Yew Huoi, How & Associates | Leading Malaysia Law Firm

Menu

ADMIRALTY IN REM – SHIPPING — FUEL OR FREIGHT? COURT CLEARS THE AIR ON GLOBAL FALCON BUNKER DISPUTE

Summary and Facts

In Global Falcon [2024] MLJU 1378, Meck Petroleum DMCC (“Meck”) supplied high-sulphur fuel oil (HSFO) to the vessel Global Falcon and subsequently claimed USD 1.3 million for unpaid bunkers. Meck initiated admiralty proceedings to arrest the vessel, asserting that the HSFO qualified as goods supplied for the vessel’s “operation or maintenance,” thus entitling them to a maritime lien.

However, the HSFO supplied had a sulphur content of 3.03%, exceeding regulatory limits for operational fuel use, and was loaded into the vessel’s cargo tanks rather than fuel tanks. The Global Falcon lacked scrubbers to process high-sulphur fuel, and the quantity of HSFO supplied was inconsistent with the vessel’s operational needs. Evidence later showed the HSFO was transferred to another vessel, indicating it was intended as cargo rather than operational fuel. Based on these factors, the court questioned if Meck’s claim met the admiralty jurisdiction requirements.

Legal Issues

  1. Qualification as Goods for Operation or Maintenance: Did the HSFO qualify as “goods or materials supplied for the operation or maintenance” of the vessel under Section 20(2)(m) of the UK Senior Courts Act 1981 (“UK SCA 1981”)?
  2. Admiralty Jurisdiction to Arrest the Vessel: Did the court have admiralty jurisdiction to arrest the vessel based on the HSFO supply?

Court Findings

  • The court concluded that the HSFO, with a 3.03% sulphur content exceeding operational fuel limits and loaded into cargo tanks, was not meant for the vessel’s operation or maintenance. This conclusion was supported by:
    • The vessel’s lack of scrubbers to utilize HSFO as fuel.
    • The quantity of HSFO supplied, which far exceeded the vessel’s operational fuel capacity.
    • Evidence showing the HSFO was discharged to another vessel, indicating it served as cargo, not operational fuel.
  • For admiralty jurisdiction to be valid, the claim must meet Section 20(2)(m) or (n) of the UK SCA 1981: “supplied to a ship for her operation or maintenance” or “for the construction or repair of equipment of a ship or in respect of dock charges or dues.”
  • The court held that Meck’s claim did not satisfy Section 20(2)(m) of the UK SCA 1981, as the HSFO was neither used nor intended for the vessel’s operation or maintenance. As a result, the court set aside the Warrant of Arrest, ordered the vessel’s immediate release, and granted the owners liberty to seek damages for wrongful arrest.

Reference Cases

  • Meck Petroleum DMCC v The Owners And/Or Demise Charterers Of The Ship Or Vessel “Global Falcon” Of The Port Of Cook Islands [2024] MLJU 1378
  • UK Senior Court Act 1981 Section 20(2)(m) & (n)
  • The River Rima [1998] 2 Lloyd’s Law Rep 193
  • Port of Geelong Authority v The Ship “Bass Reefer” 109 ALR 505
  • Supreme Court Act 1981

Back to Latest Legal Updates

Recent Post

ADMIRALTY IN REM – NO RIGHT TO ARREST: MALAYSIAN COURT BLOCKS ABUSE OF ADMIRALTY LAW OVER U.S. SANCTIONS

In Unicious Energy Pte Ltd v The Owners of the ‘Alpine Mathilde’ [2023] MLJU 2819, the High Court set aside a vessel arrest brought solely to secure arbitration claims, holding it was an abuse of admiralty jurisdiction. The Plaintiff, an OFAC-designated SDN, had no valid claim due to U.S. sanctions, and the Court ruled that arrest for arbitration must strictly comply with section 11(1)(c) of the Arbitration Act 2005. This case reinforces the limits of in rem jurisdiction and the enforceability of sanctions clauses in cross-border charterparty disputes.

Read More »
15 November ,2025 No Comments

BREACH OF FIDUCIARY DUTY – UK SUPREME COURT SHUTS DOWN ‘WHAT IF’ DEFENCE IN FIDUCIARY BREACH: NO PROFIT MEANS NO EXCUSE

In Rukhadze & Ors v Recovery Partners GP Ltd and Anor [2025] 1 Lloyd’s Rep 329, the UK Supreme Court reaffirmed the uncompromising “no profit” rule for fiduciaries. The Court held that a fiduciary who profits from their position must account for those gains – regardless of good faith, intent, or hypothetical outcomes. The appellants’ argument that they would have earned the profit even without a breach was firmly rejected. The decision emphasises that loyalty, not speculation, is the standard, and reaffirms equity’s strict stance on conflicts of interest.

Read More »
15 November ,2025 No Comments

EMPLOYMENT – CONSTRUCTIVE DISMISSAL VIA TRANSFER: WHEN MANAGEMENT PREROGATIVE CROSSES THE LINE

In Saharunzaman bin Barun v Perodua Sales Sdn Bhd & Anor [2025] 2 MLJ 17, the Court of Appeal reinstated the Industrial Court’s decision that three long-serving employees were constructively dismissed after being ordered to report for duty at distant branches within three days, following their refusal to resign and accept a fixed-term contract with an associated company. The Court found that Perodua’s actions were unreasonable, mala fide, and amounted to a fundamental breach of the employment contract, especially as no valid work permits were arranged for postings in Sabah and Sarawak. The ruling affirms that “reasonableness” clauses in transfer provisions carry enforceable weight and cannot be used as tools for disguised terminations.

Read More »
15 November ,2025 No Comments

MEDICAL NEGLIGENCE – WHEN SILENCE HURTS: COURT SLAMS GOVERNMENT WITH RM2M+ IN AMPUTATION NEGLIGENCE SUIT

In L/Kpl Naraayanan Nair a/l Subramaniam v Kerajaan Malaysia & Ors [2025] 8 MLJ 503, the High Court delivered a landmark ruling in a medical negligence suit involving a young police corporal who lost his arm due to delayed and negligent treatment. Citing emotional trauma, denial of timely access to medical records, and ongoing life-altering consequences, the court awarded over RM2 million in damages – including RM200,000 in aggravated damages – this shows the judiciary’s increasing emphasis on dignity, transparency, and rehabilitative justice in personal injury claims.

Read More »
15 November ,2025 No Comments

TORT OF DEFAMATION – NO MALICE, NO DEFAMATION: POLITICAL COMMENTARY STANDS PROTECTED

In Lim Guan Eng v Datuk Tan Teik Cheng & Anor [2025] 2 MLJ 791, the Court of Appeal dismissed a defamation claim over a politically charged article alleging conditions tied to a RM4 million school allocation. The Court ruled that the statements – framed as a call for explanation – were not defamatory when read in full context. The defendants successfully relied on the defences of fair comment and reportage, with the Court emphasising that political commentary, if rooted in fact and honestly held, remains protected speech – even during an election campaign. Malice was not proven, and the article’s publication in a neutral “Letters to the Editor” section further insulated the publisher from liability.

Read More »
15 November ,2025 No Comments

ILLEGALITY AND CONTRACT – RM49 MILLION MISTAKE? ADW2 STRUCK DOWN FOR NO CONSIDERATION DIMENSI SDN BHD LEGALLY VALID?

In Kuala Dimensi Sdn Bhd v Port Kelang Authority [2025] 2 MLJ 238, the Federal Court reaffirmed a core principle of contract law – no consideration, no contract. The Court held that the supplemental agreement (ADW2), which increased interest payable by RM49 million, was void for want of consideration, despite being acted upon. Notably, the Court rejected the “practical benefit” doctrine from Williams v Roffey, clarifying that Malaysian law continues to uphold traditional consideration requirements. Estoppel, too, could not rescue the agreement. This case sends a clear message: contractual variations must be backed by clear and enforceable consideration, or risk being struck down.

Read More »
15 November ,2025 No Comments
en_USEN
zh_TWZH ms_MYMY en_USEN
× Contact Us