The "Opal 3" ex "Kuchino"

• Jurisdiction: Singapore
• Judge: Edben
• Judgment Date: 06 June 1992
• Neutral Citation: [1992] SGHC 156
• Docket Number: Admiralty in Rem No 223 of 1992
• Date: 06 June 1992
• Year: 1992
• Published date: 19 September 2003
• Plaintiff Counsel: Tongel Yeo (Chong Yeo & Partners)
• Citation: [1992] SGHC 156
• Defendant Counsel: Sarjit Singh (C Arul & Partners),Goh Wing Sun (JYP Chia & Co)
• Court: High Court (Singapore)
• Subject Matter: Possessory lien,Requirements to invoke admiralty jurisdiction,'Owners',Whether conclusive evidence of ownership,Intervener's claim of wrongful arrest of ships by plaintiffs,Principles applied to determine beneficial ownership,Words and Phrases,Court's power to release ships under O 70 r 12(4) of the Rules of the Supreme Court 1970,s 4(4) High Court (Admiralty Jurisdiction) Act (Cap 123),Whether interveners were 'owners',Admiralty jurisdiction and arrest,Ownership of vessels,Admiralty and Shipping,Meaning of 'owner',Effect of registration,Claim of wrongful arrest of ships,Action in rem,ss 3 & 4 High Court (Admiralty Jurisdiction) Act (Cap 123),Exercise of court's discretion,Priority

The matters for my decision were: first, an application to set aside the writ and the warrant of arrest, and secondly, an application for the sale pendente lite of the Opal 3 ex Kuchino (`the ship`) subject to a possessory lien which the plaintiffs claimed. Similar applications were made in respect of two sister ships, the Kataysk and the Kantemir (`the sister ships`), in Admiralty in Rem Nos 224 and 225 of 1992.

The main question called for the determination of the meaning and content of the expression `beneficial owner` as it appears in s 4(4) of the High Court (Admiralty Jurisdiction) Act (Cap 123) (`the Act`).

First the facts. The Kuchino and the sister ships were placed at the plaintiffs` shipyard to effect repairs and improvements. The ships at all material times were on the Russian Register of Ships at the port of Murmansk under the ownership of Fishing Collective Farm Leninets (`the Leninets`). In July 1991 Leninets entered into a joint venture agreement with Emerald Fisheries (Asia Pacific) Pte Ltd (`Emerald`), a Singapore company, and Opal Fisheries Pty Ltd, an Australian company, to operate the ships after the repairs and improvements. It was acknowby Leninets in a subsequent agreement dated 27 December 1991 that Emerald had taken delivery of the ships and proceeded to refit them and prepare them to commence deep sea fishing activities as agreed under various contracts entered into previously. Emerald in turn placed the ships with the plaintiffs who performed works and improvements on them from September 1991 till March 1992. The plaintiffs claimed that they were not paid and asserted a possessory lien over the ships. The possessory lien by itself afforded no means of satisfaction to the plaintiffs as they did not have a right of sale. Further, no one else had arrested the ships. It therefore became necessary for them to invoke the statutory right of arrest and have the ships sold to enforce their claim.

On 20 March 1992 the plaintiffs issued the admiralty actions in rem against the ships and caused them to be arrested on 27 March 1992. The affidavits leading the warrants of arrest stated that Emerald would be liable to the plaintiffs in an action in personam and that Emerald were the owners of the ships when the cause of action arose. It was further made out in the affidavits that at the time of the issue of the writ, Emerald were the beneficial owners of all the shares in the ships. In support of the assertions, the plaintiffs, in relation to each ship, relied on a bill of sale and acceptance of sale showing Leninets as transferors and Emerald as transferees and executed by Leninets on 6 November 1991 before a notary public in Singapore. The bill of sale and acceptance of sale was in Panamanian form. The notary public certified that sufficient proof had been produced to him that the vendors (Leninets) were, immediately prior to the execution of the bill of sale, the owners of the relevant ship and had the right to sell and transfer that ship and the person executing the bill of sale had the power to do so, and further, that that ship was free from encumbrances and maritime liens.

On 24 April 1992 the plaintiffs filed notices to move the court for orders that the ships be appraised and sold pendente lite without prejudice to their possessory lien. The motions were entered for hearing on 22 May 1992.

On 27 April 1992 Leninets obtained an order to intervene in the action to oppose the purpose of the plaintiffs. A purported affidavit was made by Alexandre G Vassine, the president of Leninets. `Purported affidavit` because it was signed before the head of the consular department of the USSR Embassy in Singapore who is not recognized as having the power to administer oaths and affirmations in Singapore in respect of documents to be used in Singapore. Therein the president stated that Leninets were the registered owners of the ship and that the ship remained on the Russian register. The interest and title to the ship, according to him, still vested with Leninets and had never been sold or transferred to Emerald. Subsequently, Leninets filed applications seeking an order to set aside the writs of summons and warrants of arrest and for the ships to be released forthwith. The ground relied on by Leninets to set aside the writs and warrants was also that Leninets were the registered owners and that they remained as such on the Russian register of ships. Later, it was stated by Leninets, without producing any legal proof, that the ships were mortgaged to a Russian bank. The implication of this was that the ships and the mortgages were still on the Russian register and, accordingly, they were not free from encumbrances.

When the motion for sale of the ships pendente lite came up for hearing before me, I decided to hear Leninets` applications to set aside the action and arrest first as they related to the jurisdiction of the court. In any event, even if Leninets had not raised the question of jurisdiction, it was the duty of the court to do so: see Heyting v Dupont [1963] 1 WLR 1192[1963] 3 All ER 97 and Third Chandris Shipping Corp v Unimarine SA. [1979] QB 645[1979] 2 All ER 972

Registration of ships

By comity of maritime nations, every foreign going merchant ship is required to have a nationality and fly its national flag. Nationality to a ship is assigned by registration in the country whose nationality is sought by the ship. Such registration is necessary for the orderly operation and maintenance of ships as mobile territories in the high seas as well as for the purpose of entering and leaving the ports they call at. Domestic legislation provides the scheme of registration. And it is up to each flag state to fix the conditions for the acquisition of nationality and registration. Although conditions vary from state to state, the underlying principles are the same. Consequently, no ship may lawfully enter or...