The "ICL Raja Mahendra"
| Jurisdiction | Singapore |
| Judgment Date | 14 July 1998 |
| Date | 14 July 1998 |
| Docket Number | Admiralty in Rem No 236 of 1998 |
| Court | High Court (Singapore) |
[1998] SGHC 419
Choo Han Teck JC
Admiralty in Rem No 236 of 1998 (Registrar's Appeal No 275 of 1998)
High Court
Admiralty and Shipping–Admiralty jurisdiction and arrest–Arbitration clause–Reference in bill of lading to arbitration in London–Disagreement over wording of letter of undertaking to secure release of vessel–Whether scope of undertaking should be limited to Singapore and London–Section 6 International Arbitration Act (Cap 143A, 1995 Rev Ed)–Arbitration–Stay of court proceedings–Arrest or detention of property–Reference in bill of lading to arbitration in London–Provision of security to satisfy award in arbitration–Section 6 International Arbitration Act (Cap 143A, 1995 Rev Ed)
The respondent was the owner of a cargo which sank with the vessel ICL Vikraman.The cargo owner arrested ICL Raja Mahendra,a sister vessel of ICL Vikraman.Under the bill of lading in respect of the sunken cargo, any dispute arising therefrom should be referred to arbitration in London. The appellant offered the cargo owner a letter of undertaking to secure the release of the vessel. The parties could not agree on the wording of the letter of undertaking. The cargo owner insisted on the undertaking to cover damages, interest and costs “in a court or tribunal of competent jurisdiction” whereas the appellant's proposed version provided for damages, interest and costs in “Admiralty In Rem No 236 of 1998 in the High Court of the Republic of Singapore or an appeal therefrom or by arbitration in London in accordance with the arbitration clause incorporated in the bill of lading”. The appellant applied to court for an order to release the vessel upon its providing a letter of undertaking in the form proposed by it. The application was dismissed and the appellant appealed.
Held, allowing the appeal:
(1) The court's jurisdiction to arrest a ship in an action in rem should not be exercised to provide security for an award or judgment in another jurisdiction. An exception was where a party applied under s 6 of the International Arbitration Act (Cap 143A, 1995 Rev Ed). If the proceedings were stayed by virtue of an application under s 6, the court could order the provision of security for the satisfaction of any award made on the arbitration: at [22] and [23].
(2) To give effect to s 6, the provision of security should refer to an award under the arbitration agreement in question. The purpose of s 6 of the Act would not be served if, after a release of the vessel had been obtained through an application under s 6, the cargo owner then proceeded to litigate elsewhere or in a forum outside that contemplated by the arbitration agreement. There was no justification in allowing security on the wide terms proposed by the cargo owner. The specific forums of Singapore and London were the only appropriate forums on the evidence and, therefore, the letter of undertaking offered by the appellant was the more reasonable one. Accordingly, the appeal was allowed, and the vessel was ordered to be released upon the appellant providing a letter of undertaking on those terms: at [24] and [26].
[Observation: If the arbitration agreement did not specify London or any specific forum for the arbitration, then the phrase “any tribunal or court of competent jurisdiction” could be reasonable: at [25].]
Benja Bhum, The [1993] 3 SLR (R) 242; [1994] 1 SLR 88 (distd)
Cap Bon, The [1967] 1 Lloyd's Rep 543 (refd)
Vasso, The [1984] 1 Lloyd's Rep 235 (refd)
International Arbitration Act (Cap 143A, 1995 Rev Ed) s 6 (consd);s 7
Danny Chua and Mohamed Goush Marikan (Khattar Wong & Partners) for the appellant/defendant
Abbas Ali (Joseph Tan Jude Benny & Scott) for the respondent/plaintiff.
1 The plaintiffs were the owners of a cargo which sank with the vessel ICL Vikraman after a collision with another vessel on 26 September 1997. On 3 April 1998 the plaintiffs arrested ICL Raja Mahendra, a sister vessel of ICL Vikraman. Under the bill of lading dated 10 August 1997 in respect of the sunken cargo any dispute arising therefrom shall be referred to arbitration in London.
2 Subsequently, the parties began negotiations concerning the provision by the defendants of a letter of undertaking to secure any award or judgment together with interest and costs in favour of the plaintiffs so that the ICL Raja Mahendra might be released from arrest. The parties were unable to agree to the wording of the letter of undertaking. The plaintiffs insisted that...
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