It was decided in The 'Titan Unity' [2013] SGHCR 28 (CMI236) that there was prima facie an arbitration agreement between the plaintiff bank (Portigon) and the first defendant demise charterer (Oceanic). The action against Oceanic was therefore stayed in favour of arbitration at the Singapore Chamber of Maritime Arbitration (SCMA).

The present case deals with an application by the second defendant shipowner (Singapore Tankers) to set aside and strike out Portigon’s action, and the question of whether the court should order that Singapore Tankers be joined to the arbitration proceedings between Portigon and Oceanic.

After the Titan Unity was arrested on 24 June 2013, Singapore Tankers applied to set aside and strike out the admiralty writ pursuant to O 12 r 7 and O 18 r 19 of the Rules of Court, and in the alternative to the release of the vessel pursuant to O 70 r 12 of the Rules of Court. Singapore Tankers claimed that the action should be set aside or struck out as the claim was time-barred pursuant to art 3.6 of the Hague-Visby Rules, which provides that 'the carrier and the ship shall in any event be discharged from all liability whatsoever in respect of the goods, unless suit is brought within one year of their delivery or of the date when they should have been delivered. This period may, however, be extended if the parties so agree after the cause of action has arisen.' Singapore Tankers argued that the Hague-Visby Rules were applicable to the bills of lading, and sought to rely on the time-bar defence by submitting that no competent suit had been brought within 12 months of the alleged misdelivery of the cargo. It was alleged that, as the cargo was discharged by 2 February 2012, a competent suit should have been brought by 2 February 2013. Singapore Tankers claimed that the suit against Singapore Tankers was not a competent suit as it was brought in breach of the arbitration agreement between Portigon and Oceanic, where Portigon’s action against Oceanic would have been stayed in favour of arbitration.

Singapore Tankers applied in the alternative for the vessel to be released. It was alleged that counsel for Portigon had failed to disclose to the court which granted the arrest that the same law firm was acting for Portigon and the liquidators of Onsys. As Oceanic had time sub-chartered the vessel to Onsys, it would have documents which could evidence the existence of the time charterparty which contained the arbitration agreement under which the Hague-Visby time-bar defence was applicable. It was also alleged that Portigon should have disclosed the correspondence between Portigon and Onsys relating to the circumstances of the misdelivery of the cargo as well as the vessel’s chartering arrangements. Singapore Tankers also took the position that Portigon should have disclosed the fact that it did not request such further documents from Onsys’ liquidators.

Counsel for Portigon submitted that the time-bar defence goes to the merits of the action and does not constitute a jurisdictional objection. Also, it was submitted that the Hague-Visby Rules do not apply in the present case as a purposive interpretation of section 3(2) of the Carriage of Goods by Sea Act would show that the Hague-Visby Rules are only applicable to shipment between ports, which was not the situation here. Counsel for Portigon also claimed that there is no indication of the date from which the alleged time bar would run, as there was no evidence of the actual date when delivery of the cargo had been completed.

Held: Singapore Tankers was effectively trying to avail itself of the benefit of the arbitration agreement between Portigon and Oceanic. As far as Singapore Tankers was concerned, even if Portigon had commenced arbitral proceedings against Oceanic and court proceedings against Singapore Tankers within 12 months of the alleged misdelivery of cargo, Singapore Tankers’ position would still be the same, which is that the action brought by Portigon against Singapore Tankers was not a competent suit as it had been brought in breach of the arbitration agreement between Portigon and Oceanic. As such, the true purport of the position taken by Singapore Tankers is that Portigon’s claim in court should properly be the subject-matter of the arbitral proceedings between Portigon and Oceanic such that the time bar under the Hague-Visby Rules applies. This is at best an argument analogous to the forum non conveniens scenario where the court should not exercise jurisdiction that it has, and is consequently not a jurisdictional objection which warrants the admiralty writ to be set aside under O 12 r 7 of the Rules of Court.

Regarding the issue of whether the writ should be struck out, Singapore Tankers relied on the decision in Thyssen Inc v Calypso Shipping Corporation SA [2000] 2 Lloyd’s Rep 243 that an action which has been stayed in favour of arbitration will not constitute a 'competent suit' for the purposes of art 3.6 of the Hague-Visby Rules. However, the court in Thyssen found that the claimant in an arbitration could not successfully prevent its arbitral claim from being time-barred under art 3.6 of the Hague-Visby Rules from the mere fact that it had commenced court proceedings against the respondent-defendant within time. Even if the suit brought against Singapore Tankers was not a competent suit because it was brought in breach of the arbitration agreement between Portigon and Oceanic, there is no authority to show why the remedy for such a situation would be to strike out the writ filed in court.

As to Singapore Tankers' alternative application, the alleged non-disclosure was not relevant because it was undisputed that counsel for Portigon had disclosed to the court the time-bar defence under the Hague-Visby Rules. The documents and correspondence exchanged between Portigon’s and Oceanic’s solicitors which set out Oceanic’s position on the existence of the time charterparty and the time bar defence were disclosed, and counsel for Portigon had even made submissions at the hearing for the arrest of the vessel on why the action should not be stayed even if the time charterparty did exist.

On the issue of whether Singapore Tankers should be joined to the arbitral proceedings between Portigon and Oceanic, as Singapore Tankers took the position that that it was not a party to the contract of carriage which incorporated the arbitration agreement, the proper analysis here would not be on how Singapore Tankers might be found to be a contracting party to an arbitration agreement. Instead, the issue in the present case is whether the parties to the arbitration agreement, ie Portigon and Oceanic, had consented to extend the agreement to Singapore Tankers, and whether it accepted to be bound by the arbitration agreement, thus forming an agreement to arbitrate amongst the parties. Here, the parties to the arbitration agreement, Portigon and Oceanic, had expressly agreed upon a mechanism to join a person who is not a party to the arbitration agreement, under r 32.2 of the SCMA Rules, which reads as follows: 'If the parties so agree, the Tribunal shall also have the power to add other parties (with their consent) to be joined in the arbitration and make a single Final Award determining all disputes between them.' Given that the parties had expressly agreed upon a mechanism in the arbitral rules to join a person who is not a party to the arbitration agreement, the court should defer any views it might have on the parties’ implied consent to joinder to the arbitral tribunal’s determination of its own jurisdiction pursuant to that mechanism. 

The application to set aside and to strike out the writ was therefore dismissed with costs.