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2024 MarsdenLR 1725
HIGH COURT MALAYA KUALA LUMPUR
MECK PETROLEUM DMCC – Appellant
Versus
THE OWNERS AND/OR DEMISE CHARTERERS OF THE SHIP OR VESEEL GLOBAL FALCON (IM.... – Respondent
[Admiralty In Rem No: WA-27NCC-62-11/2023]
The court ruled that the supplied HSFO was not for the vessel's operation or maintenance under the UK SCA 1981, thus rejecting the Plaintiff's admiralty claim.
Headnote:(A) UK Senior Courts Act 1981 - Sections 20(2)(m) and (n) - Interpretation of admiralty jurisdiction concerning supply of goods to a vessel for operation - Claim for high sulphur fuel oil (HSFO) rejected as not supplied for vessel's operation or maintenance. (Paras 1, 24, 104)
(B) The court found that the HSFO was loaded into cargo tanks, not for consumption, and the vessel was not equipped for such fuel use under MARPOL regulations. (Paras 42, 99, 106)
Facts of the case:
The Plaintiff supplied 2,699.740 mt HSFO to the vessel 'GLOBAL FALCON', but the Owners claimed it was cargo for resale, not for the vessel's operation. (Paras 6, 24)
Findings of Court:
The court held that the HSFO was not for the vessel's operation or maintenance, leading to the dismissal of the Plaintiff's claim. (Paras 99, 106)
Issues: The main issue was whether the HSFO was supplied for the operation or maintenance of the vessel under the UK SCA 1981. (Paras 1, 24)
Ratio Decidendi: The court concluded that the large quantity and sulphur content of HSFO indicated it was not intended for the vessel's operation, thus the admiralty jurisdiction was improperly invoked. (Paras 104, 106)
Result: The Plaintiff's Writ in Rem and Warrant of Arrest were set aside, and the vessel was ordered to be released. (Paras 106)
JUDGMENT
Introduction
[1] This judgment deals with the interpretation of s 20(2)(m) and (n) of the UK Senior Courts Act 1981 ("UK SCA 1981"). It also refers to the International Convention for the Prevention of Pollution from Ships 1973/1978 as amended ("MARPOL") where by reg 14.1 of Annex VI, the International Maritime Organisation ("IMO") has with effect from 1 January 2020 reduced the global upper limit on the sulphur content of ships' fuel oil from 3.5% m/m to 0.5% m/m (mass by mass).
[2] The core issue for this Court's determination is whether a quantity of 2,699.740 mt HSFO ("HSFO") with the sulphur contents of 3.5% m/m that was supplied by the Plaintiff to the vessel, "GLOBAL FALCON" on 15 July 2023 at the Port of Khorfakkan, UAE, loaded into the vessel's cargo tanks instead of bunker tanks can be treated as supply to the vessel for "its operation or maintenance".
Background Facts
[3] The Plaintiff, MECK Petroleum DMCC ("MECK") is a UAE company which provides comprehensive marine services, including Bunker Trading, Lube Oil Trading, and Spare Parts Supply.
[4] The Defendant, International Bird Shipping Co is at all material times the Registered Owner of the vessel, "GLOBAL FALCON" (IMO: 9399167) of the port of Cook Islands ("Vessel") ("the "Owners").
[5] The Vessel was arrested on 21 November 2023 as security for the Plaintiff's claim that is subject to an arbitration for unpaid "bunkers" in the value of USD1,301,345.39 stemmed to the Vessel purportedly at the Owners' request, made through their agent or representative, for her safe use and operation.
[6] However, the Owners contended that they do not know the Plaintiff, never requested for bunkers to be supplied to the Vessel, nor do they have any contractual relationship with the Plaintiff. The Owners further contended that the HSFO supplied was not bunkers for the use and operation of the Vessel, but rather cargo purchased by charterers of the Vessel, one Ashraf Al Sharif Refined Oil Trading LLC (DED Commercial Licence No 561278) ("AAS") to sell to their buyers, one Synergy Petroleum FZE ("Synergy").
[7] The Owners have applied in encl 23 to set aside the Warrant of Arrest on the ground that this Court has no admiralty jurisdiction to issue the Warrant because:
a) the HSFO was not supplied as bunkers for the Vessel's operation but as cargo for on sale and so the Plaintiff's claim does not fall under s 20(2)(m) of UK SCA 1981; and
b) the in personam test is not satisfied in that the Owners are not the party that would be liable to the Plaintiff in personam. In other words. The Owners are not the "relevant person" under s 21(4) of the UK SCA 1981 since there is no contract between the Plaintiff and Owners for supply of bunkers to the Vessel.
[8] On the same grounds too, the Owners are asking this Court in encl 46 to summarily determine as a question of law whether the Plaintiff can move this Court to exercise its admiralty jurisdiction on a claim under s 20(2)(m) and (n) of the UK SCA 1981 (applicable by virtue of s 24(b) of the Courts of Judicature Act 1964 ) where:
a) the carriage on the quantity of HFSO supplied was for and on behalf of alleged charterers, AAS;
b) the HSFO was loaded into the cargo tanks as cargo; and
c) the Vessel is not suited to use HFSO as bunkers.
[9] And in the event the question is answered in the negative in any one or all circumstances, the Court to make the following consequential orders:
a) that the Writ in rem be set aside;
b) the Vessel be immediately released from arrest;
c) the Plaintiff's application for appraisement and sale pendente lite be dismissed with costs;
d) Owners be awarded damages as assessed by Court; or be allowed to filed a separate civil claim from wrongful arrest
[10] Prior to this, the Owners had applied in encl 26 to dismiss the Plaintiff's action on the ground that the Plaintiff has failed to file and serve a Statement of Claim on the Owners within the prescribed time, despite no application for stay of the proceed
