The plaintiff, a Bulgarian company, sold the vessel Vidima to Oxford Jay International Pte Ltd, a Singapore-registered company, for USD 2,120,000. Under the sale agreement 10% of the purchase price was paid in cash (USD 212,000) while the balance of USD 1,908,000 was to be paid under a loan agreement. The plaintiff granted the loan to Oxford Jay International Pte Ltd. This loan was secured by an unregistered mortgage dated 17 August 1992. There was no registration of any charge filed in the Registry of Companies in Singapore against Oxford Jay International Pte Ltd. The balance of the purchase price was not paid.

Despite numerous demands for payment none was forthcoming and the plaintiff arrested the vessel. However, sometime after the loan agreement was entered into, the vessel changed hands and underwent a number of name changes. At the time of the arrest, the vessel was named Jarguh Sawit and owned by Jaguh Harimou Sdn Bhd (the defendant). The defendant contended that it was a bona fide purchaser for value without notice of the mortgage. The defendant further contended that as the plaintiff was aware that the ownership had changed at the time the warrant for arrest was issued, the court’s admiralty jurisdiction had been wrongly invoked.

The plaintiff replied that it made searches for the purposes of the proceedings and discovered that a person named Mr Vejayakumar s/o Muthu Kanaga Sundaram (Vejaya), who was a director and shareholder of Oxford Jay International, and the person who executed the mortgage deed with the plaintiff, was also the director and substantial shareholder of the defendant. Therefore, the plaintiff contended that the defendant was by no means a bona fide purchaser for value without notice.

The assistant registrar dismissed the defendant's application and held that the issues raised warranted determination at trial. The defendant appealed.

At the appeal stage, the defendant changed solicitors and its arguments. The defendant argued that the bona fide purchaser aspect was tangential, and that what mattered most was whether the jurisdiction of the court had been correctly invoked since the current owner of the Jarguh Sawit was not, at the time the writ was issued, the party liable in personam; and further argued that the endorsement on the writ was irregular. The defendant argued that the prevailing judicial opinion in maritime nations which are signatories to the Arrest Convention 1952, the MLM Convention 1926, the MLM Convention 1967 and the MLM Convention 1993 supported its argument that an unregistered mortgage cannot follow into the hands of a subsequent owner. Although Singapore is not a party to the Arrest Convention 1952, the High Court (Admiralty Jurisdiction) Act (Cap 123) closely follows the Administration of Justice Act 1956 (UK) which is founded on the Arrest Convention 1952.

Held: Appeal dismissed with costs. The admiralty jurisdiction of the High Court is statutory and, in so far as material, the relevant sections of the High Court (Admiralty Jurisdiction) Act (Cap 123) are ss 3(1)(c), 3(4)(c), 4(1), 4(2), 4(3). Section 3(1) provides a list of claims that the admiralty jurisdiction of the court may hear. Specifically, s 3(1)(c) allows the admiralty jurisdiction of the High Court to hear claims in respect of a mortgage or a charge of a ship. Section 4(1) allows the admiralty jurisdiction for claims in s 3(1) to be invoked in personam and s 4(2) allows the cases in section 3(1)(a),(b),(c) and (r) to be invoked in rem. There is a bifurcation between the group of claims. The absence of words ‘in personam’ in s 4(2) infers that actions in rem can be invoked without any need to establish in personam liablity.

The defendant argued that s 4(2) is unclear and ambiguous and urged the court to look at the Arrest Convention 1952 to arrive at the proper construction of the subsection. A similar invitation in respect of s 4(4) was made in The Permina 108 [1974-1976] SLR(R) 850 (see CMI395). That invitation was declined. In The Permina 108 the Court of Appeal commented that, even when Singapore was a colony of the United Kingdom, it was not one of the colonies to which the United Kingdom had under art 18 extended the Arrest Convention 1952, and since independence Singapore had not acceded under art 15 to the Convention.

There is no ambiguity in s 4(2) when it is read under the scheme of the Act. The construction of s 4(2) does not warrant the inclusion of the words ‘in the possession of the person who would be liable on the claim in an action in personam’ or words to that effect. Although there are questions about whether the defendant was a bona fide purchaser for value and whether the unregistered mortgage is legal or equitable, these should not be conflated with the question of jurisdiction.

The question of the endorsement of the writ was quickly disposed of. The writ correctly and adequately particularised the claim. Having regard to all the facts and arguments the plaintiff was entitled to invoke the admiralty jurisdiction of the High Court in rem against the Jarguh Sawit in the manner which was done.