Front Carriers Ltd v Atlantic & Orient Shipping Corp: Mareva Injunction & Foreign Arbitration

In Front Carriers Ltd v Atlantic & Orient Shipping Corp, the Singapore High Court addressed an application by Atlantic & Orient Shipping Corporation (“A&O”) to set aside a Mareva injunction obtained ex parte by Front Carriers Limited (“FCL”) in support of arbitration commenced in London for breach of a time charter. The court, while establishing personal jurisdiction over A&O through service, considered its power to grant interim relief in aid of foreign arbitration under the International Arbitration Act and the Civil Law Act. Belinda Ang Saw Ean J set aside the Mareva order, not for lack of jurisdiction, but due to the absence of sufficient evidence of a risk of dissipation of assets by A&O.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

The Mareva order of 26 August 2005 is set aside due to the lack of merits on the plaintiff's part.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Singapore court addresses Mareva injunction in support of London arbitration. The court found it had jurisdiction but set aside the injunction.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Front Carriers LtdPlaintiffCorporationMareva order set asideLost
Atlantic & Orient Shipping CorpDefendantCorporationApplication to set aside Mareva injunction grantedWon

3. Judges

Judge NameTitleDelivered Judgment
Belinda Ang Saw EanJudgeYes

4. Counsels

Counsel NameOrganization
Anna QuahAng & Partners
Chong Shiao HannAng & Partners
Yap Yin SoonAllen & Gledhill

4. Facts

  1. FCL sought Mareva relief in Singapore to support London arbitration for breach of a time charter.
  2. FCL negotiated a charter with Juan Lee, purportedly representing A&O, at US$31,500 a day.
  3. A&O later denied Juan Lee's authority to fix the charter, claiming he had left A&O Singapore.
  4. FCL applied for Mareva relief against A&O in Singapore and commenced arbitration in London.
  5. A&O argued the High Court lacked jurisdiction to grant the Mareva order and that FCL failed to prove a risk of asset dissipation.
  6. A&O conceded Juan Lee was its representative after filing to set aside the Mareva injunction.
  7. A&O confirmed its Singapore bank account had a nil balance and another account was closed.

5. Formal Citations

  1. Front Carriers Ltd v Atlantic & Orient Shipping Corp, OS 1104/2005, SIC 5286/2005, [2006] SGHC 127

6. Timeline

DateEvent
Time charter concluded between FCL and A&O (disputed)
Juan Lee declared he lacked authority to fix the charter
Amstec Shipping Pte Ltd denied the existence of a binding charter
FCL applied for Mareva relief against A&O in Singapore and commenced arbitration in London
Andrew Phang Boon Leong JC granted Mareva relief ex parte
Allen & Gledhill entered an appearance on A&O’s behalf
Judgment reserved

7. Legal Issues

  1. Jurisdiction to grant Mareva injunction in support of foreign arbitration
    • Outcome: The High Court has the power to grant Mareva relief in aid of international arbitration held overseas under the International Arbitration Act and the Civil Law Act.
    • Category: Jurisdictional
    • Sub-Issues:
      • Power of High Court under International Arbitration Act
      • Power of High Court under Civil Law Act
  2. Requirements for grant of Mareva relief
    • Outcome: The court found insufficient evidence of a risk of dissipation of assets and set aside the Mareva order.
    • Category: Substantive
    • Sub-Issues:
      • Risk of dissipation of assets
      • Full and frank disclosure of material facts

8. Remedies Sought

  1. Mareva Injunction

9. Cause of Actions

  • Breach of Contract

10. Practice Areas

  • Commercial Litigation
  • Arbitration
  • Shipping Law

11. Industries

  • Shipping

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Swift-Fortune Ltd v Magnifica Marine SAHigh CourtYes[2006] 2 SLR 323SingaporeDistinguished on the interpretation of the International Arbitration Act regarding the High Court's power to grant interim orders in support of foreign arbitration.
Siskina v Distos Compania Naviera SAN/AYes[1979] AC 210England and WalesCited for the principle that the High Court has no jurisdiction to grant interlocutory relief when the substantive proceedings take place abroad.
Channel Tunnel Group Ltd v Balfour Beatty Construction LtdN/AYes[1993] AC 334England and WalesCited for the principle that the court retains the power to grant interim relief even when proceedings are stayed for arbitration.
PT Garuda Indonesia v Birgen AirCourt of AppealYes[2002] 1 SLR 393SingaporeCited to support the principle that Singapore courts can only intervene in arbitral proceedings taking place abroad in limited instances.
Katran Shipping Co Ltd v Kenven Transportation LtdN/AYes[1992] 1 HKC 538Hong KongCited as an example of an interim measure of protection under Article 9 of the UNCITRAL Model Law.
Interbulk (Hong Kong) Ltd v Safe Rich Industries LtdN/AYes[1992] 2 HKLR 185Hong KongCited regarding the interpretation of Article 9 of the UNCITRAL Model Law and the court's power to grant interim relief.
Econ Corporation International Limited v Ballast-Nedam International BVHigh CourtYes[2003] 2 SLR 15SingaporeCited to support the High Court's jurisdiction to assist both foreign and Singapore arbitration through interim protection.
Coop International Pte Ltd v Ebel SAHigh CourtYes[1998] 3 SLR 670SingaporeCited to explain the applicability of Articles 8 and 9 of the UNCITRAL Model Law to foreign arbitration.
The Rena KN/AYes[1979] QB 377England and WalesCited regarding the High Court's power to retain or order alternative security when parties have agreed to arbitration.
Mercedes Benz AG v LeiduckN/AYes[1996] AC 284Hong KongDiscussed in relation to the court's territorial jurisdiction over a foreigner outside the jurisdiction.
Art Trend Ltd v Blue Dolphin (Pte) LtdN/AYes[1982–1983] SLR 362SingaporeCited to support the power of the High Court to grant Mareva relief under Section 4(10) of the Civil Law Act.
Choy Chee Keen Collin v Public Utilities BoardN/AYes[1997] 1 SLR 604SingaporeCited for the requirement of 'solid evidence' to demonstrate a 'real risk' of dissipation of assets for granting a Mareva injunction.
Karaha Bodas Co LLC v Pertamina Energy Trading LtdCourt of AppealYes[2006] 1 SLR 112SingaporeDistinguished as the court was not asked to grant a Mareva injunction to support a pending arbitration.
The Lady MurielN/AYes[1995] 2 HKC 320Hong KongIllustrates the principle that once personal jurisdiction is established, the court has jurisdiction to grant interim relief based on its domestic law.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
Civil Law Act (Cap 43, 1999 Rev Ed)Singapore
International Arbitration Act (Cap 143A, 2002 Rev Ed)Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Mareva Injunction
  • International Arbitration Act
  • UNCITRAL Model Law
  • Foreign Arbitration
  • Dissipation of Assets
  • Time Charter
  • Jurisdiction
  • Interim Measures
  • Service out of Jurisdiction
  • Cause of Action

15.2 Keywords

  • Mareva Injunction
  • Foreign Arbitration
  • International Arbitration Act
  • Singapore High Court
  • Shipping Dispute

17. Areas of Law

Area NameRelevance Score
Mareva Injunctions95
International Arbitration Act90
Injunctions85
International Arbitration80
Arbitration75
Civil Procedure70
Shipping Law65
Breach of Contract60
Contract Law60
Commercial Law55
Commercial Disputes50

16. Subjects

  • Arbitration Law
  • Civil Procedure
  • Shipping Law
  • Injunctions