Sapura Dana SPV Pte Ltd (Sapura Dana), the registered owner of the Barge Sapura 2000, applied for a declaration that the vessel's arrest was wrongfully obtained, and a refund of the security deposited for the release of the vessel, together with interest accrued.

The plaintiff, Kreuz Subsea Pte Ltd (Kreuz), was a Singapore company. The vessel was a derrick pipelay barge flying the flag of Malaysia. The plaintiff claimed that the vessel was beneficially owned by Sapura Energy Bhd (Sapura Energy), and that Sapura Energy owned and controlled many subsidiaries around the world, including Sapura Offshore Sdn Bhd (Sapura Offshore). In December 2018, Sapura Offshore ordered, and the plaintiff supplied, a reel drive unit, together with personnel and technicians, for the vessel on a rental basis. Sapura Offshore did not pay the plaintiff for this. The plaintiff claimed that Sapura Offshore was an agent of Sapura Dana, and that it had expressly warranted that it had authority from the vessel and its owner to pledge its credit. The plaintiff therefore arrested the vessel in the Port of Mumbai.

The applicant, Sapura Dana, contended that the ship arrest was unjustified and wrongful. It was the registered owner of the vessel, and the equipment and personnel were not supplied pursuant to a contract between the plaintiff and Sapura Dana. The plaintiff had no maritime claim against the vessel and/or the applicant. In the absence of such a maritime claim, the vessel should not have been arrested for an in personam claim against Sapura Offshore. The applicant asserted that under the Admiralty (Jurisdiction and Statement of Maritime Claims) Act 2017 (the Act) beneficial ownership arrest was not contemplated.

The plaintiff argued that its maritime claim fell within s 4(1)(l) of the Act. The plaintiff's case was not based on beneficial ownership alone. Group companies or holding/subsidiary companies should be treated as a single economic unit if the facts and circumstances so warranted, as they did in this case.

Held: The application is rejected.

Whether the applicant has made out a prima facie case for a refund of the security on the ground that the arrest of the vessel was wrongful and unjustifiable, in turn depends on whether the plaintiff had made out a prima facie case for the arrest of the vessel.

Under s 5 of the Act, the High Court is vested with jurisdiction to order the arrest of a vessel for the purpose of providing security against a maritime claim. On a plain reading of s 5(1)(a), two conditions need to be satisfied before the jurisdiction to arrest a vessel can be exercised. First, there must be a maritime claim. Second, the maritime claim must be against the person who owns the vessel, both at the time such claim arose and at the time the arrest is effected.

As to the first issue, the plaintiff relies on s 4(1)(l) of the Act, comprising a broad category of supplies and services rendered to the vessel for its operation, management, preservation, or maintenance, including any fee payable or leviable. Section 4(1)(l) is thus not restricted to 'necessities', in the strict sense of the term. Its scope cannot be restricted to the essentials which are absolutely required to keep the vessel merely floating, or to prevent a black-out on board. Supplies and services rendered to a vessel which are necessary for equipping the vessel to discharge the purpose for which the vessel sails, would also fall within the ambit of this maritime claim. If viewed through this prism, the equipment supplied and services rendered for its operation and management squarely fall within the scope of s 4(1)(l).

The second issue is whether the plaintiff's claim is against the person who owns the vessel, both at the time the claim arose and at the time the arrest is effected. Previous judgments on supply of bunkers to vessels show that the courts have held that where it can be inferred from the facts that services were actually supplied to the relevant vessels, the issue of absence of privity of contract cannot be satisfactorily adjudicated at an interlocutory stage, and must be left to be determined at trial. However, these judgments were rendered before the enactment of the Act.

The controversy boils down to whether the liability for the plaintiff's maritime claim can be fastened on the applicant. The service orders were placed by Sapura Offshore. In the standard terms and conditions appended to the service order, the 'buyer' was defined as Sapura Engineering & Construction Pvt Ltd, Sapura Fabrication Bhd, and Sapura Offshore Sdn Bhd. The plaintiff's invoice was addressed to Sapura Offshore. However, there are clear and categorical allegations in the plaintiff's claim that Sapura Offshore acted on behalf of the vessel and its owner, and was an agent of the owner. It is further averred that Sapura Offshore operates and manages the project undertaken by the vessel and its owner. Sapura Energy, the holding company of Sapura Dana and Sapura Offshore, is the commercial operator and technical manager of the vessel. A Lloyd's List Intelligence Vessel Report identifies Sapura Energy as the beneficial owner and commercial operator of the vessel. Sapura Dana is a wholly-owned subsidiary of Sapura Energy. This becomes evident from the documents placed on record pertaining to not only Sapura Offshore but also Sapura Dana. It is in the context of this relationship between Sapura Energy and Sapura Dana, on the one hand, and Sapura Energy and Sapura Offshore, on the other hand, and the all-pervasive control which Sapura Energy seems to exercise over Sapura Dana and Sapura Offshore, that the allegations in the plaintiff's claim have to be appreciated.

The allegations in the claim, if considered in conjunction with the nexus between the entities, and the purpose for which the services were utilised by the vessel, prima facie sustain a case that the liability was incurred for and on behalf of the vessel and its registered owner. On the facts of this case, any other view would erode the sanctity of the contractual obligation in a commercial transaction having a maritime flavour, where supplies are made and services are rendered on the faith and credit of the vessel. Such a view may give a long leash to a party utilising supplies and services by allowing an associated entity to solicit the supplies and services, and then subsequently raising the defence of absence of contractual obligation. It may not, therefore, be appropriate to decide the contentious issue of the in personam liability of the applicant at this stage, and sans evidence. No case for a declaration that the arrest was wrongful and for the refund of the security deposit is thus made out.