Yew Huoi, How & Associates | Leading Malaysia Law Firm

SHIPPING AND ADMIRALTY IN REM – A SINKING ASSET – COURT ORDERS SALE OF ARRESTED VESSEL TO PRESERVE CLAIM SECURITY

1. Summary and Facts:
The case The Owners And/Or The Demised Charterers Of The Ship Or Vessel ‘Winning Loyalty’ V The Owners And/Or The Demised Charterers Of The Property Or Ship Or Vessel ‘Shi Pu 1’ [2020] 11 MLJ 603 relates to an admiralty dispute arose following a collision between the plaintiff’s vessel, Winning Loyalty, and the defendant’s vessel, Shi Pu 1. The plaintiff’s claim for damages amounted to RM1,716,660, leading to the arrest of Shi Pu 1. The defendant, unable to provide alternative security, left the vessel under arrest in open waters, resulting in rapid deterioration and increased maintenance costs. The plaintiff sought an order for the appraisal and sale of the vessel pendente lite (pending litigation) to preserve its value as security for the claim.

2. Legal issues:
i. Whether the court should grant an order for the appraisal and sale of the vessel pendente lite?
ii. Whether the defendant’s inability to provide alternative security justified such an order?

3. Court Findings:
• The High Court granted the application for a pendente lite sale. It found that the defendant’s failure to provide alternative security or maintain the vessel demonstrated a lack of financial capability.
• This rendered the vessel, described as a “wasting asset,” subject to ongoing depreciation in value, further jeopardizing the plaintiff’s claim security.
• The court emphasized that the need to preserve the security value outweighed the potential prejudice to the defendant. It rejected the argument that the application was premature, stating that such an order could be made even in the absence of a statement of claim.

4. Practical Implications:
This decision reaffirms the importance of proactive management of arrested vessels. Shipowners must recognize that courts prioritize protecting the value of the plaintiff’s claim security over potential prejudice to the defendant. The ruling serves as a reminder that failure to provide security or adequately maintain an arrested vessel may result in its judicial sale, especially where its value is rapidly diminishing. This case reinforces the principles of maritime law in ensuring equitable treatment for all parties while safeguarding the economic integrity of claims in admiralty disputes.

5. Reference Case and Legislation:
• The Owners and/or The Demised Charters of The Ship or Vessel ‘WINNING LOYALTY’ v The Owners and/or The Demised Charterers of The Property or Ship or Vessel ‘SHI PU [2020] 11 MLJ 603
• The ‘Myrto’ [1978] 1 Lloyd’s Rep 11 (CA)

Sorotan Terkini

ROAD ACCIDENT – INSURANCE COMPANY STRIKES BACK: HIGH COURT OVERTURNS ROAD ACCIDENT CLAIM

When a motorcyclist claimed he was knocked down in an accident, the Sessions Court ruled in his favor, holding the other rider fully liable. But the insurance company wasn’t convinced. They appealed, arguing that there was no proof of a collision and even raised suspicions of fraud. The High Court took a closer look – and in a dramatic turn, overturned the decision, dismissed the claim, and awarded RM60,000 in costs to the insurer. This case is a stark reminder that in court, assumptions don’t win cases – evidence does.

Read More »

CHARTERPARTY – LIEN ON SUB-FREIGHTS: CLARIFYING OWNERS’ RIGHTS AGAINST SUB-CHARTERERS

In Marchand Navigation Co v Olam Global Agri Pte Ltd and Anor [2025] 1 Lloyd’s Rep 92, the Singapore High Court upheld the owners’ right to enforce a lien on sub-freights under Clause 18 of the NYPE 1946 charterparty, ruling that the phrase ‘any amounts due under this charter’ was broad enough to cover unpaid bunker costs. Despite an arbitration clause between the owners and charterers, the sub-charterer was obligated to honor the lien, as it was not a party to the arbitration agreement. This decision reinforces that a properly exercised lien on sub-freights can be an effective tool for owners to recover unpaid sums, even in the presence of disputes between charterers and sub-charterers.

Read More »

SHIP SALE – LOSING THE DEAL, LOSING THE DAMAGES? THE LILA LISBON CASE AND THE LIMITS OF MARKET LOSS RECOVERY

In “The Lila Lisbon” [2025] 1 Lloyd’s Rep 101, the court ruled that a buyer cancelling under Clause 14 of the Norwegian Salesform Memorandum of Agreement is not automatically entitled to loss of bargain damages unless the seller is in repudiatory breach. The case clarifies that failing to deliver by the cancellation date does not constitute non-delivery under the English Sale of Goods Act 1979, as the clause grants the buyer a discretionary right rather than imposing a firm obligation on the seller. This decision highlights the importance of precise contract drafting, particularly in ship sale agreements, where buyers must ensure that compensation for market loss is explicitly provided for.

Read More »

CRIMINAL – KIDNAPPING – NO ESCAPE FROM JUSTICE: COURT UPHOLDS LIFE SENTENCE IN HIGH-PROFILE KIDNAPPING CASE

A 10-year-old child was abducted outside a tuition center, held captive, and released only after a RM1.75 million ransom was paid. The appellants were arrested following investigations, with their statements leading to the recovery of a portion of the ransom money. Despite denying involvement, they were convicted under the Kidnapping Act 1961 and sentenced to life imprisonment and ten strokes of the whip. Their appeal challenged the identification process, the validity of the charge, and the admissibility of evidence, but the court found the prosecution’s case to be strong, ruling that the appellants had acted in furtherance of a common intention and were equally liable for the crime.

Read More »

TRADEMARK – BUSINESS SABOTAGE AND TRADEMARK MISUSE

Businesses must be vigilant in protecting their contractual rights, brand identity, and operational control. In this case, unauthorized control over online booking platforms, misleading alterations to the hotel’s digital presence, and continued use of trademarks post-termination led to significant legal consequences. This ruling highlights the importance of clear agreements, strict compliance with contractual obligations, and proactive enforcement of intellectual property rights.

Read More »

NAVIGATION AND SHIPPING LAW – COLLISION REGULATIONS – COLLISION AT SEA – A WAKE-UP CALL FOR ADHERING TO NAVIGATION RULES

The collision between the FMG Sydney and MSC Apollo highlights the critical importance of adhering to established navigation rules. Deviations, delayed actions, and reliance on radio communications instead of clear, early maneuvers can lead to disastrous outcomes. This case serves as a stark reminder for mariners: follow the rules, act decisively, and prioritize safety above assumptions.

Read More »
ms_MYMY
× Hubungi Kami