Consorcio MGT v Owner of MIN RUI: Admiralty Claim for Damaged Steel Structures

In Consorcio MGT and DM Construtora De Obras Ltda v Owner and/or Demise Charterer of the vessel “MIN RUI”, the High Court of Singapore heard an admiralty action in rem regarding a claim for loss and damage to a consignment of steel structures. The plaintiffs sued as owners, consignees, and/or bill of lading holders. The court allowed the defendant's appeal, finding that the defendant was not the beneficial owner of the vessel Min Rui on 16 December 2014, when the in rem writ was issued, because the vessel had been sold in October 2014.

1. Case Overview

1.1 Court

High Court of the Republic of Singapore

1.2 Outcome

Appeal Allowed

1.3 Case Type

Admiralty

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Admiralty action concerning damaged steel structures. The court held that the defendant was not the beneficial owner of the vessel at the time the in rem writ was issued.

1.7 Decision Date

2. Parties and Outcomes

3. Judges

Judge NameTitleDelivered Judgment
Belinda Ang Saw EanJudgeYes

4. Counsels

4. Facts

  1. Plaintiffs claimed for loss and damage to a consignment of steel structures shipped on the Min Rui.
  2. The consignment was shipped on 24 June 2014 from Humen, China to Itajai, Brazil.
  3. The defendant was the registered owner of the Min Rui when the cause of action arose.
  4. The defendant sold the Min Rui in October 2014 to Chellona Investment Inc and/or its nominee.
  5. Delivery of possession of the Min Rui took place on 12 December 2014 at Qingdao, China.
  6. The in rem writ was issued on 16 December 2014.
  7. The Min Rui was renamed Qi Dong before the arrest on 11 February 2015.

5. Formal Citations

  1. THE “MIN RUI”, ADM No 271 of 2014(RA No 342 of 2015), [2016] SGHC 183

6. Timeline

DateEvent
Consignment of steel structures shipped on board the Min Rui at Humen, China for carriage to Itajai, Brazil
Min Rui arrived at Itajai, Brazil
Defendant entered into a Memorandum of Agreement to sell the Min Rui to Chellona Investment Inc and/or its nominee
First addendum to the Memorandum of Agreement setting out the agreed list of delivery documents
Second addendum to the Memorandum of Agreement nominating Qidong Shipping Limited as the ultimate buyer
Provisional Patente De Navegacion issued to the Buyer in respect of the vessel by the Directorate General of Merchant Marine Panama
Plaintiffs obtained a report on the Min Rui from Lloyd’s List Intelligence
Bill of sale executed by the defendant in favor of the Buyer of the Min Rui
Delivery of possession of the Min Rui took place at Qingdao, China
Defendant and the Buyer signed a Protocol of Delivery and Acceptance
Executed Bill of Sale handed over to the Buyer, who signed the Acceptance of Sale
Plaintiffs obtained a report on the vessel Qi Dong from Lloyd’s List Intelligence
Plaintiffs obtained a Transcript of the Hong Kong Shipping Register
Attestation for Change of Ship’s Name, Flag and Ownership issued by Bureau Veritas
Cajigas & Co advised the plaintiffs that there was no record of a change of ownership of the Min Rui in PRMAP
Notice of Intention to Close a Ship’s Registration by Owner submitted to the Hong Kong Shipping Register
Plaintiffs filed the in rem writ
Registration of the Min Rui closed in the Hong Kong Shipping Register
Certificate of Deletion issued by the Hong Kong Registrar of Ships
Continuous Synopsis Record issued stating that the Min Rui ceased to be registered with the flag state, Hong Kong
Plaintiffs conducted a search at the Hong Kong Shipping Register
Notarial Certificate of Bill of Sale issued by the Consul General of Panama in Vietnam
Cajigas & Co confirmed that the vessel was not registered in PRMAP
Min Rui arrested in Singapore
Public Deed of Title for Permanent Recordation at the PRMAP was filed
Security provided by the defendant to be returned

7. Legal Issues

  1. Beneficial Ownership
    • Outcome: The court held that the defendant was not the beneficial owner of the vessel at the time the in rem writ was issued.
    • Category: Substantive
    • Related Cases:
      • [1977-1978] SLR(R) 105
      • [1992] 2 SLR (R) 231
      • [1993] 2 SLR (R) 113
      • [1999] 2 SLR(R) 647
  2. Jurisdiction
    • Outcome: The court determined that it lacked in rem jurisdiction because the defendant was not the beneficial owner of the vessel when the writ was issued.
    • Category: Jurisdictional
    • Related Cases:
      • [1993] 3 SLR (R) 71
      • [1997] 3 SLR(R) 829

8. Remedies Sought

  1. Arrest of the vessel
  2. Damages for loss and damage to cargo

9. Cause of Actions

  • Admiralty Action in Rem
  • Claim for loss and damage to a consignment of steel structures

10. Practice Areas

  • Admiralty
  • Shipping
  • Jurisdiction
  • Beneficial Ownership

11. Industries

  • Shipping

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
The Pangkalan Susu/Permina 3001Court of AppealYes[1977-1978] SLR(R) 105SingaporeCited for the definition of beneficial ownership in the context of admiralty jurisdiction.
The Kapitan TemkinHigh CourtYes[1998] 2 SLR (R) 537SingaporeCited regarding estoppel in relation to the certificate of register and the entries in the register.
The Opal 3 ex KuchinoHigh CourtYes[1992] 2 SLR (R) 231SingaporeCited for the principle that registration of a ship is prima facie but not conclusive evidence of true ownership.
The Ohm Mariana ex PoenyCourt of AppealYes[1993] 2 SLR (R) 113SingaporeCited for the principle that registration of a ship is not conclusive proof of true ownership and the court may look behind the register.
The Temasek EagleHigh CourtYes[1999] 2 SLR(R) 647SingaporeCited for the principle that entries in Lloyd’s Register of Shipping and the ship’s register are useful starting points but not conclusive proof of beneficial ownership.
The Andres BonifacioCourt of AppealYes[1993] 3 SLR (R) 71SingaporeCited for the principle that the court may trace the history of ownership to ascertain who the beneficial owner of a vessel was and that the determination of jurisdiction in rem depends on Singapore law as the lex fori.
The Makassar Caraka Jaya Niaga 111-39High CourtYes[2011] 1 SLR 982SingaporeCited for the principle that the ascertainment of beneficial ownership of a vessel is a matter of Singapore law and that the court will take into account relevant aspects of foreign law.
The Tian Sheng No 8Hong Kong Court of Final AppealYes[2000] 2 Lloyd’s Rep 430Hong KongCited for the principle that it would not be easy to prove that the registered owner of a vessel was not its beneficial owner.
The Almojil 61Hong Kong Court of AppealYes[2015] 3 HKLRD 598Hong KongCited for the principle that the words “beneficial owner” should not be construed in the manner for the benefit of plaintiffs and may not be used by defendants to defeat the arrest of a ship.
The Evpo AgnicEnglish Court of AppealYes[1988] 2 Lloyd’s Rep 411England and WalesCited as the English position on the definition of 'owner' which the Singapore Court of Appeal departed from in The Ohm Mariana.
The Halycyon IsleHigh CourtYes[1979-1980] SLR(R) 538SingaporeCited for the principle that the question of jurisdiction must be determined by the lex fori.
The TS HavprinsHigh CourtYes[1983] 2 Lloyd’s Rep 356England and WalesCited for the principle that the question of jurisdiction must be determined by the lex fori.
The Jarguh SawitCourt of AppealYes[1997] 3 SLR(R) 829SingaporeCited for the principle that the question of jurisdiction must always be determined by the lex fori.
The SangwonCourt of AppealYes[1999] 3 SLR(R) 919SingaporeCited for the principle that the court would take into account North Korean law to determine if the registered owner of a vessel could hold property.
Tisand (Pty) Ltd and Others v The Owners of the Ship M.V “Cape Moreton” (Ex “Freya”)Federal Court of AustraliaYes[2005] FCAFC 68AustraliaCited for the principle that for a ship to be subject to in rem jurisdiction, it must be the property of the presumptively liable relevant person.
The Nazym KhikmetEnglish Court of AppealYes[1996] 2 Lloyd’s Rep 362England and WalesCited for the principle that the application of the law of the lex fori includes the law of the forum’s rules of private international law making foreign law relevant.
Raftland Pty Ltd v Federal Commissioner of TaxationHigh Court of AustraliaYes[2008] HCA 21AustraliaCited for the need for caution in adopting the description “sham” as the finding of sham requires a finding of deceit.
The Ocean EnterpriseHigh CourtYes[1997] 1 Lloyd’s Rep 449England and WalesCited as an example of a case where sale transactions have been found to be shams.
The Saudi PrinceHigh CourtYes[1982] 2 Lloyd’s Rep 255England and WalesCited as an example of a case where sale transactions have been found to be shams.
The EnfieldHigh CourtYes[1981-1982] SLR(R) 527SingaporeCited as an example of a case where sale transactions have been found to be shams.
The TjaskemolenHigh CourtYes[1997] 2 Lloyd’s Rep 465England and WalesCited as an example of a case where sale transactions have been found to be shams.
The Skaw PrinceHigh CourtYes[1994] 3 SLR(R) 146SingaporeCited as an example of a case where sale transactions have been found to be shams.
Naamlooze Vennootschap Stoomvaart Maatschappij Vredobert v European Shipping Co, LtdNot AvailableYes[1926] 25 Lloyd’s Rep 210Not AvailableCited for the distinction between a “sale” and an “agreement to sell”.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
High Court (Admiralty Jurisdiction) Act (Cap 123, 2001 Rev Ed)Singapore
Merchant Shipping (Registration) OrdinanceHong Kong
Admiralty Act 1988Australia
Sale of Goods Act 1979England and Wales

15. Key Terms and Keywords

15.1 Key Terms

  • Beneficial ownership
  • In rem writ
  • Memorandum of Agreement
  • Bill of Sale
  • Provisional Patente
  • Lex fori
  • Norwegian Saleform
  • Delivery of possession
  • Hong Kong Shipping Register
  • Panama Registry

15.2 Keywords

  • Admiralty
  • Shipping
  • Beneficial Ownership
  • Jurisdiction
  • In Rem
  • Min Rui
  • Steel Structures
  • Cargo Damage

17. Areas of Law

16. Subjects

  • Admiralty Jurisdiction
  • Beneficial Ownership of Vessels
  • Sale of Goods
  • Conflict of Laws