The "Duden"

• Jurisdiction: Singapore
• Judge: Andrew Ang J
• Judgment Date: 09 September 2008
• Neutral Citation: [2008] SGHC 149
• Docket Number: Admiralty in Rem No 112 of 2005 (Registrar's Appeal No 247 of 2008)
• Date: 09 September 2008
• Year: 2008
• Published date: 16 September 2008
• Plaintiff Counsel: Wendy Leong (AsiaLegal LLC)
• Citation: [2008] SGHC 149
• Defendant Counsel: Wendy Tan and Charmaine Fu (KhattarWong)
• Court: High Court (Singapore)
• Subject Matter: Terms or conditions for grant of stay,Uncertainty and confusion as to incorporation,Arbitration time-barred by Hague-Visby Rules,Time bars,Stay of court proceedings for arbitration applied for,Whether court should grant stay on condition that time bar waived,Court's discretion to grant terms or conditions for stay under International Arbitration Act (Cap 143A, 2002 Rev Ed),Admiralty and Shipping,Stay of court proceedings,Mandatory stay under International Arbitration Act (Cap 143A, 2002 Rev Ed),Arbitration,Incorporation of arbitration agreement,Principles underlying court's discretion to grant terms or conditions for stay under International Arbitration Act (Cap 143A, 2002 Rev Ed),Limitation of liabilities,Section 6(2) International Arbitration Act (Cap 143A, 2002 Rev Ed),Whether justice of case called for court to impose terms or conditions,Hague-Visby Rules

9 September 2008

Andrew Ang J:

Introduction

1 This was an appeal against the decision of the assistant registrar (“AR”) in Admiralty in Rem No 112 of 2005 granting a stay of proceedings in favour of arbitration in England. Specifically, the appeal was brought against one of the conditions imposed by the AR for the stay of court proceedings, viz, the condition that the appellants/defendants waive the defence of time bar in the arbitration proceedings. At the end of the hearing of the appeal, I dismissed the appeal with costs fixed at $2,500 and disbursements.

Facts of the case

2 The respondents/plaintiffs are the lawful holders and/or endorsees of the Bill of Lading No 001 dated 27 September 2004 (“the Bill of Lading”) under which 25,400mt of Indian Solar Salt (“the Cargo”) was shipped. The Cargo was shipped on board the “DUDEN” (“the Vessel”) on a voyage from Kandla Port, India, to Qingdao, China.

3 During that period of time, the Vessel was serving under a chain of time charterparties. The head charterparty, dated 20 May 2003, was between the appellant and Anchor Navigation Ltd (“Anchor Navigation”). On 9 March 2004, Anchor Navigation chartered the Vessel to Parkroad Corporation (“Parkroad”) for a period of about 13 months. Parkroad, in turn, sub-chartered the Vessel to other parties for various periods. One party to whom Parkroad had sub-chartered the Vessel to was Grand Loyal Ltd (“Grand Loyal”). On 9 September 2004, the Vessel was further sub-chartered by Grand Loyal to Goodearth Maritime Ltd (“Goodearth”). Goodearth subsequently fixed the Vessel on the following day, 10 September 2004, Jakhau Salt Company Pvt Ltd (ie, the named shipper in the Bill of Lading) for the voyage from Kandla, India, to Qingdao, China, with the Cargo.

4 On 3 November 2004, part of the Cargo was found damaged and/or contaminated during discharging operations at the discharge port of Qingdao. According to the respondents’ surveyors, the damage to and/or contamination of the Cargo was caused by the rust of the Vessel’s bulkheads and the rust of the bottom of the Vessel’s holds. As such, the respondents held the appellants, being the contractual carrier of the Cargo, responsible for the loss and damage they suffered.

Proceedings in Singapore

5 On 7 July 2005, the respondents filed a writ of summons (“the Writ”) in the High Court of Singapore against the Vessel wherein they claimed damages, interest thereon and costs from the appellants in respect of the appellants’ breach of contract and/or duty as bailees and/or negligence in or about the loading, stowage, handling, custody, care and discharge of the Cargo. The Writ was valid for 12 months. Upon obtaining issuance of the Writ, the respondents engaged a professional ship-watch service provider, Navspec Marine Consultants Pte Ltd (“Navspec”), to maintain local watch on the Vessel and to alert them of the arrival, if any, of the Vessel in Singapore with a view to effecting service of the Writ and arresting the Vessel for security.

6 On 5 July 2006, the Writ was renewed for a further 12 months, ie, from 7 July 2006 to 7 July 2007. On 15 February 2007, the Vessel called in Singapore. Navspec was maintaining watch on the Vessel but was not alerted of the Vessel's call. As such, the respondents were not made aware of the Vessel’s call and failed to effect service of the Writ. On 3 July 2007, the respondents renewed the Writ for a further 12 months, ie, from 7 July 2007 to 7 July 2008. Full disclosure was made of the fact that the Vessel had called in Singapore on 15 February 2007.

7 On 12 November 2007, the Vessel called in Singapore again. Service of the Writ was finally effected and the Vessel was arrested. On 15 November 2007, the Vessel was released upon the appellants’ provision of security for the respondents’ claim in the sum of US$222,857.35 by way of payment into court.

8 On 10 January 2008, the appellants filed Summons No 113 of 2008 to set aside the second renewal of the Writ on the ground that the Vessel had called in Singapore on 15 February 2007 during the currency of the first renewal of the Writ and that service of the Writ should have been effected at that time. In the alternative, the appellants asked for a stay of court proceedings in favour of arbitration in London. The appellants succeeded with respect to the setting aside of the second renewal of the Writ before the AR but this was reversed on appeal by Choo Han Teck J on 23 May 2008 (Registrar’s Appeal No 145 of 2008). The appellants subsequently applied for leave to appeal to the Court of Appeal against the decision under s 34(2)(d) of the Supreme Court of Judicature Act (Cap 322, 2007 Rev Ed). Leave was refused, however, and the appellants then proceeded to make an application to the Court of Appeal for leave to be granted (Originating Summons No 821 of 2008). The application was dismissed on 19 August 2008.

9 In respect of the application to stay court proceedings in favour of arbitration in London, the AR ordered a stay of court proceedings on condition that the security obtained by the respondents from the arrest of the Vessel be retained as security for the arbitration proceedings in London and the appellants waive the defence of time bar in the arbitration proceedings in London. The AR imposed the second condition, viz, the waiver of the defence of time bar as she felt it was appropriate and necessary in the circumstances of the case. It was not denied that the claim would have been subject to the defence of time bar pursuant to Art III r 6 of the Hague-Visby Rules which states as follows:

Subject to paragraph 6bis the carrier and the ship shall in any event be discharged from all liability whatsoever in respect of the goods, unless suit is brought within one year of their delivery or of the date when they should have been delivered. This period may, however, be extended if the parties so agree after the cause of action has arisen.

10 The appellants subsequently appeared before me on 28 July 2008 to appeal against the AR’s decision to impose the condition that the appellants waive the defence of time bar in the English arbitration proceedings.

The law

11 The relevant statutory provision which empowers the court to impose conditions when granting a stay of proceedings in favour of arbitration is s 6(2) of the International Arbitration Act (Cap 143A, 2002 Rev Ed). This provision states that when an application is made by a party in accordance with s 6(1) the court must order a stay of court proceedings unless the arbitration agreement is “null and void, inoperative or incapable of being performed” but may impose “such terms or conditions as it may think fit”. Such empowerment of the court stands in contrast to s 9 of the Arbitration Act 1996 (UK) (the English equivalent of s 6 of the International Arbitration Act) where, if the criteria for a stay of court proceedings in favour of arbitration are made out, the court is obliged to stay proceedings for arbitration without condition (David Joseph QC, Jurisdiction and Arbitration Agreements and their Enforcement (Sweet & Maxwell, 1^st Ed, 2005) para 11.02). It is similar to Australian legislation, where s 7(2) of the Arbitration (Foreign Awards and Agreements) Act 1974 provides that the court may impose “such conditions (if any) as it thinks fit” when ordering a stay of proceedings in favour of arbitration.

12 The discretion of the court to impose terms and conditions upon a stay of court proceedings in favour of arbitration is an unfettered discretion. This was the view of Lai Siu Chiu J in Splosna Plovba International Shipping and Chartering d.o.o. v Adria Orient Line Pte Ltd [1998] SGHC 289. She held (at [23]):

My orders as well as the original orders of the deputy registrar were made in accordance with s 6(2) of the [International Arbitration Act], that...