Case update on The “Jeil Crystal”  SGHC 292, by Mary-Anne Chua, Partner, JTJB Lawyers, Singapore
It is typical when commencing an in-rem action and arresting a vessel, to first file a generally endorsed writ, and to supplement this post arrest, with a more comprehensive Statement of Claim.
In The “Jeil Crystal”  SGHC 292, in rem action was commenced by the Plaintiff on the basis that it was the holder of original bills of lading, and that the Defendant had delivered cargo without production of the original bills of lading. The commencement of the in rem action, arrest of the Defendant’s vessel and subsequent release pursuant to the provision of security appears to have proceeded in an uncontroversial manner.
However, the Plaintiff was not in fact the holder of the original bills of lading when it commenced action. According to the Plaintiff, it only discovered this after the Defendant’s Defence and Counterclaim had been filed. The Plaintiff subsequently took steps to amend its Statement of Claim, in a bid to substitute its mis-delivery claim for claims relating to breach of contract and negligence. This prompted a cross application from the Defendant, for the setting aside of the writ and warrant of arrest and alternatively, striking out.
The amendments to the Statement of Claim were allowed, and the question that then arose for consideration before the Singapore court was whether, the Plaintiff’s warrant of arrest could be upheld on the basis of the amended claim despite this not having been originally pleaded. Justice S. Mohan answered this question in the affirmative. In coming to this decision, Justice Mohan noted the following:
1. If the amended claim had been introduced when the action was commenced, this would have fallen within the Singapore court’s admiralty jurisdiction and would not have been legally or factually unsustainable. Although the Plaintiff’s writ was defective in framing the wrong cause of action, this defect was cured by the amendments to the Statement of Claim.
2. While the Plaintiff did not make full and frank disclosure of material facts when applying for the warrant of arrest, the court retained an overriding discretion to allow the warrant of arrest to stand.
3. The exercise of this discretion was appropriate in this case as the Plaintiff’s non-disclosure did not appear to be deliberate or intended to mislead the court. In addition, the effect of the amendments to the Statement of Claim cured any defect in the cause of action pleaded in the writ.
4. The Hong Kong decision of The Amigo, cited by the Defendant did not support the principle that an amended statement of claim can never be the basis to uphold a defective writ or warrant of arrest. The Amigo was also distinguishable because the plaintiff there did not disclose the fact that it had commenced two other non in rem actions and there was also no successful amendment made to the statement of claim.
One of the possible concerns arising from this decision is whether it will open the door to Plaintiffs recklessly formulating a cause of action to facilitate an arrest, and then curing any cause of action defects by way of subsequent amendments when the dust has settled. Justice Mohan’s view is that this will not be the case. In his words, “it is ultimately the court’s role to ensure that abuse of [the court’s] process is not condoned and ultimately that power is exercised within the ambit of the factual matrix of the case before it. Simply because the very exercise of the court’s discretion is unfavourable to one of the parties in a particular case does not, in my view, ipso facto undermine the policy or preventing abuse of the draconian nature of a vessel arrest, nor would it result in the alleged “lowering of standards in the invocation of the in rem jurisdiction of the Courts’ as contend by the defendant””.
The Defendant has now appealed against Justice Mohan’s decision and it remains to be seen if the Appellate Division of the High Court will endorse and uphold Justice Mohan’s reasoning and decision.