The "Arcadia Spirit"

• Jurisdiction: Singapore
• Judge: Grimberg
• Judgment Date: 19 January 1988
• Neutral Citation: [1988] SGHC 8
• Docket Number: Admiralty in Rem No 5 of 1988
• Date: 19 January 1988
• Year: 1988
• Published date: 19 September 2003
• Plaintiff Counsel: M Karthigesu and A Thambiyah (Cooma Lau & Loh & M Karthigesu)
• Citation: [1988] SGHC 8
• Defendant Counsel: GP Selvam and Kenneth Tan (Drew & Napier)
• Court: High Court (Singapore)
• Subject Matter: Discretion of court,Admiralty and Shipping,Admiralty jurisdiction and arrest,O 70 r 12(4) Rules of the Supreme Court 1970,Release of vessel against provision of letter of guarantee by Japan P & I Club

(delivering oral judgment)

I take the view that O 70 r 12(4) gives me the discretion to order the release of this vessel against the provision of a P & I Club letter of guarantee. P & I Clubs are now acknowledged as being part and parcel of the maritime industry. The unreported New Zealand case, The Pacific Charger (CA, NZ, unreported) [a report of this judgment appears at [1988] 3 MLJ 263 ], to which Mr Selvam referred, establishes that a Club guarantee has been considered acceptable security by the court in New Zealand. In that case the scope of the New Zealand equivalent of our O 70 r 12(4) was considered. It is obvious, too, from the textbooks, that Club security has become acceptable as a matter of course, when negotiations for security take place outside the rules of court.

There is admittedly a wrinkle, a very important wrinkle, in this case in that here we are dealing with a proposed letter of guarantee to be furnished by a Club which has no presence or assets here, and which resides in a non-Commonwealth and non-common law jurisdiction. Therefore, theoretically, there could be an enforcement problem. However, it seems to me that to allow that possibility to affect my mind would be to adopt a wholly negative approach. I prefer to proceed upon the assumption that the Japan Club - whose guarantees (as the evidence shows) are acceptable to a number of governments, including our own - that such a club which would stand to lose its international reputation were it to default on a guarantee - would fulfil its obligations with honour. Accordingly, I am inclined to order the release of the vessel in consideration of the provision of a letter of guarantee of the Japan Club in terms to be agreed.

I am faced, having made that decision, with the other difficulty arising from the lack of consensus on quantum, coupled with the urgency of the matter. I was informed by Mr Selvam this morning that the vessel is seaworthy, and but for the fact that she is currently under arrest, would sail. I had in mind the possibility of adjourning this application with liberty to restore, so as to enable either the plaintiff or defendant to apply for an order of appraisal under O 70 r 22. However, that would obviously take time, to the detriment of the defendant. I am also influenced against this course by the fact that Mr Selvam has indicated to me that the defendant would be prepared to procure a guarantee of the Club in the sum of $26m, which is substantially...