On 23 December 2019, Malta suffered a nationwide power outage caused by damage to the claimant's underwater High Voltage Alternating Current (HVAC) connector cable in the Sicily Channel. The claimant alleged that the damage was caused by the M/V Di Matteo, whose registered owner is Roberto Pte Ltd, a company domiciled in Singapore. The vessel was entered with the defendant P&I Club (the Club). On 3 January 2020, the Club provided security to the claimant by way of a letter of undertaking (LOU) based on the maximum tonnage limitation figure prescribed under the LLMC 1996. The LOU is subject to English law and to the exclusive jurisdiction of the English High Court of Justice. Liability proceedings are currently in progress in the First Hall of the Civil Court of Malta. The LLMC 1996 applies in Malta.

The owner has commenced proceedings in the High Court of Singapore seeking to establish a limitation fund by reference to the LLMC 1976. The owner has invited the Singapore Court to order, among other things, that upon the establishment of the fund any existing security given by or on behalf of the owner shall be released forthwith. To the claimant's knowledge, the only security in existence is the LOU. The claimant argues that the order sought by the owner in the Singapore Court attempts to invade [sic] this Court's exclusive jurisdiction with respect to the LOU. Accordingly, the claimant requests the following declarations:

1. All disputes arising over the validity of the LOU are to be determined solely in the High Court of Justice, in proceedings between the parties in England, applying English law.
2. The LOU is and remains a valid and binding contract between the claimant and the Club, and is not null and void.
3. Should the Club by itself, its agents or privies (including any action brought by its shipowning member or members at its behest), wish to dispute the continuing validity of the LOU, it must do so solely by bringing proceedings in this Court, and any contrary proceedings brought by or at the behest of the Club would constitute a breach of the LOU.
4. Should any contrary declaration to para 2 above be made by the Singapore Court, it will not affect the validity of the LOU under English law, which is and remains the applicable law of the LOU.

The Club challenges this Court's jurisdiction on the basis that:

1. The Singapore Court has sole and exclusive jurisdiction to make an order under art 13.2 of the LLMC 1976. England does not have jurisdiction to determine the relief sought raised in the claim form because the Singapore Court is not seeking to 'invade [sic] this Court’s exclusive jurisdiction with respect to the LoU'; alternatively
2. The Singapore Court is the proper and more convenient forum for determining whether an order should be made under art 13.2 as it is the forum in control of the limitation proceedings.

The Club therefore applies for an order that this Court has no jurisdiction to hear this claim or should decline to do so, and for an order setting aside or staying these proceedings in favour of the courts of Singapore.

Held: The Club's application fails.

Although it is said in the application notice that Singapore is the proper and more appropriate forum for determining whether an order is made under art 13.2 of the LLMC 1976, that misses the point, which is whether any order made by the Singapore Court to the effect that the LOU be released would affect the validity of the LOU, the subject of these proceedings, by operation of its governing law, which is English law. The LOU contains an exclusive English Court jurisdiction clause. These proceedings were commenced on 9 October 2020, prior to the UK’s exit from the European Union. In those circumstances, art 25 of Regulation EU number 1215 of 2012 (Brussels Recast) applies, with the consequence that this Court has no jurisdiction to refuse jurisdiction or stay proceedings otherwise within the scope of the jurisdiction agreement on forum non conveniens grounds - see IMS SA v Capital Oil & Gas Industries Ltd [2016] EWHC 1956 Comm, [2016] 4 WLR 163 [44]. The sole basis on which the jurisdiction of the English Court can be challenged is on the basis that the Singapore Court has the sole and exclusive jurisdiction to make an order under art 13.2 of the LLMC 1976.

Article 13.2 of the LLMC 1976 is to the following effect: 'After a limitation fund has been constituted in accordance with Article 11, any ship or other property, belonging to a person on behalf of whom the fund has been constituted, which has been arrested or attached within the jurisdiction of a State Party for a claim which may be raised against the fund, or any security given, may be released by order of the Court or other competent authority of such State'.

The effect of art 13.2 as a matter of English law has been considered in The ICL Vikraman [2003] EWHC 2320 Comm, [2004] 1 Lloyd's Rep 21, Colman J (CMI778). That case was in some ways the mirror image of this case. There, an English domiciled P&I club provided a LOU to cargo interests in Singapore to obtain the release of a vessel arrested there. That LOU, which contained no tonnage limitation provision, included a non-exclusive English jurisdiction agreement. At the relevant time, the UK was a State Party to the LLMC 1976 but Singapore was not. The vessel's owner established a limitation fund in England in accordance with the LLMC 1976 and applied for the release of the LOU, pursuant to art 13.2 of the LLMC 1976. Colman J dismissed that application. In summary, he held that the overriding purpose of the LLMC 1976 was to cap a shipowner’s liability for a particular incident, and for the enforcement of that liability against a single source of security, but that its scope was confined to State Parties, both in relation to the establishment of a limitation fund and in relation to the release of other security which, if it was to be released, had to be within the jurisdiction of the State Party concerned or at least a State Party to the LLMC 1976. The purpose of art 13.2 was to protect a shipowner, who had established a limitation fund in any State that was a State Party to the LLMC 1976 in respect of a claim, from enforcement of that claim against any other property or security that was subject to the jurisdiction of the same or another State Party. It followed that although the owner was entitled to establish the limitation fund in England, the effect of art 13.2 was that security located in Singapore did not fall within that article because Singapore was not a State Party to the LLMC 1976 and so that security would not be, or could not be, released.

Whether that authority will be followed as a matter of Singapore law is not for this Court to say, although generally State courts attempt to adopt a common interpretation of cross-border Conventions. However, what is clear is that it is highly likely that The ICL Vikraman will be followed by an English court in deciding whether an order made by the courts of a State Party to the LLMC 1976 can have the effect of releasing a security that is not subject to either the laws or jurisdiction of that or any other State Party to the LLMC 1976. As a matter of English law, it is better than seriously arguable that the LOU is not a security within the jurisdiction of the Singapore Court. It is not a vessel or other property attached within the jurisdiction of any State Party to the LLMC 1976, nor was the security given to obtain the release of a vessel or other property attached within the jurisdiction of any State Party to the LLMC 1976. Physically, the LOU is located in Malta, which is not a State Party to the LLMC 1976 to the extent that physical location is relevant. In addition, it is probable that English law would treat the LOU as being located in England because that is the State that, by agreement between the parties, has been given exclusive jurisdiction in relation to it.

Whilst this differs from the conclusion reached by Colman J in The ICL Vikraman, no authorities were drawn to his attention that addressed this issue. In summary, therefore, it is at least strongly arguable that an English court applying English law would conclude that the LOU should be treated as located in England and that, in consequence, the Singapore Court has no jurisdiction to order its release, if that is what ultimately happens, because the LOU is not a security that is within the jurisdiction of a State Party to the LLMC 1976.

The Club's case is that it is for the Singapore Court to decide whether it has jurisdiction under art 13.2 to order the release of a LOU. The Club fully accepts that the Singapore Court may determine that Singapore is not the relevant State Party for the purpose of releasing the LOU, but maintains that it is only that Court that can decide that issue, because the question of whether the Singapore Court has jurisdiction under art 13.2 is not a dispute arising under the LOU, but is one that arises under the LLMC 1976 which is exclusively within the jurisdiction of the Singapore Court.

The claimant maintains that this argument should be rejected because:

1. The parties to the LOU have agreed that the English Court is the exclusive forum for dealing with all disputes that arise under the LOU; and/or
2. Article 13.2 of the LLMC 1976 is inapplicable to the LOU because:

• the UK is not a party to the LLMC 1976;
• no limitation fund has yet been established in Singapore;
• the Singapore Courts have no power under art 13.2 to make an order in relation to the LOU; and
• the LOU is not located within the jurisdiction of the Singapore Court.

In determining these issues, nothing in this judgment should be treated as being or is intended to be in any way an indication as to how the Singapore Court should approach the issue that is before it. That is a matter exclusively for the Singapore Court to resolve, applying Singapore law. This Court's sole concern on this application is whether the English Court has jurisdiction to determine the claimant’s application for the declarations it seeks. If the Singapore Court decides that it has no jurisdiction to order the release of the LOU, no problem arises. However, if the Singapore Court accedes to the owner’s application, and if the claimant succeeds in recovering a judgment in the Maltese proceedings for a sum in excess of the security that would be provided under the LLMC 1976 in Singapore, the claimant would seek to enforce its claim in England against the Club under the LOU. Any such proceedings would have to be brought in England, because the parties have agreed that the English courts have exclusive jurisdiction to determine disputes under the LOU, and would be determined in accordance with English law because the parties have agreed that will be the law governing the contract contained in or evidenced by the LOU.

The question whether any order of the Singapore Court under art 13.2 of the LLMC 1976 had the effect of releasing the Club from its LOU would be a dispute to be determined in England according to English law. If the English Court would have jurisdiction in such circumstances, there is no principled reason why the Court would not have jurisdiction to determine by declaration a dispute between the Club, which maintains that any order made by the Singapore Court under art 13.2 would have the effect of discharging the LOU, and the claimant, which maintains that that cannot be the effect of such an order, applying English law. There is further no principled reason why the English Court would not have exclusive jurisdiction in relation to such a dispute, just as it would over an enforcement claim, following judgment in the Maltese proceedings. This is so because the exclusive jurisdiction agreement governs all disputes between the parties concerning the LOU.

The application by the owner in Singapore under art 13.2 is separate from the claimant’s claim against the Club, who is not a party to the Singapore proceedings. The issue concerning the effect of any order by the Singapore Court on the enforceability of the LOU is one that by agreement between the parties is one that must be determined exclusively by the English court. The Club maintains that these proceedings are for the purpose of obtaining an order that the owner is not entitled to apply to the Singapore Court for the release of the LOU. That is incorrect. The owner is not a party to these proceedings. The LOU is an autonomous contract between the claimant and the Club, and these proceedings are concerned with a dispute as to the effect on that contract of an order being sought in Singapore, from the Singapore Court, under the LLMC 1976 in proceedings brought by the owner. These proceedings in no way impinge upon the ability of the owner to make its application to the Singapore Court, or the right of the Singapore Court to make whatever order it considers appropriate in those proceedings. These proceedings are concerned with the entirely separate question of the impact, if any, that an order sought in Singapore will have on the liability of the Club under its autonomous contract with the claimant contained in the LOU. That issue is one that the parties to that agreement have agreed should be determined exclusively by the English Court.