Admiralty and Shipping Law

• Date: 01 December 2016
• Author: TOH Kian Sing SC LLB (Hons) (National University of Singapore), BCL (Oxon); Advocate and Solicitor (Singapore). CHAN Leng Sun SC LLB (Malaya), LLM (Cantab); Advocate and Solicitor (Malaya), Advocate and Solicitor (Singapore), Solicitor (England and Wales).
• Publication year: 2016
• Published date: 01 December 2016

[NB: The admiralty law section was contributed by Toh Kian Sing SC; and the shipping law section was contributed by Chan Leng Sun SC.]

ADMIRALTY LAW

2.1 The year 2016 saw a total of six mostly lengthy admiralty decisions handed down by the Singapore courts – two by the Court of Appeal, and four by the High Court. These decisions are reviewed below.

Jurisdictional challenge on the basis of affidavit evidence or trial

2.2 In The Chem Orchid,1 the Court of Appeal affirmed the decision of Steven Chong J in The Chem Orchid2 (“The Chem Orchid (HC)”), primarily on procedural grounds.

2.3 In this case, Han Kook Capital Co Ltd (“HKC”), the owners of the Chem Orchid, had applied to set aside the writs on the basis that the court's admiralty jurisdiction had not been validly invoked. HKC contended that at the time the writs had been issued, the party who was liable on the claims, that is, the bareboat charterer, Sejin Maritime Co Ltd (“Sejin”), was no longer the demise charterer of the vessel and as such, the requirements of s 4(4)(i) of the High Court (Admiralty Jurisdiction) Act3 (“HCAJA”) were not satisfied.4 This section of the review only covers the admiralty law aspects of the Court of Appeal's decision.

2.4 The underlying facts leading up to the decision in The Chem Orchid (HC) are more fully set out in a previous review.5 Like the hearing at first instance, the issue facing the Court of Appeal was whether or not, on the balance of probabilities, the relevant person (that is, Sejin) for the purposes of s 4(4)(i) of the HCAJA was, at the time the action was brought, the demise charterer of that ship.6

2.5 The appeal was dismissed on two alternative grounds. First, the court ruled that the setting-aside applications were, in substance, similar to a striking out application under O 18 r 19 of the Rules of Court7 (“RoC”). Under s 34(1)(e) of the Supreme Court Judicature Act8 (“SCJA”) read with para (e) of the Fourth Schedule, there will be no avenue of appeal to the Court of Appeal if the striking out application is not allowed. Alternatively, assuming that this was an interlocutory decision in respect of which leave of court to appeal to the Court of Appeal, the court observed that no leave of court was sought from Chong J under s 34(2)(d) of the SCJA read with para (e) of the Fifth Schedule. The court was not prepared to grant such leave.

2.6 Apart from dismissing the appeal, the Court of Appeal also took the opportunity to endorse the observations of Chan Sek Keong CJ in The Bunga Melati 5.9 In essence, Chan CJ's view, which the Court of Appeal reiterated, was that a shipowner who challenges the admiralty jurisdiction of the court on a factual issue has a choice of whether to mount that challenge by relying on affidavit evidence alone or to put forward the testimony of witnesses with cross-examination of such witnesses. If he elects the former, any finding by the court that it has admiralty jurisdiction will only be on a preliminary and interlocutory basis; there is no conclusive finding on affidavit evidence alone. The Court of Appeal reasoned that “[t]he issue of jurisdiction will then merge with the plaintiff's substantive claim at the trial, which will have to be proved by the plaintiff on the balance of probabilities”.10 If, however, the defendant chooses the latter, that is, to have a conclusive finding on jurisdiction and to have a full hearing on the jurisdiction issue, the court can decide the issue conclusively.

2.7 The Court of Appeal noted that in its earlier decision of The Jarguh Sawit,11 it had held, inter alia, that the question of the court's

jurisdiction is a procedural (as opposed to substantive) issue,12 and that once the question of the court's jurisdiction is determined at the interlocutory stage, “the question of jurisdiction cannot be tried again”.13 The unqualified nature of this proposition, clearly, cannot stand with the court's adoption of Chan CJ's approach. The Court of Appeal, therefore, took the opportunity to clarify that its comments in The Jarguh Sawit ought to be read in context, that is, where there is an interlocutory challenge to the court's exercise of admiralty jurisdiction.14 Thus, once an applicant's interlocutory challenge to the court's exercise of admiralty jurisdiction has been dismissed with finality, the applicant cannot, at trial, mount a further jurisdictional challenge since, at trial, the court will not be deciding whether or not there is good cause to assume jurisdiction, but rather, will be deciding whether there is good cause for judgment to be rendered in the plaintiff's favour.15

2.8 On the facts of The Chem Orchid, the Court of Appeal observed that the question of the disputed jurisdictional fact (viz, whether or not Sejin was still the demise charterer of the vessel at the time the writ was issued) involved the application of foreign law (that is, Korean law) and could not be proven conclusively on the balance of probabilities at the interlocutory stage.16 This was because the applicant, in seeking to set aside the writs, relied solely on affidavit evidence and did not apply to court to have the relevant witnesses examined orally, by way of a “mini-trial”, as suggested by Chan CJ in The Bunga Melati 5.17 In the circumstances, by relying solely on affidavit evidence, Chong J could only have decided the disputed jurisdictional fact on a prima facie basis, which would be non-conclusive of the jurisdictional issue in question,18 leaving the possibility that the issue be conclusively determined at trial. His Honour's decision that Sejin was still the relevant person did not affect the substantive right of the parties and was, therefore, an interlocutory (as opposed to final) decision. The upshot is that (on the court's alternative reasoning) leave to appeal is required under s 32(2)(d) read with para (e) of the Fifth Schedule of the SCJA.

2.9 The Chem Orchid builds on the Court of Appeal's previous decision in The Bunga Melati 5 in terms of the conclusiveness of a finding on a jurisdictional issue. The defendant now has a choice as to whether he wants a conclusive finding on the issue. If he does, he may

have to consider a “mini-trial” of the issue, if it is in fact centric, by way of oral testimony of witnesses, rather than merely relying on affidavit evidence, which is the more conventional route.

Whether an agreement to procure an agreement relating to the use or hire of a ship itself falls within s 3(1)(h) of the HCAJA

2.10 In Likpin International Ltd v Swiber Holdings Ltd,19 the appellant, Likpin International Ltd (“Likpin”), appealed against the High Court's decision to strike out the writ. Likpin contended that it had entered into a procurement agreement with the first respondent, Swiber Holdings Limited (“Swiber”), in respect of the intended charter of a pipe-laying vessel (“Procurement Agreement”).20 The appellant further contended that the second respondent had procured or induced a breach of or unlawfully interfered with the Procurement Agreement.21

2.11 The Court of Appeal, in a brief judgment, affirmed the High Court's decision in finding that the claim was legally and factually unsustainable.22 In so far as the appellant's case on the court's admiralty jurisdiction was concerned, the appellant contended that its claim in respect of the Procurement Agreement comes within s 3(1)(h) of the HCAJA, viz, a claim “arising out of any agreement relating to the carriage of goods in a ship or to the use or hire of a ship” [emphasis in original].23 In particular, the appellant's case was that the Procurement Agreement was not a charterparty in itself, but rather, an agreement between the appellant and Swiber for the latter to procure the second respondent to enter into a charterparty with the appellant on terms.24 In other words, the appellant's case was that the Procurement Agreement, as an agreement to procure a charterparty, was in the nature of an agreement to procure an agreement relating to the use of hire of a ship, and as such, it comes within the scope of s 3(1)(h).

2.12 The Court of Appeal considered and agreed with the previous High Court decision of The Catur Samudra,25 where the High Court considered the expression, “relating to”, in s 3(1)(h) of the HCAJA imposes the requirement that the agreement in question is to have some “reasonably direct connection with [the use or hire of a ship]”.26 Given

that the words, “relating to”, in s 3(1)(h) of the HCAJA ought to be read narrowly, the court held, albeit provisionally, that it excludes a collateral or separate agreement independent of a charterparty or bill of lading, unless it is “intrinsically related to the use or hire of a vessel”.27

Appealing against a court order awarding damages for the wrongful arrest of a vessel

2.13 The High Court's decision in The Xin Chang Shu28 (“The Xin Chang Shu (No 2)”) arose out of the plaintiff's attempt to overturn the High Court's decision to, inter alia, award damages for wrongful arrest with such damages to be assessed (“Wrongful Arrest Order”). The High Court's decision in respect of the Wrongful Arrest Order is set out in The Xin Chang Shu.29

An application for leave to appeal the wrongful arrest order

2.14 In so far as the plaintiff's attempt to overturn the Wrongful Arrest Order is concerned, the key issue which the High Court considered was whether or not the said order is an “interlocutory order” for the purposes of para (e) of the Fifth Schedule to the SCJA,30 for which leave to appeal is required.31 Following the framework established by the Court of Appeal in Dorsey James Michael v World Sport Group Pte Ltd,32 the High Court held that the structure of s 34 of the SCJA, in determining matters that are non-appealable or appealable only with leave, is clear.33 Section 34(1)(c) of the SCJA provides that orders specified in the Fourth Schedule of the SCJA are non-appealable, save as provided in that Schedule, and s...