The defendant, Hai Yin Diesel Trading Pte Ltd, a Singapore company, was the owner of the bulk oil tanker Hai Yin 1. By a charterparty dated 26 December 1996, Hai Yin time-chartered the vessel to Dragonix, another Singapore company. The charter was on the Shelltime 4 form. It was for six months from delivery of vessel in or about January 1997. By a fixture note dated 8 January 1997, Dragonix in turn chartered the vessel to the plaintiff, Wah Yuen Petroleun Marine Pte Ltd, on a voyage charter on the Asbatankvoy form, to carry a bulk cargo of gas oil to China. The cargo of gas oil for which the plaintiff chartered the tanker was being sold to a Hong Kong company Guijiang, who apparently was on-selling it to a Chinese firm by the name of Ming Xiu. The fixture note provided for the loading of 4,300 metric tonnes of it at Pasir Gudang for discharge at one safe port in South China to be declared 4 days after completion of loading. The vessel was detained by the Chinese maritime police on suspicion of smuggling. When news reached Singapore about the detention, the defendant sent representatives to China to secure the vessel's release. The vessel, the master and crew were released in May 1997. The gas oil, however, was treated as smuggled goods, and was auctioned off by the Chinese police.

The plaintiff claimed for the loss of the cargo. The defendant relies on the exceptions in the Hague Rules, in particular art 4.2.g, exempting the carrier from liability for loss or damage arising or resulting from 'arrest or restraint of princes, rulers or people'. The defendant also counterclaims for damages for the detention of the ship.

Held: Both the claim and counterclaim are dismissed.

The first question is whether the Hague Rules apply to the bill of lading in this case. The bill of lading was issued at Pasir Gudang, a place in Malaysia. Section 2 of the Malaysian Carriage of Goods by Sea Act 1950 (which is modelled on the 1924 UK Act of a similar title) provides that the Hague Rules shall have effect in relation to and in connection with the carriage of goods by sea in ships carrying goods from any port in Malaysia to any other port whether in or outside Malaysia.

Restraint by princes, rulers and peoples, this archaic and beloved phrase of maritime law, means no more, and no less, than any forcible interference with a maritime voyage or adventure at the hands of the constituted government or ruling power of any country. The facts of this case clearly fall within that definition; the question does not admit of much argument. The defence based on this ground clearly succeeds. The plaintiff seeks to suggest a number of possible reasons for the detention. These suggestions are well summarised in the defence counsel's reply submission. It is said, among other things, that one reason for the detention might be that the master had not complied with Chinese regulations relating to the seeking of temporary berthing within Chinese territorial waters. It is also said that suspicion might have been aroused because the master might have stopped the vessel before reaching Beihai port limits and later tried to enter port without reporting to the port authorities. It is suggested that the master should have ensured that all necessary import documents and formalities had been obtained and complied with before sailing into Chinese territorial waters, and he had failed to do so. It is also suggested that the master had under-declared the quantity of cargo on board in the bill of lading and this might have aroused suspicion.It seems to me that all these suggestions are quite speculative. There is no evidence at all that the Chinese maritime police were led into their suspicion, if their action was indeed a result of such suspicions, by any of these considerations. We have no means of knowing what was really at the back of their minds.

The defendant also raises a defence under art 4.2.i of the Hague Rules ('act or omission of the shipper or owner of the goods'). The defendant contends that the plaintiff as the seller of the goods was in a position to see that an import permit be obtained; it should have ensured that there was an import permit in place before sending forth the vessel. On the evidence, it has not been shown that the absence of an import permit was the cause of the vessel and the goods being detained. There is no basis for this defence.

The defendant also raises a counterclaim for the loss suffered by it as a result of the detention of the vessel. To succeed on the counterclaim, the defendant would have to show that the detention was due to an act or omission of the plaintiff. Again, we do not know what was the exact reason for the detention of the vessel. The burden of proving the counterclaim lies on the defendant. It has not been discharged. In the circumstances, both the claim and counterclaim are dismissed.