Five Ocean Corp v Cingler Ship: Cargo Lien, Arbitration, & Interim Measures

In Five Ocean Corporation v Cingler Ship Pte Ltd, the Singapore High Court addressed the court's powers under Section 12A of the International Arbitration Act concerning the sale of cargo to preserve its value pending arbitration. Five Ocean Corporation sought the sale of a cargo of Indonesian steam coal due to concerns about unpaid freight and the cargo's condition. The court allowed the application, ordering the net proceeds to be paid into court pending further order from the arbitral tribunal. PT Commodities & Energy Resources, an intervener, appealed the decision. The court found that Five Ocean Corporation had a right to detain the cargo and that the sale was necessary to preserve the value of the cargo, given its deteriorating condition and the ongoing dispute.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Application to sell the cargo allowed.

1.3 Case Type

Admiralty

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Singapore High Court case regarding a cargo lien, arbitration, and the court's power to order interim measures for preserving assets.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Five Ocean CorporationPlaintiffCorporationApplication to sell the cargo allowedWon
Cingler Ship Pte LtdDefendantCorporationOrders to provide documents to facilitate the sale of the CargoNeutral
PT Commodities & Energy ResourcesIntervenerCorporationAppeal against Order of 5 August 2015Lost

3. Judges

Judge NameTitleDelivered Judgment
Belinda Ang Saw EanJudgeYes

4. Counsels

Counsel NameOrganization
Ho Pey YannAllen & Gledhill LLP
Vivian AngAllen & Gledhill LLP
Tan Wee KongLegal Solutions LLC
Poh Ying Ying JoannaLegal Solutions LLC
Mahmood Gaznavi s/o Bashir MuhammadMahmood Gaznavi & Partners
Leow Zi XiangMahmood Gaznavi & Partners

4. Facts

  1. Five Ocean Corporation (FOC) time chartered the Corinna from CMI.
  2. FOC voyage chartered the Corinna to Cingler Ship Pte Ltd.
  3. Cingler voyage chartered the Corinna to PT Commodities & Energy Resources (CER).
  4. A bill of lading was issued naming CER as the shipper.
  5. Cingler failed to pay freight due to FOC.
  6. CMI and FOC gave notice of lien and the exercise of the lien to Cingler, CER and Adani Enterprises.
  7. The Cargo was in international waters off the last nominated discharge port.

5. Formal Citations

  1. Five Ocean Corporation v Cingler Ship Pte Ltd, Originating Summons No 625 of 2015, [2015] SGHC 311

6. Timeline

DateEvent
Worldwide freezing order granted by the High Court of England and Wales over CER’s assets.
Five Ocean Corporation time chartered the Corinna from CMI.
Five Ocean Corporation voyage chartered the Corinna to Cingler Ship Pte Ltd.
The Corinna arrived at Samarinda, East Kalimantan to load the Cargo.
Loading of the Cargo commenced.
Loading of the Cargo was completed.
A set of Gencon 1994 form bill of lading was issued.
Bill of Lading released to CER.
Cingler failed to pay freight due five banking days after the release of the Bill of Lading.
FOC issued a Notice of Lien on Sub-Freight to CER and Cingler.
Cingler requested FOC to instruct the Master to depart immediately for ‘Visak’ port East Coast India.
Cingler revised the discharge port to Paradip.
The lien was exercised over the Cargo outside the territorial waters off the last nominated port, Paradip.
CMI gave notice of exercise of its contractual lien over the Cargo.
FOC filed OS 625.
Cingler obtained a court order to stay proceedings because of a scheme of arrangement under s 210 of the Companies Act.
A corresponding injunction was granted by Andrew Ang J on CER’s assets in Singapore.
The time for Cingler to respond to the Notice of Arbitration or appoint an arbitrator expired.
Mr Bazul Ashhab appeared at the hearing to support CER’s application for an adjournment.
Leave of court was granted for OS 625 to continue against Cingler.
The court allowed FOC’s application to sell the Cargo.
CER’s Notice of Appeal was filed.
CER filed an application for a stay of execution pending its appeal to the Court of Appeal.
Decision Date

7. Legal Issues

  1. Contractual Lien
    • Outcome: The court found that the lien clause of the head voyage charterparty was incorporated into the bill of lading.
    • Category: Substantive
    • Sub-Issues:
      • Incorporation of lien clause into bill of lading
      • Enforceability of lien against third parties
      • Exercise of lien rights
  2. Interim Measures in Aid of Arbitration
    • Outcome: The court held that it had the power to order the sale of the cargo as an interim measure to preserve its value pending arbitration.
    • Category: Procedural
    • Sub-Issues:
      • Court's power to order sale of cargo
      • Preservation of assets
      • Urgency of application

8. Remedies Sought

  1. Order for Sale of Cargo
  2. Preservation of Assets

9. Cause of Actions

  • Breach of Contract
  • Enforcement of Lien

10. Practice Areas

  • Admiralty
  • Arbitration
  • Commercial Litigation
  • Shipping
  • International Trade

11. Industries

  • Shipping
  • Commodities
  • Energy

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Xiamen Xindaan Trade Co Ltd v North China Shipping Co LtdEnglish High CourtYes[2009] EWHC 588England and WalesCited as authority for the principle that when a bill of lading is silent as to the identity of the charterparty, the incorporated charterparty is the head voyage charter and not the sub-voyage charter.
Itex Itagrani Export SA v Care Shipping Corporation and others (The “Cebu”) (No 2)Not specifiedYes[1990] 2 Lloyd’s Rep 316Not specifiedCited for the observation that the word “hire” is used for sums payable under time charters, and the word “freight” is restricted to voyage charter-parties and bills of lading.
The NanfriNot specifiedYes[1979] 1 Lloyd’s Rep 201Not specifiedCited in relation to the Master's authority to issue a bill of lading on behalf of the shipowner.
The “Berkshire”Not specifiedYes[1974] 1 Lloyd’s Rep 185Not specifiedCited for the principle that a clause in a charter-party entitles the charterers to present to the master bills of lading for signature, provided they do not contain extraordinary terms or terms manifestly inconsistent with the charter-party.
Maldives Airport Co Ltd v GMR Male International Airport Pte LtdCourt of AppealYes[2013] 2 SLR 449SingaporeCited for the interpretation of the term “assets” under s 12A(4) of the IAA and the types of contractual rights that can be preserved.
Photo Production Ltd v Securicor Transport LtdHouse of LordsYes[1980] AC 827United KingdomCited to distinguish between contractual rights that can be preserved and those that give rise to a secondary obligation to pay damages.
Bristol Airport plc v PowdrillNot specifiedYes[1990] Ch 744Not specifiedCited for the definition of security as a right exercisable against property to enforce the discharge of an obligation.
Castleton Commodities Shipping Company Pte Ltd v Silver Rock InvestmentsEnglish High CourtYes[2015] EWHC 2584 (Comm)England and WalesCited as a case with similar facts where the court allowed the sale of cargo and the claimant asserted a right to direct the vessel not to unload the cargo, which was considered a similar right to a lien.
Stelios B Maritime Ltd v Ibeto Cement Co (The “Stelios B”)Not specifiedYes(2007) 711 LMLN 2Not specifiedCited as precedent for ordering the sale of cargo that was not situated within a country’s jurisdiction.
Emilia Shipping Inc v State Enterprise for Pulp and Paper IndustriesNot specifiedYes[1991] 1 SLR(R) 411SingaporeCited for the principle that the court has the power to order the sale of cargo under O 29 r 4 of the Rules of Supreme Court 1970 where the cargo is of a perishable nature or likely to deteriorate.

13. Applicable Rules

Rule Name
Rules of Court (Cap 322 R 5, 2014 Rev Ed) O 29 r 6

14. Applicable Statutes

Statute NameJurisdiction
International Arbitration Act (Cap 143A, 2002 Rev Ed) s 12ASingapore
Companies Act (Cap 50, 2006 Rev Ed) s 210Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Cargo
  • Lien
  • Charterparty
  • Bill of Lading
  • Freight
  • Arbitration
  • Interim Measures
  • Time Charter
  • Voyage Charter
  • Discharge Port

15.2 Keywords

  • Cargo Lien
  • Arbitration
  • Interim Measures
  • Singapore High Court
  • International Arbitration Act
  • Sale of Goods
  • Shipping Dispute

17. Areas of Law

Area NameRelevance Score
Contractual Lien75
Arbitration70
Admiralty and Maritime Law60
Shipping Law60
Contract Law50
Breach of Contract50
Commercial Law40
Sale of Goods40
International Trade30
Property Law30
Summary Judgement20

16. Subjects

  • Shipping Law
  • Arbitration Law
  • Contract Law
  • International Trade