The first plaintiff was the owner of the MT Trident Star. On 24 August 2016, while the vessel was at berth at ATT Tanjung Bin Terminal, Johor, Malaysia, there was a spillage of fuel oil carried on board the vessel as cargo. On 7 November 2016, the first plaintiff brought a limitation action pursuant to s 6(2) read with s 7(1) of the Merchant Shipping (Liability and Compensation for Oil and Bunker Oil Pollution) Act 1994 (the Act) [which gives domestic effect in Malaysia to the CLC 1992 and the Bunkers Convention 2001], to have its liability limited in accordance with Pt I of Sch 1 to the Act. On 17 February 2017, this Court allowed the first plaintiff's application to limit its liability for all claims arising from the incident as follows:

(a) that a decree to the 1st Plaintiff to limit its liability under the Act, in respect of the incident in this action against the Defendants and all claimants for damage or loss in respect of the incident, to 4,510,000 special drawing rights (or its Ringgit Malaysia equivalent) together with interest and costs ('Limitation Decree');

(b) that pursuant to s. 7(2) of the Act and Order 70 rule 36A of the Rules of Court, 2012, the 1st Plaintiff be at liberty to constitute the limitation fund by depositing in court security for the amount of 4,510,000 special drawing rights (or its Ringgit Malaysia equivalent on the date of payment into Court or provision of security) together with interest and costs, by way of a letter of undertaking issued by The Shipowners' Mutual Protection and Indemnity Association (Luxembourg) ('the Club') being the Insurer of the Vessel pursuant to s. 13 (1) of the Act; and

(c) that upon constitution of the limitation fund, all proceedings in any action or arbitration in connection with and/or arising out of the incident be stayed, any ship or other property arrested or security given to avoid or prevent arrest be released and no judgment or order now or in the future in respect of pollution damage liability in connection with and/or arising out of the incident be enforced except in so far as costs.

The plaintiff then constituted a limitation fund in the form of a letter of undertaking (LOU) issued by the Club. This Court further ordered that the limitation fund be advertised in two local newspapers, namely The New Straits Times and The Star, as well as in The Straits Times in Singapore. In response to those advertisements, 19 defendants entered an appearance to claim for loss and damage arising from the incident. None of them applied to set aside the limitation decree, which means that none of them disputed the first plaintiff's right to limit its liability.

In view of the possibility that the first plaintiff's liability to pay compensation might exceed the limitation fund, the second plaintiff, the International Oil Pollution Compensation Fund 1992, was then added to this limitation action pursuant to s 19 of the Act.

In spite of subsequent proceedings, the defendants' claims were eventually resolved amicably between the parties on confidential terms, and culminated in the defendants filing notices of discontinuance. The settlements between the plaintiff and the defendants also meant that the limitation fund remains intact, and the Club has not had to pay out on any claims.

The first plaintiff now seeks an order that the Club LOU be discharged and returned to the first plaintiffs' solicitors for cancellation, and that this limitation action be discontinued.

Held: The first plaintiff's applications are granted.

Despite invoking O 70 rr 35-37 of the Rules of Court 2012, the first plaintiff readily conceded that, even though r 36A(1) provided for the constitution of a limitation fund for payment into court, and that r 36A(5) read with r 23(2) and (3) provided for payment out to persons entitled, there were no provisions in the Rules for the discharge and release of the security constituting the limitation fund. Consequently, the first plaintiff invoked the inherent jurisdiction of this Court under O 92 r 4 of the Rules of Court 2012.

The first plaintiff informed the Court that there was no reported decision on this issue in Malaysia, but that there was a relevant Singapore High Court decision: Thoresen Shipping Singapore Pte Ltd v Global Symphony SA [2020] 5 SLR 843 (CMI1986). In Thoresen Shipping, which involved a limitation LOU issued following a collision, Pang Khang Chau J allowed an application for discharge of the LOU, saying at [15]:

However, as the LOU provides that it 'shall continue and be in place until further Order of the Court', and as a function of the court's authority over the Limitation Fund, it would be open to the court, by order, to discharge the LOU. For the reasons discussed at [13] above, I was prepared, for good measure, to make such an order in addition to ordering the return of the LOU for cancellation.

Even though the Club LOU here does not have a similar provision, this Court can still exercise its inherent jurisdiction to grant the relief sought. This is because of the lacuna in the Rules that does not provide for the discharge and return of the security deposited into Court as a limitation fund under O 70 of the Rules. The underlying purpose of the Club LOU was to pay out on claims made against the first plaintiff arising from the incident. However, that did not happen, as the first plaintiff settled all the claims made by the defendants without any recourse to the Club LOU or the limitation fund. Even though the Club LOU does not in its terms express a duration or time limit, it is also highly unlikely that there will be any other claims, as the advertisements were placed five years ago, and the time limit for making claims expired 60 days after that. The uncertainty to the plaintiff and to the Club of the Club LOU remaining undischarged or 'alive' is a good enough reason to allow it to be discharged and returned to the plaintiff for cancellation, more so when the first plaintiff has settled all the claims, the time limit for bringing claims has long expired, and no prejudice will result to any party for so ordering.

As all the defendants have discontinued their claims against the first plaintiff and there are no outstanding claims, it is also only right that this limitation action should be discontinued.