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SECTION 1 INTRODUCTION TO SHIPPING LAW
 
25.1.1 The shipping law of Singapore broadly covers the areas of carriage of goods by sea, admiralty law, and merchant shipping legislation. So far as carriage of goods by sea is concerned, Singapore law is largely similar to English law. Common law principles and two statutes, namely the Carriage of Goods by Sea Act and the Bills of Lading Act, form the body of the law on carriage by sea. The primary legislation on admiralty law and jurisdiction is the High Court (Admiralty Jurisdiction) Act of Singapore, which is modelled after the UK Administration of Justice 1956. The merchant shipping law of Singapore is embodied in the Merchant Shipping Act, which is a piece of legislation that covers somewhat diverse areas such as the powers of the port authorities, registration of mortgages, limitation of liability, registration of ships, and rights of crew. There is also legislation covering specific areas such as pollution at sea.
 
25.1.2 This introduction to the shipping law of Singapore is intended to give an overview to the reader of the various areas grouped under the rubric of shipping law. For more detailed discussion, the reader is referred to the following texts written on the area: for Carriage of Goods by Sea, see Professor Tan Lee Meng’s book, The Law in Singapore on Carriage of Goods by Sea, 1994, 2nd Edn; for Admiralty law, see Toh Kian Sing, Admiralty Law and Practice, 2007, 2nd Edn.
 
 
 
SECTION 2 CARRIAGE OF GOODS BY SEA
 
25.2.1 A contract for the carriage of goods usually assumes one of two forms: a charterparty or a bill of lading.
 
 
 
SECTION 3 CARRIAGE OF GOODS BY SEA: CHARTERPARTIES
 
 
A. Time charterparty
 
(1) The master and crew of the vessel perform services for a specified period in consideration of the payment of hire
 
 
(2) The charterer has the obligation to nominate a safe port
 
25.3.3 A charterer has the obligation to nominate a safe port (The Evia (No.2) [1982] 2 Lloyd’s Rep 307). If an unsafe port is nominated, a shipowner is entitled to ask the charterer to re-nominate another port. If the charterer refuses, the shipowner may terminate the charterparty or he may send the vessel to the nominated unsafe port but reserve his right to claim damages.
 
(3) The duration of a time charterparty is usually subject to an express or implied margin or tolerance of time on either side of the agreed redelivery date and the vessel must be in the same condition, excepting wear and tear
 
25.3.4 The duration of a time charterparty is usually subject to an express or implied margin or tolerance of time on either side of the agreed redelivery date. This arises from the presumption that a definite date for the termination of a time charter should be regarded as an approximate date only (The London Explorer [1971] 1 Lloyd’s Rep 523). The charterer is obliged to re-deliver the vessel to the shipowner in the same good order and condition, fair wear and tear excepted, as the vessel was in at the time of delivery to the charterer. The re-delivery must take place by the final terminal date of the charterparty, taking into account any express or implied margin or tolerance of time for redelivery.
 
B. Voyage Charterparty
 
(1) A contract to carry specified goods on a defined voyage
 
25.3.5 A voyage charterparty is essentially a contract to carry specified goods on a defined voyage or series of voyages. Like a time charterparty, the shipowner retains possession of the vessel and employs the master and crew.
 
(2) The shipowner is remunerated by the payment of freight for goods delivered at the discharge port
 
25.3.6 The shipowner is remunerated by the payment of freight, which is usually calculated by reference to the quantity of cargo shipped or by a lump sum. There is a rule against the deduction of freight for damage to or loss of cargo (Ocean Projects Inc v Ultratech Pte Ltd [1994] 2 SLR(R) 245). In the absence of any provision entitling the shipowner to advance freight, freight is only earned when the shipowner has carried the goods to the discharge port and is in a position to deliver them to the charterer. Under the common law, a shipowner is entitled to exercise a possessory lien for unpaid freight.
 
(3) The shipowner must ensure the seaworthiness of the vessel at the commencement of the voyage, unless otherwise expressly agreed
 
 
(4) The risk of delay lies with the shipowner for the voyage, but with the charterer for loading and discharge operations
 
 
C. Demise or Bareboat Charterparty
 
(1) A contract for the hire of the ship as a chattel
 
 
(2) The charterer operates the vessel for the duration of the charter as he pleases subject to any specific restrictions in the charterparty and pays charterhire periodically
 
25.3.10 A demise charterer operates the vessel for the duration of the charter as he pleases, subject to any trading or cargo restrictions specified in the charterparty. Like a time charterparty, he pays charterhire on a periodic basis. Demise charterparties are sometimes entered into as a form of long or medium term financing arrangements (see, for example, Mark Davis, Bareboat Charters, 2005, 5th Edn at chapters 33-35).
 
 
 
SECTION 4 CARRIAGE OF GOODS BY SEA: BILLS OF LADING
 
25.4.1 Broadly speaking, a bill of lading is a document signed by the carrier, or by the master or other agent on behalf of the carrier, stating that certain specified goods have been shipped on board a particular ship and setting out the terms on which the goods would be carried by the ship. A bill of lading serves three functions. It contains or evidences the contract of carriage, serves as a receipt for the goods carried, and is a document of title.
 
A. Bill of lading as Evidence of the Contract
 
(1) Where goods are shipped by the charterer, a bill of lading does not displace the charterparty as the contractual document
 
25.4.2 Whether a bill of lading is evidence of the contract of carriage depends on whether it is the charterer who holds the bill of lading. Where the goods are shipped by the charterer, the bill of lading does not displace the charterparty as the document governing the contractual relationship between the shipowner and the charterer (The Dunelmia [1970] 1 QB 289).
 
(2) Where the shipper is not the charterer, the bill of lading evidences the contract of carriage
 
25.4.3 Where the shipper or the holder of the bill of lading at the material time is not the charterer, the bill of lading either evidences or contains the contract of carriage. As a general rule, the shipper is entitled to hold the shipowner responsible for his goods, and to claim delivery of them on the terms of the bill of lading. The shipowner cannot therefore rely on the terms in the charterparty which are not incorporated in the bill of lading. As between the shipper and shipowner, the bill of lading evidences the contract of carriage but may be supplemented or contradicted by any relevant contract(s) that came into existence prior to its issue. However, as between the shipowner and a consignee or indorsee of the bill of lading, the bill of lading contains the contract of carriage.
 
(3) The terms of a bill of lading may be supplemented or superseded by the Hague or Hague Visby Rules
 
25.4.4 The terms of the bill of lading may be supplemented or superseded by the provisions of the Hague or Hague Visby Rules. Singapore is a signatory to the Hague Visby Rules which are reproduced in the Singapore Carriage of Goods by Sea Act. These Rules have mandatory application under the said Act. The application of these Rules is explained below.
 
B. Bill of Lading as a Receipt
 
(1) The bill of lading functions as an acknowledgement by the carrier of receipt of specified goods; fraudulent or negligent misrepresentations may be actionable in tort
 
25.4.5 A bill of lading also functions as an acknowledgement by the carrier of the receipt of the goods specified in it. It usually contains various representations as to the quantity and condition of the goods. If fraudulently or negligently made, such representations may form the basis of an action in tort against the carrier by third parties who suffer loss in reliance on them, in particular consignees or financial institutions who take up and pay for the shipping documents in circumstances where, if the true facts had been stated, they would have been entitled to reject them (The Saudi Crown [1986] 1 Lloyd’s Rep 261).
 
(2) The bill of lading is prima facie evidence of the condition, marks, quantity of goods, and date of loading as between the shipper and shipowner
 
25.4.6 Under the common law, a bill of lading is prima facie evidence of the condition, marks, and quantity of the goods as well as the date of loading as between the shipper and the shipowner. However, as between the shipowner and the consignee or indorsee, such statements in the bill of lading cannot be rebutted by the shipowner.
 
 
 
C. Bill of Lading as a Document of Title
 
(1) The bill of lading is document of title, which enables its owner to raise credit for an international sale if it is an ‘order’ bill
 
 
(2) The bill of lading entitles its holder to the delivery of goods against presentation of the bill
 
 
(3) Switching of bills of lading is a dangerous practice for the shipowner, but is not untoward if meant to conceal the identity of the shipper or to split bulk cargo
 
 
D. Rights of Suit under Bills of Lading
 
(1) The Bills of Lading Act transfers all rights of suit for a contract of carriage, not including charterparties, to any person who lawfully becomes the holder of a bill of lading
 
25.4.12 Rights of suit under a bill of lading were previously governed by the 1855 Bills of Lading Act and depended on the passing of property in the goods shipped under the bill of lading by reason of the indorsement or consignment of the bill of lading. The 1855 Bills of Lading Act has been abolished and replaced in Singapore by the current Bills of Lading Act (hereinafter ‘BLA’), which is in pari material with the UK Carriage of Goods by Sea Act 1992.
 
 
(2) A person who has the right of suit may exercise that right for another person who has an interest in relation to the goods to which bill of lading relates and sustains loss in consequence of a breach of contract
 
25.4.14 Where a person with any interest or right in relation to goods to which a bill of lading relates sustains loss or damage in consequence of a breach of the contract of carriage, but rights of suit in respect of the breach are vested in another person, that other person is entitled to exercise those rights for the benefit of the person who sustained the loss or damage to the same extent as they could have been exercised if they had been vested in the person for whose benefit they are exercised (see s. 2(4) of the BLA).
 
(3) A bill of lading is not transferrable where the goods are specified to be delivered to a named person
 
25.4.15 A bill of lading is not transferable where it requires the goods specified in it to be delivered to a named person, omitting any language of transferability. Such a bill is described as a straight consigned bill of lading. For the purposes of the BLA, a straight consigned bill is treated as a waybill.
 
(4) Where a bill of lading is indorsed by a special indorsement, the bill of lading ceases to be transferable until it is indorsed by the named indorsee
 
 
(5) A person who becomes the lawful holder of a bill of lading and demands delivery or makes a claim under the contract of carriage is also subject to the liabilities under that contract
 
25.4.17 Where a person becomes the lawful holder of a bill of lading under the BLA and takes or demands delivery from the carrier of any of the goods to which the bill of lading relates or makes a claim under the contract of carriage against the carrier in respect of any of those goods, that person will become subject to the same liabilities under that contract as if he had been a party to that contract (see s. 3 of the BLA).
 
E. Singapore Carriage of Goods by Sea Act and the Hague-Visby Rules
 
(1) Scope of the Hague-Visby Rules
 
 
(2) The HVR apply only to contracts of carriage covered by a bill of lading or any similar document of title
 
25.4.19 The HVR apply only to contracts of carriage covered by a bill of lading, including a straight consigned bill of lading (see The Rafaela S [2003] 3 All ER 369), or any similar document of title insofar as such a document relates to the carriage of goods by sea. The HVR apply to the period from the time when the goods are loaded on board the ship to the time they are discharged from the ship.
 
(3) The carrier is bound to exercise due diligence to make the vessel seaworthy before and at beginning of the voyage
 
25.4.20 A carrier is bound to exercise due diligence to make the ship seaworthy before and at the beginning of the voyage (see Art. III rule 1 of the HVR). The obligation under the HVR to exercise due diligence to make the ship seaworthy replaces the absolute obligation at common law to provide a seaworthy ship. Subject to the provisions conferring protection on the carrier in certain circumstances, the carrier is obliged under Art. III rule 2 of the HVR to properly and carefully load, handle, stow, carry, keep, care and discharge the goods carried.
 
(4) The carrier enjoys package and weight limitations in addition to the exclusions under Art. IV rule 2 of the HVR
 
25.4.21 A carrier enjoys package and weight limitations of 10,000 gold francs (S$1,563.65) per package and 30 gold francs (S$4.69) per kilogramme under the HVR. There is also a list of exclusions under Art. IV rule 2 of the HVR which a carrier may avail himself of, provided he satisfies the obligation of exercising due diligence to provide a seaworthy vessel.
 
(5) The carrier is discharged from all liability in respect of goods carried unless a suit is brought within 1 year of the delivery date, but this period may be extended if parties agree
 
25.4.22 The carrier is discharged from all liability whatsoever in respect of the goods unless a suit is brought within 1 year of the date of delivery or of the date when the goods should have been delivered. The 1-year period may however be extended if the parties so agree after the cause of action has arisen.
 
(6) The limits specified in the HVR may not be reduced further for the carrier’s benefit
 
25.4.23 The exclusions, time limits, and limitation of liability prescribed by the HVR may not be reduced further for the carrier’s benefit (Art. III rule 8 of the HVR; see also The Epar [1983-1984] SLR(R) 545).
 
F. Jurisdiction or Arbitration Agreements in Contracts of Carriage
 
(1) A jurisdiction or arbitration clause may be incorporated into a contract of carriage
 
25.4.24 A jurisdiction or arbitration clause may be incorporated into the contract of carriage whereby the parties agree to a specific forum for the adjudication of disputes arising out of the contract. Nonetheless, parties may be tempted to breach such jurisdiction or arbitration clauses so as to take advantage of certain time bar defences or higher limits of liability that may be available in forums other than those agreed in the contract. Where such breaches happen, the defendant can apply for a stay of the proceedings.
 
(2) The court will prima facie give effect to a foreign jurisdiction clause, but may refuse an application for stay where the facts and circumstances are exceptional
 
 
(3) The court retains discretion to stay proceedings in favour of domestic arbitration, but must grant stay in favour of international arbitration
 
 
 
 
SECTION 5 ADMIRALTY LAW
 
A. Nature of an Admiralty Action in rem
 
 
 

25.5.3 The subject matter of the Singapore High Court’s admiralty jurisdiction is set out in limbs (a) to (r) of s. 3(1) of the High Court (Admiralty Jurisdiction) Act (hereinafter ‘HC(AJ)A’), which is largely similar to s. 20(2)(a)-(s) of the UK Senior Courts Act 1981.

 
B. Invocation of Admiralty Jurisdiction
 
(1) The res can only be arrested within territorial waters and port limits
 
 
(2) The court’s admiralty jurisdiction can be invoked in 3 situations, when vessel is either arrested or served with the writ in rem
 
25.5.5 As far as the invocation of admiralty jurisdiction is concerned, s. 4 of the HC(AJ)A permits an action in rem to be brought in 3 situations:
  • an action in rem being brought against the ship or other property in respect of claims that come within s. 3(1)(a)-(c) and (r) of the HC(AJ)A;
  • an action in rem being brought against ship, aircraft, or other property encumbered with a maritime lien or other charge; and
C. Principle of ‘One Claim, One Ship’: Plaintiff cannot proceed against other ships named in writ for same claim after invoking admiralty jurisdiction against one ship
 
 
D. Procedure for Arresting Vessel
 
 
E. Person who wishes to prevent arrest may lodge caveat against arrest
 
25.5.8 A person who wishes to prevent the arrest of a ship or other property can lodge a caveat against arrest. The caveator agrees to put up bail to prevent the arrest of the vessel. Although the caveat does not guarantee that an arrest will not be made, it nevertheless acts as a deterrent to arrest because, unless the plaintiff can demonstrate that there was a good and sufficient reason for arresting despite the caveat, the court may order him to pay damages to the caveator for any loss arising out of the arrest as well as discharge the warrant of arrest.
 
F. Party may be liable for damages if arrest carried out mala fides or crassa neligentia
 
 
G. Shipowner may seek release of ship or stave off arrest by providing security
 
(1) Security may be furnished in the form of bail, letters of undertaking from P&I clubs, bank guarantees, or payment into court
 
 
(2) Security provided should be sufficient to meet the claim
 
 
H. Liens
 
25.5.12 There are generally three types of lien relevant to admiralty law: i) maritime lien; ii) statutory lien; and iii) possessory lien.
 
(1) Maritime lien
 
25.5.13 A maritime lien is an encumbrance or charge on the res, which accrues from the moment the underlying claim giving rise to it attaches, travels with the res, survives any change of ownership of the res (except one that is consequential upon a judicial sale) and is carried into effect by an action in rem. As a general rule, a maritime lienee enjoys a higher priority than other kinds of maritime claimants. The established categories of claims which give rise to maritime liens are salvage, damage done by a ship, master’s wages, master’s disbursements, and crew’s wages.
 
(2) Statutory lien
 
25.5.14 A statutory lien refers to the right of a claimant to invoke the court’s admiralty jurisdiction by means of an action in rem in respect of a claim which does not attract a maritime lien. Claims which can be enforced by way of a statutory lien are set out in s. 3(1)(a)-(r) of the HC(AJ)A. Although it is the arrest that gives a claimant his pre-judgment security, the institution of the action in rem starts with the issuance of the writ in rem and thereupon the statutory lien attaches to the ship and survives any change of ownership by remaining enforceable against a bona fide purchaser of the ship without notice, unless the vessel has been judicially sold.
 
(3) Possessory lien
 
 
 
I. Relative priority between claims
 
(1) The rules of priority between claims are procedural and important where the sum of the claims exceeds the value of the res, and determine the order in which claims are satisfied
 
25.5.17 The relative priority between claims is a vital issue when the sum total of the claims exceeds the value of the res, as it determines the order in which these various competing claims will be satisfied out of the funds lying in court representing the proceeds of sale of the res. The rules of priority are characterised as procedural and are therefore governed by the lex fori (The Halcyon Isle [1981] AC 221).
 
(2) The order of priority
 
25.5.18 If there are various claims to the proceeds of sale of the res, the prima facie ranking of claims in order of priority is as follows:
  1. Sheriff’s expenses;
  2. costs of the producer of the fund;
  3. maritime liens (except for a possessory lien which accrues before the maritime lien);
  4. possessory lien;
  5. mortgages; and
  6. statutory liens.
 
 
 
SECTION 6 VARIOUS ASPECTS OF MERCHANT SHIPPING AND OIL POLLUTION LEGISLATION OF SINGAPORE
 
A. Limitation of Liability of Shipowners
 
(1) Limitation of liability covered by Part VIII of the Merchant Shipping Act
 
25.6.1 Limitation of liability of shipowners for maritime claims is dealt with statutorily under Part VIII of the Merchant Shipping Act. Such claims include those for death or personal injury, loss or damage to goods occurring on board or in connection with the operation of a ship.
 
(2) Limitation in Singapore is governed by the Convention on Limitation of Liability for Maritime Claims 1976
 
 
B. Oil Pollution
 
(1) Three statutes in Singapore govern oil pollution
 
25.6.3 In Singapore, there are three primary statutes governing oil pollution. They are i) Merchant Shipping (Civil Liability and Compensation for Oil Pollution) Act (hereinafter ‘CLC’); ii) Merchant Shipping (Civil Liability and Compensation for Bunker Oil Pollution) Act (hereinafter ‘BOPA’); and iii) Prevention of Pollution of the Sea Act (hereinafter ‘PPSA’).
 
(2) The CLC governs oil pollution caused by a ship constructed or adapted for carrying oil
 
25.6.4 The CLC was enacted to bring into effect in Singapore the International Convention on Civil Liability for Oil Pollution Damage 1992 and the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage 1992. The CLC governs oil pollution caused by any ‘ship constructed or adapted for carrying oil in bulk as cargo’ (see s. 3 of the CLC).
 
(3) The BOPA governs oil pollution caused by the discharge or escape of bunker oil from a ship
 
25.6.5 The BOPA was enacted to give effect to the International Convention on Civil Liability for Bunker Oil Pollution Damage 2001. Under the BOPA, a shipowner’s liability is strict but not absolute (see s. 3 and 4 of the BOPA). A person whose claim falls within the remit of the BOPA has a right of direct action against the ship’s insurers. As a necessary corollary to the above, the BOPA also provides for compulsory insurance for shipowners of ships with a size above 1,000 gross tonnes. Ships over 1,000 gross tonnes that wish to enter Singapore’s port limits are required to have adequate insurance covering liability arising from pollution damage, and are required to carry certificates as evidence of that insurance (see s. 12 of the BOPA).
 
(4) The PPSA imposes criminal liability for the discharge of oil and other pollutants
 
25.6.6 The PPSA was enacted to give effect to the International Convention for the Prevention of Pollution from Ships 1973 as modified and added by the Protocol of 1978 (hereinafter ‘MARPOL’) and other international agreements with similar purport. Broadly speaking, the PPSA seeks to impose criminal liability for the discharge of oil and other pollutants from ships into Singapore waters. Further, s. 18 of the PPSA provides that the owner of the ship found to have discharged the pollutants is liable to the appointed authority for the costs of any measure reasonably taken by that authority to remove the discharge as well as the costs of preventing or reducing any damage caused in Singapore which results from such discharge.
 
25.6.7 Liability under the PPSA may be said to be strict. However, there are exceptions that apply to different classes of pollutants and polluters. For example, under s. 4(3) of the PPSA, discharge of an oily mixture is excused if: i) the oil was contained in an effluent produced by operations for the refining of oil, ii) and it was not reasonably practicable to dispose of the effluent otherwise than by discharging it into Singapore waters, and iii) all reasonably practicable steps had been taken for eliminating oil from the effluent. Further, under s. 7(2) of the PPSA, discharge of oil or pollutants from a ship is excused if it is necessary for the purpose of securing the safety of the ship or saving life at sea.
 
25.6.8 Apart from provisions prohibiting pollution, the PPSA also imposes positive obligations on shipowners, such as the keeping of oil or cargo record books (see PPSA s. 12 to 14). Additionally, a person who intends to export or import a noxious liquid substance in bulk is required to notify the port authority of his intention to do so (see PPSA s. 9). The PPSA also imposes a duty to report any discharge of pollutants (see PPSA s. 15 and 16).
 
 
 
Updated as at 30 April 2015
 
By: Toh Kian Sing, SC and V. Bala
Admiralty & Shipping Practice Group
Rajah & Tann Singapore LLP