Tag: arbitration act

Singapore Court orders sale of liened cargo

In Five Ocean Corporation v Cingler Ship Pte Ltd [2015] SGHC 311 the High Court of Singapore has ordered the sale of cargo subject to a lien exercised by the shipowner on behalf of the head charterer pursuant to a bill of lading incorporating the terms of the sub-charter, which was subject to Singapore arbitration and English law. The order was made pursuant to the powers of the court under s12 A (4) of the International Arbitration Act, which is in similar terms to s 44(3) of the English Arbitration Act 1996. Section 12 A (4) provides “If the case is one of urgency, the High Court or a Judge thereof may, on the application of a party or proposed party to the arbitral proceedings, make such orders under subsection (2) as the High Court or Judge thinks necessary for the purpose of preserving evidence or assets.” All parties were before the court and subject to its in personam jurisdiction.

The court held that an order for sale was “necessary” in order to preserve the “asset”, the disponent owner’s right to detain possession of the Cargo. The vessel was in international waters in the Bay of Bengal and the crew had been on board the vessel for almost four months, and some were falling ill. There was a lack of fresh food, water and medical supplies and overheating of the cargo of coal had been detected, with the risk of self-ignition should it continue to remain in the Vessel’s holds, a dire situation exacerbated by the monsoon season. The shipowners had been willing to exercise their lien under the bill of lading but the court noted that they would have been obliged to do so by reason of the employment clause in the time charter.

Don’t be late. Arbitrate.

We are all familiar with the ‘Italian Torpedo’ where a party to a contract containing an arbitration clause commences proceedings in a jurisdiction which will not recognise its effect. The Africa Reefer [2015] EWHC 1950 (Comm), provides a salutary lesson against overconfidence that one’s chosen court will, indeed, determine that arbitration does not apply.

Pears were carried from Argentina to Antwerp under a bill of lading incorporating a charterparty subject to London arbitration. The bill of lading was subject to the Hague-Visby Rules and a one year time limit. The claimants commenced proceedings in Belgium and the parties awaited the final report of the court surveyor. After this was produced the defendant, in November 2012, served a defence objecting to the jurisdiction of the Belgian courts on the grounds that the dispute was subject to London arbitration. The claimants took no steps to commence arbitration, confident that it would succeed on this point under article 96 of the Belgian Private International Code and article 91 of the Belgian Maritime Law. Much to their surprise, in 2014 the Belgian court found for the defendant.

In 2015 the claimants sought an extension of time of three years and eight months for commencing arbitration relying on s.12(3) (b) of the Arbitration Act 1996 which provides for the court to order that an extension be given where: “the conduct of one party makes it unjust to hold the other party to the strict terms of the provision in question”. Burton J declined to grant the requested extension. There was no conduct by the defendants upon which the claimants could rely which made it unjust to hold the claimants to the one year time limit. The defendants had been entitled under Belgian law to participate in the Belgian proceedings up until the time when they raised the jurisdiction objection in November 2012, and it was common ground that by doing so the defendants had not waived their right to claim arbitration. Thereafter, the claimants took no steps to commence arbitration until their rude awakening in 2014 when the Belgian court found for the defendant.