Judgment

[Please note that this case has not been edited in accordance with the current Singapore Law Reports house style.]

Chan Seng Onn JC:

1       The defendants, Transport Hellenic Inc, Panama, were the owners of the vessel Trade Resolve (‘the vessel’). The plaintiffs, Kian Guan Industries Pte Ltd, were the holders of the bill of lading No 1 dated 23 October 1998, Fujairah (‘bill of lading’) for 36,432.289 metric tonnes (35,856.787 litres) of off-specification fuel oil (‘oil cargo’) loaded on board the vessel sometime in October 1998 at Fujairah for carriage to off port limits at Singapore (‘the nominated discharge port’). Loyoil LLC (‘Loyoil’) was named in the bill of lading as the shippers. The plaintiffs were the notify party. The consignee was to be named to the order of United Overseas Bank Ltd, Singapore.

2       By way of a contract dated 22 December 1998, Loyoil sold the oil cargo to Wah Yuen Petroleum Marine Pte Ltd (‘the interveners’), who in turn sold it to the plaintiffs on 3 January 1999. When the vessel arrived and anchored off port limits, Singapore, at the bearing, Latitude 01 degrees 13.3 minutes North, Longitude 103 degrees 34.86 minutes East, the interveners pumped 4,671 cubic meters of their own emulsified and recovery oil into the vessel for blending with the plaintiffs’ oil cargo. The blending was carried out pursuant to some prior arrangement between the interveners and the plaintiffs.

3       After blending, a substantial quantity of the blended oil was discharged onto another vessel, the Obo Gallantry. Sometime on 30 January 1999, the master of the vessel stopped the discharge on the instructions of the charterers, Aris Shipping Ltd, Abu Dhabi (‘the charterers’). Remaining on board were some 13,500 to 15,000 metric tonnes of the blended oil, which had now become the subject of dispute among the parties to this action.

Reasons for stopping the discharge

4       The defendants initially allowed the blending operations to be carried out on the understanding that they would be paid the demurrage and detention charges under the charterparty, and that such allowance was without prejudice to their exercising a lien over the cargo. This factual assertion was to some extent corroborated by the telex on 26 January 1999 from the interveners stating that there was a promise that instructions to the master of the vessel to discharge the cargo would be given once the letter of credit (‘LC’) payment advice was received, and that the required LC for part payment of the demurrage claims had been declared by them. The interveners then asked for discharge of the blended cargo by 26 January 1999. In para 5 of their telex, the interveners stated that:

Regarding the demurrage claims, as agree by your goodself, accept our bank guarantee. We will still perform our bank guarantee, but you have to release the cargo 39,000 mts to our vsl MT Belgallantry. And the balance you can hold until you had received our bank guarantee. (For the balance demurrage will be base on the last time sheet and make payment to you.)

5       The interveners further represented, by way of an OCBC bank remittance advice stamped 22 January 1999, that a remittance of US$100,000 had been made in favour of the defendants or Loyoil. This representation was subsequently discovered to be false as no such sum was remitted. When the charterers and defendants realised that the demurrage had not been paid by the interveners, the master of the vessel was immediately ordered to cease discharging the blended cargo to preserve the defendants’ lien for the unpaid demurrage.

6       These events led to the following fax dated 9 February 1999 from the charterers’ and Loyoil’s English solicitors’, Holman Fenwick & Wilans, to A Bilbrough & Co Ltd, where it was stated that:

7    On or about 24 December 1998, Loyoil entered into a sale contract with Wah Yuen Petroleum Pte Ltd (WY), the terms of which provided in summary that the cargo would be sold for US$1,139,000, that the discharge would take place during the period 24 to 27 December, that the sellers would pay for the demurrage on the vessel for this period, but thereafter demurrage would be for the account of the buyer.

8    Unfortunately, WY delayed in two respects. First, they did not open the letter of credit until 21 January 1999 and payment was not received until 29 January, and secondly, they did not provide off take vessels until end January. It follows that under the side contract, WY is responsible for demurrage for that period.

9    Aris/Loyoil permitted discharge even though demurrage was not paid on the express understanding that demurrage would be paid before discharge was completed and on the basis of a banking slip provided by WY (Wah Yuen) on or about 21 January to the effect that a substantial amount of demurrage had been remitted from their bank in Singapore to Aris/Loyoil. In fact, this proved to be false and Aris/Loyoil had no option other than to order the vessel (the ‘Trade Resolve’) to cease discharge and exercise a lien over the remaining cargo of approximately 13500 MT as security for demurrage.

10  WY in turn have sold the cargo to Kian Guan Enterprises Pte Ltd (KG). In fact it was KG who opened the letter of credit in favour of Loyoil. We have not seen the sale contract between WY and KG and do not know if the demurrage terms are back to back.

11     On the next day, 10 February 1999, Holman Fenwick & Wilans wrote to the defendants’ solicitors in New York, Richard W Bladwin Esq, stating that their clients had given the defendants a lawful order to exercise a lien over the cargo remaining on board in respect of outstanding demurrage, and if the defendants released the cargo or otherwise gave up the lien, they would be liable to damages to their clients.

12     Captain S Michalopulos, the operations manager of Marine Management Services MC, Piraeus, Greece, who were the managers and representatives of the shipowners of the vessel, filed an affidavit on behalf of the defendants confirming, inter alia, that the blending operation was conducted on the understanding that the defendants would be paid the demurrage due to them and that such blending was subject to the terms of both the charterparty and the bill of lading, which had incorporated all the terms of the charterparty, including the lien clause.

13     I noted that the plaintiffs and interveners did not file any affidavit to dispute the fact that such an understanding had been reached. Neither had they disputed the defendants’ assertion that the interveners had fraudulently represented, by way of an OCBC bank remittance advice stamped 22 January 1999, that a remittance of US$100,000 had been made in favour of the defendants or Loyoil, when there was in fact no such remittance. The plaintiffs merely denied that the defendants were entitled to exercise any lien over the cargo as against the plaintiffs for any unpaid demurrage or detention charges. In my view, this was quite different from a positive denial on affidavit (which was absent) of the abovementioned facts relied upon by the defendants to support their claim that they had a lien over the entire blended cargo remaining on board. Clearly, the court could only decide whether the defendants were entitled to a lien, which was a question of law, after a careful consideration of the relevant factual evidence. If the plaintiffs and interveners did not challenge those material facts raised on affidavit by the defendants, the court would deem those facts as unchallenged and base its decision on those unchallenged facts.

14     It was also not in dispute that the defendants were not paid for the demurrage that resulted from the considerable delay at the nominated discharge port, and in the light of what had transpired, the defendants claimed a lien over the blended cargo remaining on board their vessel as security for payment of the demurrage. Counsel for the plaintiffs made clear at the hearing that they were not claiming any rights other than their lien over the entire blended cargo on board for demurrage pursuant to the demurrage and lien clauses in the charterparty. It was not their position that the plaintiffs were personally liable to pay the demurrage, for which they could bring an action against the plaintiffs, should the proceeds of sale of the retained oil cargo be insufficient to satisfy their unpaid demurrage. They simply relied on their lien to refuse further discharge of the blended oil cargo remaining on board their vessel.

Commencement of plaintiffs’ action in rem

15     On 30 January 1999, the plaintiffs commenced this action in Admiralty in Rem No 74 of 1999 and obtained a warrant of arrest entered No 61 of 1999. The writ and the warrant of arrest were purportedly served and executed on the same day on the vessel, which was anchored at the stated location off the port limits of Singapore. The plaintiffs alleged that the defendants were liable for the wrongful detention and conversion of their cargo. The interveners intervened in the plaintiffs’ action as they alleged that their emulsified and recovery oil (of 4,671 cubic meters) was still on board, albeit fully blended with the plaintiffs’ fuel oil, and the defendants had refused to let them repossess their oil.

16     Whilst on this point, I did not think it was right for the interveners and the plaintiffs to assert as a fact that all 4,671 cubic meters of the interveners’ oil was still on board following the earlier discharge of a substantial quantity of the blended oil. Surely, a substantial part of the interveners’ oil would have been discharged at the same time, since the interveners’ emulsified and recovery oil and the plaintiffs’ fuel oil could no longer be physically separated after the blending. Consequently, the plaintiffs’ fuel oil could not have been pumped out separately leaving the entire lot of the 4671 cubic meters of the interveners’ oil behind.

17     The defendants entered an appearance to the action on 20 February 1999. On 6 March 1999, they filed an application to set aside the arrest on the basis that it was executed in contravention of s 65A of the Supreme Court of Judicature Act (Cap 322) and that the arrest was effected outside the territorial limits of Singapore. They also asked for an enquiry on the damages resulting from the wrongful arrest. In the same application, the defendants applied under O 14 r 12 of the Rules of Court for a determination of two issues: (a) whether the lien clause (cl 21) under a Asbatankvoy Form Tanker Voyage Charterparty dated 3 September 1998 (‘charterparty’) between the charterers and the defendants had been incorporated in the bill of lading issued by the master of the vessel, and (b) whether it conferred on the defendants a right to exercise a lien on the cargo for all demurrage due and payable under the charterparty, which lien was valid, binding and effective as against the plaintiffs, the interveners or any other parties interested in the cargo. These matters came before me for determination.

18     The other parts of the defendants’ application concerning the sale of the cargo had been dealt with earlier by Lai Kew Chai J, who ordered that the blended oil cargo on board be appraised and sold, and that the rights of all the parties interested in the cargo be preserved against the sale proceeds to be paid into court, pending resolution by the court of the ownership and rights of lien asserted against the cargo. Clearly, the defendants had submitted to the jurisdiction of the court concerning the cargo by entering an appearance and making an application for the cargo to be sold and the sale proceeds paid into court. I had no doubt in my mind that the court had jurisdiction to hear the matter concerning the lien because the entry of appearance by the defendants would give the court in personam jurisdiction over the defendants. The learned judge had in fact ordered that the matter be heard before the court. Since the proceeds of sale of the subject matter of the lien would be paid into court, it must follow that this court would necessarily also have jurisdiction over how the proceeds would be paid out following its determination of the ownership and rights of the parties over the cargo.

19     But whether the arrest of the vessel was wrongful, and whether the court’s admiralty jurisdiction in rem against the vessel itself had been properly invoked either by the service of the writ and/or execution of the warrant of arrest on the vessel were entirely separate matters. I could not see any legal basis for the plaintiffs’ objections that the defendants could not submit to the court’s jurisdiction to deal with the dispute on the cargo brought within the court’s jurisdiction to be sold pendente lite by the Sheriff, and yet challenge at the same time that the vessel’s arrest was wrongful, unlawful and ineffective for want of jurisdiction, being an arrest effected outside Singapore’s territorial waters and in contravention of the authorisation granted by the Registrar to arrest only within port limits.

20     It was not disputed that the plaintiffs’ claim came within s 3(1)(g) and s 3(1)(h) of the High Court (Admiralty Jurisdiction) Act (Cap 123). Hence, the court had the admiralty jurisdiction to hear the claim. The defendants did not dispute that the action was properly brought under s 4(4) of the said Act. The vessel was the one in connection with which the plaintiffs’ claim arose. At the time the cause of action arose, Transport Hellenic Inc, Panama, were the owners of the vessel and were the persons who would, apart from s 5 of the High Court (Admiralty Jurisdiction) Act, be liable to the plaintiffs in an action in personam. At the date the writ was issued, Transport Hellenic Inc were the beneficial owners of the vessel as respects all the shares therein. Thus, the plaintiffs were entitled to invoke the admiralty jurisdiction by an action in rem against the vessel and to have it arrested. But that did not mean that the admiralty jurisdiction in rem had in fact been invoked. The issuance of a writ in an action in rem was only the start of the invocation. A further step was necessary to invoke the admiralty jurisdiction in rem against the vessel (or, for that matter against a sister ship). This could be done either by serving the writ in rem on the vessel or by arresting the vessel: The Fierbinti [1994] 3 SLR 864. The Court of Appeal held that arrest was not an essential or necessary step in the invocation of the court’s jurisdiction. It was previously thought that the court’s in rem jurisdiction was invoked only after the vessel was served with both the writ and the warrant of arrest. With this elucidation of the law by the Court of Appeal, it is now clear that the court’s admiralty jurisdiction in rem against the vessel will be considered as having been properly invoked from the point of time of service of the writ or execution of the warrant of arrest, whichever is the earlier, provided of course the necessary prerequisites are satisfied for proper service or execution as the case may be. Should there be irregularities in the service of the writ or execution of the warrant of arrest, the plaintiffs may well fail to invoke the jurisdiction of the court, for instance, where the irregularity amounts to a nullity. The kind of irregularity must be examined closely as a waiver of the irregularity by the parties will not necessarily confer jurisdiction on the court. It depends on the nature of the irregularity waived.

21     In this case, it was not disputed that the admiralty writ in rem and the warrant of arrest were both validly issued and the court was entitled to exercise admiralty jurisdiction in rem against the vessel. But the procedural and substantive aspects concerning proper service of the writ and execution of the warrant of arrest were entirely different matters. Since they were challenged, I would now examine whether the necessary pre-requisites had been satisfied, and if not, then whether the defendants had waived any of the irregularities and what effect such waiver would have on the invocation of the court’s admiralty jurisdiction.

Execution of warrant of arrest

22     A writ in rem could not be served on a vessel outside Singapore: O 70 r 3(3). Similarly, a vessel could not be lawfully arrested if it was outside the territorial waters of Singapore. Even for an arrest within territorial waters, the terms and conditions stipulated in the letter of authorisation granted by the Registrar to the solicitor to enable him to exercise the powers of the Sheriff to arrest the vessel must be strictly adhered to. On top of that, limitations for arrest of foreign ships have been imposed as could be seen in art 28 of the United Nations Convention on the Law of the Sea (‘UNCLOS’), which was ratified by Singapore on 17 November 1994. These limitations must also be observed although they do not appear to be absolute prohibitions having regard to the choice of the words ‘should not’ and ‘may not’ in art 28, which states that:

Civil jurisdiction in relation to foreign ships

1    The coastal State should not stop or divert a foreign ship passing through the territorial sea for the purpose of exercising civil jurisdiction in relation to a person on board the ship.

2    The coastal State may not levy execution against or arrest the ship for the purpose of any civil proceedings, save only in respect of obligations or liabilities assumed or incurred by the ship itself in the course or for the purpose of its voyage through the waters of the coastal State.

3    Paragraph 2 is without prejudice to the right of the coastal State, in accordance with its laws, to levy execution against or to arrest, for the purpose of any civil proceedings, a foreign ship lying in the territorial sea, or passing through the territorial sea after leaving internal waters.

23     Article 28 was inserted to preserve the right, recognised by customary international law, of peaceful or innocent passage through the territorial sea for vessels of states other than the coastal state. Article 14 of UNCLOS embodied this aspect of customary international law and provided as follows:

1    Subject to the provisions of these articles, ships of all States, whether coastal or not, shall enjoy the right of innocent passage through the territorial sea.

2    Passage means navigation through the territorial sea for the purpose either of traversing that sea without entering internal waters, or of proceeding to internal waters, or of making for the high seas from internal waters.

3    Passage includes stopping and anchoring, but only in so far as the same are incidental to ordinary navigation or are rendered necessary by force majeure or by distress.

4    Passage is innocent so long as it is not prejudicial to the peace, good order or security of the coastal State. Such passage shall take place in conformity with these articles and with other rules of international law.

5    Passage of foreign fishing vessels shall not be considered innocent if they do not observe such laws and regulations as the coastal State may make and publish in order to prevent these vessels from fishing in the territorial sea.

24     Having regard to the above, it was clear to me that if the foreign ship had assumed or incurred any obligations or liabilities when it was within the territorial waters of Singapore, then the vessel could be arrested even though it might be innocently passing through Singapore’s territorial sea. This gave the coastal State sovereignty over matters arising within its territorial jurisdiction. But if the obligations or liabilities were not assumed or incurred by the ship in the course or for the purpose of its innocent passage through Singapore’s territorial waters, ie they were antecedent liabilities assumed or incurred prior to the vessel’s entry into territorial waters, no arrest of the vessel making an innocent passage through the territorial waters of Singapore ought to be allowed by the court. However, if the foreign ship had stopped or anchored within the territorial waters of Singapore and was thus no longer continuing its innocent passage through the territorial waters, then the vessel could be lawfully arrested for the purpose of any civil proceedings because the interest of the coastal state had reassumed its importance and there was no need in such an instance to balance the countervailing necessity to keep sea lanes of communication as open as possible. But where the stopping or anchoring was reasonably incidental to ordinary navigation, or was rendered necessary by force majeure or by distress, then the vessel should not be arrested as that stopping or anchoring would be regarded as an integral part of the vessel’s innocent passage through the territorial sea of Singapore.

25     For completeness, I might add here that the above limitations stated in art 28 of UNCLOS concerning execution and arrest of a foreign vessel within territorial waters would not be applicable if the vessel was within the internal waters of Singapore as defined in UNCLOS.

26     On the facts of this case, the foreign vessel was already at anchor and was in fact, performing blending operations whilst at anchor. Obviously, its innocent passage, whether through the territorial sea or not, had been completed by the time of its arrest. If the vessel was anchored under these circumstances within the territorial sea of Singapore, it could be lawfully arrested without any breach of Singapore’s international obligations, but not if it was outside Singapore’s territorial sea. It was thus important to decide this question.

Was the vessel arrested and the writ in rem served outside Singapore’s territorial waters

27     The plaintiffs contended that the vessel was anchored within Singapore’s territorial waters. Hence, both the service of the writ in rem and the execution of the warrant of arrest were proper. Were they? The starting point for this analysis would be the UK Territorial Waters Jurisdiction Act 1878, which was not disputed was applicable to the United Kingdom and all other parts of Her Majesty’s dominions at that time, of which Singapore was one. Section 7 provides:

‘The territorial waters of Her Majesty’s dominions,’ in reference to the sea, means such part of the sea adjacent to the coast of the United Kingdom, or the coast of some other part of Her Majesty’s dominions, as is deemed by international law to be within the territorial sovereignty of Her Majesty; and for the purpose of any offence declared by this Act to be within the jurisdiction of the Admiral, any part of the open sea within one marine league of the coast measured from low-water mark shall be deemed to be open sea within the territorial waters of Her Majesty’s dominions:

28     The latter part of s 7 above dealt with the jurisdiction for criminal offences which extended to one marine league from the low-water mark of the coastline. Counsel informed me that one marine league was equivalent to 3 nautical miles. But for non-criminal matters, the territorial waters under that Act would be that part of the adjacent sea as was deemed by international law to be within the territorial sovereignty of Her Majesty. Thus, the present limits of the territorial waters of Singapore is such part of the sea adjacent to the coast of Singapore as is deemed by current international law to be within the territorial sovereignty of Singapore.

29     With UNCLOS successfully concluded in 1982, which saw numerous countries being signatories to it including Singapore, Malaysia and Indonesia, I would for the present purposes be guided by UNCLOS in my determination of the current state of international law in relation to the delimitation of the territorial waters of Singapore. I agreed with counsel for the plaintiffs that it was legitimate to regard UNCLOS as reflective, if not already an embodiment, of customary international law.

30     Under art 3 of UNCLOS, Singapore had the right to establish the breadth of its territorial sea up to a limit not exceeding 12 nautical miles from the low-water line along the coast (defined as the normal baseline in UNCLOS). I noted that art 3 had not deemed that every state would have a territorial sea extending to 12 nautical miles. UNCLOS left each coastal state to decide for itself whether to extend the breath of its territorial sea.

31     The next important question was whether Singapore had in fact exercised its right under art 3 to extend its territorial sea up to 12 nautical miles. Counsel for the plaintiffs submitted that Singapore had already done so. He relied on the following pre-UNCLOS press release dated 15 September 1980 from the Ministry of Foreign Affairs:

Exclusive Economic Zone

The Resumed Ninth Session of the Third United Nations Conference on the Law of the Sea has just ended at Geneva. From the results of the Session, it would appear that the Conference is now drawing to a close and a new Convention on the Law of the Sea is likely to be concluded soon.

         One of the trends emerging from the Conference is the endorsement of a 12-nautical mile limit for the territorial sea, with assurances of unimpeded transit passage through straits, and for a 200-nautical mile Exclusive Economic Zone beyond the territorial sea where coastal States will have jurisdiction and rights over resources. The practice of States in recent years has also been consistent with this trend. Among others, Malaysia and Indonesia have already declared a 12-nautical mile territorial sea and a 200-nautical mile Exclusive Economic Zone.

         Since 1878, Singapore has adhered to the concept of a three-nautical mile territorial sea. In certain areas, Singapore can extend its territorial sea beyond three nautical miles and can also claim an Exclusive Economic Zone. In the light of the said international developments, Singapore will exercise its rights to extend its territorial sea limit up to a maximum of 12 nautical miles. Likewise, Singapore will also establish an Exclusive Economic Zone.

         The precise coordinates of any extensions of the territorial sea and the establishment of any Exclusive Economic Zone will be announced at an appropriate time. Should such extensions and the establishment of an Exclusive Economic Zone overlap with claims of neighbouring countries, Singapore will negotiate with these countries with a view to arriving at an agreed delimitation in accordance with international law.

32     Where the separation between the coastal states was less than 24 nautical miles, the 12 mile territorial seas of the adjacent coastal states would be delimited as follows under art 15 of UNCLOS which provided that:

Where the coasts of two States are opposite or adjacent to each other, neither of the two States is entitled, failing agreement between them to the contrary, to extend its territorial sea beyond the median line every point of which is equidistant from the nearest points on the baselines from which the breadth of the territorial seas of each of the two States is measured. The above provision does not apply, however, where it is necessary by reason of historic title or other special circumstances to delimit the territorial seas of the two States in a way which is at variance therewith.

33     It was not disputed that the vessel was anchored more than 3 but less than 12 nautical miles from the nearest land mass sovereign to Singapore. The vessel was 4.05 nautical miles from Sultan Shoal Lighthouse (Singapore territory) and 4.61 nautical miles from Tanjung Piai (Malaysian territory) at the time of her arrest. Article 15 was thus relevant. Since the vessel was on the nearer side of the median line to Singapore and within 12 nautical miles, plaintiffs’ counsel submitted that the vessel was therefore arrested within Singapore’s territorial waters, although it was off port limits. I was given to understand that port limits at that location was 3 nautical miles from Singapore.

34     Plaintiffs’ counsel further relied on the presence on numerous occasions of Singapore Police Coast Guard vessels patrolling in this area outside port limits, which he submitted demonstrated that Singapore had been exercising its rights of sovereignty in that area. Hence, he argued that Singapore’s territorial sea extended to the waters where the vessel was anchored. In my view, the presence or absence per se of these Singapore Police Coast Guard vessels in these waters could not and did not establish if Singapore’s territorial sea according to international law extended to where these coast guard vessels were sighted.

35     It was not disputed (and I assumed that counsel had checked their facts), that no announcements had been made by the Government of Singapore of the precise coordinates of the extensions of the territorial sea in the area where the vessel was anchored. Counsel could not show me documents evidencing any agreed delimitation with Malaysia for the waters in the area in question. Counsel for the plaintiffs relied exclusively on the press release by the Ministry of Foreign Affairs to show that Singapore had in effect declared an extension of its territorial sea to 12 nautical miles.

36     On reading the press announcement issued by the Ministry of Foreign Affairs, it did not appear to me to constitute a declaration of the extension of our territorial waters to the 12 nautical mile limit or to the median line at the points where the separation between the baselines of Singapore and neighbouring states was less than 24 nautical miles. It was simply an announcement that Singapore would in the future exercise its rights to extend its territorial sea limit to a maximum of 12 nautical miles, the precise coordinates of which would be announced at some appropriate time in the future. Should Singapore’s claim of a territorial sea limit of 12 nautical miles overlap with the claims of neighbouring countries, Singapore would in future negotiate with these countries to reach an agreed delimitation in accordance with international law. The announcement was merely a declaration of an intention to exercise its rights. In any event, it could not amount to any actual exercise of Singapore’s rights pursuant to art 3 of UNCLOS, as the September 1980 press announcement in fact preceded the date, 10 December 1982, when UNCLOS was opened for signature at Montego Bay, Jamaica.

37     If Singapore had not subsequently exercised the rights available to it under UNCLOS and under international law to extend its territorial sea from 3 nautical miles to 12 nautical miles, then its territorial sea must have remained at 3 nautical miles. It did not follow however that because Singapore had failed to exercise its rights, neighbouring states who were also signatories to UNCLOS, had therefore an increased right under UNCLOS or international law to extend the limits of their territorial sea beyond the median line to the full extent of 12 nautical miles in waters where the separation between the baselines of the neighbouring states and Singapore was less than 24 nautical miles. It mattered not that Singapore had not declared an extension of its territorial sea to 12 nautical miles.

38     In fact, art 15 specifically prohibited any extension, in the absence of agreement, by a neighbouring state of its territorial limit beyond the median line, unless the very limited exceptions in art 15 applied. I did not see any of the exceptions being applicable to the area where the vessel was anchored. Thus, it was my opinion that the waters between the 3 nautical mile limit and the median line at that location where the vessel was anchored, must be regarded as open sea or high sea, and not the territorial waters either of Malaysia or Singapore.

39     The prohibition under art 15 made perfect sense to me as it would prevent a mad scramble by neighbouring states to declare a 12 nautical miles territorial sea. If the first in time to declare a 12 nautical miles limit could go beyond the median line at the expense of the state who was later in time to declare the 12 miles limit, the situation would be inimical to friendly relations between neighbouring states, as disputes could easily arise.

Regularity of service of the writ

40     It is trite law that a writ in rem can be served on a vessel anywhere within the port limits or the internal waters of Singapore. What about service of a writ in rem on a vessel within Singapore’s territorial sea but outside these waters? I noted that art 28 of UNCLOS had not placed any limits on the service of a writ in rem on a foreign vessel passing innocently through the territorial sea. Article 28 only restricted the coastal state’s right to levy execution against or arrest a ship during its innocent passage through the state’s territorial sea. As the mere service of a writ on the ship would not amount to an execution or arrest, a plaintiff could therefore validly invoke the admiralty jurisdiction in rem of the Singapore court against a particular ship by serving the writ in rem on that ship although it might be on an innocent passage through Singapore’s territorial sea.

41     It was also clear that unlike a writ in an action in personam, which could be served outside Singapore provided the Rules of Court relating to service of process out of jurisdiction were complied with, an admiralty writ in an action in rem could not be served outside the territorial waters of Singapore: O 70 r 3(3) of the Rules of Court. The service would be bad and must be set aside. It was not a mere irregularity which could be waived by the defendants. It was a nullity. Hence, the admiralty in rem jurisdiction of the court could not have been validly invoked against the vessel by the plaintiffs’ service of the writ in rem out of jurisdiction and it necessarily followed that the court would not have any jurisdiction to try the action as an action in rem nor give a judgment in rem against the vessel.

Procedure to dispute jurisdiction

42     A defendant could dispute the court’s jurisdiction under O 12 r 7 (1)(a) read with O 70 r 2 of the Rules of Court by entering an appearance and applying to set aside the service of the writ in rem on the vessel. If the vessel had also been wrongfully arrested, the defendants could apply to have the arrest set aside and the vessel released under O 12 r 7(1)(e). Service of the writmight be bad and the arrest might still be proper. Vice versa, service of the writ might be proper but the arrest could still be wrongful. The facts would have to be examined.

43     Hence, in a case where the writ in rem was properly issued and validly served on a vessel whilst on an innocent passage through Singapore’s territorial sea, but the subsequent arrest was wrongful as the arrest took place when the vessel had not entered Singapore’s internal waters at all, the security purportedly taken by seizing the vessel would be treated as having been wrongfully obtained. Consequently, the plaintiffs would be ordered to release the vessel even if the vessel had been forcefully moved into Singapore’s internal waters or port limits following the wrongful arrest outside these internal waters in contravention of art 28 of UNCLOS. Should the vessel subsequently re-enter Singapore’s internal waters of its own accord, the plaintiffs would of course be entitled to re-arrest the vessel. This example illustrated a situation where there was no irregularity in the service of a writ in rem but the arrest was wrongful. With this in mind, I would now examine if there was necessarily any inconsistency or inherent contradiction when the defendants decided to enter an appearance to the action in rem and waive the irregularity concerning the service of the writ in rem, but take objections to the execution of the warrant.

44     The defendants applied only to set aside the arrest but not the service of the writ in rem although both the writ and warrant of arrest were served at the same time beyond the limits of Singapore’s territorial waters. Counsel for the defendants said that they wanted the court to determine the merits of the action concerning the lien including the issue on the validity of the vessel’s arrest, and hence, they decided to waive any irregularity concerning the service of the writ in rem but not the irregularity of the arrest. If they took objections to the writ and have the court set it aside, then the whole action would not be heard. That was not what the defendants wanted. So they entered an appearance, submitted to the jurisdiction of the court and prevented the plaintiffs from obtaining a judgment in default, but made clear in their correspondence with the defendants’ solicitors that they reserved their right to challenge the validity and lawfulness of the arrest.

45     Plaintiffs’ counsel objected strenuously that once the defendants had waived the irregularity of the service of the writ in rem out of jurisdiction and submitted to the court’s in rem jurisdiction, they must be deemed to have concurrently waived any irregularity in the vessel’s arrest outside of Singapore’s territorial waters. He contended that the defendants could no longer challenge the warrant of arrest on the ground that there was no in rem jurisdiction. The defendants basically could not take contradictory positions. However, he had to concede that one could serve a writ in rem without arresting the vessel (although he said that it was most unusual). In my view, the action in rem could still be tried and a judgment in rem obtained. In The Nautik [1895] P 121, the writ in rem was duly served on the ship within the jurisdiction. Before the ship could be arrested, the ship sailed out of jurisdiction. Judgment in rem against the ship was given for the plaintiffs.

46     I could understand why it was unusual not to arrest the vessel because there would be a real risk of the vessel clandestinely sailing away the moment the vessel was served with the writ in rem. A plaintiff naturally would want to ensure that the vessel was kept under arrest within the jurisdiction as security to meet his claim. A judgment in rem might well be a paper judgment if the vessel was no longer available in the jurisdiction for execution. Waiting for the vessel to return to the jurisdiction to be arrested to enforce that judgment in rem would not be of much use. Enforcing a judgment in rem out of jurisdiction against the vessel would not be that straightforward.

47     By way of comparison, in an enforcement in Singapore of a foreign judgment given in an action in rem against a vessel, the foreign court would be deemed to have had jurisdiction if the vessel was situated in that foreign country at the time of the proceedings in that foreign court: s 5(2)(b) Reciprocal Enforcement of Foreign Judgments Act (Cap 265). If the foreign country where the vessel could be found had laws on enforcement of foreign judgments similar to ours, then the Singapore court would not be deemed to have jurisdiction to try the action in rem and give a judgment in rem against the vessel should the vessel not be within Singapore’s territorial waters at the time of the proceedings. It might well be necessary then to prove during the foreign enforcement proceedings of a Singapore court’s judgment in rem, that the Singapore court in fact had the jurisdiction to hear the action in rem although the vessel was not or no longer situated within the internal waters or the territorial waters of Singapore at the time of the proceedings but had left the jurisdiction after service of the writ in rem. But these difficulties would not inmy opinion mean that a Singapore court could never try the action and give a judgment in rem against a vessel, when the admiralty jurisdiction to try and hear an action in rem had been invoked by a proper service of the writ in rem within jurisdiction on the vessel, although the vessel was not subsequently arrested and kept within the jurisdiction throughout the period of the Singapore proceedings. That judgment in rem would in any event be enforceable by way of arrest should the vessel come into the internal waters of Singapore.

48     The fact that the serving of a writ in rem and execution of a warrant of arrest were substantively different matters consequently meant that the position taken by the defendants was not inherently contradictory. But as the decided facts were that the vessel was served with the writ in rem and warrant of arrest outside jurisdiction, I had to examine more closely whether the defendants, by doing what they did, had submitted only to the in personam jurisdiction or had they submitted both to the in personam and in rem admiralty jurisdiction of the court.

49     The High Court will have jurisdiction to hear and try any action in personam when the defendant submits to the jurisdiction of the court: s 16(1)(b) of the Supreme Court of Judicature Act. In a case falling within s 5(1) to (3) of the High Court (Admiralty Jurisdiction) Act where under certain circumstances, the court will not entertain an action in personam to enforce a claim, these provisions are made inapplicable when the defendant submits to the jurisdiction of the court. See s 5(4) of the High Court (Admiralty Jurisdiction) Act. Hence, where the court would otherwise not have been able to hear an action in personam, the aforesaid statutes have enabling provisions to confer on the court the jurisdiction to do so when the defendant submits to the court’s jurisdiction. But I could find no equivalent statutory provision which allowed a defendant to submit to and confer on the court the jurisdiction to hear an action in rem, where there was otherwise no such jurisdiction. In the absence of a statutory provision, I did not think that would be possible. GP Selvam JC, as he then was, said at p 638 of his judgment in The Ohm Mariana [1992] 2 SLR 623 that:

It is settled law that where a statute confers a limited and circumscribed jurisdiction , it cannot be enlarged by parties by agreement or otherwise. One can overcome an irregularity but not a nullity. Where a court exercises jurisdiction which it does not possess, the proceedings amount to nothing: see A-G v Lord Hotham and Re Dulles’ Settlement Trusts; Dulles v Vidler. Further, ‘it is the duty of counsel to take jurisdiction points and if they do not do so [it is] for the court to take them’: per Lawton LJ in Third Chandris Shipping Corp v Unimarine SA at p 659. In Heyting v Dupont Plowman J said that he regarded it his duty to consider on his own initiative whether he had the jurisdiction to adjudicate the claims before him, and held that parties by consent cannot impose jurisdiction on the court.

50     In my view, only after the admiralty jurisdiction to hear an action in rem is properly invoked by a proper service of a writ in an action in rem within Singapore’s territorial waters, or by a proper and lawful arrest in territorial waters without contravention of art 28 of UNCLOS or in inland waters, then the court will be vested with the necessary admiralty jurisdiction to hear and try an action in rem, and to give a judgment in rem against the vessel if the claim is proved.

51     On the facts, since both the service of the writ in rem and the arrest were outside jurisdiction (ie outside territorial waters), any submission to jurisdiction would only be to the extent of the jurisdiction of the court against the defendants in an action in personam. Thus the court could still determine the merits of the lien and the action, and award a judgment in personam against the defendants if the plaintiffs proved their claim. Enforcement of such a judgment was a separate matter. But the court would not by the submission to jurisdiction by the defendants and by the defendants’ waiver of the irregularity of service of the writ in rem outside jurisdiction, be conferred the jurisdiction to hear the action as an action in rem against the vessel, although it might exercise its admiralty jurisdiction to hear the matter as an action in personam. In other words, the lack of jurisdiction to hear the action as an action in rem would not be cured either by the submission to jurisdiction or the waiver of the irregular service of the writ in rem out of jurisdiction. Neither would an arrest out of jurisdiction confer any in rem jurisdiction on the court. The court would only have admiralty jurisdiction to hear the action as an action in personam against the defendants. The vessel must therefore be released from its wrongful arrest and be free to leave Singapore.

52     In conclusion, by the defendants’ entry of an appearance and their submission to the court’s jurisdiction to determine the merits of the plaintiffs’ claim and their claim to the lien, they had submitted personally to the jurisdiction of the court. Under the unusual circumstances of this case where both the writ and warrant were served out of jurisdiction, the action would nonetheless continue and proceed as an action only in personam, and if judgment in personam was entered for the plaintiffs, the defendants would become liable for the full amount of the plaintiffs’ proved claim even though the judgment sum might eventually exceed the value of the vessel. However, I would not regard the in rem jurisdiction of the court as having been invoked despite the waiver of the bad service of the writ out of jurisdiction for the reasons I had given.

53     In reaching the above conclusion, I was much guided by the decision of the Court of Appeal in The Fierbinti, where the court held at pp 870–872 that:

…An action in rem once commenced against the ship is an action against the ship itself and continues as such even though it may also be an action in personam against the owner thereof. If the owner does not enter an appearance and the judgment is obtained, the judgment is enforceable only against the ship and to the extent of the value of the ship. If, however, the owner enters an appearance the action will continue as an action in rem against the ship and an action in personam against the owner, and if judgment is obtained it is enforceable against the ship and also against the owner to the full extent of the judgment: see The Gemma at pp 291–292; The August 8 at p 456, and The Kusu Island at pp 260–261. It has been held in The Kusu Island that although an action in rem is one against the res, the defendant to the action is the owner of the res and not the res itself: see pp 261–262.

         Such a construction of O 70 r 7(1) and (2), which is based on the express wordings thereof, is wholly consistent with the established rule that in order to invoke the in rem jurisdiction against a res the res in question must be within the jurisdiction. In The Freccia Del Nord at p 392, Sheen J said:

‘… I must add that the court cannot have jurisdiction over a ship which does not come within its jurisdiction. Many a writ in rem has been issued in the hope or expectation that the ship against which the plaintiff has brought his action will come within the jurisdiction. Frequently that hope or expectation has been frustrated or thwarted by a change of orders to the master of the ship.’

In The Good Herald,… Sheen J said at p 238:

‘The concept of an action in rem is that the writ is issued against a ship. The action is commenced by service of the writ on that ship and is enforced by the arrest of the ship. … If the owner acknowledges service of the proceedings and thereby submits to the jurisdiction, an action in personam is grafted on to the action in rem against the ship.’

…

         Reverting to the facts in this case, we do not think that the appearance so entered by the defendants’ solicitors has any effect or significance at all on the issue whether or not the in rem jurisdiction has been invoked against the Fierbinti. The effect of the entry of appearance was that thenceforth the action, which started as an in rem action, would proceed and continue as an action in personam against the owners of the Fierbinti, but as the writ has not been served on the ship the in rem character of that action remained.

54     I would attempt to draw an analogy with the facts in The Fierbinti. The service of the writ in rem on the vessel out of jurisdiction in this case was equivalent to having no service at all on the vessel although the in rem character of the action remained. But the effect of the entry of appearance by the defendants, though having no effect on whether the in rem jurisdiction had been invoked against the vessel, was that the action, which started as an in rem action, could still proceed and continue as an action in personam against the defendants as the owners of the vessel. By entering an appearance, the writ in rem would be deemed to have been duly served, not on the vessel, but on the defendants in person by virtue of O 70 r 7(2) read with O 10 r 1(3). Hence the court would have jurisdiction to hear and determine the merits of the action regarding the lien, and (a) give judgment in personam against the defendants if the plaintiffs succeed in proving their claim, although there was no proper service of the writ in rem on the vessel within jurisdiction, or (b) dismiss both the plaintiffs’ and interveners’ claims if the defendants succeed in establishing their lien.

55     Having reached the conclusion that there was jurisdiction for me to hear the action as an action in personam, I proceeded to determine the rights of the parties with respect to the alleged lien over the blended oil cargo remaining on board the vessel.

Terms of the bill of lading and exercise of the lien

56     The plaintiffs and the interveners basically contended that the lien exercised by the defendants did not bind them and accordingly, they refused to pay all or any of the demurrage and detention charges incurred.

57     The defendants relied on the decision of the Queen’s Bench Division in The Miramar [1983] 2 Lloyd’s Rep 319, where Mustill J had occasion to consider a bill of lading prepared on a form stipulated for use in conjunction with an Exxonvoy charterparty. The bill of lading provided that the freight was payable as per the charterparty and it stipulated that:

This shipment is carried under and pursuant to the terms of the charter dated 19 May 1980, and SEA Petrochem Limited, Singapore, charterer, and all the terms whatsoever of the said charter except the rate and payment of freight specified therein apply to and govern the rights of the parties concerned in this shipment.

58     The charterparty was on the terms of the Exxonvoy form which contained, inter alia, the following lien clause:

21. LIEN. The Owner shall have an absolute lien on the cargo for all freight, deadfreight, demurrage and costs, including attorney fees, of recovering the same, which lien shall continue after delivery of the cargo into the possession of the Charterer, or of holders of any Bills of Lading covering the same or of any storageman.

59     The difficulty was in the construction of the demurrage clause in the charterparty which imposed a liability to pay demurrage only on the charterer but not on the holder of the bill of lading. That clause began as follows:

DEMURRAGE. Charterer shall pay demurrage … at the rate specified in Part I for all time that loading and discharging and used lay-time … exceeds the allowed lay-time elsewhere herein specified.

60     The court had to consider whether the incorporating words in the bill of lading could be given any meaning at all, without transmuting ‘the Charterer’ in the charterparty into ‘the bill of lading holder’ when embodying them in their new context. Mustill J went on to say:

…I am of the opinion that cl 21 (lien clause) can be incorporated into the bill of lading contract without any strain. If this is so, the incorporating words have produced a really useful practical result. The results which the shipowner most wishes to preserve are those relating to his freight, dead-freight and demurrage. In theory, a power to sue the consignee directly in respect of the indebtedness will be of value. In practice, however, the shipowner is not really interested in litigating for his freight and demurrage. For practical purposes, what he needs is the capacity to enforce his claim on the spot, and for this purpose the lien is what matters. If the incorporating words of the bill of lading ensure that the shipowner’s lien is good against the bill of lading holder, this is sufficient to meet the shipowner’s requirements and, for the reasons I will state in a moment, I shall hold that the lien is good against the bill of lading holder in the circumstances of the present case.

61     The reasons for the learned judge’s decision were as follows:

… Looking first at the presumed intention of the draftsman, one sees that the clause is designed to create a lien over the ‘cargo’. It is only in a minority of cases that the cargo belongs to the charterer himself throughout the transit, and it follows that if the clause is to be useful it must be understood as creating rights against third parties. A clause in the charter cannot do this directly, and it must therefore have been intended that the clause would operate by way of incorporation into the bills of lading. Since the clause is of a type which most intimately concerns the interests of the consignee in the carriage and delivery of the cargo, even the most general form of incorporating words would, in principle, be sufficient to produce this result. In fact, the language of the present document is in a very explicit form.

         …

         It has been a feature of shipping practice for many years that the shipowner looks primarily to his lien in case of dispute, and no doubt has ever been raised about the acceptability of a situation where the lien is more extensive as against consignees than their own direct personal liability: see, for example, Vergottis v Robinson David & Co Ltd sup at p 25.

         Nor, in my judgment, is it an objection that the present charter contains no ‘cesser’ clause, with the result that if the lien is good against the consignee, the shipowner will have concurrent remedies, one against the charterer under the charterparty and the other against the consignee under the bill of lading. I find nothing anomalous in this, and certainly nothing sufficient to preclude the court from treating the lien clause as incorporated, if all the other requirements for incorporation are satisfied.

62     In dealing with the demurrage clause in the charterparty, which expressly stated that the charterer, and not the bill of lading holder, was to pay demurrage, Mustill J said that the expression ‘the charterer’ should be understood as meaning what it said and should not be rewritten so as to confer a new contractual right against the bill of lading holder. The learned judge thus decided that the bill of lading holder would not be personally liable, as parties to the contract contained in the bill of lading, for demurrage computed in accordance with the charterparty. The shipowners were dissatisfied with this part of his judgment limiting their rights only to the lien, which prevented them from claiming personally against the holder of the bill of lading for the outstanding demurrage in the event that the proceeds of sale of the cargo under the lien were insufficient. So they appealed.

63     The Court of Appeal (see [1984] 1 Lloyd’s Rep 142) contrasted the word ‘charterer’ in the demurrage clause in the charterparty with the words ‘supplier, shipper or consignee of the cargo’ in that same clause, which indicated that ‘charterer’ in that clause did not include the ‘consignee of the cargo’. The Court of Appeal upheld the decision of the learned trial judge that the intention of the parties to the bill of lading contract was not that the bill of lading holder should also be liable for demurrage, but that the charterers alone should be liable, and that the words should be given their natural and ordinary meaning.

64     Sir John Donaldson MR delivering the judgment of the Court of Appeal also referred to the lien clause and appeared to have sanctioned the decision of Mustill J that the lien clause was good as against the bill of lading holder nevertheless, although there was no appeal on this issue by the holder of the bill of lading. Sir John Donaldson pointed out the fact that there were other terms in the charterparty which applied without doing any violence to the language, and which therefore provided a commercial purpose for the incorporation of those provisions into the bill of lading. Those terms not only included the lien clause but also cl 20(b)(i) to (vii) on ‘Insurance and Terms of Bills of Lading’, which the Court of Appeal said were matters of vast importance as between the shipowner and the bill of lading holder. The Court of Appeal noted that cl 20 itself provided that sub-paras (i) to (vii) inclusive would be incorporated either verbatim or by reference in the bill of lading. Thus the Court of Appeal concluded that ‘this form of bill of lading clearly is incorporating those clauses.’

65     The matter went on appeal to the House of Lords (see [1984] AC 676) as the shipowners were again dissatisfied. The House of Lords upheld the decision of the Court of Appeal. But Lord Diplock in delivering the unanimous decision of the House of Lords deliberately refrained from expressing any view on the effect of the ‘curiously drafted lien clause’ as it was not the subject of appeal to the Court of Appeal nor to the House of Lords. Counsel for the plaintiffs relied on the following passage of Lord Diplock,

… the time may be ripe for this House to re-examine this (ie the curiously drafted lien clause) and other standard forms of lien clauses around which there seems to have accumulated a mystique which cries out for clarification and simplification,

and submitted that Lord Diplock plainly did not endorse the position which the High Court took, ie that cl 21 allowed shipowners to exercise a lien against the holder of the bill of lading even though the holder of the bill of lading was not personally liable to pay demurrage.

66     With respect to plaintiffs’ counsel, Lord Diplock did not express any opinion one way or the other on the question whether the lien clause was incorporated into the bill of lading as to be binding on the holder of the bill of lading. He only said that the lien clauses should be re-examined by the House. Fifteen years have since passed and counsel did not show me any decision of the House of Lords or of the Court of Appeal which had overruled the first instance decision of Mustill J in the The Miramar.

67     Despite the comments of Lord Diplock, I was much persuaded by the reasons given by Mustill J that led him to decide the way he did, and I would respectfully adopt them as they were equally applicable to the case before me. The lien and demurrage clauses in the Asbatankvoy Form Tanker Voyage Charterparty in our case were in fact identical with the lien and demurrage clauses in the Exxonvoy Form Charterparty in the The Miramar.

68     The bill of lading, which I had to consider, expressly stated that:

This shipment is carried under and pursuant to the terms of the charter dated 3 September 1998 at Piraeus between Transport Hellenic Inc, Panama and Aris Shipping Ltd, Abu Dhabi as charterer, and all the terms whatsoever of the said charter except the rate and payment of freight specified therein apply to and govern the rights of the parties concerned in this shipment. [Emphasis added.]

69     Freight was stipulated as ‘Freight as per charterparty dated 3 September 1998.’ All the terms whatsoever of the Asbatankvoy Form Tanker Voyage Charterparty were therefore expressly incorporated in the bill of lading. Being a common form charterparty, the holder of the bill of lading should have fully understood the implications of the terms of the charterparty including cl 21, where the defendants as the shipowners, would have an absolute lien on the cargo, inter alia, for all freight and demurrage unpaid including the legal costs for recovery, which lien was expressly stated to continue even after delivery to the subsequent holder of the bill of lading of that cargo. Clause 21 in the Asbatankvoy Form Tanker Voyage Charterparty provided that:

21. LIEN. The Owner shall have an absolute lien on the cargo for all freight, deadfreight, demurrage and costs, including attorney fees, of recovering the same, which lien shall continue after delivery of the cargo into the possession of the Charterer or of the holders of any Bills of Lading covering the same or of any storageman. [Emphasis mine.]

70     In my opinion, the incorporating words in the bill of lading evinced a clear intention to bind the plaintiffs, as the holder of the bill of lading, to the rights and obligations created by the charterparty and that included the lien clause (cl 21) which gave the defendants an absolute lien on the cargo for their unpaid freight, deadfreight, demurrage and costs, including attorney fees. There was no ambiguity in the scope and reach of the clause, which the plaintiffs knew they would be subjected to upon their purchase of the cargo on board the vessel from their sellers. It was plain to me that the lien clause in the charterparty had been incorporated into the bill of lading, giving rights to the defendants against the cargo owners, whoever they might be.

71     In the ‘Additional Clauses to the MT Trade Resolve Charterparty dated 03.09.98’, cl 29 allowed the charterers to take on board additional cargo to blend with the cargo already on board, and the time taken for the blending operations was to count as used laytime or time on demurrage if the vessel was on demurrage. As this clause would in my view be similarly incorporated into the bill of lading, the defendants would also have a lien over the cargo pumped on board as security for demurrage incurred due to the blending operations.

72     Finally, the plaintiffs and interveners had not disputed the facts asserted by the defendants that they allowed the blending of the fuel oil on board with the interveners’ emulsified and recovery oil subject to their lien. Accordingly, the interveners could not now be allowed to renege on their promise to be subject to the lien for the unpaid demurrage including that occasioned by the time taken for the blending operations.

73     For the reasons given, the defendants would have a valid lien on the blended oil cargo retained on board, which was good as against both the plaintiffs and the interveners.

Waiver of lien by defendants

74     At the hearing, plaintiffs’ counsel did not submit on the points raised in the affidavit of Mr Chua Chin Seong, managing director of the plaintiffs, that the defendants had, by agreeing to commence discharge of the blended oil cargo unconditionally waived their right of lien and that if they were entitled to exercise the lien, they had, in breach of their duty as lien-holders, caused damage to the cargo. In any event, I did not think there was any merit in these contentions.

75     I accepted that the defendants would have lost their lien over what had been discharged unconditionally from their vessel. But their lien clearly continued over what remained on board. At no time had the defendants given any intimation by word or conduct that they had released their rightful lien over the remaining cargo on board for their unpaid demurrage and costs. Hence, no waiver arose.

76     With regards to the alleged damage to the cargo, even if it were true that the defendants had, by their failure to take reasonable care as a bailee, caused any damage to the remaining cargo on board, their lien would still subsist over the damaged cargo. Unless it could be shown that the net proceeds of sale of the cargo would have exceeded the amount of unpaid demurrage and costs had the cargo not been damaged, then I could see some basis for the plaintiffs, as the owners of the cargo, to mount a claim against the defendants for the diminution in the amount of sale proceeds that would otherwise be paid over to them.

Orders made

77     As the blended oil cargo on board the vessel was ordered to be sold and the proceeds of sale paid into court, I accordingly declared that the defendants were entitled to the lien on the cargo, and hence the sale proceeds, for their unpaid demurrage and costs but not including the detention charges, which were not expressly provided for under the lien clause and hence must be excluded having regard to the contra proferentum rule requiring me to adopt a construction least favourable to the defendants as the bill of lading was a standard document used by them. I further declared that the lien, which applied to all the blended cargo on board the vessel, was valid as against both the plaintiffs and the interveners. The amount of demurrage unpaid was to be assessed by the Registrar. For avoidance of any doubt, any unpaid demurrage and costs not satisfied by the proceeds of sale of the blended cargo on board would not be claimable against the plaintiffs. Any balance of the sale proceeds remaining after satisfaction of the demurrage and costs must be paid over to the rightful owners of the cargo.

78     The plaintiffs were of course not precluded by my decision from proceeding with their claim against the defendants, their servants or agents for damages for breach of contract of carriage and breach of duty and/or negligence in the loading, handling, stowage, care, custody, carriage and discharge of the cargo. It might well be that they had suffered loss on the blended cargo that was earlier discharged from the vessel, including a diminution in the sale proceeds of the blended oil cargo on board, after deduction of the unpaid demurrage and costs, which would otherwise be paid over to them if not for the fact that the cargo was damaged by the defendants.

Damages for wrongful arrest

79     Additionally, the defendants sought damages for the wrongful arrest of the vessel. The legal basis for allowing such damages was succinctly summarised in The Ohm Mariana by GP Selvam JC as he then was, when he said at p 637:

…it is evident that the cause of action for wrongful arrest in admiralty law is akin to the tort of abuse of legal process in general and wrongful seizure of goods or wrongful arrest of person in particular. In each case, arrest per se will not be the basis of liability. Parke J in Mitchell v Jenkins said:

‘I have always understood, since the case of Johnstone v Sutton, which was decided long before I was in the profession, that no point of law was more clearly settled than that in every action for a malicious prosecution or arrest, the plaintiff must prove what is averred in the declaration, viz that the prosecution or arrest was malicious and without reasonable or probable cause.’

The true basis of the claim therefore is, to use the common law phrase, ‘without reasonable or probable cause’, and to use the admiralty language ‘crassa negligentia or mala fides’. (See The Walter D Wallet and The Strathnaver.) The expression ‘crassa negligence’ or gross negligence’ simply means negligence. The addition of the vituperative epithat adds nothing to its meaning or content: Wilson v Brett.

         The justification for the principle is that when an admiralty action in rem is brought, the arrest of the res is the necessary foundation of the action. Should the res be arrested under a mistake of fact or law but bona fide, the law will not punish the claimant as an award of costs is sufficient penalty to discourage unfounded litigation. The execution of law causes no harm: execution juris non habet injuriam.

         Where the owner of the res can show malice, proof of actual damage is not necessary to sustain a claim for arrest in a court of admiralty. However, unless he can prove special damages, the court will only award nominal damages: The Walter D Wallet.

80     I would now revert to the facts of the case to determine if I should allow any damages for the wrongful arrest.

Registrar’s letter of authorisation

81     A letter of authorisation dated 29 January 1999 was issued by the assistant registrar pursuant to s 65A of the Supreme Court of Judicature Act authorising Hussein bin Mohd Sahron from the firm of the plaintiffs’ solicitors to serve the writ of summons on the vessel and to arrest the vessel within port limits. Section 65A provides that:

(1) Subject to such directions as may be given by the Chief Justice, the Registrar may authorise a solicitor or a person employed by a solicitor to exercise the powers and perform the duties of an officer of the Sheriff during such period or on such occasion as the Registrar thinks fit and subject to such terms and conditions as the Registrar may determine.

82     Clearly, the plaintiffs’ solicitors had no authority to arrest the vessel outside port limits. As a warrant of arrest may only be executed by the Sheriff or his officer under O 70 r 9 of the Rules of Court, the plaintiffs’ solicitors could only act under such powers of the Sheriff to arrest the vessel as had been granted to him by the Registrar under the letter of authorisation. Despite having agreed to abide by the conditions laid down in the letter of authorisation, and despite being fully aware that the vessel was anchored outside port limits, the plaintiffs’ solicitors proceeded nevertheless to arrest the vessel. I regarded this deliberate act of the plaintiffs’ solicitors, no doubt with the concurrence of their clients, as sufficient evidence of bad faith on their part such as to invite damages upon their clients for the wrongful arrest. I think it was a contemptuous act in deliberate and flagrant disregard of the limited authority granted to them. As solicitors, they should know better than to wilfully exceed that limited authority especially when it pertained to matters as serious as that of arresting a vessel.

83     Plaintiffs’ counsel submitted that there was no malice intended to anyone particularly the Sheriff. He justified his action on the basis that his clients were at that time faced with a situation which required them to consider whether or not (a) a Singapore court would, in the event that the ship was determined to be within territorial waters, take the view that the admiralty jurisdiction of the court extended to waters outside port limits that were still within Singapore’s territorial waters, and (b) the court would, in exercise of its inherent power, regularise the arrest. In advising the clients on the limitation to the authority granted by the Sheriff and the propriety of his legal advice, counsel said that he had in mind a case involving the service of writ on an overseas principal without an order of court being taken out where the court waived the irregularity. Counsel further mentioned that the large amount of the plaintiffs’ claim influenced his decision to have the vessel arrested in contravention of the authorisation granted to him by the Registrar as he felt that there was a risk of the vessel sailing away. Further, the defendants were a one-ship company and the vessel was on her last voyage to Singapore to be broken up subsequently in Bangladesh for scrap. I did not think that these were justifiable reasons for proceeding with the arrest. In my opinion, service of a writ to notify a defendant of an action commenced against him was very different from exercising coercive powers of arrest.

84     Counsel for the defendants also argued that the contravention of the Registrar’s authorisation might amount to a contempt of court but could not give rise to any damages for wrongful arrest. I disagreed as they were entirely separate matters. A party could still be punished by the court for contemptuous disregard of its orders and damages could also be granted to the wronged party affected adversely by that same act which gave rise to the contempt.

85     In this case, apart from the fact that the arrest was in direct and deliberate contravention of the Registrar’s authorisation, there was also no jurisdiction to arrest the foreign vessel because it was not within Singapore’s territorial waters. The arrest was consequently unlawful and invalid. It was more than a mere irregularity and I agreed with the submission by defendants’ counsel that the mala fides involved justified an award of damages.

86     Accordingly, I set aside the arrest and also ordered damages for the wrongful arrest to be assessed by the Registrar.

Plaintiffs’ claim dismissed.

Reported by Hui Choon Kuen