Want to Arrest in Singapore? If you’re Not Actually Malicious, Feel Free

For more than 150 years, the test for wrongful arrest of a vessel has been that of ‘malice’ and ‘gross negligence’ on the part of the arresting party, as first described in The Evangelismos (1858) 12 Moo PC 352. While this test remains unchallenged in England and Wales, other common law jurisdictions including, but not limited to, Australia, South Africa, and Singapore have questioned its validity. More recently, the so-called Evangelismos test came under scrutiny in the judgment of the Singapore High Court in Hansa Safety Services GmbH v The Owner of the Vessel, the “King Darwin” (The King Darwin) [2019] SGHC.

On 13 November 2018, the claimant, Hansa Safety Services GmbH, brought an action in rem for services rendered to the vessel, the King Darwin. The total sum of the claim was 5,864.00 euros. On the same day, Hansa Safety Services GmbH arrested the King Darwin pursuant to a warrant of arrest. On 19 November 2018, the owners of the King Darwin provided security and the vessel was released.

On 21 January 2019, the Insolvency Administrator of the owners of the King Darwin, Hendrik Gittermann, was granted leave to intervene in the action. In his summons, Hendrik Gittermann sought to set aside the warrant of arrest and obtain damages for wrongful arrest of the vessel from Hansa Safety Services GmbH.

On 21 March 2019, Hansa Safety Services GmbH served a Notice of Discontinuance which it had filed on 7 February 2019, fourteen days after service of the defence to it. The purpose of the Notice of Discontinuance was to rescind the action as a whole including the counterclaim for damages for wrongful arrest of the vessel from Hansa Safety Services GmbH.

On 22 March 2019, Hendrik Gittermann applied to strike out the Notice of Discontinuance on the ground that it is necessary to prevent injustice or an abuse of process of the Court. The Senior Assistant Registrar granted the application. Hansa Safety Services GmbH appealed.

Vincent Hoong JC dismissed the appeal and upheld the order to strike out the Notice of Discontinuance. According to Vincent Hoong JC, this was an appropriate case for the Court to exercise its inherent powers to strike out a Notice of Discontinuance to prevent injustice to Hendrik Gittermann. The time and effort that Hendrik Gittermann would expend in recommencing a claim for the wrongful arrest of the King Darwin from Hansa Safety Services GmbH, taken in conjunction with the uncertainty of the test to be applied when bringing a claim for damages for wrongful arrest outside of in rem proceedings, were sufficient to set aside the Notice of Discontinuance.

Hendrik Gittermann argued that, by discontinuing the action, Hansa Safety Services GmbH would deprive him of his right to pursue a claim for wrongful arrest, which must be pursued in the context of an in rem action by the arresting party. Vincent Hoong JC rejected this argument. Hendrik Gittermann could bring a claim for damages for wrongful arrest independently of any in rem action by the arresting party. Vincent Hoong JC, reviewing the judgments in The Wallet D Wallet [1893] P 202, Best Soar Ltd v Praxis Energy Agents Pte Ltd [2018] 3 SLR 423 and Congentra AG v Sixtenn Thirteen Marine Sa (The Nicholas M) [2009] 1 All ER 479 (Comm), explained that such claim could be brought under the tort of wrongful arrest, which has long been recognised by the English Courts.

Furthermore, Hendrik Gittermann argued that, were he to pursue a claim for wrongful arrest independently of any in rem action by the arresting party, the test to be applied is unclear. Vincent Hoong JC recognised that the Court of Appeal’s observations in The Kiku Pacific [1999] 2 SLR (R) 91 and The Vasiliy Golovin [2008] 4 SLR (R) 994 have raised arguments that the applicable test for pursuing a claim for wrongful arrest when an in rem action is discontinued and an independent action is brought should be that of ‘without reasonable or probable cause’, rather than ‘malice’, as suggested in The Evangelismos (1858) 12 Moo PC 352. Nevertheless, Vincent Hoong JC took the view that these observations were not enough to lay down a less stringent test and ‘malice’ would almost certainly be the relevant threshold.

Carriers Be Aware!!!! (Contribution Claims Fall outside the Athens Regime)

All personal injury, loss of life or loss of / damage to luggage claims must be brought against the carrier (contracting or performing) under Art 14 of the Convention Relating to the Carriage of Passengers and their Luggage by Sea (Athens Convention), however, the Convention does not purport to be a complete Code governing all liabilities of sea carriers – for example, it is silent both with regard to claims of passengers against the carrier in cases of cancellation of the scheduled voyage and with rights of recourse as between carriers and other parties.

What about a contribution claim brought by a third party against the carrier? Would such claims be subject to the time bar provisions of the Athens Convention? This was the primary discussion point in Feest v. South Strategic Health Authority and Another [2015] EWCA Civ 708. In August 2008, the claimant sustained a spinal injury while on a boat tour with her work colleagues (as part of a team building exercise) in the Bristol Channel. She sued her employer and sought damages for her injury. Her employer then issued a Part 20 claim against the owner of the boat for contribution under s. 1(1) of the Civil Liability (Contribution) Act 1978. Granting the application of the owner for a summary judgment on the Part 20 claim, the district judge dismissed the claim on the ground that it was time bared (as it was brought later than 2 years, stipulated by Art 16 of the Athens Convention).  The defendant employer’s appeal was dismissed by Judge Havelock-Allan QC, sitting as a judge of the Queen’s Bench of the Bristol Mercantile Court. The defendant then appealed to the Court of Appeal which reversed the said judgment.  It was held that a claim for contribution is autonomous from the Athens Convention and it derives from the English domestic statute entitlement to contribution. On that basis, the time bar provisions of the Athens Convention would not apply to a contribution claim. An alternative argument, developed by the counsel for the carrier to the effect that Art 16 of the Athens Convention extinguishes the right for an action rather than bars the remedy of court proceedings, was also rejected by the Court of Appeal. This might come as a surprise to continental lawyers as, in continental jurisdictions, time bar provisions usually have the effect of extinguishing the right to any claim (including contribution rights). However, unlike Article 29 of the Warsaw Convention, Article 16 of the Athens Convention does not address this issue with any real definitive language and leaves it to national law to determine the effect of the time bar provision. In English law, the effect of time bar provisions is normally to deny the plaintiff a right of action after a certain period has elapsed but the right is not extinguished.

From the perspective of international maritime law, the outcome of the Court of Appeal is disappointing but the fact remains that the UK legal system is dualist in nature and in the absence of clear language used in an international convention, disputes as to interpretation of provisions of a convention will be resolved by the application of the national law, which is, of course, what happened here!

Ship arrest in Singapore

Cases of liability for wrongful arrest in Admiralty are rare: successful claims, which require a showing of malice or gross negligence, even more so. We now have an account of one at the end of last year in Singapore. Bunker suppliers sold bunkers to the (now-very-bankrupt) OW Group; they were passed on paper through other OW companies, one of which fuelled the vessel. It’s elementary law that if A sells to B and B to C, then A has no claim against C: it was also plain to any third-year law student that the suppliers hadn’t a cat in hell’s chance of showing agency in any of the OW companies. Nevertheless, having voluntarily given credit to the uncreditworthy, the suppliers blithely went and arrested the ship in Singapore. Not surprisingly they were held liable in damages. The case is The Xin Chang Shu [2015] SGHC 308. The judgment, worth a look, is here; a useful note on it can be found here.

With thanks to Prof E Macdonald for the tip-off.

AT

Arrest of Ships

An interesting decision of the Federal Court of Australia in The Sam Hawk [2015] FCA 1005. For the purpose of determining if a claimant has a maritime lien for a contractual claim (here the supply of bunkers), the law of the contract under which the bunkers were supplied controls. The court refused to follow the Privy Council in The Halcyon Isle [1981] AC 221 .

More details at http://www.hfw.com/Arrest-of-the-SAM-HAWK-October-2015

Andrew Tettenborn