Marchand Navigation v Olam Global Agri & Sinco Shipping: Lien over Sub-Freights & Arbitration Stay
In Marchand Navigation Company v Olam Global Agri Pte Ltd and Sinco Shipping Pte Ltd, the Singapore High Court addressed the issue of a shipowner's lien over sub-freights and the impact of an arbitration clause. Marchand, the owner of the vessel Maria Theo 1, sought to exercise a lien over demurrage owed by Olam to Sinco, the charterer. The court held that the existence of a dispute and the presence of an arbitration clause did not affect Marchand's right to exercise the lien against Olam. The court ordered that the US$190,112 be paid out to Marchand.
1. Case Overview
1.1 Court
General Division of the High Court of the Republic of Singapore1.2 Outcome
Marchand was entitled to exercise its lien pursuant to Clause 18 of the Charterparty dated 29 April 2022 in respect of the US$190,112 owed by Olam to Sinco.
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 shipowner's lien over sub-freights and the impact of an arbitration clause on exercising that lien.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Marchand Navigation Company | Claimant | Corporation | Judgment for Claimant | Won | Tan Hui Tsing, Deborah Koh Leng Hoon |
| Olam Global Agri Pte Ltd | Defendant | Corporation | Neutral | Neutral | Teo Ke-Wei Ian, Tan Yong Jin Jonathan |
| Sinco Shipping Pte Ltd | Defendant | Corporation | Judgment against Defendant | Lost | Tan Wen Cheng Adrian |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Kwek Mean Luck | Judge of the High Court | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Tan Hui Tsing | DennisMathiew |
| Deborah Koh Leng Hoon | DennisMathiew |
| Teo Ke-Wei Ian | Helmsman LLC |
| Tan Yong Jin Jonathan | Helmsman LLC |
| Tan Wen Cheng Adrian | August Law Corporation |
4. Facts
- Marchand was the owner of the Vessel.
- Sinco chartered the Vessel from Marchand.
- Sinco sub-chartered the Vessel to Olam.
- Olam owed Sinco US$190,112 in demurrage.
- Marchand issued a notice of exercise of the Clause 18 lien to Olam.
- Sinco disputed Marchand’s exercise of the lien.
- Marchand paid Integr8 Sum to Integr8 pursuant to a settlement agreement between Marchand and Integr8.
5. Formal Citations
- Marchand Navigation Co v Olam Global Agri Pte Ltd and another, Originating Application No 138 of 2023, [2023] SGHC 339
6. Timeline
| Date | Event |
|---|---|
| Charterparty dated between Marchand and Sinco | |
| Bunkers supplied by Integr8 Fuels Inc to the Vessel | |
| Settlement agreement and addendum dated between Marchand and Integr8 | |
| Addendum to settlement agreement between Marchand and Integr8 | |
| Remittances made by Marchand to Integr8 began | |
| Sinco filed affidavit for Scheme of Arrangement | |
| Olam and Sinco agreed that the sum due under the Voyage Charter was US$190,112 | |
| Marchand issued a notice of exercise of the Clause 18 lien to Olam | |
| Remittances made by Marchand to Integr8 ended | |
| Integr8’s counsel informed Sinco’s counsel that the claim for the Integr8 Sum had been assigned in full to Marchand | |
| Justice Hri Kumar Nair noted that Sinco intended to pay off its bunker creditors in its Scheme of Arrangement proposal | |
| Sinco was added as a party to these proceedings | |
| Hearing date | |
| Hearing date | |
| Hearing date | |
| Judgment date |
7. Legal Issues
- Lien over Sub-Freights
- Outcome: The court held that Marchand was entitled to exercise its lien pursuant to Clause 18 of the Charterparty dated 29 April 2022 in respect of the US$190,112 owed by Olam to Sinco.
- Category: Substantive
- Sub-Issues:
- Amounts due under charter
- Exercise of lien against sub-charterer
- Related Cases:
- [2018] 2 SLR 129
- Stay of Court Proceedings
- Outcome: The court held that the existence of a dispute and the presence of the arbitration clause did not affect Marchand's right to exercise Clause 18 as against a sub-charterer.
- Category: Procedural
- Sub-Issues:
- What constitutes a dispute
- Effect of arbitration clause on lien
- Related Cases:
- [2009] 4 SLR(R) 732
8. Remedies Sought
- Determination that Marchand may exercise the Clause 18 lien
- Order that Olam shall pay to Marchand all hire, freight and/or demurrage due and owing from Olam to Sinco
9. Cause of Actions
- Exercise of Lien
- Breach of Charterparty
10. Practice Areas
- Admiralty
- Shipping
- Commercial Litigation
- Arbitration
11. Industries
- Shipping
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Diablo Fortune Inc v Duncan, Cameron Lindsay and another | Court of Appeal | Yes | [2018] 2 SLR 129 | Singapore | Considered the nature of the shipowner’s “lien” over sub-freights, sub-hires or demurrages and time for detention. |
| Samuel v West Hartlepool | N/A | Yes | (1906) 11 Com Cas 115 | N/A | Owners’ lien covered the cost of fuel and other disbursements incurred on the voyage, since these were the responsibility of the charterers and thus qualified as “amounts due under this Charter” under Clause 18. |
| Samuel v West Hartlepool | N/A | Yes | (1907) 12 Com Cas 203 | N/A | Owners’ lien covered the cost of fuel and other disbursements incurred on the voyage, since these were the responsibility of the charterers and thus qualified as “amounts due under this Charter” under Clause 18. |
| Alpha Marine Corp v Minmetals Logistics Zhejiang Co Ltd | N/A | Yes | [2021] Bus LR 1391 | N/A | The owners’ liquidated claim in relation to the bunkers was indeed a sum due under the charterparty. |
| Tjong Very Sumito and others v Antig Investments Pte Ltd | Court of Appeal | Yes | [2009] 4 SLR(R) 732 | Singapore | Established a high threshold before the court would find that something fell outside the scope of a “dispute” as defined in arbitration clauses. |
| Gulf International Holding Pte Ltd v Delta Offshore Energy Pte Ltd | High Court | Yes | [2023] SGHC 151 | Singapore | The debtor had simply sought multiple extensions of time to make repayment and did not dispute liability until before the court. |
| Care Shipping Corporation v Latin American Shipping Corporation | N/A | Yes | [1983] 1 QB 1005 | N/A | The fact that there appeared to be a dispute between Marchand and Sinco that could have been referrable to arbitration does not prevent Marchand’s exercise of the lien under Clause 18 as against a sub-charterer, Olam. |
| Getwick Engineers Limited v Pilecon Engineering Limited | N/A | Yes | [2002] 1020 HKCU 1 | Hong Kong | Where there had been an attempt to pay the amount claimed by way of a cheque, but where the cheque was subsequently dishonoured. Such a cheque, which would be treated as cash, would be regarded a clear and unequivocal admission of both liability and quantum |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Arbitration Act 1996 | England |
15. Key Terms and Keywords
15.1 Key Terms
- Lien
- Sub-freights
- Demurrage
- Charterparty
- Arbitration Clause
- NYPE
- Time Charter
- Voyage Charter
- Bunkers
- Integr8 Sum
15.2 Keywords
- lien
- sub-freights
- arbitration
- charterparty
- shipping
- demurrage
16. Subjects
- Admiralty and Shipping
- Carriage of Goods by Sea
- Liens
- Arbitration
- Stay of Court Proceedings
17. Areas of Law
- Admiralty Law
- Shipping Law
- Carriage of Goods by Sea
- Arbitration Law