The ‘Oriental Baltic’

• Jurisdiction: Singapore
• Judge: Tan Lee Meng J
• Judgment Date: 30 March 2011
• Neutral Citation: [2011] SGHC 75
• Plaintiff Counsel: Goh Wing Sun (W S Goh & Co)
• Date: 30 March 2011
• Hearing Date: 01 February 2011
• Docket Number: Admiralty in Rem No 163 of 2010 (Summons No 5654 of 2010)
• Published date: 06 April 2011
• Citation: [2011] SGHC 75
• Court: High Court (Singapore)
• Year: 2011

Tan Lee Meng J:Introduction

The plaintiff, United Bunkering & Trading (Asia) Pte Ltd (“UBT”), applied for leave under s 299 of the Companies Act (Cap 50, 2006 Rev Ed) (the “Act”) to continue with its in rem action against the defendant, the owner of the Oriental Baltic (the “Vessel”), Oriental MES Logistics Pte Ltd (“OML”), which is being wound up. UBT’s application was opposed by the intervener, Posh Maritime Pte Ltd (“PMP”).

Background

In November 2009, PT Sarana Kelola Investa, which had instituted Admiralty in Rem No 328 of 2009 (“ADM 328”) against, OML, arrested the Vessel in Singapore.

UBT, which had then not instituted any action against OML, filed a caveat against the release of the Vessel on 25 May 2010.

On 23 July 2010, PMP, which had instituted Admiralty in Rem No 92 of 2010 (“ADM 92”) against OML, was given leave to intervene in ADM 328.

On 7 September 2010, OML’s directors resolved to wind up the company as it could not continue with its business because of its liabilities. The winding up of OML commenced on 8 September 2010 at around 10.18 am. Mr Farooq Ahmad Mann and Mr Ewe Pang Kooi of M/s Ewe Loke & Partners were appointed as the company’s provisional liquidators.

After the liquidation of OML commenced, UBT instituted its in rem action against OML on the afternoon of 8 September 2010 at around 2.25 pm. UBT claimed that OML owed it US$183,106.84, as well as contractual interest, for the supply of marine gas oil in November and December 2009.

On 15 October 2010, the Vessel was sold by the Sheriff and the proceeds of sale, which amounted to $403,000, were paid into court.

On 25 October 2010, PMP obtained judgment in ADM 92. On 26 November 2010, it applied for the determination of priorities and payment out of the proceeds of sale of the Vessel.

On 1 February 2011, UBT’s application for leave to continue with its in rem action was heard.

Whether leave should be given to UBT to continue with its action

Section 299(2) of the Act, which concerns legal proceedings where the winding up of a company has commenced, provides:

After the commencement of the winding up no action or proceeding shall be proceeded with or commenced against the company except by leave of the Court and subject to such terms as the Court imposes.

Obviously UBT wanted leave to continue with its action in order to obtain judgment and stake a claim for a share of the proceeds of sale of the Vessel. As UBT’s claim potentially competed with that of PMP, the latter intervened in the present proceedings and strenuously argued that UBT’s application for leave should be rejected.

Whether leave to continue with admiralty in rem proceedings after the owner of the vessel has gone into liquidation must be considered very carefully because of the effect of such proceedings on other creditors of the company. In an oft-cited case, In re Aro Co Ltd (“Re...