Right To Arrest Vessels Post-judgment/award ' What Is The Tide?

• Published date: 02 July 2021
• Subject Matter: Litigation, Mediation & Arbitration, Transport, Marine/ Shipping, Trials & Appeals & Compensation
• Law Firm: SKRINE
• Author: Mr Siva Kumar Kanagasabai, Trishelea Ann Sandosam and Adam Thye Yong Wei

The right to arrest a vessel in an action in rem i.e. an action against property, is primarily used to obtain security for a future court judgment or arbitral award. But can such right of arrest be exercised against a vessel after a judgment or arbitral award has been obtained pursuant to an in personam action (i.e. an action against a person)?

This is an important question as the advantages and benefits of arrest are manifold. An arrest, which forces the vessel to remain within a jurisdiction, can be exercised based on a prima facie case at the commencement of the in rem proceedings and is relatively easier to obtain than an injunction The arrest also places pressure on the party whose vessel has been arrested to provide security for the vessel's release and once judgment in an in rem action has been obtained, the arresting party enjoys higher priority from the proceeds of sale of the vessel as compared to certain categories of creditors.

Malaysian Admiralty Jurisdiction

The High Courts in Malaysia have "the same jurisdiction and authority in relation to matters of admiralty as is had by the High Court of Justice in England under the United Kingdom Supreme Court Act 1981", pursuant to section 24(b) of the Courts of Judicature Act 1964. Hence, although Malaysia is not a signatory to the Brussels Arrest Convention 1952, by virtue of section 24(b) the High Courts in Malaysia has the same in rem jurisdiction to arrest seagoing vessels as the High Court of a signatory to the Arrest Convention, namely the UK

The UK High Court's admiralty jurisdiction is set out in sections 20 to 24 of the UK Supreme Court Act 1981 (since renamed the Senior Courts Act 1981) ("SCA") These sections provide that, subject to the satisfaction of specified conditions, an in rem action may be brought against a ship (or in certain circumstances, a sister ship) amongst others, when a claim gives rise to a maritime lien¹ or a statutory lien under the SCA.

The previously established tide - 'No bar rule'

The bringing of an in rem action against a vessel has been regarded as a separate action to an in personam action. This is so even though it has been decided in The Kusu Island [1989] 2 SLR 267 that upon an appearance being entered by the owner/bareboat charterer of the vessel in an in rem action, the in rem action becomes a hybrid action against the property, as well as an in personam action against the defendant entering appearance.

Early cases in the 1800s have held that where an in personam judgment against a shipowner is unsatisfied, the plaintiff is not precluded from bringing an in rem action against the vessel (The "Bengal " (1859) 166 ER 1220; The "John and Mary" (1859) 166 ER 1221; The Cella (1888) 13 P.D. 82).

The most famous application of this principle was in The Rena K [1979] 1 QB 377 ("The Rena K") which concerned an arbitration award. This rule formulated in The Rena K (which would later become known as the 'no bar rule') was held to apply to claims involving maritime liens and statutory liens. Brandon LJ's reasoning was that based on the authorities, "a cause of action in rem, being of a different character from a cause of action in personam, does not merge in...