Winplus Corp v Frumentarius: Admiralty Jurisdiction & Bareboat Charter Termination

In The “Chem Orchid” [2015] SGHC 50, the Singapore High Court addressed appeals concerning four in rem writs against the vessel Chem Orchid. The plaintiffs, including Winplus Corporation Co Ltd, Frumentarius Ltd, KRC EFKO-KASKAD LLC, and Mercuria Energy Trading SA, filed claims against the demise charterer, Sejin Maritime Co Ltd. The defendant, Frumentarius Ltd, the owner of the vessel, applied to set aside the writs, arguing the bareboat charter had been terminated. Steven Chong J allowed the plaintiffs' appeals, holding that Sejin remained the demise charterer when the actions commenced and dismissed HKC's appeals.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Plaintiffs' appeals allowed; HKC's appeals dismissed.

1.3 Case Type

Admiralty

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Singapore High Court addresses admiralty jurisdiction in ship arrest cases, focusing on bareboat charter termination and redelivery requirements.

1.7 Decision Date

17 February 2015

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
WINPLUS CORPORATION CO LTD	Plaintiff	Corporation	Appeal Allowed	Won	Yogarajah Yoga Sharmini, Subashini d/o Narayanasamy
FRUMENTARIUS LTD	Plaintiff	Corporation	Appeal Allowed	Won	Tan Hui Tsing
KRC EFKO-KASKAD LLC	Plaintiff	Corporation	Appeal Allowed	Won	Tan Hui Tsing
MERCURIA ENERGY TRADING SA	Plaintiff	Corporation	Appeal Allowed	Won	Philip Tay
FRUMENTARIUS LTD	Defendant	Corporation	Appeals Dismissed	Lost	Henry Heng, Darius Lee
WINPLUS CORPORATION CO LTD	Other	Corporation
Sejin Maritime Co Ltd	Other	Corporation

3. Judges

Judge Name	Title	Delivered Judgment
Steven Chong	Judge	Yes

4. Counsels

Counsel Name	Organization
Yogarajah Yoga Sharmini	Haridass Ho & Partners
Subashini d/o Narayanasamy	Haridass Ho & Partners
Tan Hui Tsing	Gurbani & Co
Philip Tay	Rajah & Tann Singapore LLP
Henry Heng	Legal Solutions LLC
Darius Lee	Legal Solutions LLC

4. Facts

HKC leased the Vessel to Sejin under a Lease Agreement.
Sejin defaulted on rental payments after October 2010.
HKA was established to recover bad debts owed to HKC.
HKA issued a termination notice to Sejin on 4 April 2011.
Sejin continued to trade the Vessel after the purported termination.
Winplus arrested the Vessel on 28 July 2011 for unpaid bunkers.
Frumentarius, KRC, and Mercuria issued further in rem writs.

5. Formal Citations

Chem Orchid, Admiralty in Rem No 184 of 2011 (Registrar's Appeal No 426 of 2013), Admiralty in Rem No 197 of 2011 (Registrar's Appeal No 1 of 2014), Admiralty in Rem No 198 of 2011 (Registrar's Appeal Nos 2 and 8 of 2014), Admiralty in Rem No 201 of 2011 (Registrar's Appeal Nos 6 and 7 of 2014), [2015] SGHC 50

6. Timeline

Date	Event
2010-02-01	HKC entered into an agreement to lease the Vessel to Sejin for 108 months.
2010-10-01	Sejin made its last rental payment to HKC.
2010-12-01	HK AMC Co Ltd was established to deal with the recovery of bad debts owed to HKC.
2010-12-24	HKC issued a Notice of Credit Transfer to Sejin.
2010-12-27	HKC and HKA executed an Asset Transfer Agreement.
2011-04-04	HKA sent a Lease contract termination notice to Sejin.
2011-05-09	HKA issued a further notice to Sejin reiterating that Sejin had lost all the benefit of time for payment of the rental arrears.
2011-05-13	Sejin entered into a charterparty with Frumentarius Ltd.
2011-05-23	Sejin wrote to HKA explaining its inability to discharge its monthly payment obligations.
2011-05-31	Sejin provided HKA with a written update that the Vessel had entered Belawan and was in the process of loading palm oil cargo.
2011-06-04	The Vessel completed loading three parcels of palm oil cargo at Belawan.
2011-06-11	The Vessel completed loading an additional parcel of palm oil cargo at Dumai.
2011-06-13	The Vessel stemmed bunkers which were supplied by Winplus.
2011-06-14	HKA issued a formal written response to Sejin’s letter dated 23 May 2011.
2011-06-16	The Vessel arrived in Singapore.
2011-06-30	The Vessel took on more bunkers, which were also supplied by Winplus.
2011-07-04	Sejin responded in a letter stating that it was not intentionally delaying the return of the Vessel.
2011-07-15	Sejin sent a further letter stating that it would do its best to return the ship to Korea as soon as possible.
2011-07-28	Winplus filed an in rem writ against the Vessel and arrested her in Singapore.
2011-08-08	Three further in rem writs were issued against the Vessel by Frumentarius, KRC, and Mercuria respectively.
2011-08-22	HKC entered appearances in all the in rem actions as the registered owner of the Vessel.
2011-10-07	The court ordered the Vessel to be appraised and sold.
2011-12-23	The court approved of the Vessel's sale below the appraised value.
2012-02-29	HKC filed applications seeking to set aside the writs.
2012-10-11	First hearing date before the Assistant Registrar.
2013-09-01	Last hearing date before the Assistant Registrar.
2015-02-18	Judgment reserved.
2015-10-26	The appeals to this decision in Originating Summons No 21 of 2015 and Civil Appeals Nos 58, 59, 60 and 62 of 2015 were dismissed by the Court of Appeal.

7. Legal Issues

Admiralty Jurisdiction
- Outcome: The court held that the plaintiffs had successfully invoked the court's admiralty jurisdiction as Sejin remained the demise charterer at the time the actions were commenced.
- Category: Jurisdictional
- Sub-Issues:
  - Invocation of in rem jurisdiction
  - Requirements under s 4(4) of the High Court (Admiralty Jurisdiction) Act
Termination of Bareboat Charter
- Outcome: The court held that the 4 April Notice was invalid and that physical redelivery is required to terminate a bareboat charter.
- Category: Substantive
- Sub-Issues:
  - Validity of termination notice
  - Requirement of physical redelivery
  - Constructive redelivery
Ostensible Authority
- Outcome: The court held that KRC and Mercuria's alternative claims against HKC should not be struck out, as the master was clothed with ostensible authority to bind HKC.
- Category: Substantive
- Sub-Issues:
  - Master's authority to bind the owner
  - Representation by the owner
  - Reliance by third parties
Construction of Contract
- Outcome: The court interpreted the relevant articles of the Lease Agreement to determine the validity of the termination notice and the requirement of physical redelivery.
- Category: Substantive
- Sub-Issues:
  - Interpretation of Art 24(2) of the Lease Agreement
  - Interpretation of Art 26(3) of the Lease Agreement

8. Remedies Sought

Setting Aside of Writs
Striking Out of Claims
Arrest of Vessel

9. Cause of Actions

Breach of Contract
Non-delivery of Cargo
Unpaid Bunkers

10. Practice Areas

Admiralty Litigation
Commercial Litigation
Shipping
Charterparties

11. Industries

Shipping
Maritime

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
The “Bunga Melati 5”	Court of Appeal	Yes	[2012] 4 SLR 546	Singapore	Cited for the burden of proof required to invoke admiralty jurisdiction under s 4(4) of the HCAJA.
The “Kapitan Temkin”	High Court	Yes	[1998] 2 SLR(R) 537	Singapore	Cited for the principle that questions affecting the jurisdiction of the court are determined by the lex fori.
The “Ohm Mariana” ex “Peony”	High Court	Yes	[1992] 1 SLR(R) 556	Singapore	Cited for the principle that admiralty jurisdiction is conferred by statute and cannot be conferred by agreement or waiver of the parties.
The “Alexandrea”	High Court	Yes	[2002] 1 SLR(R) 812	Singapore	Cited for the principle that admiralty jurisdiction is conferred by statute and cannot be conferred by agreement or waiver of the parties.
Ships “Hako Endeavour”, “Hako Excel”, “Hako Esteem” and “Hako Fortress” v Programmed Total Marine Services Pty Ltd	Federal Court of Australia	Yes	(2013) 296 ALR 265	Australia	Cited for the principle that the validity of a termination notice can be examined by the court notwithstanding the bareboat charterer's acceptance of the termination.
ASP Holdings Ltd v Pan Australia Shipping Pty Ltd	Federal Court of Australia	Yes	(2006) 235 ALR 554	Australia	Cited for the principle that the validity of a termination notice can be examined by the court notwithstanding the bareboat charterer's acceptance of the termination.
Loke Hong Kee (S) Pte Ltd v United Overseas Land Ltd	Privy Council	Yes	[1981–1982] SLR(R) 424	Singapore	Cited for the principle that subjective opinions must be genuinely held.
Patrick Stevedores No 2 Pty Ltd v MV “Turakina”	Federal Court of Australia	Yes	(1998) 154 ALR 666	Australia	Cited for the principle that physical redelivery is generally required to terminate a bareboat charter.
CMC (Australia) Pty Ltd v The Ship “Socofl Stream”	Federal Court of Australia	Yes	[1999] FCA 1419	Australia	Cited for the principle that parties can contract out of the general rule requiring physical redelivery.
The “Rangiora”, “Ranginui” and “Takitimu”	High Court of New Zealand	Yes	[2000] 1 Lloyd’s Rep 36	New Zealand	Cited for the principle that physical redelivery is generally required to terminate a bareboat charter.
Gulf Marine and Industrial Supplies Inc v The Demise Charterers of the Ship or Vessel MV ‘Trident Dawn’ (Qatar Flag)	High Court of Hong Kong	Yes	[1992] HKCFI 273	Hong Kong	Cited as a case that judicially considered the issue of physical redelivery.
The “Guiseppe di Vittorio”	Admiralty Court	Yes	[1998] 1 Lloyd’s Rep 136	England and Wales	Cited for the principle that the hallmark of a bareboat charter is the transfer of possession and control of the vessel from the owner to the charterer.
Medway Drydock & Engineering Co Ltd v MV Andrea Ursula	Queen's Bench Division	Yes	[1973] 1 QB 265	England and Wales	Cited for the principle that a bareboat charterer has temporary ownership of the vessel or is its owner pro hac vice.
Rama Corporation Ld v Proved Tin and General Investments Ld	Court of Appeal	Yes	[1952] 2 QB 147	England and Wales	Cited for the theoretical underpinning of apparent authority in the doctrine of estoppel.
Freeman & Lockyer (a firm) v Buckhurst Park Properties (Mangal) Ltd and another	Court of Appeal	Yes	[1964] 2 QB 480	England and Wales	Cited for the theoretical underpinning of apparent authority in the doctrine of estoppel.
ING Re (UK) Ltd v R&V Versicherung AG	Commercial Court	Yes	[2006] 2 All ER (Comm) 870	England and Wales	Cited for the theoretical underpinning of apparent authority in the doctrine of estoppel.
CMC (Australia) Pty Ltd v ‘Socofl Stream’	Federal Court of Australia	Yes	[2000] FCA 1681	Australia	Cited for the principle that Sovcomflot was liable to CMC on the basis that it had clothed the master with ostensible authority.
The Ship “Socofl Stream” v CMC (Australia) Pty Ltd	Federal Court of Australia	Yes	[2001] FCA 961	Australia	Cited for the principle that Sovcomflot was liable to CMC on the basis that it had clothed the master with ostensible authority.
MCC Proceeds Inc v Bishopsgate Investment Trust plc and others	Court of Appeal	Yes	[1999] CLC 417	England and Wales	Cited for the three main duties of a foreign law expert.
Pacific Recreation Pte Ltd v S Y Technology Inc and another appeal	Court of Appeal	Yes	[2008] 2 SLR(R) 491	Singapore	Cited for the role of an expert in providing an opinion on foreign law.
Wong Kai Woon alias Wong Kai Boon and another v Wong Kong Hom alias Ng Kong Hom and others	High Court	Yes	[2000] SGHC 176	Singapore	Cited for the principle that it is preferable for raw sources of foreign law to be accompanied by expert opinions.
Goh Chok Tong v Tang Liang Hong	Court of Appeal	Yes	[1997] 1 SLR(R) 811	Singapore	Cited for the principle that where foreign law is not proved, it is presumed to be the same as the law of the forum.
EFT Holdings, Inc and another v Marinteknik Shipbuilders (S) Pte Ltd and another	Court of Appeal	Yes	[2014] 1 SLR 860	Singapore	Cited for the principle that the court lacks knowledge of foreign law and must be informed of its content by evidence from the parties.
King v Brandywine Reinsurance Co	Court of Appeal	Yes	[2005] 1 Lloyd's Rep 655	England and Wales	Cited for the principle that the expert's role is to prove the rules of construction of the foreign law, and it is then for the court to interpret the contract.
Rouyer Guillet Et Compagnie v Rouyer Guillet & Co Ltd	Court of Appeal	Yes	[1949] 1 All ER 244	England and Wales	Cited for the principle that evidence on the construction of a private document is admissible so far as it deals with foreign rules of construction or French rules of law or the explanation of French technical terms, but evidence as to its meaning after those aids have been taken into account is not admissible.
The Duchess Di Sora v AL Phillipps and others, executors, etc	House of Lords	Yes	(1863) 10 HLC 624	United Kingdom	Cited for the principle that the office of construction of a written instrument, whether foreign or domestic, brought into controversy before our tribunals, properly belongs to the Judge.
Wu Yang Construction Group Ltd v Zhejiang Jinyi Group Co, Ltd and others	High Court	Yes	[2006] 4 SLR(R) 451	Singapore	Cited for the principle that the ability of the court to make an informed decision on a question determinable by reference to foreign law is dependent largely on the quality of the expert evidence adduced.
The “H156”	High Court	Yes	[1999] 2 SLR(R) 419	Singapore	Cited for the principle that the expert opinion consisted only of “one judgmental sentence” which was also unaccompanied by any propositions of foreign law or foreign materials to support the expert’s conclusion.
Chem Orchid	Court of Appeal	Yes	[2016] SGCA 4	Singapore	The appeals to this decision in Originating Summons No 21 of 2015 and Civil Appeals Nos 58, 59, 60 and 62 of 2015 were dismissed by the Court of Appeal on 26 October 2015.

13. Applicable Rules

Rule Name
Rules of Court (Cap 322, R 5, 2014 Rev Ed) O 18 r 19
Rules of Court (Cap 322, R 5, 2014 Rev Ed) O 40A r 3(2)(b)
Rules of Court (Cap 322, R 5, 2014 Rev Ed) O 40A r 4

14. Applicable Statutes

Statute Name	Jurisdiction
High Court (Admiralty Jurisdiction) Act	Singapore

15. Key Terms and Keywords

15.1 Key Terms

Bareboat Charter
Demise Charter
In Rem Writ
Admiralty Jurisdiction
Termination Notice
Physical Redelivery
Constructive Redelivery
Ostensible Authority
Lease Agreement
Asset Transfer Agreement
Notice of Credit Transfer

15.2 Keywords

Admiralty Jurisdiction
Bareboat Charter
Demise Charter
Termination
Redelivery
Ostensible Authority

16. Subjects

Admiralty
Shipping
Contract Law
Agency

17. Areas of Law

Admiralty Law
Contract Law
Agency Law
Conflict of Laws
Shipping Law