Singapore Court orders sale of liened cargo

In Five Ocean Corporation v Cingler Ship Pte Ltd [2015] SGHC 311 the High Court of Singapore has ordered the sale of cargo subject to a lien exercised by the shipowner on behalf of the head charterer pursuant to a bill of lading incorporating the terms of the sub-charter, which was subject to Singapore arbitration and English law. The order was made pursuant to the powers of the court under s12 A (4) of the International Arbitration Act, which is in similar terms to s 44(3) of the English Arbitration Act 1996. Section 12 A (4) provides “If the case is one of urgency, the High Court or a Judge thereof may, on the application of a party or proposed party to the arbitral proceedings, make such orders under subsection (2) as the High Court or Judge thinks necessary for the purpose of preserving evidence or assets.” All parties were before the court and subject to its in personam jurisdiction.

The court held that an order for sale was “necessary” in order to preserve the “asset”, the disponent owner’s right to detain possession of the Cargo. The vessel was in international waters in the Bay of Bengal and the crew had been on board the vessel for almost four months, and some were falling ill. There was a lack of fresh food, water and medical supplies and overheating of the cargo of coal had been detected, with the risk of self-ignition should it continue to remain in the Vessel’s holds, a dire situation exacerbated by the monsoon season. The shipowners had been willing to exercise their lien under the bill of lading but the court noted that they would have been obliged to do so by reason of the employment clause in the time charter.

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