SSAB Oxelosund AB v Xendral Trading Pte Ltd

• Jurisdiction: Singapore
• Judgment Date: 12 June 1991
• Date: 12 June 1991
• Docket Number: Admiralty in Personam No 174 of
• Court: High Court (Singapore)

SSAB Oxelosund AB

Plaintiff

and

Xendral Trading Pte Ltd

Defendant

[1991] SGHC 80

Lai Siu Chiu JC

Admiralty in Personam No 174 of 1991

High Court

Civil Procedure–Mareva injunctions–Factors considered in grant of interim injunction–Contract–Consideration–Detriment or loss suffered–Four-party agreement–Performance of existing obligation owed to third party–Obligation to third party to perform charterparty

The plaintiff lost its shipment of iron ore concentrate when the defendant's vessel sank in severe weather conditions. The plaintiff claimed that the sinking was due to the vessel's unseaworthiness and successfully applied ex parte for a worldwide Mareva injunction prohibiting the defendant, its servants or agents, including its insurance brokers and mortgagees, from disposing of any of its assets, in particular the proceeds of the hull insurance policy on the vessel. The defendant applied to discharge the injunction.

Held, discharging the injunction:

(1) It was not disputed that the plaintiff had a good arguable claim for purposes of obtaining a Mareva injunction. The only dispute was whether the facts showed that there was a real risk that the defendant would dissipate its assets: at [8].

(2) The facts of this case and the conduct of the defendant did not justify the grant of a pre-judgment worldwide Mareva injunction. The granting of such an injunction was a draconian measure to be ordered only in very exceptional circumstances: at [15].

(3) There was no evidence that the defendant had secreted or attempted to secrete assets outside the jurisdiction so as to render nugatory any judgment. The defendant, its mortgagee and parent company all belong to one group, and their inter-relationships did not give rise to any sinister connotations. There was an element of hire-purchase between the defendant and the vessel's charterer and the vessel's manager was one of the five foremost ship management companies in the world. A one-ship company like the defendant was a norm in the shipowning industry: at [16].

(4) The plaintiff was merely a claimant for unliquidated damages as against the defendant, and did not satisfy the definition of “creditor” under s 254 (2) (a) of the Companies Act (Cap 50, 1990 Rev Ed) and the plaintiff may ultimately not succeed in its contention that the vessel was unseaworthy: at [17].

(5) The continuation of the charterparty by the vessel's charterer constituted good consideration for the purposes of the four-party agreement, and the charterer's obligation to pay hire under the charterparty was separately secured by a guarantee furnished by another company to the defendant: at [18].

(6) The plaintiff had invoked the machinery of the Mareva injunction to obtain security for its claim which was an abuse of process: at [20].

(7) There was no reason to believe that the vessel's P & I Club would not meet any claims if the plaintiff succeeded in its action, despite the “pay and be paid” principle: at [21].

Babanaft International Co SA v Bassatne [1990] Ch 13; [1989] 2 WLR 232 (refd)

Coral Rose, The [1991] 1 Lloyd's Rep 563 (refd)

Derby & Co Ltd v Weldon (No 6) [1990] 1 WLR 1139; [1990] 3 All ER 263 (refd)

Derby & Co Ltd v Weldon (Nos 3 & 4) [1990] Ch 65; [1989] 2 WLR 412 (refd)

Derby & Co Ltd v Weldon [1990] Ch 48; [1989] 2 WLR 276 (refd)

Fanti, The [1991] 2 AC 1; [1990] 2 All ER 705 (refd)

Iraqi Ministry of Defence v Arcepey Shipping Co SA [1981] QB 65 (folld)

Niedersachsen, The [1983] 1 WLR 1412; [1983] 2 Lloyd's Rep 600 (folld)

Pao On v Lau Yiu Long [1980] AC 614 (folld)

Republic of Haiti v Duvalier [1990] 1 QB 202 (refd)

Companies Act (Cap 50, 1990 Rev Ed) ss 131 (3) (d), 131 (3) (f), 254 (2) (a)

Goh Kok Leong and Linda Chen (Ang & Partners) for the plaintiff

Haridass Ajaib (Haridass Ho & Partners) for the defendant.

Lai Siu Chiu JC

1 The defendants in this case applied by summons in chambers entered No 1329 of 1991 on 4 March 1991 for the discharge of the ex parte interim injunction which the plaintiffs obtained on 19 February 1991 which, inter alia:

(a) prohibited the defendants, their servants or agents including their insurance brokers Lowndes Lambert and their mortgagees Hill Samuel Bank Ltd (“Hill Samuel”) from disposing of, transferring, charging, diminishing in value or in any way dealing with any of their assets wheresoever the same may be situate including and in particular the proceeds of the insurance policy of the vessel Protektor save in so far as such assets or the value thereof exceed US$3,573,495.50;

(b) required the defendants by their directors within 72 hours of service of the order to swear an affidavit disclosing the nature, whereabouts and full value of the defendants' assets both in and outside Singapore including bank accounts.

2 Attendant with summons in chambers entered No 1329 of 1991, the defendants had also separately applied (vide summons in chambers entered No 1372 of 1991) for an extension of time until the hearing of the former, to comply with the order for discovery.

3 The plaintiffs' statement of claim averred that the plaintiffs as the owners and/or consignees and/or indorsees of bill of lading number 90314 dated 7 January 1991 had shipped iron ore concentrate (“the goods”) on board the defendants' vessel Protektor (“the vessel”) from Port Cartier, Quebec, Canada to Oxelosund, Sweden. The goods never reached their destination as the vessel sank with the loss of all 33 lives on board on or about 12 January 1991 in the North Atlantic Ocean off the Grand Banks of Newfoundland due to severe weather conditions caused by hurricane force winds.

4 The plaintiffs contended that...