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Tuesday, 02 February 16
SETTING ASIDE, STRIKING OUT AND APPEALS TO THE COURT OF APPEAL IN SHIP ARRESTS - RAJAH & TANN ASIA LLP
 KNOWLEDGE TO ELEVATE
The Singapore Court of Appeal once again has had to grapple with ship arrest, setting aside and appeals to the Court under the High Court (Admiralty Jurisdiction) Act (Cap 123, 2001 Rev Ed) (“HCAJA”) and the Supreme Court of Judicature Act (Cap 322, 2007 Rev Ed) (“SCJA”).
One of the longest running arrest cases in recent history, the Chem Orchid is a sequel to the “Bunga Melati 5" [2012] 4 SLR 546 and Wasco Gem” [2014] 2 SLR 63. Both “Bunga Melati 5” and “Nasco Gem” were cited by the Court of Appeal in “Chem Orchid”.
In what is likely the most important admiralty and shipping case of 2015, in The “Chem Orchid” [2016] SGCA 4 (“Chem Orchid”), the Court of Appeal also examined and commented on the relationship between the application to set aside the arrest of a ship and the trial of the claim in the event the arrest is not set aside.
Significantly the decision of the Court of Appeal was that of a 5 Judge panel. Court of Appeal hearings typically feature a 2 or 3 Judge panel and a quorum of 5 Judges is reserved for cases of particular importance.
Another noteworthy mention is that the Chem Orchid was an appeal from the High Court’s decision in The “Chem Orchid” [2015] SGHC 5o that was a leading decision on the difficult issue of Bareboat Charters.
The Chem Orchid cases once again demonstrates the dominance of Rajah & Tann’s Shipping and International Trade team which handled all 3 cases: “Bunga Melati 5″1, Wasco Gem”2 and “Chem Orchid”.
Mr Philip Tay (assisted by Ms Yip Li Ming) of that team represented Mercuria Energy SA in the “Chem Orchid” appeal and in the High Court decision in the The “Chem Orchid” [2015] SGHC 5o.
Brief Facts
Han Kook Capital Co Ltd (“HKC” or “Owners”) were owners of the eponymous “CHEM ORCHID” that was bareboat or demise chartered (“Lease Agreement”) to a company called Seijin Maritime (“Seijin”).
A bareboat or demise charter leases the whole ship to a charterer. As the charterer is for all intents and purposes the owner under the HCAJA, a ship can be arrested for claims against the charterer.
In evidence that was thrown up in the High Court, it transpired that the ship was plagued by mechanical breakdowns. Seijin was itself mired in financial troubles.
Not knowing of these ills, various cargo owners, sub-charterers and suppliers continued to trade with the vessel and sub-chartered her, loaded cargo on her and supplied her with provisions and bunkers.
The vessel eventually met her fate in Singapore after a fatal breakdown and was arrested by her creditors and sold by the High Court as the owners did not provide security to release her.
Seijin did not participate in the High Court proceedings but HKC applied to exclude all the creditors by applying to the High Court to have all the claims set aside or struck out.
HKC’s application was premised on the alleged termination of the Lease Agreement by a notice of termination issued by another company, HK AMC Co Ltd (“HKA”).
HKC had alleged that it had transferred the right to terminate the Lease Agreement to HKA and the notice of termination issued by HKA had terminated the Lease Agreement before the claimants filed their claims in the Singapore Court.
In the alternative HKC applied to strike out the claims on the basis that all the contracts (for the charter of the ship, for the shipment of cargo for the provision of supplies, etc) were made with Seijin and they are not liable for these claims.
Holding of the High Court
In The “Chem Orchid” [2015] SGHC 5o, the High Court dismissed the setting aside and striking out applications of HKC against all creditors.
In an unprecedented case, the High Court went on to examine the requirements for the termination of a bareboat charter, recognising the importance of the topic in admiralty law.
Divergent lines of authorities
There were 2 lines of cases prior to the decision. One group holds that as the physical delivery of the ship was the essence of a bareboat charter, for a bareboat charter to be terminated, the ship must be physically redelivered to effect a reversion of possession and control. A notice was not sufficient.
The other group of cases appeared to hold that a notice was sufficient to terminate even without physical redelivery if this was provided by contract.
In an unprecedented decision, the High Court held that the Lease Agreement had not been validly terminated. The High Court held that:
For a bareboat charter to be terminated, the ship must be physically redelivered to effect a reversion of possession and control to the owner. The requirement of physical redelivery cannot be contracted out of and there is no space in Singapore law for the doctrine of `constructive redelivery’.
The notice of termination was in any event invalid as it should have been issued by HKC. HKA did not have the right to issue the notice. The notice was also defective as it did not meet the requirements of the charter for the notice of termination.
Effect on contracts after termination
The other equally far reaching result of the High Court’s decision was the effect of the contracts made by Seijin if the Lease Agreement had been terminated.
The High Court held that Mercuria had an arguable case that the contracts had been made with HKC if the Lease Agreement was already terminated at the time when the contracts were made for shipment of cargo on the ship. The legal inference was that HKC was the actual contracting party.
HKC appealed to the Court of Appeal contending the decision of the High Court was wrong.
Holding of the Court of Appeal
Appeal dismissed under s 34(1)(a) of the SCJA
The sequence of events leading to the appeals is noteworthy.
Immediately after the Notice of Appeal was filed by HKC, Mercuria and the other parties objected that that HKC had no right to appeal without leave.
HKC “invited” Mercuria and the other parties to strike out the appeal but Mercuria and the other parties felt they did not need to do so. They argued that the burden was on HKC as Appellant to prove that they had the right to appeal.
Despite the objections, HKC surprisingly made no efforts whatsoever to try and ascertain if it had the right to appeal before proceeding further.
Instead, for several months after, HKC continued to prepare and serve its Appellants’ Case, all its Appeal Bundles and its Submissions and right up to the day of the appeal itself, as if it had the right to appeal and went through the entire appeal process.
On the day of the appeal hearing itself, the Court of Appeal held that HKC had no right to appeal and dismissed HKC’s appeal without hearing the merits of the appeal. The Court of Appeal did not reserve its decision and the decision was made on the day of the hearing itself.
In an unprecedented decision, the Court of Appeal held that HKC’s setting aside application was in substance a request to the court to strike out the in rem actions on a basis similar to that which underlies 0 18 r 19 of the Rules of Court.
The grounds relied on by HKC to challenge the court’s jurisdiction were the same as the grounds which could defeat the Creditors’ substantive claims.
The Court of Appeal thus held that s 34(1)(a) of the SCJA read with para (e) of the Fourth Schedule applied and precluded HKC from appealing against the Judge’s decision.
This part of the ruling is potentially far reaching and may extend outside Shipping cases to non-Shipping cases. It may also herald a different approach to the interpretation of the Rules of Court where the Court looks at the substance rather than the form of the application.
Leave under s 34(2)(d) of the SCJA
The Court also held that if an appeal could be filed with leave under s 34(2)(d) of the SCJA read with para (e) of the Fifth Schedule, “…we agree with Mercuria and Winplus that HKC should have sought leave to appeal from the Judge first.”
As HKC did not apply for leave, it meant that even if HKC could have appealed with the court’s leave, the Court of Appeal could not grant HKC leave.
Impact of the setting aside on the trial of the action
Perhaps the most significant aspect of the decision is the impact of setting aside applications on the trial of the action.
The Court held that as the Judge declined to set aside the in rem writs on the basis of the affidavit evidence before him, the present admiralty proceedings continue to be afoot, with no conclusive finding made yet on the jurisdictional point.
The Court held that HKC can therefore raise the jurisdictional issue again at the trial; and the trial judge would be entitled, at that stage, to rule on jurisdiction based on all the evidence, including oral evidence, and the arguments placed before him.
The Court held that nothing said by the Judge or by the Court of Appeal in the present proceedings would have a bearing on how the trial judge should decide the jurisdictional issue at the trial.
Further, whatever the trial judge’s ruling on jurisdiction may be, any party who is dissatisfied would have an automatic right to appeal against that decision.
The Order 57 r 16(4) of the Rules of Court Argument
HKC also argued that under Order 57 r 16(4) of the Rules of Court, the Court of Appeal could grant it leave to appeal despite its failure to obtain leave from the Judge if there were “special circumstances” which made it “impossible or impracticable” for HKC to seek leave to appeal from the Judge.
The Court held this contention was unmeritorious as the correspondence between HKC’s solicitors and the respective solicitors for Mercuria and Winplus showed that HKC’s solicitors had been informed of HKC’s failure to seek leave from the Judge. However, HKC’s solicitors were adamant that HKC did not need leave of court to appeal.
Guidance
Finally, the Court of Appeal also provided the guidance that the proper approach for HKC to take (assuming HKC had a right of appeal to begin with) would have been to seek a declaration from the Judge that it did not need leave of court to appeal.
Alternatively, in the event that the Judge ruled that leave to appeal was needed, HKC should have sought leave from the Judge before lodging its appeals.
HKC’s failure to take these measures could not constitute “special circumstances” so as to bring them within the scope of 0 57 r 16(4) of the ROC.
Source: Rajah & Tann Asia LLP | Hellenic Shipping News
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Monday, 07 March 16
INDONESIAN 5700 GAR COAL INDEX DECLINE $0.05 A TON WEEK OVER WEEK
COALspot.com: Average 5000 GAR coal index of Indonesian origin decline 0.28 percent week over week to averaging $38.66 per ton on this past Friday, ...
Monday, 07 March 16
FREIGHT MARKET MOVING POSITIVE; ALL SEGMENTS EXCEPT CAPE SHOWING A FIRM TREND
COALspot.com: The freight market was steady this past week and showing a firm trend for all segments except for Cape index.
The Baltic Dry Ind ...
Friday, 04 March 16
GLOBAL ECONOMY'S JITTERS ARE SLOWING DOWN SHIPPING EVEN FURTHER - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The global economy’s shaky condition to say the least is now hampering growth and as a result demand for shipping is slowing down, something ...
Friday, 04 March 16
U.S. YEAR-TO-DATE COAL PRODUCTION TOTALED 109.3 MMST; 30.2% LOWER THAN THE COMPARABLE YEAR-TO-DATE COAL PRODUCTION IN 2015 - EIA
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 13.1 million shor ...
Thursday, 03 March 16
INDIA'S BUDGET NOT ENOUGH TO BOOST STEELMAKERS' PROFITABILITY - FITCH RATINGS
COALspot.com: Fitch Ratings says that increase in proposed infrastructure spending in India's latest government budget is unlikely to provide a ...
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Showing 2536 to 2540 news of total 6871 |
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- Ambuja Cements Ltd - India
- OPG Power Generation Pvt Ltd - India
- ASAPP Information Group - India
- Savvy Resources Ltd - HongKong
- Minerals Council of Australia
- Latin American Coal - Colombia
- Gujarat Mineral Development Corp Ltd - India
- India Bulls Power Limited - India
- Renaissance Capital - South Africa
- Meenaskhi Energy Private Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Marubeni Corporation - India
- VISA Power Limited - India
- Port Waratah Coal Services - Australia
- Chettinad Cement Corporation Ltd - India
- Global Green Power PLC Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- GMR Energy Limited - India
- Agrawal Coal Company - India
- Vijayanagar Sugar Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Banpu Public Company Limited - Thailand
- Metalloyd Limited - United Kingdom
- SN Aboitiz Power Inc, Philippines
- Ind-Barath Power Infra Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Carbofer General Trading SA - India
- Maheswari Brothers Coal Limited - India
- Eastern Coal Council - USA
- Merrill Lynch Commodities Europe
- Kepco SPC Power Corporation, Philippines
- Deloitte Consulting - India
- Goldman Sachs - Singapore
- PowerSource Philippines DevCo
- Edison Trading Spa - Italy
- IHS Mccloskey Coal Group - USA
- Asmin Koalindo Tuhup - Indonesia
- Global Business Power Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Bangladesh Power Developement Board
- Wood Mackenzie - Singapore
- Independent Power Producers Association of India
- GN Power Mariveles Coal Plant, Philippines
- Bulk Trading Sa - Switzerland
- Coalindo Energy - Indonesia
- Bharathi Cement Corporation - India
- Bhoruka Overseas - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Posco Energy - South Korea
- New Zealand Coal & Carbon
- Neyveli Lignite Corporation Ltd, - India
- Uttam Galva Steels Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Anglo American - United Kingdom
- Jindal Steel & Power Ltd - India
- Ministry of Mines - Canada
- Georgia Ports Authority, United States
- Cement Manufacturers Association - India
- Romanian Commodities Exchange
- Mjunction Services Limited - India
- Kartika Selabumi Mining - Indonesia
- SMC Global Power, Philippines
- Orica Australia Pty. Ltd.
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Karaikal Port Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Siam City Cement - Thailand
- Wilmar Investment Holdings
- PetroVietnam Power Coal Import and Supply Company
- CIMB Investment Bank - Malaysia
- Gujarat Sidhee Cement - India
- Manunggal Multi Energi - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Grasim Industreis Ltd - India
- Indogreen Group - Indonesia
- Coal and Oil Company - UAE
- PNOC Exploration Corporation - Philippines
- Star Paper Mills Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Altura Mining Limited, Indonesia
- Standard Chartered Bank - UAE
- Malabar Cements Ltd - India
- Orica Mining Services - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Price Waterhouse Coopers - Russia
- Bhatia International Limited - India
- Thiess Contractors Indonesia
- Formosa Plastics Group - Taiwan
- Antam Resourcindo - Indonesia
- Sakthi Sugars Limited - India
- Indo Tambangraya Megah - Indonesia
- Interocean Group of Companies - India
- Pipit Mutiara Jaya. PT, Indonesia
- Australian Coal Association
- Madhucon Powers Ltd - India
- Jaiprakash Power Ventures ltd
- Toyota Tsusho Corporation, Japan
- Commonwealth Bank - Australia
- Karbindo Abesyapradhi - Indoneisa
- White Energy Company Limited
- McConnell Dowell - Australia
- Borneo Indobara - Indonesia
- Sree Jayajothi Cements Limited - India
- Africa Commodities Group - South Africa
- Semirara Mining and Power Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Global Coal Blending Company Limited - Australia
- Rashtriya Ispat Nigam Limited - India
- AsiaOL BioFuels Corp., Philippines
- San Jose City I Power Corp, Philippines
- Larsen & Toubro Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Vedanta Resources Plc - India
- Eastern Energy - Thailand
- Parry Sugars Refinery, India
- Leighton Contractors Pty Ltd - Australia
- Sarangani Energy Corporation, Philippines
- Vizag Seaport Private Limited - India
- Krishnapatnam Port Company Ltd. - India
- Coastal Gujarat Power Limited - India
- Miang Besar Coal Terminal - Indonesia
- Aboitiz Power Corporation - Philippines
- Bukit Makmur.PT - Indonesia
- South Luzon Thermal Energy Corporation
- PTC India Limited - India
- Electricity Generating Authority of Thailand
- Straits Asia Resources Limited - Singapore
- International Coal Ventures Pvt Ltd - India
- Mintek Dendrill Indonesia
- Barasentosa Lestari - Indonesia
- MS Steel International - UAE
- Meralco Power Generation, Philippines
- Bayan Resources Tbk. - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bukit Baiduri Energy - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Kideco Jaya Agung - Indonesia
- LBH Netherlands Bv - Netherlands
- Electricity Authority, New Zealand
- TeaM Sual Corporation - Philippines
- Globalindo Alam Lestari - Indonesia
- Chamber of Mines of South Africa
- The Treasury - Australian Government
- Energy Link Ltd, New Zealand
- The State Trading Corporation of India Ltd
- Central Java Power - Indonesia
- European Bulk Services B.V. - Netherlands
- Essar Steel Hazira Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Kumho Petrochemical, South Korea
- Parliament of New Zealand
- Singapore Mercantile Exchange
- Maharashtra Electricity Regulatory Commission - India
- Indika Energy - Indonesia
- Mercuria Energy - Indonesia
- Iligan Light & Power Inc, Philippines
- Dalmia Cement Bharat India
- GVK Power & Infra Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Thai Mozambique Logistica
- Therma Luzon, Inc, Philippines
- Tata Chemicals Ltd - India
- Makarim & Taira - Indonesia
- Aditya Birla Group - India
- IEA Clean Coal Centre - UK
- Power Finance Corporation Ltd., India
- Ceylon Electricity Board - Sri Lanka
- Xindia Steels Limited - India
- London Commodity Brokers - England
- GAC Shipping (India) Pvt Ltd
- ICICI Bank Limited - India
- Medco Energi Mining Internasional
- CNBM International Corporation - China
- Salva Resources Pvt Ltd - India
- Sojitz Corporation - Japan
- Petron Corporation, Philippines
- Semirara Mining Corp, Philippines
- Rio Tinto Coal - Australia
- Economic Council, Georgia
- Sindya Power Generating Company Private Ltd
- Indonesian Coal Mining Association
- Trasteel International SA, Italy
- Mercator Lines Limited - India
- Timah Investasi Mineral - Indoneisa
- Baramulti Group, Indonesia
- Energy Development Corp, Philippines
- Gujarat Electricity Regulatory Commission - India
- SMG Consultants - Indonesia
- Kaltim Prima Coal - Indonesia
- Indian Energy Exchange, India
- Bhushan Steel Limited - India
- Siam City Cement PLC, Thailand
- Attock Cement Pakistan Limited
- Directorate Of Revenue Intelligence - India
- Heidelberg Cement - Germany
- Ministry of Transport, Egypt
- Tamil Nadu electricity Board
- The University of Queensland
- Videocon Industries ltd - India
- Australian Commodity Traders Exchange
- Binh Thuan Hamico - Vietnam
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ministry of Finance - Indonesia
- Kobexindo Tractors - Indoneisa
- Samtan Co., Ltd - South Korea
- Lanco Infratech Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Planning Commission, India
- Bahari Cakrawala Sebuku - Indonesia
- Indian Oil Corporation Limited
- Petrochimia International Co. Ltd.- Taiwan
- Riau Bara Harum - Indonesia
- Sical Logistics Limited - India
- Central Electricity Authority - India
- Sinarmas Energy and Mining - Indonesia
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