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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, 28 January 16
RICHARDS BAY COAL SWAPS FOR Q1,Q2 AND Q3 DELIVERIES FIRM THIS PAST WEEK
COALspot.com: Q1’ 2016 API4 FOB Richards Bay Coal swap rose month over month and week over week.
The Q1’ 2016 FOB Richards Bay Coa ...
Wednesday, 27 January 16
API 5 FOB NEWCASTLE COAL SWAPS CLOSE MIXED
COALspot.com: API 5 FOB Newcastle Coal swap for Q1’ 2016 delivery rose another $1.17 per ton (3.13%) this past week compared to the sam ...
Wednesday, 27 January 16
CHINA'S STALLING ECONOMY HAS HAD A GREAT EFFECT ON VARIOUS COMMODITIES; DECREASED DEMAND DRIVING COMMODITY PRICES LOWER AND LOWER - LINOS ALEXANDROS KOGEVINAS
Having gone through the first few weeks of 2016, it’s starting to look like another challenging year is ahead of us. Hopes for a recovery in ...
Wednesday, 27 January 16
WORLD HARD COAL PRODUCTION AND CONSUMPTION DECLINE IN 2015 FOR THE FIRST TIME IN OVER A DECADE - VDKI
COALspot.com: Seaborne hard coal trade and the changes in this area were decisively affected by China and India - VDKi.
China bears the g ...
Tuesday, 26 January 16
Q3'16 CFR SOUTH CHINA COAL SWAP DROPPED BELOW $41 A TON
COALspot.com: API 8 CFR South China Coal swap for Q1’ 2016 delivery rose US$ 0.82 (1.94%) per ton month over month.
A commodity swap is ...
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Showing 2586 to 2590 news of total 6871 |
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- Coal and Oil Company - UAE
- Energy Link Ltd, New Zealand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Bhoruka Overseas - Indonesia
- Kumho Petrochemical, South Korea
- Global Green Power PLC Corporation, Philippines
- Heidelberg Cement - Germany
- Kartika Selabumi Mining - Indonesia
- Borneo Indobara - Indonesia
- Interocean Group of Companies - India
- Indogreen Group - Indonesia
- SMG Consultants - Indonesia
- Bhushan Steel Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Larsen & Toubro Limited - India
- Xindia Steels Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Jaiprakash Power Ventures ltd
- Vijayanagar Sugar Pvt Ltd - India
- Rio Tinto Coal - Australia
- Dalmia Cement Bharat India
- Coastal Gujarat Power Limited - India
- Bangladesh Power Developement Board
- Madhucon Powers Ltd - India
- Anglo American - United Kingdom
- Kapuas Tunggal Persada - Indonesia
- New Zealand Coal & Carbon
- San Jose City I Power Corp, Philippines
- Cement Manufacturers Association - India
- Meralco Power Generation, Philippines
- Kepco SPC Power Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Attock Cement Pakistan Limited
- Energy Development Corp, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Mercator Lines Limited - India
- The University of Queensland
- Latin American Coal - Colombia
- Indian Energy Exchange, India
- Eastern Energy - Thailand
- Coalindo Energy - Indonesia
- Minerals Council of Australia
- Essar Steel Hazira Ltd - India
- Wilmar Investment Holdings
- GMR Energy Limited - India
- Marubeni Corporation - India
- International Coal Ventures Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Bharathi Cement Corporation - India
- IEA Clean Coal Centre - UK
- SN Aboitiz Power Inc, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Price Waterhouse Coopers - Russia
- Miang Besar Coal Terminal - Indonesia
- Bulk Trading Sa - Switzerland
- Romanian Commodities Exchange
- Petron Corporation, Philippines
- Mjunction Services Limited - India
- Aditya Birla Group - India
- Vizag Seaport Private Limited - India
- Posco Energy - South Korea
- Chamber of Mines of South Africa
- Holcim Trading Pte Ltd - Singapore
- White Energy Company Limited
- Formosa Plastics Group - Taiwan
- Vedanta Resources Plc - India
- Gujarat Sidhee Cement - India
- Sree Jayajothi Cements Limited - India
- Simpson Spence & Young - Indonesia
- Merrill Lynch Commodities Europe
- Edison Trading Spa - Italy
- Barasentosa Lestari - Indonesia
- Aboitiz Power Corporation - Philippines
- Meenaskhi Energy Private Limited - India
- Tamil Nadu electricity Board
- Toyota Tsusho Corporation, Japan
- Ministry of Transport, Egypt
- TeaM Sual Corporation - Philippines
- Bhatia International Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Altura Mining Limited, Indonesia
- Africa Commodities Group - South Africa
- Medco Energi Mining Internasional
- Bukit Makmur.PT - Indonesia
- Global Coal Blending Company Limited - Australia
- Sojitz Corporation - Japan
- Trasteel International SA, Italy
- Semirara Mining and Power Corporation, Philippines
- GVK Power & Infra Limited - India
- Sarangani Energy Corporation, Philippines
- Malabar Cements Ltd - India
- ICICI Bank Limited - India
- Binh Thuan Hamico - Vietnam
- Power Finance Corporation Ltd., India
- Ind-Barath Power Infra Limited - India
- Ministry of Finance - Indonesia
- Kobexindo Tractors - Indoneisa
- AsiaOL BioFuels Corp., Philippines
- Thai Mozambique Logistica
- Parry Sugars Refinery, India
- Bukit Asam (Persero) Tbk - Indonesia
- Chettinad Cement Corporation Ltd - India
- Manunggal Multi Energi - Indonesia
- Indonesian Coal Mining Association
- Economic Council, Georgia
- Ceylon Electricity Board - Sri Lanka
- Gujarat Electricity Regulatory Commission - India
- Mintek Dendrill Indonesia
- Krishnapatnam Port Company Ltd. - India
- Renaissance Capital - South Africa
- Eastern Coal Council - USA
- Iligan Light & Power Inc, Philippines
- SMC Global Power, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Savvy Resources Ltd - HongKong
- Rashtriya Ispat Nigam Limited - India
- Videocon Industries ltd - India
- The State Trading Corporation of India Ltd
- Georgia Ports Authority, United States
- Salva Resources Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Electricity Generating Authority of Thailand
- Banpu Public Company Limited - Thailand
- IHS Mccloskey Coal Group - USA
- LBH Netherlands Bv - Netherlands
- Alfred C Toepfer International GmbH - Germany
- India Bulls Power Limited - India
- Neyveli Lignite Corporation Ltd, - India
- GAC Shipping (India) Pvt Ltd
- Kideco Jaya Agung - Indonesia
- CNBM International Corporation - China
- PNOC Exploration Corporation - Philippines
- Singapore Mercantile Exchange
- Star Paper Mills Limited - India
- Tata Chemicals Ltd - India
- Orica Mining Services - Indonesia
- Directorate Of Revenue Intelligence - India
- Jindal Steel & Power Ltd - India
- Maheswari Brothers Coal Limited - India
- Global Business Power Corporation, Philippines
- Baramulti Group, Indonesia
- ASAPP Information Group - India
- Timah Investasi Mineral - Indoneisa
- Wood Mackenzie - Singapore
- Cigading International Bulk Terminal - Indonesia
- Antam Resourcindo - Indonesia
- Thiess Contractors Indonesia
- Oldendorff Carriers - Singapore
- Jorong Barutama Greston.PT - Indonesia
- Australian Coal Association
- Orica Australia Pty. Ltd.
- Siam City Cement PLC, Thailand
- Grasim Industreis Ltd - India
- Commonwealth Bank - Australia
- Indo Tambangraya Megah - Indonesia
- Australian Commodity Traders Exchange
- Bukit Baiduri Energy - Indonesia
- Ambuja Cements Ltd - India
- PTC India Limited - India
- OPG Power Generation Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Ministry of Mines - Canada
- Indian Oil Corporation Limited
- Standard Chartered Bank - UAE
- Mercuria Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- PowerSource Philippines DevCo
- Samtan Co., Ltd - South Korea
- VISA Power Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- CIMB Investment Bank - Malaysia
- Straits Asia Resources Limited - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Goldman Sachs - Singapore
- Port Waratah Coal Services - Australia
- Sical Logistics Limited - India
- Sakthi Sugars Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Planning Commission, India
- Maharashtra Electricity Regulatory Commission - India
- South Luzon Thermal Energy Corporation
- Sindya Power Generating Company Private Ltd
- Electricity Authority, New Zealand
- Independent Power Producers Association of India
- Parliament of New Zealand
- Intertek Mineral Services - Indonesia
- Makarim & Taira - Indonesia
- Karaikal Port Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Semirara Mining Corp, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Central Electricity Authority - India
- Bayan Resources Tbk. - Indonesia
- Metalloyd Limited - United Kingdom
- Therma Luzon, Inc, Philippines
- Pendopo Energi Batubara - Indonesia
- Indika Energy - Indonesia
- Siam City Cement - Thailand
- Kaltim Prima Coal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Deloitte Consulting - India
- Karbindo Abesyapradhi - Indoneisa
- London Commodity Brokers - England
- The Treasury - Australian Government
- Lanco Infratech Ltd - India
- Agrawal Coal Company - India
- Uttam Galva Steels Limited - India
- MS Steel International - UAE
- McConnell Dowell - Australia
- Globalindo Alam Lestari - Indonesia
- Carbofer General Trading SA - India
- Central Java Power - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
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