Natixis v Owner of MIRACLE HOPE: Setting Aside Arrest Warrant for Material Non-Disclosure
In the High Court of Singapore, Natixis, Singapore Branch, arrested the vessel “Miracle Hope” owned by Ocean Light Shipping Inc for breach of contract of carriage. Petróleo Brasileiro S.A. - Petrobras, the 2nd Intervener, applied to set aside the warrant of arrest, alleging material non-disclosure by Natixis. The court dismissed Petrobras’ application, finding no breach of the duty of full and frank disclosure by Natixis.
1. Case Overview
1.1 Court
High Court of the Republic of Singapore1.2 Outcome
Application to set aside the warrant of arrest is dismissed.
1.3 Case Type
Admiralty
1.4 Judgment Type
Judgment
1.5 Jurisdiction
Singapore
1.6 Description
The High Court dismissed Petrobras' application to set aside the arrest warrant of the vessel MIRACLE HOPE, finding no material non-disclosure by Natixis.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Natixis, Singapore Branch | Plaintiff | Corporation | Application to set aside the warrant of arrest is dismissed | Won | Toh Kian Sing SC, Seow Hwang Seng John, Vellayappan Balasubramaniyam, Wu Junneng |
| Owner and/or demise charterer of the vessel “MIRACLE HOPE” | Defendant | Other | Application to set aside the warrant of arrest is dismissed | Neutral | Yap Ming Kwang Kelly, Keng Xin Wee Shereen |
| Clearlake Shipping Pte Ltd | 1st Intervener | Corporation | Application to set aside the warrant of arrest is dismissed | Neutral | Song Swee Lian Corina, Liang Junhong Daniel |
| Petróleo Brasileiro S.A. - Petrobras | 2nd Intervener | Corporation | Application to set aside the warrant of arrest is dismissed | Lost | Sze Kian Chuan, Tan Shi Yun Jolene |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Navin Anand | Assistant Registrar | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Toh Kian Sing SC | Rajah & Tann Singapore LLP |
| Seow Hwang Seng John | Rajah & Tann Singapore LLP |
| Vellayappan Balasubramaniyam | Rajah & Tann Singapore LLP |
| Wu Junneng | Rajah & Tann Singapore LLP |
| Yap Ming Kwang Kelly | Oon & Bazul LLP |
| Keng Xin Wee Shereen | Oon & Bazul LLP |
| Song Swee Lian Corina | Allen & Gledhill LLP |
| Liang Junhong Daniel | Allen & Gledhill LLP |
| Sze Kian Chuan | Joseph Tan Jude Benny LLP |
| Tan Shi Yun Jolene | Joseph Tan Jude Benny LLP |
4. Facts
- Natixis arrested the vessel “Miracle Hope” for breach of contract of carriage.
- Petrobras applied to set aside the warrant of arrest based on material non-disclosure.
- Natixis is the holder of original bills of lading for crude oil loaded on the Vessel.
- Ocean Light Shipping Inc is the registered owner of the Vessel.
- The Cargo was delivered to Hontop at Dongjiakou, China, without presentation of the Bills of Lading.
- Hoptop failed to repay the amounts disbursed by Natixis under the Letter of Credit.
- Petrobras paid US$76,050,000 into the Singapore Court as security for the release of the Vessel.
5. Formal Citations
- The “Miracle Hope”, Admiralty in Rem No 45 of 2020 (Summons No 1766 of 2020), [2020] SGHCR 3
6. Timeline
| Date | Event |
|---|---|
| Bank facility agreement dated | |
| General Agreement for Commercial Business dated | |
| Master Security Agreement dated | |
| Sale contract dated | |
| Letter of Credit issued | |
| Letter of Indemnity dated | |
| Cargo delivered to Hontop at Dongjiakou, China | |
| Cargo delivered to Hontop at Dongjiakou, China | |
| Natixis demanded Bills of Lading from PGT | |
| PGT delivered Bills of Lading to Natixis | |
| Natixis demanded delivery of Cargo from Owners | |
| Vessel arrested | |
| Natixis demanded security of US$76,050,000 from Owners | |
| English High Court granted mandatory injunction to Trafigura | |
| English High Court granted mandatory injunction to Clearlake | |
| Statement of claim filed | |
| Petrobras filed a defence and an application to set aside the warrant of arrest | |
| English High Court varied mandatory injunctions | |
| Clearlake and Petrobras were to put up security by way of payment into the Singapore Court | |
| Petrobras paid US$76,050,000 into Singapore Court | |
| Vessel released | |
| Hearing by video-conference | |
| Judgment reserved |
7. Legal Issues
- Material Non-Disclosure
- Outcome: The court found that Natixis did not breach its duty to give full and frank disclosure to the court when it applied for the warrant of arrest.
- Category: Procedural
- Sub-Issues:
- Failure to disclose consent to delivery without production of bills of lading
- Failure to disclose that bills of lading were spent
- Failure to disclose the Master Security Agreement
- Failure to disclose the time gap between delivery and demand for bills of lading
- Related Cases:
- [2008] 4 SLR(R) 994
- [2006] 1 SLR(R) 358
- [1993] 2 SLR(R) 136
- [2010] 3 SLR 294
- [2012] 4 SLR 546
- [2016] 1 SLR 1096
- Locus Standi
- Outcome: The court found that Petrobras has locus standi to apply to set aside the warrant of arrest.
- Category: Procedural
- Related Cases:
- [2010] 3 SLR 409
- [1991] 2 SLR(R) 479
- Right to Challenge Arrest
- Outcome: The court found that Petrobras has not lost its right to challenge the arrest.
- Category: Procedural
- Related Cases:
- [2003] 3 SLR(R) 362
8. Remedies Sought
- Setting Aside Warrant of Arrest
- Damages for Wrongful Arrest
9. Cause of Actions
- Breach of Contract of Carriage
10. Practice Areas
- Admiralty
- Shipping
- Arrest of Vessels
- Intervention
11. Industries
- Shipping
- Banking
- Commodities Trading
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| The “Engedi” | High Court | Yes | [2010] 3 SLR 409 | Singapore | Cited for the principle that a person with an interest in the arrested vessel may be permitted to intervene in the action to protect that interest. |
| Trafigura Maritime Logistics Pte Ltd v Clearlake Shipping Pte Ltd | English High Court | Yes | [2020] EWHC 726 (Comm) | England | Cited regarding proceedings in England between parties in the charterparty chain on the furnishing of security for the release of the Vessel. |
| Clearlake Chartering USA Inc. & Anor v Petróleo Brasileiro S.A. | English High Court | Yes | [2020] EWHC 805 (Comm) | England | Cited regarding proceedings in England between parties in the charterparty chain on the furnishing of security for the release of the Vessel. |
| Trafigura Maritime Logistics Pte Ltd v Clearlake Shipping Pte Ltd | English High Court | Yes | [2020] EWHC 995 (Comm) | England | Cited regarding proceedings in England between parties in the charterparty chain on the furnishing of security for the release of the Vessel. |
| The “Soeraya Emas” | High Court | Yes | [1991] 2 SLR(R) 479 | Singapore | Cited for the principle that an intervener can protect their interests by defending the action, irrespective of whether the defendant enters an appearance. |
| The “Fierbinti” | High Court | Yes | [1994] 3 SLR(R) 574 | Singapore | Cited for the dual function of a warrant of arrest in admiralty law: invoking jurisdiction and obtaining security. |
| The “Rainbow Spring” | Court of Appeal | Yes | [2003] 3 SLR(R) 362 | Singapore | Cited for the principle that the courts must retain the discretion to set aside an arrest for non-disclosure if the facts warrant it. |
| The “Vasiliy Golovnin” | Court of Appeal | Yes | [2008] 4 SLR(R) 994 | Singapore | Cited for the principle that a plaintiff applying for an arrest on an ex parte basis is under a duty to make full and frank disclosure of all material facts. |
| Treasure Valley Group Ltd v Saputra Teddy & Anor (Ultramarine Holdings Ltd, intervener) | High Court | Yes | [2006] 1 SLR(R) 358 | Singapore | Cited for the principle that the court must first decide whether there has been non-disclosure and then determine whether the omitted facts were material. |
| The “Damavand” | Court of Appeal | Yes | [1993] 2 SLR(R) 136 | Singapore | Cited for the test of materiality: whether the fact is relevant to the decision of whether or not to issue the warrant of arrest. |
| The “Eagle Prestige” | High Court | Yes | [2010] 3 SLR 294 | Singapore | Cited for the principle that the court's concerns at the application stage are with jurisdiction in rem and disclosure of material facts germane to considerations of jurisdiction in rem. |
| The “Bunga Melati 5” | High Court | Yes | [2012] 4 SLR 546 | Singapore | Cited for the principle that the court should only refuse to grant the warrant of arrest in cases where it is clear that the application amounts to an abuse of process. |
| The “Xin Chang Shu” | High Court | Yes | [2016] 1 SLR 1096 | Singapore | Cited for the principle that there is generally no duty to disclose defences which only affect the merits of the underlying claim and do not touch on the admiralty jurisdiction of the court. |
| BNP Paribas v Bandung Shipping Pte Ltd (Shweta International Pte Ltd and another, third parties) | High Court | Yes | [2003] 3 SLR(R) 611 | Singapore | Cited for the principle that an order bill entitles the holder to call for delivery of the goods specified therein and delivery without production of the bill of lading constitutes a breach of contract. |
| The “Pacific Vigorous” | High Court | Yes | [2006] 3 SLR(R) 374 | Singapore | Cited for the principle that a bill of lading remains effective until the goods are delivered to the person entitled to them, and a holder is entitled to sue for breach of contract committed prior to the time it became holder. |
| The “Yue You 902” | High Court | Yes | [2020] 3 SLR 573 | Singapore | Cited for the principle that a bill of lading is only spent when delivery is effected to the person entitled to the goods. |
13. Applicable Rules
| Rule Name |
|---|
| O 12 r 7 of the Rules of Court (Cap 322, R5, 2014 Rev Ed) |
| O 70 r 2(3) of the Rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| COVID-19 (Temporary Measures) Act 2020 | Singapore |
| High Court (Admiralty Jurisdiction) Act (Cap 123, 2001 Rev Ed) | Singapore |
| Rules of Court (Cap 322, R5, 2014 Rev Ed) | Singapore |
| Bills of Lading Act (Cap 384, 1994 Rev Ed) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Warrant of Arrest
- Material Non-Disclosure
- Bills of Lading
- Letter of Credit
- Letter of Indemnity
- Voyage Charterparty
- Ship Arrest
- Admiralty Jurisdiction
- Locus Standi
15.2 Keywords
- Admiralty
- Shipping
- Ship Arrest
- Material Non-Disclosure
- Bills of Lading
- Singapore
- High Court
- Intervention
16. Subjects
- Admiralty
- Practice and Procedure
- Shipping
17. Areas of Law
- Admiralty Law
- Shipping Law
- Civil Procedure