KfW IPEX-Bank GmbH v Owner of WORLD DREAM: Ship Mortgage & Gaming Equipment Dispute

In KfW IPEX-Bank GmbH v Owner of the vessel “WORLD DREAM”, the General Division of the High Court of Singapore addressed whether a ship mortgage extended to gaming equipment on board the vessel “WORLD DREAM”. KfW IPEX-Bank GmbH (“KfW”) sought a determination that the mortgage included the gaming equipment, while World Dream Limited (“WDL”) applied for a declaration that it did not. The court dismissed WDL's application, holding that the mortgage encompassed the gaming equipment.

1. Case Overview

1.1 Court

General Division of the High Court

1.2 Outcome

Application dismissed.

1.3 Case Type

Admiralty

1.4 Judgment Type

Judgment

1.5 Jurisdiction

Singapore

1.6 Description

The High Court dismissed World Dream Limited's application, ruling that the ship mortgage extended to gaming equipment on board the vessel.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
KfW IPEX-Bank GmbHClaimantCorporationApplication granted in their favourWon
Owner of the vessel “WORLD DREAM” (IMO No. 9733117)DefendantCorporationApplication dismissedLost
World Dream LimitedDefendantCorporation

3. Judges

Judge NameTitleDelivered Judgment
S MohanJudge of the High CourtYes

4. Counsels

Counsel NameOrganization
Teo Jim YangAscendant Legal LLC
Edgar Chin Ren HoweAscendant Legal LLC
Ch’ng Cheng Yi SamanthaAscendant Legal LLC
Ang Hui Ming VivianAllen & Gledhill LLP
Douglas Lok Bao GuangAllen & Gledhill LLP
Ho Pey YannAllen & Gledhill LLP
Whang Yixuan RennieAllen & Gledhill LLP

4. Facts

  1. KfW IPEX-Bank GmbH (KfW) is a bank incorporated in Germany.
  2. World Dream Limited (WDL) owned the vessel “WORLD DREAM”.
  3. KfW granted WDL a term loan facility for the United States dollar equivalent of EUR 606,842,214.00.
  4. The loan was secured by a first priority mortgage over the Vessel.
  5. The WD Mortgage was executed in the Bahamian statutory form and registered on 26 October 2017.
  6. The Vessel had various facilities, including restaurants, bars, swimming pools, and gaming equipment.
  7. GHK commenced voluntary winding up proceedings on 18 January 2022.
  8. Default judgment was entered against WDL on 19 May 2022 by consent.
  9. The Vessel was sold by the Sheriff on 24 February 2023 for USD 330,000,000.00.
  10. WDL applied for a declaration that the gaming equipment did not fall within the scope of the ship mortgage.

5. Formal Citations

  1. The “World Dream”, Admiralty in Rem No 16 of 2022 (Summons No 2787 of 2023), [2024] SGHC 56

6. Timeline

DateEvent
Term loan facility agreement granted to WDL by Lenders
WD Mortgage executed and registered with Bahamian authorities
Facility agreement amended and restated by supplemental agreement
Similar term loan facility made available to EHL
Second supplemental agreement modifying the Facility Agreement concluded
CE Mortgage granted to KfW by EHL
GHK commenced voluntary winding up proceedings
Dream Cruises Holding Limited commenced voluntary winding up proceedings
KfW commenced HC/ADM 16/2022 and arrested the Vessel
Default judgment entered against WDL by consent
Order for appraisement and sale of the Vessel made
Winding up orders made in respect of GHK and Dream Cruises Holding Limited
WDL applied for leave to enter an appearance in ADM 16
Leave granted by parties’ consent
Vessel and its bunkers sold by the Sheriff
SUM 2787 filed by WDL
KfW applied for the priority of claims against the Sale Proceeds to be determined
SUM 2979 allowed but ordered that a sum of USD 1,500,000.00 be retained in court
Judgment reserved
Judgment

7. Legal Issues

  1. Scope of Ship Mortgage
    • Outcome: The court held that the ship mortgage extended to the gaming equipment on board the vessel.
    • Category: Substantive
    • Sub-Issues:
      • Interpretation of 'ship'
      • Interpretation of 'appurtenances'
      • Interpretation of 'belongings'
    • Related Cases:
      • (1890) 25 QBD 328
      • (1826) 5 B & C 155
      • [1993] 1 Lloyd’s Rep 106
      • (1823) 166 ER 39
      • (1875) 2 R (4th series) 339
  2. Interpretation of Contractual Terms
    • Outcome: The court applied established principles of contractual interpretation to determine the scope of the mortgage.
    • Category: Substantive
    • Sub-Issues:
      • Application of parol evidence rule
      • Ascertaining the meaning conveyed to a reasonable business person
      • Eschewing unreasonable interpretations
    • Related Cases:
      • [2008] 3 SLR(R) 1029

8. Remedies Sought

  1. Declaration that gaming equipment on board the vessel does not fall within the scope of the ship mortgage

9. Cause of Actions

  • Declaration regarding the scope of a ship mortgage

10. Practice Areas

  • Admiralty
  • Shipping
  • Practice and procedure of action in rem
  • Payment out of proceeds of sale
  • Contractual terms
  • Parol evidence rule
  • Interpretation of deeds

11. Industries

  • Banking
  • Shipping
  • Entertainment
  • Gambling

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Coltman v ChamberlainQueen's Bench DivisionYes(1890) 25 QBD 328England and WalesCited as persuasive authority on the meaning of the word “ship” as it appears in ship mortgages.
Gale v LaurieCourt of King’s BenchYes(1826) 5 B & C 155England and WalesCited for the proposition that articles on board which were needful for the accomplishment of the objects of the voyage were to be regarded as a part of the “ship”.
In re Salmon & Woods, Ex parte GouldNot specifiedYes(1885) 2 Mor Bky Cas 137England and WalesCited to support the interpretation of 'ship' to include items necessary for safe navigation.
OW Bunker and Trading Co Ltd A/S v Ship MV “Mawashi Al Gasseem” (No 2)Federal Court of AustraliaYes[2007] FCA 1139AustraliaCited for its reference to Nigel Meeson's Admiralty Jurisdiction and Practice, but ultimately disagreed with the interpretation presented.
The “Eurosun” and “Eurostar”Not specifiedYes[1993] 1 Lloyd’s Rep 106England and WalesCited for the ordinary meaning of the word ‘appurtenances’.
The “Dundee”High Court of AdmiraltyYes(1823) 166 ER 39England and WalesCited for the proposition that the word ‘appurtenances’ must not be construed with a mere reference to the abstract naked idea of a ship.
William John Armstrong and Company v D. M’Gregor and CompanyNot specifiedYes(1875) 2 R (4th series) 339ScotlandCited for the proposition that for an object to fall within the category of a vessel’s “belongings”, it must be “necessary for the [Vessel’s] voyage”.
St John v BullivantUpper Canada Court of Queen’s BenchYes(1881) 45 UCQB 614CanadaCited for the proposition that “mere furnishings”, especially those of an ornamental nature, will not ordinarily be viewed as falling within the scope of a ship’s “appurtenances”, but ultimately distinguished.
Zurich Insurance (Singapore) Pte Ltd v B Gold Interior Design & Construction Pte LtdCourt of AppealYes[2008] 3 SLR(R) 1029SingaporeCited for general principles of contractual interpretation.
Marc Rich & Co. Ltd. v Tourloti Compania Naviera S.A. (The “Kalliopi A”)Not specifiedYes[1988] 2 Lloyd’s Rep. 101England and WalesCited for the principle that the interpretation of a charter-party cannot be conducted solely on the basis of the ordinary English meaning of the words.
Kazakstan Wool Processors (Europe) Ltd v Nederlandsche Credietverzekering Maatschappij NVNot specifiedYes[2000] Lloyd’s Rep IR 371England and WalesCited for the principle that the court is not entitled to rewrite the bargain which they have made merely to accord with what the court thinks to be a more reasonable result.
Mohammed Shahid Late Mahabubur Rahman v Lim Keenly Builders Pte LtdHigh CourtYes[2010] 3 SLR 1021SingaporeCited for the principle that the contra proferentem rule does not permit the artificial creation of an ambiguity in order to reach a particular result.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
No applicable statutes

15. Key Terms and Keywords

15.1 Key Terms

  • Ship mortgage
  • Gaming equipment
  • Vessel
  • Appurtenances
  • Belongings
  • Facility agreement
  • WD Mortgage
  • WD Deed
  • Sale Proceeds
  • Ship

15.2 Keywords

  • Ship mortgage
  • gaming equipment
  • World Dream
  • Admiralty
  • Singapore
  • contractual interpretation

17. Areas of Law

Area NameRelevance Score
Ship Mortgage80
Admiralty and Maritime Law75
Contracts70
Banking and Finance65
Commercial Law60
Property Law55
Civil Practice50

16. Subjects

  • Admiralty
  • Shipping
  • Contract Law
  • Banking Law
  • Mortgages
  • Contractual Interpretation