The plaintiff applied for an order that the memorandum of appearance entered by Te Hsing Maritime SA (Te Hsing) as a defendant in this action be set aside. Further, the plaintiff requested that Te Hsing cease to be a party or be deemed to be a party in these proceedings on the grounds that the presence of Te Hsing in these proceedings was unlawful, non-compliant with the provisions of the High Court Rules 1980, and out of order.

The plaintiff's application was supported by an affidavit of the Managing Director of the plaintiff, Chemin Resources (S) Pte Ltd, a company registered in Singapore. The plaintiff is the owner and legal holder and/or shipper of a bill of lading covering 20,937 mt of barite ore carried on the MV Jui Cheng now known as Te Hsing, a Panamanian vessel, to be shipped to Surabaya, Indonesia. The plaintiff argued that the legal owner and beneficiary of all shares in the vessel at all material times was Ruei Cheng SA or Ruei Cheng Shipping (Ruei Cheng). Therefore, Ruei Cheng was responsible to the plaintiff as the carrier, and breached the contract of carriage when it was said to be negligent and failed and/or refused to deliver the cargo to Surabaya. Instead, Ruei Cheng has converted the cargo for its own use. As a result, the plaintiff has suffered losses and losses in the amount of USD 1,015,444.50, which is the invoice value of the cargo.

The plaintiff filed a writ in rem in this Court on 14 June 2005. The ownership of the vessel was transferred to Te Hsing on 5 July 2005 after the writ in rem filing date. Subsequently, the detention of the vessel was carried out in Kuantan on 10 December 2005, at which time service of the writ was carried out properly. The plaintiff obtained alternative security through a bank guarantee and, as a result, the vessel was later released. A memorandum of unconditional appearance was then filed by Te Hsing. It is the plaintiff's assertion that Te Hsing has no locus standi because the actual defendant is the person who will be liable to the plaintiff in personam, namely Ruei Cheng.

On the question of whether ownership had been transferred from Ruei Cheng to Te Hsing on 14 June 2005, the plaintiff argued that reference should be made to the law regarding the passing of title in Panama. The plaintiff therefore argued that Te Hsing was not the real defendant in this action in accordance with the provisions of the laws of the Panamanian State. Referring to arts 3.1 and 3.2 of the Arrest Convention 1952, Te Hsing argued that ship arrests can only be made in three circumstances and that the burden of proof to prove that the defendant is the registered owner of the detained vessel always rests on the plaintiff. Tse Hing argued that the plaintiff had failed to submit any official documents to support that Rui Cheng was the registered owner of the vessel Jui Cheng at the time of filing the writ: see Kawasaki Kisen Kaisha Ltd v Owners of the Ship or Vessel 'Able Lieutenant' [2002] 6 MLJ 433 (CMI303). The registration document is prima facie evidence of ownership that then places the burden of proof on the defendant. Te Hsing further argued that it had successfully proved that it had taken possession of the vessel Jui Cheng on 4 June 2005 and later renamed it Te Hsing. Therefore, it argued, it had at least equitable ownership over the vessel.

Held: Plaintiff's application granted. Memorandum of appearance by Te Hsing is struck out.

Since the vessel Jui Cheng now known as Te Hsing was registered in Panama and flew the Panamanian flag, the applicable law that applies to registration and transfer of the vessel is the law applicable in the country of Panama. In this situation, the position or status of actual ownership according to the law on the vessel concerned must be in accordance with the provisions of the law currently in force in that country in this regard. To ensure the true position of the provisions of Panamanian law on such issues, the Court has taken into account expert evidence on Panamanian law. According to the expert witness, the ownership status of the vessel at the time of the cause of action arose and at the time the writ was filed was that it still belonged to Ruei Cheng and not to Te Hsing Shipping. This is because, under the Commercial Code of Panama, to ensure the passing of good title, the bill of sale dated 5 July 2005 must first be registered with the Panama Public Registry Office. In this case, the bill of sale was only registered on 20 July 2005.

The Court is satisfied that Ruei Cheng was the registered and beneficial owner of the vessel Jui Cheng now known as Te Hsing at the relevant time. Therefore, Te Hsing's assertion regarding the plaintiff's failure to prove that Ruei Cheng is the registered owner of the vessel through a registration document cannot be accepted by the Court. The Court agrees with the plaintiff's submission that this was just a tactic by Te Hsing to confuse the Court. The bill of sale dated 5 July 2005 is strong prima facie evidence to indicate the true ownership position. Furthermore, the bill of sale clearly displays the name of Ruei Cheng as the vendor and Te Hsing as the purchaser.