In Re DONG MY ONG

• Jurisdiction: Singapore
• Judge: Tay Yong Kwang JC
• Judgment Date: 22 September 1999
• Neutral Citation: [1999] SGHC 248
• Court: High Court (Singapore)
• Year: 1999
• Published date: 07 March 2013
• Plaintiff Counsel: Belinda Ang, S C and Gan Seng Chee (Ang & Partners)
• Defendant Counsel: Sin Lye Kuen (Khattar Wong & Partners)
• Citation: [1999] SGHC 248

JUDGMENT:

GROUNDS OF JUDGMENT

1 The Plaintiffs’ claim, as shown in the endorsement of claim in the Writ of Summons, is for damages for conversion of their cargo of Indian solvent extracted toasted yellow soyabean meal in bulk and/or breach of contract and/or negligence. The said cargo was on board the Defendants’ vessel ‘Dong Myong’ from Kakinada, India and was supposed to have been discharged at Shekou, China.

2 On 3 July 1999, the Plaintiffs arrested the vessel ‘Sangwon’ of the port of Nampo, North Korea owned by Yuson Shipping Co Ltd ("Yuson"). In the affidavit leading the arrest, it was stated that the Plaintiffs’ claim was brought under Section 3(1)(g) and/or 3(1)(h) of the High Court (Admiralty Jurisdiction) Act and that they were invoking Section 4(4) of the said Act to effect the sister-ship arrest. The Plaintiffs claimed that the Defendants were, at the time the cause of action herein arose, the owners or charterers or persons in possession or in control of ‘Dong Myong’ and that the Defendants were the persons who would, apart from Section 5 of the said Act, be liable to the Plaintiffs in an action in personam and were also, at the date of the issue of the Writ of Summons (i.e. 25 May 1999), the beneficial owners of ‘Sangwon’ as respects all the shares therein.

3 At the material time, ‘Dong Myong’ flew the flag of North Korea but the owners of the vessel were not identified in Lloyd’s Register of Shipping. The Plaintiffs relied on the advice of Professor Chin Kim, a legal expert on North Korea law from California Western School of Law, that under North Korean law, all North Korean flagged vessels were beneficially owned by the State.

4 On 6 July 1999, the owners of ‘Sangwon’ entered an appearance and one week later applied to set aside the Plaintiffs’ Writ of Summons and their Warrant of Arrest on the ground that the admiralty jurisdiction of the High Court had been wrongly invoked in this action. They also sought an enquiry as to damages suffered by ‘Sangwon’ by reason of the arrest.

5 The learned Assistant Registrar set aside the proceedings in respect of ‘Sangwon’ and ordered the Plaintiffs to pay the Defendants $8,000 as costs of this action. The order was stayed by the Assistant Registrar pending an appeal against his decision. As Counsel for the Defendants indicated that he was not pursuing the prayer for an enquiry as to damages, no order was made thereon.

6 I allowed the Plaintiffs’ appeal against the learned Assistant Registrar’s orders. As the Plaintiffs had filed a further affidavit on the day of the hearing of the appeal, upon the Defendants’ subsequent request for further arguments on the ground that they had filed further affidavits to address the points raised in that late affidavit, I heard the parties further but did not alter my decision.

7 The main issue before me was whether ‘Dong Myong’ and ‘Sangwon’ were both beneficially owned by the State of the Democratic People’s Republic of Korea or North Korea ("the State") thereby entitling the Plaintiffs to invoke Section 4(4)(b) of the High Court (Admiralty Jurisdiction) Act. It was not sufficient for the Plaintiffs to show that they had a good arguable case that both vessels were beneficially owned by the State at the time this action was brought. Since the issue of beneficial ownership was one that went towards establishing the Court’s jurisdiction, it had to be determined at this stage of the proceedings ("The Andres Bonifacio" [1991] SLR 694). The onus of proving the common ownership of both vessels lay on the Plaintiffs.

8 The Defendants’ position was that ‘Sangwon’, a vessel with gross tonnage of 10913, was legally and beneficially owned by Yuson Shipping Co Ltd of Pyongyang, Democratic People’s Republic of Korea ("DPR of Korea"). They produced certificates dated 1 August 1998 and 9 July 1999 from the Maritime Administration Bureau, DPR of Korea in support of this assertion. The Defendants maintained that they were not related or connected with ‘Dong Myong’ in any way.

9 The Defendants contended that ‘Dong Myong’ was until 10 December 1997 legally and beneficially owned by Korea Daesong Shipping Co Inc of the Republic of Panama and was registered in the Register of Cambodian Ships at Phnom Penh. On 12 December 1997, ‘Dong Myong’ was registered with the port of registry of Songrim, DPR of Korea and de-registered on 17 December 1998. From another certificate dated 9 July 1999 from the said Maritime Administration Bureau, the owners of ‘Dong Myong’ were shown to be Korea Dongmyong Shipping Co. ("KDSC") of Pyongyang, DPR of Korea.

10 The Defendants claimed that Yuson and KDSC were cooperative organizations established under the laws of the DPR of Korea on 25 July 1998 and 12 December 1997 respectively, that they were separate and distinct legal entities and were also separate and distinct from the State. In support of the above, they produced a certificate, again dated 9 July 1999, from the Central High Court of the DPR of Korea. ‘Sangwon’ was presently laden with a cargo of more than 13,000 MT of cement in bag to be discharged at Colombo, Sri Lanka.

11 The Plaintiffs relied on the opinion of the said Professor Chin Kim who disputed the assertions of the Defendants in the preceding paragraph. Professor Chin Kim explained that the State was founded on ‘Juche’ or ‘Chuche’ ("self-reliance") ideology which was a merger of communist ideology with traditional Korean Confucianism, with religious fervour. As the State was a pure Communist one, one of the principal doctrines of the Chuche ideology was State ownership of all assets and there was no true ownership of assets independent of the State. Apart from Chuche, the paramount authority was the Constitution, Article 21 of which provided:

"Article 21

The property of the State belongs to the entire people. There is no limit to the property which the State can own. All natural resources of the country, major factories and enterprises, ports and harbours, banks, transport and communications establishments are owned solely by the State. The State shall protect and develop on a preferential basis State property playing the leading role in the economic development of the country."

In Professor Chin Kim’s opinion, Yuson and KDSC were not cooperative organizations but were transport establishments owned by the State. Such establishments included those engaged in maritime transport, an extremely important element of the State’s economy, and Yuson and KDSC were engaged in such. It followed that the vessels used for...