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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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Thursday, 04 February 16
CAPESIZE: WEST AUSTRALIAN TO CHINA HAS BEEN CONCLUDED AT US$ 2.85 PMT AND THE C3 MARKET REMAINS INACTIVE - FEARNLEYS
Capesize
As everyone is getting ready for the Chinese new year, already depressed rates are under further pressure.
According to Fearnleys, ...
Wednesday, 03 February 16
DRY BULK MARKET CONTINUES TO BE UNDER PRESSURE - INTERMODAL
The Dry Bulk market continues to be under pressure, with the BDI remaining in search of even the slightest support, which seems to be delaying more ...
Tuesday, 02 February 16
RECORD EXPORTS THROUGH SOUTH AFRICA'S RICHARDS BAY COAL TERMINAL MADE AT EXPENSE OF SMALLER RIVALS, IHS SAYS
Five percent increase in coal exports through South Africa’s dominant Richards Bay Coal Terminal in 2015 unlikely to accelerate country&rsquo ...
Monday, 01 February 16
DRY BULK SUFFERS FROM POSEIDON'S POTENT PRONGS - CLARKSONS
It has been a grim start to 2016 for the bulkcarrier market, with the Baltic Dry Index sliding to new record lows on almost every day of the year s ...
Monday, 01 February 16
INDONESIA'S SECOND LARGEST COAL MINER ADARO ENERGY HAS PRODUCED 51.46 MT IN 2015; 8% LOWER COMPARED TO FY14
COALspot.com: Adaro Energy, the Indonesia’s second largest coal producer by volume has produced 51.46 Mt in 2015, 8% lower compared to ...
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Showing 2576 to 2580 news of total 6871 |
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- Oldendorff Carriers - Singapore
- Orica Australia Pty. Ltd.
- Eastern Coal Council - USA
- Trasteel International SA, Italy
- Global Coal Blending Company Limited - Australia
- Semirara Mining Corp, Philippines
- Indian Oil Corporation Limited
- Sojitz Corporation - Japan
- Globalindo Alam Lestari - Indonesia
- Bangladesh Power Developement Board
- TeaM Sual Corporation - Philippines
- Aboitiz Power Corporation - Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Intertek Mineral Services - Indonesia
- Kideco Jaya Agung - Indonesia
- Kepco SPC Power Corporation, Philippines
- Renaissance Capital - South Africa
- Tamil Nadu electricity Board
- Karaikal Port Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Siam City Cement - Thailand
- Jindal Steel & Power Ltd - India
- Africa Commodities Group - South Africa
- Madhucon Powers Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Romanian Commodities Exchange
- Karbindo Abesyapradhi - Indoneisa
- Kapuas Tunggal Persada - Indonesia
- Heidelberg Cement - Germany
- San Jose City I Power Corp, Philippines
- Port Waratah Coal Services - Australia
- Antam Resourcindo - Indonesia
- Kaltim Prima Coal - Indonesia
- IEA Clean Coal Centre - UK
- Sarangani Energy Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Coal and Oil Company - UAE
- Baramulti Group, Indonesia
- Gujarat Electricity Regulatory Commission - India
- CIMB Investment Bank - Malaysia
- OPG Power Generation Pvt Ltd - India
- Marubeni Corporation - India
- International Coal Ventures Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Indika Energy - Indonesia
- Merrill Lynch Commodities Europe
- GAC Shipping (India) Pvt Ltd
- Parliament of New Zealand
- Latin American Coal - Colombia
- Wilmar Investment Holdings
- ASAPP Information Group - India
- Petron Corporation, Philippines
- Tata Chemicals Ltd - India
- Parry Sugars Refinery, India
- Orica Mining Services - Indonesia
- Jaiprakash Power Ventures ltd
- Altura Mining Limited, Indonesia
- Chettinad Cement Corporation Ltd - India
- Thiess Contractors Indonesia
- Kartika Selabumi Mining - Indonesia
- Independent Power Producers Association of India
- The State Trading Corporation of India Ltd
- Georgia Ports Authority, United States
- LBH Netherlands Bv - Netherlands
- Sinarmas Energy and Mining - Indonesia
- Sree Jayajothi Cements Limited - India
- Jorong Barutama Greston.PT - Indonesia
- New Zealand Coal & Carbon
- CNBM International Corporation - China
- Maharashtra Electricity Regulatory Commission - India
- Directorate Of Revenue Intelligence - India
- Standard Chartered Bank - UAE
- Asmin Koalindo Tuhup - Indonesia
- Indonesian Coal Mining Association
- Semirara Mining and Power Corporation, Philippines
- McConnell Dowell - Australia
- Formosa Plastics Group - Taiwan
- Bhoruka Overseas - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Vijayanagar Sugar Pvt Ltd - India
- Goldman Sachs - Singapore
- Sakthi Sugars Limited - India
- Pendopo Energi Batubara - Indonesia
- Global Business Power Corporation, Philippines
- Grasim Industreis Ltd - India
- Bulk Trading Sa - Switzerland
- Bhushan Steel Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Commonwealth Bank - Australia
- Dalmia Cement Bharat India
- Bukit Baiduri Energy - Indonesia
- SN Aboitiz Power Inc, Philippines
- Samtan Co., Ltd - South Korea
- Electricity Generating Authority of Thailand
- AsiaOL BioFuels Corp., Philippines
- Manunggal Multi Energi - Indonesia
- Posco Energy - South Korea
- Deloitte Consulting - India
- Timah Investasi Mineral - Indoneisa
- Metalloyd Limited - United Kingdom
- Videocon Industries ltd - India
- Binh Thuan Hamico - Vietnam
- The University of Queensland
- PNOC Exploration Corporation - Philippines
- Thai Mozambique Logistica
- Gujarat Sidhee Cement - India
- Sindya Power Generating Company Private Ltd
- Alfred C Toepfer International GmbH - Germany
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indogreen Group - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Eastern Energy - Thailand
- TNB Fuel Sdn Bhd - Malaysia
- South Luzon Thermal Energy Corporation
- Economic Council, Georgia
- Energy Development Corp, Philippines
- Simpson Spence & Young - Indonesia
- Indian Energy Exchange, India
- The Treasury - Australian Government
- Mjunction Services Limited - India
- India Bulls Power Limited - India
- Larsen & Toubro Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Vizag Seaport Private Limited - India
- GMR Energy Limited - India
- Cigading International Bulk Terminal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Riau Bara Harum - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Barasentosa Lestari - Indonesia
- Uttam Galva Steels Limited - India
- Xindia Steels Limited - India
- Ceylon Electricity Board - Sri Lanka
- Bukit Makmur.PT - Indonesia
- Star Paper Mills Limited - India
- ICICI Bank Limited - India
- PTC India Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Coastal Gujarat Power Limited - India
- Wood Mackenzie - Singapore
- Mercator Lines Limited - India
- Australian Coal Association
- Australian Commodity Traders Exchange
- Ambuja Cements Ltd - India
- Coalindo Energy - Indonesia
- Ministry of Transport, Egypt
- Bank of Tokyo Mitsubishi UFJ Ltd
- Pipit Mutiara Jaya. PT, Indonesia
- Central Electricity Authority - India
- Maheswari Brothers Coal Limited - India
- Planning Commission, India
- Attock Cement Pakistan Limited
- Iligan Light & Power Inc, Philippines
- Interocean Group of Companies - India
- GVK Power & Infra Limited - India
- Chamber of Mines of South Africa
- Rio Tinto Coal - Australia
- Leighton Contractors Pty Ltd - Australia
- Edison Trading Spa - Italy
- Rashtriya Ispat Nigam Limited - India
- Ministry of Finance - Indonesia
- Agrawal Coal Company - India
- Ind-Barath Power Infra Limited - India
- Carbofer General Trading SA - India
- VISA Power Limited - India
- Therma Luzon, Inc, Philippines
- IHS Mccloskey Coal Group - USA
- Savvy Resources Ltd - HongKong
- MS Steel International - UAE
- Bhatia International Limited - India
- Banpu Public Company Limited - Thailand
- Toyota Tsusho Corporation, Japan
- Cement Manufacturers Association - India
- Borneo Indobara - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Minerals Council of Australia
- Singapore Mercantile Exchange
- Meralco Power Generation, Philippines
- Electricity Authority, New Zealand
- Makarim & Taira - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- PowerSource Philippines DevCo
- Holcim Trading Pte Ltd - Singapore
- Medco Energi Mining Internasional
- Mercuria Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- Energy Link Ltd, New Zealand
- Vedanta Resources Plc - India
- Mintek Dendrill Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- European Bulk Services B.V. - Netherlands
- Lanco Infratech Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Aditya Birla Group - India
- Bharathi Cement Corporation - India
- London Commodity Brokers - England
- Indo Tambangraya Megah - Indonesia
- Essar Steel Hazira Ltd - India
- SMC Global Power, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Meenaskhi Energy Private Limited - India
- Kumho Petrochemical, South Korea
- SMG Consultants - Indonesia
- Anglo American - United Kingdom
- Gujarat Mineral Development Corp Ltd - India
- Power Finance Corporation Ltd., India
- Malabar Cements Ltd - India
- Sical Logistics Limited - India
- Ministry of Mines - Canada
- Salva Resources Pvt Ltd - India
- White Energy Company Limited
- Central Java Power - Indonesia
- Siam City Cement PLC, Thailand
- Petrochimia International Co. Ltd.- Taiwan
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