On April 2001, Sino-Add (the defendant) employed the Angelic Spirit for the carriage of cargo from Panaji (an Indian port) to a Chinese port under terms of a voyage charterparty with the plaintiff (the time charterer of Angelic Spirit). However, less than the full amount of cargo contracted for was loaded, which took place at Mormugao (another Indian port). The plaintiff issued an invoice dated 8 June 2001 to the defendant, attempting to claim USD 658,995.37 for freight charges, demurrage charges, dead freight, deviation costs, bunker charges and port charges, but did not receive payment. On 14 June 2001, the plaintiff served a notice to commence arbitration to the defendant's solicitors, but there was no response. Finally, the plaintiff applied for and obtained a Mareva injunction over the assets of the defendant and Sino-Trust to the value of USD 700,000. The defendant applied to discharge the injunction order and stay the proceedings in favour of arbitration.

Notwithstanding the defendant’s concession that the plaintiff had established a good arguable case, the grounds for the discharge application were that the plaintiff had not established a real risk of dissipation of assets by the defendant and the plaintiff had been in breach of their duty to make full disclosure of all material facts and circumstances in the injunction application.

The stay application concerned the voyage charterparty, which was on an amended Gencon Charter form, as revised in 1922 and 1976. Clauses 11 and 32 of the charterparty were of relevance. Clause 11 gave the York-Antwerp Rules 1974 contractual effect: ‘General average to be settled according to York-Antwerp Rules 1974’. The parties disputed the meaning of cl 32, which stated: ‘General Average and arbitration if any to be settled and adjusted in London, English Law to apply’. The defendant submitted that this clause had one meaning and referred to arbitration any dispute under the charterparty, citing the ruling in Tritonia Shipping Inc v South Nelson Forest Products Corporation [1996] 1 Lloyd’s Rep 114, which interpreted the clause ‘Arbitration to be settled in London’ as ‘Any dispute under this charter-party to be settled by arbitration in London’. The plaintiff cited the ruling in The ‘Ioanna’ [1978] 1 Lloyd’s Rep 238, which considered the interpretation of the clause stating ‘General Average & arbitration to be settled according to York-Antwerp Rules 1950 in London’ (cl 13), a clause that was almost identical to cl 32, to argue that cl 32 did not have that one meaning - it could refer to arbitration all matters or only those relating to general average, and that there was no other agreement to arbitrate any other types of dispute.

Held: Both applications dismissed.

Discharge application

The Judge held that the plaintiff had established that there was a serious risk of the assets being removed from Singapore so as to avoid satisfying a judgment against the defendant for three reasons: (1) the defendant threatened to disappear; (2) the defendant’s Singapore incorporation neither meant a substantial presence here nor that the defendant was unlikely to remove assets from Singapore to avoid the effect of a judgment against it; and (3) the defendant did not appear to have any commercial presence in Singapore. The Judge also found no merit in any of the defendant’s assertions concerning the plaintiff’s material non-disclosure as these had no relevance.

Stay application

Clause 32 of the charterparty only related to arbitration of general average disputes and was not a general arbitration agreement. The Judge cited Stephenson LJ’s reasoning in the construction of cl 13 in The ‘Ioanna’ with approval - the words ‘& arbitration’ in cl 13 was held on its true construction to mean that the parties were agreeing to prefer arbitration to litigation in the courts of any country for any dispute as to general average which might arise and it was English law which was to apply to the settlement of those disputes involving liability to make general average contributions. Since the present dispute did not concern general average, there was no question of an automatic stay of the present proceedings. Even though the plaintiff had issued notice indicating its wish to arbitrate, this invitation had lapsed or had been revoked by the plaintiff's commencement of legal proceedings in Singapore. Accordingly, there was no basis to order a stay of the proceedings.