The "Acrux"

• Jurisdiction: Singapore
• Judgment Date: 07 September 2004
• Date: 07 September 2004
• Docket Number: Admiralty in Rem No 57 of 2004
• Court: High Court (Singapore)

The “Acrux”

[2004] SGHC 198

Belinda Ang Saw Ean J

Admiralty in Rem No 57 of 2004 (Registrar's Appeal No 221 of 2004)

High Court

Admiralty and Shipping–Admiralty jurisdiction and arrest–Action in rem–Defendant's vessel arrested by plaintiff for failure to make payment by deadline–Defendant making part payment and later paying shortfall and interest under protest–Whether declaration of rights as regards payment under protest remaining a claim within admiralty jurisdiction–Whether plaintiff only entitled to security limited to cost of action up to payment under protest or release of vessel–Section 3 (1) (l) High Court (Admiralty Jurisdiction) Act (Cap 123, 2001 Rev Ed)–Admiralty and Shipping–Admiralty jurisdiction and arrest–Action in rem–Defendant's vessel arrested by plaintiff for failure to make payment by deadline–Whether defendant had provided security by way of earlier guarantee–Whether claim paid once defendant gave instructions to bankers to remit payment–Whether plaintiff entitled to claim for shortfall–Section 3 (1) (l) High Court (Admiralty Jurisdiction) Act (Cap 123, 2001 Rev Ed)–Admiralty and Shipping–Practice and procedure of action in rem–Duty of disclosure–Whether plaintiff failing to make full and frank disclosure in ex parte application for arrest

The plaintiff had an outstanding claim against the defendant, the owner of the Acrux.The plaintiff told the defendant that if a bank guarantee for $51,064.06 was not provided by 1 April 2004 or payment was not received by 9.00am Singapore time on 2 April 2004, the Acrux would be arrested. The plaintiff rejected two successive guarantees from one of the defendant's related companies, Siba Ships SpA, as they were considered “practically worthless”. As no payment was received by the deadline, the plaintiff commenced in rem proceedings against the Acrux on 2 April 2004.

On 6 April 2004, the plaintiff's solicitors wrote to the defendant's London lawyers demanding payment of the claim in full plus interest and legal costs. The defendant made part payment in the sum of $50,955.23 but refused to pay the balance. The plaintiff arrested the Acrux on 7 April 2004, and the defendant paid the shortfall and interest under protest the day after.

The defendant applied to set aside the in rem writ and arrest on the grounds that: (a) security had already been provided by the second guarantee from Siba Ships SpA; (b) the plaintiff's claim was paid on 2 April 2004 when the defendant instructed its bankers to remit payment; (c) the trivial shortfall was in respect of charges from the plaintiff's bank which were absorbed in the past by the plaintiff; (d) the plaintiff was only entitled to security limited to the cost of the action up to the stage of payment under protest or release of the vessel; and (e) the plaintiff did not make full disclosure of all material facts in its ex parte application for arrest. The senior assistant registrar dismissed the application, and the defendant appealed.

Held, dismissing the appeal:

(1) The plaintiff had informed the defendant that the guarantee from Siba Ships SpA was unacceptable. The defendant's claim that security had been provided by the guarantee from Siba Ships SpA was also inconsistent with its subsequent instructions to its bankers to remit $51,064.06 to the plaintiff: at [4].

(2) Although the defendant had given instructions to its bankers to remit payment to the plaintiff on 2 April 2004, the value date on the remittance advice was 6 April 2004. Since the plaintiff did not have an immediate and unconditional right to use the money by the deadline, it was justified in issuing the writ on 2 April 2004: at [5].

(3) The advice from the plaintiff's bank did not show that the shortfall was on account of its charges. In any case, the plaintiff had been demanding payment of the shortfall plus interest since 6 April 2004. The defendant was left under no illusion as to the plaintiff's demand, and there was no question of an accord arising from the part payment being accepted in full payment and the shortfall, interest and costs being discharged by the accord: at [10].

(4) It was trite law that to secure the release of an arrested vessel, a proper security in the amount of the claim based on the plaintiff's reasonably best arguable case, plus interest and costs, was required: at [11].

(5) The defendant's payment of the shortfall and interest under protest did not end the matter, as the validity of these claims remained a direct issue in the in rem action. A declaration of rights as regards the claim for which a payment under protest was made was still a claim under s 3 (1) (l) of the High Court (Admiralty Jurisdiction) Act (Cap 123, 2001 Rev Ed), as the section did not limit the type of claim which was to be...