The "Dilmun Filmar"
DMC Rating Category: Developed
This Case Note was contributed by Ang &
Website’s International Contributors for Singapore
The settlement agreement provided that Pan-United accepted a total sum of S$310,000, payable in three instalments, in full and final settlement of their claim of S$1.1 million in the action in rem. Castle Shipping agreed to release Pan-United from all claims arising out of the repairs upon executing the settlement agreement. Upon receipt of the first instalment, Pan-United would release the vessel from arrest. Upon receipt of all three instalments, Pan-United would discontinue the action in rem and discharge the vessel, her owners and related parties from all claims arising from the subject matter of the action in rem. Clause 10 provided that, in the event of Castle Shipping’s failure to pay any instalments, Pan-United had the right to proceed against them and to re-arrest the vessel for the full claim amount of S$1.1 million, plus contractual interest.
Castle Shipping paid the first instalment. The vessel was released and sold to Halisen Shipping Co Ltd. Castle Shipping failed to pay a balance of S$170,000 under the settlement agreement. Pan-United re-arrested the vessel in the original action in rem. Halisen applied to set aside the arrest.
The judge found that the arrest was wrongful.
2. By their conduct, Pan-United had affirmed the settlement agreement after the repudiatory breach - namely, the failure to pay the outstanding instalments - thereby precluding recourse to the original claim. The Statement of Claim filed before the re-arrest and the affidavit in support of the re-arrest claimed the sum of S$170,000 (the balance due under the settlement agreement). After the re-arrest, Pan-United’s solicitors wrote to Halisen’s solicitors stating that the sum due was S$170,000, as stated in the settlement agreement. The amendment to the Statement of Claim, which the claimants had made some five months after the re-arrest, had also acknowledged that their claim arose out of the compromise Pan-United entered into with Castle Shipping.
3. The original cause of action had been superseded by the claimants’ affirmation of the settlement agreement. The settlement agreement gave rise to a new cause of action, for which a fresh action had to be started in order to sue on the compromise. The claim to enforce the settlement agreement was not a claim that was within section 3(1)(l) or (m) of the High Court (Admiralty Jurisdiction) Act.*
4. The re-arrest was mala fide and an abuse of the court process. The security furnished for the release of the vessel from re-arrest was ordered to be returned to Halisen and there would be an inquiry as to damages for wrongful arrest.
* Section 3(1)(l) provides that the Court has admiralty jurisdiction where the claim is in respect of goods or materials supplied to a ship for her operation or maintenance. Section 3(1)(m) confers admiralty jurisdiction for any claim in respect of the construction, repair or equipment of a ship or dock charges or dues.
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