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FOREIGN MARITIME LIENS AND LAW REFORM IN SINGAPORE
Introduction
The lack of uniformity between municipal maritime laws poses ‘serious legal and
practical difficulties’ for those dealing with maritime liens in the international
shipping context1. This paper submits that reforms to Singapore law are needed to
address these difficulties.
Problem with foreign maritime liens
The difficulties posed by maritime liens are twofold. Firstly, the terminology used to
describe the bundle of rights enjoyed by a maritime lienee (as understood under
Singapore law) varies between jurisdictions. In Singapore, a maritime lienee enjoys
‘an encumbrance over a ship or other res like cargo and freight’ which ‘accrues from
the moment the cause of action comes into being’, ‘travels secretively with the res’,
‘survives any change of ownership of the res’ and ‘is carried into effect by an action
in rem’2. He is also ‘accorded higher priority vis-à-vis other claimants such that he
enjoys a better chance of having his claim satisfied from the proceeds of sale for the
res’3. Contrastively, the bundle of rights approximate in nature to those
aforementioned is, inter alia, called ‘creances privilegiees’ in France and ‘preferential
debts against ships’ in the Netherlands4. Secondly, even if there is congruity in
terminology between two jurisdictions, there may still be divergence as to what types
of claimants deserve the status of a maritime lienee. In Commonwealth jurisdictions,
the concept of maritime lien is confined to a ‘small cluster’ of claims, being
‘seamen’s wages, master’s wages, master’s disbursements, salvage, damage done by a
ship, bottomry and respondentia’5. By comparison, the ‘concept of a maritime claim is
more widely received’ in ‘the United States and other civil law jurisdictions’6. Claims
for ‘necessaries and cargo damage, among others, are granted full status of maritime
1
D. R. Thomas, Maritime Liens, (London: Stevens & Sons, 1980) at Page 552 [Thomas]; Dr. P K Mukherjee,
“Thelaw of maritime liens and conflict of laws” (2003) 9 Journal of International Maritime Law at Page 545
[Murkherjee]
2
Toh Kian Sing, Admiralty Law and Practice, 2d ed. (Singapore: LexisNexis, 2007) at Page 237 [Toh]
3
Toh at Page 237
4
Mukherjee at Page 547
5
William Tetley, “MaritimeLiens in the Conflict of Laws” in James A.R. Nafziger and Symen C. Symeonides,
ed., Law and Justice in a MultistateWorld (New York: Transational Publisher, Inc. 2002) 437 at Page 443
[Tetley];Thomas at Page 308
6
Thomas at Page 552; Tetley at Page 443
liens by the relevant legislation and/or international conventions binding on these
States’7.
As such, complicated private international law questions arise when a claimant tries to
assert his bundle of rights created under foreign law (a foreign maritime lien) before
the Singapore High Court (SGHC). The first question is whether the SGHC has
admiralty jurisdiction under s. 3(1) of the High Court (Admiralty Jurisdiction) Act
(HC(AJ)A) to hear the claim8. The second question is whether the SGHC should
recognize and enforce the foreign maritime lien. In this context recognizing the
foreign maritime lien means ascertaining ‘the legal consequences attributable under
the foreign law to the events on which the claim was founded’ and accepting ‘the
existence of the claimant’s legal rights as derived from the application of foreign
law’9. Enforcing the foreign maritime lien means allowing the claimant to invoke the
admiralty jurisdiction of the SGHC by bringing an action in rem under s. 4 of the
HC(AJ)A. The third question is how should the SGHC prioritize the foreign maritime
lienee’s claim to the proceeds of the sale of the res.
Current position in Singapore
The current legal position in Singapore with regards to these questions is that stated
by Lord Diplock in Halcyon10. Although Singapore courts are no longer bound by
previous decisions of the Privy Council (PC), such decisions remain persuasive11.
Lord Diplock held that the SGHC has admiralty jurisdiction to hear claims
‘wheresoever arising’ in relation to ‘all ships’ as long as these claims fall within s.
3(1) of the HC(AJ)A12. He opined that s. 3(1) of the HC(AJ)A is ‘exhaustive’13.
7
Tetley at Page 443; Commercial Instruments and Maritime Liens Act 46 U.S.C. ss3130 et seq; Art. 31 of Law
No. 67-5 of Jan 3, 1967; Art. 4 of the International Convention for the Unification of Certain Rules of Law
Relating to Maritime Liens and Mortgages, 1926
8
High Court (Admiralty Jurisdiction) Act (Cap. 123, 2001 Rev. Ed. Sing.)
9
CA Ying, “Priorities and the Foreign Maritime Lien” (1982) 8 Adelaide Law Review 95 at Page 96 [Ying];
T.A.G. Beazley , “MaritimeLiens in the Conflict of Laws” 20 MalayaLaw Review 111 at Page 112 [Beazley];
Williams and HumbertLtd v. W. & H. TradeMarks (Jersey) Ltd. and Multinvest (U.K.) Ltd. and Others [1986] 1
A.C. 368
10
Bankers Trust International Ltd v. Todd Shipyards Corp (The Halycon Isle) [1981] AC 221 at Page 239
[Halcyon]
11
Practice Statement (Judicial Precedent) [1994] SGCA 148
12
S. 3(4) of theHC(AJ)A
13
Halcyon at Page 239
Lord Diplock also held that the SGHC will only recognize and enforce a foreign
maritime lien if ‘the events on which the claim is founded would have given rise to a
maritime lien’ under Singapore law as the lex fori14. He gave three reasons for this.
First, a maritime lien is procedural in nature. It is ‘devoid of any legal consequences
unless carried into effect by a legal process’15. Second, the court ‘must be able to act
with neutrality between competing creditors whose rights have been acquired under
different jurisdictions’16. Hence, it ‘would be unjust to give full effect to a creditor’s
rights acquired under a particular system of law to the detriment of other creditors’17.
Third, the categories of claims giving rise to maritime liens should be minimized.
This is because a maritime lien is an ‘unregistered encumbrance’ on a ship ‘capable of
binding’ ignorant third parties18. The recognition of foreign maritime liens would
‘exacerbate this problem’19.
Finally, Lord Diplock held that the SGHC will prioritize claims in accordance with
Singapore law as the lex fori. This is because ‘priorities as between claimants to a
limited fund are matters of procedure’20. Since the SGHC will only recognize and
enforce a foreign maritime lien if the events on which the claim is founded would
have given rise to a maritime lien under Singapore law as the lex fori, these foreign
maritime liens rank as maritime liens (as understood under Singapore law).
Reforms necessary
The current legal position in Singapore is undesirable. Firstly, the position in Halcyon
ignores the ‘substantive characteristics’ of the maritime lien21. The maritime lien
‘exists from the event creating it’ and may ‘accrue independent of personal
liability’22. It is enforceable against a bona fide purchaser, but only with regards to the
property involved in the claim23. Additionally, if one were to adopt the approach
taken by the Australian High Court in Pfeiffer, it is difficult to see how the
recognition of a maritime lien can be properly characterized as procedural. It clearly
14
Halcyon at Page 238
15
Halcyon at Page 234
16
Toh at Page 246; Halcyon at Page 231
17
Toh at Page 246; Halcyon at Page 231
18
Toh at Page 246; Halcyon at Page 240
19
Toh at Page 246
20
Halcyon at Page 230
21
D. C. Jackson, Enforcement of Maritime Claims, 4th
ed. (London: LLP: 2005) at Para 17.57 [Jackson]
22
Republic of India and Another v. India Steamship Co. Ltd. (No. 2) [1998] A.C. 879 at Page 908
23
Jackson at Para 17.59
‘affects the existence, extent or enforceability of the rights or duties of the parties to
an action’24.
Secondly, the position in Halcyon means that the rights in a vessel are determined
significantly by ‘chance’25. Whether a claimant has a maritime lien or not depends on
the law of the ‘place where the ship is arrested’. This is fortuitous and limited to ‘one
of the countries that the vessel visits’26. Further, if ‘the ship is arrested by one
claimant, the other claimants have no choice about where the proceedings take
place’27. As a result, stakeholders in the shipping industry plan their businesses
‘unable to know with certainty the legal consequences of their actions’28.
Thirdly, the position in Halcyon contravenes the comity of nations. Comity in this
context means ‘the recognition which one nation allows to the legislative, executive
or judicial acts of another nation, having due regard both to international duty and
convenience, and to the interests of its own citizens’29. While comity is ‘not a matter
of absolute obligation’ under public international law, it is a necessity in these modern
times. This is because comity is crucial in facilitating ‘the flow of wealth, skills and
people across state lines a fair and orderly manner’30. It is important for a global city-
state like Singapore to exercise comity. A difficult aspect of comity is finding the
appropriate levels of ‘deference and respect’31. A right balance has to be struck
between foreign and domestic interests. In this regard, the position in Halcyon leaves
no room for balancing. Foreign creditors are wholly subjugated by Singapore law as
the lex fori. Furthermore, it perpetuates the impression that the Singapore courts are
chauvinistically protecting banks against ‘the impairment of their security’32. This
24
John Pfeiffer Pty Ld v. Rogerson (2000) 203 CLR 503 at Para 97 [Pfeiffer]
25
John M. Kriz, “Ship Mortgages, Maritime Liens And their Enforcement: TheBrussels Conventions of 1926 and
1952”, (1963) Duke Law Journal 671 at Page 672
26
Martin Davies and Kate Lewins, “Foreign Maritime Liens: Should They be Recognized in Australian Courts?”,
(2002) 76 The Australian Law Journal 775 at Page 781 [Davies]
27
Davies Page 781
28
Brian R Opeskin, “ThePrice of Forum Shopping”, (1994) 16 Sydney Law Review 14 at Page 27
29
De Savoye v. Morguard Investments Limited v. Credit Foncier TrustCompany [1990] 3 S.C.R. 1077 at Para 31
[Morguard] [emphasis added]; Poh Soon Kiat v. Desert Palace Inc (trading as Caesars Palace) [2009] SGCA 60
at Para 37 [Poh]
30
Morguard at Para 31
31
Poh at Para 37
32
Michael Marks Cohen, “In Defense of Halcyon Isle”, (1987) Llyod’s Maritimeand Commercial Law Quarterly
152 at Page 154 [Cohen]
‘excessive regard to the interests of one party over others’ means that Singapore risk
becoming ‘unattractive to foreign shipping’33.
Thus, reforms are needed if Singapore is to continue to ‘enhance modern international
trade’34. It should be noted there are diverse stakeholders in the Singapore shipping
industry. Singapore ‘sits at the centre of a web of trade routes and is connected to
more than 600 ports in over 120 countries’35. It is a ‘top bunkering port’36. A wide
range of marine services is available in Singapore. These include pilotage, towage,
ship supplies and ship-repair facilities37. As of 2013, 4379 ships are registered on the
Singapore Shipping Registry38. Banks are heavily involved in the shipping business39.
Any reform must achieve an even-handed result between these stakeholders. The
suggested reforms can also be divided into four categories: (1) jurisdiction, (2)
recognition, (3) enforcement and (4) priorities.
Jurisdiction
This paper submits that Parliament should amend the HC(AJ)A to vest the SGHC
with the admiralty jurisdiction to hear any claim in respect of a foreign maritime
lien40.
The wide words ‘any claim in respect of a foreign maritime lien’ are used so that
admiralty jurisdiction in this regard will not be unduly restricted. There must
nevertheless be a ‘defined link’ between the claim and the foreign maritime lien41. It
is neither ‘necessary nor desirable’ to attempt to formulate ‘a more comprehensive
test’42. A claimant conferred a foreign maritime lien under foreign law would clearly
have ‘a claim in respect of a foreign maritime lien’.
33
Civil Admiralty Jurisdiction (ALRC Report 33 1986) at Para 96 [ALRC Report]
34
Myburgh PA “TheShip Supplier’s Lien: Taking a (MapleLeaf out of the Canadian StatuteBook?” [2010] Asia-
Pacific Law Review 279 [Myburgh]
35
http://www.mpa.gov.sg/sites/maritime_singapore/what_is_maritime_singapore/premier_hub_port.page
36
http://www.mpa.gov.sg/sites/maritime_singapore/what_is_maritime_singapore/premier_hub_port.page
37
http://www.mpa.gov.sg/sites/maritime_singapore/what_is_maritime_singapore/premier_hub_port.page
38
http://www.sgmarineindustries.com/Indprof/SSOI/ED05_Statistics.pdf
39
Cohen at Page 154
40
Appendix
41
The Alexandrea [2002] SGHC 82 at Para 27
42
The Indriani [1996] SGCA 2 at Para 12
It may be possible to argue that the SGHC already has inherent admiralty jurisdiction
to hear any claim in respect of a foreign maritime lien, even if the claim does not fall
within the current ambit of s. 3(1) of the HC(AJ)A. This is because the inherent
jurisdiction of the Singapore courts arises from ‘its status and role as a court’ rather
than an ‘external vesting source’ such as the HC(AJ)A43. However, it is better to put
this matter beyond doubt through the amendment suggested above. The suggested
amendment is also necessary because there is no ‘sweeping up’ provision to capture
any subject matter jurisdiction not covered under s. 3(1) of the HC(AJ)A44. S. 3(1) of
the HC(AJ)A is ‘worded differently from the sweeping-up provision of s. 1(1) of the
Administration of Justice Act 1956’45. Thus, it is likely that this omission is
‘deliberate with the consequence that there is no sweeping up jurisdiction in
Singapore’46.
The practical effect of this amendment is that the SGHC will have admiralty
jurisdiction to hear a claim if the events on which the claim was founded gives rise to
a bundle of rights under foreign law similar in nature to the bundle of rights
recognized as attaching to a maritime lien under Singapore law. This is so regardless
of whether the claim falls within the current ambit of s. 3(1)(a)-(r) of the HC(AJ)A.
There may be an increase of litigation in Singapore because the SGHC will now
clearly have broader admiralty jurisdiction to hear claims in respect of foreign
maritime liens47. Keeping in mind the justifications for reform, this broadening of the
admiralty jurisdiction is a principled one and still within acceptable international
norms. Both s. 2(1) read with s. 1(1)(ee) of the Admiralty Jurisdiction Regulation Act
105 (AJRA) in South Africa and s. 22(1) read with s. 2 of the Federal Court Act
(FCA) in Canada achieve the same sort of broadening effect48. In Har, Le Dain J held
43
Jeffrey Pinsler, “TheInherent Powers of the Court”[1997] Singapore Journal of Legal Studies 1 at Page 10
44
Toh at Page 89
45
Toh at Page 89
46
Toh at Page 90
47
Contra s. 20 of the Senior Courts Act 1981 (U.K.), 1981, c. 54; Lord Diplock in Halcyon at Page 239 stating that
s. 3(1) of theHC(AJ)A is ‘exhaustive’
48
s. 2(1) read with s. 1(1)(ee) of the AJRA inter alia, reads ‘that the Supreme Court of South Africa shall have
jurisdiction to hear and determine any other matter which virtue of its nature or subject matter is a marine or
maritime matter, the meaning of the expression marine or maritime matter not being limited by reason of the
matters set forth in the preceding paragraphs’; Cf s. 2(1) read with s. 1(1)(y) of theof the Admiralty Jurisdiction
Regulation Act 105 of 1983 in South Africa; Query how the phrase‘any maritime lien, whether or not falling
under any of thepreceding paragraphs’ will be interpreted in light of thedecision by the Supreme Court of Africa
in Transol Bunker B.V. v. Motor Vessel “Andrico Unity” her owners and any parties interested in her; Grecian-
Mar SRL v. Motor Vessel “Andrico Unity” er owners and any parties interested in her 1987 (4) SA 325 (A) at
Page 334 to 336 [Andrico];
that these provisions allowed the Federal courts to exercise ‘jurisdiction to enforce a
maritime lien’ ‘in addition’ to that listed under s. 22(2) of the FCA49. Therefore, ‘the
limitation imposed’ under s. 43(3) of the FCA on a claim brought in respect of s.
22(2)(m) of the FCA did not apply in that case50.
Recognition
This paper submits that Parliament should also issue an explanatory statement within
the meaning of s. 9A(3)(b) of the Interpretation Act defining a ‘foreign maritime
lien’51. In this regard, a ‘foreign maritime lien’ should be defined as a ‘the bundle of
rights under foreign law similar in nature to the bundle of rights recognized as
attaching to a maritime lien under Singapore law’52. Thus, the courts must engage in a
two-stage process to determine the existence of a foreign maritime lien.
At the first stage, the court should ‘analyze the nature of the rights created by the
application of the foreign law’53. The relevant foreign law to be applied can be
determined by the existing private international law rules of Singapore. In this regard,
the Singapore courts will embark on a three-fold process involving: ‘(a) the
characterization of the relevant issue, (a) the selection of the choice of law rule which
lays down a ‘connecting factor’ for that particular issue and (c) the identification of
the system of law which is tied by that connecting factor to the relevant issue’54. The
nature of the claimant’s rights in the ship would usually be characterized as a property
issue to be governed by the lex situs. This is because ‘the interests of third parties in
the form of a general body of creditors are clearly affected’55. Determining the situs of
a vessel is a vexed problem. It warrants a detailed discussion outside the scope of this
paper. Provisionally, it is submitted that a merchant ship is situated ‘in a country
where it is at any given time’, though she may be deemed ‘to be situate at her port of
registry’ when she is ‘not situated in territorial waters’56. We might query whether the
conflicts approach known as the ‘multiple-contact test’ used in Lauritzen in the US
49
The Har Rai [1984] 2 F.C. 345 at Para 12 [Har]; Tetley at Page 8
50
Har at Para 12; Tetley at Page 8
51
Interpretation Act (Cap. 1, 2002 Rev. Ed. Sing.)
52
Ying at Page 99
53
Beazley at Page 112
54
WestLB AG v. Phillippine National Bank and others [2012] SGHC 162 at Para 79
55
Halcyon at Page 231
56
Sir Lawrence Collins, Dicey, Morris and Collins on The Conflict of Laws, 14th
ed. (London: Sweet & Maxwell,
2006) at Para 22E-057
should be adopted57. The multiple-contact approach can ‘degenerate into a mere
numerical counting of contacts’58.
At the second stage, the court must then decide ‘whether that bundle of rights created
under foreign law is sufficiently equivalent to the bundle of rights called a maritime
lien under Singapore law’59. The courts should look for indicia such as whether the
bundle of rights (1) is ‘an encumbrance over a ship or other res’, (2) accrues ‘from the
moment the cause of action comes into being’, (3) travels ‘secretively with the res’,
(4) survives ‘any change of ownership of the res’, (5) is ‘carried into effect by an
action in rem’ and (6) affords ‘the holder higher priority vis-à-vis other claimants
such that he enjoys a better chance of having his claim satisfied from the proceeds of
sale for the res’60.
This approach will put Singapore at odds with countries such as South Africa, New
Zealand and Australia, which have adopted the position in Halcyon61. However, it is
submitted that the proposed position is better. This is because it gives effect to the
‘substantive characteristics’ of a maritime lien62. A foreign maritime lien ‘cannot be
shaken off by changing the location of the res’63. Crucially, the types of claims that
can give rise to a foreign maritime lien are also not limited to those ‘presently existing
under Singapore law’64. Practically, this explanatory statement will also allow
claimants to know clearly whether they have a foreign maritime lien in a ship arrested
in Singapore. The two-stage process brings some certainty to this area of the law.
There are established precedents guiding its application. It is similar to the approach
taken by Bankes L.J. in Colorado and Ritchie J in Ioannis65. In Colorado, Bankes L.J.
held that ‘what rights created by the so-called mortgage deed’ must ‘be determined
according to French law as the contract was made in France. Consequently, the
57
William F. Dougherty, “Multi-Contact Analysis for a MultinationalIndustry:TheUnited States Approach to
Choice of Law Analysis in theEnforcement of Maritime Liens” 13 U.S.F. Maritime Law Journal 75 at Page 82
[Dougherty]; Lauritzen v. Larsen 345 U.S. 571, 953 AMC 1210 (1953)
58
Dougherty at Page 81
59
Beazley at Page 112
60
Toh at Page 237
61
Fournier v. The Margaret Z [1999] 3 NZLR 111; Morlines Maritime Agency v. The Proceeds of Sale of the Ship
Skulptor Vuchetich [1997] FCA 1627; Andrico
62
Jackson at Para 17.57
63
The Ioannis Daskalelis [1974] S.C.R. 1248 [Ioannis]
64
Toh at Page 237
65
Hills Dry Docks & Engineering Company Ltd v. “Colorado” Lloyds Law Reports Vol. 14 No. 5 146 at Page
148 [Colorado]; Ioannis at Page 1259
‘mortgage hypotheque in France’ was also held to be ‘a security in the nature of a
maritime lien’ in England, quite ‘distinct from an English maritime mortgage’66. In
Ioannis, Ritchie J held that ‘the nature of the right in rem fell to be determined
according to the lex loci’ which was US law67.
Enforcement
This paper submits that Parliament should amend the HC(AJ)A to allow a claimant
with a foreign maritime lien on a ship or other property to bring an action in rem
against that ship or other property under s. 4(3) of the HC(AJ)A68. The claimant with
a foreign maritime lien on a ship or other property should not be allowed to bring an
action in rem under s. 4(4) of the HC(AJ)A.
Parliament, in legislating for the recognition and enforcement of foreign maritime
liens, is for all practical purposes creating a new class of maritime lien beyond those
presently existing under Singapore law. This is because, as observed earlier, a foreign
maritime lien is better viewed as a substantive right which accrues in the ship from
the moment the cause of action comes into being. It would be contradictory to then
afford the foreign maritime lienee a statutory right of action in rem, which is a
procedural right against the ship and its sister ships. Further, such an approach is in
the spirit of comity. It sends the message that Singapore is willing to accord the
appropriate levels of respect to the laws of the foreign state by elevating the status of
a foreign maritime lienee.
The consequence of recognizing and enforcing ‘a foreign maritime lien (for example
for good supplied to a ship) where the equivalent local claim does not give rise to a
lien’ is to potentially ‘give the foreign claimant priority over the local one, even
where the foreign law’s classification of the claim as a lien is out of line with any
international consensus on the scope of liens’69. This problem can be illustrated using
the case of US and Canada. In the US, the ‘Maritime Lien Act of 1910 conferred a
66
Thomas at Para 552
67
Ioannis at Page 1259
68
Appendix
69
ALRC Report at Para 123
lien for the suppliers of necessaries’70. For Canada, this brought about ‘a problem
where it would enforce the liens of American necessaries suppliers, but would not
give a lien status to suppliers of necessaries in Canada’71. The Canadian lawmakers
remedied this by introducing s. 139 of the Marine Liability Act 2001, which basically
conferred a necessaries supplier in Canada a maritime lien over foreign vessels72.
It is submitted that legislative reform in the manner adopted in Canada is not
necessary to avoid prejudice against local stakeholders. The Canadian legislation,
though a step in the right direction, is myopic. It ‘perpetuates the same inequitable
treatment against a third country ship suppliers that the Canadian ship suppliers had
been lamenting’ by ‘favoring Canadian and US ship suppliers above all others’73.
Furthermore, it is ‘not carefully integrated into the structure of the existing Canadian
admiralty jurisdiction’74. Instead, two alternative solutions are already available. First,
a Singapore court may refuse on the grounds of public policy to recognize a foreign
maritime lien if to do so would lead to an unacceptably unjust result75. In the case
where a foreign state’s ‘classification of the claim as a lien is so out of line with any
international consensus on the scope of liens’, the Singapore courts can refuse to
recognize a foreign maritime lien from that state76. Second, the admiralty principles of
priority are not ‘immutable’77. A Singapore court may prioritize the foreign maritime
lienee lowly if the ‘equities or policy considerations’ of a particular case calls for it78.
Priorities
This paper submits that no reforms are needed to the current admiralty principles of
priority. In this regard, a codification of the laws relating to priorities in the form of s.
11 of the AJRA is not recommended as such a ‘legislative restatement would tend to
lack the flexibility needed to do justice in an unusual fact situation’79. Where the
Singapore court is required to rank the rights in a ship involving foreign claimants
70
Norman Letalik, “Forum Shopping comes to Canada: The Recognition of Foreign MaritimeLiens” in The
regulation of international shipping: international and comparative perspectives: essays in honor of Edgar Gold
(Boston:Martinus Nijhoff Publishers, 2012) 525 at Page 527 [Letalik]; Ioannis
71
Letalik at Page 527
72
Letalik at Page 527
73
Myburgh
74
Myburgh
75
Kuwait Airways Corpn v. Iraqi Airways Co (No. 4 and 5) [2002] UKHL 19 [Kuwait]
76
Kuwait
77
Toh at Page 325
78
Toh at Page 325
79
ALRC Report at Para 257
from the same foreign jurisdiction whose rights arise under the same foreign law, the
Singapore court should consider applying the priorities rules of that foreign law80.
APPENDIX
80
Tetley at Page 15
Parliament should amend s. 3(1) of the HC(AJ)A by including a new subsection, s.
3(1)(s) of the HC(AJ)A. S. 3(1)(s) of the HC(AJ)A should read: ‘The admiralty
jurisdiction of the High Court shall be as follows, that is to say, jurisdiction to hear
and determine any of the following questions or claims: any claim in respect of a
foreign maritime lien’
Parliament should issue an explanatory statement within the meaning of s. 9A(3)(b) of
the Interpretation Act defining a ‘foreign maritime lien’. In this regard, a ‘foreign
maritime lien’ should be defined as a ‘the bundle of rights under foreign law similar
in nature to the bundle of rights recognized as attaching to a maritime lien under
Singapore law’
Parliament should amend s. 4(3) of the HC(AJ)A to read: ‘In any case in which there
is a maritime lien, other charge or foreign maritime lien on any ship, aircraft or other
property for the amount claimed, the admiralty jurisdiction of the High Court may be
invoked by an action in rem against that ship, aircraft or property’
BIBLIOGRAPHY
D. R. Thomas, Maritime Liens, (London: Stevens & Sons, 1980) at Page 552
Dr. P K Mukherjee, “The law of maritime liens and conflict of laws” (2003) 9 Journal
of International Maritime Law at Page 545
Toh Kian Sing, Admiralty Law and Practice, 2d ed. (Singapore: LexisNexis, 2007) at
Page 237
William Tetley, “Maritime Liens in the Conflict of Laws” in James A.R. Nafziger and
Symen C. Symeonides, ed., Law and Justice in a Multistate World (New York:
Transational Publisher, Inc. 2002) 437 at Page 443
CA Ying, “Priorities and the Foreign Maritime Lien” (1982) 8 Adelaide Law Review
95 at Page 96 [Ying]
T.A.G. Beazley , “Maritime Liens in the Conflict of Laws” 20 Malaya Law Review
111 at Page 112
D. C. Jackson, Enforcement of Maritime Claims, 4th ed. (London: LLP: 2005) at Para
17.57
John M. Kriz, “Ship Mortgages, Maritime Liens And their Enforcement: The Brussels
Conventions of 1926 and 1952”, (1963) Duke Law Journal 671 at Page 672
Martin Davies and Kate Lewins, “Foreign Maritime Liens: Should They be
Recognized in Australian Courts?”, (2002) 76 The Australian Law Journal 775 at
Page 781
Brian R Opeskin, “The Price of Forum Shopping”, (1994) 16 Sydney Law Review 14
at Page 27
Michael Marks Cohen, “In Defense of Halcyon Isle”, (1987) Llyod’s Maritime and
Commercial Law Quarterly 152 at Page 154
Civil Admiralty Jurisdiction (ALRC Report 33 1986) at Para 96
http://www.mpa.gov.sg/sites/maritime_singapore/what_is_maritime_singapore/premi
er_hub_port.page
http://www.sgmarineindustries.com/Indprof/SSOI/ED05_Statistics.pdf
Jeffrey Pinsler, “The Inherent Powers of the Court” [1997] Singapore Journal of
Legal Studies 1 at Page 10
Sir Lawrence Collins, Dicey, Morris and Collins on The Conflict of Laws, 14th ed.
(London: Sweet & Maxwell, 2006) at Para 22E-057
William F. Dougherty, “Multi-Contact Analysis for a Multinational Industry: The
United States Approach to Choice of Law Analysis in the Enforcement of Maritime
Liens” 13 U.S.F. Maritime Law Journal 75
Norman Letalik, “Forum Shopping comes to Canada: The Recognition of Foreign
Maritime Liens” in The regulation of international shipping: international and
comparative perspectives: essays in honor of Edgar Gold (Boston: Martinus Nijhoff
Publishers, 2012) 525
Myburgh PA “The Ship Supplier’s Lien: Taking a (Maple Leaf out of the Canadian
Statute Book?” [2010] Asia-Pacific Law Review 279

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Maritime Liens and Law Reform in Singapore

  • 1. FOREIGN MARITIME LIENS AND LAW REFORM IN SINGAPORE Introduction The lack of uniformity between municipal maritime laws poses ‘serious legal and practical difficulties’ for those dealing with maritime liens in the international shipping context1. This paper submits that reforms to Singapore law are needed to address these difficulties. Problem with foreign maritime liens The difficulties posed by maritime liens are twofold. Firstly, the terminology used to describe the bundle of rights enjoyed by a maritime lienee (as understood under Singapore law) varies between jurisdictions. In Singapore, a maritime lienee enjoys ‘an encumbrance over a ship or other res like cargo and freight’ which ‘accrues from the moment the cause of action comes into being’, ‘travels secretively with the res’, ‘survives any change of ownership of the res’ and ‘is carried into effect by an action in rem’2. He is also ‘accorded higher priority vis-à-vis other claimants such that he enjoys a better chance of having his claim satisfied from the proceeds of sale for the res’3. Contrastively, the bundle of rights approximate in nature to those aforementioned is, inter alia, called ‘creances privilegiees’ in France and ‘preferential debts against ships’ in the Netherlands4. Secondly, even if there is congruity in terminology between two jurisdictions, there may still be divergence as to what types of claimants deserve the status of a maritime lienee. In Commonwealth jurisdictions, the concept of maritime lien is confined to a ‘small cluster’ of claims, being ‘seamen’s wages, master’s wages, master’s disbursements, salvage, damage done by a ship, bottomry and respondentia’5. By comparison, the ‘concept of a maritime claim is more widely received’ in ‘the United States and other civil law jurisdictions’6. Claims for ‘necessaries and cargo damage, among others, are granted full status of maritime 1 D. R. Thomas, Maritime Liens, (London: Stevens & Sons, 1980) at Page 552 [Thomas]; Dr. P K Mukherjee, “Thelaw of maritime liens and conflict of laws” (2003) 9 Journal of International Maritime Law at Page 545 [Murkherjee] 2 Toh Kian Sing, Admiralty Law and Practice, 2d ed. (Singapore: LexisNexis, 2007) at Page 237 [Toh] 3 Toh at Page 237 4 Mukherjee at Page 547 5 William Tetley, “MaritimeLiens in the Conflict of Laws” in James A.R. Nafziger and Symen C. Symeonides, ed., Law and Justice in a MultistateWorld (New York: Transational Publisher, Inc. 2002) 437 at Page 443 [Tetley];Thomas at Page 308 6 Thomas at Page 552; Tetley at Page 443
  • 2. liens by the relevant legislation and/or international conventions binding on these States’7. As such, complicated private international law questions arise when a claimant tries to assert his bundle of rights created under foreign law (a foreign maritime lien) before the Singapore High Court (SGHC). The first question is whether the SGHC has admiralty jurisdiction under s. 3(1) of the High Court (Admiralty Jurisdiction) Act (HC(AJ)A) to hear the claim8. The second question is whether the SGHC should recognize and enforce the foreign maritime lien. In this context recognizing the foreign maritime lien means ascertaining ‘the legal consequences attributable under the foreign law to the events on which the claim was founded’ and accepting ‘the existence of the claimant’s legal rights as derived from the application of foreign law’9. Enforcing the foreign maritime lien means allowing the claimant to invoke the admiralty jurisdiction of the SGHC by bringing an action in rem under s. 4 of the HC(AJ)A. The third question is how should the SGHC prioritize the foreign maritime lienee’s claim to the proceeds of the sale of the res. Current position in Singapore The current legal position in Singapore with regards to these questions is that stated by Lord Diplock in Halcyon10. Although Singapore courts are no longer bound by previous decisions of the Privy Council (PC), such decisions remain persuasive11. Lord Diplock held that the SGHC has admiralty jurisdiction to hear claims ‘wheresoever arising’ in relation to ‘all ships’ as long as these claims fall within s. 3(1) of the HC(AJ)A12. He opined that s. 3(1) of the HC(AJ)A is ‘exhaustive’13. 7 Tetley at Page 443; Commercial Instruments and Maritime Liens Act 46 U.S.C. ss3130 et seq; Art. 31 of Law No. 67-5 of Jan 3, 1967; Art. 4 of the International Convention for the Unification of Certain Rules of Law Relating to Maritime Liens and Mortgages, 1926 8 High Court (Admiralty Jurisdiction) Act (Cap. 123, 2001 Rev. Ed. Sing.) 9 CA Ying, “Priorities and the Foreign Maritime Lien” (1982) 8 Adelaide Law Review 95 at Page 96 [Ying]; T.A.G. Beazley , “MaritimeLiens in the Conflict of Laws” 20 MalayaLaw Review 111 at Page 112 [Beazley]; Williams and HumbertLtd v. W. & H. TradeMarks (Jersey) Ltd. and Multinvest (U.K.) Ltd. and Others [1986] 1 A.C. 368 10 Bankers Trust International Ltd v. Todd Shipyards Corp (The Halycon Isle) [1981] AC 221 at Page 239 [Halcyon] 11 Practice Statement (Judicial Precedent) [1994] SGCA 148 12 S. 3(4) of theHC(AJ)A 13 Halcyon at Page 239
  • 3. Lord Diplock also held that the SGHC will only recognize and enforce a foreign maritime lien if ‘the events on which the claim is founded would have given rise to a maritime lien’ under Singapore law as the lex fori14. He gave three reasons for this. First, a maritime lien is procedural in nature. It is ‘devoid of any legal consequences unless carried into effect by a legal process’15. Second, the court ‘must be able to act with neutrality between competing creditors whose rights have been acquired under different jurisdictions’16. Hence, it ‘would be unjust to give full effect to a creditor’s rights acquired under a particular system of law to the detriment of other creditors’17. Third, the categories of claims giving rise to maritime liens should be minimized. This is because a maritime lien is an ‘unregistered encumbrance’ on a ship ‘capable of binding’ ignorant third parties18. The recognition of foreign maritime liens would ‘exacerbate this problem’19. Finally, Lord Diplock held that the SGHC will prioritize claims in accordance with Singapore law as the lex fori. This is because ‘priorities as between claimants to a limited fund are matters of procedure’20. Since the SGHC will only recognize and enforce a foreign maritime lien if the events on which the claim is founded would have given rise to a maritime lien under Singapore law as the lex fori, these foreign maritime liens rank as maritime liens (as understood under Singapore law). Reforms necessary The current legal position in Singapore is undesirable. Firstly, the position in Halcyon ignores the ‘substantive characteristics’ of the maritime lien21. The maritime lien ‘exists from the event creating it’ and may ‘accrue independent of personal liability’22. It is enforceable against a bona fide purchaser, but only with regards to the property involved in the claim23. Additionally, if one were to adopt the approach taken by the Australian High Court in Pfeiffer, it is difficult to see how the recognition of a maritime lien can be properly characterized as procedural. It clearly 14 Halcyon at Page 238 15 Halcyon at Page 234 16 Toh at Page 246; Halcyon at Page 231 17 Toh at Page 246; Halcyon at Page 231 18 Toh at Page 246; Halcyon at Page 240 19 Toh at Page 246 20 Halcyon at Page 230 21 D. C. Jackson, Enforcement of Maritime Claims, 4th ed. (London: LLP: 2005) at Para 17.57 [Jackson] 22 Republic of India and Another v. India Steamship Co. Ltd. (No. 2) [1998] A.C. 879 at Page 908 23 Jackson at Para 17.59
  • 4. ‘affects the existence, extent or enforceability of the rights or duties of the parties to an action’24. Secondly, the position in Halcyon means that the rights in a vessel are determined significantly by ‘chance’25. Whether a claimant has a maritime lien or not depends on the law of the ‘place where the ship is arrested’. This is fortuitous and limited to ‘one of the countries that the vessel visits’26. Further, if ‘the ship is arrested by one claimant, the other claimants have no choice about where the proceedings take place’27. As a result, stakeholders in the shipping industry plan their businesses ‘unable to know with certainty the legal consequences of their actions’28. Thirdly, the position in Halcyon contravenes the comity of nations. Comity in this context means ‘the recognition which one nation allows to the legislative, executive or judicial acts of another nation, having due regard both to international duty and convenience, and to the interests of its own citizens’29. While comity is ‘not a matter of absolute obligation’ under public international law, it is a necessity in these modern times. This is because comity is crucial in facilitating ‘the flow of wealth, skills and people across state lines a fair and orderly manner’30. It is important for a global city- state like Singapore to exercise comity. A difficult aspect of comity is finding the appropriate levels of ‘deference and respect’31. A right balance has to be struck between foreign and domestic interests. In this regard, the position in Halcyon leaves no room for balancing. Foreign creditors are wholly subjugated by Singapore law as the lex fori. Furthermore, it perpetuates the impression that the Singapore courts are chauvinistically protecting banks against ‘the impairment of their security’32. This 24 John Pfeiffer Pty Ld v. Rogerson (2000) 203 CLR 503 at Para 97 [Pfeiffer] 25 John M. Kriz, “Ship Mortgages, Maritime Liens And their Enforcement: TheBrussels Conventions of 1926 and 1952”, (1963) Duke Law Journal 671 at Page 672 26 Martin Davies and Kate Lewins, “Foreign Maritime Liens: Should They be Recognized in Australian Courts?”, (2002) 76 The Australian Law Journal 775 at Page 781 [Davies] 27 Davies Page 781 28 Brian R Opeskin, “ThePrice of Forum Shopping”, (1994) 16 Sydney Law Review 14 at Page 27 29 De Savoye v. Morguard Investments Limited v. Credit Foncier TrustCompany [1990] 3 S.C.R. 1077 at Para 31 [Morguard] [emphasis added]; Poh Soon Kiat v. Desert Palace Inc (trading as Caesars Palace) [2009] SGCA 60 at Para 37 [Poh] 30 Morguard at Para 31 31 Poh at Para 37 32 Michael Marks Cohen, “In Defense of Halcyon Isle”, (1987) Llyod’s Maritimeand Commercial Law Quarterly 152 at Page 154 [Cohen]
  • 5. ‘excessive regard to the interests of one party over others’ means that Singapore risk becoming ‘unattractive to foreign shipping’33. Thus, reforms are needed if Singapore is to continue to ‘enhance modern international trade’34. It should be noted there are diverse stakeholders in the Singapore shipping industry. Singapore ‘sits at the centre of a web of trade routes and is connected to more than 600 ports in over 120 countries’35. It is a ‘top bunkering port’36. A wide range of marine services is available in Singapore. These include pilotage, towage, ship supplies and ship-repair facilities37. As of 2013, 4379 ships are registered on the Singapore Shipping Registry38. Banks are heavily involved in the shipping business39. Any reform must achieve an even-handed result between these stakeholders. The suggested reforms can also be divided into four categories: (1) jurisdiction, (2) recognition, (3) enforcement and (4) priorities. Jurisdiction This paper submits that Parliament should amend the HC(AJ)A to vest the SGHC with the admiralty jurisdiction to hear any claim in respect of a foreign maritime lien40. The wide words ‘any claim in respect of a foreign maritime lien’ are used so that admiralty jurisdiction in this regard will not be unduly restricted. There must nevertheless be a ‘defined link’ between the claim and the foreign maritime lien41. It is neither ‘necessary nor desirable’ to attempt to formulate ‘a more comprehensive test’42. A claimant conferred a foreign maritime lien under foreign law would clearly have ‘a claim in respect of a foreign maritime lien’. 33 Civil Admiralty Jurisdiction (ALRC Report 33 1986) at Para 96 [ALRC Report] 34 Myburgh PA “TheShip Supplier’s Lien: Taking a (MapleLeaf out of the Canadian StatuteBook?” [2010] Asia- Pacific Law Review 279 [Myburgh] 35 http://www.mpa.gov.sg/sites/maritime_singapore/what_is_maritime_singapore/premier_hub_port.page 36 http://www.mpa.gov.sg/sites/maritime_singapore/what_is_maritime_singapore/premier_hub_port.page 37 http://www.mpa.gov.sg/sites/maritime_singapore/what_is_maritime_singapore/premier_hub_port.page 38 http://www.sgmarineindustries.com/Indprof/SSOI/ED05_Statistics.pdf 39 Cohen at Page 154 40 Appendix 41 The Alexandrea [2002] SGHC 82 at Para 27 42 The Indriani [1996] SGCA 2 at Para 12
  • 6. It may be possible to argue that the SGHC already has inherent admiralty jurisdiction to hear any claim in respect of a foreign maritime lien, even if the claim does not fall within the current ambit of s. 3(1) of the HC(AJ)A. This is because the inherent jurisdiction of the Singapore courts arises from ‘its status and role as a court’ rather than an ‘external vesting source’ such as the HC(AJ)A43. However, it is better to put this matter beyond doubt through the amendment suggested above. The suggested amendment is also necessary because there is no ‘sweeping up’ provision to capture any subject matter jurisdiction not covered under s. 3(1) of the HC(AJ)A44. S. 3(1) of the HC(AJ)A is ‘worded differently from the sweeping-up provision of s. 1(1) of the Administration of Justice Act 1956’45. Thus, it is likely that this omission is ‘deliberate with the consequence that there is no sweeping up jurisdiction in Singapore’46. The practical effect of this amendment is that the SGHC will have admiralty jurisdiction to hear a claim if the events on which the claim was founded gives rise to a bundle of rights under foreign law similar in nature to the bundle of rights recognized as attaching to a maritime lien under Singapore law. This is so regardless of whether the claim falls within the current ambit of s. 3(1)(a)-(r) of the HC(AJ)A. There may be an increase of litigation in Singapore because the SGHC will now clearly have broader admiralty jurisdiction to hear claims in respect of foreign maritime liens47. Keeping in mind the justifications for reform, this broadening of the admiralty jurisdiction is a principled one and still within acceptable international norms. Both s. 2(1) read with s. 1(1)(ee) of the Admiralty Jurisdiction Regulation Act 105 (AJRA) in South Africa and s. 22(1) read with s. 2 of the Federal Court Act (FCA) in Canada achieve the same sort of broadening effect48. In Har, Le Dain J held 43 Jeffrey Pinsler, “TheInherent Powers of the Court”[1997] Singapore Journal of Legal Studies 1 at Page 10 44 Toh at Page 89 45 Toh at Page 89 46 Toh at Page 90 47 Contra s. 20 of the Senior Courts Act 1981 (U.K.), 1981, c. 54; Lord Diplock in Halcyon at Page 239 stating that s. 3(1) of theHC(AJ)A is ‘exhaustive’ 48 s. 2(1) read with s. 1(1)(ee) of the AJRA inter alia, reads ‘that the Supreme Court of South Africa shall have jurisdiction to hear and determine any other matter which virtue of its nature or subject matter is a marine or maritime matter, the meaning of the expression marine or maritime matter not being limited by reason of the matters set forth in the preceding paragraphs’; Cf s. 2(1) read with s. 1(1)(y) of theof the Admiralty Jurisdiction Regulation Act 105 of 1983 in South Africa; Query how the phrase‘any maritime lien, whether or not falling under any of thepreceding paragraphs’ will be interpreted in light of thedecision by the Supreme Court of Africa in Transol Bunker B.V. v. Motor Vessel “Andrico Unity” her owners and any parties interested in her; Grecian- Mar SRL v. Motor Vessel “Andrico Unity” er owners and any parties interested in her 1987 (4) SA 325 (A) at Page 334 to 336 [Andrico];
  • 7. that these provisions allowed the Federal courts to exercise ‘jurisdiction to enforce a maritime lien’ ‘in addition’ to that listed under s. 22(2) of the FCA49. Therefore, ‘the limitation imposed’ under s. 43(3) of the FCA on a claim brought in respect of s. 22(2)(m) of the FCA did not apply in that case50. Recognition This paper submits that Parliament should also issue an explanatory statement within the meaning of s. 9A(3)(b) of the Interpretation Act defining a ‘foreign maritime lien’51. In this regard, a ‘foreign maritime lien’ should be defined as a ‘the bundle of rights under foreign law similar in nature to the bundle of rights recognized as attaching to a maritime lien under Singapore law’52. Thus, the courts must engage in a two-stage process to determine the existence of a foreign maritime lien. At the first stage, the court should ‘analyze the nature of the rights created by the application of the foreign law’53. The relevant foreign law to be applied can be determined by the existing private international law rules of Singapore. In this regard, the Singapore courts will embark on a three-fold process involving: ‘(a) the characterization of the relevant issue, (a) the selection of the choice of law rule which lays down a ‘connecting factor’ for that particular issue and (c) the identification of the system of law which is tied by that connecting factor to the relevant issue’54. The nature of the claimant’s rights in the ship would usually be characterized as a property issue to be governed by the lex situs. This is because ‘the interests of third parties in the form of a general body of creditors are clearly affected’55. Determining the situs of a vessel is a vexed problem. It warrants a detailed discussion outside the scope of this paper. Provisionally, it is submitted that a merchant ship is situated ‘in a country where it is at any given time’, though she may be deemed ‘to be situate at her port of registry’ when she is ‘not situated in territorial waters’56. We might query whether the conflicts approach known as the ‘multiple-contact test’ used in Lauritzen in the US 49 The Har Rai [1984] 2 F.C. 345 at Para 12 [Har]; Tetley at Page 8 50 Har at Para 12; Tetley at Page 8 51 Interpretation Act (Cap. 1, 2002 Rev. Ed. Sing.) 52 Ying at Page 99 53 Beazley at Page 112 54 WestLB AG v. Phillippine National Bank and others [2012] SGHC 162 at Para 79 55 Halcyon at Page 231 56 Sir Lawrence Collins, Dicey, Morris and Collins on The Conflict of Laws, 14th ed. (London: Sweet & Maxwell, 2006) at Para 22E-057
  • 8. should be adopted57. The multiple-contact approach can ‘degenerate into a mere numerical counting of contacts’58. At the second stage, the court must then decide ‘whether that bundle of rights created under foreign law is sufficiently equivalent to the bundle of rights called a maritime lien under Singapore law’59. The courts should look for indicia such as whether the bundle of rights (1) is ‘an encumbrance over a ship or other res’, (2) accrues ‘from the moment the cause of action comes into being’, (3) travels ‘secretively with the res’, (4) survives ‘any change of ownership of the res’, (5) is ‘carried into effect by an action in rem’ and (6) affords ‘the holder higher priority vis-à-vis other claimants such that he enjoys a better chance of having his claim satisfied from the proceeds of sale for the res’60. This approach will put Singapore at odds with countries such as South Africa, New Zealand and Australia, which have adopted the position in Halcyon61. However, it is submitted that the proposed position is better. This is because it gives effect to the ‘substantive characteristics’ of a maritime lien62. A foreign maritime lien ‘cannot be shaken off by changing the location of the res’63. Crucially, the types of claims that can give rise to a foreign maritime lien are also not limited to those ‘presently existing under Singapore law’64. Practically, this explanatory statement will also allow claimants to know clearly whether they have a foreign maritime lien in a ship arrested in Singapore. The two-stage process brings some certainty to this area of the law. There are established precedents guiding its application. It is similar to the approach taken by Bankes L.J. in Colorado and Ritchie J in Ioannis65. In Colorado, Bankes L.J. held that ‘what rights created by the so-called mortgage deed’ must ‘be determined according to French law as the contract was made in France. Consequently, the 57 William F. Dougherty, “Multi-Contact Analysis for a MultinationalIndustry:TheUnited States Approach to Choice of Law Analysis in theEnforcement of Maritime Liens” 13 U.S.F. Maritime Law Journal 75 at Page 82 [Dougherty]; Lauritzen v. Larsen 345 U.S. 571, 953 AMC 1210 (1953) 58 Dougherty at Page 81 59 Beazley at Page 112 60 Toh at Page 237 61 Fournier v. The Margaret Z [1999] 3 NZLR 111; Morlines Maritime Agency v. The Proceeds of Sale of the Ship Skulptor Vuchetich [1997] FCA 1627; Andrico 62 Jackson at Para 17.57 63 The Ioannis Daskalelis [1974] S.C.R. 1248 [Ioannis] 64 Toh at Page 237 65 Hills Dry Docks & Engineering Company Ltd v. “Colorado” Lloyds Law Reports Vol. 14 No. 5 146 at Page 148 [Colorado]; Ioannis at Page 1259
  • 9. ‘mortgage hypotheque in France’ was also held to be ‘a security in the nature of a maritime lien’ in England, quite ‘distinct from an English maritime mortgage’66. In Ioannis, Ritchie J held that ‘the nature of the right in rem fell to be determined according to the lex loci’ which was US law67. Enforcement This paper submits that Parliament should amend the HC(AJ)A to allow a claimant with a foreign maritime lien on a ship or other property to bring an action in rem against that ship or other property under s. 4(3) of the HC(AJ)A68. The claimant with a foreign maritime lien on a ship or other property should not be allowed to bring an action in rem under s. 4(4) of the HC(AJ)A. Parliament, in legislating for the recognition and enforcement of foreign maritime liens, is for all practical purposes creating a new class of maritime lien beyond those presently existing under Singapore law. This is because, as observed earlier, a foreign maritime lien is better viewed as a substantive right which accrues in the ship from the moment the cause of action comes into being. It would be contradictory to then afford the foreign maritime lienee a statutory right of action in rem, which is a procedural right against the ship and its sister ships. Further, such an approach is in the spirit of comity. It sends the message that Singapore is willing to accord the appropriate levels of respect to the laws of the foreign state by elevating the status of a foreign maritime lienee. The consequence of recognizing and enforcing ‘a foreign maritime lien (for example for good supplied to a ship) where the equivalent local claim does not give rise to a lien’ is to potentially ‘give the foreign claimant priority over the local one, even where the foreign law’s classification of the claim as a lien is out of line with any international consensus on the scope of liens’69. This problem can be illustrated using the case of US and Canada. In the US, the ‘Maritime Lien Act of 1910 conferred a 66 Thomas at Para 552 67 Ioannis at Page 1259 68 Appendix 69 ALRC Report at Para 123
  • 10. lien for the suppliers of necessaries’70. For Canada, this brought about ‘a problem where it would enforce the liens of American necessaries suppliers, but would not give a lien status to suppliers of necessaries in Canada’71. The Canadian lawmakers remedied this by introducing s. 139 of the Marine Liability Act 2001, which basically conferred a necessaries supplier in Canada a maritime lien over foreign vessels72. It is submitted that legislative reform in the manner adopted in Canada is not necessary to avoid prejudice against local stakeholders. The Canadian legislation, though a step in the right direction, is myopic. It ‘perpetuates the same inequitable treatment against a third country ship suppliers that the Canadian ship suppliers had been lamenting’ by ‘favoring Canadian and US ship suppliers above all others’73. Furthermore, it is ‘not carefully integrated into the structure of the existing Canadian admiralty jurisdiction’74. Instead, two alternative solutions are already available. First, a Singapore court may refuse on the grounds of public policy to recognize a foreign maritime lien if to do so would lead to an unacceptably unjust result75. In the case where a foreign state’s ‘classification of the claim as a lien is so out of line with any international consensus on the scope of liens’, the Singapore courts can refuse to recognize a foreign maritime lien from that state76. Second, the admiralty principles of priority are not ‘immutable’77. A Singapore court may prioritize the foreign maritime lienee lowly if the ‘equities or policy considerations’ of a particular case calls for it78. Priorities This paper submits that no reforms are needed to the current admiralty principles of priority. In this regard, a codification of the laws relating to priorities in the form of s. 11 of the AJRA is not recommended as such a ‘legislative restatement would tend to lack the flexibility needed to do justice in an unusual fact situation’79. Where the Singapore court is required to rank the rights in a ship involving foreign claimants 70 Norman Letalik, “Forum Shopping comes to Canada: The Recognition of Foreign MaritimeLiens” in The regulation of international shipping: international and comparative perspectives: essays in honor of Edgar Gold (Boston:Martinus Nijhoff Publishers, 2012) 525 at Page 527 [Letalik]; Ioannis 71 Letalik at Page 527 72 Letalik at Page 527 73 Myburgh 74 Myburgh 75 Kuwait Airways Corpn v. Iraqi Airways Co (No. 4 and 5) [2002] UKHL 19 [Kuwait] 76 Kuwait 77 Toh at Page 325 78 Toh at Page 325 79 ALRC Report at Para 257
  • 11. from the same foreign jurisdiction whose rights arise under the same foreign law, the Singapore court should consider applying the priorities rules of that foreign law80. APPENDIX 80 Tetley at Page 15
  • 12. Parliament should amend s. 3(1) of the HC(AJ)A by including a new subsection, s. 3(1)(s) of the HC(AJ)A. S. 3(1)(s) of the HC(AJ)A should read: ‘The admiralty jurisdiction of the High Court shall be as follows, that is to say, jurisdiction to hear and determine any of the following questions or claims: any claim in respect of a foreign maritime lien’ Parliament should issue an explanatory statement within the meaning of s. 9A(3)(b) of the Interpretation Act defining a ‘foreign maritime lien’. In this regard, a ‘foreign maritime lien’ should be defined as a ‘the bundle of rights under foreign law similar in nature to the bundle of rights recognized as attaching to a maritime lien under Singapore law’ Parliament should amend s. 4(3) of the HC(AJ)A to read: ‘In any case in which there is a maritime lien, other charge or foreign maritime lien on any ship, aircraft or other property for the amount claimed, the admiralty jurisdiction of the High Court may be invoked by an action in rem against that ship, aircraft or property’ BIBLIOGRAPHY
  • 13. D. R. Thomas, Maritime Liens, (London: Stevens & Sons, 1980) at Page 552 Dr. P K Mukherjee, “The law of maritime liens and conflict of laws” (2003) 9 Journal of International Maritime Law at Page 545 Toh Kian Sing, Admiralty Law and Practice, 2d ed. (Singapore: LexisNexis, 2007) at Page 237 William Tetley, “Maritime Liens in the Conflict of Laws” in James A.R. Nafziger and Symen C. Symeonides, ed., Law and Justice in a Multistate World (New York: Transational Publisher, Inc. 2002) 437 at Page 443 CA Ying, “Priorities and the Foreign Maritime Lien” (1982) 8 Adelaide Law Review 95 at Page 96 [Ying] T.A.G. Beazley , “Maritime Liens in the Conflict of Laws” 20 Malaya Law Review 111 at Page 112 D. C. Jackson, Enforcement of Maritime Claims, 4th ed. (London: LLP: 2005) at Para 17.57 John M. Kriz, “Ship Mortgages, Maritime Liens And their Enforcement: The Brussels Conventions of 1926 and 1952”, (1963) Duke Law Journal 671 at Page 672 Martin Davies and Kate Lewins, “Foreign Maritime Liens: Should They be Recognized in Australian Courts?”, (2002) 76 The Australian Law Journal 775 at Page 781 Brian R Opeskin, “The Price of Forum Shopping”, (1994) 16 Sydney Law Review 14 at Page 27 Michael Marks Cohen, “In Defense of Halcyon Isle”, (1987) Llyod’s Maritime and Commercial Law Quarterly 152 at Page 154
  • 14. Civil Admiralty Jurisdiction (ALRC Report 33 1986) at Para 96 http://www.mpa.gov.sg/sites/maritime_singapore/what_is_maritime_singapore/premi er_hub_port.page http://www.sgmarineindustries.com/Indprof/SSOI/ED05_Statistics.pdf Jeffrey Pinsler, “The Inherent Powers of the Court” [1997] Singapore Journal of Legal Studies 1 at Page 10 Sir Lawrence Collins, Dicey, Morris and Collins on The Conflict of Laws, 14th ed. (London: Sweet & Maxwell, 2006) at Para 22E-057 William F. Dougherty, “Multi-Contact Analysis for a Multinational Industry: The United States Approach to Choice of Law Analysis in the Enforcement of Maritime Liens” 13 U.S.F. Maritime Law Journal 75 Norman Letalik, “Forum Shopping comes to Canada: The Recognition of Foreign Maritime Liens” in The regulation of international shipping: international and comparative perspectives: essays in honor of Edgar Gold (Boston: Martinus Nijhoff Publishers, 2012) 525 Myburgh PA “The Ship Supplier’s Lien: Taking a (Maple Leaf out of the Canadian Statute Book?” [2010] Asia-Pacific Law Review 279