Shipping & Transport, Malaysia updates

Court rules in Silver Moon time charterparty case
Shearn Delamore & Co
  • Malaysia
  • January 24 2018

In a recent case, the plaintiff had instructed the defendant – the owner of the vessel Silver Moon – to head to the South Indian Ocean for cargo operations. Despite having received the instructions, the vessel had to deviate and deal with multiple repair works. In view of the vessel being unseaworthy, the plaintiff contended that the defendant was in repudiatory breach of the time charterparty and had the vessel arrested.

Changes to National Cabotage Policy
Shearn Delamore & Co
  • Malaysia
  • August 09 2017

The prime minister recently proposed that Sabah, Sarawak and Labuan be exempted from the National Cabotage Policy, which governs maritime transport between Peninsular Malaysia and East Malaysia, effective June 1 2017. Under the proposal, foreign ships can transport cargo domestically. This announcement attracted differing opinions regarding its possible impact.

Damages under marine cargo all-risk insurance policy
Shearn Delamore & Co
  • Malaysia
  • April 19 2017

A court recently considered an insurance claim under a marine cargo all-risk insurance policy for damages to a ship unloader crane that had occurred while it was being unloaded onto a barge at West Port, Port Klang. The court ultimately found that the plaintiffs had proven their case on the balance of probability and granted their claim for RM4.5 million, with costs.

Court rules on payment for bunkers
Shearn Delamore & Co
  • Malaysia
  • January 18 2017

In a recent high court case, the plaintiff's notice of lien stipulated that it had exercised a lien over the bunkers, and that the defendants should pay the plaintiff and not the second intervener. The defendants applied to set aside or strike out the plaintiff's subsequent in rem action, as they had no contractual nexus with the plaintiff for the purchase and supply of the bunkers. The court held that since there was no direct contract between the plaintiff and the defendants, a contractual lien did not arise.

Court of Appeal rules on limitation clauses
Shearn Delamore & Co
  • Malaysia
  • September 21 2016

The Court of Appeal recently reviewed a high court decision which had dismissed an application by the first defendant for determination of a preliminary issue. The Court of Appeal had to consider whether the limitation period in the bill of lading, as provided for in the Hague Rules, was contrary to Section 29 of the Contracts Act 1950 and whether an earlier Court of Appeal decision was binding on the high court.

Floating charges on the high seas
Shearn Delamore & Co
  • Malaysia
  • May 11 2016

The courts recently dealt with a case involving competing claims for the vessel Safir Kish 4. After hearing extensive arguments over which party had priority over the ship, the court found the registration and transfer of the ship from the shipbuilder to the first defendant to be null and void. As such, the court ordered the ship to be retransferred and reregistered in the shipbuilder's name.

High Court rules on liability for loss of cargo
Shearn Delamore & Co
  • Malaysia
  • January 06 2016

A recent case before the High Court in Kuala Lumpur concerned the loss of cargo delivered from Indonesia to Saudi Arabia. The plaintiff shipper brought the claim against the non-vessel owning common carrier for acting in breach of contract as carrier or duty of care as bailee under the terms of the bill of lading by releasing the shipper's cargo without due production of the original house bills of lading.

High Court rules on admiralty jurisdiction
Shearn Delamore & Co
  • Malaysia
  • July 29 2015

The plaintiff in a recent High Court case brought an in rem action against the owners of four vessels for wrongful occupation of its lay-up site and trespassing. The defendants applied to strike out the action, contending that the plaintiff's claim did not fall within the High Court's admiralty jurisdiction. As the plaintiff failed to prove that its claim fell squarely within the court's admiralty jurisdiction, the court struck out the claim with costs.

Court rules on use of plural writs
Shearn Delamore & Co
  • Malaysia
  • July 15 2015

The plaintiff in a recent case commenced admiralty proceedings against two vessels for unpaid bunkers supplied to those vessels. After both vessels were arrested, the defendant contended that the arrests were flawed, as the plaintiff had not applied to strike out the other vessel from the plural writ after the first vessel was arrested. The court rejected the defendant's argument, holding that the plaintiff need not strike out the other vessel named in the plural writ.

Court rules on liability for ruptured pipeline
Shearn Delamore & Co
  • Malaysia
  • March 25 2015

The Admiralty Court recently ruled on the liability of a shipowner in a case involving a ruptured oil pipeline. The court found that the defendant shipowner had failed to discharge its burden to establish that the damages were not caused by its actual fault or privity and that, on a balance of probability, it was liable to the plaintiff for negligence.

Merchant Shipping Ordinance 1952 – provisions for maritime collisions
Shearn Delamore & Co
  • Malaysia
  • December 03 2014

A recent maritime incident brought into play the provisions under the Merchant Shipping Ordinance 1952 that relate to collisions. The ordinance requires that special inquiries and investigations take place whenever there are shipping casualties. It also makes clear what constitutes a 'shipping casualty' and outlines responsibility for damages.

High court acquits company charged under Merchant Shipping Order 1952
Shearn Delamore & Co
  • Malaysia
  • September 24 2014

The Merchant Shipping Order 1952 stipulates that ships must notify the director general of the Marine Department before engaging in certain activities in Malaysian waters. In a recent case the sessions court found Komas Energy responsible for anchoring a ship without proper notification. On appeal, the high court held that the prosecution had failed to prove a prima facie case against the appellant and that the latter had raised reasonable doubt.

Convention on Limitation of Liability for Maritime Claims in force
Shearn Delamore & Co
  • Malaysia
  • June 04 2014

On March 1 2014 the Convention on the Limitation of Liability For Maritime Claims 1976, as amended by the 1996 Protocol to Amend the Convention on Limitation of Liability for Maritime Claims 1976, came into force in Malaysia. Prior to this, the 1957 International Convention on the Limitation of the Liability of Owners of Seagoing Ships was in force.

Failure to register mortgage can be costly
Shearn Delamore & Co
  • Malaysia
  • March 12 2014

The High Court recently considered a loan granted to one party to part-finance the purchase of two vessels owned by a second party. As security for the loan, the two vessels were to be mortgaged by way of a third-party mortgage charged to the plaintiff. Some time later, the first party defaulted on its payment and the plaintiff initiated foreclosure proceedings. However, the plaintiff had failed to register the mortgage.

Court finds shipper negligent following explosion that sank vessel
Shearn Delamore & Co
  • Malaysia
  • December 04 2013

A fire and subsequent explosion during the loading of a cargo of dangerous goods at Port Klang resulted in the loss of both the vessel and its other cargo. In a recent court judgment, the shipper was found liable in negligence to the carrier. The court argued that the shipper owed a reasonable duty of care to the carrier to prevent the dangerous goods from causing or doing injury to the vessel.

Court dismisses action against carrier as time barred
Shearn Delamore & Co
  • Malaysia
  • July 17 2013

The Malaysian courts recently considered the applicability of a plea of limitation under the Hague Rules, as incorporated into national law. The case arose following alleged damage to cargo as a result of faulty refrigeration. The court held that as the plaintiff's claim was brought after the expiry of the one-year limitation period under the rules, it was time barred and the plea of limitation was therefore a valid defence.

Court considers duties arising from bill of lading
Shearn Delamore & Co
  • Malaysia
  • May 08 2013

A Malaysian court recently examined liability for loss caused by the discharge or delivery of cargo without the production of original bills of lading. The court held that the act of discharging cargo belonging to the plaintiff into the hands of a third party at a different destination from that contracted for under the bill of lading was the cause of the loss. The defendant was found to have failed in carrying out its duties as bailee.

Forum selection clauses before Malaysian courts
Shearn Delamore & Co
  • Malaysia
  • January 30 2013

It is not uncommon for a bill of lading to have a pre-agreed stipulation that any dispute or claim arising out of the bill is to be brought before and determined by a foreign tribunal or court, known as a forum selection clause. Malaysian courts of first instance seized with jurisdiction over disputes between a shipper and a carrier have considered the application of such a pre-agreed forum selection clause.

Court considers limitation of liability in relation to collision
Shearn Delamore & Co
  • Malaysia
  • September 26 2012

The Court of Appeal recently ruled that an appeal by an owner in a collision action was allowed in part. The court overturned an earlier High Court decision that had held that the owner was not entitled to limit its liability for damage under Section 360 of the Merchant Shipping Ordinance. The appellate court held that the owner was liable in negligence but was granted limitation pursuant to the ordinance.

New practice direction governs admiralty and maritime claims
Shearn Delamore & Co
  • Malaysia
  • June 13 2012

The Admiralty Court recently issued Practice Direction 1/2012 in relation to admiralty and maritime claims, which is to be followed in relation to admiralty and maritime matters at the high courts. The Kuala Lumpur Admiralty Court and the other high courts are to hear all matters pertaining to 'maritime claims', which are defined in detail in the practice direction.

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