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PRELUDE
PRELUDE
Legal Disputes Involving Ships
Ships are moving objects often belonging to different nationalities that are resident in different countries. Collision can occur between two ships of different nationalities in a third country. Quite often, performance of a contract of carriage is required in a state other than that in which the contract was concluded. In the event of any dispute arising from such a contract, problems may ensue as to the court in which proceedings can be instituted and as to the appropriate law which is applicable to the transaction. Legal disputes involving ships are by its nature quite complex.
Legal dispute settlement (dispute resolution) includes:
· Litigation
Or, it could be achieved through Alternative Dispute Resolution (ADR):
· Arbitration
· Mediation[1]
· Conciliation[2]
Whose law to use when there is a dispute to be settled?
…especially when there is ‘foreign element’ – a contact with some system of law other than Singapore law and the parties in disputes are non-Singaporean.
Example:
…because a contract was made or to be performed in a foreign country, or because a tort was committed there, or because property was situated there, or because the parties are not Singaporean.
Scenarios (contract with no stipulation which jurisdiction’s law to be followed for dispute settlement):
Two Singaporeans made contract which is to be performed in Singapore – Action is brought in Singapore, the court will apply Singapore law when there is a contractual dispute.
Two Singaporeans made contract which is to be performed in Singapore – Action is brought in Malaysia, the Malaysian court will mostly likely[3] apply Singapore law when there is a contractual dispute.
A Singaporean and a Malaysian made contract which is to be performed in Singapore – Singapore court or any court in the world, depending where the litigation is, will have to decide which country’s element is more significant and apply Singapore or Malaysian law accordingly. The decided law which is for application in the cause of the proceeding is called the proper law of the forum.
The Choice of Forum
English Admiralty Court has long exercised a wide jurisdiction in maritime cases, eg involving collisions. Foreign plaintiffs often sue in that Court for collisions or other shipping disputes occurring abroad. This is in no doubt convenient if the suits are, in reality, between insurers based in London. However, defendants sometimes object and apply for English proceedings to be stayed so that action can proceed in a foreign court. In other words, the forum where proceedings takes place must be suitable for both parties and do not deprive the plaintiff of a legitimate personal or legal advantage which could be available to him if he invoked the jurisdiction of the English courts.
Jurisdiction Clauses
Parties to contract are wise to agree in advance as to the place and country where legal disputes are to be heard should it arise. Such clauses are commonly incorporated in bills of lading, charterparties, and agreement for sales of ships, repair, towage and salvage. For obvious reasons such clauses are really not relevant to collision cases where the parties have no existing relationship.
Choice of Law Clauses
Similarly it is also wise for contracting parties from different states to specify as to whose law is to apply, "proper law" of the contract. This is to avoid disputes about the "conflict of laws".Forum:
…place where dispute settlement is taking place.
Stay [of proceeding]:
…suspend a dispute settlement proceeding from going on, due to ie the forum is not convenient (forum non conveniens), dispute is supposed to be settled through arbitration instead of litigation, etc.
Parties would prefer to have the cause in action in a forum which is convenient to them respectively. Therefore, sometimes, before the actual cause of action commences to address the main issue of the dispute, an action is brought up to decide on the appropriate forum to hear the actual case in question.
It is wise to indicate the place for legal dispute settlement, including the applicable law: the law to be used for such settlement.
Note:
A cause of action held in Singapore does not necessary apply the Singapore law.
…such clauses cannot be for collision because who will know that with whom he will collide with in the future? Does one really want a collision incident to occur on oneself?
Example:[1]
Applicable Law
The applicable law clause should be drafted under legal advice. The following is a simple model clause:
This contract is governed by the laws of _________________*.
* State the country or jurisdiction
Maritime Arbitration
Court proceedings are rarely cheap and not often speedy. Settling disputes before an arbitrator is often resort to by parties involve in the disputes. In addition to it being a speedier process, it also allows the parties to obtain the benefit of men with specialised commercial experience especially in the difficult cases.
Arbitration is based upon agreement between the parties to the dispute. An agreement to submit a case to arbitration may be made at any time but, although agreements to arbitrate are sometimes made when the disputes arises, they are more often made at an earlier date. A clause will be inserted into a contract, for example, whereby if any dispute arises between parties to the contract, it is to be referred to an arbitrator named in the clause, or to one chosen by a procedure set out in the clause.
Arbitration clauses are quite valid and lawful so long as they do not seek to exclude the jurisdiction of the court entirely. The whole system is regulated by the Arbitration Act. International arbitration will be governed by the International Arbitration Act (Cap 143A) and domestic arbitration by the Arbitration Act (Cap 10).
Arbitration[1]
Parties who are in dispute agree to submit their disagreement to a person whose expertise or judgment they trust.[2] They each put their respective cases to this person-this private individual, this arbitrator-who listens, considers the facts and the arguments, and then makes a decision. That decision is final and binding on the parties; and it is binding because the parties have agreed that it should be, rather than because of the coercive power of any State. Arbitration, in short, is an effective way of obtaining a final and binding decision on a dispute or series of disputes, without reference to a court of law.[3]
Arbitration clause (or often being referred to as arbitration agreement) inserted in a contract may delineates the jurisdiction, choice of law, type of arbitration (ad hoc[4] or institutional[5]) etc to be carried out.
MA0115 Ch 5.pdf5. Introduction to Carriage of Goods by Sea and ADR.pdfClick the buttons below to access online materials:
5.0 Introduction
5.1 Contract of Carriage
5.2 Carrier
5.3 Charterparties
5.4 Bills of Lading
5.5 Carriage of Goods by Sea Disputes
5.6 International Conventions for Bills of Lading
5.7 Legal Disputes
5.8 Arbitration
5.9 Action in Personam
5.10 Action in Rem
5.11 Mediation
5.12 Mareva Injunction
5.13 Case law: Pan United Shipping Pte Ltd v Cendrawasih Shipping Pte Ltd [2004] SGHC 32
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