The Reecon Wolf [2012] SGHC 22

The Reecon Wolf is an important decision as it is the first time since the English Court of Appeal decision in The Herceg Novi [1998] 2 Lloyds' Rep. 454 and Singapore's subsequent accession in 2005 to the 1976 Convention on Limitation of Maritime Claims ("the 1976 Convention") that the Singapore High Court has had to decide the issue of forum non conveniens in a dispute involving a collision between two vessels where the competing jurisdictions apply different limitation of liability regimes, namely the International Convention relating to Limitation of Liability of Owners of Sea-going Ships 1957 ("the 1957 Convention") and the 1976 Convention.

In The Herceg Novi, the competing jurisdictions were Singapore, which at the time applied the 1957 Convention, and England, which then applied the 1976 Convention. In The Reecon Wolf, the competing jurisdictions were Malaysia (which applies the 1957 Convention) and Singapore (which applies the 1976 Convention).

The background facts

On 21 August 2010, the Reecon Wolf ("RW") collided with the Captain Stefanos ("CS") whilst both vessels were transiting the Straits of Malacca en route to Singapore for bunkering and thereafter to Chinese discharge ports. The collision occurred in Malaysian territorial waters.

After the collision, the following events took place:-

  • On 24 August 2010, RW interests commenced an in rem action in Malaysia against CS ("the Malaysia Action") and arrested CS.
  • On 26 August 2010, CS interests commenced an in rem action in Singapore against RW ("the Singapore Action") and arrested the RW in Singapore.
  • The RW and CS were released from arrest on 28 August 2010 and 30 August 2010 after provision of security for the Singapore and Malaysia Actions respectively.
  • On 8 September 2010, RW interests filed their Preliminary Act in the Malaysia Action. On 26 October 2010, CS interests filed their Preliminary Act in the Singapore Action and applied to stay the Malaysia Action. In turn, RW interests applied to stay the Singapore Action on 3 November 2010.
  • On 18 March 2011, RW interests' application to stay the Singapore Action was dismissed. RW interests appealed against the dismissal.
  • On 1 July 2011, CS interests' application to stay the Malaysia Action was dismissed by the Malaysian Court.
  • On 8 July 2011, the Singapore Court reversed the first instance decision dismissing the stay application and ordered a stay of the Singapore Action.

The Singapore Court's decision

The court reaffirmed that The Spiliada test for forum non conveniens applied in Singapore and to in rem proceedings as well. In considering Stage 1 of the The Spiliada test (namely, the connecting factors to determine if there was another clearly and distinctly more appropriate forum), the judge noted that the parties were identical in both the Singapore and Malaysia Actions. The court also noted that the substantive issues in both actions, namely (i) which of the two vessels was responsible for the collision, and (ii) if both vessels were negligent, what should the apportionment of liability be between the vessels, would be in issue in both actions.

RW interests raised eight factors pointing to Malaysia as clearly and distinctly the more appropriate forum compared to Singapore. CS disputed that the factors raised by RW pointed towards Malaysia as the more appropriate forum. In turn, CS also highlighted certain factors which pointed towards Singapore as the more appropriate forum. Among other things, RW interests argued that the collision occurred in Malaysian territorial waters and the tort occurred in Malaysia; the governing law of the tort was Malaysian law; the surveyors who had inspected the vessels after the collision were based in Malaysia; and the existence of concurrent proceedings in Malaysia and Singapore in respect of the same collision and between the same parties, with the risk of conflicting judgments was undesirable. CS interests, on the other hand, argued among other things that the place of the collision was fortuitous; Malaysian law in relation to the underlying issues was substantially the same as Singapore law; the Singapore Action was commenced as of right; and that RW interests had commenced the Malaysia Action for the sole purpose of taking advantage of the lower limits of liability in Malaysia.

After considering the countervailing arguments, the court held that the main factors to be considered were: (a) the fact of concurrent proceedings; (b) the place of the commission of the tort, and (c) international comity. The other factors raised by the parties were considered, at best, neutral.

Concurrent proceedings

The court noted that both the Singapore Action and Malaysia Action had been invoked as of right and neither action was very advanced. However, the court also noted there were obvious overlaps in the issues to be considered in the two actions and that substantially the same principles of law (including the Collision Regulations) would be applied in both actions. There was, therefore, in the court's view, a real risk of conflicting judgments, based on the same facts, emanating from the two jurisdictions. CS' failure to obtain a stay of the Malaysia Action was a further consideration; not only was there a real risk of conflicting judgments, the court in the jurisdiction where the tort was committed had decided that it would continue to exercise its jurisdiction over the case.

Place of commission of tort

The court held that the place where the tort occurred was prima facie the natural and appropriate forum for the trial of the action. The collision occurred within Malaysian territorial waters which was a factor in favour of Malaysia. Had the collision occurred on the high seas, there would prima facie be no natural forum. The court held that the prima facie position had not been displaced and the Malaysian Court's decision to retain jurisdiction constituted a further factor against Singapore being the natural forum.

International comity

The court adopted the reasoning of the Canadian Supreme Court (on anti-suit injunctions) in Amchem Products Inc v. British Columbia (Workers' Compensation Board) [1993] 1 SCR 897 which held that a domestic court, as a matter of comity, ought to take cognisance of the fact that a foreign court, applying the same forum non conveniens principles or adopting an approach consistent with such principles, had assumed jurisdiction over the dispute. It was not disputed that Malaysia adopted the same forum non conveniens principles as Singapore. Since the Malaysian Court had, applying those principles, refused to stay the Malaysia Action, the Malaysian Court's decision was a weighty factor pointing in favour of Malaysia as the natural forum.

In the round, the court held that for Stage 1, RW had established that Malaysia was clearly and distinctly the more appropriate forum. For Stage 2, CS sought to argue that they would be deprived of a personal or juridical advantage if the Singapore Action was stayed because of the higher limits of liability under the 1976 Convention which Singapore applied. The court roundly rejected the argument and held that the existence of different internationally recognised limitation regimes in the competing jurisdictions was not a legitimate personal or juridical advantage or disadvantage under Stage 2, reaffirming The Herceg Novi. Moreover, such an argument would invariably require the Singapore Court to make comparisons between the statutory limits in Singapore and Malaysia, a comparison which the court was not prepared to embark on, particularly in relation to another friendly state.

As CS were unable to show that they would suffer any legitimate personal or juridical advantage if the Singapore Action was stayed, the court allowed the appeal and ordered that the Singapore Action be stayed on condition that RW furnish equivalent security to CS to answer any judgment in Malaysia.

Comment

The decision is a welcome re-affirmation of The Herceg Novi and should prevent forum shopping attempts in the future when similar circumstances arise. Interestingly, Malaysia has since ratified and passed legislation to give effect to the 1996 Protocol to the 1976 Convention but the new law has not yet come into force in Malaysia. When it does come into force, the situation will be reversed and Malaysia will have higher limits than Singapore. It will be interesting to see how The Reecon Wolf would be applied then if there is a serious enough casualty which brings those limits into play.

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