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2023 MarsdenLR 2673
HIGH COURT MALAYA KUALA LUMPUR
MULIAR OLEG & ANOR – Appellant
Versus
THE OWNERS AND/OR PERSONS IN POSSESSION OR CONTROL OF THE SHIP ORIENTAL DRAGO.... – Respondent
[Admiralty Action In Rem Nos: WA-27NCC-11-02-2021 & WA-27NCC-21-04-2021]
The conversion date for foreign currency claims against a limited fund must be uniform to ensure fairness among claimants, as established in Miliangos v. George Frank (Textile) Limited.
Headnote:(A) Admiralty Law - Jurisdiction to award judgments in foreign currency - Conversion date for claims in foreign currency against a limited fund must be uniform to avoid currency fluctuation risks among claimants - Relevant principles established in Miliangos v. George Frank (Textile) Limited [1976] AC 443. (Paras 66-69)
(B) Claims against a limited fund - The conversion date for payment of claims in foreign currency must be the date of the Order of Priorities and Payment Out to ensure fairness among competing claimants. (Paras 108-110)
(C) Pre-judgment and post-judgment interest - Interest must be computed based on the RM equivalent of the judgment amounts as stated in the respective Writs and Statements of Claim. (Paras 131-132)
(D) Overpayment - Court orders refund of overpaid amounts to ensure compliance with the Order of Priorities and Payment Out. (Paras 141-142)
Facts of the case:
The case involves two actions against a vessel for unpaid wages and repatriation costs by crew members, with claims expressed in both USD and RM. The court had to determine the proper conversion date for these claims against a limited fund constituted from the sale of the vessel.
Findings of Court:
The court determined that the conversion date for USD claims should be the date of the Order of Priorities and Payment Out, and that interest should be calculated on the RM equivalent of the claims.
Issues: The main issues include the appropriate conversion date for foreign currency claims against a limited fund and the calculation of interest on the judgments.
Ratio Decidendi: The court ruled that a uniform conversion date is necessary to ensure fairness among claimants with different priorities, and that interest must be calculated based on the RM equivalent as expressed in the claims.
Result: The court ordered the conversion rates for claims, the calculation of interest, and directed the refund of overpayments.
| Table of Content |
|---|
| 1. currency conversion rate impact on claims. (Para 1 , 2 , 3 , 4) |
| 2. claims against the vessel and their details. (Para 5 , 6 , 7 , 8 , 9 , 10) |
| 3. chronology of actions taken in the case. (Para 11 , 12 , 13 , 14) |
| 4. determination of priorities and payment out order. (Para 24 , 25 , 29 , 30 , 31 , 32) |
| 5. payment out requests and correspondence. (Para 33 , 34 , 35 , 36) |
| 6. court's observations on functus officio. (Para 57 , 58 , 59 , 60) |
| 7. jurisdiction to pronounce judgment in foreign currency. (Para 67 , 68 , 69 , 70) |
| 8. final orders and conclusions of the court. (Para 143) |
Introduction
[1] The equivalent value of our Ringgit Malaysia ("RM") to the United States Dollar ("USD) as at 20 April 2021, was RM4.123. However, by 21 August 2023, the value of RM had plunged to RM4.79 to USD1.00.
[2] The steep fluctuation in the value of RM has given rise in the present case to a dispute as to the proper date for the conversion of the equivalent in RM of claims made in foreign currencies, in particular, claims made in USD currency by the Plaintiffs in the Action in Rem Suit WA-27NCC-11-02/2021 and Action in Rem Suit WA-27NCC-21-04/2021.
[3] This judgment explores the principle in the English House of Lords case of Miliangos v. George Frank (Textile) Limited [1976] AC 443. More specifically, the question whether a different consideration ought to be taken in the case where claims in both foreign currencies and local currency are made against a limited fund constituted in RM and where the claimants thereto are ranked differently in priorities.
[4] As is shown in this judgment, the conversion date to be used for payment to claims in USD in this case can have significant consequences to the other claimants to the fund.
Background Facts
Action In Rem No: WA-27NCC-11-02/2021 ("Suit 11") And Action In Rem WA-27NCC-21-04/2021 (Suit 21) - The Parties And Their Claims Against The Vessel
[5] Suit 11 is an action filed by the Master and 193 crew members ("Plaintiffs in Suit 11") for unpaid wages and for disbursements in relation to repatriation costs incurred against the vessel, "ORIENTAL DRAGON ("the Vessel"). Significantly, the Master and the crew members had quantified their respective claims in the Statement of Claim as follows:
"For the Master:
a) USD30,660.00 (equivalent to RM124,571.58 at the rate of exchange of USD1 to RM4.063 as at 9 February 2021) for the Outstanding Wages .... ;
b) USD335,179.85 (equivalent to RM1,361,835.73 at the rate of exchange of USD1 to RM4.063 as at 9 February 2021) as Outstanding Disbursements..."
For the 193 crew members:
a) USD1,615,512.28 (equivalent to RM6,563,826.39 at the rate of USD1 to RM4.063 as at 9 February 2021) being the Outstanding Wages...;"
[Emphasis Added]
[6] Suit 21 is also an action for outstanding wages earned and for repatriation costs by 18 crew members (other than those in Suit 11) against the Vessel ("Plaintiffs in Suit 21). Similarly, the crew members had quantified their claims in the Statement of Claim as follows:
"For the 18 crew members:
a) USD117,608.02 (equivalent to RM484,897.87 at the rate of exchange of USD1 to RM4.123 as at 20 April 2021) being the Outstanding Wages..."
b) USD47,260.42 (equivalent to RM194,854.71 at the rate of exchange of USD1 to RM4.123 as at 20 April 2021) being the Repatriation Costs..."
[Emphasis Added]
[7] The Defendant, Worldport Corporation Limited, having its registered address at Room 603, 6/F, Star House, No 3 Salisbury Road, Tsim Sha Tsui, Kowloon, Hong Kong was the registered owner of the Vessel and/or was in possession or control of the Vessel.
[8] The Vessel was arrested by her Master and crew members in Suit 11. The registered owner of the Vessel did not put up security, and the Vessel was appraised and sold by judicial sale pendente lite, together with her bunkers for the total sum of RM20,802,988.49. The sum (with interest earned thereon) was paid into Court and made available for enforcement of legitimate claims ("the Fund).
[9] In Suit 11
