The "Suhaili 5201"

• Jurisdiction: Singapore
• Judge: Sinnathuray J
• Judgment Date: 09 October 1987
• Neutral Citation: [1987] SGCA 17
• Date: 09 October 1987
• Subject Matter: Whether court has jurisdiction to cancel or vary guarantee,Admiralty and Shipping,Security for release,Offer of bank guarantee by respondents,Admiralty jurisdiction and arrest,Appellants insisting on payment of money into court,Claim against owners and others interested in ship,Requirements for arrest,Amount of security
• Docket Number: Civil Appeal No 81 of 1986
• Published date: 19 September 2003
• Defendant Counsel: P Suppiah (P Suppiah & Co)
• Court: Court of Appeal (Singapore)
• Plaintiff Counsel: Mark Looi (Haridass Ho & Partners)

Cur Adv Vult

(delivering the judgment of the court):

This was an appeal by the plaintiffs/ appellants against an order of the High Court discharging the guarantee furnished by the defendants/ respondents as security for the release of their vessel, the `Suhaili 5201`, which the appellants had earlier arrested.

The facts have been complicated by the several amendments which the appellants made to their statement of claim at various stages of the proceedings and it would perhaps be useful to first set out these facts in some detail.

On 1 July 1986, the appellants commenced these proceedings against the respondents. In their indorsement of claim, the appellants prayed for a declaration that they were entitled to their possessory lien of the `Suhaili 5201` and for the sum of $1,048,511.77 in respect of modifications carried out to the same vessel at the respondents` request. The appellants arrested the `Suhaili 5201` on the same day. The affidavit leading to the warrant of arrest stated, inter alia, that the `Suhaili 5201` was the vessel in connection with which the claim for the $1,048,511.77 arose.

On 4 July 1986, the respondents entered unconditional appearance. In response to the respondents` enquiry on security for release of the vessel, the appellants asked for payment into court of $1,584,530.74 made up of:

Claim $1,050,358.62

Interest at 1 2% p.a. for 4 years $504,172.12

Costs $30,000.00

$1,584,530.74

It will be noted that the sum of $1,050,358.62 claimed was more than the amount as stated in the indorsement of claim.

The respondents offered a bank guarantee for the said sum of $1,584,530.74 but the appellants insisted on the money being paid into court. The respondents then applied for and on 18 July 1986 obtained an order of court for the release of the `Suhaili 5201 ` upon the respondents providing security in the form of a bank guarantee for $1,584,530.74, without having to pay the money into court.

On 17 July 1986, a guarantee by Banque Indosuez for $1,584,530.74 was furnished by the respondents whereupon on 18 July 1986, the `Suhaili 5201` was released.

On 21 July 1986, the appellants filed their statement of claim. In this statement of claim, the appellants abandoned their claim for the declaration that they were entitled to a possessory lien. The appellants also reduced their claim from $1,048,511.77 in the general indorsement to $1,000,358.62 particulars of which were as follows:

Invoice No 013-86 $166,128.35

Invoice No 012-8 $5,739.29

Invoice No 014-86 $1,200,000.00

Overseas calls and telex charges (estimate) $5,500.00

$1,377,367.64

Less : credit notes and moneys received on account $377,330.66

$1,000,358.62

On 7 August 1986, the appellants filed an amended statement of claim in which the total claim was increased from $1,000,358.62 to $1,050,358.62 to correspond with the figure in respect of which security had been asked for and furnished. This was done by reducing the receipts of $377,330.66 in the particulars above to $327,330.66.

On 19 September 1986, the respondents applied by way of motion for an order.that the guarantee provided for the release of the `Suhaili 5201` in the sum of $1,584,530.74 be cancelled or reduced.

At the hearing of the motion before the learned High Court judge, counsel for the appellants argued, firstly, that the court had no jurisdiction to reduce or cancel the guarantee as the guarantee amounted to a private arrangement between the parties and was therefore different from bail furnished under the Rules of the Supreme Court. Secondly, in respect of the amount of security to be provided, counsel for the appellants informed the learned judge that the figures in the amended statement of claim were wrong and that the appellants were reducing their claim from $1,050,358.62 as stated in the amended statement of claim to $669,552.30.

The appellants arrived at this figure of $669,552.30 as follows. It transpired that the appellants had done work for the respondents in respect of two ships: the `Suhaili 5201` and the `Sirocco`. According to the appellants` invoices, the total amount in respect of both ships came up to $2,006,349.82. This figure was the sum total of eight invoices:

(a) In respect of `Suhaili 5201`:

Invoice No 012-86 for $ 5,739.29

Invoice No 013-86 for $ 166,449.99

Invoice No 014-86 for $ 1,200,000.00

Invoice No 018-86 for $ 3,341.60 $ 1,375,530.88

(b) In respect of the `Sirocco`:

Invoice No 008-86 for $ 450,000.00

Invoice No 009-86 for $ 3,946.59

Invoice-No 010-86 for $ 166,128.35

Invoice No 011-86 for $ 10,744.00 $ 630,818.94

$ 2,006,349.82

The appellants admitted receipt of a total sum of $1,336,797.52. Therefore, the appellants alleged there was an outstanding balance of $669,552.30 due.

The learned judge rejected the appellants` first contention and held that the court had jurisdiction in this case to vary the amount of the guarantee furnished by the respondents. The learned judge referred to The Hoe Lee [1970] 1 MLJ 45 , The Alletta [1974] 1 Lloyd`s Rep 40 and The Ling Yung [1984] 2 MLJ 217 where, in each of those cases, the security furnished by way of a banker`s guarantee was a private arrangement between the parties and not a security given to the court unlike bail. The learned judge distinguished these cases on the ground that in each of these cases the court had nothing to do with the original provision of the guarantee and they were thus properly described as `purely private`. In contrast, in the present case, the guarantee was embodied in an order of court.

With regard to the amount of security that should be given, the learned judge followed the principles broadly laid down by Brandon J (as he then was) in The Moschanty [1971] 1 Lloyd`s Rep 37 and Polo II [1977] 2 Lloyd`s...