The “Echo Star” ex “Gas Infinity”

• Jurisdiction: Singapore
• Judge: S Mohan JC
• Judgment Date: 28 September 2020
• Neutral Citation: [2020] SGHC 200
• Published date: 01 October 2020
• Date: 28 September 2020
• Year: 2020
• Hearing Date: 27 July 2020,20 July 2020
• Plaintiff Counsel: Jude Philomen Benny, Mary-Anne Shu-Hui Chua (Joseph Tan Jude Benny LLP)
• Defendant Counsel: Vellayappan Balasubramaniyam, Dedi Affandi bin Ahmad, Dinesh Sabapathy (Rajah & Tann Singapore LLP)
• Court: High Court (Singapore)
• Citation: [2020] SGHC 200
• Docket Number: Admiralty in Rem No 143 of 2019 (Registrar's Appeal No 106 of 2020)

S Mohan JC: Introduction

The question of who should enter an appearance as a defendant in an action is one to which a fairly straightforward, and some might say, obvious answer can be given – it would be the defendant as named in the proceedings. In an admiralty action in rem against a ship, the answer to this question may also seem simple, but is at times deceptively so. In an admiralty in rem writ, the defendant is not named as such but is generically described. For example, Form 159 of the Rules of Court (Cap 322, R5, 2014 Rev Ed) (“ROC”) describes the defendant as:

(The owners of the ship [X] or as may be)

By and large, this generic description does not pose much difficulties. The identity of the defendant in the in rem action can still be a fairly straightforward question and which can be answered easily. The defendant would, ordinarily, be the party that is the owner (or the demise charterer as the case may be) of the ship in question on the day the action is commenced by the filing of the in rem writ in court.

However, complications may arise if the ownership of the ship changes between the date the cause of action arises and the date the action in rem is commenced. For certain admiralty claims, if an in rem writ has not been issued before the ownership change has taken place, those claims may no longer be pursued by way of an action in rem against that ship. This is because the prerequisites for the valid invocation of the court’s admiralty in rem jurisdiction under s 4(4) of the High Court (Admiralty Jurisdiction) Act (Cap 123, 2001 Rev Ed) (“the Act”) cannot be met by the prospective claimant (see the Court of Appeal’s summary in The Bunga Melati 5 [2012] 4 SLR 546 at [112]).

The limitations described at [3] above do not, however, apply to a claim that gives rise to a maritime lien. It is a long established principle of maritime law that a claim which gives rise to a maritime lien (and by extension, any in rem writ issued to enforce such a claim) is not defeated by a subsequent change in the ownership of the ship in connection with which the claim arose (The Halcyon Isle [1979-1980] SLR (R) 538 (“The Halcyon Isle”) (the Privy Council on appeal from the Court of Appeal of Singapore) at [21]). It is an equally well-established principle of maritime law that a claim arising from damage caused by a ship (for example, as a result of a collision with another ship) gives rise to a maritime lien (see The Bold Buccleugh (1851) 7 Moo PC 267 (“The Bold Buccleugh”)). A collision damage claim would fall within s 3(1)(d) of the Act, which confers admiralty jurisdiction on the High Court to hear and determine any “claim for damage done by a ship”. Section 4(3) of the Act recognises, inter alia, that for claims that give rise to a maritime lien on a ship, the High Court’s admiralty jurisdiction may be invoked by an action in rem against that ship.

That having been said, when the “wrongdoing” ship involved in a collision with another ship undergoes a change in ownership and an in rem writ is issued against the first ship after the change in ownership has taken place, which party should correctly enter an appearance in the action as the defendant? Is it the owner at the time of the collision or the owner at the time when the in rem writ was issued? As elaborated below, the answer lies in (a) appreciating that a collision damage maritime lien is ultimately fault-based notwithstanding its maritime lien status and (b) understanding the effect of entry of appearance in an in rem action in relation to in personam liability.

These deceptively simple but important questions were at the heart of the appeal before me in Registrar’s Appeal No 106 of 2020 (“RA 106”). I was informed by counsel, during the hearing, that there is a dearth of caselaw on the questions set out at [5] above. As the present case afforded this court an opportunity to provide some clarity on these and other questions that arose for my consideration in the course of the appeal, I now provide the full written grounds for my decision.

Facts

The relevant key facts are largely undisputed and may be stated briefly.

On or about 7 April 2019, the vessels, Royal Arsenal and Echo Star were involved in a collision in the Straits of Hormuz.¹ At the time of the collision, the Echo Star was known as the Gas Infinity and was owned by Sea Dolphin Co., Ltd (“Sea Dolphin”). I will hereafter refer to the Echo Star (ex-Gas Infinity) as “the Ship”.

On or about 28 July 2019, Sea Dolphin sold the Ship and transferred ownership of it to Cepheus Limited (“Cepheus”) pursuant to a Memorandum of Agreement dated 25 June 2019 entered into between Sea Dolphin and Cepheus on the Norwegian Saleform 2012 as duly amended.² Cepheus took delivery of the Ship from Sea Dolphin on the same day and the Ship was subsequently renamed the Echo Star. It was undisputed that Cepheus was a stranger to the collision.³

On 6 November 2019, the owners of the Royal Arsenal (“the plaintiff”) commenced Admiralty action in rem No 143 of 2019 (“ADM 143”). The in rem writ was issued against “the vessel Echo Star (ex-Gas Infinity)” and the defendant was named as:

Owner and/or Demise Charterer of the vessel “ECHO STAR” (ex-GAS INFINITY) (IMO No. 9134294)

On 15 November 2019, Cepheus’ lawyers, Rajah & Tann Singapore LLP (“Rajah & Tann”), filed a Memorandum of Appearance (“MOA”), entering appearance for Cepheus as the defendant.

Pursuant to an order of an Assistant Registrar made on 18 December 2019, Cepheus furnished security for the plaintiff’s claim, interest and costs by paying a sum of US$6,796,354.00 into court on 20 December 2019.⁴ The Ship was released from arrest on the same day.

On 20 January 2020, Rajah & Tann also entered an appearance in the action on behalf of Sea Dolphin (ie, the owner of the Ship at the time of the collision) as defendant. Sea Dolphin subsequently filed its List of Electronic Track Data on 21 January 2020 pursuant to O 70 r 19(4) of the ROC.

On 31 January 2020, Rajah & Tann on behalf of Cepheus, wrote to the plaintiff’s lawyers Joseph Tan Jude Benny LLP, requesting the plaintiff’s consent for: (a) Cepheus to be granted leave to withdraw its MOA as defendant (which Rajah & Tann contended was mistakenly filed); and (b) Cepheus to instead be given leave to intervene in ADM 143 (pursuant to O 70 r 16 of the ROC) and enter an appearance as an intervener.

On 7 February 2020, the plaintiff’s lawyers replied stating that the plaintiff was not prepared to give its consent. Accordingly, on 12 March 2020, Cepheus filed Summons No 1187 of 2020 (“SUM 1187”) seeking the following orders: leave to withdraw its MOA dated 15 November 2019 pursuant to O 21 r 1 of the ROC; leave to intervene in ADM 143 pursuant to O 70 r 16 of the ROC; and liberty to enter an appearance in ADM 143 as an intervener within eight days of the order made in SUM 1187.

On 12 June 2020, SUM 1187 was heard by the learned Assistant Registrar (“the AR”) who allowed the application, granting Cepheus leave to withdraw its appearance as defendant in ADM 143 and to instead participate as an intervener. Dissatisfied, the plaintiff appealed against the AR’s decision in RA 106.

Issues to be determined

Two issues fell for my determination in the appeal: First, the threshold issue of who was the proper party to enter appearance as the defendant in the circumstances of this case. Second, whether leave ought to be granted to Cepheus to withdraw its appearance as defendant, and to intervene in ADM 143.

From the facts that I have recited above and the principles alluded to at [4], it will be quite apparent (and was common ground) that the plaintiff’s claim in ADM 143 gives rise to a damage maritime lien. Thus, for the avoidance of doubt, I will use “damage lien” to refer specifically to the damage maritime lien, and “maritime lien” to refer generally to all categories of maritime liens.

Further, to ensure clarity, I will refer to the owners of the Ship at the time of the collision as Sea Dolphin and to the owners of the Ship at the time the in rem writ was issued as Cepheus.

Is Sea Dolphin or Cepheus the proper defendant?

In cases involving maritime liens when there is no change in the ownership of the subject ship, the proper party to enter an appearance as a defendant is straightforward – it would simply be the owner (or demise charterer as the case may be) of the ship in question on the day the in rem writ was issued.

The present case was, however, unusual (although perhaps not uncommon) in that some time after the collision but prior to the issuance of the in rem writ in ADM 143, Cepheus became the owner of the Ship. As prefaced at [5] and [6] above, the question of what reference point should be used to identify the relevant owner for purposes of entering an appearance as the proper defendant was at the heart of RA 106.

Counsel for the plaintiff, Mr Jude Benny, contended that Cepheus, as the owner of the Ship when the writ was issued on 6 November 2019, had correctly entered appearance as the defendant in ADM 143.⁵ In support of the plaintiff’s case, Mr Benny made three key arguments: Cepheus was the relevant owner for the purposes of the action in ADM 143 because it was the one who was “correctly so described at the date when the writ [was] issued” on 6 November 2019, citing The Helene Roth [1980] 1 Lloyd’s Rep 477 (“The Helene Roth”) in support. Three other cases were also cited in support of this proposition, namely, The Father Thames [1979] 2 Lloyd’s Rep 364 (“The Father Thames”), The Monica S [1967] 2 Lloyd’s Rep 113 (“The Monica S”) and The Igor [1956] 2 Lloyd’s Rep 271 (“The Igor”).⁶ This understanding of the relevant owner is also in line with industry practice as reflected in standard ship sale and purchase documents. These invariably require previous owners to indemnify new owners in respect of claims arising from...