The “Eurohope”

• Jurisdiction: Singapore
• Judge: Chua Lee Ming J
• Judgment Date: 31 August 2017
• Neutral Citation: [2017] SGHC 218
• Year: 2017
• Date: 31 August 2017
• Published date: 12 September 2017
• Hearing Date: 17 November 2016,15 November 2016
• Subject Matter: Admiralty and shipping,Admiralty jurisdiction and arrest,Action in rem
• Plaintiff Counsel: Liew Teck Huat, Dafril Phua and Christopher Yee (Niru & Co LLC)
• Defendant Counsel: Leong Kah Wah and Lim Ruo Lin (Rajah & Tann Singapore LLP)
• Court: High Court (Singapore)
• Citation: [2017] SGHC 218
• Docket Number: Admiralty in Rem No 63 of 2016 (Registrar's Appeal Nos 386 and 387 of 2016)

Chua Lee Ming J: Introduction

The main issue in this case was whether the High Court’s admiralty jurisdiction under the High Court (Admiralty Jurisdiction) Act (Cap 123, 2001 Rev Ed) (“the Act”) could be invoked by an action in rem for the sole purpose of obtaining security in aid of pending court proceedings in London. I concluded that it could not.

Undisputed facts

The plaintiff, DSA Consultancy (FZC), chartered the vessel Eurohope (“the Vessel”) from the defendant. The charterparty was governed by English law and contained an exclusive jurisdiction clause in favour of the High Court of London (except for claims not exceeding US$100,000).

On 29 February 2016, soon after entering into the charterparty, the defendant purported to terminate the charterparty. On 30 March 2016, the plaintiff commenced an admiralty action in the High Court of London for wrongful termination of the charterparty (“the London proceedings”).

On 25 April 2016, the plaintiff issued the writ in rem in the present action and arrested the Vessel. The affidavit filed in support of the application for the warrant of arrest stated that the application for the warrant of arrest was “to obtain security in aid of [the London proceedings]”; and “once the security is obtained, the Plaintiffs intend to apply for a stay of this action with the security in place, pending the determination of the [London proceedings]”.

The defendant furnished security by way of a letter of undertaking issued by the American Steamship Owners Neutral Protection and Indemnity Association Inc (“the American P&I Association”) and the Vessel was released on 29 April 2016.

On 5 May 2016, the plaintiff filed Summons 2153 of 2016 for an order to stay all proceedings in the present action, and for the security furnished by the defendant to remain in force, pending final determination of the London proceedings.

On 17 May 2016, the defendant filed Summons 2377 of 2016 for, among other things, the writ and/or warrant of arrest to be struck out and/or set aside, damages for wrongful arrest and in the alternative, for moderation of the security amount.

The assistant registrar (“AR”) dismissed the defendant’s application and granted the plaintiff’s application. The defendant appealed against the AR’s decisions in both applications. These were Registrar’s Appeal Nos 386 and 387 respectively. I allowed both appeals and struck out the writ and set aside the warrant of arrest. However, I refused the defendant’s application for damages to be assessed for wrongful arrest or wrongful continuation of the arrest of the Vessel.

Whether the writ in rem and/or warrant of arrest should be struck out and/or set aside

Section 3 of the Act confers admiralty jurisdiction on the High Court. The types of admiralty claims that the High Court has jurisdiction to hear and determine are set out in s 3(1)(a) to (r) of the Act.

Section 4 of the Act deals with the mode of exercise of the admiralty jurisdiction of the High Court. Broadly speaking, the admiralty jurisdiction of the High Court may be invoked by an action in personam in all cases (s 4(1) of the Act); or by an action in rem where the claim falls within s 4(2)–4(5) of the Act. An action in rem is against the res and allows the plaintiff to obtain security (in the form of the res) for its claim in the action.

In the present case, it was not disputed that the plaintiff’s claim for wrongful termination of the charterparty fell within the scope of s 3(1)(h) of the Act which provides as follows:

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: … (h) any claim arising out of any agreement relating to carriage of goods in a ship or to the use or hire of a ship; …

It was also not disputed that by virtue of s 4(4) of the Act, the plaintiff was entitled to invoke the admiralty jurisdiction of the High Court by commencing the present action in rem. Section 4(4) of the Act provides as follows: (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 charter 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.

However, the plaintiff admitted that it had no intention of proceeding with the present action in Singapore and that the sole purpose of commencing the action was to obtain security in aid of the London proceedings.

The issue before me was whether it was an abuse of process to commence an action in rem for the sole purpose of arresting a vessel in order to obtain security in aid of legal proceedings in a foreign court.

In The “Cap Bon” [1967] 1 Lloyd’s Rep 543, the plaintiff invoked the court’s admiralty jurisdiction for the purpose of providing security for the payment of an arbitration award. The court held that it had no jurisdiction under the Administration of Justice Act 1956 (c 46) (UK) (“AJA 1956”) to arrest ships for this purpose. Brandon J reasoned as follows (at 547):

[Section 3(4) of the AJA 1956] provides that the Admiralty jurisdiction may be invoked by an action in rem, and the jurisdiction referred to is the jurisdiction to hear and determine various types of claim as set out in [s 1(1) of the AJA 1956]. It is to be inferred from that that the object of the process in rem is to provide security for a plaintiff in respect of any judgment which he may obtain as the result of the hearing and determination of a claim. That is the purpose of proceedings in rem and, subject to the point I made, that it covers also payment of a sum due under a settlement in an action, it is the sole purpose of such process … In my view the court … only has jurisdiction to arrest ships and keep ships under arrest for the purpose of providing security for a judgment of the Court.

Sections 1(1) and 3(4) of the AJA 1956 are, for all intents and purposes, identical to ss 3(1) and 4(4) of the Act respectively.

Brandon J found reinforcement for his view in the fact that under the Rules of the Supreme Court that were in force then, bail “must be given by bond in Form No. 11” and Form No. 11 covered only a judgment in the action or a sum payable by virtue of a settlement of the action (at 547–548).

Subsequently, in The “Vasso” (formerly “Andria”) [1984] 1 Lloyd’s Rep 235 (“The Vasso”), the English Court of Appeal disagreed with Brandon J’s reasoning in The Cap Bon although the end result was the same. The Court of Appeal was of the view that the plaintiff’s purpose in invoking the court’s admiralty jurisdiction did not affect the existence of the court’s jurisdiction under the Supreme Court Act 1981 (c 54) (UK) (“SCA 1981”), but only the court’s exercise of its jurisdiction. Goff LJ stated as follows (at 241):

[W]e find ourselves unable to agree with [Brandon J’s] view that the Court has no jurisdiction to arrest a ship, or to maintain an arrest, where the purpose of the plaintiff is simply to obtain security for an award in arbitration proceedings. We are ourselves unable to conceive of a case where the jurisdiction of the Court depends upon the purpose of the plaintiff invoking the Court’s jurisdiction. Generally speaking, the word “jurisdiction” simply expresses a power of the Court – in such cases as the present, the power of the Court – to “hear and determine”, i.e. to adjudicate upon, certain types of claim. These types of claim are set out in the lettered sub-paragraphs of what used to be s 1(1) of the [AJA 1956] (now s. 20(2) of the [SCA 1981]): and, as appears from s 3(4) of the [AJA 1956] (now s. 21(4) of the [SCA 1981]) that jurisdiction may be invoked by an action in rem in the case of some, though not all, of those types of claim. Of course, where the court’s jurisdiction may be invoked by an action in rem, the Court must have the power to arrest …

In our judgment, the purpose of the plaintiff in invoking the Admiralty...