Yew Huoi, How & Associates | Leading Malaysia Law Firm

Menu

LEGAL IMPLICATIONS OF FRAUDULENT VESSEL REGISTRATION: LESSONS FROM COSCO SHIPPING HEAVY INDUSTRY V OSTA FLEET

Summary and Facts
Cosco Shipping Heavy Industry (Dalian) Co Ltd & Anor v Osta Fleet Sdn Bhd primarily regards an ownership and registration dispute over the vessel “Dalian Developer”. The Plaintiffs, Cosco Shipping Heavy Industry and Dalian Developer Drilling Co. Ltd, constructed and owned the “Dalian Developer” vessel. The vessel was registered under Osta Fleet’s name without the Plaintiffs’ knowledge, though they claim ownership. The Plaintiffs claim the registration of the vessel under Osta Fleet was done fraudulently without their authorization and seek deregistration. The Defendant, on the other hand, asserts the registration was legitimate and done as per contractual arrangements, including a technical agreement to convert the vessel for Malaysian waters to secure contracts with Petronas.

Legal Issues

  • The central issues include whether the vessel’s Builder’s Certificate used for registration was forged and whether the Defendant’s registration was lawful under the Merchant Shipping Ordinance 1952.

Court Findings

  • A significant part of the court’s conclusion rested on forensic analysis of the Builder’s Certificate, which is a crucial document required for the registration of a vessel. The Plaintiffs alleged that the certificate, which Osta Fleet used to register the vessel, was forged.
  • The court relied on expert testimony and forensic analysis that examined the document’s physical and digital characteristics, comparing it with authentic versions. The analysis uncovered inconsistencies in the signatures, dates, and formatting of the certificate.
  • The expert found clear signs of tampering and falsification, indicating that the document was not issued by the Plaintiffs and had been altered to reflect false ownership details.
  • The court carefully examined the Merchant Shipping Ordinance (MSO) and noted that the Defendant failed to follow the prescribed registration protocols. Specifically, the vessel was registered under Osta Fleet without proper authorization from the rightful owners (the Plaintiffs).
  • The MSO requires proper documentation, including a legitimate Builder’s Certificate, to be presented for the vessel’s registration. Since the certificate was proven to be fraudulent, the entire registration process was deemed invalid.

Procedural Recommendation while Registering Vessel
When registering a vessel in Malaysia, it’s essential to avoid scams by conducting thorough due diligence, using professional verification, ensuring secure communication, employing fraud detection tools, having clear contract terms, and maintaining legal safeguards and regular audits.

Reference Legislation & Cases
a. Cosco Shipping Heavy Industry (Dalian) Co Ltd & Anor v Osta Fleet Sdn Bhd [2024] MLJU 2250
b. Dan-Bunkering (Singapore) Pte Ltd v The Owners of The Ship or Vessel “Pdz Mewah” (IMO No.: 9064009) of Port Klang & Anor [2020] MLJU 1574
c. Merchant Shipping Ordinance 1952

Back to Latest Legal Updates

Recent Post

JURISDICTION – CHOOSING THE RIGHT COURT: THE SEA JUSTICE CASE HIGHLIGHTS WHERE MARITIME DISPUTES SHOULD BE HEARD

In The Sea Justice cases [2024] 2 Lloyd’s Rep 383 and [2024] 2 Lloyd’s Rep 429, the Singapore courts tackled a key question: which country should handle a maritime dispute when incidents span international waters? After examining the location of the collision, existing limitation funds in China, and witness availability, the courts concluded that China was the more appropriate forum. This ruling highlights that courts will often defer to the jurisdiction with the closest ties to the incident, ensuring efficient and fair handling of cross-border maritime disputes. This approach is also relevant in Malaysia, where similar principles apply.

Read More »
17 November ,2024 No Comments

BREACH OF CONTRACT – FORCE MAJEURE – FORCE MAJEURE UNPACKED: WHEN ‘REASONABLE ENDEAVOURS’ DON’T BEND CONTRACT TERMS

The UK Supreme Court clarified the limits of force majeure clauses, ruling that “reasonable endeavours” do not require a party to accept alternative performance outside the agreed contract terms. This decision emphasizes that force majeure clauses are meant to uphold, not alter, original obligations – even in unexpected circumstances. The case serves as a reminder for businesses to define alternative options explicitly within their contracts if flexibility is desired.

Read More »
17 November ,2024 No Comments

NEGLIGENCE – MEDICAL NEGLIGENCE – HOSPITAL ACCOUNTABILITY REINFORCED: COURT UPHOLDS NON-DELEGABLE DUTY IN MEDICAL NEGLIGENCE

In a landmark ruling, the court reinforced the hospital’s non-delegable duty of care, holding that even when services are outsourced to independent contractors, the hospital remains accountable for patient welfare. This decision emphasizes that vulnerable patients, reliant on medical institutions, must be safeguarded against harm caused by third-party providers. The ruling ultimately rejected the hospital’s defense of independence for contracted consultants, underscoring a high standard of duty owed to patients.

Read More »
17 November ,2024 No Comments

CONTRACTS – CONTRACT FOR THE SALE OF GOODS FOB – REMOTENESS OF DAMAGES IN BACK-TO-BACK CONTRACTS – COURT DEFINES LIMITS ON LIABILITY

In a complex dispute involving back-to-back contracts, the court clarified the boundaries for assessing damages, emphasizing that a chain of contracts does not automatically ensure liability passes through. Although substantial losses resulted from delays and disruption, the court highlighted the importance of the remoteness of damages, noting that each contract’s unique terms ultimately limited liability. This decision emphasise the need for parties in chain contracts to carefully define indemnity and liability provisions, as damages are assessed based on foreseeability rather than simply the structure of linked agreements.

Read More »
17 November ,2024 No Comments

TORT – BREAKING CONFIDENTIALITY – COURT CRACKS DOWN ON INSIDER LEAKS AND CORPORATE CONSPIRACY

In a recent ruling on corporate confidentiality, the court held two former employees liable for disclosing sensitive business information to a competitor, deeming it a breach of both employment contracts and fiduciary duties. This case highlights the serious consequences of unauthorized sharing of proprietary data and reinforces that such disclosures can lead to substantial legal and financial repercussions, even for the receiving parties if they knowingly benefit from confidential information.

Read More »
17 November ,2024 No Comments
en_USEN
zh_TWZH ms_MYMY en_USEN
× Contact Us