The "Bunga Melati 5"

• Jurisdiction: Singapore
• Judge: Belinda Ang Saw Ean J
• Judgment Date: 23 August 2011
• Neutral Citation: [2011] SGHC 195
• Court: High Court (Singapore)
• Docket Number: Admiralty in Rem No 21 of 2010 (Registrar’s Appeal No 252 of 2010)
• Year: 2011
• Published date: 01 September 2011
• Hearing Date: 25 August 2010,26 August 2010,11 October 2010,12 October 2010
• Plaintiff Counsel: Leong Kah Wah, Teo Ke-Wei Ian and Koh See Bin (Rajah & Tann LLP)
• Defendant Counsel: Prem Gurbani, s Mohan and Adrian Aw (Gurbani & Co)
• Subject Matter: Admiralty and Shipping,Civil Procedure
• Citation: [2011] SGHC 195

Belinda Ang Saw Ean J: Introduction

This was an appeal by the plaintiff from the decision of the Assistant Registrar (“AR”) in Equatorial Marine Fuel Management Services Pte Ltd v The Owners of the Ship or Vessel “Bunga Melati 5” [2010] SGHC 193, granting the defendant’s application to strike out and/or set aside the plaintiff’s admiralty writ in rem and statement of claim pursuant to O 18 r 19 of the Rules of Court (Cap 322, R 5, 2006 Rev Ed) (the “ROC”) or the court’s inherent jurisdiction, and/or for want of admiralty jurisdiction in rem under s 4(4) of the High Court (Admiralty Jurisdiction) Act (Cap 123, 2001 Rev Ed) (the “HCAJA”).

After hearing the parties, I dismissed the appeal and upheld the decision of the learned AR, ordering that the plaintiff’s action be struck out under O 18 r 19 of the ROC. However, as I did not agree with all the views expressed by him (particularly those which related to the invocation of admiralty jurisdiction in rem), which I believe raise matters of practical significance to the Admiralty Bar, and as the plaintiff has appealed against my judgment (vide Civil Appeal No 193 of 2010), I set out the grounds of my decision below.

I should add that the defendant had, in Registrar’s Appeal (“RA”) No 256 of 2010, also cross-appealed against part of the learned AR’s decision. However, as I had already ruled in the defendant’s favour in the present action, RA No 256 of 2010 was adjourned pending the outcome of Civil Appeal No 193 of 2010.

In these grounds, references to O 18 r 19 of the ROC should be understood as including a reference to the court’s inherent jurisdiction to strike out an action as being frivolous, vexatious or an abuse of process (on which see Singapore Civil Procedure 2007 (G P Selvam gen ed) (Sweet & Maxwell Asia, 2007) at para 18/19/16). As some cases cited in these grounds make reference to different editions of the HCAJA, I should also make clear that the abbreviation “HCAJA” should be understood as including all editions of the High Court (Admiralty Jurisdiction) Act, since they are substantially the same in terms of content. In addition, since I will be referring to ss 3(1) and 4(4) of the HCAJA frequently throughout these grounds, it is convenient to set out these provisions in extenso:

Admiralty jurisdiction of High Court 3. —(1) The admiralty jurisdiction of the High Court shall be as follows, that is to say, jurisdiction to hear and determine any of the following questions or claims: (a) any claim to the possession or ownership of a ship or to the ownership of any share therein; (b) any question arising between the co-owners of a ship as to possession, employment or earnings of that ship; (c) any claim in respect of a mortgage of or charge on a ship or any share therein; (d) any claim for damage done by a ship; (e) any claim for damage received by a ship; (f) any claim for loss of life or personal injury sustained in consequence of any defect in a ship or in her apparel or equipment, or of the wrongful act, neglect or default of the owners, charterers or persons in possession or control of a ship or of the master or crew thereof or of any other person for whose wrongful acts, neglects or defaults the owners, charterers or persons in possession or control of a ship are responsible, being an act, neglect or default in the navigation or management of the ship, in the loading, carriage or discharge of goods on, in or from the ship or in the embarkation, carriage or disembarkation of persons on, in or from the ship; (g) any claim for loss of or damage to goods carried in a ship; (h) any claim arising out of any agreement relating to the carriage of goods in a ship or to the use or hire of a ship; (i) subject to section 168 of the Merchant Shipping Act (Cap. 179) (which requires salvage disputes to be determined summarily by a District Court in certain cases), any claim in the nature of salvage (including any claim arising under section 11 of the Air Navigation Act (Cap. 6) relating to salvage to aircraft and their apparel and cargo); (j) any claim in the nature of towage in respect of a ship or an aircraft; (k) any claim in the nature of pilotage in respect of a ship or an aircraft; (l) any claim in respect of goods or materials supplied to a ship for her operation or maintenance; (m) any claim in respect of the construction, repair or equipment of a ship or dock charges or dues; (n) any claim by a master or member of the crew of a ship for wages and any claim by or in respect of a master or member of the crew of a ship for any money or property which, under any of the provisions of the Merchant Shipping Act (Cap. 179) is recoverable as wages or in the Court and in the manner in which wages may be recovered; (o) any claim by a master, shipper, charterer or agent in respect of disbursements made on account of a ship; (p) any claim arising out of an act which is or is claimed to be a general average act; (q) any claim arising out of bottomry; (r) any claim for the forfeiture or condemnation of a ship or of goods which are being or have been carried, or have been attempted to be carried, in a ship, or for the restoration of a ship or any such goods after seizure, or for droits of admiralty,

together with any other jurisdiction connected with ships or aircraft which may be vested in the Court apart from this section.

…

Mode of exercise of admiralty jurisdiction 4. — …

(4) In the case of any such claim as is mentioned in section 3 (1) (d) to (q), where — (a) the claim arises in connection with a ship; and (b) the person who would be liable on the claim in an action in personam (referred to in this subsection as the relevant person) was, when the cause of action arose, the owner or charterer of, or in possession or in control of, the ship,

an action in rem may (whether or not the claim gives rise to a maritime lien on that ship) be brought in the High Court against — (i) that ship, if at the time when the action is brought the relevant person is either the beneficial owner of that ship as respects all the shares in it or the charterer of that ship under a charter by demise; or (ii) any other ship of which, at the time when the action is brought, the relevant person is the beneficial owner as respects all the shares in it.

Overview The plaintiff’s case

The plaintiff, Equatorial Marine Fuel Management Services Pte Ltd, was a Singapore company in the business of supplying marine fuels (“bunkers”). The defendant, MISC Berhad, was a Malaysian shipping company and the registered owner of a number of vessels, including the Bunga Melati 5.

In its statement of claim, the plaintiff alleged that the parties had, on or about 3 July 2008, entered into two fixed price contracts, under which it agreed to supply 35,000 metric tonnes of bunkers (per contract) to a number of vessels owned or operated by the defendant in August and September 2008 at the price of US$744 and US$750 per metric tonne respectively (the “Fixed Price Contracts”). In addition, the plaintiff alleged that the parties had, on or about 18 September 2008, entered into a separate contract for the supply of 1,000 metric tonnes of bunkers, on a “spot” basis, to the defendant’s vessel the MT Navig8 Faith (the “Navig8 Faith Contract”). According to the plaintiff, a Malaysian company, Market Asia Link Sdn Bhd (“MAL”), at all material times acted as the broker or buying agent of the defendant in respect of the Fixed Price Contracts and the Navig8 Faith Contract. I should say that the defendant contested these allegations with a different version of events, which I will come to at [45] below.

The plaintiff did not receive full payment in respect of the supplied bunkers, and, according to the plaintiff’s statement of claim, a rather substantial sum of US$21,703,059.39 (plus contractual interest) remained outstanding.

Consequently, the plaintiff commenced the present action in rem and served the writ in rem on the Bunga Melati 5; however, no warrant of arrest was issued and the vessel was not arrested. In all likelihood, security for the claim was furnished voluntarily in lieu of an arrest. It was common ground that the Bunga Melati 5 was not one of the vessels which had received the bunkers supplied. As such, this was what is commonly known as a “sister ship action” under s 4(4)(b)(ii) of the HCAJA.

The plaintiff’s case was essentially that the defendant was a party to the Fixed Price Contracts and the Navig8 Faith Contract via the agency of the defendant’s alleged agent, MAL, and that the defendant was therefore contractually liable to the plaintiff for the bunkers supplied. As an alternative to its claim in contract, the plaintiff also argued that, if there were no valid and binding contracts for the sale and supply of the bunkers between the parties, the defendant was liable to it in unjust enrichment, since the defendant had enjoyed the use of the plaintiff’s bunkers without paying for them. In addition, the plaintiff contended that the offer of a corporate guarantee by the defendant, in the context of earlier court proceedings in the United States in respect of the same dispute (the “US proceedings”), amounted to an admission of liability by the defendant.

The US proceedings

Prior to the start of the present action, the plaintiff had commenced another set of proceedings in the United States District Court for the Central District of California (the “California District Court”), based on essentially the same claims as the present action (albeit the issue of agency was apparently not pleaded). The plaintiff filed a “Verified Complaint” to obtain an attachment order under Rule B of the Supplemental Rules for Admiralty or Maritime Claims and Asset Forfeiture Actions of the Federal Rules of Civil Procedure (the “Rule B attachment order”). The Rule B attachment order was executed against one of the defendant’s...