The "Virgo I" ex "Kapitan Voloshin"

CourtHigh Court (Singapore)
JudgeG P Selvam J
Judgment Date14 December 2000
Neutral Citation[2000] SGHC 275
Citation[2000] SGHC 275
Date14 December 2000
Defendant CounselVivian Ang and Mark Ortega (Allen & Gledhill),Khoo Kah Ho and Lim Tanguy Yuteck (Fabian & Khoo),Leong Kah Wah (Joseph Tan Jude Benny)
Subject MatterAdmiralty and Shipping,Sale of vessel,Whether vessel transferred by previous shipowners to present shipowners,Admiralty jurisdiction and arrest,Balance of sale proceeds,Competing claims for sale proceeds by present and previous shipowners
Docket NumberAdmiralty in Rem No 774 of 1998
Published date20 November 2003


Grounds of Decision

The claim

1. The "KAY" was arrested in this action by her crew on 18 November 1998. It was sold for $1,620,000 including bunkers on board. After payment of the Sheriff’s expenses, crew’s wages and the claims by the shipyard there remained to the account of the action about $570,000. Two parties are scrambling for it.

2. By Notice of Motion No 250 of 1999 a Liberian Corporation have asked for the funds in Court to be paid out to them. By name it is Falkland Investments Ltd ("Falkland"). A Russian corporation Vladivostock Base of Trawling and Refrigeratory Fleet ("VBTRF") by its liquidator opposes the application.

3. Falkland asserts the claim for the funds on the premises that it was the owner of the "KAY" at the time of the arrest and sale. The determination of the issues depends on whether the premises put forward by Falkland are true or false. So I shall at once state the premises relied on by Falkland.

The premises

4. Falkland’s basic premises is that the former owner of the "KAY", that is VBTRF, by an agreement dated 16 January 1998 transferred the vessel to Falkland as datio in solutum. The Latin phrase means "An accord and satisfaction under the civil law, wherein the consideration is in property and not in money". The document states "indemnity" as the equivalent of datio in solutum. The vessel was then known as "VLADIMIR CHIVILIKHIN" and belonged to the Port of Vladivostock.

5. Following the transfer, says Falkland, the vessel was on 1 July 1998 registered provisionally at the Port of Belize in the state of Belize. It is in Central America. It was formerly known as British Honduras. The provisional registration certificate was issued on 1 July 1998.

6. The transfer document refers to Falkland as "Creditor" and VBTRF as the "Debtor". The recitals in the transfer document read as follows :

"(1) The debtor and the Creditor on 2 June 1997 concluded a Loan Agreement (the "Loan Agreement") under which the Debtor received a loan in the amount of USD7,000,000 (seven million) and was to repay same to the Creditor within 11 July 1997 in accordance with the terms of the Loan Agreement.

(2) The debtor and the Creditor on 2 June 1997 concluded a mortgage agreement in respect of MV "VLADIMIR CHIVILIKHIN" and which is registered in the State Register of Ships in the Fishing Sea Port of Vladivostock No 43 on 3 June 1997 ("the Mortgage Agreement").

(3) The debtor has defaulted in the due performance of his obligations under the Loan Agreement, has acknowledged his debt in full and undertakes in all respects to procure the repayment of the moneys to the Creditor due under the Loan Agreement but is unable to make any repayments."

7. The operative parts of the document which effected the transfer of title read as follows :

"1.1 In consideration of the matters set out in this Agreement the Debtor undertakes in lieu of the partial performance of its obligations under the Loan Agreement and the performance of its obligations under the Mortgage Agreement to transfer to the Creditor the vessel "VLADIMIR CHIVILIKHIN" ("the Vessel") and the Creditor undertakes to accept the said Vessel as an indemnity (datio in solutum) in accordance with the present Agreement.

1.2 The Vessel "VLADIMIR CHIVILIKHIN" is registered in the State Register of Ships in the Fishing Sea Port of Vladivostock 19 July 1990 under No 6. The vessel is sailing under the Russian Flag, has a call signal UHGP.

1.3 It has been mutually agreed between the Parties that the transfer of the Vessel and the rights of ownership therein to the Creditor shall extinguish the Debtor’s obligation under the Loan Agreement only in the amount of US$3,500,000 (three million, five hundred thousand) and provided always that the transfer of the Vessel is completed and shall extinguish the Debtor’s obligations under the Mortgage Agreement. Save as aforesaid the Debtor’s obligations under the Loan Agreement and all other associated security documents shall remain in full...

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