The "Dai Yun Shan"

• Jurisdiction: Singapore
• Judge: Goh Joon Seng J
• Judgment Date: 02 March 1992
• Neutral Citation: [1992] SGHC 51
• Docket Number: Admiralty in Rem No 135 of 1992
• Date: 02 March 1992
• Year: 1992
• Published date: 19 September 2003
• Plaintiff Counsel: Michael Kuah (Lee & Lee)
• Citation: [1992] SGHC 51
• Defendant Counsel: Kenneth Tan (Rajah & Tann)
• Court: High Court (Singapore)
• Subject Matter: Admiralty jurisdiction and arrest,Application for security for costs,What constitutes a 'dispute',Interpretation of arbitration clause,Whether constitutes taking a step in the proceedings,Civil Procedure,Arrest or detention of property,Admiralty and Shipping,Stay of proceedings,s 4 Arbitration (Foreign Awards) Act (Cap 10A),Principles applied,Arbitration,Discretion of court,Stay of court proceedings,Arbitration clause,Choice of forum clause in bill of lading,Whether dispute required to be referred to arbitration,Action in rem

Cur Adv Vult

The plaintiffs, Canada Packers Inc, are a foreign company having their principal place of business at 3080 Yonge Street, Toronto, Canada. The plaintiffs have a representative office in Singapore at 10 Beach Road #32-04, Shaw Towers, Singapore 0718. They were, at all material times, the shippers and holders of the bill of lading No H/1 relating to 4,210 drums of Red Palm Olein (`the cargo`) shipped on board the `Dai Yun Shan` (`the vessel`) for carriage from Singapore to the port of Huangpu, Guangzhou, China. The defendants are the Fujian Shipping Co, a state-owned company in the People`s Republic of China. The consignee under the bill of lading was `To order`, and the party to notify was Man Shui (Macau) Co Ltd (`Man Shui`).

The vessel left Singapore with the cargo on board on 7 January 1990 and arrived at Huangpu on or about 11 January 1990. Upon its arrival, the cargo was discharged into the warehouses of the Huangpu Harbour Authority.

On 13 January 1990 a representative of Man Shui presented a copy of the bill of lading to the ship`s agent, the China Ocean Shipping Agency (`Penavico`) with a letter of indemnity in favour of Penavico against liability for delivery of the cargo to Man Shui, or its order, prior to presentation of the original bill of lading. Penavico, as agent of the defendants, accepted the indemnity and chopped `as delivery order` on the copy bill of lading in the hands of Man Shui. The said copy bill of lading thus became a delivery order. On or about 15 January 1990, the said copy bill of lading was presented to the Huangpu Harbour Authority and the cargo was then released to another party, the Shanxi Provincial Cereal Oil and Foodstuffs Import and Export Corp.

The plaintiffs have to date not received payment in full for the cargo. Accordingly, they commenced these proceedings in rem against the defendants as owners of the vessel on 6 March 1990.

Upon being served with the writ herein on 6 March 1990, the defendants entered conditional appearance on 10 March 1990 without prejudice to an application to, inter alia, stay all proceedings. On 22 March 1990 the defendants filed the application for stay in Summons-in-Chambers No 1603 of 1990.

Pending the hearing of the application in SIC No 1603 of 1990, the defendants filed an application in Summons-in-Chambers No 5906 of 1990 for, inter alia, the following orders:

(i) The plaintiffs provide security for the defendants` costs of the defendants` summons-in-chambers entered No 1603 of 1990 in the sum of $10,000 or such other sums as the court may order by way of a banker`s guarantee within seven (7) days, without prejudice to the defendants` rights to apply for further security if there is an appeal from the defendants` said application.

(ii) In default of prayer 1, the plaintiffs` action be stayed.

The application for costs was heard by the assistant registrar who, by order of court dated 26 October 1990, ordered as follows:

(1) The plaintiffs provide security for the defendants` costs of the action only up to the stage of the defendants` summons-in-chambers entered No 1603 of 1990 in the sum of $5,000 ...;

(2) In default of prayer 1, the plaintiffs` action be stayed.

The application for stay was heard by the senior assistant registrar who, on 26 November 1990, so far as is material, ordered as follows:

(1) All proceedings in this action be stayed.

(2) In default of prayer 1, this action be dismissed.

(3)

(a) The defendants are to provide the plaintiffs within 14 days hereof with security of a sum in the same amount as the bail bond filed herein by way of a composite bank guarantee in the form of the draft submitted by the plaintiffs as amended by the senior assistant registrar. Upon the provision of the said composite bank guarantee, the bail bond filed herein on 9 March 1990 is to stand cancelled and the surety released from all obligations therein;

(b) In default of (a) the bail bond filed herein on 9 March 1990 shall remain on file and the defendants are to provide the plaintiffs within a further 14 days of the default in (a) with security in the same amount as the bail bond filed herein on terms to be agreed between the parties failing which on terms to the satisfaction of the senior assistant registrar.

(4) The defendants refrain from raising time bar as a defence to the plaintiffs` claim in arbitration or in the court of the People`s Republic of China provided the plaintiffs commence arbitration or court proceedings in the People`s Republic of China within five months hereof.

(5) The stay in prayer 1 is conditional upon the defendants complying with prayers 3 and 4.

...

The plaintiffs thereupon filed their notice of appeal on 3 December 1990 against the order of the senior assistant registrar. The defendants, on the same day, filed their notice of cross-appeal against the conditions of stay in prayer 3(a) and (b) set out above.

The appeals came up for hearing before me. The defendants` application is for stay pending arbitration in the People`s Republic of China, or pending reference to the courts of the People`s Republic of China and forum non conveniens. It is not in dispute that the claim is within the admiralty jurisdiction of the High Court. But the defendants rely on cl 2 of the bill of lading which reads:

Jurisdiction: All disputes arising under or in connection with this bill of lading shall be determined by Chinese law in the courts of, or by arbitration in, the People`s Republic of Singapore.

It is contended on behalf of the plaintiffs that on the authority of Sze Hai Tong Bank Ltd v Rambler Cycle Co Ltd [1959] MLJ 200 (` Rambler `s case`), there cannot be any `dispute` on the liability on the part of the defendants herein for releasing the cargo without production of the bill of lading. In Rambler `s case1 the Privy Council held that a shipowner who delivered without production of the bill of lading did so at their peril. The Privy Council held that in delivering goods without production of the bill of lading to a person who to their knowledge was other than one entitled under the bill of lading to receive them, the carrier was liable for breach of contract and conversion, and the carrier could not rely on exception cl 2(c) of the bill of lading under which the liability of the carrier should be deemed to cease absolutely after the cargo was discharged from the vessel.

But so long as the claim is not admitted, a dispute exists. Lord Saville...