Yew Huoi, How & Associates | Leading Malaysia Law Firm

Menu

SHIPPING LAW – SHIP ARREST – MORTGAGE – ACTION IN REM – SERVICE WITHIN MALAYSIA

Q: Can I file a Writ In Rem in Kuala Lumpur and have the ship arrested in Kota Kinabalu?
A: Yes. This is because Section 7(2) of the Courts Judicature Act 1964 (“CJA 1964”) allows any writ and warrant issued within the High Court Malaya be executed or served anywhere in Malaysia. This would include Sabah and Sarawak.

Cases In Point: Re Aro Co Ltd [1980] 1 All ER 1067 (EWCA); The Monica S [1967] 2 Lloyd’s Rep 113; ‘The Fierbinti’ [1994] 3 SLR 864 and Nassau Maritime Holdings Designated Activity Co v The Owners of the Ship or Vessel ‘Cape Lambert’ [2020] 11 MLJ 561 

Q: What is a Writ In Rem?
A: A Writ In Rem is a legal document that invoke the admiralty jurisdiction of the High Court against “the thing” or “res” in dispute. The thing or res is usually a ship. A Writ In Rem can be distinguished from a normal writ which is issued against a person or body of person. This is also known as a Writ In Personam. A Writ in Rem may be issued even when the res is outside the territorial jurisdiction of the court. It can then be served when the res eventually comes within the court’s territorial jurisdiction.

Q: How can I invoke the admiralty jurisdiction of the High Court?
A: Admiralty jurisdiction of the High Court may be invoked if the criteria set out in Sections 20 and 21 of the UK Seniors Court Act 1981 (“SCA 1981”) are fulfilled.

Q: My company has failed to pay the loans of the bank in respect of a ship mortgaged to the bank. Can the bank arrest the ship of my company?
A: Yes. Mortgage or charge on a ship falls within the category in Section 20(2)(c) of the SCA 1981. Admiralty jurisdiction of the High Court may be invoked.

Q: What if my company has sold the ship to a new buyer. Can the bank still pursue the claim against the res i.e. the ship?
A: Yes. Mortgage claim falls within the category where an action in rem may be brought against the res in connection with the mortgage. Unlike in a situation of cargo damage claim (which is explained in our previous legal update), the bank does not have to show the owner is liable in personam to pay the loan. Hence, even if the owner of the vessel has changed, an action in rem can still be brought against the res i.e. the ship.

 

Back to Latest Legal Updates

Recent Post

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 »
12 January ,2025 No Comments

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

In a landmark admiralty decision, the High Court ordered the pendente lite sale of the arrested vessel Shi Pu 1, emphasizing the principle of preserving claim security over the defendant’s financial incapacity. The court ruled that the vessel, deemed a “wasting asset,” could not remain under arrest indefinitely without proper maintenance or security. This case reinforces the necessity for shipowners to manage arrested assets proactively to prevent significant financial and legal repercussions.

Read More »
12 January ,2025 No Comments

EMPLOYMENT LAW – IS DIRECTOR A DIRECTOR OR EMPLOYEE? UNPACKING DUAL ROLES IN EMPLOYMENT LAW

The Court of Appeal clarified the dual roles of directors as both shareholders and employees, affirming that executive directors can qualify as “workmen” under the Industrial Relations Act 1967. The decision emphasizes that removal as a director does not equate to lawful dismissal as an employee unless due process is followed. This case highlights the importance of distinguishing shareholder rights from employment protections, ensuring companies navigate such disputes with clarity and fairness.

Read More »
12 January ,2025 No Comments

COMMERCIAL CONTRACT – FORCE MAJEURE OR JUST EXCUSES? LESSONS FROM LITASCO V DER MOND OIL [2024] 2 LLOYD’S REP 593

The recent decision in Litasco SA v Der Mond Oil and Gas Africa SA [2024] 2 Lloyd’s Rep 593 highlights the strict thresholds required to invoke defences such as force majeure and trade sanctions in commercial disputes. The English Commercial Court dismissed claims of misrepresentation and found that banking restrictions and sanctions did not excuse payment obligations under the crude oil contract. This judgment reinforces the importance of precise contractual drafting and credible evidence in defending against payment claims, serving as a cautionary tale for businesses navigating international trade and legal obligations.

Read More »
1 January ,2025 No Comments

SHIPPING – LETTER OF CREDIT – LESSONS FROM UNICREDIT’S FRAUD CLAIM AGAINST GLENCORE

The Singapore Court of Appeal’s decision in Unicredit Bank AG v Glencore Singapore Pte Ltd [2024] 2 Lloyd’s Rep 624 reaffirms the principle of autonomy in letters of credit and highlights the high evidentiary threshold for invoking the fraud exception. Unicredit’s claim of deceit was dismissed as the court found no evidence of false representations by Glencore, emphasizing that banks deal with documents, not underlying transactions. This case serves as a critical reminder for international trade practitioners to prioritize clear documentation and robust due diligence to mitigate risks in financial transactions.

Read More »
1 January ,2025 No Comments

LAND LAW – PROPERTY SOLD TWICE: OWNERSHIP NOT TRANSFERRED IN FIRST SALE

This legal update examines the Court of Appeal’s decision in Malayan Banking Bhd v Mohd Affandi bin Ahmad & Anor [2024] 1 MLJ 1, which reaffirmed the binding nature of valid Sale and Purchase Agreements (SPAs) and the establishment of constructive trust. The court dismissed claims of deferred indefeasibility by subsequent purchasers and a chargee bank, emphasizing the critical importance of due diligence in property transactions. The decision serves as a cautionary tale for financial institutions and vendors, reinforcing the need for meticulous compliance with legal and equitable obligations.

Read More »
1 January ,2025 No Comments
en_USEN
zh_TWZH ms_MYMY en_USEN
× Contact Us