The Singapore High Court has held in the case of the "EUROHOPE" (2017) SGHC 218 that a Singapore court would not allow a ship arrest if the sole purpose of the arrest was to obtain security for foreign court proceedings, as this amounted to an "abuse of process".
The "EUROHOPE" revolved around a charterparty containing an exclusive jurisdiction clause in favour of the English High Court. The charterer was engaged in a dispute with the shipowner, and commenced court proceedings against the shipowner in England. When the vessel arrived in Singapore, the charterer commenced an action against the vessel, and arrested the vessel for the sole purpose of obtaining security for the English proceedings. The Singapore High Court set aside the warrant of arrest, and struck out the action in Singapore, on the basis that the charterer's action in Singapore was an "abuse of process".
The legal position in Singapore has been that a vessel arrest in Singapore for security in support of foreign court proceedings is not allowed. In the "EUROHOPE", the Court appears to have elevated the charterer's attempt to arrest the vessel to an abuse of process. It is telling that, on the reported facts of the case, the arresting party did not assert in the evidence supporting the arrest that they were prepared to have the substantive action determined in Singapore.
Interestingly, there was the unreported case of United Endurance Adm in Rem 108/2007 ("UNITED ENDURANCE") in which a bunker seller commenced court proceedings in Greece against a shipowner, but arrested the vessel in Singapore for the sole purpose of obtaining security for the Greek proceedings. After the arrest, the seller applied to stay the Singapore action in favour of the Greek proceedings. The Singapore High Court allowed the stay on condition that the shipowner provide security for the Greek proceedings. The Court in the "EUROHOPE", however, did not follow the "UNITED ENDURANCE" as the earlier case was an unreported decision.
There is clear inconsistency between the "UNITED ENDURANCE" case and the "EUROHOPE". It is uncertain how the Court might decide if the cases were to be argued in their entirety before it. One possible way of avoiding a striking out is for a claimant to elect to have the substantive issues of its claim determined by the Singapore Court, and it is possible that in such instance the claimant may be allowed to arrest a vessel.
Arrest for security for foreign arbitration remains an exception. Cases such as The ICL Raja Mahendra (1998) SGHC 419 remains good law.
The "EUROHOPE" applies to cases where there is a foreign court jurisdiction clause, and it does not apply to cases where there is an arbitration clause. If there is an arbitration clause, the provisions of the Arbitration Act (Cap 10) and International Arbitration Act (Cap 143A) allow for an arresting party to arrest a vessel for the sole purpose of obtaining security for arbitration proceedings. In such instances, once security is obtained in response to the foreign arbitration, the court action may then be stayed (that is, suspended).
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