The court ruled that an admiralty writ in rem can be renewed beyond five times if service is impossible, emphasizing the importance of protecting statutory rights and preventing injustice.

Introduction

[1] The issue before the Federal Court concerns the number of times an admiralty writ in rem may be renewed. In this jurisdiction, the renewal of a writ is governed by O 6 r 7 of the Rules of Court 2012 ('the Rules'). More particularly, O 6 r 7(2) of the Rules expressly provides that the validity of a writ in an admiralty action may be extended five times where efforts to serve the writ on a defendant have been unsuccessful.

[2] The instant appeal turns on whether the Court may exercise its inherent powers to renew a writ in rem beyond the fifth time to prevent injustice to a plaintiff where the service of the writ is an impossibility. Both the courts below were of the view that they could not override the express terms of O 6 r 7(2) of the Rules to renew a writ in rem for the sixth time even in a situation where the writ could not be served through no fault of the plaintiff.

[3] We reversed the decisions of the courts below and now provide our reasons for doing so.

Background Facts

[4] The appellant, Fimbank PLC ('Fimbank') is a Maltese bank and a trade financier. Fimbank had financed the purchase of a cargo of approximately 17,300 MT of Ukrainian Milling Wheat ('the cargo') by its borrowercustomers. In exchange, Fimbank obtained the original bills of lading to the cargo as security for the financing extended. The cargo was shipped on board the vessel "NIKA" ('the vessel') for carriage from Chornomorsk, Ukraine to an Egyptian Mediterranean Port. At the material time, the vessel was owned by the respondent ('the vessel owners').

[5] On 17 May 2019, Fimbank filed an admiralty writ in rem in the High Court at Kuala Lumpur ('the writ') against the vessel owners on the grounds that the vessel owners misdelivered the cargo to unauthorised third parties without presentation of the original bills of lading, thereby causing loss to Fimbank. It is noted that this cause of action is well-established in this jurisdiction (see: Minmetals South-East Asia Corporation Pte Ltd v. Nakhoda Logistics Sdn Bhd 2018 MarsdenLR 475 ; [2018] 6 MLJ 152; [2019] 3 CLJ 198).

[6] The following principles govern the service of the writ:

(i) The writ is to be served on the vessel itself as stipulated under O 70 r 7(1) of the Rules:

"...a writ by which an action in rem is begun shall be served on the property against which the action is brought..."

(ii) The manner in which the service of the writ is to be physically effected against the vessel is prescribed by O 70 r 10 of the Rules. Substituted service of the writ is not permitted.

(iii) The writ also cannot be served out of the jurisdiction. This is stated under O 70 r 3(3) of the Rules:

"Service out of jurisdiction of notice of writ (O 70 r 3)

(1) Subject to the following provisions of this rule, service out of the jurisdiction of a notice of a writ, containing any [admiralty] claim... is permissible with the leave of the Court...

...

(3) Paragraph (1) shall not apply to an actionin rem."

[Emphasis Added]

(iv) It follows that the writ can only be served on the vessel if the vessel comes into Malaysian waters. The rationale for this rule was explained by the High Court of Australia in Aichhorn & Co KG v. The Ship "MV Talabot" [1974] 132 CLR 449:

"Since the jurisdiction of the Court to entertain an action in rem