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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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Wednesday, 24 February 16
HOW IS THE FUEL MIX FOR U.S. ELECTRICITY GENERATION CHANGING? - EIA
In recent years, there have been changes in the mix of fuels used to generate electricity in the United States. Natural gas and renewable energy so ...
Wednesday, 24 February 16
PRIVATE EQUITY FUNDS LOOKING TO EXIT SHIPPING, MOST NOTABLY DRY BULK, AS OVERORDERING HAS RESULTED IN EXCESS TONNAGE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The injection of more than $13 billion in shipping from various private equity funds over the past few years has resulted in what many feared would ...
Wednesday, 24 February 16
THIRTEEN - NOT ALWAYS AN UNLUCKY NUMBER? - CLARKSONS
Back in early 1999 the price of a 5 year old Panamax bulkcarrier dipped to $13.5m, and ever since analysts have hailed purchase decisions made at t ...
Monday, 22 February 16
4200 GAR COAL INDEX SETTLES AT $27.02, DOWN 0.07% FROM LAST WEEK
COALspot.com: Average 5000 GAR coal index of Indonesian origin decline 0.17 percent week over week to averaging $38.89 per ton on this past Friday, ...
Monday, 22 February 16
FREIGHT MARKETS PICKED UP SLIGHTLY THIS PAST WEEK
COALspot.com: The freight markets picked up slightly this past week.
The Baltic Dry Index (BDI) of dry-bulk shipping freights, a measure of gl ...
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Showing 2551 to 2555 news of total 6871 |
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- Central Java Power - Indonesia
- Altura Mining Limited, Indonesia
- Orica Australia Pty. Ltd.
- Bhoruka Overseas - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Energy Development Corp, Philippines
- GVK Power & Infra Limited - India
- Kaltim Prima Coal - Indonesia
- Kideco Jaya Agung - Indonesia
- CIMB Investment Bank - Malaysia
- Toyota Tsusho Corporation, Japan
- Kohat Cement Company Ltd. - Pakistan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Wilmar Investment Holdings
- Kartika Selabumi Mining - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Standard Chartered Bank - UAE
- Energy Link Ltd, New Zealand
- Riau Bara Harum - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Bangladesh Power Developement Board
- Kumho Petrochemical, South Korea
- Alfred C Toepfer International GmbH - Germany
- Bhatia International Limited - India
- Videocon Industries ltd - India
- Ceylon Electricity Board - Sri Lanka
- Indonesian Coal Mining Association
- Africa Commodities Group - South Africa
- European Bulk Services B.V. - Netherlands
- PTC India Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Antam Resourcindo - Indonesia
- Global Green Power PLC Corporation, Philippines
- Eastern Energy - Thailand
- Commonwealth Bank - Australia
- OPG Power Generation Pvt Ltd - India
- Parry Sugars Refinery, India
- Aboitiz Power Corporation - Philippines
- Karbindo Abesyapradhi - Indoneisa
- Meralco Power Generation, Philippines
- Goldman Sachs - Singapore
- Petron Corporation, Philippines
- Tata Chemicals Ltd - India
- Manunggal Multi Energi - Indonesia
- San Jose City I Power Corp, Philippines
- Global Business Power Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Indika Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- Coastal Gujarat Power Limited - India
- Port Waratah Coal Services - Australia
- Singapore Mercantile Exchange
- Deloitte Consulting - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Oldendorff Carriers - Singapore
- Asmin Koalindo Tuhup - Indonesia
- PowerSource Philippines DevCo
- Australian Commodity Traders Exchange
- Krishnapatnam Port Company Ltd. - India
- GAC Shipping (India) Pvt Ltd
- Sinarmas Energy and Mining - Indonesia
- Salva Resources Pvt Ltd - India
- ICICI Bank Limited - India
- Ambuja Cements Ltd - India
- The University of Queensland
- Sindya Power Generating Company Private Ltd
- LBH Netherlands Bv - Netherlands
- PetroVietnam Power Coal Import and Supply Company
- Mercator Lines Limited - India
- Sree Jayajothi Cements Limited - India
- Interocean Group of Companies - India
- Malabar Cements Ltd - India
- Aditya Birla Group - India
- Thiess Contractors Indonesia
- International Coal Ventures Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- Ministry of Transport, Egypt
- TeaM Sual Corporation - Philippines
- GMR Energy Limited - India
- Eastern Coal Council - USA
- TNB Fuel Sdn Bhd - Malaysia
- ASAPP Information Group - India
- IEA Clean Coal Centre - UK
- Sarangani Energy Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- McConnell Dowell - Australia
- Borneo Indobara - Indonesia
- Ind-Barath Power Infra Limited - India
- The Treasury - Australian Government
- Planning Commission, India
- Anglo American - United Kingdom
- Bharathi Cement Corporation - India
- Baramulti Group, Indonesia
- Renaissance Capital - South Africa
- Cigading International Bulk Terminal - Indonesia
- Electricity Authority, New Zealand
- Semirara Mining Corp, Philippines
- Posco Energy - South Korea
- Therma Luzon, Inc, Philippines
- Leighton Contractors Pty Ltd - Australia
- Rashtriya Ispat Nigam Limited - India
- Sojitz Corporation - Japan
- Gujarat Electricity Regulatory Commission - India
- Agrawal Coal Company - India
- New Zealand Coal & Carbon
- Marubeni Corporation - India
- Semirara Mining and Power Corporation, Philippines
- Ministry of Finance - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Merrill Lynch Commodities Europe
- Bank of Tokyo Mitsubishi UFJ Ltd
- Edison Trading Spa - Italy
- Simpson Spence & Young - Indonesia
- Jindal Steel & Power Ltd - India
- Independent Power Producers Association of India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Siam City Cement - Thailand
- India Bulls Power Limited - India
- Barasentosa Lestari - Indonesia
- SN Aboitiz Power Inc, Philippines
- Iligan Light & Power Inc, Philippines
- Meenaskhi Energy Private Limited - India
- Vedanta Resources Plc - India
- Indian Oil Corporation Limited
- Mintek Dendrill Indonesia
- Maheswari Brothers Coal Limited - India
- Bukit Baiduri Energy - Indonesia
- Georgia Ports Authority, United States
- Grasim Industreis Ltd - India
- Medco Energi Mining Internasional
- Sakthi Sugars Limited - India
- Parliament of New Zealand
- Vijayanagar Sugar Pvt Ltd - India
- London Commodity Brokers - England
- Directorate Of Revenue Intelligence - India
- Sical Logistics Limited - India
- Vizag Seaport Private Limited - India
- Larsen & Toubro Limited - India
- Jaiprakash Power Ventures ltd
- Samtan Co., Ltd - South Korea
- Lanco Infratech Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Mercuria Energy - Indonesia
- Coalindo Energy - Indonesia
- MS Steel International - UAE
- Savvy Resources Ltd - HongKong
- Timah Investasi Mineral - Indoneisa
- Tamil Nadu electricity Board
- The State Trading Corporation of India Ltd
- Romanian Commodities Exchange
- Madhucon Powers Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Xindia Steels Limited - India
- Cement Manufacturers Association - India
- Ministry of Mines - Canada
- Bukit Makmur.PT - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Kepco SPC Power Corporation, Philippines
- Electricity Generating Authority of Thailand
- VISA Power Limited - India
- Indian Energy Exchange, India
- Chettinad Cement Corporation Ltd - India
- Essar Steel Hazira Ltd - India
- Binh Thuan Hamico - Vietnam
- Attock Cement Pakistan Limited
- Kapuas Tunggal Persada - Indonesia
- Makarim & Taira - Indonesia
- Trasteel International SA, Italy
- Star Paper Mills Limited - India
- Central Electricity Authority - India
- Thai Mozambique Logistica
- South Luzon Thermal Energy Corporation
- SMG Consultants - Indonesia
- Global Coal Blending Company Limited - Australia
- Kobexindo Tractors - Indoneisa
- Bhushan Steel Limited - India
- Formosa Plastics Group - Taiwan
- Gujarat Sidhee Cement - India
- Minerals Council of Australia
- Intertek Mineral Services - Indonesia
- Banpu Public Company Limited - Thailand
- SMC Global Power, Philippines
- CNBM International Corporation - China
- Power Finance Corporation Ltd., India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Straits Asia Resources Limited - Singapore
- Indogreen Group - Indonesia
- Australian Coal Association
- Metalloyd Limited - United Kingdom
- Karaikal Port Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Carbofer General Trading SA - India
- Uttam Galva Steels Limited - India
- Dalmia Cement Bharat India
- Bahari Cakrawala Sebuku - Indonesia
- Pendopo Energi Batubara - Indonesia
- Bulk Trading Sa - Switzerland
- Economic Council, Georgia
- Rio Tinto Coal - Australia
- Heidelberg Cement - Germany
- Latin American Coal - Colombia
- Siam City Cement PLC, Thailand
- Price Waterhouse Coopers - Russia
- Maharashtra Electricity Regulatory Commission - India
- Orica Mining Services - Indonesia
- Chamber of Mines of South Africa
- Billiton Holdings Pty Ltd - Australia
- GN Power Mariveles Coal Plant, Philippines
- Wood Mackenzie - Singapore
- Globalindo Alam Lestari - Indonesia
- White Energy Company Limited
- Mjunction Services Limited - India
- Coal and Oil Company - UAE
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