The “Swiber Concorde”

• Jurisdiction: Singapore
• Judge: Pang Khang Chau JC
• Judgment Date: 07 September 2018
• Neutral Citation: [2018] SGHC 197
• Citation: [2018] SGHC 197
• Hearing Date: 13 August 2018,27 August 2018
• Published date: 15 September 2018
• Year: 2018
• Date: 07 September 2018
• Docket Number: Admiralty in Rem No 47 of 2017 (Summons No 3077 of 2018)
• Plaintiff Counsel: Song Swee Lian Corina and Parveen Kaur (Allen & Gledhill LLP)
• Defendant Counsel: James Low
• Court: High Court (Singapore)

Pang Khang Chau JC: Introduction

Where an arrested vessel is sold successfully by the Sheriff following an earlier abortive sale, should the deposit forfeited by the Sheriff in the earlier abortive sale be treated as part of the proceeds of sale of the vessel and be paid out to claimants together with the proceeds of sale? In the present case, I held that it should. I now provide my reasons.

Background

The Plaintiff is the mortgagee of the vessel “Swiber Concorde” (“the Vessel”). To recover the loan secured over the Vessel, the Plaintiff commenced admiralty in rem proceedings against the Vessel, caused the Vessel to be arrested, obtained judgment in default of appearance, and obtained an order for appraisement and sale of the Vessel and her bunkers. Pursuant to the said order for appraisement and sale, the Sheriff conducted two rounds of bidding at which all bids received were below the appraised value of the Vessel. The Plaintiff then obtained the court’s leave on 1 November 2017 for the Vessel to be sold below its appraised value and on the Sheriff’s usual terms and conditions of sale (“the Conditions of Sale”) to Valentine Maritime Ltd (“VML”), who submitted the highest bid in the second round of bidding.

Forfeiture of bid deposit

On 3 November 2017, the Sheriff wrote to VML to accept its bid of USD 5,000,100 for the Vessel. In accordance with the Conditions of Sale, VML was required to pay the balance of the 10% deposit of the purchase price (less the USD 50,000 deposit already paid to the Sheriff by VML when submitting its bid) by 8 November 2017, and pay the balance 90% of the purchase price plus the value of the bunkers by 14 November 2017. As VML failed to make the said payments, reminders to VML were sent on 10 November 2017 and 15 November 2017. On 20 November 2017, VML informed the Sheriff that it had decided not to proceed with the purchase of the Vessel, and requested the Sheriff to cancel the sale and return the USD 50,000 deposit. The Sheriff replied on 28 November 2017 to accept VML’s repudiation of the sale contract and inform VML that its deposit had been forfeited pursuant to cl 16 of the Conditions of Sale.

Completion of judicial sale of the Vessel

A third round of bidding was then conducted, pursuant to which the Vessel was sold to Thien Nam Offshore Services Joint Stock Company (“Thien Nam”) for USD 4,599,769 after the court discharged the earlier order for sale to VML and granted leave for the Vessel to be sold below its appraised value to Thien Nam. The sale was completed on 31 January 2018 with the proceeds of sale paid into court on the same day.

Application for payment out of proceeds of sale

Following the expiry of the 90-day moratorium for determination of priority or validity of claims (imposed by the court order for appraisement and sale of the Vessel), the Plaintiff applied to court for

a determination of priorities and payment out against the fund, including interest earned thereon, representing the proceeds of sale of the ship or vessel “SWIBER CONCORDE” (the “Vessel”) and the bunkers lying on board, and held in Court to the credit of these proceedings …

[emphasis in original; emphasis added]

At the hearing of the application, I observed that the Sheriff’s final statement of account distinguished between: the “proceeds of sale” of USD 4,599,769 for the Vessel and USD 11,683 for the bunkers paid by the buyer, Thien Nam, which was paid into court and held by the Account-General of Singapore; and the deposit of USD 50,000 furnished by VML, which was held by the Sheriff’s office.

I therefore asked for submissions on whether the deposit furnished by VML should be paid out together with the proceeds of sale. One issue I wanted addressed was, having...