The "Dilmun Fulmar"

• Jurisdiction: Singapore
• Judge: Belinda Ang Saw Ean J
• Judgment Date: 31 October 2003
• Neutral Citation: [2003] SGHC 270
• Docket Number: Admiralty in Rem No 600215 of 2001
• Date: 31 October 2003
• Year: 2003
• Published date: 26 November 2003
• Plaintiff Counsel: Gerald Yee (Joseph Tan Jude Benny)
• Citation: [2003] SGHC 270
• Defendant Counsel: Michael Lai and Wendy Tan (Haq and Selvam)
• Court: High Court (Singapore)
• Subject Matter: Action in rem,Whether settlement agreement entitled ship repairers to arrest vessel,Admiralty and Shipping,Admiralty jurisdiction and arrest,Ship repairers entered into settlement agreement with vessel's owners in full and final settlement of outstanding claims,Vessel arrested after owners failed to pay instalments under settlement agreement

1 The Plaintiffs, Pan-United Shipyard Pte Ltd, are ship repairers and they repaired and supplied material to the “Dilmun Fulmar” between October and November 1999. A tax invoice no. PAN99/0440 dated 26 November 1999 evidences the contract. The Defendants, Castle Shipping Company Limited, paid a sum of $650,000 for the repairs, leaving as at 8 May 2001 an outstanding balance sum of $770,822.28. At all material times, the Defendants were the registered owners of the vessel. On 16 May 2001, the Plaintiffs commenced an in rem action against the vessel “Dilmun Fulmar” and arrested her on 12 August 2001.

2 After the arrest, the Plaintiffs and the Defendants came to an agreement on 14 August 2001 whereby the Defendants agreed to pay the sum of $310,000 in full and final settlement of the Plaintiffs’ claims (“the Settlement Agreement”). The settlement sum of $310,000 was to be paid in three instalments. The Defendants’ director, Philip Carr, personally guaranteed the performance of the Defendants’ obligations under the Settlement Agreement. The vessel was released from arrest on 17 August 2001 after the first instalment of $140,000 was paid. The Defendants defaulted on the next two instalments totalling $170,000 and the Plaintiffs on 29 July 2002 re-arrested the “Dilmun Fulmar” which had by then been renamed the “Hailisen” following a change of ownership in September/October 2001. The present owners who are Hailisen Shipping Co Ltd intervened in the action. For convenience, I shall continue to use in this decision her former name in the absence of an amendment to the Writ of Summons.

3 The “Dilmun Fulmar” was released on 10 August 2002 upon provision of security. Thereafter, the Interveners applied to court for the Writ of Summons and the second Warrant of Arrest to be set aside. They also sought damages for wrongful arrest. The Assistant Registrar granted the application. I did not disturb the Assistant Registrar’s order to set aside the Writ and arrest. The Plaintiffs have appealed against my decision and I now publish my reasons.

The Dispute

4 The Plaintiffs’ case is that the Defendants have renounced the Settlement Agreement by their failure to pay the second and last instalment payments. In re-arresting the “Dilmun Fulmar”, the Plaintiffs were pursuing their original claim which was a claim falling under s3(1)(l) and (m) and the in rem action was brought pursuant to s4(4) of the High Court Admiralty Jurisdiction Act (Cap. 123). Their Counsel, Mr. Gerald Yee, submitted that the Plaintiffs’ right to re-assert the original claim and sue in rem was preserved by Clause 10 of the Settlement Agreement. It permitted the Plaintiffs to re-arrest the “Dilmun Fulmar” or any sister ships and/or to claim for the entire sum of $1,154,916.78 and contractual interest at 1% per month or part thereof. Clause 10 read with Clauses 7 and 8 supported the Plaintiffs’ contention that the original claim was suspended and could be revived in the event of non-payment of any of the instalments.

5 Counsel for the Interveners, Mr. Michael Lai, argued that the Plaintiffs’ original claim had been compromised and the second arrest was on account of the Plaintiffs’ claim based on the Settlement Agreement. The Writ was for a cause of action different from a claim under the Settlement Agreement. Accordingly, the in rem action and the second Warrant of Arrest should be set aside on the ground that the court had no jurisdiction in rem in respect of the actual claim sought to be made by the Plaintiffs in these proceedings. The re-arrest was not in respect of a claim that fell within s3(1)(l) or (m) of the Act. The alternative ground of challenge was that the second arrest was an abuse of the court process because the Plaintiffs already had adequate security for the claim made.

The Settlement Agreement

6 It would be convenient to set out the relevant terms of the Settlement Agreement. In the Recital, the claim amount stated therein was $1,154,916.78. It stated that the in rem action commenced in May 2001 was to recover this amount. The relevant Clauses read as follows:

“

1. Pan-United agrees to accept the total sum of S$310,000 inclusive of interest of S$25,000 and S$25,000 as legal costs (hereinafter referred to as “the Settlement Sum”) in full and final settlement of their claim in Admiralty in Rem no.600215 of 2001.

2. The Settlement Sum is to be paid by Castle Shipping in three (3) instalments as set out herein.

3. The S$140,000 remitted by Castle Shipping on 1800 hours on 14 August 2001 (Singapore time) shall be deemed to be the first instalment of the Settlement Sum.

4. ….

5. ….

6. Upon receipt of the first instalment of the Settlement Sum in the sum of S$140,000, Pan-United shall forthwith release the “Dilmun Fulmar” from arrest in Admiralty in Rem no. 600215 of 2001.

7. Upon receipt of all three (3) instalments of the Settlement Sum, Pan-United shall forthwith discontinue their action in Admiralty in Rem No.600215 of 2001.

8. Upon receipt of all three (3) instalments Pan-United irrevocably releases and discharges the vessel “Dilmun Fulmar” her master, owners, operators, managers, charterers and Castle Shipping including their successors and assigns from all and any claim, demand or otherwise arising out of the subject matter of Admiralty in Rem no. 600215 of 2001 (including but not limited to any claim for legal costs and expenses).

9. Upon executing this Settlement Agreement, Castle Shipping irrevocably releases and discharges Pan-United, their successors and assigns from all and any claim, demand or otherwise arising out of the repairs and all other services carried out by Pan-United to the “Dilmun Fulmar”

10. In the event that the first instalment is not received by Pan-United by 1800 hours 14 August 2001 (Singapore time) and/or in the event that any of the two (2) instalments are not paid by Castle Shipping by the date provided therein, this Agreement and the...