The "Sunwind"

• Jurisdiction: Singapore
• Judgment Date: 15 July 1998
• Date: 15 July 1998
• Docket Number: Admiralty in Rem No 90 of 1998
• Court: High Court (Singapore)

The “Sunwind”

[1998] SGHC 420

Kan Ting Chiu J

Admiralty in Rem No 90 of 1998

High Court

Admiralty and Shipping–Admiralty jurisdiction and arrest–Action in rem–Arrest of vessel–Disagreement on right to arbitrate–Charterers sought security for arbitration award–Shipowners offered security for judgment award only–Shipowners applied for release of vessel and damages–Whether charterers can claim security to cover arbitration award in the circumstances–Section 7 (1) International Arbitration Act (Cap 143A, 1995 Rev Ed)–Arbitration–Commencement–Security to cover arbitration award–Arrest of vessel–Disagreement on right to arbitrate–Charterers sought security for arbitration award–Shipowners offered security for judgment award only–Shipowners applied for release of vessel and damages–Whether charterers can claim security to cover arbitration award in the circumstances–Section 7 (1) International Arbitration Act (Cap 143A, 1995 Rev Ed)

The ship Sunwind was damaged in a collision with another vessel and underwent repairs in Singapore. The plaintiff, the charterer of the ship, and the defendant, the shipowner, commenced negotiations on the security for the plaintiff's claim. The plaintiff had wanted its claim to be arbitrated but the defendant disputed its right to arbitrate. The plaintiff subsequently arrested the ship pursuant to a warrant of arrest. The parties were unable to agree on the scope of the security for the ship's release. The plaintiff wanted a guarantee to cover any order of any court or tribunal of competent jurisdiction, which would include an arbitration tribunal. The defendant was only willing to offer a guarantee to cover an award made by the High Court of Singapore or an appeal therefrom. The defendant applied for an order that theSunwind be released from arrest and that the plaintiff pay damages for wrongful detention from the time when it delivered to the plaintiff a letter of undertaking incorporating its preferred phraseology. The application was dismissed by the deputy registrar. The defendant appealed.

Held, allowing the appeal:

(1) On a plain reading of s 7 of the International Arbitration Act (Cap 143A, 1995 Rev Ed), the court only had the power to order security to cover an arbitration award when it ordered a stay of the proceedings before it. There was no need to consider or provide security against an arbitration award unless the proceedings were stayed pending arbitration: at [15].

(2) Only security in the form offered by the defendant could be ordered because the powers under s 7 were not available to the court. If there was an application and an order to stay the proceedings pending arbitration, the court could order security in the form the plaintiff wanted as that would be wholly reasonable under the circumstances, but the absence of an order to stay the proceedings made a critical difference: at [16].

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