The "Jeil Crystal"

• Jurisdiction: Singapore
• Judge: Judith Prakash JCA
• Judgment Date: 17 October 2022
• Neutral Citation: [2022] SGCA 66
• Court: Court of Appeal (Singapore)
• Docket Number: Civil Appeal No 22 of 2022
• Published date: 21 October 2022
• Year: 2022
• Hearing Date: 08 August 2022
• Plaintiff Counsel: Tan Chai Ming Mark, Ahn Mi Mi and Genesa Tan Yun Ru (Focus Law Asia LLC)
• Defendant Counsel: Liew Teck Huat and Phang Cunkuang (Niru & Co LLC)
• Subject Matter: Admiralty and Shipping,Admiralty jurisdiction and arrest,Practice and procedure of action in rem,Civil Procedure,Amendments
• Citation: [2022] SGCA 66

Steven Chong JCA (delivering the grounds of decision of the court): Introduction

This appeal, which arose from an application to set aside a warrant of arrest in an action in rem, has raised an issue which hitherto has not squarely come before the Singapore court for determination. When the setting-aside application was heard before a judge in the General Division of the High Court (“the Judge”), it was clear that the original claim stated in the warrant of arrest never existed. Indeed, prior to the filing of the setting-aside application, the plaintiff had applied to amend the statement of claim, abandoning the original claim altogether and substituting it with a totally different claim. In short, it was not seriously disputed that the arrest of the vessel had been premised on a patently wrong claim.

Nonetheless, the Judge did not set aside the warrant of arrest because, in his view, given that he had allowed the amendment to the statement of claim, and since that amendment related back to the date of the in rem writ, the original claim stated in the warrant of arrest was deemed to have likewise been amended. The Judge held that, since the facts in relation to the amended claim had existed at the time of the arrest and were also within the High Court (Admiralty Jurisdiction) Act (Cap 123, 2001 Rev Ed) (“the HCAJA”), the warrant of arrest should not be set aside, notwithstanding the defect in the original claim.

The appellant, Jeil International Co Ltd (“JIL”), the owner of The Jeil Crystal (“the Vessel”), sought leave to appeal against the Judge’s refusal to set aside the warrant of arrest. The appellant was granted leave to appeal by the Appellate Division of the High Court but only in respect of the following limited issue (“the Question”):

In an application to set aside a warrant of arrest of a ship, can the warrant of arrest be upheld on the basis of an amended claim and/or cause of action which was not originally pleaded by the arresting party at the time of the application for and the issue of the warrant of arrest?

JIL’s appeal, which had been filed with the Appellate Division, was later transferred to the Court of Appeal on the court’s own motion under s 29D(3) of the Supreme Court of Judicature Act (Cap 322, 2007 Rev Ed) (“the SCJA”) on the ground that it was “more appropriate” for the Court of Appeal to hear the appeal as it raised a point of law of public importance, and also because of the complexity and novelty of the issues raised in the appeal (see O 56A r 12(2)(b) and O 56A r 12(3)(b) and r 12(3)(c) of the Rules of Court (2014 Rev Ed) (“the Rules”)).

We heard and allowed the appeal on 8 August 2022, answering the Question in the negative. In our view, the answer to the Question, and the resolution of the dispute arising from the unique circumstances of the arrest, turned on a proper understanding of the nature of a warrant of arrest and whether it was capable of amendment in the first place. These are our detailed grounds.

Background facts

The respondent, Banque Cantonale de Geneve (“BCG”), is a Swiss bank in the business, inter alia, of trade financing. In May 2020, by way of a letter of credit, BCG financed a transaction for the purchase of 2,000 metric tons of Lube Base Oil 150BS (“the Cargo”) by its customer, one GP Global APAC Pte Ltd (“GP Global”). GP Global in turn chartered the Vessel from JIL to carry the Cargo.

A set of original bills of lading was issued in respect of the Cargo (“the Original BL”). The Original BL named BCG as the consignee, and it was provided by GP Global to BCG under the terms of the letter of credit. However, it was undisputed that, sometime in late-June 2020, BCG had released and endorsed the Original BL to GP Global pursuant to the latter’s request. According to BCG, GP Global had requested for the return of the Original BL, in order to procure the delivery of the Cargo to its buyer, one Prime Oil Trading Pte Ltd (“Prime Oil”)

Between July and August 2020, BCG became concerned that several shipments involving GP Global (including the Cargo) for which it had provided financing appeared questionable. BCG also learnt sometime in July 2020 that the Cargo had been discharged without production of the Original BL, a fact which it apparently verified following further investigations. On 10 October 2020, BCG commenced HC/ADM 256/2020 (“ADM 256”). The writ in ADM 256 (“the Writ”) contained the following endorsement of claim:

[BCG], as the owner or other person interested in the cargo lately laden on board the Vessel ‘JEIL CRYSTAL’ under Bill of Lading No. EX384/2020 dated 13.6.2020 [the Original BL], claims damages against [JIL] for conversion of the said cargo, and/or breaches of contract and/or duty and/or negligence, in or about the carriage and/or care and/or custody of the said cargo, in particular, discharging and/or releasing the said cargo without the production of the original Bill of Lading.

On 10 October 2020, BCG obtained a warrant of arrest for the Vessel (“WA 39”). WA 39 contained an endorsement of claim that was identical to the one in the Writ. At the hearing of the application for WA 39, BCG claimed to be the “holder” of the Original BL. Quite clearly, that was incorrect because BCG had by then already released and endorsed the Original BL to GP Global (see [7] above).

On 11 October 2020, WA 39 was executed, and the Vessel was arrested. At that time, however, JIL was already in possession of the Original BL. This was because, by 29 June 2020, the Original BL had been surrendered by GP Global to JIL, and a set of switched bills of lading (“the Switched BL”) was issued in place of the Original BL, pursuant to GP Global’s request. According to JIL, GP Global had made this request sometime on or around 16 June 2020, and the Original BL that was surrendered to it contained a stamped and signed endorsement by BCG on its reverse side, with the words “[d]eliver to the order of GP Global APAC Pte Ltd”. Thus, by the time the Writ was issued, JIL and not BCG was in possession of the Original BL.

Immediately after the arrest of the Vessel, JIL instructed their solicitors to seek BCG’s confirmation that it (BCG) was still in possession of the Original BL. On 13 October 2020, BCG’s solicitors replied, stating that they were “instructed to inform … that [BCG] holds the original 3/3 Bills of Lading”. In the event, on 19 October 2020, JIL furnished security by way of payment into court in the sum of S$2.1m (“the Security”) to secure the release of the Vessel, and the Vessel was eventually released on 21 October 2020.

On 4 November 2020, BCG filed its statement of claim in ADM 256 (“the SOC”). Then, on 10 November 2020, JIL instructed its solicitors to file a Notice to Produce, requesting to inspect, amongst other things, the Original BL that BCG claimed was still in its custody. On 16 November 2020, BCG’s solicitors filed a Notice of Inspection wherein they stated that they did not have the Original BL in their possession and hence it was not available for inspection. The Notice further added that the solicitors had requested BCG to send the Original BL to them and, once received, they would notify JIL’s solicitors to arrange for the inspection to take place. It is not disputed that BCG’s solicitors did not follow up with JIL’s solicitors as regards the inspection of the Original BL.

On 30 November 2020, JIL filed its defence & counterclaim in ADM 256 (“the D&CC”). JIL averred in the D&CC the abovementioned facts relating to the switching and the cancellation of the Original BL (see [10] above). JIL further averred that the Cargo had been properly discharged into the possession of one Standard Asiatic Oil Company Ltd, which was the consignee of the Switched BL and thus entitled to take delivery of the Cargo. BCG claimed that it was only upon reviewing the D&CC that it came to its attention that the Original BL had been switched and that it no longer had possession of the Original BL. BCG claimed that it was also only through subsequent internal investigations that it learned that the Original BL had been delivered to GP Global in late-June 2020 pursuant to the latter’s request to facilitate the delivery of the Cargo to Prime Oil (see [7] above).

On 15 January 2021, BCG filed its reply and defence to counterclaim (“the Reply”). In the Reply, BCG acknowledged that it had, in late-June 2020, voluntarily released the Original BL to GP Global pursuant to the latter’s request, but averred that it was unaware that GP Global had requested the Original BL for the purpose of switching the Original BL. It added that if it had known that GP Global had intended to switch the Original BL, it would have denied GP Global’s request.

On 4 February 2021, BCG filed HC/SUM 586/2021 to amend the SOC. The amendment abandoned BCG’s original claim for misdelivery of the Cargo. The amended claim was instead based on an alleged wrongful switch of the Original BL without BCG’s knowledge or consent. BCG pleaded that the wrongful switch was, amongst other matters, a breach of the contract of carriage as evidenced by the Original BL, a breach of JIL’s duty to BCG to take reasonable care of the Cargo which resulted in loss and damage to BCG, as well as a breach of JIL’s duty as bailee of the Cargo for reward. A day later, on 5 February 2021, JIL filed HC/SUM 599/2021 (“SUM 599”) to set aside WA 39, and also to strike out the Writ and ADM 256 pursuant to O 18 r 19 of the Rules. SUM 599 also sought the return of the Security, and an order for BCG to pay damages for wrongful arrest. It should be noted that, in addition, JIL has pursued a counterclaim for wrongful arrest against BCG.

The Judge’s decision

The Judge dismissed JIL’s application to set aside WA 39 and to strike out the Writ and ADM 256, but he allowed BCG’s application to amend the SOC. The Judge found that BCG’s failure to disclose the fact that it did not have...