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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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- Sinarmas Energy and Mining - Indonesia
- IEA Clean Coal Centre - UK
- Indo Tambangraya Megah - Indonesia
- Power Finance Corporation Ltd., India
- Altura Mining Limited, Indonesia
- Global Green Power PLC Corporation, Philippines
- Parliament of New Zealand
- Grasim Industreis Ltd - India
- Samtan Co., Ltd - South Korea
- New Zealand Coal & Carbon
- Jaiprakash Power Ventures ltd
- Toyota Tsusho Corporation, Japan
- Ministry of Transport, Egypt
- Offshore Bulk Terminal Pte Ltd, Singapore
- Eastern Coal Council - USA
- Bangladesh Power Developement Board
- Indogreen Group - Indonesia
- Sical Logistics Limited - India
- Georgia Ports Authority, United States
- Metalloyd Limited - United Kingdom
- LBH Netherlands Bv - Netherlands
- Kaltim Prima Coal - Indonesia
- Energy Development Corp, Philippines
- Ceylon Electricity Board - Sri Lanka
- Meralco Power Generation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Riau Bara Harum - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Semirara Mining Corp, Philippines
- Dalmia Cement Bharat India
- AsiaOL BioFuels Corp., Philippines
- Africa Commodities Group - South Africa
- Directorate Of Revenue Intelligence - India
- IHS Mccloskey Coal Group - USA
- Carbofer General Trading SA - India
- Madhucon Powers Ltd - India
- ICICI Bank Limited - India
- South Luzon Thermal Energy Corporation
- Timah Investasi Mineral - Indoneisa
- Rashtriya Ispat Nigam Limited - India
- Jindal Steel & Power Ltd - India
- London Commodity Brokers - England
- Electricity Generating Authority of Thailand
- Central Electricity Authority - India
- Singapore Mercantile Exchange
- Oldendorff Carriers - Singapore
- Sindya Power Generating Company Private Ltd
- Baramulti Group, Indonesia
- Sarangani Energy Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- TeaM Sual Corporation - Philippines
- Global Coal Blending Company Limited - Australia
- Bayan Resources Tbk. - Indonesia
- Agrawal Coal Company - India
- Marubeni Corporation - India
- Iligan Light & Power Inc, Philippines
- GMR Energy Limited - India
- San Jose City I Power Corp, Philippines
- Vizag Seaport Private Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Coalindo Energy - Indonesia
- Krishnapatnam Port Company Ltd. - India
- VISA Power Limited - India
- Price Waterhouse Coopers - Russia
- PowerSource Philippines DevCo
- SMG Consultants - Indonesia
- Star Paper Mills Limited - India
- Wilmar Investment Holdings
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Pendopo Energi Batubara - Indonesia
- CIMB Investment Bank - Malaysia
- Merrill Lynch Commodities Europe
- GN Power Mariveles Coal Plant, Philippines
- Intertek Mineral Services - Indonesia
- Rio Tinto Coal - Australia
- Gujarat Mineral Development Corp Ltd - India
- European Bulk Services B.V. - Netherlands
- Ministry of Finance - Indonesia
- Wood Mackenzie - Singapore
- Neyveli Lignite Corporation Ltd, - India
- Latin American Coal - Colombia
- Globalindo Alam Lestari - Indonesia
- Meenaskhi Energy Private Limited - India
- Coal and Oil Company - UAE
- Holcim Trading Pte Ltd - Singapore
- McConnell Dowell - Australia
- Chettinad Cement Corporation Ltd - India
- Vedanta Resources Plc - India
- Ind-Barath Power Infra Limited - India
- ASAPP Information Group - India
- Manunggal Multi Energi - Indonesia
- Petron Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Vijayanagar Sugar Pvt Ltd - India
- Borneo Indobara - Indonesia
- Makarim & Taira - Indonesia
- Eastern Energy - Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Australian Commodity Traders Exchange
- Petrochimia International Co. Ltd.- Taiwan
- Uttam Galva Steels Limited - India
- Orica Mining Services - Indonesia
- Xindia Steels Limited - India
- MS Steel International - UAE
- Lanco Infratech Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Directorate General of MIneral and Coal - Indonesia
- Romanian Commodities Exchange
- Renaissance Capital - South Africa
- Anglo American - United Kingdom
- Parry Sugars Refinery, India
- Semirara Mining and Power Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Essar Steel Hazira Ltd - India
- Cigading International Bulk Terminal - Indonesia
- India Bulls Power Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Bhushan Steel Limited - India
- Antam Resourcindo - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Leighton Contractors Pty Ltd - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Simpson Spence & Young - Indonesia
- Aditya Birla Group - India
- Australian Coal Association
- Indika Energy - Indonesia
- CNBM International Corporation - China
- Bank of Tokyo Mitsubishi UFJ Ltd
- Coastal Gujarat Power Limited - India
- Gujarat Sidhee Cement - India
- Indian Energy Exchange, India
- Port Waratah Coal Services - Australia
- Economic Council, Georgia
- Attock Cement Pakistan Limited
- Minerals Council of Australia
- Interocean Group of Companies - India
- Standard Chartered Bank - UAE
- Medco Energi Mining Internasional
- Sakthi Sugars Limited - India
- Mintek Dendrill Indonesia
- Kideco Jaya Agung - Indonesia
- Posco Energy - South Korea
- Gujarat Electricity Regulatory Commission - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- Siam City Cement - Thailand
- Goldman Sachs - Singapore
- Therma Luzon, Inc, Philippines
- GVK Power & Infra Limited - India
- Ambuja Cements Ltd - India
- Bukit Makmur.PT - Indonesia
- Karaikal Port Pvt Ltd - India
- Videocon Industries ltd - India
- Larsen & Toubro Limited - India
- Kumho Petrochemical, South Korea
- PTC India Limited - India
- Mjunction Services Limited - India
- Cement Manufacturers Association - India
- Bharathi Cement Corporation - India
- Trasteel International SA, Italy
- Kobexindo Tractors - Indoneisa
- Straits Asia Resources Limited - Singapore
- Mercator Lines Limited - India
- Global Business Power Corporation, Philippines
- Bulk Trading Sa - Switzerland
- Deloitte Consulting - India
- International Coal Ventures Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- Siam City Cement PLC, Thailand
- Chamber of Mines of South Africa
- Karbindo Abesyapradhi - Indoneisa
- Bhoruka Overseas - Indonesia
- SMC Global Power, Philippines
- Kepco SPC Power Corporation, Philippines
- Tamil Nadu electricity Board
- Bhatia International Limited - India
- The University of Queensland
- Malabar Cements Ltd - India
- Kartika Selabumi Mining - Indonesia
- White Energy Company Limited
- Independent Power Producers Association of India
- Savvy Resources Ltd - HongKong
- SN Aboitiz Power Inc, Philippines
- Energy Link Ltd, New Zealand
- Pipit Mutiara Jaya. PT, Indonesia
- PNOC Exploration Corporation - Philippines
- Banpu Public Company Limited - Thailand
- Bukit Baiduri Energy - Indonesia
- Edison Trading Spa - Italy
- Indian Oil Corporation Limited
- Tata Chemicals Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Aboitiz Power Corporation - Philippines
- Central Java Power - Indonesia
- Electricity Authority, New Zealand
- Sojitz Corporation - Japan
- Commonwealth Bank - Australia
- The Treasury - Australian Government
- Mercuria Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- The State Trading Corporation of India Ltd
- TNB Fuel Sdn Bhd - Malaysia
- Barasentosa Lestari - Indonesia
- Indonesian Coal Mining Association
- Binh Thuan Hamico - Vietnam
- Salva Resources Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Orica Australia Pty. Ltd.
- Jorong Barutama Greston.PT - Indonesia
- Ministry of Mines - Canada
- Heidelberg Cement - Germany
- Thiess Contractors Indonesia
- Planning Commission, India
- Thai Mozambique Logistica
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