This appeal relates to the application of the defendants under O 18 r 19 of the Rules of Court to strike out the statement of claim of the plaintiffs. The plaintiffs are in the business of importing, exporting and selling electronic goods. The defendants are shipping lines in the business of container shipping. Pursuant to a bill of lading issued by the defendants to the plaintiffs, a container was shipped from Singapore to Pointe Noire, Congo. Upon arrival, the container was discharged into Congo Terminal in or around November 2013. No bill of lading was presented and the container remained uncollected until around 20 January 2014. On 20 January 2014, one Kennedy Ukonu commenced proceedings in the Congolese court for the release of the container to him. The Congolese court order was re-enforced with a police requisition order dated 23 January 2014 compelling the release of the container. In support of their position, the defendants also sought and obtained a written opinion from a law office in Congo dated 9 October 2014 confirming that ‘Congo Terminal could not oppose this execution for fear of being liable to legal proceedings on the ground of rebellion against a court ruling’ and ‘neither the company Pil nor Congo Terminal could oppose its immediate and prompt execution under constraint of the authorities’.

It was the applicant defendants’ position that the claim of the plaintiffs was legally unsustainable. It was submitted that the defendants had no option but to comply with the Congolese court order re-enforced with the police requisition order. As such, the contract was clearly frustrated. The defendants also submitted that under the terms and conditions of the bill of lading, they were entitled to rely upon various exemption clauses that absolved them of liability. It was also submitted that while they had a defence under the Hague-Visby Rules, they were prepared not to rely upon that for the purposes of the Registrars’ Appeal, and assume they did not apply.

The plaintiffs, on the other hand, argued that there was no frustration and the precise terms of the alleged frustration were unclear due to the circumstances surrounding the case. They also argued that the exemption clauses were not applicable and that they had a valid claim against the defendants under the Bill of Lading Act (cap 384) and/or in the contract pursuant to the bill of lading.

Held: This being a contract for the carriage of goods by sea, it was common ground that the Frustrated Contacts Act (cap 115) did not apply. Instead, the position was governed by common law as laid down by the Court of Appeal in Alliance Concrete Singapore Pte Ltd v Sato Kogyo (S) Pte Ltd [2014] SGCA 35 where Andrew Phang JA noted at [33] ‘Under the doctrine of frustration, both parties are automatically discharged from their contract by operation of law because without the default of either party, a supervening event that has occurred after the formation of the contract renders a contractual obligation radically or fundamentally different from what has been agreed in the contract.’ The Court of Appeal stressed that the doctrine of frustration was to be applied only in truly exceptional circumstances.

Turning to the law in relation to striking out, the Court of Appeal in The Bunga Melati 5 [2012] 4 SLR 546 highlighted that the test of whether a party’s claim should be struck out under O 18 r 19(b) or the inherent jurisdiction of the court depended on whether the party’s action was ‘plainly or obviously unsustainable’. This was defined by the Court of Appeal as an action that was either legally or factually unsustainable. An action was ‘legally unsustainable’ if it was clear at the outset that even if a party was to succeed in proving all the facts, and he was not entitled to the remedy sought.

The court was of the view that the claim of the plaintiffs was not so unsustainable that it was clearly scandalous, frivolous, vexatious or an abuse of the process of the court. While the defendants argued strenuously as to why they say the claim has been frustrated and/or excluded under the terms of the contract, they did not produce any controlling case law or textbook authority supporting their position that the release of goods against a foreign court order constituted a valid discharge of the obligations under a bill of lading, absolving them of all liability. The factual matrix in the Court of Appeal decision in The Vasiliy Golovnin [2008] 4 SLR(R) 994 cited by counsel for the defendants in support of their application to strike out was materially different from the case at hand.

As highlighted by the Court of Appeal in Alliance Concrete Singapore Pte Ltd, it was also pertinent to note that the doctrine of frustration was one that was to be exercised in truly exceptional circumstances. Here, the possibility of judicial intervention was contemplated in the terms of the bill of lading as well as in the Hague-Visby Rules. Consequently, in the absence of direct authority on point, and full argument and evidence, the judge was unable to conclude that the legal doctrine of frustration applied, shutting out the plaintiffs at this preliminary stage. Appeal dismissed.