The "Nur Allya"

• Jurisdiction: Singapore
• Judge: Navin Anand AR
• Judgment Date: 16 August 2018
• Neutral Citation: [2018] SGHCR 12
• Court: High Court (Singapore)
• Docket Number: Admiralty in Rem No 3 of 2017 (Summons No 2232 of 2018) & Admiralty in Rem No 4 of 2017 (Summons No 2234 of 2018)
• Published date: 25 August 2018
• Year: 2018
• Hearing Date: 12 June 2018
• Plaintiff Counsel: K Muralitherapany and Ng Lip Kai (Joseph Tan Jude Benny LLP)
• Defendant Counsel: Ramachandran Doraisamy Raghunath and Rafizah Gaffoor (Peter Doraisamy LLC)
• Subject Matter: Civil Procedure,Extension of Validity of Writ,Settlement Negotiations
• Citation: [2018] SGHCR 12

Navin Anand AR: Introduction

The issue of limitation tends to feature more prominently in admiralty proceedings than in usual commercial claims. Certain admiralty claims have shorter limitation periods than the six year period applicable to general claims in contract and tort. One example, which is well known to the shipping industry, is claims arising out of vessel collisions which are subject to a two year limitation period under Section 8(1) of the Maritime Conventions Act 1911 (Cap IA3, 2004 Rev Ed) (the “MCA”). A consequence of a shorter limitation period is that the renewal of writs assumes critical importance to protect against claims being defeated by a defence of limitation.

By way of two applications (one each in HC/ADM 3/2017 (“ADM 3”) and HC/ADM 4/2017 (“ADM 4”)), the Defendant applied to set aside two ex parte orders which extended the validity of the writs in ADM 3 and ADM 4, for a period of 12 months each (the “Extension Orders”). The Plaintiffs in ADM 3 and ADM 4 had only applied to extend the validity of the writs after the writs ceased to be valid and the two year time bar under the MCA had set in. A setting aside of the Extension Orders would mean that the Plaintiffs’ claims against the Defendant are time-barred under the MCA. The Plaintiffs resisted the setting aside applications, citing, inter alia, the Defendant’s conduct during settlement negotiations in the intervening period between the issuance of the writs and their expiry.

After hearing the parties, I decline to set aside the Extension Orders, but I vary them to the extent that the validity of the writs in ADM 3 and ADM 4 are extended for six months. I set out my full grounds below.

Background Facts The Collisions

The Plaintiff in ADM 3 is the owner of the vessel “GS Spring”.¹ The Plaintiff in ADM 4 is the owner of the vessel “Atika”.² For ease of reference, I refer to the “GS Spring” and the “Atika” collectively as the “Vessels”. Both Plaintiffs are represented by Mr K Muralitherapany (“Mr Murali”).

The Defendant in ADM 3 and ADM 4 is the owner of the vessel “Nur Allya”.³

On 4 January 2015, the “Nur Allya” was involved in a double collision with the “GS Spring” and the “Atika” in the Eastern Outer Port Limit of Singapore (the “Collisions”).⁴ The Plaintiffs alleged that the Collisions were caused by the Defendant’s negligence.⁵ The Plaintiffs have allegedly incurred costs for repair works and surveys done on the Vessels.⁶ In addition, the Plaintiff in ADM 4 has allegedly suffered loss of use in respect of the “Atika”.⁷

The parties do not dispute that claims arising out of the Collisions are subject to the two year limitation period provided for under the MCA. In this regard, s 8(1) of the MCA reads as follows:

Limitation of actions

8.-(1) No action shall be maintainable to enforce any claim or lien against a ship or her owners in respect of – (a) any damage or loss to another ship, her cargo or freight, or any property on board her, or damage for loss of life or personal injuries suffered by any person on board her, caused by the fault of the former ship, whether such ship be wholly or partly in fault; or (b) any salvage services,

unless proceedings therein are commenced within 2 years from the date when the damage, loss or injury was caused or the salvage services were rendered.

Accordingly, under s 8(1) of the MCA, the limitation period for claims arising out of the Collisions would have expired on 4 January 2017.

The Plaintiffs commenced proceedings within time.⁸ On 3 January 2017, the Plaintiffs issued in rem writs in ADM 3 and ADM 4 (the “Writs”) against the owner and/or demise charterer of the “Nur Allya” and 26 of her sister vessels. The writ in ADM 3 related to loss and damage to the “GS Spring” while the writ in ADM 4 was for loss and damage to the “Atika”. The Writs were valid for a period of 12 months, until 2 January 2018.

Correspondence between the parties

The correspondence between the parties lie at the heart of the present dispute. At the outset, it should be noted that neither party has taken objection to the other exhibiting correspondence marked “without prejudice”. Where necessary, I will refer to the correspondence in my decision.

The Plaintiffs first intimated a claim against the Defendant on 28 December 2016 through a letter of demand from the Plaintiffs’ solicitors to the Defendant.⁹ In the letter, the Plaintiffs contended that the Collisions were solely caused by the Defendant’s negligence and demanded the sums of (a) $569,058.59 for losses arising out of the “GS Spring” Collision, and (b) $30,411.00 plus US$12,500.00 for losses arising out of the “Atika” Collision.

The Plaintiffs did not hear from the Defendant until 23 February 2017, when Mr Benedict James Chandler (“Mr Chandler”) from the Defendant’s Protection & Indemnity Club (“P&I Club”) emailed Mr Murali, and responded to the letter of demand as follows:¹⁰

Dear Sirs

We are the P&I Insurers of the Owners of the MV Nur Allya, and are instructed to correspond with you on our Members’ behalf. We refer to the letter dated 28 December 2016 sent to our clients…

On further investigation, we understand that two writs were issued in the Singapore Court against “NUR ALLYA” on 3 January 2017 and they might refer to the collision between M/V Nur Allya with M/T GS Spring and M/V Attika.

We must reserve our position and rights but are open to resolve [sic] this matter swiftly and amicably… [emphasis added in italics]

Three things ought to be noted from Mr Chandler’s email. First, the Defendant knew that the Plaintiffs filed two writs in respect of the Collisions on 3 January 2017. If Mr Chandler had any doubts as to whether the writs were issued in respect of the Collisions or whether proceedings were commenced within time, he would have sought clarification or asked for copies of the writs. He did not. Second, the Defendant was open to resolving the matter swiftly and amicably, presumably by entering into a settlement agreement. Third, the Defendant did not intimate a cross-claim against the Plaintiffs. I will explain why this is relevant later in my decision (see [60] below).

Mr Murali responded the next day (ie, 24 February 2017) to propose a call to discuss settlement and the provision of security for the Plaintiffs’ claims.¹¹ Mr Murali’s wrote as follows:

Dear Ben

… I would be happy to discuss an amicable solution of this matter with you though we will also have to speak about the provision of security for the claim to obviate the need for an arrest.

Can we arrange to speak on Tuesday or Wednesday next week? [emphasis added in italics]

On 27 February 2017, Mr Chandler replied and agreed to have a telephone discussion with Mr Murali. In his email which was marked “without prejudice”, Mr Chandler said:¹²

WITHOUT PREJUDICE

Dear Murali

… Would it be possible to table a discussion for Wednesday afternoon at 3.30? If you have “starting positions” for settlement that you’d like to communicate in writing first, as a basis for discussion, please do confirm these in writing, as this may allow me to obtain instructions from Members on certain matters ready for the call itself. [emphasis added in italics]

Mr Murali and Mr Chandler had a telephone discussion on 1 March 2017. The parties provided differing accounts of this call. According to the Plaintiffs, the parties discussed the provision of security and the prospects of settlement.¹³ On the other hand, the Defendant says that the call “was an initial discussion about the claim and to discuss potential provisions… [and] no starting position was discussed or given…”.¹⁴

On 19 July 2017, Mr Murali wrote to Mr Chandler to provide an itemised breakdown of (a) the Plaintiffs’ claims (with supporting documents) and (b) the security demanded by the Plaintiffs.¹⁵ There was some delay from March 2017 to July 2017. The Plaintiffs’ explanation for the delay was that they were only able to present concrete figures for their claims which consisted several heads of repairs and expenses on 19 July 2017.¹⁶ In Mr Murali’s email which was marked ‘without prejudice’, he said:

WITHOUT PREJUDICE

Dear Ben,

Further to our telcon on 1/3/17, I set out below the details of my clients’ claim (with supporting documents) and security requirement. My apologies for the delay.

Please note that all supporting documents for the claim are provided on a WP basis.

Claim

[Table setting out the claim for the “GS Spring”]

[Table setting out the claim for the “Atika”]

I am happy to discuss the claim or any queries you may have. It would be in the interest of both parties to avoid costly litigation.

Security

In order to avoid an arrest, the security amount required for our clients’ claims is as follows.

[Security breakdown for the “GS Spring”]

[Security breakdown for the “Atika”]

… Our clients will also require that your principles [sic] appoint a solicitor or agent in Singapore to accept service of process.

Please let us hear from you regarding security within 7 days.

[emphasis added in italics]

Mr Murali’s email of 19 July 2017 precipitated a flurry of emails on 21 July 2017. In the morning, Mr Chandler wrote to Mr Murali and stated, “[w]e shall of course consider the claim documents and security request” [emphasis added in italics].¹⁷ In the afternoon, Mr Chandler sought Mr Murali’s confirmation that the Plaintiffs would refrain from arresting the Defendant’s vessels while Mr Chandler took his clients’ instructions.¹⁸ Mr Murali replied and stated that he was not able to give such a confirmation. However, Mr Murali informed Mr Chandler that he would not arrest the Defendant’s vessels without prior notice.¹⁹

Between 16 August 2017 and 9 October 2017, Mr Murali and Mr Chandler negotiated and discussed the wording of the security, which was to take the form of two letters of undertaking from the...