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2024 MarsdenLR 2277
HIGH COURT MALAYA KUALA LUMPUR
COSCO SHIPPING HEAVY INDUSTRY (DALIAN) CO LTD & ANOR – Appellant
Versus
OSTA FLEET SDN BHD – Respondent
[Admiralty In Personam No: WA-27NCC-50-07/2019]
The registration of the vessel 'Dalian Developer' was found invalid due to a forged Builder's Certificate, violating the Merchant Shipping Ordinance 1952.
Headnote:(A) Merchant Shipping Ordinance 1952 - Sections 11, 16(2), 21, and 23 - Ship registration dispute - Plaintiffs claim beneficial ownership of vessel 'Dalian Developer' - Court finds 2014 Builder's Certificate used for registration was forged, rendering registration invalid - Defendant's claim dismissed. (Paras 217, 218)
Facts of the case:
The Plaintiffs allege fraudulent registration of the vessel 'Dalian Developer' in the Defendant's name without their consent, claiming beneficial ownership based on a legitimate Builder's Certificate issued in 2015. (Paras 5-11)
Findings of Court:
The court concluded that the registration was obtained fraudulently, as the 2014 Builder's Certificate was not authentic, violating the Merchant Shipping Ordinance's requirements. (Paras 217, 218)
Issues: Whether the registration of the Vessel was fraudulent and whether the Plaintiffs are the rightful owners. (Paras 36, 217)
Ratio Decidendi: The court established that the 2014 Builder's Certificate was forged, and thus the registration was null and void under the Merchant Shipping Ordinance. (Paras 217, 218)
Result: The Plaintiffs' claim was allowed; the Defendant's counterclaim was dismissed. (Paras 218)
JUDGMENT
[1] In the annals of ship registration law, few cases have presented as intriguing a puzzle as this dispute over the vessel "Dalian Developer". It is a tale that unfolds not on the high seas, but in the bureaucratic corridors of maritime registries and corporate boardrooms At its heart lies a ship of remarkable capabilities, but more than that, it is a story about the intricacies of vessel ownership and the sometimes murky waters of registration procedures.
[2] As I sift through the voluminous evidence before me, I am struck by the complexity of the case. On one side stands a giant of Chinese shipbuilding. On the other, a Malaysian company with aspirations in the offshore industry. Between them is a vessel, registered in Malaysia but claimed by a Chinese entity, embodying a dispute that hinges on the minutiae of administrative processes and documentary requirements.
[3] The central question seems deceptively simple: Who is the rightful owner of the "Dalian Developer"? But to answer this, we must navigate through a labyrinth of builder's certificates, registration forms, and statutory declarations. We must scrutinise the very mechanics of how a ship comes to be registered under a nation's flag, and what that registration truly signifies.
[4] Our task, then, is to chart a course through these bureaucratic waters towards a just and reasoned conclusion. For the implications of this case extend beyond the fate of a single vessel, touching on the fundamental integrity of ship registration systems and the reliance placed upon them by maritime authorities and commercial entities alike.
Background Facts
[5] In early 2014, Mr Azman Bin Abu Bakar ("Azman"), the CEO of AAB Ocean Group of companies, engaged in discussions with the 1st Plaintiff, Cosco (Dalian) Shipyard Co Ltd, regarding working together to market an offshore drilling unit known as "Dalian Developer" ("the Vessel") to Petroliam Nasional Berhad ("Petronas") in Malaysia, specifically to secure charter contracts. The Vessel was then under construction at the 1st Plaintiff's shipyard in Dalian, China.
[6] The Vessel was provisionally registered with the Port of Registry in Kota Kinabalu, Malaysia ("Malaysia Ship Registry"') on 3 July 2014, and then permanently registered on 4 November 2014, under the Defendant, Osta Fleet Sdn Bhd The registered owner was thus the Defendant. The Plaintiffs contend that the permanent registration was done without their knowledge. Upon completion of construction, the 1st Plaintiff as the Builder issued a Builder's Certificate dated 30 June 2015 ("2015 Builder's Certificate") transferring ownership of the Vessel to the 2nd Plaintiff, Dalian Developer Drilling Co, Limited.
[7] On 19 December 2015, the 1st Plaintiff entered into a Commercial and Technical Services Agreement ("CTSA") with CH Pavilion Sdn Bhd ("CH Pavilion"), a special purpose company created by Azman. The purpose was to commercially and technically upgrade the Vessel into a Floating, Production, Drilling, Storage and Offloading (FDPSO) unit based on Technip S A Paris design, and use it to tender for Petronas contracts in Malaysian waters.
[8] On 23 December 2015, the parties entered into a supplementary Rider Agreement ("the Rider Agreement') that set out the shareholding and divestment arrangements regarding the Petronas licensed company to be acquired by CH Pavilion to facilitate getting contracts from Petronas.
[9] On 31 November 2018 the Defendant submitted a tender to Petronas Carigali Sdn Bhd ("Petronas Carigali') for the Limbayung Deepwater Development Project ("the Limbayung Project'), an advanced offshore development project in Sabah, Malaysia with the Defendant expecting substantial profits from the tender with a value of a USD1.861 billion. Over the next few years, no firm charter contract was awarded by Petronas for the Vessel through the efforts of CH Pavilion, the Defendant or otherwise. The tender submission process was still underway.
[10] On
