Slr 379- (See below at Part 9 problems relating to arrest) Definition of Beneficial Ownership.- When arresting a ship, the P had to satisfy both the in personam test and the in rem test. For the in

personam test, they had to show a good arguable case. To satisfy the in rem test, they had to show that the

ship in rem action at the time the proceedings were commenced was beneficially owned by the personam in respect of all shares in it.

- Beneficial ownership meant that such ownership of a ship is vested in a person who has the right to sell, dispose of or alienate all the shares in that ship.

The Aventicum [1978] 1 Lloyd’s Rep 184

iii) S 4(4)(b) ‘in possession or in control of the vessel’ eg mortgagee in possession – person liable in personam – cover salvor in possession – takes possession of vessel bareboat charterer manager of vessel closely linked to shipowner purchaser under conditional sale agreement with payment byinstalments shipyard in possession – ex possessory lien and takes control of vessel as security before handing over ship

because claim not paid

- 4. Vessel beneficially owned by person liable in personam at the time action is brought ie when writ is issued.

- In most maritime claims there will be gap between time when cause of action arose and time writ issued – this gap can be 6 days/ 6 mths etc

- During this lapse many things can happen to ship – sold, fire, etc- When bring action in sg by issuers of writ, this vessel must now be benef owned by person liable in

personam- hence can also go for any of the sister ships owned by the person liable.- note s4(4)(b) (i) and (ii) “all the shares”.

- Ie 2 time frames – when action arose – person liable in personam must be owner etc..- If owner at time of action arose and writ issued, but if not owner at time cause of action arose but eg

charterer (not the shipowner in certain cases) – must be benef owner when writ is issued. But if he although remains charterer and as result cannot invoke in rem juris against vessel, but if owns own vessel – a sister vessel, claimant can arrest the sister vessel because it is benef owned by person who is liable in personam

- There may be 2 sitn– A) change in ownership at time writ issued– B) if the party liable happened to own their own vessel, this reqt wld be met because the

vessel wld be benef owned by party liable when writ is issued

The Permina 108 [1979] 1 Mlj 49Principle Entitled to arrest ship beneficially owned by the persons liable even when the ship arrested had no

connection with the claim. Connection established by beneficial ownership. No reqt of common ownership for both offending and sister shipsFacts: Respondent had a claim against the appellant for non-payment of the charter hire due under a charter party

in respect of Ibnu. Respondents arrested the Permina 108 which belonged to the appellants. Appellants appealed to the CA arguing that the respondents were not entitled to arrest the Permina 108 as

the claim asserted in relation to the charter of the Ibnu and has no connection with the Permina even if owned by the Appellants.

Held (Wee Chong Jin CJ): True construction of s4 (4) of the Act is such that a ship which is liable to arrest can be any other ship which

at the time when the action was brought was the property of the person liable in possession and who at the time when the cause of action arose was either the owner or charterer of, or in possession of or in control of the ship with which the claim arose.

Respondents were entitled to arrest the Permina 108 which was beneficially owned at the date of issue of the writ by the respondents who were charterers of Ibnu the ship in connection with which the appellants claim arose and who were also the persons liable in respect of the claim.

Appeal dismissed. Case endorsed in no of commonwealth countries –

o HK: the sextum 1982o NZ: The FUA kavenga 1987o UK: The Span terza 1982

Note :- Usually ships are not owned by the operators, they are usually on charter.

- Another Illustration: o NOL chartered HAWK which had loaded its cargo in Singapore and discharged its cargo in

California. However, the cargo was damaged. Instituted claims for damage of cargo. o Cargo claims fall under s3(1)(g)o Claim arose in connection with a ship (claim arose because HAWK’s cargo was damaged – in

connection with HAWK, the ship)o NOL was at the time the cause of action rose, the charterer of HAWK. o However, as NOL was only the charterer, HAWK cannot be arrested as the last condition required

in s4 (4) is not fulfilled. However, s4 (4) (b) allows the claimant to arrest any other ship which is beneficially owned by NOL. if NOL owns VULTURE, the claimant can arrest VULTURE in respect of this claim.

Note 4**- In light of amendments fo s4.4 HCAJA in april 2004, admiralty juris may be invoked against offending

ships tt are at time action brought, demised chartered by person who wld be liable in personam at time cause of action arose

- But notwithstanding amendments, arresting parties not allowed to invole adm juis against any other ship other than offending shp even though this ship may have beendemised chartered to demise cahrterer at time action brought – compare s4.4(i) and (ii)

5. Burden of Proof - NB: do not confuse merits with jurisdiction (s4 (4) of the Act governs jurisdiction). Court will not concern

itself with whether a person will succeed on the merits.- Juris to issue in rem writ – this is balance of probabilities – the aventicum 1978

- • Burden On Claimant To Prove Ingredients On Balance Of Probabilities- Burden is on the claimant that each and every condition under s4 (4) of the Act is satisfied before he can

successfully invoke the in rem jurisdiction against the vessel. – Authority: The Maritime Trader [1981] 2 Lloyds Re 153– Have to satisfy every single condition under s4 (4) of the Act on the balance of

probabilities. (Burden of proof of jurisdiction is on the balance of probabilities but only required to show that there is a prima facie arguable case when it comes to the merits of the case)

– Authority The Aventicum [1978] 1 Lloyds Rep 184

- • Requirements Under Section 4(4) Must Be Decided By Affidavit Evidence– THE I CONGRESO [1977] 1 LLOYD’S REP 536

Usually s4(4) requirements must be decided by affidavit evidence alone and should not be tried.

Courts have entertained application to cross examine disponent of affidavit – arises when unusu featues in transfers

But those are exceptional cases

Exceptions- Only very rarely is one able to bring a claim when not all the conditions are fulfilled. - Sometimes trial may be ordered if the affidavit evidence is too voluminous.- Usually only when there is a ‘fraudulent element’ then will courts order issues under s4(4) to be tried. - Examples:

Insurance Company collapsed, vessels insured by company appeared to be sold. Brought claims despite change of ownership of vessels.

Allegation of fraud. Can order trial within trial to determine if transfer was a sham.- • Trial Ordered If Fraudulent Element Present

– The Saudi Prince [1982] 2 Lloyd’s Rep 255– The Saudi Al-Jubail (Unreported Admiralty In Rem No 399 Of 19834)

Miscellaneous- ? Statutory lien does not survive change of ownership ? It is created when writ is issued and not when it is

served. Note: peculiar difference in admiralty from other areas of law, time between writ issued and

served is irrelevant. In admiralty it could take weeks or even months after the writ is issued before it can be served,

depending on whether ship had called port in Singapore. - Example 1:

Writ issued on 1/1/2002. At the time writ issued, vessel still owned by party liable in personam. Lien is attached to the ship. New buyer who had failed to do due diligence, buys vessel on 1/3/2002. Vessel is arrested on 1/6/2002 when it called at port. Law recognises existence of lien as long as all the ingredients of s 4(4) satisfied when writ was issued.

To prevent such incidence, do a writ search on all jurisdictions where in rem writs are frequently invoked.

- Example 2: - Collision with ship. Claim arises against charterer in personam. Owner of ship not liable at that

point. If issue writ against owner will be set aside. But you can issue writ against all of charterer’s ships.

- Example 3: - Claim arises on 1 Jan against A. A sells a ship X to B on 1 Mar. Issue writ against X on 3 Mar.

Writ will be set aside.

Section 4(4) Of The High Court (Admiralty Jurisdiction) Act – check.- • Two Different Time Frames To Consider:

– At the time when the cause of action arose– At the time when the Writ is issued

- • At Both Time Frames, You Should Only Examine The Liability Of The Same Party- • First Step

– Identify the offending vessel, for eg ‘X’- • Second Step

– Identify the party liable in personam, for eg ‘A’– Stick to this person throughout the analysis

- • Third Step– Determine whether ‘A’ is either owner or charterer or in possession or control of ‘X’– If yes – go to step 4 – – if only manager then reqt fails. Full stop. Cannot go beyond. Fatal flaw.

- • Fourth Step– Determine the vessel which you intend to proceed against, for eg ‘X’ or a sister vessel ‘Y’

- • Last Step– Determine whether ‘A’ is the beneficial owner of the vessel which you intend to proceed against

Another way of putting it:Stage 1: Identify who the “culpable” party is at the time the cause of action arose. He has to be the person who is either the owner or charterer or someone in possession or control of

the ship that caused the damage.Stage 2: We want to sue the culpable party and make him pay damages. We look to arrest of ship to get

security against that party. We look to get security from the culpable party’s assets (which may not be the ship at the time the cause of action arose since he could merely be renting the ship from the innocent shipowner) i.e. all the ships he owns.

Therefore, at the time the action is brought (i.e. the time the writ is issued), any ship the culpable party beneficially owns can be named in the writ. Don’t care when he purchased the ships, so long that the ship is his at the time the writ is issued.

Problems Relating To Arrest

- interpretation of s4.4

- 1) • Change Of Ownership– where claims fall within s3.1 of the act and does not confer a maritime lien, valid change of

ownership prior to issue of the writ - extinguishes right to proceed in rem– Because reqt tt person is liable in personam at time writ issued no longer satisfied since vessel has

changed ownership– Where the claim falls within section 4(4) of the Act and does not confer a ML, the right to proceed

in rem is extinguished if there is a valid and bona fide change of ownership prior to the issue of the writ – The Fierbinti (1994)

– Note examine accts – see whether new owners employing same crew, whether wages paid, see whether real purchase price transferred – a lot of fraud in this area. Need to see whther really VALID change of ownership (cross examination!!!)

- Illustration- Vessel A owned by X- Cause of Action arises on 1 Jan. Defendant gets wind of it on 3 Jan. Sells vessel on 4 Jan. P who is

slow to act issues writ against that vessel on 5 Jan.- Since vessel sold before issue of writ, claimant loses rights in that vessel, cannot arrest.

- Cases- ->It does not matter when writ was served – time frame is when writ was ISSUED.

The Monica S [1967] 2 Lloyd’s Rep 113- Question: whether P, who issued a writ in rem against the carrying ship at the time she was still owned by

the carrier but has not yet served the writ or arrested the ship, has a right to proceed with the action, when there was a subsequent transfer of the ownership of the ship to a third party.

- There is no reason why once a P had properly brought an action in rem, he should not, despite a subsequent change of ownership of res, be able to prosecute it through all its stages up to judgement and payment out of the proceeds.

- This may be hard on the innocent buyer but would caveat emptor applies. Buyer should have done due diligence checks.

The Fierbinti [1994] 3 Slr 864 - By issuing the writ in rem against a ship the court asserts its jurisdiction to determine the plaintiff`s claim

against the ship. - Under s 4(4), the issuance of the writ creates a statutory lien and protects it from any change in ownership

although the writ has not been served- By serving it on the ship, the plaintiff `notifies` the ship and its owner and also all persons interested therein

of his claim against the ship. He has by that process invoked the court`s jurisdiction to determine his claim against the ship. In our opinion, upon service of the writ on the vessel, the plaintiff has invoked the jurisdiction of the court.

- Facts: o The respondents, who were the plaintiffs in the action, were owners of a cargo of raisin lately

laden on board the ship Fierbinti. On 2 December 1989, they took out an admiralty writ in rem against the owners of or other persons interested in a total number of 19 ships named therein, including the Fierbinti. The claim endorsed on the writ was for loss and damage to the cargo carried on board the Fierbinti. Negotiations took place between the parties. On 10 November 1990, the defendants` solicitors confirmed that security would be provided. On 12 November 1990, the writ was by agreement served on the defendants` solicitors without striking out any of the ships named therein. On 7 December 1990, the defendants` solicitors entered an appearance for `the owners of the ship or vessel Fierbinti`. In the meantime, negotiations were still under way. Unfortunately, they were brought to an abrupt end on 1 March 1993 or thereabouts when the respondents` solicitors were informed by the defendants` liability insurers that no security would, after all, be provided. On 5 May 1993, the respondents caused to be issued a warrant of arrest, and on the same day the Mehedinti, one of the ships named in the writ, was arrested. However, since the issue of the writ, there had been a change in the ownership of the Mehedinti. In May or June 1990, the appellants had bought over the vessel from the defendants. Accordingly, the appellants obtained leave to intervene in the action. An

application was made for an order to set aside the warrant of arrest. It was heard before the assistant registrar who granted the application. On appeal to the judge in chambers, Mr GP Selvam JC (as he then was) allowed the appeal and set aside the order of the assistant registrar. See The Bolbina et al; Owners of Cargo Lately Laden on Board the Ship or Vessel `Fierbinti` v Owners of and Other Persons interested in the Ships or Vessels `Bolbina` and 18 Other Vessels ((Romline SA Shipping Co, interveners) [1994] 1 SLR 554. The appellants appealed.

- Held , dismissing the appeal: o (1).Under RSC O 70 r 7(1) a writ in rem must be served on the res. This is subject to r 7(2)

which provides that the writ need not be so served if it is deemed to have been served on the defendant by virtue of O 10 r 1(2) or (3). However, r 7(2) does not equate deemed service under O 10 r 1(2) or (3) with the actual service of the writ on the res under r 7(1). Effectively, r 7(2) only operates to dispense with service of the writ on the property as required under r 7(1). Deemed service does not therefore operate to invoke the in rem jurisdiction of the court.

o (2).The defendant owners cannot, by entering appearance for one particular ship, foist upon the plaintiff that ship against which the in rem jurisdiction would then be treated as having been invoked. Section 4(4) of the High Court (Admiralty Jurisdiction) Act (Cap 123) gives to the plaintiffs the choice whether to proceed against the offending ship or any one of the sister ships.

o (3).The validity of the writ for the period of 12 months is only for the purpose of service. In the present case, the writ was deemed to have been duly served on the defendants. Consequently, service on the res itself was dispensed with. As the writ had been served in accordance with the rules, the question of expiry of the writ was spent.

o (4).The in rem jurisdiction of the court is invoked when the writ is served on the ship or when the ship is arrested, whichever first occurs.

o (5).The matters which the appellants alleged that the respondents had failed to disclose in the affidavit leading to the issue of the warrant of arrest had no relevance, and, accordingly, the respondents had not failed to make a full and frank disclosure of material facts. Even if they were relevant and there was such a failure on the part of the respondents, the court in exercise of its discretion would not have been disposed to set aside the warrant of arrest.

- 2) • Vessels Owned By Related Companies- benef ownership has restrictive meaning - if incorp 10 diff comp to own 10 diff ships, law respects tt

since placed such a structure from day 1.- Can incorporate one-ship companies for benefit of the Group if corporate structure firmly in

place before the cause of action accrued. *aventicum; the Saudi prince- Usu for vessels to be owned by 1 ship companies and for 1 ship companies to be under common

control and/or management- Qn is whether can arrest vessel in respect of liab incurred by another vessel on basis tt both though

owned by sep legal entitesl have identiacal shrs and/or dirs- Law in this area is settled- Common phenomenon in shipping that shipowners set up related Co.s to own ships. Organisation

of corporate affairs so assets are insulated when a claim is brought. So series of 1-ship Co.s under a holding Co. The law recognises such Co.s as separate legal entities.

- So cannot arrest vessel under sister ship provision on the basis that the Co.s are related. Must have common ownership of ships.

- Problem of vessels owned by related Co.s only applies if corporate structure set in place before COA accrues.

o If 1-ship Co.s only set up after COA accrues, the law will regard these transfers as shams because objective of transfers to hide assets, not bona fide attempt to put corporate structure in place – The Aventicum; The Saudi Prince

o Will examine whether sold to third aprty to riase finances/ related party etco Typically lifting of corporate veil only if there’s fraud.

- Transfers are however examined critically, Timing of transfer would determine if you can or cannot life the corporate veil.- Can’t cross arrest if the vessel belongs to a different company related or owned by the 1st.

- If the one-ship companies only created after cause of action has accrued, transfer can be challenged as being sham

– The aventicum [1978] 1 lloyd’s rep 1845– The Saudi prince [1982] 2 lloyd’s rep 255

The Skaw Prince [1994] 3 Slr 379 (Also Above, On Beneficial Ownership)- It is well known that businessmen engaged in shipping set-ups utilise one-ship companies to imit liability.

The court will not lift the corporate veil unless circumstances are exceptional. - Some special circumstances where the corporate veil may be lifted:

1. Fraud, façade or sham. 2. Whether the companies are set up at a convenience or otherwise used to conceal another

individual or entity.3. Whether there was any under-capitalisation of the subsidiary.

- Since the corporate structure of the Skaw Group was already firmly in place before the P’s claim arose, the creation of C and F were perfectly legitimate.

- Corporate veil should only be lifted where deliberate fraud had been perpetrated.- Principle:

o Recognition of one-ship companies set up to minimise liabilities, courts will not lift the corporate veil unless the circumstances are exceptional. \

o Case lays down the definition of beneficial ownership. - Facts:

o Plaintiffs had a claim against C and tried to arrest the Skaw Prince owned by F on the pretext that C and F were 100% beneficially owned by Skaw Shipping who were liable to them since they owned C.

o Defendants applied to set aside arrest. - Held (Amarjeet JC)

o When arresting a ship, the plf had to satisfy both the in personam test and the in rem test. For the in personam test, they had to show a good arguable case. To satisfy the in rem test, they had to show that the ship in rem action at the time the proceedings were commenced was beneficially owned by the personam in respect of all shares in it.

o Beneficial ownership meant that such ownership of a ship is vested in a person who has the right to sell, dispose of or alienate all the shares in that ship.

o Well-known that businesses engaged in shipping set up one-ship companies to limit liabilities and this devise has been recognised by the courts as a legitimate one. Courts will not life corporate veil unless the circumstances are exceptional.

o Since the corporate structure of the Skaw Group was already firmly in place before the plf’s claim arose, the creation of C and F were perfectly legitimate.

o Corporate veil should only be lifted where deliberate fraud had been perpetrated.

The Evpo Agnic [1988] 2 Lloyd’s Rep 412 (Ca)· Judgment (Lord Donaldson of Lymington MR): · Right to bring an action in rem against any other ship of which the relevant person was the beneficial owner

did not extend to a ship owned by a sister company of the company owning the ship in connection with which the claim arose.

The Maritime Trader [1981] 2 Lloyd’s Rep 153- Facts: P arrested ship “Maritime Trader” owned by MTS for a claim against MTO (holding company of

MTS) on the grounds that Maritime Trader is beneficially owned by MTS. - Held (Sheen J):

o Although all the shares in MTS were owned by MTO, a shareholder had no property legal or equitable in the assets of the company MTO had no property in Maritime Trader.

o Only way that it could said that Maritime Trader was beneficially owned as respects all the shares therein by MTO unless the corporate veil could be lifted.

o There was no device or sham designed to defraud the plf since Maritime Trader was owned by MTS ever since she was built.

The Andres Bonifacio [1993] 3 Slr 521- Held (Lai Kew Chai J)

- There has to be existing special circumstances before lifting the corporate veil, such as the presence of a façade or sham set up to deceive the Ps. The corporate veil cannot be lifted just because a company made subsidiaries in order to avoid future liabilities.

- 3) • Bareboat Charterparty- stat amendments in sg- hiring of vessel – arrangement in which hirer hires the vessel so it is at his disposal – may be string of

charters- Also known as demised charterer/ demise charterparty.- A specific type of charterparty. Owner only supplies ship. Charterparty obtains crew and everything

else himself. Ie the vessel is chartered without crew provided– No crew. Engage ur own fuel, crew, etc– At end of charterperiod, return this to owner fair wear and tear excepted– During that period all liab falls on bareboat charterer– Note that when dealing with ship, usu x know tt dealing with bareboat because bill of lading

signed by owner usu – so u think tt contracting with owner but may in fact be contracting with bareboat

– Does not depend on disclosure of interest so long as as matter of fact, he is bareboat charterer, then is in the one liable

- In Singapore, beneficial title means title/property, 100% control of the boat does not give rise to 1% of title. Hence previously you can’t arrest an errant ship on a demise charter.

- Different position in UK and Malaysia, refer to s21(4)(i) UK Supreme Court Rules.- OLD POSITION in Pangkalan has been superceded by amendment to HC (AJ) Act.

(Old) The Pangkalan Susu / Permina 3001 [1977] 2 Mlj 129 - Ca- Whether complete control equates to benef ownership- Held – no, barebot charterer not benef owner. If he remains barebot charterer fr tme cuase of action arose to

time writ issued, cannot proceed in rem cases- Beneficial Ownership means such ownership of a ship as is vested in a person who has the right to sell,

dispose of, or alienate all the shares in that ship. That is it means legal or eqtuiable title- Not enough to have full possession and control of a ship without ownership, e.g. a bareboat charterer.

‘ownership’ connotes title, legal or equitable whereas the expression ‘possession and control’ however full and complete was not related to title.

- Accordingly bareboat charterer of vessel are not beneficial owners- : - operates unfairly because pple ma not know tt dealing with barebot charterer- Principle

– Full possession and control of ship does not equate title. Beneficial ownership means owning all shares in the ship.

- Facts: – Respondents fell into arrears and the Appellants arrested the ship Permina 3001 which was under

full control and possession of the respondents. – Whether the Permina 3001 was considered beneficially owned by the respondents pursuant to

s4(4) of the Act. - Held (Wee Chong Jin CJ):

– A person with full possession and control of a ship has beneficial use of her and did not have beneficial ownership as respects all the shares in the ship and the ship is not beneficially owned as per s4(4) of the Act.

– The words ‘ownership’ connotes title, legal or equitable whereas the expression ‘possession and control’ however full and complete was not related to title.

(NOW) s 4 (4)(b)(i) HC (AJ) Act applies on and after 1 April 2004- can arrst provided remain barebot charterer to same party who was barebot charterer when action arose- 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- At the time of cause of action arising a bareboat charterer would have had control/possession. At the

time of issue of the writ, it is sufficient that the same guy is still the bareboat charterer, for the writ to issue. It would be difficult otherwise to sue the bareboat charterer who doesn’t own the ship.

- The statute is wide enough to allow you to proceed against ships bareboat chartered by D at the time of issue of writ, even if it is no longer bareboat chartered by D but returned to owner at time of arrest! Hardship if issue writ just before charter ends but arrest after?

– Eg if bareboat charterer is bareboat charterer of another charter, cannot go after Y, because NOT the same vessel

– The exception is a limited exception pertaining to the same vessel- And at both time frames, person liable in personam ie bareboat must remain the bareboat charterer

of the vessel- In other juris, this is a complete defence still

- 4) • One Ship - One Arrest Rule- arrest very draconian remedy

- a) Claimant can arrest one ship only in respect of each cause of action

**The Banco [1971] 1 Lloyd’s Rep 49, Applied In The Damavand 1993- Principle:

o May only arrest 1 ship for security for 1 cause of action. o Only after judgment is entered can you arrest the required number of ships to satisfy the amount

of claim.- Facts:

o Df’s vessel collided with a jetty in River Thames causing extensive damage. o P issued writ in rem against df and arrested his entire fleet of vessels (7 ships). o Whether the P had right to arrest all 7 ships.

- Held (Lord Denning MR)o The jurisdiction may be invoked against either the offending ship or any other ship in the same

ownership, but not more than one. o If the defendant enters an appearance, the action in rem proceeds just as an action in personam.

Only after judgment is entered against the defendant, can there be execution against any of his property within the jurisdiction, be it his other ships or any other goods.

Additional Information:- The practice emerging with the introduction of sister ship arrest is that the naming of the offending and

sister ships in one writ was approved of in The Banco. - This practice is based on convenience, as a plaintiff cannot foretell which of the offending or sister ships

will be coming within jurisdiction. By naming all the ships that he can potentially proceed against, he is able to serve the writ on the particular ship as well as execute the warrant of arrest against her, as soon as he learns that one of the named ships would sail in.

- The plaintiff does not have to proceed against the first ship that comes within jurisdiction but may wait for a more valuable one amongst those named on his writ to arrive thereafter. Having invoked admiralty jurisdiction against one ship, he cannot go against any other of the ships named in the writ and should strike them out of the writ.

– b) Entitled to security up to value of arrested vessel

The Charlotte [1920] P 78- Claimant entitled to security only up to the value of arrested vessel, not the full amount of the claim. Part

of the claim will be unsecured. - Eg: claim $50 mil, arrested the vessel then realised that vessel is not worth $50mil; size of security is

limited to the value of the boat.- However, if judgment had already been obtained, during execution can arrest as many ships as necessary

to hold as security up to the value of the claim.

Combined effect of both rules a and b is tt claimant not able to obtain security for tt part of claim which exceeds value of vessel arrested and he canot arrest another vessel for excess amt

Hence part of claim will be unsecured Accordingly where claim for substantial amt, valueof vessel o be arrested shld be considered before

arresting

– Consider value of the vessel before arresting. value based on factors such as age, size, tonnage (scrap value of steel)

- 5) one claim one ship rule- bane of parties who find tt claim worth more than any shp belognign to def- Bottomline: Do not be dumb enough to arrest a vessel worth $100, 000 belonging to D, when the damage is

$6,000,000 and the D has other vessels worth more.

The Damavand [1993] 2 Slr 717(Ca S’pore, Applying The Banco– Principle

As long as there is a separate cause of action to warrant a 2nd arrest, the 2nd arrest is valid. right to amend claim to reapportion claims so long as security for first arrest

But if only one cause of action, cannot split. Ie arises from same factual matrix. – Facts:

Respondents arrested Minab 4 for non-payment of goods and materials supplied to the appellants’ vessels including the vessel Bisoton.

Respondent amended writ in action, deleting references to claim for supplies to Bisoton and commenced 2nd admiralty action against the Demavand.

Whether 2nd arrest is valid. The respondents commenced an admiralty action in rem (`the Minab 4 action`) against the

appellants for goods and materials supplied to the appellants` vessels, including the vessel Bisoton. The appellants` vessel Minab 4 was arrested and the writ which was generally indorsed was served upon her. Thereafter the respondents amended the indorsement on the writ in the action deleting references to the claim for supplies to the Bisoton and commenced the present admiralty action in rem against the appellants` vessel Damavand for the Bisoton claim. The Damavand was arrested and the second writ served upon her. She was later released after the appellants had made payment to the respondents.

The appellants applied to set aside the writ and the warrant of arrest in the present action on the ground that the court lacked jurisdiction and/or that the action was frivolous and vexatious and was an abuse of the process of the court. They argued that the admiralty jurisdiction of the court had been invoked when the Minab 4 action was instituted and the writ of summons at the material time included among others a claim for supplies to the Bisoton. Thenceforth, it was no longer possible to invoke the admiralty jurisdiction again by an action in rem against the Damavand making the same claim, notwithstanding that the claim had been deleted in the Minab 4 action before the Damavand action was commenced. It was also argued that the prior arrest of the Minab 4 and the inclusion of the Bisoton claim in the Minab 4 action, though subsequently deleted, were material facts which the appellants failed to disclose in the affidavit leading to the issue of the warrant of arrest against the Damavand.

The application was dismissed by the senior assistant registrar and on appeal before a judge-in-chambers, it was held that there was no want of jurisdiction and that the respondents had not abused the process of the court since they made the amendment in the Minab 4 action before the time limited for an appearance had expired. It was also held that the prior arrest of the Minab 4 and the inclusion of the Bisoton claim in the Minab 4 action at the time were not material and accordingly there had been no non-disclosure of material facts. The appellants appealed. (Bottomline: Can bring a separate cause of action against a sister ship. Just do not arrest two/more sister ships based on the same cause of action)

– Held (LP Thean): When the Bisoton claim was deleted from the writ served on Minab 4, the Bisoton claim ceased to

be an action in respect to that claim. 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.

Such an action does not violate or infringe the single ship arrest rule. No reason why a P should not amend his claim by removing a part of his claim which is

severable and can survive as a separate cause of action from the remainder of the claim even after a writ in rem had been served and the ship arrested

This was then inserted into second writ and formed basis of antoehr arrest so long as it stands as sep cause of action and security not obtained in first arrest

(1).When following service of the writ on the Minab 4 the Bisoton claim was deleted from the writ, the Minab 4 action ceased to be an action in rem for that claim and 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, and such an action does not violate or infringe the `single ship arrest rule`.

(2).There is 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, and issue a writ in rem against a sister ship in respect of that cause of action.

(3).A plaintiff may amend the endorsement of the claim in the writ at the time and in the manner allowed by the rules of court, and depending on the circumstances he may amend his claim even after the time limited for entering appearance has expired. The exercise of this right is however always subject to control by the court and where the exercise of such right amounts to an abuse of the process of the court, it would not be allowed.

(4).With regard to the issue of non-disclosure of material facts in the ex parte proceedings leading to the warrant of arrest of the Damavand, the test of materiality is whether the fact is relevant to the making of the decision whether or not to issue the warrant of arrest, that is, a fact which should properly be taken into consideration when weighing all the circumstances of the case, though it need not have the effect of leading to a different decision being made.

(5).It was not material that the Minab 4 had been arrested and that at the time, the claim in the Minab 4 action included the Bisoton claim, which was subsequently deleted. These facts would not have affected the decision whether or not to issue the warrant of arrest.

- Esp useful against def who fails to pay on more than one occasion under an agremenet or who fails to pay under diff agreements – can expect to face more than one arrest

- 6) • Arrest Outside Port Limits But Within Territorial Waters

Section 65A of the Supreme Court of Judicature Act (‘SCJA’)Solicitor authorised to act as officer of Sheriff65A. —(1) Subject to such directions as may be given by the Chief Justice, the Registrar may authorise a solicitor or a person employed by a solicitor to exercise the powers and perform the duties of an officer of the Sheriff during such period or on such occasion as the Registrar thinks fit and subject to such terms and conditions as the Registrar may determine.

- Territorial waters port limits. Only port limits demarcated on charts – limits within which MPA regulations will have application. Used to be practice that a ship could be outside port limits but within territorial waters.

- Subsequently, directive issued that warrant of arrest can only be served within port limits.

- A lot of dispute as to demarcation bet Malaysia and sg – only clear ivision is in military charts- Sheriff recently decided tt x want to arrest vessels outside port limits but within territorial limits of sg- Practice Directions published to prevent arrest outside port limits; cannot arrest vessel outside port

limits even if within territorial waters. The reason for this is that territorial limits are ambiguous.- Registrar (acting as Sheriff)’s discretion was challenged in the Trade Resolve, but it was confirmed that they

had the discretion to set the practice direction to limit jurisdiction to port limits.

The Trade Resolve [1999] 4 Slr 424 - Facts:

- The defendant ship owners` vessel carried oil cargo belonging to the plaintiffs. The oil cargo was sold to the plaintiffs by the interveners. When the vessel anchored off the port limits of Singapore, but within the territorial waters, the interveners blended their own emulsified oil with the oil cargo pursuant to an agreement between the plaintiffs and themselves. The defendant`s main argument was that the vessel`s arrest was wrongful, unlawful and ineffective for want of jurisdiction, being an arrest effected outside of Singapore`s territorial waters.

- Held , dismissing the plaintiffs` claim: - (1).The court clearly had in personam jurisdiction over the defendants as they had entered appearance to

apply to the court for the cargo to be sold and the sale proceeds paid into court. This however, did not preclude the defendants from arguing that the vessel`s arrest was wrongful, unlawful and ineffective for want of jurisdiction, being an arrest effected outside of Singapore`s territorial waters (see [para ] 18-19).

- (2).As the defendants were the beneficial owners of the vessel at the time of the issue of the writ, the plaintiffs were entitled to invoke the admiralty jurisdiction of the High Court by an action in rem against the

vessel and have it arrested. However, the issuance of the writ was only the start of the invocation of the jurisdiction and did not mean that it had in fact been invoked. The High Court`s admiralty jurisdiction would only be considered to have been properly invoked from the time of the service of the writ or execution of the warrant of arrest, whichever was the earlier (see [para ] 20).

- (3).The vessel was outside Singapore`s territorial waters as it was anchored 4.05 nautical miles from the nearest land mass sovereign to Singapore. Singapore`s territorial waters only extended to 3 nautical miles. That being the case, the service of the writ in rem on the vessel was out of jurisdiction and hence bad as it was not a mere irregularity (see [para ] 33, 38, 41).

- (4).There was nothing inconsistent with the defendants entering an appearance to the action in rem and waiving the irregularity concerning the service of the writ in rem, but taking objections to the execution of the warrant. This was because they were substantively different matters. By way of illustration, it was possible to serve a writ in rem without arresting the vessel (see [para ] 45, 47 ).

- (5).Only after the admiralty jurisdiction to hear an action in rem was properly invoked by a proper service of a writ in rem within Singapore`s territorial waters, or by a proper and lawful arrest in territorial waters without contravention of art 28 of the United Nations Convention on the Law of the Sea or in inland waters, then the court would be vested with the necessary jurisdiction to hear and try an action in rem, and to give a judgment in rem against the vessel if the claim was proved. The lack of jurisdiction to hear the matter as an action in rem would not be cured either by the submission to jurisdiction or to 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 (see [para ] 50-51, 53).

- (6).All the terms of the Asbatankvoy Form Tanker Voyage Charter-party was incorporated in the bill of lading. This included the lien and demurrage clauses which gave the defendants an absolute lien on the oil cargo for their unpaid freight, deadfreight, demurrage and costs, including attorney fees. Accordingly, the defendants were entitled to the lien on the cargo, and hence the sale proceeds, for their unpaid demurrage and costs but not the detention charges which were not expressly provided for under the lien clause. Any demurrage and costs not satisfied by the proceeds of sale of the blended cargo was not claimable against the plaintiffs and any balance of the proceeds remaining after satisfaction of the demurrage and costs must be paid over to the rightful owners of the cargo ( see [para ] 69-70, 77).

- (7).As the arrest was deliberately effected outside the port limits, in contravention of the Registrar`s authorisation, there was bad faith on the part of the plaintiffs and hence damages for wrongful arrest would be awarded ( see [para ] 82, 85).

- Judgment (Chan Seng Onn JC): - Vessel was arrested at 4.05 nautical miles from the nearest land mass sovereign to Singapore.

It was arguably be an arrest within Singapore territorial water but definitely outside of port limits which extends only 3 nautical miles.

- Court found it to be a contemptuous act in deliberate and flagrant disregard of the limited authority granted to them. (Steven Chong : malice can be shown)

- Judge relied on the test of no reasonable or probable cause and found that the arrest was wrongful.

- Since arrest was deliberately effected outside of the port limits in contravention of the Registrar’s authorisation, there was bad faith. Damages for wrongful arrest awarded.

- Sheriff acted ultra vires – cannot cut down on juris – L argued on this- When leave is given to issue arrant of arrest,sheriff will state circumstances under which

warrant is issued – auth clear- Litigant went to arrest vessel outside port limits- Writ set aside AND because court found tt he knew he had no right of arrest since letter of

arrest sheriff specifically said he could not go beyond ports limits of sg – so had to pay damages.

- In The Trade Resolve , L who knew vessel outside port limits but within territorial waters obtained warrant of arrest without disclosing that vessel not within port limits. Served and arrested vessel outside port limits. PF tried to justify arrest on basis that it was within jurisdiction and thus could go beyond restriction in letter of authorisation. Court held that vessel outside territorial waters and further held that authority to effect warrant of arrest restricted to terms of letter of authorisation because representing the Sheriff. Not only was arrest set aside, Court found that the arrest was malicious because no reasonable basis to arrest vessel since there was knowledge the vessel was outside port limits and the scope of the authority conferred.

- But this does not mean that vessel cannot be arrested outside port limits…could have case where L makes FFD that vessel outside port limits but is confirmed by MPA to be within territorial waters and since vessel within jurisdiction, Court should not restrict its authority and allow the arrest.

- 7) • Foreign Arbitration Clause

Previous position in Singapore- Singapore Arbitration (Foreign Awards) Act (Cap 10A) (‘AFAA’) (repealed)

- if claim subj to non domestic arbitration clause ie clause prov for arbitration in forum other than sg, court shal stay court proceeding

- so adniratly proceedings for claims subj to non domestic arbitration clause wld be stayed and eseel released unless evid tt shipowner cld not satisfy arbitration award

The Evmar [1989] 2 Mlj 460 applying THE RENA K [1978] 1 Lloyd’s Rep 545

- When contract is subjected to foreign arbitration clause, the arresting party can arrest ship only if they can prove that the ship owner’s financial situation is so precarious that arrest is necessary.

- Facts: - Case significant in terms of the effect of arbitration clauses and the notion of malice.The plaintiffs were

the owners of a cargo of corn (the cargo) which were shipped on board the Evmar (the ship) which was owned by the defendants. The cargo was allegedly damaged while in the course of carriage aboard the ship. A writ in rem claiming for damages was issued and the ship was arrested pursuant to a High Court warrant issued on the same day. Prior to the arrest, the plaintiffs had asked agents of the defendants to furnish a guarantee from P&I Club. The defendants agreed to furnish security for the plaintiffs` claim subject to certain reservations. These reservations were not accepted by the plaintiffs who proceeded to arrest the ship. On 14 March 1988, the defendants informed the plaintiffs that in order to mitigate their own losses, they would agree to the plaintiffs` demands for security, and a letter of undertaking was accordingly faxed to the defendants` solicitors. The plaintiffs however refused to release the ship but asked the defendants to file a bail bond to obtain the release of the ship. Subsequently, on the same day, the defendants applied by summons-in-chambers for an order, inter alia, setting aside the warrant of arrest. The application, which was heard by the deputy registrar on 15 March 1988, set aside the warrant of arrest, released the ship from arrest, stayed all proceedings on the ground that the bill of lading had an arbitration clause, ordered the plaintiffs to pay the defendants damages for the wrongful arrest and detention of the ship, and ordered costs to be taxed and paid by the plaintiffs to the defendants. The plaintiffs appealed to the High Court against all these points except the staying of proceedings.

- The defendants claimed that the warrant should be set aside as the affidavit sworn to lead it did not disclose material facts, namely the presence of an arbitration clause on the bill of lading for the cargo, and that the parties were negotiating for a letter of undertaking in lieu of arrest. It was also claimed that the affidavit should have deposed to the fact that the defendants lacked the means to satisfy any arbitration award, but failed to do so. The plaintiffs claimed that notwithstanding the deputy registrar ordering an unconditional stay of the proceedings, the High Court should impose a term that the stay was conditional upon the arrest being maintained or the letter of undertaking being retained as alternative security to satisfy any arbitration award that might be given against the defendant.

- Held, allowing the appeal in part: - (1).The mere fact that there was an arbitration clause in a bill of lading did not preclude a plaintiff

from instituting an action in rem against a ship. The only prerequisite to the court`s jurisdiction to issue a warrant of arrest was that the writ had to have been filed in an action in rem.

- (2).On the basis of case authority, there was no material non-disclosure in the present case by the mere fact that the affidavit to lead the warrant of arrest did not disclose that there was an arbitration clause on the bill of lading.

- (3).While it was open to the defendants to apply for a stay of proceedings, that had not yet occurred at the time the plaintiffs` affidavit was sworn. The question whether the defendants were able to unable to satisfy an arbitration award did not arise at this stage and there was therefore no material non-disclosure by the plaintiffs.

- (4).The matters that had to be stated in an affidavit leading the warrant of arrest were prescribed on O 70 r 4 of the Rules of the Supreme Court. Nothing there required that matters relating to pending negotiations for security should be stated in the affidavit. The fact of negotiation between the parties was therefore immaterial.

- (5).The plain reading of s 4(3) of the Arbitration (Foreign Awards) Act showed that the power of the court to impose conditions had to be imposed at the time the order was made staying the proceedings. The deputy registrar gave an outright order to stay without imposing any conditions. And since the plaintiffs had withdrawn their appeal against the order, it was not open to the High Court, as an appellate court, to vary the order granting an unconditional stay when the order was no longer under appeal.

- (6).The question here was whether the court, following the principle laid down in The Rena K [1978] 1 Lloyd`s Rep 545, should order that the ship be kept under arrest or the letter of undertaking be retained to meet whatever award that might be made against the defendants.

- (7).This principle, however, could only apply if there was evidence to show that if the plaintiffs should obtain an award in respect of the full amount of their claim, the defendants might well be unable to satisfy. No evidence of this was produced. On the contrary, there was evidence that the P&I Clubs were prepared to stand by and indemnify the defendants against the claim made by the plaintiffs. Accordingly, the ship should be released from arrest and the letter of undertaking given to the plaintiffs as an alternative security should be returned.

- (8).While the ship should be released, the warrant of arrest should not be set aside since there was nothing wrong in the issue of it or its execution.

- (9).Whether there were any damages due eventually to the defendants on account of the arrest would have to await the outcome of the substantive claim that was being referred to arbitration. It was within the power of an arbitrator to award damages for wrongful arrest. To succeed in such a claim, the defendants would have to show there was mala fides or malicious negligence on the part of the plaintiffs.

- (10).The only issue then was whether the fact that the defendants agreed to furnish the letter of undertaking `under protest` gave the plaintiffs a reasonable cause not to release the ship. The expression `under protect` meant no more than that the defendants were reserving their rights, which they were entitled to do.

- (11).Since alternative security had been furnished to the plaintiffs in terms which they had asked for, the plaintiffs had no further reasons not to release the ship. The test to be applied to determine whether there was wrongful continuance of an arrest was the same as that applicable to wrongful arrest, ie mala fides or crassa negligentia implying malice.

- (12).The plaintiffs` refusal on 14 March 1988 to accept the letter of undertaking amounted to at least malicious negligence. The plaintiffs were therefore liable for damages for the continued detention of the ship from 14 to 15 March 1988.

- (13).The assessment of the quantum of damages for the wrongful continuance of arrest had to be left to the arbitrator to whom the claim was being referred.

- (14).The appeal as regards the second order to set aside the warrant of arrest was allowed. Order 3 (releasing the ship from arrest) would remain. So would orders 1 and 4 (allowing the time for service of defendants` application to set aside the arrest to be abridged and staying the plaintiffs` proceedings) (in respects of which the plaintiffs withdrew their appeal). Order 5 (ordering the plaintiffs to pay the defendants damages which were to be assessed by the registrar) would be modified to leave the arbitrator to assess damages for the wrongful arrest of the ship from 14 to 15 March 1988.

- (15).There were two main applications in the summons taken out by the defendants - to have the warrant of arrest set aside and to obtain a stay of proceedings. The defendants had failed on the first application but succeeded in the second. The arguments before the deputy registrar centred more on the first point than the second. Before the High Court, there was hardly any argument regarding the second point. Having regard to all the circumstances, the plaintiffs had to bear only one-third of the costs of the defendants for the hearings before the deputy registrar and before the High Court.

Present position in Singapore- International Arbitration Act (‘IAA’) (Cap 143A) (repealed the AFAA)

Section 6:Enforcement of international arbitration agreement.6. —(2) The court to which an application has been made in accordance with subsection (1) shall make an order, upon such terms or conditions as it may think fit, staying the proceedings so far as the proceedings relate to the matter, unless it is satisfied that the arbitration agreement is null and void, inoperative or incapable of being performed.- » Court to stay legal proceedings commenced in breach of arbitration agreement falling within the IAA

BUT - Section 7: - can arrest vessel in aid of arbitrationCourt’s powers on stay of proceedings.7. —(1) Where a court stays proceedings under section 6, the court may, if in those proceedings property has been arrested or bail or other security has been given to prevent or obtain release from arrest, order — (a) that the property arrested be retained as security for the satisfaction of any awardmade on the arbitration; or (b) that the stay be conditional on the provision of equivalent security for the satisfaction of any such award. Where the Court stays Admiralty proceedings under s6, Court may order arrested property or other security that was put up, to be retained as security for the arbitration award, or that stay be conditional on the provision of security for the award- » Court may order arrested property or other security that was put up to be retained as security for the

arbitration award, or that stay be conditional on the provision of security for the award- » Similar to section 26 of the UK Civil Jurisdiction and Judgments Act (‘CJJA’)- Bottomline: Can now arrest vessel even if there is an FAA.

Hyosung (Hk) Ltd V The Owners Of The Vessel Or Ship ‘Hilal’ [2001] 1 Slr 387- Facts: - The plaintiffs commenced the action against the defendants for breach of duty in contract and tort in respect

of 9,000 metric tons of urea from a shipment of 28,000 metric tons on board the defendants` vessel. The plaintiffs claimed under a bill of lading dated 24 February 1997. The plaintiffs arrested the defendants` vessel the `Hilal I` on 14 October 2000. The action was brought under s 4(4)(a) of the High Court (Admiralty Jurisdiction) Act (Cap 123) in respect of a claim falling under ss 3(1)(g) and (h) of the Act. The defendants applied to stay the action in favour of arbitration in London pursuant to an express arbitration clause. By the same summons-in-chambers the defendants also prayed that the `Hilal I` be released and the arrest set aside. The assistant registrar granted an order for the stay of proceedings but made no order on the defendants` application for the release of the vessel, the effect of which, effectively, was to refuse the application. The plaintiffs appealed against the order for stay of proceedings and the defendants appealed against the refusal to order a release of the vessel.

- Held , dismissing the plaintiffs` appeal and allowing the defendants` appeal: - (1).The error that appeared in the charterparty was typographical in nature. Hence, there was only one

charterparty in which the arbitration clause was adequately set out and applied by reason of the express wording of s 6 of the International Arbitration Act (Cap 143A) (see [para ] 9).

- (2).The order for a stay of proceedings is a different matter from the order retaining the vessel under arrest. It does not follow that the vessel must be released upon a stay order being given. Neither does it follow that the vessel must remain under arrest. The plaintiffs` claim had no connection with this forum. The only factor in the plaintiffs` favour was, first, the fact that the arrest was lawfully made and secondly, that the court was generally loathe to interfere with the discretion of the court below in such cases. The arguments presented before the appellate court were fuller than in the court below. As such, the application was considered afresh. There was no reason for the arrest to continue in this case (see [para ] 14-16).

- interpretation of s7: swift fortune: held tt court will not grant mareva injn in adi of foreing arbitration – pending

- another case: Belinda Ang J – yes.

- But for in rem proceedings, law is clear and settled, can arrest vessel in aid of foregn arbitration (swift fortune makes position clear)

The Bazias 3 [1993] 1 Lloyd’s Rep 101 (Uk Position: English Ca)- discretion to release a vessel same as in normal Admiralty proceedings, i.e. the vessel would be

released upon the provision of sufficient security and Rena K principles did not apply.

- 8) • Arrest On Weekends And After Office Hours- prev warrant of arrest cld only be executed by sheriff and his officers – as sheriffs and officers only

available during office hrs, arrest of ships x take place after tt or during weekends – so shipowners cld simply avoid arrest by ordering vessels to sg only after working hrs and during weekends

- S65A SCJA and Rules of Supreme Court allow Court to appoint solicitors or experienced shipping clerks to effect arrest. Can also call up the duty Registrar to apply for warrant even outside office hours.– Ships can now be arrested after office hours and on weekends

– This also means that during an application to extend writ, harder to argue that no chance to arrest ships on a weekends etc that it was in Singapore.

Post Judgment Arrests, and Possessory Liens

Post Judgment Arrests

The Daien Maru 18 [1985] 2 MLJ 90o Permitted an arrest to be made after a judgment in rem has been obtained, when security for the claim was

not obtained earlier. o DISTING FR EARLIER uk decisions eg the alletta on grds tt bail was prov in those circumstances and

hence replaced the reso Logical extension of concept of action in rem: since it is an action against the res, a judgment should be

enforceable against the res by a remedy unique to the action, namely, arrest.

Possessory Lieno asserted by shipyards who have not been paid for repairs. Self help remedyo entitled to detain the vessel; They are still holding onto the ship, entitled to do so without having to arrest

the vessel.o But shipyards sometimes need to arrest the ship in order to get court order to sell vessel.o Does the arrest of vessel mean that possession is deemed lost, and therefore the lien is lost? NO

The Dwina 1 [1967] 2 SLR 670- The possessory lienee, in arresting the ship, retains his lien over the vessel.

Gebruder Naf v Ploton (1890) 25 QBD 13 (English CA)- The English Courts will not interfere to assess the value of a lien in the absence of fraud. - But Singapore courts have stepped in to reassess value of a lien.

The Solitaire (Singapore CA)- At first instance, judge refused to reduce security demanded and allowed shipyward to retain lien for full

amt of security dd since no evid of fraud on part of shipyard- In CA lien reduced to 125 million

- Upon the application of the shipowner, court reduced the lien exerted over a ship from 300 million to 125 million. No fraud present. Departed from English principles.

How To Secure Release Of The Vessel- Pt of arresting vessel – found juris/ obtain security- Of course best is cash

- • Types Of Security– Letter of undertaking or guarantee from an insurer

Letter of Undertaking from an Insurer – 2 main types of insurers: (a) H&M Insurer (Haul and Machinery)

- Underwriters for collisions and salvage - Where the insurance concerns the haul and machinery of the vessel.

(b) P&I Clubs (Protection and Indemity) – Usually letters of undertaking for arrest are from P&I Clubs. - Covers 3rd Party liabilities. – cargo claims./ charterparty disputes- Covered by specialist insurer cost PandI clubs- Owners seeking indemnity from insurers. - Internationally recognised clubs: UK (mainly), Scandinavia, Japan (prominent in

Asia). - China P&I clubs gaining popularity but not yet internationally recognised.

– Bank guarantee– Usually guarantees sought from local banks for the purposes of enforceability. – However, contractual relationship if clients are willing to accept a guarantee from an

overseas bank, it is entirely up to them.

– Ensure that the guarantee can be readily enforced. – Bail bond – security to court

– Rules of Court (O 70 r 15)

Bail (O. 70, r. 15)15. —(1) Bail on behalf of a party to an action in rem must be given by bond in Form 168; and the sureties to the bond must enter into the bond before a Commissioner for Oaths, not being a Commissioner, who, or whose partner, is acting as solicitor or agent for the party on whose behalf the bail is to be given, or before the Registrar. (2) Subject to paragraph (3), a surety to a bail bond must make an affidavit stating that he is able to pay the sum for which the bond is given. (3) Where a corporation is a surety to a bail bond given on behalf of a party, no affidavit shall be made under paragraph (2) on behalf of the corporation unless the opposite party requires it, but where such an affidavit is required it must be made by a director, manager, secretary or other similar officer of the corporation. (4) The party on whose behalf bail is given must serve on the opposite party a notice of bail containing the names and addresses of the persons who have given bail on his behalf and of the Commissioner for Oaths or Registrar before whom the bail bond was entered into; and after the expiration of 24 hours from the service of the notice (or sooner with the consent of the opposite party) he may file the bond and must at the same time file the affidavits (if any) made under paragraph (2) and an affidavit proving due service of the notice of bail to which a copy of that notice must be exhibited.

- • Wording Of Security- Security for the release of a ship arrested is usually a matter of agreement between the parties with the

exception of bail bonds. - Has to be enforceable within jurisdiction otherwise security is not good security.

– P&I Clubs’ letter of undertaking- P&I Clubs are members of re-insurance pool, as a group, they are very solvent.

– World-wide recognition in the maritime industry. – English Courts held that however solvent a club may be an arresting party is not compelled to

accept P&I undertaking. – Singapore departed from that stand in The Arcadia Spirit.

– Bank guarantee– Bail bonds

The Arcadia Spirit [1988] Slr 244- departed fr estd eng principels – significant- position in England then was tt – only form of security where court will have juris to regulate is bail bond

– a bail bond is undertaking to court – precise court form described in rules where undertake to court – if adjuged liable to pay to plaintiff then undertake to court that wil pay to litigant/ plaintiff

– eng trad approach is only bail bond will be regulated by court – can have guarantee fr DBS or letter of undertaking etc but does not matter - however

substantial or financially stable insurer is, it is a private undertaking and court will not intervene

- for long time, tt was felt to be unfair –if diff litigant and want to create diff for ship owner who has diff raising bail bond because security in large qties, oppressive to compel ship owner to settle

- large sch of thought tt sg maritime bar – shld not operate this principle in sg- Principle:

· The courts can compel parties to accept security from an internationally renowned P & I Club and release vessel [ not just bail bond].

· Departed from *the Saudi star which held tt such letters purely private arrangements which court will not interfere with

- Held: court had jurisdiction to compel claimant to accept the letter of undertaking from a substantial P&I Club· Court was influenced by fact that P&I Club’s letter of undertaking accepted by Singapore government

too.- Facts:

· Tanker collided into plf’s oil loading berth and plf arrested the tanker and claimed security for the release of the tanker for the sum of $50mil.

· Df offered security in the form of a letter of undertaking to be issued by the Japan P&I club for the sum of $19.7mil (increased to $26mil).

· However, plf resisted the release stating that the court’s jurisdiction to order the release of a ship was limited to circumstances when df filed a bail bond.

· Whether court had jurisdiction to compel the plf to accept security and order release of ship. - Held (Grimberg JC): pragmatic approach- (1).The court had discretion under O 70 r 12(4) of the Rules of the Supreme Court 1970 to order the release

of the vessel against the provision of a P & I Club letter of guarantee. - (2).The vessel should be released against a letter of guarantee by the Japan P & I Club for the value of the

vessel. Pacific Charger, The (CA, NZ, unreported); [1988] 3 MLJ 263 (folld)- P&I Clubs are now acknowledged as being part and parcel of the maritime industry and are considered

acceptable security. - The Japan Club whose guarantees are acceptable to the Singapore government for unlimited liability would

fulfil its obligations with honour since its international reputation would be at stake. - So this shld be acceptable security for esso – therefore based on this reasoning, the letter fo undertaking shld

be acceptable – compellable by the court because it has inherent hjuris to regulate the arrest and the continuation juris to prevent abuse

- Court has juris to compel litigant to accept a private guarantee- Court orders the release of Bessel in consideration of the provision of a letter of guarantee of the Japan Club,

the terms to be agreed upon by the parties. - Felt tt any decision that disrupts shld be slow to be adopted

Semco Salvage & Marine Pte Ltd V Owners Of And Other Persons Interested In The Ship Or Vessel Mv ‘Benja Bhum’ [1994] 1 Slr 88

Principle: · The arresting party could insist on what terms the letter of undertaking should contain as long as they had

made a lawful arrest. Facts: · Arrest for remuneration for salvage services and fees however parties were prepared to refer to claim to

arbitration. · Plf wanted undertaking from P&I Club to include arbitral award and final judgment of a court but df wanted

the undertaking to cover only a final award of an arbitration. · Df applied to seek order of ct to release vessel from arrest.· The plaintiffs commenced this action in rem against the vessel Benja Bhum (`the vessel`) claiming

remuneration for salvage services and/or salvage fees and expenses incurred in the salvage of the vessel on or about 25 January 1993. While the negotiations were in progress, the plaintiffs agreed to allow the defendants to furnish security in the form of a letter of undertaking issued by the Swedish Club instead of a guarantee by a bank. However, the two solicitors were not able to agree on a material part of the undertaking. The plaintiffs wanted the undertaking to cover not only any arbitration award but also any final judgment of a court or tribunal of competent jurisdiction. The defendants wanted the undertaking to cover only a final award of an arbitration `commenced in London by reason of an agreement for private submission to arbitration contained in or evidenced by Haridass Ho & Partners` fax dated 9 February 1993 `.As the defendants were not prepared to furnish the undertaking in terms required by the plaintiffs` solicitors, the plaintiffs refused to release the vessel from arrest. Hence, this application for the release of their vessel Benja Bhum from arrest and also for damages was made by the defendants under O 70 r 12(4) of the Rules of the Supreme Court 1990. The assistant registrar dismissed the application. The defendants appealed.

Held: · (1).Though the parties had agreed in principle to refer the plaintiffs` claim to arbitration, the terms of the

agreement had yet to be agreed at that time. In effect, there was really no binding agreement. · (2).The plaintiffs had already arrested the vessel and had a security for their claim. They were therefore

entitled in the circumstances to insist that the letter of undertaking should contain terms which would give them adequate protection or security in replacement of the res they had arrested. The terms required by them were wholly reasonable in the circumstances.

· (3).In addition, the words suggested by the defendants were plainly wrong. There was, at that time, no agreement for private submission to arbitration `contained in or evidenced by Haridass Ho & Partners` fax dated 9 February 1993`. The agreement for private submission to arbitration, if at all there was to be one, would be contained in a document yet to be agreed upon and certainly not in `Haridass Ho & Partners` fax

dated 9 February 1993`. Therefore, the defendants` suggested text was wholly inappropriate and wrong and was rightly rejected by the plaintiffs.

Notes · Since the plf had already arrested the vessel and had security for their claim they were entitled in the

circumstances to insist that the letter of undertaking should contain terms which would give them adequate protection or security in replacement of the res they had arrested.

· Since the terms required by the pfl were wholly reasonable, appeal to release vessel was dismissed

The Arktis Fighter [2001] 3 Slr 394Principle: · Court had discretion whether or not to compel parties to release a vessel upon provision of letter of

undertaking by a P&I Club. · Factors to be considered would include the credit rating of that particular club. · JC Choo Han Teck: Rejected the security coz there was a lot of adverse comments about the security

standing of the insurerFacts: · Vessel was arrested by the plf as a result of damage to cargo. Df prayed for an order to release vessel with a

provision of letter of undertaking from df’s Norwegian P&I Club, Skuld. · Whether courts can compel release of vessel with provision of letter of undertaking. The plaintiffs sued the

defendants for damage to cargo which consisted of about 1,100mts of steel plates. · The plaintiffs averred that the vessel should not be released unless the defendants provide security in the

sums of US$3.8m and US$6.5m, as the potential damage to the plaintiffs was US$3.8m (being the total replacement costs of the steel plate cargo) and US$6.5m (being liquidated damages to the plaintiffs` third party contractors).

Held (Chao Hick Tin JC): · As Skuld had recently received a ‘BB’ in a S&P rating (Standard & Poors rating – a credit rating

agency) which means that the insurer has ‘vulnerable characteristics’ and ‘could lead to insufficient ability to meet financial commitments’, there is sufficient evidence to warrant caution and not to order security to be furnished by the suspect insurer.

· Financial security of insurer had slipped· Held tt whilst had discretion to compel parties to accept security, also retains residual discretion to

refuse ltter of undertaking if security is not good.· (extension of same principle tt court in corr circumstances can compel litigant to accept security c.f.

England where no discretion)· Once court is satisfied that a vessel has been lawfully arrested, it will order its release only upon adequate

security is furnished. Court could not compel the plf to relinquish its substantial security in exchange for a vulnerable one.

· (3).The court felt that it was not unreasonable for the plaintiffs to ask for security of up to US$3.8m for their claim but did not feel that the security should include the liquidated damages of US$6.5m as the full circumstances of the likelihood of the plaintiffs having to pay that sum had not been adequately presented (see [para ]7 and 8).

· (4).The plaintiffs were entitled to an undertaking that would be nearly as secure as the vessel they had arrested. The defendants` P & I club, Skuld, had recently been given a `BB` rating which meant that it has `vulnerable characteristics` and `could lead to insufficient ability to meet financial commitments`. As such the court decided that security could be provided by way of a letter of undertaking from Skuld, on the condition that the defendants substitute a local banker`s guarantee for it within a month. The vessel was to be released on the defendants` provision of security in the amount of US$3.8m plus interest over three years at 8% and S$350,000 costs (see [para ]8-10).

Owners Of Cargo Lately Laden On Board The Ship Or Vessel ‘Piya Bhum’ [1994] 1 Slr 564

Principle: · Bail Bond put up by a foreign-based P&I club with no assets in the jurisdiction is unacceptable. Facts: - The plaintiffs commenced an admiralty in rem action against the defendants for damages in respect of loss

or damage to their cargo. The plaintiffs` solicitors attempted to negotiate security with the defendants insurers, the P and I Club. They were, however, unable to agree upon the wording of the letter of undertaking. The P and I Club then executed a bail bond and filed it unilaterally. The plaintiffs

applied for the bail bond to be declared invalid on the ground of lack of financial sufficiency of the surety within the jurisdiction. The summons was dismissed by the registrar. The plaintiffs appealed. (Whole case about who can/cannot post a bail bond)

Held: allowing the appeal: - The essential feature of a bail bond is that the plaintiff who has obtained a judgment or settlement

which has been filed in court may proceed to levy execution, and need not bring a separate action against the sureties for the judgment sum. Without this feature, the bail bond fails in its purpose. Since a judgment of the court has no extra territorial force in that it cannot be enforced in a foreign country by direct execution, a bail bond by a person without assets within the court`s jurisdiction would be worthless from the plaintiffs` point of view. The bail in this case was given by a Swedish corporate entity which had no assets within the jurisdiction. The bail bond was, accordingly, worthless and the plaintiffs were justified in rejecting it.

- Comment: If it was a P&I Letter of Undertaking – would not be rejected!

- • Quantum Of Security- litigant in arrest sitn is entitled to request security to cover its best arguable case

– Entitled to security on best arguable case however, only if supported by documentation. – Basis/ Factual evidnce to support this claim

- Eg: best arguable case is $100k, cannot claim for $1 mil. Also cannot claim for $100k if documents state that you only have a claim for $50k. Therefore the quantum for security should be measured at $50k.

Continental Grain Co V Owners Of The Ship Or Vessel ‘Evpo Agsa’ [1992] 2 Slr 487

Facts: - The plaintiffs arrested the vessel, alleging negligence and inducing breach of contract, there being no

privity of contract between the plaintiffs and the defendant owners. The defendants provided security in the amount of $1,505,333.95. They then applied (a) to set aside the writ of summons and the warrant of arrest on the basis that there was no jurisdiction for the claim as the alleged claim did not fall within the ambit of the High Court (Admiralty Jurisdiction) Act (Cap 123); and (b) to moderate the amount of the security. The registrar who took up the application was asked to decide only the security issue. He ordered security in the amount of $1 and ordered costs against the plaintiffs. The plaintiffs appealed to a judge-in-chambers.

Held , allowing the appeal: - (1).When a court considers an application confined to the question of security for costs, it must assume that

there is a valid cause of action. It must then determine the amount of the claim, and, in addition, allow costs and interest. The amount of the claim is not a matter of discretion of the court but of entitlement. The amount of security should cover the plaintiff`s reasonably arguable best case.

- (2).Affidavits lack the facility and flexibility in assisting the court in making satisfactory findings of fact when there is a dispute. In the absence of cross-examination by opposing counsel, the court is placed in great difficulty in evaluating conflicting affidavit evidence.

- (3).Counsel and their clerks should not become witnesses in cases where they are retained and this applies equally to counsel making affidavits where the facts are in dispute.

- (4).The defendants` case was presented on the basis of affidavits made by their counsel on their behalf. In his affidavits he made conclusions of facts, arguments, comments, inferences, statements of law, gave expert opinion, relied on hearsay evidence, self-serving documents etc. The defendants had an agent, foreign lawyers and surveyors in Singapore, and there was no explanation why none of them made an affidavit. Further, the affidavits mingled admissible matters with inadmissible matters. No court could accept the contents of those affidavits as conclusive and decide in the defendants` favour.

- (5).The plaintiffs appeared to have a bona fide claim and did not act oppressively. They were entitled to security for the amount of the claim with interest and costs.

- Judgment (Selvam J): When a court considers an application confined to the question for security for costs, it must

assume that there is a valid course of action. It must then determine the amount of claim including costs and interest.

The amount of claim is not a matter if discretion of the court but an entitlement, it should over the plf’s reasonably arguable best case.

The Polo II [1977] 2 Lloyd’s Rep 115

H 156 [1999] 3 SLR 756Principle: · Quantified security should be the arresting party’s reasonably arguable best case supported by documentary

evidence and not a figure plucked out of the air.Facts: · Plf arrested ship for security on 4/1/1999 and df entered appearance requesting for breakdown of the claim

and wording of the security required. · Plf did not respond and only after 6 months did plf quantify the security, claiming security for loss of profits

and loss of market share without documentary proof. · On 29 December 1998, the plaintiffs arrested the vessel as security for their claim. On 4 January 1999, the

defendants entered an appearance and requested a breakdown of the claim and the wording of the security required. The plaintiffs did not respond. The defendants repeated the request on 6 and 8 January 1999. On 8 January 1999, the plaintiffs asserted a claim for US$1,464,635.60 with interests and costs. They further asserted that there would be an additional claim for `market share` which they had not yet quantified. The defendants rejected the amount and the additional claim.

· On 15 January 1999, the defendants applied to court to fix the quantum and form of the security to be issued by them to the plaintiffs in order to procure the release of the vessel.

· At the hearing before the assistant registrar, the plaintiffs quantified the security to be provided by the defendants in the sum of US$2,228,535.24. This included US$1,221,898 for `loss of profits` and US$250,000 for `loss of market share`. The remainder of the amount claimed was for expenses. The assistant registrar ordered that the vessel be released without security. The plaintiffs appealed to the judge in chambers.

Held (GP Selvam J): · A party which arrested a vessel must act with the utmost expedition. Must not abuse the power of arrest or

act oppressively or unreasonably. · Must act in good faith and provide full and frank information in an organised form to enable the court to

exercise its discretionary power on a legal and reasonable basis. · Conduct of plf was unreasonable as the plf should have been able to quantify their claim on the date the writ

was issued. · In particular, (a) the plaintiffs should have been able to quantify their claim on the date the writ was issued.

However, even in January 1999, six months after the alleged repudiation, they were still not able to quantify their claim in full; (b) the final estimate of the plaintiffs` loss of profits postulated a profit of 130% for the period July to November 1998. This was not a realistic figure but an imaginative figure plucked out of the air. It was grossly and unfairly out of proportion to the realities of the shipping market and, prima facie, oppressive. A realistic figure should be based on the previous year`s financial statements on which the plaintiffs paid tax (see [para ] 3, 9, 24, 27).

· A realistic figure should be based on documentary proof ie previous years financial statements etc… · Arrest was an abuse of process and vessel was released without security. · The plaintiffs had further disingenuously sought to shelter behind a pretended opinion of Norwegian law

which merely stated that the `heads of damages are of a type recognised in Norway.` In fact, there was no proper opinion before the court, as the `opinion` failed to present the materials and the grounds upon which the conclusions contained therein had been reached. The function of an expert of foreign law was to submit propositions of law as fact for the consideration of the court. The court should guard against partiality of the expert in favour of the party which calls them (see [para ] 26).

· A set of core legal principles in matters of shipping and international trade were applicable to the present case: (a) The damages must be calculated with reference to the date on which the contract was discharged by repudiation. Damages cannot continue indefinitely. (b) Where a substitute ship was available, the damages would be the difference between the contract price and the price of the substitute ship provided the latter was higher. They could also claim the loss of use up to the time of acquisition of the substitute ship provided it was a reasonable period. If the price was lower, prima facie, there was no claim. (c) If no equivalent or near equivalent substitute was available, the loss of profits was calculated for a reasonable time to acquire a substitute ship. In computing the net profits, all operation and financing costs and expenses necessary to generate the revenue must be deducted. (d) If the claimant alleged that he lost an extraordinary lucrative contract in estimating the revenue, he must give prior notice of it. The innocent party was not entitled to damages which were grossly and unfairly out of proportion to the prevailing market. (e) If the claim was extravagant or fanciful in principle or in numbers, it would be rejected out of hand as oppressive and abusive (see [para ] 15-16).

· (5).The plaintiffs` quantification of their losses was not in accordance with the above principles and therefore could not be sustained. In particular, the plaintiffs failed to state how the `loss of profit` and `loss of market share` figures had been calculated. They also did not explain the meaning of `loss of market share`, which smacked of loss of profits. Further, the plaintiffs could not claim wasted expenditure, when such expenditure would be wasted anyway. Accordingly, the claims for loss of market share and wasted expenditure should be eliminated (see [para ] 15, 16, 23 and 24).

· The plaintiffs` appeal vide CA 35/99 was heard by the Court of Appeal (Yong Pung How CJ, Goh Joon Seng and Tan Lee Meng JJ) on 19 May 1999 and was dismissed.

Caveats (for interest)

- May have more than 1 claim- Uncommon for 2 litigants to effect 2 diff arrests- What subseq claimant does to prxt interest -> file caveat against release – tells first arresting party to give

notice - If does not put up security to him as caveator, then wants to be able to take up arrest

- 1. Against Arrest– more a risk management sitn in practice (not examinable)

Caveat against arrest (O. 70, r. 5)5. —(1) A person who desires to prevent the arrest of any property must file in the Registry a Request4, in Form 162, signed by him or his solicitor undertaking — (a) to enter an appearance in any action that may be begun against the property described in the Request4; and (b) within 3 days after receiving notice that such an action has been begun, to give bail in the action in a sum not exceeding an amount specified in the Request4 or to pay the amount so specified into Court, and on the filing of the Request4 a caveat against the issue of a warrant to arrest the property described in the Request4 shall be entered in the caveat book. (2) The fact that there is a caveat against arrest in force shall not prevent the issue of a warrant to arrest the property to which the caveat relates. Remedy where property protected by caveat is arrested (without good and sufficient reason) (O. 70, r. 6)6. Where any property with respect to which a caveat against arrest is in force is arrested in pursuance of a warrant of arrest, the party at whose instance the caveat was entered may apply to the Court by summons for an order under this Rule and, on the hearing of the application, the Court, unless it is satisfied that the party procuring the arrest of the property had a good and sufficient reason for so doing, may by order discharge the warrant and may also order the last-mentioned party to pay to the applicant damages in respect of the loss suffered by the applicant as a result of the arrest. Application and interpretation (O. 70, r. 1)1. —(1) This Order applies to Admiralty causes and matters, and the other provisions of these Rules apply to those causes and matters subject to the provisions of this Order. (2) In this Order — "action in rem" means an Admiralty action in rem; "caveat against arrest" means a caveat entered in the caveat book under Rule 5; "caveat against release and payment" means a caveat entered in the caveat book under Rule 13; "caveat book" means the book kept in the Registry in which caveats issued under this Order are entered; "limitation action" means an action by shipowners or other persons under any written law for the limitation of the amount of their liability in connection with a ship or other property; "Sheriff's account" refers to the account which is maintained pursuant to Order 90, Rule 18, and includes the bank account maintained in the name of the Sheriff of Singapore; "ship" includes any description of vessel used in navigation. (3) In this Order, any reference to payment into Court of proceeds of sale of any property sold by the Sheriff means payment of such proceeds into the Sheriff’s account.

Direction or undertaking to the whole world at large. Caveat against arresting vessel including undertaking to provide security against arrest. Generally, as lawyer, should not file caveat for ship because lawyer never know what other claims are

lurking and may be personally liable to raise securityo Once u file caveat, unhdertaking is by lawyer to whole world whoever wants to arrest vesselo Sol is under personal undertaking to arrange security

o So never file caveat against arrest for client Caveator will be given 3 days after receiving notice that an action against the ship has begun to give

security. [n/b the writ must be served on the caveator. – operates as ‘notice’ that an action against the ship has begun]

Existence of caveat against arrest would not prevent the issuance of an arrest warrant to arrest the property which the caveat relates.

Usually filed by solicitor however dangerous to do so. See illustration below.o Why?

O 70 r. 6 – the arrestor who proceeds to arrest despite the presence of a caveat may be made to pay damages to the caveator unless the court is satisfied that he had a good and sufficient reason for arresting.

Caveat should be filed by the client, or a company of substance.

Illustration: o Solicitor lodged caveat against arrest as claimant had refused to accept security. Anticipated

that their best arguable case is worth $1 mil, lodged caveat for $1 mil. However, unknown to the lawyer, there are other parties who want to arrest the ship. Since the caveator is personally liable for all the claims after the lodging of the caveat, solicitor is liable for all the claims after lodging caveat. Caveat should be filed by clients and not by solicitors.

- 2. Against ReleaseCaveat against release and payment (O. 70, r. 13)13. —(1) A person who desires to prevent the release of any property under arrest in an action in rem and the payment out of Court of any money in Court representing the proceeds of sale of that property must file in the Registry a Request 4 in Form 166, and on the filing of the Request 4 a caveat against the issue of a release with respect to that property and the payment out of Court of that money shall be entered in the caveat book. (2) Where the release of any property under arrest is delayed by the entry of a caveat under this Rule, any person having an interest in that property may apply to the Court by summons for an order requiring the person who procured the entry of the caveat to pay to the applicant damages in respect of the loss suffered by the applicant by reason of the delay, and the Court, unless it is satisfied that the person procuring the entry of the caveat had a good and sufficient reason for doing so, may make an order accordingly. Used to prevent release of property under arrest (usually used against constructive arrest), and payment out

of court any money in court representing the proceeds of sale of that property. Used for multiple claims. Caveat against 2nd arrest, some parties would carry out 2nd arrest to accelerate

proceedings or eat into funds, interested parties may apply for caveat to prevent such an act. [by caveating against the release of the vessel, u cannot arrest again!]

It must be lodged while the Warrant of Arrest is still in force. Caveat must be sufficient time to give party time to either withdraw caveat upon payment or to take over

arrest if necessary. Note: the court can make the caveator pay damages to the plaintiff who have suffered losses due to delay –

i.e. the caveat was procured without good and sufficient reason.

Wrongful Arrest Traditionally, in England, to succeed in claim, must show PF acted in bad faith or with gross negligence

amounting to malice but over the years, these have been used interchangeably with standards used in civil claims – The Evangelismos (1981)

In local case, The Evmar, Court equated bad faith with ‘without reasonable and probable cause’. Arrest effected even though security offered. So after arrest, Shipowner decided to furnish security in

desired form under protest. PF, however, rejected letter of undertaking. Warrant of arrest eventually set aside on grounds of non-disclosure Court held that from the day when security offered in exact amount and wording as demanded, PFs no

longer had any reason to detain the vessel. Continued arrest was thus malicious. The Trade Resolve – would also be a case of bad faith because PF went ahead to arrest knowing it was

outside port limits. Position clarified in The Kiku Pacific – no room to import concept of reasonable or probable cause. Must

have bad faith or gross negligence amounting to malice. But old cases even when decided under this standard would have produced the same result.

Eg: Vessel deprived of used for 1 month, ruled in favour of defendant; ship owner was found to be not liable for any damages. Can ship owner then apply for damages? No.

Conditions to be satisfied for Wrongful Arrest – would be determined by the conduct of the parties at the time of the arrest:

For wrongful arrest to be ordered: court must find element of: - Mala Fides (Bad Faith) & Crassa Negligentia (Gross Negligence) Implying Malice

– THE EVANGELISMOS (1851) 12 Moo PC 352– In principle, negligence must be such that you can infer malice.– If genuine mistake then no malice can be inferred– Neg has to be so gross – then easier to imply malice – (eg in trade resolve, warrant of arrest

indicated clearly tt canot go beyond port limits, so from here can infer malice)– Note however that you cannot equate negligene with wrongful arrest

- Application of test of ‘Without Reasonable Or Probable Cause’ subseq to evangelismos – to infer malice interchangeably with test of gross neg

- Without reasonable or probable cause’ test adopted in The Evmar and The Ohm Mariana (but latest: this is the wrong test.)

The Evmar [1989] 2 MLJ 460

Principle· Suggests that malice can be inferred by without reasonable or probable cause.Facts: · Cargo(corn) was allegedly damaged while in the course of carriage. · Df initially provided security with reservations but plf refused to accept security. · Amts kept changing, sol queried amts· When letter of ndetaking offered, litigant rfused to accept -

o When df again provided security based on the terms laid out by the plf but ‘under protest’, plf rejected the security again and refused to release ship.

Held (Chao Hick Tin JC)· Justified release of vessel and finding of wrongful arrest on the fact that that was ‘malicious negligence’

when plf refused to accept letter of undertaking. · However, suggestion that plf had no reasonable cause not to release the ship when df agreed to furnish letter

of undertaking ‘under protest’ as the expression ‘under protest’ meant no more than that dft were reserving their rights which they were entitled to.

· Therefore suggests that the test of ‘no reasonable cause’ could lead to ‘malicious negligence’. · In this case, fr mmt tt security offered albeit under protest, claiamtn has no more reasonable cause to cont

arrest for continuation period· Court condemened plaintiff and damages ordered

The Ohm Mariana [1992] 2 Slr 623

Facts: · The plaintiffs arrested the vessel in September 1985, asserting a claim for agents` disbursements. The

defendants denied owing any moneys to the plaintiffs for the period from October 1984 to February 1985. They also claimed damages for wrongful arrest of the vessel.

HC Judgment by GP Selvam JC: · The cause of action for wrongful arrest in admiralty law is akin to the tort of abuse of legal process in

general and wrongful seizure of goods or wrongful arrest of person in particular. · In this case, in rem jurisdiction was invoked when plf had no rights. Selvam JC found malice on the basis

that there was no reasonable or probable cause of arrest.

Held , at first instance, dismissing the plaintiffs` claim and allowing the defendants` counterclaim:

· (9).In cases of mala fides or crassa negligentia a court of admiralty may award damages for wrongful arrest. The cause of action for wrongful arrest in admiralty law is akin to the tort of abuse of legal process in general and wrongful seizure of goods or wrongful arrest of person in particular. Arrest per se will not be the basis of liability.

· (10).Should the res be arrested under a bona fide mistake of fact or law, the law will not punish the claimant as an award of costs is a sufficient penalty to discourage unfounded litigation. Where the owner of the res can show malice, proof of actual damage is not necessary to sustain a claim for arrest in a court of admiralty. However, unless special damages can be proved, only nominal damages will be awarded.

· (11).In the instant case the admiralty jurisdiction in rem was invoked when the plaintiffs had no rights. This was because they made a mistake of law. There was negligence but not gross negligence. However, there was malice. The malice was manifested in the manner in which the plaintiffs created the management agreement. They must have realized that as part or beneficial owners in the joint venture, they could not lawfully assert a claim in rem for disbursements and give them retrospective operation. In order to invoke the admiralty jurisdiction and effect the arrest, the claims had to be disguised as agents` claims for disbursements. The first four pages of the management agreement were fabricated, clearly with the malicious intention to punish the defendants by the use of the arrest. Accordingly, the plaintiffs were liable in damages to the defendants for wrongful arrest.

· CA overturned Selvam JC’s position and held that arrest was not wrongful even though plf did not satisfy the conditions under s4(4) of the Act.

The Kiku Pacific [1999] 2 Slr 595· Settled the test once and for all· Test is that laid down in The Evangelismos (1858) 12 Moo PC 352, ie mala fides or crassa negligentia

implying malice: (in that case: Judgment by Rt Hon T Pemberton Leigh: Owners must demonstrate that there is either bad faith or gross negligence which implies malice.)

· Principle: o The without probable reasonable/probable cause is test for malicious prosecution not

involving vessels and if used in civil admiralty cases might prove to be confusing. – test shld not be imported

o Test to be used should be that stated in The Evangelismos: either mala fide or gross negligence implying malice.

· Facts: · Ult supplier of bunkers did not receive payment.· Owner said tt not liable in persona because x contract· But decided not to apply to strike out because wanted law to be decided· Plf rejected a letter of undertaking provided by the owners of vessel in March 1996, but later accepted

a letter of undertaking on 10 July after a subsequent letter of undertaking, which was almost identical in wording with the first, was provided.

· Df submitted that there had been wrongful arrest as malice could be inferred where there was no reasonable or probable cause for arrest and that on the facts there was no reasonable or probable cause for rejecting the security offered in March 1996.

· The appellants were the owners of the vessel Kiku Pacific (`the owners`). The respondents were Fal Energy Co Ltd (`Fal`), a company incorporated in Sharjah, United Arab Emirates (`UAE`), carrying on the business of fuel and oil supplies. Fal then sought payment from the owners. In March 1996, pending resolution of the dispute, the owners made an offer of security in the form of a letter of undertaking from the London Steamship P&I Club providing for the claim to be subject to English jurisdiction. The security was rejected by Fal, who wanted a first class bank guarantee, and wanted the claim to be subject to UAE jurisdiction instead of England. On 8 July 1996, FAL arrested the Kiku Pacific in Singapore. The owners brought an appeal against the trial judge`s dismissal of their counterclaim for damages for wrongful arrest. The owners acknowledged that the test for wrongful arrest was that of malice, but submitted that malice could be inferred where there was no reasonable or probable cause for arrest and that on the facts, there was no reasonable or probable cause for bringing the action or for rejecting the security offered in March 1996.

- Held (Karthigesu JA): - (1).The test for wrongful arrest of a vessel was mala fides or crass negligentia, implying malice (see [para ]

14-17); The Evangelismos [1858] 12 Moo PC 352; 14 ER 945, The Margaret Jane (1869) LR 2 A&E 345 and The Strathnaver [1875] 1 App Cas 58 followed.

- (2).The term `reasonable or probable cause` was used in The Evmar [1989] SLR 474 [1989] 2 MLJ 460 . While it was not clear from the judgment which authority the judge relied on for the term `reasonable or probable cause`, it was clear from the judgment that in awarding damages for wrongful arrest, the test applied was that of The Evangelismos of mala fides or crassa negligentia (see [para ] 25).

- (3).The term `reasonable or probable cause` was also used in The Ohm Mariana [1992] 2 SLR 623 . The judge relied on the decisions in Mitchell v Jenkins (1833) 5 B & Ad 588 and The Walter D Wallet [1893] P 202. However Mitchell v Jenkins was a case which dealt with malicious prosecution of persons and the issue was whether malice was a finding of fact which ought to be left to the jury. The Walter D Wallet was an action in common law for damages arising from the arrest and consequently adopted the language of the common law action for malicious prosecution (see [para ] 18-24, 26); Mitchell v Jenkins (1833) 5 B & Ad 588 and The Walter D Wallet [1893] P 202 distinguished.

- (4).While the use of the term `reasonable and probable cause` was well established in actions for malicious prosecution, the court was uncomfortable with the import of such a term into admiralty law as part of the test for wrongful arrest for a vessel. The standard of proof for a criminal case was `beyond reasonable doubt`. In a civil case however the standard of proof was `on a balance of probabilities`. The term `reasonable or probable cause` would be too similar to the standard of proof for civil cases and would suggest that a plaintiff who failed in his action on a balance of probabilities was liable to pay damages for wrongful arrest. That would be stating the threshold for wrongful arrest of a vessel at too low a level, and would discourage potential plaintiffs from pursuing their claims because of the heavy damages which they might incur if they were subsequently unable to prove their claim at trial (see [para ] 27-29).

- (5).There was no malice or gross negligence on the part of Fal in bringing the action. Even though Fal clearly did not have a maritime lien under Singapore law - a fact which they could have easily ascertained prior to the arrest - Fal did not proceed solely on the basis of a maritime lien. The claim by Fal for the price of the marine oil was not clearly an experiment which was contrary to the long practice of the court or the elementary principles of law (see [para ] 31-36).

- (6).There was no malice or gross negligence on the part of Fal in refusing the security offered in March 1996 (see [para ] 38-42).

- (7).The trial judge`s decision not to order costs for the counterclaim was based on his view that Fal had `sailed very close to the wind in bringing this action against the defendants, and refusing their offer of security` and that Fal`s cause of action was `palpably weak`. The appellate court was not of the view that Fal`s action was entirely without merit and `palpably weak`. Neither was it of that view in respect of Fal`s rejection of the initial offer of security. The trial judge`s decision on costs was therefore reversed and the costs of the counterclaim awarded to Fal (see [para ] 44-45).

· Found tt owner not liable in personam· One of arg was tt they kept changing cause of action – they were experimenting cause of action

· If u don’t know legal and factual matrix tt gives rise to right of arrest, cannot experiemtn cxuas of action with vessel

· If they do so, then shld pay because no reasonable basis· While the term ‘reasonable and probable cause’ was well established in actions for malicious prosecution,

the court was uncomfortable with the import of such a term into admiralty law as part of the test for wrongful arrest for a Bessel.

· The term ‘reasonable or probable cause’ would be too similar to the standard of proof for civil cases and would suggest that a plf who failed in his action on a balance of probability was liable to pay damages for wrongful arrest.

· That would be stating the threshold for wrongful arrest of a vessel at too low a level and would discourage potential plf from pursuing their claims because of the heavy damages which they might incur if they were subsequently unable to prove their claim at trial.

· The term ‘reasonable or probable cause’ would cause confusion and more importantly dilute the threshold required for an action in wrongful arrest to succeed.

· Why?· Wrongful arrest has its origins in the Tort of Malicious Prosecution which operates on the basis of a

‘beyond reasonable doubt standard. So the test suggested in The Evmar is too close to the ‘civil’ standard.· CA maintained tt action rightly dismissed but clarified law and said tt danger of importing principle of no

reasonable or probable cause which is principle peculiar to tort of malicious prosecution· No longer to rely on it as foundation to infer malice.· Court will still examine facts, etc· Determination of malice essetnail prereq for them to codemn litigant to wrongful arrest

The Trade Resolve [1999] 4 Slr 424· Letter of authority in Trade Resolve limited to arrest within port limits. · Departing from Sheriff’s orders implies malice satisfies the test. · Here still condemened to pay damages because knew no basis to proceed with arrest or cntinutaiton of

arrest· Judge relied on test of no reasonable or probable cause and found tt arrest wrongful· But submitted tt even if judge had applied test of gross negligence, wld still have reached same conclusion

on the facts· Here sheriff authorized plaintiff’s sols to serve writ and arrest vessel whtin port limits; vessel outside port

limits but plaintiffs maintained she was still within territorial waters; despite being aware tt vessel outside port liits, plaintiffs proceeded to arrest vessel which court ofund to be contemptuous act in deliberate and flagrant disregard of the limited auth granted to them

The AAV [2001] 1 SLR 207

Principle: · Entitled to damages for wrongful arrest as long as the arresting party had knowledge that the ship owner

was not in a contractual relationship with the arresting party. Facts: · Plf arrested df’s tug for failure to pay marine gas oil supplied to the tug. Df contended that the plf knew

that the tug was under a time charter to the charterers with fuel expenses to be borne by the charterers and not the df.

· Besides the contract for sale and purchase of marine gas oil was made between the plf and another coy, no relationship with the df ship owner.

· Whether df entitled to damages for wrongful arrest. · Party who broght claim against vessel knew tt prior to arrest, no cause of action because admitted it in

correspondence· In this clear case, court condemned litigant for damages for wrongful arrest · Question: Can not stating a material fact amount to malice. The plaintiffs` claim was for the balance

sum of US$77,251.74 being the price of marine gas oil supplied and delivered to the defendants` tug for her operation and/or maintenance at Singapore at the request of the defendants, their agents and/or servants. The plaintiffs issued a warrant of arrest against the tug. The defendants applied for an order that the writ of summons and warrant of arrest be set aside and that the tug be released from arrest forthwith. They also asked for damages for wrongful arrest. The ground of the application was that the court did not have jurisdiction over the proceedings under ss 3(1)(l) and 4(4) of the High Court (Admiralty Jurisdiction) Act (Cap 123) (`the Act`).

· The defendants contended that the plaintiffs knew that the tug was under a time charter to the charterers with fuel expenses to be borne by the charterers and not the defendants.

· The assistant registrar set aside the writ of summons and warrant of arrest and ordered the plaintiffs to release the tug from arrest forthwith. No order, however, was made on the application for damages for wrongful arrest. Both parties appealed. The issues on appeal were: (1) whether the High Court had jurisdiction to issue the admiralty writ against the tug; (2) whether there had been a material non-disclosure in the warrant leading to the arrest; and (3) whether the defendants were entitled to damages for wrongful arrest.

Held (Judith Prakash J), dismissing the plaintiff`s appeal and allowing the defendant`s cross-appeal: · (3).When an ex parte application is made for the arrest of the vessel, the affidavit leading the warrant of

arrest must disclose all material facts known to the deponent in relation to the arrest. The deponent of the affidavit must disclose those facts that are relevant to the making of the decision whether or not a warrant of arrest should be issued that is, a fact which should properly be taken into consideration by the court when weighing all the circumstances of the case though the disclosure of the fact might not have the effect of leading to a different decision being made (see [para ] 44).

· (4).The plaintiffs should have disclosed all the circumstances in which the orders had been placed. They should have informed the court that the orders were originally made by New Acmes purporting to act as agents for the defendants and why they believed this representation even though the Portnet search subsequently undertaken showed another entity as the tug`s general agent. It was also material, since the claim was for fuel supplied to a vessel for its operation, that at least 80% of the same had gone into another vessel rather than the tug (see [para ] 46). Since these facts were not disclosed, the warrant of arrest itself could have been set aside on this ground (see [para ] 47).

· (5).The plaintiffs` non-disclosure of material facts was intentional and malicious. Even if Mr Lui from New Acmes had made a representation to them that he was acting as agent for the defendants, the plaintiffs had acted recklessly in attempting to arrest the ship without any further investigation as to whether the defendants were in fact the persons who were contractually liable to them. There was information before them (ie the Portnet search) that that representation could have been false and they should either have carried out further investigations or at the least have disclosed the information to the court so that a proper assessment of the correctness of their claim could be made. Instead, they deliberately chose to leave out all information which would have caused doubt as to whether the defendants were the persons who would be liable in an action in personam (see [para ] 50). Thus, the defendants were entitled to damages for wrongful arrest (see [para ] 51).

· Court at the trial made finding of fact that the arresting party knew that the ship owner was not in contractual relationship with them no in personam liability did not fulfil first requirement of s4(4) of the Act.

· Plf had acted recklessly in attempting to arrest the ship without any further investigation as to whether the df were in fact the persons who were contractually liable to them.

· By not disclosing that they had supplied marine gas oil to the tanks of the barge and not directly to the tug, they had failed to include material facts in their affidavit leading to the conclusion that their act was intentional and malicious.

Judgment And Sale- • Judgment In Default (Order 70 Rule 20) – not examinable

Judgment by default (O. 70, r. 20)20. —(1) Where a writ is served under Rule 7 (5) on a party at whose instance a caveat against arrest was issued, then if — (a) the sum claimed in the action begun by writ does not exceed the amount specified in the undertaking given by that party or his solicitor to procure the entry of the caveat; and (b) that party or his solicitor does not within 14 days after service of the writ fulfil the undertaking given by him as aforesaid, the plaintiff may, after filing an affidavit verifying the facts on which the action is based, apply to the Court for judgment by default. (2) Judgment given under paragraph (1) may be enforced by the arrest of the property against which the action was brought and by committal of the party at whose instance the caveat with respect to that property was entered. (3) Where a defendant to an action in rem fails to enter an appearance within the time limited for appearing, then, on the expiration of 14 days after service of the writ and upon filing an affidavit proving due service of the writ, an affidavit verifying the facts on which the action is based and, if a statement of claim was not endorsed on the writ, a copy of the statement of claim, the plaintiff may apply to the Court for judgment by default. Where the writ is deemed to have been duly served on the defendant by virtue of Order 10, Rule 1 (2), or was filed or served under Rule 7, an affidavit proving due service of the writ need not be filed under this paragraph, but the writ endorsed as mentioned in the said Rule 1 (2) or endorsed by the Registrar with a statement that he accepts service of the writ must be filed with the affidavit verifying the facts on which the action is based. (4) Where a defendant to an action in rem fails to serve a defence on the plaintiff, then, after the expiration of the period fixed by these Rules for service of the defence and upon filing an affidavit stating that no defence was served on him by that defendant during that period, an affidavit verifying the facts on which the action is based and, if a statement of claim was not endorsed on the writ, a copy of the statement of claim, the plaintiff may apply to the Court for judgment by default. (5) Where a defendant to a counterclaim in an action in rem fails to serve a defence to counterclaim on the defendant making the counterclaim, then, subject to paragraph (6), after the expiration of the period fixed by these Rules for service of the defence to counterclaim and upon filing an affidavit stating that no defence to counterclaim was served on him by the first-mentioned defendant during that period, an affidavit verifying the facts on which the counterclaim is based and a copy of the counterclaim, the defendant making the counterclaim may apply to the Court for judgment by default. (6) No application may be made under paragraph (5) against the plaintiff in any such action as is referred to in Rule 3 (1). (7) An application to the Court under this Rule must be made by summons and if, on the hearing of the summons, the Court is satisfied that the applicant’s claim is well-founded, it may give judgment for the claim with or without a reference to the Registrar and may at the same time order the property against which the action or, as the case may be, counterclaim is brought to be appraised and sold and the proceeds to be paid into Court or may make such other order as it thinks just.

(8) In default actions in rem evidence may, unless the Court otherwise orders, be given by affidavit without any order or direction in that behalf. (9) The Court may, on such terms as it thinks just, set aside or vary any judgment entered in pursuance of this Rule. (10) Order 13 and Order 19 (except Rule 1) shall not apply to actions in rem.

1. Procedure – Ord 70 r20 May obtain judgment in default if:

(c) sum claimed in the action began by writ does not exceed the amount specified in the undertaking stated in the caveat against arrest;

(d) party does not fulfil undertaking pursuant to the caveat within 14 days;(e) df fails to enter appearance after 14 days;(f) df fails to serve defence after 14 days; or(g) df to a counterclaim fails to serve defence to the counterclaim.

Application to the court by motion and court may give judgment for the claim. The ct may set aside or vary any judgment entered in pursuance of this rule. Differences from normal civil claims?

(a) Application is by Motion(b) Must convince on the merits that the plaintiff has a good claim. [given the ‘in rem’ consequences]

2. Documentation: Generally require:

(a) proper service of writ by virtue of Ord 10 r1;(b) affidavit proving due service or writ;(c) affidavit verifying the facts on which the action is based;(d) copy of statement of claim; and(e) affidavit stating no defence/defence to counterclaim served (if applicable).

3. Intervener’s Rights (impt) Judgment against the whole world, require notification of proceedings. Parties interested could intervene as

interveners. O 70 r. 16.

o Where property is under arrest or moneys representing the proceeds of sale of that property are in court – a person with interest [need not and does not have to be anything to do with the original subject-matter of the action, or the matter in dispute – The Soeraya Emas] may with leave of court intervene in the action.

Application made Ex-parte with affidavit showing the ‘interest in the property’. R. 16(2) An Intervenor does not prosecute his claim in the action in rem in which he has intervened.

o He can only protect his interest by Defending the action.

Soeraya Emas [1992] 1 SLR 33 Principle: · Interveners are permitted to set up defences which the owners of the ship could have set up had they

defended the action.

Facts: · Mortgagees obtained an order of court to declare the validity of their mortgage thus giving them liberty to

enter final judgment for their claim with the consent of the df ship owners. · Inter Maritime intervened and claimed an interest for having disbursed several expenses to the vessel and

applied to set aside order of court or alternatively for a declaration that the order shall not be binding on them.

· Registrar held Inter Maritime had no locus standi in the proceedings since df had already consented to the order.

Held (Karthigesu JA)· A person who has been given leave to intervene in an admiralty action in rem protects his interests in the

property by defending the action in rem.

· Permitted to set up such defences which the owners of the ship could have set up had they defended the action.

· The court needs only to be satisfied that the contentions of Inter Maritime have merit. As long as there is merit in their case, they have locus standi for if they succeed in challenging the validity of the mortgage, their claim will rank before the plf’s.

· (1).By appearing, the action continues against the defendant shipowner as an action in rem and also as an action in personam. In so far as Inter Maritime were concerned, these proceedings were and still are an admiralty action in rem, but in so far as the defendants are concerned, by reason of their appearance and albeit by their consent, a judgment has been entered against them for which they are also personally liable. The order of court dated 21 July 1989 therefore binds only the plaintiffs and the defendants. Inter Maritime had not then entered appearance and could not therefore have consented.

· (2).Since these proceedings still remain an admiralty action in rem vis-a-vis all persons having an interest in the Soeraya Emas, except the defendants, the right to intervene is governed by O 70 r 16.

· (3).A person who has been given leave to intervene in an admiralty action in rem protects his interest in the property by defending the action in rem. He is permitted to set up such defences which the owners of the ship could have set up had they defended the action. At this stage, the court needs only to be satisfied that the contentions of Inter Maritime have merit, and the court was so satisfied. They have locus standi for if they succeed in their defences of challenging the validity of the mortgage, their claim will not rank after the plaintiffs` claim.

· (4).On the facts and circumstances of these proceedings, natural justice also demands that Inter Maritime should be given an opportunity to be heard. They have defences to the plaintiffs` claim and should be allowed to raise them and it cannot be seen how the plaintiffs can thereby be prejudiced

NOTE:· Intervenors do not have locus standi to raise issues not pertinent to the protection of his interest – The

Lord Strathocona. · The requirement of an interest in the ship or the proceeds of sale may hinder a party who does not have such

an interest but is nonetheless adversely affected by the Arrest.· BUT court has an inherent jurisdiction to allow such parties to intervene.

- • Appraisement And Sale (Order 70 Rule 22)

Appraisement and sale of property (O. 70, r. 22)22. —(1) A commission for the appraisement and sale of any property under an order of the Court shall not be issued until the party applying for it has filed a Request4 in Form 169. (2) Such a commission must, unless the Court otherwise orders, be executed by the Sheriff and must be in Form 170. (3) A commission for appraisement and sale shall not be executed until an undertaking in writing satisfactory to the Sheriff to pay the fees and expenses of the Sheriff on demand has been lodged in the Sheriff’s office. (4) The Sheriff shall pay into Court the gross proceeds of the sale of any property sold by him under a commission for sale and shall bring into Court the accounts relating to the sale (with vouchers in support) for taxation. (5) On the taxation of the Sheriff’s accounts relating to a sale any person interested in the proceeds of the sale shall be entitled to be heard, and any decision of the Registrar made on the taxation to which objection is taken may be reviewed in the same manner and by the same persons as any decision of a Registrar made in taxation proceedings under Order 59, and Rules 34 and 35 of that Order shall apply accordingly with the necessary modifications.

Very harsh remedy – Court ordered sale of the vessel. Usually only ordered when the court is satisfied that the S/O cannot put up security and the

residual security after deducting sheriff’s expenses is not substantially insufficient to meet the claims.

2 forms of Judicially effected sale : Sale Pendente Lite Judicial Sale.

Sheriff in both types of sale must obtain minimally the ‘appraised’ value of the vessel. Cannot sell for a price below that without leave of court.

Sale pending litigation – courts will decide if the sale should be carried out. [Sale Pendente Lite]

- Eg: If vessel is worth $50 mil, and claim is worth $5 mil, unlikely will order vessel to be sold.

The funds and proceeds will be frozen until judgment entered.

1. Procedure & Documentation: (a) File praecipe in Form 165(b) Obtain order of Court to set up commission for the appraisement and sale of property(c) Commission must be executed by Sheriff in Form 166(d) Commission shall be executed only after an undertaking in writing to the Sheriff to pay the fees and

expenses of the Sheriff on demand has been lodged in the Sheriff’s office. (e) Sheriff will pay into the courts the gross proceeds of the sale. (f) Proceeds will be frozen pending judgment.

General Order Of Priorities – EXAMS!!!!- For each priority claim, there is sub priority claim – note!!- Order 70 rule 21

1. MPA Port Dues [By s 29 MPA] – Statutory Power to distrain. - English cases have taken a semantically different view that the MPA is over and above the priority

rankings [i.e. outside of priorities]. - Singapore?

o Head of Priority ranking. [The Felicie]

The Felicie [1992] 1 slr 175,

Principle: · Law confers the highest priority on port fees. · Irony that the successful party did not secure a single cent from the judgment after accruing huge costs! Facts: · Due to alleged fraud, vessel was not sold pending litigation and was under arrest for 10 years· By time came to trial, was in 80s· Plaintiffs won but vessel rotting away · Port dues came up to an approximate sum of $190,000. The vessel was finally 10 years later. · Query whether port dues can be recovered from proceeds of sale of the vessel as party of the sheriff’s

expenses and in priority to all other items of the sheriff’s expenses. Held , ordering payment out to PSA: · (1).PSA cannot invoke the admiralty jurisdiction of the court to enforce a claim for port dues and had no

right to intervene in these proceedings. PSA should have persuaded the sheriff to apply to the court in his name, by agreeing to indemnify the sheriff of all costs and expenses, to resolve the question.

· (2).The Act provides two means of recovery for port or other dues. Section 64 gives a power to distrain. Subsections (1) and (2) give a power to arrest and sell respectively. Subsection (3) enables the PSA to detain a vessel without arrest until all dues are paid by giving notice to the port master who will then not grant the ship port clearance. In addition to the aforesaid, s 65 enables recovery to be made by civil proceedings.

· (3).There is no requirement for the PSA to first obtain judgment in civil proceedings before enforcing a claim for port dues. The person who should be sued for the dues is the owner of the vessel.

· (4).The right of a port authority to detain and sell a ship for dues is a statutory possessory lien and stands in priority to all other claims. The court can order the ship to be sold free of all these rights whilst transthem with equivalent priority to the proceeds of sale in court. The port dues thus are a first charge on the proceeds of sale of the ship.

· (5).The Singapore practice of the sheriff treating the PSA port dues and other dues as part of his expenses is well founded and established since well before 1976. The PSA was thus entitled to be paid the port dues in the sum of $196,560 as a paramount first priority payment out of the proceeds of sale of the Felicie.

Held (Karthigesu J): · Right of a port authority to detain and sell a ship for dies is a statutory possessory lien and stands in priority

to all other claims. The court can order the ship to be sold free of all these rights while transferring them with equivalent priority to the proceeds of sale in court. The port dues thus are a first charge on the proceeds of sale of the ship. – for historical reasons. Privilege to continue.

· Singapore practice of the sheriff treating the PSA port dues as part of his expenses is well founded and established. PSA was thus entitled to be paid the port dues as a paramount first priority payment out of the proceeds of sale of the Felicie.

Comment· Effect of The Felicie is that even if the MPA does not exercise its statutory right to distrain under s 29

MPA, the port dues can nonetheless be recovered as Sheriff’s Expenses! – so the MPA will not be relegated to the mere status of a statutory lienee.

· [E.g. of MPA not exercising its statutory rights to distrain – i.e. by bringing an in rem action !!!] nonetheless, will be part of sheriff expenses.

The Hurst [1999] 1 SLR 237 Principle: · Paramount claim from PSA remained even after its conversion to MPA. Facts: · Vessel was arrested on 14 March 1997, but Notification governing provision for port dues for MPA came

into effect only on 9 April 1997. · Contention that MPA was not entitled to port dues because 1997 Notification did not impose port dues for

vessels arrested before it came into force. · Argued tt felicie unfair but same judge held tt priority to continueHeld (Choo Han Teck JC): · Before it was replaced by the 1997 Notification, PSA scale of port dues via the 1994 Notification applied to

any vessel in port, whether under arrest or otherwise. Therefore the 1994 Notification would continue to apply to The Hurst and MPA entitled to port dues.

· Practice of treating port dues as part of sheriff’s expenses prevailed and MPA still has top priority to proceeds of sale.

Brave attempt in The Hurst to challenge The Felicie. But failed.

2. Sheriff’s costs and expenses Rankng pari passu Includes undertaking given by law firm. However, MPA port dues may wipe out claim as demonstrated in The Felicie.

3. Plf’s costs of and Incidental to the arrest of the vessel and other costs which court may award in priority to all other claims except sheriff’s expenses Does not include all costs, only costs of and incidental to the actual arrest of the vessel (ie

disbursements etc…) Pl’s substantive costs not covered!

Substantive costs follow the ranking of the claim. *** Cannot split up the costs

4. Salvage claims – claims for costs, fees and expenses and damages last salvage takes priority own order for priority in this the last salvage in time has highest priority because ifnot for last salvor there wld be no ship within each claim, whichever existed earlier will get priority over the later one.(applies to other

categories as well)

5. collision claims – claims for damages 1st collision takes priority

6. Crew claims [Wage Maritime Lien] • Wages And Disbursements Of Master And Crew

**These are maritime liens BEFORE possessory liens arises

7. Possessory claims in respect of unpaid repairs [Ship Repairers possessory Lien – comes into effect the Moment the Ship enters the shipyard – i.e. into the effective possession of the yard. Exists until the yard loses possession – The Tergeste.

- Typically relate to shipyards- Logic – when shipyard repairs vessel, it wld have improved the vessel/chattel, therby enhancing its

value- Therefore shld be given some measure of priority- Essence: In order to exercise a possessory lien, the lienee (shipyard) has to be in actual or constructive

possession. If possession given up, priority lost and shipyard only becomes a SLienee.- (While custody transferred to sheriff, possession remains with shipyard, thereby possessory lienee who

effects arrest cot to enjoy adv of possessory lien)

POST POSSESSION MARITIME LIENS:8. Subsequent maritime liens – almost impossible for maritime liens after vessel is already subject to a

possessory claim. Usually claiming for wages. Crew wages prior to vessel being sent to the shipyard rank in priority of

possessory claims but crew wages after ship in dry dock rank after possessory claims. ML which accrued after the yard came into possession of the vessel for repairs. This will follow the

same order of priority in 4-6 (but practically, only ML which will arise is for wages).

9. Mortgagee• Claim By Mortgagee

10. all other unsecured claims - Claim by other claimants having stat lien on vessel [Statutory Lienee] – such stat lien will rank pari passu. Ie rights under s3.1

***Order Not Immutable but at discretion of court (though court rarely departs from it)

The Eastern Lotus [1980] 1 Mlj 137 At Page 141

Principle: · Order of priorities not immutable but subject to the requirements of justice.· Court can depart from ranking – The Eastern Lotus

Case where order of priority between wages and collision – PF, in order to ensure that the vessel does not incur too many claims, decided to go to Court for order to repatriate the crew. PF paid crew wages and repatriation expenses and sought to be subrogated to crew’s rights. – then have wages ranked as sheriff’s expenses

Subsequently, DM Lienee sought to have priority (collision).Facts: · Mortgagees had obtained an order of court for the payment of wages and disbursements of the master and

crew and monies for repatriation of master and crew. In exchange, the rights of master and crew were to be subrogated to the mortgagee.

· Claims for collision arose after mortgagee had obtained order of court and made relevant payments. · Whether mortgagee should be entitled to payment before damage claims arising from collision. Held , dismissing the appeal: · (1).In spite of the general order of priorities, a court, in the exercise of its admiralty jurisdiction, was

entitled to have regard to the equities in any particular case before it. · (2).It was common ground that in general a claimant for damage caused by the ship had priority over

a claim for wages. However, in the present case, the judge was right in concluding that on the facts, it would be an injustice if the respondent were deprived of the payment they made, acting on the order of court of 17 March 1978.

· ‘It is common ground that the owners of the vessel are insolvent. It is common ground that the general order of priorities as developed by the authorities and settled admiralty practice are now well established. The question is whether the order of priorities as so established are now immutable or whether a court, under its inherent jurisdiction, depending on the facts, can alter the order of priorities in any particular case. It is common ground that in general a claimant for damage caused by the ship has priority over a claim for wages. The authority for this is the case of the Linda Flor ER 1150. The judgment of Dr Lushington reads as follows:

· However, it appears from these two decisions that a court, in the exercise of its admiralty jurisdiction, is entitled, in spite of the general order of priorities, to have regard to the equities in any particular case before it. In the present case it is conceded that the owners of the vessel are insolvent. The crew were all

foreign and the sheriff could not carry out the commission for appraisement and sale without first making arrangements for the crew to leave the vessel and for their repatriation. The claim of the appellants for damage to an installation in Poland was not known to the sheriff, the mortgagees, the owners of the vessel or the court when the court made the order of 17 March 1978. The respondents as mortgagees were under no obligation to make funds available to the Sheriff to carry out the commission for appraisement and sale. They made full disclosure of all the facts within their knowledge. They were entitled to protect their property and did not make the payment as a volunteer but after consultation with the sheriff and pursuant to an order of the court. The appellants, on the other hand, merely relied on the established order of priorities and that they would be seriously prejudiced by the order of court. They have not indicated in their affidavit when they suffered the damage to the installation in Poland. They merely denied that they have been sluggish or deliberately lying low with a view to inducing someone else to expending money to his detriment.

· We agree with the conclusion arrived at by TS Sinnathuray J that on the facts before him it would be an injustice if the respondents are now deprived of the payment they made, acting on the order of court of 17 March 1978. In the result the appeal is dismissed with costs.’

· Appeal dismissed · Held (TS Sinnathuray J):

· Court held unfair for priority to be enforced inflexibly because PF would not have gone to Court for order to be allowed to pay the crew and be subrogated to crew’s claim if he’d known there was a collision. As PF would be prejudiced if priority enforced in the usual way, order not followed.

· In spite of the general order of priorities, a court in the exercise of its admiralty jurisdiction was entitled to have regard to the equities in any particular case before it.

· It would been an injustice if the mortgagees were deprived of the payment they had made acting on the order of court.

Order of Priorities - Checklist:

MPA Port Dues Sheriff’s Undertakings Costs of and incidental to the arrest Salvage – damages Collision – damages Crew claims Possessory liens Other maritime lines Mortgagees Statutory liens

Comparing Arrest Remedy With Mareva Injunction - Substantive And Procedural => litigants try to bring themselves wihtin in rem juris

1. Comparing arrest remedy with mareva injunction – substantive and procedural

- Jurisdiction- Arrest remedy is only available in in rem proceedings whereas an injunction is essentially an in

personam remedy. - To arrest a vessel, the claimant must satisfy the requirement under s4(4) of the HC (AJ) Act. - The HC (AJ) Act is available to arrest vessels for 3 broad claims:

a. Ownership, possession and mtgeb. ML – dealing with salvage, collisions, and wages, arising by operation of law and

attached to ship on date when claim arose; fater lien created, follows ship despite any subseq change of ownership

c. SL – main grp of maritime claims classified as stat liens – include cargo claims, charterparty disputes, repairs, supplies, agency expenses etc; only created when reqts of s4.4 HCAJA satisfied

- Change of ownership

- Where the claim fall within section 3(1) of the Act and does not confer a ML, the right to proceed in rem is extinguished if there is a valid and bona fide change of ownership prior to the issue of the writ

- • The monica s [1967] 2 lloyd’s rep 113- • the fierbinti [1994] 3 slr 864

- Vessels owned by related companies- So long as the the corporate structure is firmly in place before the cause of action accrued, it is OK o

incorporate one-ship companies for the benefit of the Group- The skaw prince- Both one local and eng case that says this- Legitimate way to limit liab

- But if the one-ship companies were created after the cause of action accrued, the transfer could be challenged on the basis that it is a sham

- Accordingly, vessels owned by related companies cannot be arrested unless there is evidence to lift the corporate veil or to show that the transfer is a sham

- • The Pangkalan Susu / Permina 3001 [1997] 2 Mlj 129- therefore they are identified as the liable person- but only if you lift the corporate veil

- Bareboat charterparty- Under the Act, the person who would be liable in an action in personam must also be the beneficial owner of

the vessel at the time when the writ was issued- The Singapore CA in The Pangkslan Susu, held that “ownership” connotes legal or equitable title.

Possession or control of a vessel, however full and complete, is not beneficial ownership of the vessel.- Accordingly, the bareboat charterers of a vessel are not her beneficial owners. Thus claimant cannot arrest

vessel bareboat chartered out

- One Ship One Arrest Rule- For every cause of action, a claimant can arrest only one ship – The Damavand (1993)- If there are many causes of actions, then can arrest as many ships as there are causes of actions- Claimant is only entitled to security up to the value of the arrested vessel rather than the full amount of his

claim – The Charlotte (1920)- The combined effect of both rules is that the claimant will not be able to obtain security for that part of his

claim which exceeds the value of the vessel arrested and he cannot arrest another vessel for the excess amount. Hence, part of the claim will be unsecured. Accordingly, where the claim is for a very substantial amount, the value of the vessel should be considered first before arresting - • The banco [1997] 1 lloyd’s rep 49- • the damavand [1993] 2 slr 717- • the charlotte [1920] p 78

Types of Claims- Mareva remedy is available for all types of claims provided the requirements are satisfied- But, the types of in rem claims are exhaustively listed in section 3(1) HC(AJ)Act (see the provision)- Note that not all claims which are maritime in nature would give rise to an in rem claim. Claims such as

container hire, marine insurance premiums, stevedoring services and dispute under sale and purchase of vessels do not give rise to in rem claims although they are maritime in nature

- As such, with regard to these claims you must resort to the mareva remedy if you want to obtain pre-judgement security

Availability- An arrest is given as of right so long as the claim falls within the admiralty jurisdiction of the HC of

Singapore. The only pre-requisite to the issue of a warrant of arrest is a valid issuance of the writ of summons – The Evmar; The Vasso

- Mareva Injunction is purely a discretionary remedy. A claimant is only entitled to an injunction if he can satisfy the Court that there are grounds to believe that the Df will deliberately dissipate or remove his assets to defeat the claim- The evmar [1989] 2 mlj 460- The vasso [1984] 1 lloyd’s rep 235

Types of Arrest- For in rem proceedings, only the vessel can be arrested- For a mareva injunction, any asset belonging to the Df can be the subject matter of attachment, such as

bunkers, bank account, claim against an insurance policy

Location of Assets- in order to arrest a vessel, the vessel must be within the jurisdiction of the HC of Singapore- A Mareva injunction can attach to any asset of the Df so long as the Df is amenable to the jurisdiction

of the court of Singapore.- Unlike an arrest, it is possible to obtain a worldwide injunction. (this is rarely given because of

enforcement difficulties)

Third Party Rights- So long as a valid in rem writ is issued, the court can order the arrest of the vessel. It does not matter

that the arrest will affect third party rights such as cargo owners, the charterers etc.- However, for a mareva injunction, third party rights cannot be interfered with. Innocent third parties

can apply to court to discharge the injunction on the basis that the injunction is affecting their rights – The Eleftherios (1982)

Ease of Application- To apply for a warrant of arrest, the application is made ex parte. So long as the claim prima facie falls

within the admiralty jurisdiction of the HC of Singapore, the warrant of arrest will be issued by the Registrar

- To apply for a mareva injunction, the application is more complicated. In the first place, it must be heard by a HC judge. The obligation to provide full and frank disclosure of material facts is more onerous for a mareva injunction than it is for an arrest

Exposure to damages- For an arrest, damages are only payable if the claimant can prove that the arrest was malicious or

without reasonable or probable cause – The Evmar. This is a very difficult burden to discharge- For a mareva injunction, an undertaking to pay damages is mandatory before the grant of an injunction.

Any party who has suffered loss or incurred expense as a result of the injunction is entitled to claim on the undertaking without having to prove malice. For an injunction, an undertaking to pay damages is invariably ordered. Such an undertaking may be required to be fortified by way of a bank guarantee in some circumstances.

- For an arrest, such an undertaking is not required. The undertaking is merely to pay the sheriff’s expenses

The Nature of Relief- Relief by way of Mareva injunction does not confer any proprietary rights over the assets which are the

subject matter of the injunction – Cretanor Maritime Company v Irish Marine Management (1978)- But, the issue of an in rem writ could constitute an encumbrance on the vessel – The Monica S (1968)- Once an in rem writ is validly issued, the claimant acquires a status of a secured creditor for the

purposes of winding up proceedings – The Hull No. 308 (1991)

Subject to Variation/ Discharge- Mareva injunction is subject to variation of discharge at the instance of the Df on consideration s of

commercial convenience or to enable the Df to meet his contractual or other obligations or even to pay his debts – The Angel Bell (1981)

- But, an arrest is final unless it is set aside on limited grounds such as want of jurisdiction or abuse of process, or where it is lifted following provision of security to the Pf for the claim – The Moschanthy (1971)

*** Tutor said we will might be asked to draft an Indorsement of Claim This document accompanies the Writ when served on D:

" The Plaintiff, as the owner of a cargo of  15,000 tons of rice shippedonboard the Defendant's ship, NEPTUNE, &/or as the lawful holder of the B/L

No.1 dated 1st Jan 01, claim damages from the Defendant for loss of anddamage to the cargo during the voyage from Bangkok to  Singapore  in themonth of Jan 01 sustained by reason of the Defendant's breach of contractand/or duty and/or negligence in and about the carriage thereof. "

Comparing Arrest Remedy with Mareva Injunction

Arrest Remedy Mareva Injuction

Jurisdiction As long as requirements under s4(4) of the Act is satisfied, the claimant is able to arrest vessels for 3 broad categories of claim: (a) ownership, possession and

mortgage;(b) maritime liens; and (c) Statutory liens.

Problems relating to arrest are found in Admiralty (1) + (2). They are namely: (a) change of ownership;(b) vessels owned by related

companies;(c) bareboat charterparty;(d) One ship, one arrest rule.

Mareva Injunction may only be carried out if (s16 SCJA): (a) party submits to the jurisdiction

of the Singapore Courts;(b) Is served in Singapore in

accordance to Ord 10 ROC(c) Is served outside Singapore in the

circumstances authorised by and in the manner prescribed by Ord 11 ROC.

Types of Claims Types of in rem claims are exhaustively listed in s3(1) of the Act.

Mareva is available for all types of claims.

Availability An arrest is given as of right as long as the claim falls within the admiralty jurisdiction of the High Court of Singapore. Only pre-requisite to the issue of a warrant of arrest is a valid issuance of the writ of summons.

Mareva is a discretionary remedy, only entitled to a Mareva if there are grounds to believe that the df will deliberately dissipate or removed his assets to defeat the claim

Types of Arrest Can only arrest a vessel. Can arrest any asset.

Location of Assets Vessel must be within the jurisdiction of the High Court of Singapore (within Port Limits)

Can attach to any asset in any part of the world as long as the df is amenable to the jurisdiction of the Court of Singapore.

3rd Party Rights As long s there is a valid writ, does not matter that the arrest will affect 3rd Party rights.

3rd Party rights cannot be interfered with; innocent 3rd parties can apply to court to discharge the injunction.

Ease of Application Application is made ex-parte. Made before a High Court judge.

Required to provide full and frank disclosure.

Requirement to provide full and frank disclosure. Obligation of disclosure is more onerous for Mareva than for arrest.

Exposure to Damages

Damages are only payable if the claimant can prove that arrest was due to bad faith or gross negligence implying malice.(No undertaking but can be liable for wrongful arrest)(Only undertaking in Arrest is that to pay the Sheriff’s Expenses)

Party who had suffered loss or incurred expense as a result of the injunction is entitled to claim on the undertaking to pay damages (which is mandatory for applicants applying for a Mareva injunction) without having to prove malice.

Nature of Relief Confer proprietary right of vessel, stand as secured creditor in winding up.

Does not confer any proprietary right over assets which are subject matter of the injunction. Because the Mareva operates in personam – court is ordering the defendant to stop dissipating his assets – not ordering his ‘assets’!

Subject to Variation / Discharge

Final unless set aside on limited grounds .ie. lack of jurisdiction, abuse of process etc.

Subject to variation or discharge at the instance of the df on considerations of commercial convenience.- Conditions for Mareva injunction are now stated in the Standard Orders for a local Mareva and a Worldwide Mareva.