The plaintiff, Batavia EXIMP & Contracting (S) Pte Ltd (Batavia), claimed for damages for the alleged misdelivery of New Zealand pine logs carried under bills of lading. Batavia claimed that it had extended financing to Amrose Singapore Pte Ltd (Amrose). Pursuant to this finance agreement, Batavia was to procure its bank to issue letters of credit to Amrose's supplier, TPT Forests Ltd (TPT Forests) for shipments of the logs from New Zealand to India on the Taikoo Brilliance. TPT Forests subsequently endorsed the bills of lading to the order of the Bank of Baroda, which in turn endorsed them to the order of Batavia, and transferred them to Batavia.

The defendant, Pedregal Maritime SA, was the registered owner of the Taikoo Brilliance. The vessel was on time charter from the defendant to China Navigation Co (CN), who sub-chartered the vessel to TPT Shipping Ltd by way of a voyage charterparty.

On 15 September 2019, the vessel entered Kandla Port, India, and commenced discharge of the cargo. Batavia claimed that it was unaware of the exact date on which, and to whom, the cargo was delivered. Sometime in July 2020, Batavia became concerned about Amrose's ability to repay. On 18 August 2020, Batavia commenced admiralty actions against the defendant on the basis that it had failed to deliver the cargo to Batavia on presentation of the bills of lading. Batavia also commenced similar actions in Malaysia and New Zealand.

Batavia alleged that at around the same time it also asked Amrose for a copy of the relevant charterparty, but Amrose refused.

On 18 September 2020, the Navios Koyo, a sister ship of the Taikoo Brilliance, was arrested in Singapore. On 23 September 2020, CN's solicitors wrote to Batavia's solicitors seeking confirmation of the amount of security demanded by Batavia for the release of the Navios Koyo, and pointing out that the charterparty referred to in the bills of lading referred contained a London arbitration clause. Batavia's solicitors replied on the same day asking for a copy of the charterparty. CN's solicitors sent Batavia's solicitors a copy the next day.

Clause 1 on the reverse side of the bills of lading provided: 'All terms and conditions, liberties and exceptions of the Charter Party, dated as overleaf, including the Law and Arbitration Clause are herewith incorporated.'

The front side of the bills of lading identified a charterparty dated 3 July 2019. The defendant's case was that the relevant charterparty was the voyage charterparty of that date. Clause 60 of that charterparty provided:

Any dispute arising from or in connection with this Charter Party shall be referred to arbitration in London. In the event of such dispute, the parties shall endeavour to agree on the choice of a sole arbitrator or, failing agreement on the appointment of such an arbitrator within 14 days of one party calling on the other to do so, such sole arbitrator shall be appointed by the London Maritime Arbitrators Association. The decision of the sole arbitrator shall be final and binding.

On 6 November 2020, the defendant applied for a stay of the admiralty actions in favour of arbitration in London pursuant to s 6 of the International Arbitration Act (rev ed 2002, Cap 143A) (the Act). On 17 December 2020, the Assistant Registrar granted an unconditional stay of the admiralty actions in favour of arbitration in London. Batavia appealed, arguing that the stay should be conditional on a time-bar waiver.

Held: Appeal dismissed.

The time-bar issue arises because of art 3.6 of the Hague Rules and the Hague-Visby Rules, which were incorporated by cll 2(a) and 2(b) of the bills of lading.

The discharge of the cargo appears to have been completed by 23 September 2019. The admiralty actions were commenced on 18 August 2020 within the one-year time bar. However, the London arbitral proceedings were commenced on 22 December 2020, after the time bar had elapsed. In granting a stay under s 6 of the Act, the Court has an unfettered discretion in imposing conditions whenever the justice of the case calls for it: The Duden [2008] 4 SLR(R) 984 [12], [13], [16] (CMI194). However, as it is a wide discretionary power, it should be exercised with great caution and courts generally should be slow to interfere in the arbitration process: The Duden [14]-[15]. In The Duden at [16], the Court also cautioned that the imposition of a condition as to the waiver of a defence of time-bar can only be justified 'in very special circumstances as it takes away a substantive right of one of the parties'.

A defendant is entitled to assert a time-bar defence. The responsibility is on a plaintiff to commence its action before its claim becomes time-barred. A plaintiff, seeking a time-bar waiver as a condition to a stay pending arbitration, has to show that it is unjust to penalise it for having allowed its claim to become time-barred.

The thrust of Batavia's submission was that it was unaware of the terms applicable to the bills of lading until it was too late. However, Batavia had ample time to obtain a copy of the charterparty. Batavia received the bills of lading in September 2019. However, Batavia did not try to obtain a copy of the charterparty until sometime in July/August 2020 when it allegedly asked Amrose for a copy. It is clear that Batavia had no difficulty finding out who the owner of the Taikoo Brilliance was. Enquiries would no doubt have led Batavia to CN.

Even without having obtained a copy of the voyage charterparty, Batavia would have known of the existence or potential existence of an arbitration clause. Clause 1 on the reverse side of the bills of lading expressly referred to the incorporation of 'the Law and Arbitration Clause'. This made Batavia’s inaction between September 2019 and July/August 2020 all the more unreasonable. It is also clear that Batavia had no difficulty finding out the date the cargo was discharged, even if it was an estimate. Batavia would then have known, or have been able to estimate, when its claims would be time-barred.

There was no evidence of impropriety on the defendant's part. The defendant was under no obligation to bring the existence of the voyage charterparty or the arbitration clause to Batavia's attention. Besides, Batavia would have known from the bills of lading of the existence of the charterparty dated 3 July 2019 (ie the voyage charterparty) as well as the existence (or at least the potential existence) of an arbitration clause. Further, the defendant could not be expected to second guess Batavia’s reasons for commencing admiralty actions instead of arbitration.

Batavia pointed out that its claims amounted to USD 4,419,833.61 and submitted that an unconditional stay would cause undue and disproportionate hardship to it. The value of Batavia’s claims carry little weight in the context of a time-bar waiver. It has nothing to do with whether Batavia acted reasonably in not having commenced arbitration before its claims became time-barred, or whether the defendant should be faulted for Batavia’s failure to commence arbitration in time. Further, it would be wrong in principle to treat a plaintiff more favourably on account of the fact that it has a higher value claim.

Batavia relied on The Duden and The Xanadu [1997] 3 SLR(R) 360. In both cases, the Court granted a stay pending arbitration on the condition that any time-bar defence be waived. However, in The Duden, no charterparty was identified on the bill of lading and the plaintiff was informed of the charterparty only after its claim was time-barred. Even then, the plaintiff was given the wrong information at first instance. The circumstances here are quite different; the bills of lading clearly identified a charterparty dated 3 July 2019, which corresponded to the date of the voyage charterparty. As for The Xanadu, first, the Court found at [6] that there was sufficient ambiguity as to whether the bill of lading had identified the arbitration clause which was invoked. It was therefore reasonable for the plaintiffs to commence admiralty proceedings. Second, the Court found that the defendants there had waited until after the expiry of the time-bar before they applied to stay proceedings. Third, the Court took into account that undue and disproportionate hardship would be caused to the plaintiff as its claim was in excess of USD 200,000. Again, in contrast, the bills of lading here clearly identified a charterparty. Also, the defendant's conduct could not be faulted. Finally, the reference to the amount of the plaintiffs' claim in The Xanadu has to be looked at in the context of the other two reasons relied on by the Court.