The "Golden Petroleum"

• Jurisdiction: Singapore
• Judge: MPH Rubin JC
• Judgment Date: 05 October 1993
• Neutral Citation: [1993] SGHC 235
• Date: 05 October 1993
• Subject Matter: Meaning of 'goods and material supplied to the ship for her operation or maintenance',Whether includes claim for a loan,Words and Phrases,s 3(1)(l) High Court (Admiralty Jurisdiction) Act (Cap 123),Admiralty jurisdiction and arrest,Whether applies to supply of bunker oil which was to be sold to other ships,Arrest of vessel,'Goods... supplied to the ship for her operation',Admiralty and Shipping
• Docket Number: Admiralty in Rem No 518 of 1992
• Published date: 19 September 2003
• Defendant Counsel: Goh Kok Leong (Ang & Pnrs)
• Court: High Court (Singapore)
• Plaintiff Counsel: S Selvadurai with Chan Kia Pheng (Palakrishnan & Pnrs)

Cur Adv Vult

This was an appeal by the plaintiffs, Gronco Services Pte Ltd, from the decision of the assistant registrar who allowed the defendants` application to set aside the writ of summons issued by the plaintiffs against the defendants, the owners of and other persons interested in the ship Golden Petroleum, on the ground that the plaintiffs` claim was not within the admiralty jurisdiction of the court. The other matters appealed against included the assistant registrar`s consequential orders: (a) that the warrant of arrest issued pursuant to the writ of summons against the named vessel, `Golden Petroleum`, be set aside; and (b) security furnished by the defendants to the plaintiffs to obtain the release of the said ship be returned to the defendants.

In the main, this appeal is concerned with the proper construction of s 3(1)(l) of the High Court (Admiralty Jurisdiction) Act (Cap 123). The relevant portion of the said section reads:

(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:

...

(l) any claim in respect of goods or materials supplied to a ship for her operation or maintenance;

...

The material facts relevant to the resolution of the dispute between the parties can be stated as follows. The plaintiffs commenced this admiralty suit on 29 July 1992 and the ship Golden Petroleum of the port of the Republic of Singapore (hereinafter referred to as `the ship`) was arrested on 29 July 1992 on a warrant of arrest issued on the same day.

By the endorsement of claim made on the writ, the plaintiffs claimed a sum of US$146,249.72 being the balance of the price of goods or material supplied to the ship at the defendants` request in or about September 1991 up to February 1992. The affidavit filed by the solicitor for the plaintiffs on 29 July 1992 in support of the plaintiffs` application for the arrest of the ship by and large repeated the said endorsement. The ship was released from arrest on 31 July 1992 when the defendants furnished satisfactory security.

After the defendants had entered appearance on 1 August 1992, the plaintiffs filed their statement of claim on 11 August 1992. The statement of claim is not lengthy and since the wordings and particulars found in the statement of claim do have a bearing and effect on the issues raised in this appeal, it is reproduced hereunder:

Statement of claim

The plaintiffs` claim is for the sum of US$146,249.72 being the balance of the price of bunkers supplied to the ship belonging to the defendants, Golden Petroleum, of the port of the Republic of Singapore, at the request of the defendants, full particulars of which the defendants are well aware of and short particulars whereof are as follows:

Particulars

Total owed by Gronco Services under P Petroleum`s invoices

from July 1991 to February 1992 US$1,630,544.93

Total owed by P Petroleum under Gronco Services` invoices

from September 1991 to February 1992 US$1,253,024.15

Payments made by Gronco Services to P Petroleum

from July 1991 to December 1991 US$ 523,770.50

Balance owed by P Petroleum to Gronco Services US$ 146,249.72

It is also relevant to note that, prior to the issue of process, the plaintiffs had issued a demand letter dated 11 July 1992 to the defendants. As the letter is equally material to the issues canvassed before me, it is also set out hereunder:

11 July 1992

P Petroleum Pte Ltd

...

Claim by Gronco Services Pte Ltd

We act for Gronco Services Pte Ltd.

We are instructed that there is due and owing from you to our clients the sum of US$153,708.38 for goods supplied to you at your request and for a loan made to you at your request, short particulars of which are set forth herewith.

We are further instructed to and do hereby demand from you the said sum of US$153,708.38

Take notice that unless the said sum of US$153,708.38 is paid to our clients or to us as their solicitors within seven (7) days from the date hereof, we have instructions to commence legal proceedings against you without further reference, and without prejudice to our clients` rights against your vessels.

Yours faithfully

(signed)

...

Short particulars

Total owed by Gronco under P Petroleum`s invoices US$ 1,641,913.43

Total owed by P Petroleum under Gronco`s invoices US$ 1,253,024.15

Balance due to P Petroleum US$ 388,889.28

Gronco pays US$ 523,770.50

Balance due to Gronco US$ 134,881.22

P Petroleum pays US$ 6,172.84

Balance due to Gronco US$ 128,708.38

Loan from Gronco to P Petroleum US$ 25,000.00

Total due to Gronco US$ 153,708.38

It should be stated at the outset that though the goods supplied to the ship were bunker oil, the oil delivered to the ship was not bunker oil for her own use or consumption but was intended for sale to other ships. This fact had not been disputed by the plaintiffs. The averments in the affidavit of the defendants asserting that (a) the various quantities of fuel oil/marine diesel oil which formed the subject matter of the claim were shipped on board the ship as `cargo` and were not used for her running; (b) the quantities of the said oil which were loaded into the ship were delivered into her cargo tanks and not into her bunker tanks; and (c) the ship`s propulsion units did not run on the types of oil supplied were not challenged or contested by the plaintiffs.

There were two main issues raised on appeal. The first issue was whether the endorsement of the writ by the plaintiffs was defective. The second issue, a jurisdiction issue, was whether the writ issued came within the purview of the High Court (Admiralty Jurisdiction) Act (Cap 123) (`the Act`). Subsidiary issues raised on appeal were whether a ship can be liable to arrest for a general balance of account and whether there was non-disclosure when the arrest was obtained.

The defendants` position on the first issue was that the endorsement of the writ inasmuch as it did not include a statement that the goods supplied were for the ship`s operation was defective. Counsel for the defendants in this regard primarily relied on the case of The `Courageous Colocotronis`; EMJ Colocotronis & Ors v European American Banking Corp & Ors .1 The facts and ruling in that case are set out in the headnotes as follows:

The plaintiffs issued a warrant of arrest against the ship Courageous Colocotronis on 22 November 1977. The affidavit leading to the warrant of arrest alleged that the plaintiffs were the sole beneficial owners of the said vessel as they held all the shares of Navegantes, a company which was the registered legal owner of the said vessel. The defendant bank were a New York banking corporation which had financed Navegantes in the sum of US$6,600,000 on a loan agreement for the purchase of the said vessel supported by the mortgage of the ship by Navegantes to the defendants and in addition the personal guarantee of the plaintiffs. They had entered a conditional appearance and sought to have the writ struck out on the grounds, inter alia, that the writ, affidavit leading to the warrant of arrest and the warrant of arrest were defective in law. Another corporation, UMTT [United Maritime No 2 Tanker Transport], who claimed to be the present owners of the said vessel having purchased it from RTC [Reefer Transportation Company] who had in turn purchased it from Navegantes also entered a conditional appearance and made a similar application to that of the defendant bank. The plaintiffs applied to amend the writ of summons and this was granted. The amended writ stated that the plaintiffs as shareholders of the company Navegantes brought the action for the benefit of the company for a declaration that the said vessel was legally owned by the company.

In setting aside the warrant of arrest and striking out the writ of summons and all subsequent proceedings, Kulasekaram J (as he then was) held that:

(1) Order 2 of the Rules of the Supreme Court 1970 was designed to save rather than destroy and to cure that which was capable of cure in matters arising out of non-compliance with the Rules provided the failure to comply with the Rules was not so serious as to be contrary to natural justice and to render the proceedings in which they occurred or any order made under it a nullity.

(2) The statement of the nature of the claim in the affidavit leading to the warrant of arrest in this case was bad in law. The affidavit should state the nature of the claim of the plaintiffs as the defendants whose interests in the ship would be affected by the arrest and detention of the ship should know why their rights and interests were being invaded .

(3) In this case the nature of the plaintiff`s claim was not brought home to the defendants at the time of the arrest. The issue of a warrant of arrest under such circumstances would be contrary to natural justice. [Emphasis added.]

From the perusal of the material facts and the observations of Kulasekaram J, it appeared to me that the case had little relevance to the facts at hand and did not seem to support the proposition for which counsel for the defendants contended. The endorsement in the case before me does not suffer from any of the defects accentuated by Kulasekaram J in The `Courageous Colocotronis` . The endorsement is clear and unequivocal and does not leave any party, least of all the defendants, in doubt as to the nature of the claim. In my view the mere omission of the words `for her operation` does not have the effect of misleading any interested party. Furthermore the forms and precedents referred to and at least one endorsement highlighted in a leading case seemed to suggest that the endorsement in the present case was not atypical. The plaintiffs` endorsement accords with the precedents found in...