Yew Huoi, How & Associates | Leading Malaysia Law Firm

Menu
  • Legal Updates from YHA Law Firm

ADMIRALTY LAW – SHIP ARREST – ORDER FOR SALE

Q: When can the court order a sale of vessel?
A: If the court is satisfied that there is a good reason to do so.

Where no security is put up to procure the release of the vessel after arrest, the court may make such an order. The shipowner has the duty to ensure he has the necessary and continuing financial means to maintain the vessel (i.e. repair from ordinary wear and tear exposed in rough sea conditions for being stationary for too long).  If the shipowner is unable to do so, nor provide alternative security, then the court will order a sale of vessel.

Q: What constitutes a good reason? In contrast, what cease to be a good reason?
A: The judge will rely on four factors to assess ‘good reason’. For example, length of trial; daily costs incurred (bunkers, insurance, wages etc); maintenance costs to prevent deterioration of ship; security of claim would be diminished (i.e. vessel turned into a wasting asset).

Cases In Point: SSK B&T Pte Ltd v The Owners Of The Ship Or Vessel ‘Silver Moon’ Of Port Klang (No 2) [2017] 8 MLJ 466

Q: What are the common circumstances where court would make such an order?
The court is in favour to order a sale in the following situations  :-

  • reluctance of the shipowners to put up security for release of the vessel
  • shipowners having nothing else to meet any judgment sum
  • diminution in the value of the vessel
  • value of the vessel is far lesser than the amount claimed

In contrast, the court would not make a pendente lite order in cases where :-

  • cost of maintaining an arrested vessel is not substantial
  • temporarily suspended vessels thus not incurring cost (i.e. hot/cold laying up)
  • ongoing undertakings to pay for insurance and maintenance costs until the conclusion of the trial by the shipowner

Case In Point : ‘Jade Phoenix’ and ‘Golden Phoenix’ [1988] 2 CLJ 536

Q: How is the sale pendente lite executed?
A: The Admiralty Sheriff is required under the commission for appraisement and sale to sell at the highest price that can be obtained for the ship or maritime property. Appraisement is the official valuation of the ship or maritime property by a court appointed valuer in order to prevent it from being sold at too low a price.

The value of the vessel is then compared to the amount of the plaintiff’s claim. The proceeds of sale are placed on deposit and may be credited with interest.

Back to Latest Legal Updates

Sorotan Terkini

EMPLOYMENT – RETRENCHMENT – INDUSTRIAL COURT UPHOLDS GLOBAL RESTRUCTURING: REDUNDANCY VALID DESPITE ONGOING WORK OVERSEAS

In Sin Leong v BT Systems (M) Sdn Bhd [2025] 4 ILJ 221, the Industrial Court upheld the employer’s retrenchment exercise following a global restructuring, ruling that the claimant was lawfully dismissed due to genuine redundancy. Although the claimant’s functions continued in India, the Court held that the abolition of the entire Malaysian team sufficed to establish redundancy. The company’s profitability did not negate the restructuring, and the LIFO principle did not apply since the whole department was closed. The decision reinforces that courts will respect managerial prerogative, provided the retrenchment is bona fide and not tainted by mala fide or victimisation.

Read More »
30 Mac ,2026 Tiada Ulasan

DECREE NISI – ADULTERY AND FRAUD – NOT CONCEAL REMARRIAGE – COLLUSION EVIDENCE

In Kanagasingam a/l Kandiah v Shireen a/p Chelliah Thiruchelvam & Anor [2026] 7 MLJ 494, the High Court set aside spousal maintenance and committal orders after finding that the ex-wife had fraudulently concealed her remarriage, which by law extinguished her entitlement under section 82 of the Law Reform (Marriage and Divorce) Act 1976. The Court held that consent orders obtained through non-disclosure were vitiated by fraud and ordered repayment of RM310,000, together with RM400,000 in aggravated damages and RM300,000 in exemplary damages. The decision underscores that fraud unravels all, even in family proceedings, and that courts will not hesitate to impose punitive consequences for abuse of process.

Read More »
30 Mac ,2026 Tiada Ulasan

FEDERAL COURT SAVES SECTION 233 CMA: ‘OFFENSIVE’ AND ‘ANNOY’ REMAIN CONSTITUTIONAL

In The Government of Malaysia v Heidy Quah Gaik Li [2026] MLJU 384, the Federal Court overturned the Court of Appeal’s ruling that had struck out the words “offensive” and “annoy” from section 233(1)(a) of the Communications and Multimedia Act 1998. The Court held that these terms, when read together with the requirement of intent to annoy, fall within the permissible restrictions on free speech under Article 10(2)(a) of the Federal Constitution. While the impugned words were upheld as constitutional, the respondent’s acquittal was maintained as her Facebook posts criticising immigration detention conditions did not demonstrate the required intent to annoy or harass.

Read More »
30 Mac ,2026 Tiada Ulasan

HIGH COURT ORDERS TIKTOK VIDEO TAKEN DOWN: ADVICE ON SECRET CONVERSION OF MINORS VIOLATES CONSTITUTION

In Karnan a/l Rajanthiran & Ors v Firdaus Wong Wai Hung [2025] 9 MLJ 14, the High Court granted a mandatory interim injunction ordering the immediate removal of a viral TikTok video advising how underaged non-Muslim children could be secretly converted to Islam without their parents’ knowledge. The Court held that the advice prima facie breached Article 12(4) of the Federal Constitution, which provides that a minor’s religion must be determined by their parent or guardian. Given the risk of irreparable harm to constitutional rights, the Court found the case “unusually strong and clear” and concluded that justice and the balance of convenience favoured the urgent removal of the video pending trial.

Read More »
30 Mac ,2026 Tiada Ulasan

MARITIME LAW – CLAUSES 28 AND 29 BARECON 2001 – OWNERS CAN’T PICK ANY PORT: COURT LIMITS ‘CONVENIENCE’ IN VESSEL REPOSSESSION CLAUSE

In Songa Product and Chemical Tankers III AS v Kairos Shipping II LLC [2026] 1 Lloyd’s Rep 100, the Court of Appeal held that a clause allowing owners to repossess a vessel at a location “convenient to them” does not entitle them to demand redelivery at any distant port of their choosing. The Court emphasised that repossession must occur as soon as reasonably practicable, and where the vessel is already at a safe and accessible port, owners cannot require charterers to incur the cost and risk of sailing it across the world. The decision clarifies that charterers, as gratuitous bailees post-termination, are only obliged to preserve the vessel – not to undertake burdensome repositioning for the owners’ convenience.

Read More »
30 Mac ,2026 Tiada Ulasan

MARINE INSURANCE – FRAUD DOESN’T DEFEAT COVER: COURT UPHOLDS MORTGAGEE’S CLAIM UNDER MII POLICY OF MORTGAGEE’S CLAIM

In Oceanus Capital Sarl v Lloyd’s Insurance Co SA (The “Vyssos”) [2026] 1 Lloyd’s Rep 79, the Commercial Court held that a mortgagee was entitled to recover under a Mortgagee’s Interest Insurance (MII) policy despite a forged war risks cover note and a breach of trading warranties by the shipowner. The Court found that the proximate cause of loss was the mine strike, not the forged insurance, and that the mortgagee was not “privy” to the breach, as its consent had been induced by fraud. The decision reinforces that MII policies are designed to protect lenders from owner misconduct and non-recovery under primary insurance, and that fraud will not defeat cover where the mortgagee acted reasonably.

Read More »
30 Mac ,2026 Tiada Ulasan
ms_MYMY
en_USEN zh_TWZH ms_MYMY