Tag: wrongful arrest

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.

Compensation for the unlawful arrest and detention of the Arctic Sunrise and its crew

Arbitral Tribunal orders the Russian Federation to pay a little under 5,4 million euros to the Netherlands

On 18 July 2017, almost two years after that an Arbitral Tribunal (Tribunal) found that the Russian Federation must compensate the Netherlands following the wrongful arrest of the Arctic Sunrise and its crew, the Tribunal handed down its Award on the issue of compensation.

Background

Before looking at this recent decision in more in depth, the history of the dispute will be laid out. Starting on 18 September 2013, when Greenpeace activists tried to enter the Russian offshore oil platform (the Prirazlomnaya) in order to protest against attempts to begin exploiting oil and gas resources in the Arctic. One day later, the Russian Federation boarded and arrested the Arctic Sunrise and detained its crew. Subsequently, the vessel was brought to the port of Murmansk and the crew was charged with having committed a range of administrative and criminal offences, including acts of terrorism and hooliganism.

The Netherlands initiates Proceedings before an Arbitral Tribunal 

Some two weeks later, on 4 October 2013, The Netherlands, being the flag State of the Arctic Sunrise, started proceedings before an Arbitral Tribunal that was established pursuant to Annex VII of the 1982 Law of the Sea Convention. The Russian Federation refused to participate in the Arbitral proceedings that were initiated by the Netherlands. The position of the Russian Federation was, that this type of dispute was beyond the jurisdiction of an international court or tribunal, due to a declaration it had made at the time of becoming a party to the 1982 Law of the Sea Convention. However, the proceedings went ahead, despite the non-participation of the Russian Federation.

The Netherlands requests Interim Measures from the ITLOS

On 21 October 2013, the Netherlands requested interim measures from the International Tribunal for the Law of the Sea (ITLOS). According to the Netherlands, the Russian Federation had to immediately release the Arctic Sunrise and its crew, after the posting of a bond, upon which they would be free to leave Russian territory as well as any maritime areas under its jurisdiction. ITLOS gave an Order on interim measures on 22 November 2013. Initially, the Russian Federation did not comply with the Order of the ITLOS – eventually, however, the vessel and crew were released in late November 2013. The Russian release of vessel and crew was based on its national laws, the Order of the ITLOS played no decisive role in this, according to the Russian Federation  – as it happened, the effect of the national laws and regulations on which the Russian Federation relied, coincided with what was set out by the ITLOS in its Order containing interim measures.

Arbitral Award on the Merits

One of the main substantive issues on which the Arbitral Tribunal was asked to rule during the merits phase, was the (un)lawfulness of the response of the Russian Federation to the presence of the Arctic Sunrise and its crew. The gist of the argument of the Netherlands was that, as the flag State, it had sole jurisdiction over the ship and the crew on-board during the entirety of this incident (Article 58 of the 1982 Law of the Sea Convention). On 14 August 2015, the Tribunal released its Award on the merits. The Arbitral Tribunal found that the Netherlands had exclusive jurisdiction over the Arctic Sunrise whilst it was operating in the exclusive economic zone of the Russian Federation. This means that the Russian Federation could have only lawfully initiated steps against the vessel that was flagged to the Netherlands and its crew with the latter’s consent. After coming to this conclusion, the Tribunal went on to state that the Netherlands had to be compensated.

Arbitral Award on Compensation

In its recent Award on compensation, the Tribunal set the total amount of compensation owed by the Russian Federation to the Netherlands at a little under 5,4 million euros. This sum was arrived at by adding up the damage that was done to the Arctic Sunrise (EUR 1,695,126.18); compensation related to the unlawful arrest, prosecution and detention of its crew (EUR 600,000); a variety of other damages incurred by the Netherlands, including the failure to release the vessel and crew in a timely manner (EUR 2,461,935.43); costs made by the Netherlands in issuing a bank guarantee (EUR 13,500); and lastly, the Netherlands had to be reimbursed for paying the full amount of deposits required by the Tribunal (EUR 625,000) – meaning that the Russian Federation had to pay the half it owed of the costs that were needed for the proceedings to be initiated. Although the Russian Federation is required under international law to abide by the ruling on compensation, whether it will actually do so remains to be seen.

 

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