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Shipping Law

MARITIME LAW – SOYBEANS, SALVAGE SALES AND SUIT RIGHTS: COURT CLARIFIES CARGO DAMAGE RECOVERY

In AMS Ameropa Marketing and Sales AG & Anor v Ocean Unity Navigation Inc (The “Doric Valour”) 1 Lloyd’s Rep 389, the UK Commercial Court awarded US$293,755.10 for heat-damaged soybeans shipped from Louisiana to Egypt. Although only 70 – 80 mt of beans were physically damaged, 3,600 mt were reasonably treated as distressed and sold in a salvage sale at an 18% discount. The Court held that the assignee of the cargo receiver had valid title to sue, and that the salvage sale was a reasonable act of mitigation. Ancillary claims for warehousing, survey, and transport costs failed for lack of proof.

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Shipping Law

SHIPPING – ADMIRALTY – FLOATING CASINOS AS COLLATERAL: COURT HOLDS GAMING EQUIPMENT FALLS WITHIN SHIP MORTGAGE

In KfW IPEX-Bank GmbH v Owner of the Vessel “World Dream” [2025] 2 Lloyd’s Rep 137, the Singapore High Court ruled that casino gaming equipment on board a luxury cruise ship formed part of the mortgaged vessel. The Court held that under long-standing admiralty principles, “ship” covers not only navigation gear but also items necessary for the vessel’s commercial adventure. As the World Dream was designed as a floating resort with gaming as a central attraction, the slot machines and casino tables were integral to its purpose and thus subject to the mortgage. The decision highlights the wide scope of ship mortgages and the importance of expressly addressing high-value movable assets in financing documents.

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Contract Law

BREACH OF CONTRACT – ACQUIESCENCE AND CLEAN HANDS: COURT OF APPEAL BARS PURCHASER FROM ENFORCING SPA

In Vila Mekar Sdn Bhd v Wong Yie Dee [2025] MLJU 2104, the Court of Appeal overturned the High Court’s order for specific performance of a Sale and Purchase Agreement (SPA). The Court held that the Purchaser’s attempt to terminate in 2010 was invalid, as he failed to pay the required compensation, and by acquiescing to the Developer’s delay, the SPA remained subsisting. Later, the Purchaser’s refusal to pay progress claims and termination of his housing loan constituted clear breach and repudiation. Emphasising the equitable maxim that “he who comes to equity must come with clean hands,” the Court removed the Purchaser’s caveat and awarded costs to the Developer.

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Constitutional Law

CONSTITUTIONAL RIGHT- BALLOT BOX VS SOPS: COURT OF APPEAL UPHOLDS CONSTITUTIONAL RIGHT TO VOTE

In Tamileswaaran a/l Ravi Kumar v Suruhanjaya Pilihan Raya Malaysia & Anor [2025] MLJU 2371, the Court of Appeal held that the Election Commission acted unconstitutionally when it barred a COVID-positive voter from casting his ballot under SOPs issued during the Johor State Elections. The Court reaffirmed that the right to vote under Article 119 of the Federal Constitution is a fundamental constitutional right that cannot be curtailed by subsidiary legislation or administrative protocols. While acknowledging a breach, the Court declined to award damages as the Commission acted in good faith under extraordinary public health circumstances.

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Malaysian Case Law

DEFAMATION – LOCUS STANDI – WHEN SOCIETIES CAN’T SUE: IKRAM’S DEFAMATION CLAIM AGAINST RIDHUAN FAILS ON LOCUS STANDI

In Mahdzir bin Md Isa (suing as Pegawai Awam Pertubuhan Ikram Malaysia) v Mohd Ridhuan Tee bin Abdullah [2025] 10 MLJ 605, the High Court dismissed a defamation suit brought on behalf of Ikram, holding that a registered society lacks the legal standing to sue for defamation under the Societies Act 1966. While the Court accepted that the impugned Facebook postings were defamatory and unsupported by the defences of justification or fair comment, the claim was struck out at the threshold issue of locus standi. The judgment underscores a significant limitation: reputational protection under defamation law does not extend to unincorporated societies.

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Maritime & Shipping Law

ADMIRALTY – LIMITATION OF LIABILITY – REPAIRS VS CARGO REMOVAL: SUPREME COURT DRAWS THE LINE ON LIMITATION1976, ARTICLE 2

In MSC Mediterranean Shipping Co SA v Conti 11 Container Schiffahrts-GmbH & Co KG (The “MSC Flaminia”) [2025] 2 Lloyd’s Rep 150, the UK Supreme Court clarified the scope of the 1976 Limitation Convention. The Court held that charterers may limit liability for claims brought directly by owners, rejecting the Court of Appeal’s restrictive “owner’s original loss” rule. However, it reaffirmed that claims for loss of or damage to the vessel itself and consequential losses remain non-limitable. Importantly, the Court drew a distinction between repair costs (not limitable) and cargo-related costs (potentially limitable): while payments to authorities, removal of fire-fighting water, and waste disposal were treated as repair costs, the discharging and decontamination of cargo fell within Article 2.1(e) as limitable claims. The ruling underscores the need for careful characterisation of claims when invoking limitation rights.

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Constitutional Law

CONSTITUTIONAL LAW – CITIZENSHIP – CITIZENSHIP DENIED: HIGH COURT REFUSES TO LEGALISE CHILD TRADING

In Ow Man Yaw & Ors v Kementerian Dalam Negeri & Anor [2024] 9 MLJ 77, the High Court dismissed an application for Malaysian citizenship brought by adoptive parents on behalf of a child obtained through an agent. The Court held that the child was not “abandoned” within the meaning of section 19B of the Federal Constitution but was instead the subject of a planned arrangement amounting to child trading. As such, the presumption of citizenship by operation of law could not be invoked. The Court further affirmed that applications under Article 15A rest solely with the Federal Government, beyond judicial intervention. The ruling underscores that the best interests of the child cannot override constitutional requirements or validate unlawful conduct.

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Contract Law

MONEYLENDERS ACT 1951- UNJUST ENRICHMENT OR ILLEGAL LOAN? COURT WEIGHS RESTITUTION AGAINST THE MONEYLENDERS ACT

In Golden Wheel Credit Sdn Bhd v Dato’ Siah Teong Din [2021] 12 MLJ, the Court considered whether a licensed moneylender, whose loan agreements were void for non-compliance with the Moneylenders Act 1951, could nevertheless pursue restitutionary remedies. The plaintiff, having advanced RM3.5 million which was channelled to the defendant’s company, sought recovery on grounds of money had and received and unjust enrichment under the Contracts Act 1950. The defendant applied to strike out the claim, arguing that it was merely an indirect attempt to enforce an illegal loan. The case illustrates the delicate balance between statutory illegality under the Moneylenders Act and the equitable principles underpinning restitution.

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Road Traffic

ROAD TRANSPORT ACT – INSURANCE – DECLARATION TO NOT INDEMNIFY THE INSURANCE

In Mohd Riza bin Mat Rani & Ors v Zurich General Takaful Malaysia Bhd [2025] 2 MLJ 224, the Court of Appeal allowed the appeal by the claimants and set aside the High Court’s decision which had favoured the insurer. The Court held that Zurich was not entitled to repudiate liability under the motor takaful policy, as the alleged non-disclosures were not proven to be material or made dishonestly. Emphasising the principles of fairness and protection inherent in takaful, the Court ruled that technical omissions should not be used to defeat the rights of accident victims and their families.

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Constitutional Law

CONSTITUTIONAL LAW – A PEACEFUL WIN: COURT STRIKES DOWN CRIMINAL PENALTY FOR NO NOTICE UNDER PAA

In Amir Hariri bin Abd Hadi v Public Prosecutor [2025] 4 MLJ 807, the Court of Appeal struck down Section 9(5) of the Peaceful Assembly Act 2012 as unconstitutional. The provision, which criminalised organisers for failing to give 10 days’ prior notice of an assembly, was held to be a disproportionate restriction on the constitutional right to peaceful assembly under Article 10(1)(b). The Court emphasised that while notice requirements under Section 9(1) remain valid for regulatory purposes, criminal penalties for non-compliance imposed an unjustifiable burden on fundamental liberties. This landmark ruling strengthens constitutional protections for public assemblies in Malaysia.

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Recent Legal Updates

ADMIRALTY IN REM – WRONGFUL ARREST – POSSESORY RIGHT – ARREST GONE WRONG: WHEN A SHIP ARREST BACKFIRES WITH DAMAGES

In Eletson Holdings Inc & Ors v The Vessel “Paros” [2026] 8 MLJ 80, the High Court set aside an arrest after finding that the plaintiffs had no proprietary or possessory right to the vessel at the time of the writ, as the bareboat charter had already been terminated. The Court held that the claim was in substance a corporate control dispute dressed up as an admiralty action, and emphasised that such disputes do not fall within admiralty jurisdiction. Critically, the plaintiffs’ failure to disclose the termination of the charter when obtaining the arrest warrant amounted to a serious breach, leading the Court to find mala fides or gross negligence and order damages for wrongful arrest. The decision reinforces that ship arrest is a powerful remedy that must be exercised with full disclosure and a proper maritime foundation.

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GUARANTEE – PERSONAL GUARANTEE ≠ PAY ON DEMAND: COURT DRAWS THE LINE BETWEEN SURETYSHIP AND DEMAND GUARANTEES

In CE Energy DMCC v Bashar [2026] Lloyds’s Rep 267, the Commercial Court clarified that not all guarantees labelled “on demand” will be treated as demand guarantees. On a proper construction, the court held that the personal guarantee in question was a contract of suretyship, requiring proof of the principal debtor’s liability rather than automatic payment upon demand. Crucially, the court found that the debtor’s “irrevocable” admissions of debt in a payment agreement created a binding contractual estoppel, which the guarantor could not challenge. The decision also confirms that, where payment is due on a “day certain”, a seller may still claim the price notwithstanding retention of title. The case underscores the importance of precise drafting and the risks of entering into settlement agreements that conclusively fix liability.

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MARITIME NEGLIGENCE – PLAINTIFF CLAIMED FOR DAMAGES CAUSED DURING ANCHOR DEPLOYMENT OPERATION – CALDERBANK OFFERS

In Tom Eastwind 365 Sdn Bhd v The Owners of the Vessel “Icon Sophia” [2025] 9 MLJ 397, the High Court held that the doctrine of res ipsa loquitur applied in a maritime collision during an anchor deployment operation, allowing an inference of negligence against the tug owner. The Court clarified that the doctrine is not defeated merely because the defendant adduces evidence explaining the accident – such evidence goes to rebutting the inference, not preventing it. While liability was established due to the tug master’s error of judgment in manoeuvring too close to a stationary barge, the plaintiff failed to properly prove its damages and was awarded only RM50,000. Notably, despite succeeding on liability, the plaintiff was ordered to pay costs after rejecting reasonable Calderbank offers, underscoring the risks of pursuing litigation without properly substantiated claims.

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JURISDICTION – BILLS OF LADING – BREACH OF HIMALAYA CLAUSE – BREACH OF EXCLUSIVE JURISDICTION CLAUSE – ONEROUS OR UNUSUAL TERMS

In Maersk Guinéa-Bissau SARL v Almar-Hum Bubacar Baldé SARL [2026] 1 Lloyd’s Rep 215, the English Commercial Court held that a shipper was liable for breach of an exclusive jurisdiction clause and a Himalaya clause after commencing proceedings in Guinea-Bissau instead of England. The Court confirmed that such clauses are standard and enforceable, and that commencing foreign proceedings in breach of them can give rise to a claim for damages. Notably, the Court also recognised that Himalaya clauses may be used offensively, allowing subcontractors to recover losses caused by wrongful litigation. The foreign judgment was not recognised due to lack of jurisdiction and denial of natural justice.

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DELIVERY WITHOUT PRESENTATION OF BILL OF LADING – LOI WON’T SAVE YOU: SHIPOWNER LIABLE FOR MISDELIVERY DESPITE INDEMNITY

In United Overseas Bank Ltd v The “Maersk Katalin” [2026] 1 Lloyd’s Rep 18, the Singapore High Court reaffirmed that delivery of cargo without presentation of original bills of lading remains a fundamental breach, even where carried out against letters of indemnity. The Court held that LOIs merely shift commercial risk but do not authorise misdelivery, and rejected arguments of consent, ratification and causation. Significantly, the Court emphasised that the burden lies on the carrier to prove that the loss would have occurred in any event – a burden not easily discharged. The decision underscores the continued strict liability regime in misdelivery cases, particularly where banks as bill holders are involved.

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CONTRACT LAW – ‘UK COURTS’ MEANS ENGLAND: COURT UPHOLDS JURISDICTION DESPITE VAGUE CLAUSE

In SMT Global Logistics Ltd v Georgian Airlines LLC [2025] Lloyd’s Rep. Plus 89, the Commercial Court held that a clause referring disputes to “the court in accordance with current legislation of the United Kingdom” was a valid jurisdiction clause in favour of the High Court of England and Wales. The Court also confirmed that the Montreal Convention does not apply to pure contractual claims for non-performance, such as repayment and loss of profits. Emphasising a broad and commercially sensible interpretation, the Court enforced the parties’ choice of forum and refused to stay proceedings, reaffirming that jurisdiction clauses will be upheld unless there are overwhelming reasons to depart.

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