Arrest of STX Mumbai Wrongful, Singapore Court Says

The High Court of Singapore has upheld a first instance decision striking out the action by Transocean Oil Pte Ltd against the Pan Ocean’s boxship “STX Mumbai” and also set aside the arrest of the vessel, Clyde & Co, Pan Ocean’s legal representatives on the case said.

The Honourable Justice Belinda Ang also ordered an inquiry into the damages suffered by the firm’s clients who are the vessel owners following the wrongful arrest.

The Registrar in the first instance hearing had ordered the striking out of the action but denied the application to set aside the arrest of the vessel.

The opposing party’s action was struck out because the vessel was arrested before the debt fell due.

“The ruling of the Singapore High Court is significant as this court has again affirmed the test for a wrongful arrest executed in bad faith or with gross negligence first espoused in England in the The Evangelismos (1858) 12 Moo PC 352 and has on the facts in this case ordered an inquiry into damages suffered due to the wrongful arrest which the courts here have typically been reluctant to do,” Clyde & Co said.

This decision also provides a Singaporean authority for the proposition that the insolvency of a company does not itself indicate an anticipatory breach by that company unless performance has been rendered impossible.

Justice Belinda Ang stated: “As the parties have not submitted on this specific point, my observations on this interesting point – the first time a Singapore court appears to be directly looking at this exception – are entirely provisional in nature. It must be left to another forum to specifically rule on the point”.

Transocean Oil meanwhile has filed an appeal to the Singapore Court of Appeal which is the court of final appeal in Singapore.

 

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