The "Indriani"

• Jurisdiction: Singapore
• Court: Court of Appeal (Singapore)
• Judge: Karthigesu JA
• Judgment Date: 12 January 1996
• Neutral Citation: [1996] SGCA 2
• Citation: [1996] SGCA 2
• Defendant Counsel: Jainil Bhandari and Goh Mei Lin (Khattar Wong & Pnrs)
• Plaintiff Counsel: Belinda Ang (Ang & Pnrs)
• Published date: 19 September 2003
• Docket Number: Civil Appeal No 25 of 1995
• Date: 12 January 1996
• Subject Matter: s 3(1)(h) High Court (Admiralty Jurisdiction) Act (Cap 123),Words and Phrases,Claim for malicious or injurious falsehood,Admiralty and Shipping,Whether 'arising out of any agreement relating to the carriage of goods in a ship or to the use or hire of a ship','Arising out of',Admiralty jurisdiction and arrest

Cur Adv Vult

(delivering the judgment of the court): This appeal concerns the scope of the admiralty jurisdiction within s 3(1)(h) of the High Court (Admiralty Jurisdiction) Act (Cap 123) (the Act). The question is whether the respondents` tortious claim for malicious or injurious falsehood is one `arising out of any agreement relating to the carriage of goods in a ship or to the use or hire of a ship`. There is also the prior question as to the interpretation of the phrase `arising out of`.

We begin with the essential facts. By a sale contract dated 22 February 1993 (the contract), the respondents agreed to sell a certain quantity of sesame seed expeller (the cargo) to PT Metro Inti Sejahtera Indonesia (Metro), an Indonesian company. The contract provided for payment by way of a letter of credit. One of the documents required for payment was a `clean on board bill of lading`. Subsequently, the respondents chartered the vessel, the Indriani, from the appellant shipowners to carry the cargo from Lianyungang in China to Jakarta in Indonesia for delivery to Metro. Clause 45 of the voyage charterparty, dated 27 March 1993, states:

Master to sign bills of lading marked `clean on board` in this respect and in order to avoid clausing of bills of lading, the master to have the right to reject any damaged cargo which is not in conformity with the description of the quality certificate as declared by official surveyors.

On or around 20 April 1993, the cargo was shipped from Lianyungang. The appellants` agents in Singapore issued a clean bill of lading, dated 21 April 1993. When the cargo was discharged in Jakarta between 30 April and 2 May 1993, it was found to be in a bad condition. On 10 June 1993, the appellants wrote a letter to Metro, the translation of which is reproduced as follows:

This is to inform you that on 15 April 1993 at the hour of 11.52am we received a notification by fax from PENAVICO, our China agent, Lianyungang Branch ...;

The fax confirmed that the goods ... were rejected by CCIC [the respondents` appointed surveyors] at Lianyungang for shipment as the quality is wet, warm and ill-smelling.

Having received the said fax, on that very day we phoned the seller Thye Nam Loong (S) Pte Ltd, Singapore, informing them about the quality condition of the goods in question, nevertheless seller insisted to ship the goods in spite of the abovementioned condition of the goods.

We need to inform you that with respect to the condition of the said goods which is already wet, warm and ill-smelling, during the voyage of the ship ... we used two blowers.

Metro rejected the cargo and refused to pay the respondents. On 24 August 1993, the respondents commenced this action in rem against the Indriani to claim damages of US$567,389.57 being the price of the cargo based on misrepresentation, deceit or fraud. The appellants applied to stay the proceedings on the ground that the parties to the charterparty had agreed to submit their dispute to arbitration. The respondents contended that they were not claiming under the charterparty but on the tort of misrepresentation. In turn, the appellants replied that the action of misrepresentation was not disclosed on the facts. The Assistant Registrar Ronald Choo agreed with the appellants. However, he suggested an alternative cause of action based on malicious or injurious falsehood to the respondents. The respondents duly amended the writ to include the tort of malicious or injurious falsehood. At this point, the jurisdictional question was raised by the appellants. The assistant registrar decided that the respondents` claim of malicious or injurious falsehood fell within s 3(1)(h) of the Act. Thus, the admiralty jurisdiction of the High Court was properly invoked.

On appeal, GP Selvam J upheld the decision of the assistant registrar: see [1995] 3 SLR 381 . GP Selvam J construed the phrase `arising out of` within s 3(1)(h) of the Act to mean `connected with`, relying on The Antonis P Lemos; Samick Lines Co v Antonis P Lemos (Owners) [1985] AC 711, [1985] 1 All ER 695. Turning to the facts, he commented, at pp 386-387:

In this case the crux of the plaintiffs` case against the defendants is that the letter of 10 June 1993 contained statements to the effect that the plaintiffs knowingly shipped cargo which was not in apparent good order and condition. It said that the cargo, to the knowledge of the plaintiffs, was wet and ill-smelling. It meant that the plaintiffs obtained a clean bill of lading without justification and in breach of the terms of the sales contract tendered a bill of lading containing false statements which would entitle buyers to refuse payment or full payment. This inevitably led to the question between the plaintiffs and defendants of whether a clean bill of lading was correctly issued. To make out their case of malicious falsehood the plaintiffs must plead and prove that the clean bill of lading was correctly obtained from the defendants and tendered to Metro. The real issue therefore is the propriety of the plaintiffs` obtaining and later tendering the clean bill of lading. This claim, therefore, is very closely `connected with` the bill of lading and an essential part of the plaintiffs` case against the defendants. It was not so connected only in a general sense. Nor did it merely form part of the background facts.

The appellants have now appealed against GP Selvam J`s decision.

Before us, counsel for the appellants, Ms Ang accepted that the bill of lading and the charterparty are agreements within the ambit of s 3(1)(h) of the Act. She also accepted that the parties to an admiralty action based on s 3(1)(h) of the Act need not be parties to the agreement in question. She asked us to consider if the phrase `arising out of` should be interpreted to mean `connected with`. If such a construction is adopted, she contended strenuously that on the facts, the claim is not connected with either the bill of lading or the charterparty such as to fall within the admiralty jurisdiction of the Act. Ms Ang highlighted the following matters for our consideration. First, she submitted that the respondents` claim is essentially based on the letter of 10 June 1993. This was written by the appellants in response to Metro`s claim against them for damage to the cargo during the voyage. Written five weeks after the performance of the voyage, the letter is not referable in any way to the performance of the charterparty or the bill of lading. Secondly, the claim of malicious or injurious falsehood can be pleaded without reference to the charterparty or bill of lading. The agreements are but the background to the claim. At most, the bill of lading and the charterparty provide evidence to prove the claim. In fact, it is possible to make out the case of malicious or injurious falsehood without the bill of lading. Thirdly, Ms Ang submitted that GP Selvam J erred in holding that if there is a clean bill of lading,...