Your World of Legal Intelligence
 Hong Kong | 1-800-335-6202

Handytankers Ks v The Owners And/or Demise Charterers Of The Ship Or Vessel M/v “Alas”, Subsequently Renamed As “Kombos” And Those Other Vessels Named In Schedule “A” Annexed Hereto

Judgment Cited authorities 12 Cited in Precedent Map Related
Vincent
Judgment Date21 July 2014
Year2014
Citation[2014] 4 HKLRD 160
Judgement NumberHCAJ241/2009
Subject MatterAdmiralty Action
CourtHigh Court (Hong Kong)
HCAJ241/2009 HANDYTANKERS KS v. THE OWNERS AND/OR DEMISE CHARTERERS OF THE SHIP OR VESSEL M/V “ALAS”, SUBSEQUENTLY RENAMED AS “KOMBOS” AND THOSE OTHER VESSELS NAMED IN SCHEDULE “A” ANNEXED HERETO

HCAJ 241/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ADMIRALTY ACTION NO 241 OF 2009

____________________

Admiralty action in Rem against the M/V “Alas”, subsequently renamed as “Kombos” and the four ships or vessels named in Schedule “A” annexed hereto.

BETWEEN
HANDYTANKERS KS Plaintiff

and
THE OWNERS AND/OR DEMISE CHARTERERS OF THE SHIP OR VESSEL M/V “ALAS”, SUBSEQUENTLY RENAMED AS “KOMBOS” AND THOSE OTHER VESSELS NAMED IN SCHEDULE “A” ANNEXED HERETO Defendants

____________________

Before: Hon Ng J in Chambers
Date of Hearing: 8 May 2014
Date of Judgment: 21 July 2014

_______________

J U D G M E N T

_______________

Introduction

1. This is the Defendants’ application by Summons dated 29 April 2014 for orders that the Warrant of Arrest of the vessel “Dewi Umayi” (“the Vessel”) and the re-amended Writ of Summons filed herein be set aside and/or struck out on the grounds that this Court has no in rem jurisdiction in respect of the Plaintiff’s claim and/or that the Plaintiff has improperly invoked the in rem jurisdiction of the Court. The Defendants further seek a Release of the Vessel and damages for her wrongful arrest.

2. The Warrant of Arrest was issued on the basis of the 2nd Affirmation of Michael Wai Shing Ng dated 26 April 2014 (“Ng 2”). The facts sufficiently appear in Ng 2 and are not materially in dispute.

Background Facts

3. By a Shelltime 4 form Charterparty dated 9 January 2008 (“Charterparty”), the Plaintiff, as owner, chartered its motor tanker “BETH” to PT. Arpeni Pratama Ocean Line Tbk (“APOL”) for five years. The Plaintiff’s claim as pleaded in the Endorsement of Claim is for damages for breach of the Charterparty and unpaid hire due under it.

4. In Ng 2, it is said that in breach of clauses 8 and 9 of the Charterparty, APOL has repeatedly failed to pay hire in full and/or on time. In particular:

(1) APOL paid the January 2009 instalment of hire late.

(2) APOL paid the February, March and April 2009 instalments of hire late and only partially.

(3) APOL failed to pay the May and June 2009 instalments of hire altogether.

(4) On 2 June 2009, the Plaintiff sent APOL an anti-technicality notice pursuant to clause 9(a) of the Charterparty which stated inter alia as follows:

“In default of c/p, you have failed to pay the above hire by the 1 June 2009 deadline.

Accordingly, we hereby give you notice under cl 9(a) of the c/p of such default and that we require you to pay that hire together with interest… within seven (7) banking days of receipt of this notice; failing which we shall withdraw the vessel…”

(5) APOL failed to comply with the anti-technicality notice and on 12 June 2009 the Plaintiff exercised its contractual right of withdrawal by reason of APOL’s repudiatory breaches and brought the Charterparty to an end.

5. Clause 79 of the Charterparty contains a L.M.A.A. Arbitration clause. The dispute between the Plaintiff and APOL was referred to arbitration in London. A Final Award in the sums of US$9,238,221.30 by way of damages and US$361,243 for unpaid hire (“Award”) was issued in favour of the Plaintiff on 1 March 2013. These sums are slightly less than the amounts stated in the in rem Writ herein ie US$11,311,032.00 for damages and hire in the sums of US$58,508.00 + US$441,375.00 + US$246,681.00.

6. In April this year, the Plaintiff invoked the Court’s in rem jurisdiction by applying for a Warrant of Arrest in respect of the Vessel owned by the Defendants. As set out paragraph 8 of Ng 2, the Plaintiff’s claim is that pleaded in the Endorsement of Claim and the Plaintiff specifically puts its claim as one falling under section 12A(2)(h) of the High Court Ordinance, Cap 4 (“Ordinance”) ie a claim “arising out of any agreement relating to …the use or hire of a ship”.

7. While the Plaintiff obtained the Award on 1 March 2013, it made plain in Ng 2 that the arrest of the Vessel was sought for the purpose of providing security for the anticipated judgment in rem in this action and not as a means of enforcing the Award.

Discussion

8. Mr Alder, for the Defendants, submitted that these proceedings and the arrest of the Vessel are fundamentally in the nature of an application to enforce the Award and in Hong Kong there is no head of Admiralty jurisdiction which permits the Plaintiff to enforce a foreign arbitration award as such. The proceedings and the arrest are therefore an abuse of process and ought to be set aside: The Chong Bong [1997] 3 HKC 579; The Bumbesti [2000] QB 559.

9. Mr Alder further submitted that the procedure of arrest is not available once a plaintiff’s claim has crystallised in a judgment or arbitration award. This is because inter alia in Article 1(2) of the International Convention for the Unification of Certain Rules Relating to the Arrest of Sea-Going Ships 1952 (“1952 Convention”), “arrest” means “the detention of a ship by judicial process to secure a maritime claim, but does not include the seizure of a ship in execution or satisfaction of a judgment”. Mr Alder urged this court to construe section 12A(2) of the Ordinance consistently with Article 1 of the 1952 Convention.

10. It is of course correct that there is no head of Admiralty jurisdiction in Hong Kong for the enforcement of arbitration awards as such. The court’s Admiralty jurisdiction is statutory and the reason why it cannot be invoked in respect of a claim based on an arbitration award is simply that, as a matter of construction, section 12A(2) of the Ordinance is not apt to cover a claim arising out of an arbitration agreement, even though the arbitration agreement is contained in a charterparty or some other agreement relating to the use or hire of a ship: The Bumbesti.

11. In The Chong Bong, the affidavit leading to the warrant of arrest expressly stated that the writ was issued to enforce an arbitration award and the statement of claim only contained causes of action for an award...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT