Shipping 2024 Comparisons

The main domestic laws establishing the authorities of the maritime and shipping courts in Singapore are:

• the High Court (Admiralty Jurisdiction) Act (Cap 123);
• the Maritime and Port Authority of Singapore (MPA);
• the Merchant Shipping Act; and
• the Merchant Shipping (Maritime Labour Convention) Act 2014.

The High Court of Singapore has jurisdiction to hear maritime cases and there are two to three High Court judges assigned to hear maritime cases. Appeals from the High Court are made to the Court of Appeal. Common maritime claims include vessel collision, breach of charterparty obligations, cargo damage, bill of lading disputes and demurrage.

The MPA is the port authority, port regulator and port planner, and essentially regulates port activities in Singapore.

For pollution, the Prevention of Pollution of the Sea Act gives the MPA the power to take measures to prevent pollution, such as denying entry or detaining ships.

For wreck removal, the Wreck Removal Convention, which has been adopted by Singapore, requires owners of vessels over 300 gross tonnage (GT) to take out insurance or provide other financial security to cover the costs of wreck removal, capped at an amount equal to the limits of liability under the application limitation regime. As a port entry requirement, owners will have to carry a Wreck Removal Convention State certificate (a “WRC State certificate”) to show that they have obtained adequate insurance coverage or other financial security to cover liability for wrecks. All Singapore-registered ships over 300 GT, therefore, must carry on board a WRC State certificate. This WRC State certificate can be obtained by applying to the MPA Registry Department.

Pursuant to Shipping Circular No 8 of 2023, all incidents involving Singapore-registered ships including but not limited to death, occupational accident or injury affecting seafarers, loss of persons from a ship, loss or abandonment of ship, security breaches, material damage to a ship, stranding or disabling of ship, involvement of the ship in a collision, damage to marine infrastructure that could endanger the safety of the ship, severe or potential damage to the environment brought about by damage of the ship, and detention by foreign authorities, must be reported to the MPA.

The MPA handles the domestic registration of vessels. An overview of an application for registration as a Singapore ship can be found via the MPA website. The relevant domestic legislation includes the Merchant Shipping (Registration of Ships) Regulations.

Owners of Singapore-flagged ships must be Singapore citizens/permanent residents or bodies corporate incorporated in Singapore with a minimum paid-up capital sum of SGD50,000. Owners of a Singapore-flagged ship must also appoint a commercial manager whose residence is in Singapore. Vessels that are still under construction cannot be registered.

In addition to the usual (permanent) registration, provisional registration of a vessel is permitted. Provisional registration is valid for one year, without the possibility of extension. The vessel must be transferred to the permanent register before the end of this period. No fee is charged for the transfer.

Dual flagging is not permitted. Singapore-flagged vessels that are found to be dual-flagged will be deregistered as the vessel will not be allowed to remain in the Singapore Registry of Ships.

A first priority statutory mortgage (in the form prescribed in the Singapore Merchant Shipping Act) must be registered with the Registry of Ships in Singapore.

A charge under Section 131 of the Singapore Companies Act must also be registered with the Singapore Accounting & Corporate Regulatory Authority within 30 days of the creation of the first priority statutory mortgage.

Documents required for the registration of a mortgage include an instrument of mortgage. If the vessel has a provisional registration where the original document of title to ownership has not been submitted, the mortgage will only be recorded upon confirmation by the mortgagee that they have signed the original documents.

Information regarding the ship and her mortgage status is available to the public, and this information may be obtained upon application and payment of a prescribed fee.

Wreck Removal

The main sources of law dealing with wreck removal in Singapore may be found under Part 9 of the Merchant Shipping Act and the First Schedule to the Merchant Shipping (Wreck Removal) Act 2017, which gives effect to the Nairobi International Convention on the Removal of Wrecks, 2007 (for all Singapore-registered ships over 300 GT).

Pollution

As for pollution from a vessel, the International Convention for the Prevention of Pollution from Ships, 1973 (the “MARPOL Convention”) (Annex I to Annex V) and the 1997 MARPOL Protocol to the International Convention for the Prevention of Pollution from Ships (Annex VI) have been ratified by Singapore. The Singapore Parliament has thus included provisions to give effect to the International Convention for the Prevention of Pollution from Ships, 1973 as modified and added to by the Protocol of 1978.

The Prevention of Pollution of the Sea Act (Cap 243) empowers the MPA to take preventative measures against pollution. In addition, the Merchant Shipping (Civil Liability and Compensation for Oil Pollution) Act (Cap 180) – which gives effect to the International Convention on Civil Liability for Oil Pollution Damage, 1992 and to the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage, 1992 – addresses liability for oil pollution. The Merchant Shipping (Civil Liability and Compensation for Bunker Oil Production) Act (Cap 180) – which was enacted to give effect to the International Convention on Civil Liability for Bunker Oil Pollution Damage, 2001 – prescribes the penalty for bunker oil pollution.

Collision

The Merchant Shipping (Prevention of Collisions at Sea) Regulations incorporate the International Regulations for Preventing Collisions at Sea, 1972, the latter being set out in the Schedule to the Merchant Shipping (Prevention of Collisions at Sea) Regulations.

The rules contained in the International Regulations for Preventing Collisions at Sea, 1972 apply to all vessels upon the high seas and in all waters connected therewith navigable by seagoing vessels.

Salvage

The statute regulating salvage of vessels in Singapore is to be found in Part 9 of the Merchant Shipping Act (Cap 179).

With effect from 24 July 2021, the Merchant Shipping Act was amended to implement the International Convention on Salvage, 1989, except for salvage pertaining to the following:

• fixed or floating platforms, or to mobile offshore drilling units when such platforms or units are on location engaged in the exploration, exploitation or production of seabed mineral resources; and
• warships or other non-commercial vessels owned or operated by a state and entitled, at the time of salvage operations, to sovereign immunity under generally recognised principles of international law unless that state decides otherwise.

The 1976 Convention on Limitation of Liability for Maritime Claims (the “LLMC 1976”) is applicable in Singapore. Singapore has also ratified the LLMC 1996 Protocol, including the 2012 Amendments (other than paragraphs 1(d) and 1(e) of Article 2 of the Convention). The applicable limits will be those of the 2012 Amendments. The applicable limits came into operation on 29 December 2019, applying to liability arising out of any occurrence that took place after 29 December 2019.

Article 11(2) of the LLMC 76 permits the constitution of a limitation fund, either by depositing the sum or by producing a guarantee acceptable under the legislation of the state party where the fund is constituted and considered to be adequate by the court or other competent authority.

Pursuant to amendments to the Rules of Court in 2018, a party wishing to constitute a limitation fund can do so by making payment into court under an order of the court, or by producing a letter of undertaking (LOU) from a protection and indemnity (P&I) club acceptable to the court (Order 33 Rule 37 of the Rules of Court 2021). This brings Singapore in line with the UK position. The limitation fund can be set up by the “ship-owner” as defined in Article 1 of the Convention and this includes the owner, charterer, manager and operator of the vessel.

To establish a limitation fund, a summons application must be made, together with a supporting affidavit. Where an LOU is to be used, it would be prudent to annex the draft LOU to the application and the supporting affidavit will need to demonstrate the P&I club’s financial ability to meet its obligations under the LOU.

The limitation fund is calculated according to the amended Convention on Limitation of Liability for Maritime Claims 1996 Protocol regime (2012 amendments).

The limits of liability for claims other than those mentioned in Article 7, arising on any distinct occasion, shall be calculated as follows.

Claims for Loss of Life or Personal Injury

• 3.02 million units of account for a ship with a tonnage not exceeding 2,000 tonnes.
• For a ship with a tonnage in excess of 2,000 tonnes, the following amounts in addition to that mentioned in subparagraph (a):

1. for each tonne from 2,001 to 30,000 tonnes, 1,208 units of account;
2. for each tonne from 30,001 to 70,000 tonnes, 906 units of account; and
3. for each tonne in excess of 70,000 tonnes, 604 units of account.

Other Claims

• 1.51 million units of account for a ship with a tonnage not exceeding 2,000 tonnes.
• For a ship with a tonnage in excess of 2,000 tonnes, the following amounts in addition to that mentioned in subparagraph (a):

1. for each tonne from 2,001 to 30,000 tonnes, 604 units of account;
2. for each tonne from 30,001 to 70,000 tonnes, 453 units of account; and
3. for each tonne in excess of 70,000 tonnes, 302 units of account.

The Maritime Labour Convention is applicable in Singapore. The local legislation enacting and giving effect to this convention is the Merchant Shipping (Maritime Labour Convention) Act. The Work Injury Compensation Act also applies, subject to modification prescribed for the application to the seafarer, to claims for compensation resulting from injuries suffered arising out of and in the course of employment of seafarers.

The Hague–Visby Rules are applicable and are in the Carriage of Goods by Sea Act.

Under Section 2(1)(a) of the Bill of Lading Act, it is the lawful holder of the bill of lading who has the right to sue the carrier under a contract of carriage. A person shall be regarded as having become the lawful holder of a bill of lading wherever they have become the holder of the bill in good faith (Section 5(2) of the Bill of Lading Act).

In this regard, Section 5(2) of the Bill of Lading Act provides three categories of persons who would be considered holders of the bill of lading:

• (a) the person with possession of the bill who is identified as the consignee of the goods to which the bill relates;
• (b) the person with possession of the bill of lading as a result of the completion, by delivery of the bill, of any endorsement of the bill or, in the case of a bearer bill, of any other transfer of the bill; and
• (c) the person with possession of the bill as a result of any transaction by virtue of which they would have become holder within (a) or (b) above had not the transaction been effected at the time when possession of the bill no longer gave the right to possession of the goods to which the bill relates.

Thus, this will depend on the construction of, and endorsements on, the bill of lading.

For the Singapore legal position on whether a bill of lading is a document of title, see the recent Singapore Court of Appeal decision of The “Luna” and another appeal [2021] 2 SLR 1054.

A ship-owner may be found liable in contract (depending on the terms of the contract) or in negligence for cargo damage (depending on whether damage sustained by the cargo was caused by negligence on the part of the ship-owner and whether the ship-owner owed a duty of care to the party alleging loss). Following the Singapore High Court decision in Wilmar Trading Pte Ltd v Heroic Warrior Inc [2019] SGHC 143, a party who may not be the owner of the cargo may claim for cargo damage if it can be shown that the ship-owner owed a duty of care to them.

The limitation of liability for cargo damage would be governed by the LLMC 1976 (as amended by the 1996 Protocol). The general limits of liability are set out in 2.4 Procedure and Requirements for Establishing a Limitation Fund.

Where contracts of carriage incorporate the Hague–Visby Rules, Article IV Rule 5(a) limits the carrier’s liability for cargo damage to:

• 666.67 units of account per package(s) or units(s); or
• 2 units of account per kilogram of gross weight,

whichever is higher.

There are no reported cases in Singapore that deal with the misdeclaration of cargo.

However, Article III Rule 5 of the Hague–Visby Rules states that the shipper shall be deemed to have guaranteed to the carrier the accuracy of cargo information at the time of the shipment and that the shipper shall indemnify the carrier for losses arising from the inaccuracy of such particulars.

Under Article III Rule 6 of the Hague–Visby Rules (as enacted by the Carriage of Goods by Sea Act), the limitation period for cargo damage is one year from delivery or the date on which the cargo should have been delivered. That said, parties can mutually agree to extend the limitation period.

There is no international convention that governs the arrests of vessels in Singapore. Singapore is not party to the 1952 Arrest Convention. As such, the Singapore High Court (Admiralty Jurisdiction) Act remains applicable.

Maritime liens that are recognised in the Singapore jurisdiction include:

• a damage lien arising out of damage done by a ship;
• Master and crew’s wages; and
• claims for salvage.

There is a list of claims that attract a statutory lien set out in the Singapore High Court (Admiralty Jurisdiction) Act. As per the High Court (Admiralty Jurisdiction) Act, a vessel can be arrested for claims that attract a maritime lien or a statutory lien. Crew injury may attract a statutory lien pursuant to Section 3(1)(f) of the High Court (Admiralty Jurisdiction) Act. Any claim arising out of any agreement relating to the carriage of goods in a ship or to the use or hire of a ship, including contracts for chartering a ship, may attract a statutory lien pursuant to Section 3(1)(h) of the High Court (Admiralty Jurisdiction) Act.

It is a requirement that the owners or demise charterers be liable in personam. When applying to obtain the warrant of arrest, the arresting party must identify the party who would be liable in personam in the action (Section 4 of the High Court (Admiralty Jurisdiction) Act).

A vessel can be arrested for unpaid bunkers under Section 3(1)(l) of the High Court (Admiralty Jurisdiction) Act for “any claim in respect of goods or materials supplied to a ship for her operation or maintenance”.

However, Section 4(4) of the High Court (Admiralty Jurisdiction) Act must be satisfied in order to obtain a warrant of arrest, namely that:

• the bunkers must have been ordered/purchased by the ship-owner or charterer of the vessel when the cause of action arose; and
• the purchaser remains the beneficial owner of the ship with respect to all the shares in it or the demise charterer of the vessel at the time the writ is issued.

In this regard, a charterer who purchases bunkers does not bind the vessel; to proceed against the vessel, the charterer shall have to be owner or demise charterer of the target vessel for arrest. This is because the action in rem shall only proceed if the person who would be liable in an action in personam was, when the cause of action arose, the owner or demise charterer of that ship. Alternatively, the action in rem may proceed against any ship owned by the charterer.

Substantively, in order to arrest a vessel, Sections 3 and 4 of the High Court (Admiralty Jurisdiction) Act must be satisfied. Essentially, the arresting party’s claim must come under a category of claim relating to the ship as set out in Section 3 of the High Court (Admiralty Jurisdiction) Act.

The arresting party must also identify the relevant person who would be liable in personam and show that this relevant person was, when the cause of action arose, the owner or charterer of, or in possession or in control of, the ship (Section 4(b) of the High Court (Admiralty Jurisdiction) Act). The arresting party must also show that the relevant person was, at the time the writ is issued, the beneficial owner of the ship in respect of all the shares in it or the demise charterer of the ship (Section 4(b)(i) of the High Court (Admiralty Jurisdiction) Act).

Procedurally, an affidavit in support of the application for the warrant of arrest must be filed and served, and a full disclosure of all relevant facts is required in this supporting affidavit because the application is ex parte.

In general, the Singapore court does not require original, notarised or legalised documents. On 18 January 2021, Singapore acceded to, and became a contracting party to, the Hague Convention Abolishing the Requirement of Legalisation for Foreign Public Documents. The Apostille Act 2020 therefore came into operation on 16 September 2021 and, as a result, Singapore and other contracting parties have waived the requirement for legalisation of public documents by replacing legalisation with the use of apostilles. As such, copies will suffice for an application to arrest a vessel and the authenticity of the document can be dealt with/objected to later.

The Sheriff may request that the arresting party place a deposit to cover the Sheriff’s anticipated expenses in maintaining the vessel while under arrest because the arresting party is obliged to maintain the vessel during the period of arrest.

See 4.4 Unpaid Bunkers.

It is possible to arrest a vessel for a claim for unpaid freight as it relates to carriage of goods in a ship and is likely to fall under Section 3(1)(h) of the High Court (Admiralty Jurisdiction) Act. See the case of The Ocean Jade [1991] 2 MLJ 385, where this issue was left open.

Vessels under the same registered ownership as the offending vessel may be arrested. However, vessels within the same group or belonging to an affiliate – but not under the same registered ownership as the offending vessel – cannot be arrested.

A plaintiff may apply for, and obtain, a Mareva injunction or freezing order in respect of the defendant’s assets. A worldwide Mareva injunction or freezing order can also be obtained. However, the procedure for, and the effect of, a Mareva injunction or freezing order in respect of a vessel is not the same as arresting a vessel.

A ship may be released upon the provision of alternative security in several forms, including:

• an LOU from a P&I club;
• a bank guarantee from a first-class bank in Singapore; or
• payment into court.

The practice of the Singapore courts is to consider applications for the judicial sale of ships if security is not provided, so as to avoid the depreciating value of a ship under continual arrest. The sale of a vessel pendente lite is possible. The arresting party is liable for maintaining the vessel at all times whilst under arrest.

Under Order 33 Rule 22 of the Rules of Court 2021 (previously Order 70 Rule 21 of the Rules of Court 2014), where the court has ordered the ship to be sold in an action in rem against a ship, any party who has obtained, or obtains, judgment against the ship or proceeds of sale of the ship may apply to the court by summons for an order determining the order of priority of the claims against the proceeds of sale of the ship.

As regards the order of priorities, it is as follows:

• port dues;
• Sheriff’s costs and expenses;
• plaintiff’s legal costs of arrest;
• maritime liens that arose prior to arrest;
• possessory liens;
• maritime liens post-arrest;
• mortgagee’s claim; and
• claims by other claimants having statutory liens over the vessel.

Generally, in actions against the proceeds of sale of the ship, costs have the same priority as the claim in respect of which they have been incurred. See the decision of The “Songa Venus” [2021] 2 Lloyd’s Law Rep 365; [2020] SGHC 74, in which the court also held that a similar result would have been obtained under Order 29 Rule 6 of the Rules of Court 2014 under which the Court might order a possessory lien holder to surrender the property in question to its owner, upon the owner paying into court the sum claimed by the possessory lien holder together with interests and costs. Thus, the court held that it was just and equitable, as well as principled, to accord the costs the same priority as the possessory lien holder.

In 2017, Singapore adopted some aspects of the Chapter 11 United States Bankruptcy Code, including:

• an automatic moratorium that starts from the date of the moratorium application; and
• a worldwide moratorium.

Where there is a moratorium for a scheme of arrangement in place, the court may restrain further proceedings from being commenced or continued. However, in relation to in rem proceedings, Section 64(12) of the Insolvency, Restructuring and Dissolution Act 2018 (IRDA) read together with Section 4 of the Insolvency, Restructuring and Dissolution (Prescribed Arrangements and Proceedings) Regulations 2020 carves out an exception to the commencement (but not the continuation) of admiralty proceedings. This means that creditors will be able to file an in rem writ against a vessel, but will not be able to serve the writ or arrest the vessel.

In The “Ocean Winner” [2021] 4 SLR 526, the Singapore High Court dealt with Section 64(8)(c) to (d) of the Insolvency, Restructuring and Dissolution Act 2018, which prohibits the commencement of any proceedings against the company, or any execution, distress or other legal processes against the property of the company during the automatic moratorium period, without the leave of court.

In that case, the plaintiff did not obtain leave of court to file the writs against four vessels that belonged to a company under judicial management. The court found that the filing of the writs only created a statutory lien in favour of the plaintiff and merely created the security interest for the plaintiff; it did not yet invoke the admiralty jurisdiction. In that limited sense, the action did not substantively “commence” until service of the writs. Hence, the filing of the in rem writ crystallised the plaintiff’s security interest, which is differentiated from a typical civil action where the claimant’s right to bring their claim already exists. In this regard, the court observed that the moratorium in a scheme of arrangement was never intended by parliament to prevent a plaintiff’s security interest from even being created, because the purpose of the scheme of arrangement was simply to give the company “breathing space”.

The court also found that the filing of the writs was not “against the company” (pursuant to Section 64(8)(c), IRDA) because it was an action against the res. The filing of the writs also did not constitute an “execution, distress or other legal process” under Section 64(8)(d) of the IRDA, because the filing of the in rem writ merely created the statutory lien (ie, the security interest in the ship) and did not involve an element of enforcement.

The arresting party may be liable for damages when the arrest is a “wrongful arrest”. In such a case, the defendant would have to show that the plaintiff had carried out the arrest with mala fide or with gross negligence so as to imply malice on the arresting party that results in losses to the defendant. If the defendant is successful in showing wrongful arrest, the warrant of arrest may be set aside and the security put up by the defendant (such as the LOU) shall be returned, and damages may be claimed against the arresting party.

The LLMC 1976 as amended by the 1996 Protocol governs “claims in respect of loss resulting from delay in the carriage by sea of cargo, passengers or their luggage” (Article 1(b), LLMC 1976).

Pursuant to Section 8 of the Maritime Conventions Act 1911, the time bar for claims against a vessel or the ship-owners for damage or loss – inter alia, for loss of life or personal injuries suffered by persons on board the vessel – would be two years from the date of loss or injury.

Under Article 7 of the LLMC 1976, “In respect of claims arising on any distinct occasion for loss of life or personal injury to passengers of a ship, the limit of liability of the shipowner of the ship is an amount of 175,000 Units of Account multiplied by the number of passengers that the ship is authorised to carry according to the ship’s certificate.”

A claim for personal injury of a passenger may attract a statutory lien pursuant to Section 3(1)(f) of the High Court (Admiralty Jurisdiction) Act and may be brought against the vessel as a maritime claim.

Singapore courts generally recognise jurisdiction clauses that are expressly stated in the bill of lading.

Generally, the court retains a discretion whether to stay proceedings or not where there is an exclusive jurisdiction clause incorporated in the bills of lading. As the court of appeal held in Vinmar Overseas (Singapore) Pte Ltd v PTT International Trading Pte Ltd [2018] SGCA 65, “Exclusive jurisdiction clauses are ubiquitous provisions in international commercial contracts... Regardless of the reason for the choice of the agreed forum, an exclusive jurisdiction clause has full contractual force unless and until it is invalidated.”

Accordingly, the court’s discretion should be exercised in favour of a stay of proceedings brought in breach of an exclusive jurisdiction clause, unless the applicant can find a “strong cause” for resisting a stay based on exceptional circumstances (Amerco Timbers Pte Ltd v Chatsworth Timber Corp Pte Ltd [1977–1978] SLR(R) 112; The “Eastern Trust” [1994] 2 SLR(R) 511 at [8]).

As held in Amerco Timbers (which endorsed The Eleftheria [1969] 1 Lloyd’s Rep 237), the factors that the court would consider in deciding whether there is a “strong cause” to refuse a stay are as follows.

• In what country the evidence on the issues of fact is situated or more readily available, and the effect of that on the relative convenience and expense of trial as between the Singapore and foreign courts.
• Whether the law of the foreign court applies and, if so, whether it differs from Singapore law in any material respects.
• With what country either party is connected and, if so, how closely.
• Whether the defendants genuinely desire trial in the foreign country, or are only seeking procedural advantages.
• Whether the plaintiffs would be prejudiced by having to sue in the foreign court because they would:
1. be deprived of security for their claim;
2. be unable to enforce any judgment obtained;
3. be faced with a time bar not applicable in Singapore; or
4. for political, racial, religious or other reasons be unlikely to get a fair trial.

Singapore courts recognise and enforce an arbitration clause of a counterparty, so long as the clause is expressly stated in the bill of lading. It is well established that a clause merely purporting to incorporate the terms of a charterparty without express reference to the arbitration clause may not be sufficient to incorporate the arbitration clause (this is a principle reiterated in The “Navios Koyo” [2021] SGCA 99 at [21]).

There is Singapore case law to suggest that general wordings may be insufficient to incorporate an ancillary charterparty arbitration clause and that the same result must follow with regard to the charterparty jurisdiction clause (The “Dolphina” [2012] 1 SLR 992). Parties should make clear in the bill of lading that the bill of lading is subject to an arbitration clause in the charter.

Where an arbitration clause has been expressly incorporated into the charterparty, court proceedings that had been commenced to arrest the vessel may be stayed upon an application for the same by any party to the arbitration agreement at any time after appearance and before filing pleadings/taking any other step in the court proceedings. The power of the court to grant a stay is found at Section 6(1) of the International Arbitration Act.

Singapore is a party to the 1958 New York Convention and the International Arbitration Act gives effect to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards.

Pursuant to the International Arbitration Act, some grounds to resist enforcement include:

• a party’s lack of capacity to agree to arbitrate;
• an invalid arbitration agreement is involved;
• a party is not given proper notice or is unable to present their case;
• the award goes beyond the scope of the arbitration agreement;
• the composition of the tribunal or procedure is not in compliance with the agreement or lex arbitri;
• the award is not yet binding;
• the award is set aside or suspended by a competent authority;
• the subject matter of the dispute is not arbitrable; and
• the enforcement is against the state’s public policy.

Section 7 of the International Arbitration Act provides that vessels may be arrested as security for a foreign arbitration. However, the Singapore court has held in DSA Consultancy (FZC) v The “Eurohope” [2017] 5 SLR 934 that a vessel cannot be arrested in Singapore as security for foreign court proceedings.

The Singapore Chamber of Maritime Arbitration (SCMA) specialises in maritime claims in the jurisdiction.

The defendant can apply for a stay of proceedings in favour of the arbitration/jurisdiction clause under Section 6(1) of the International Arbitration Act. See 6.2 Enforcement of Law and Arbitration Clauses Incorporated Into a Bill of Lading.

However, a court is also at liberty to impose certain conditions as it may think fit for a stay granted under Section 6(2) of the International Arbitration Act. For example, in Splosna Plovba International Shipping and Chartering d.o.o. v Adria Orient Line Pte Ltd [1998] SGHC 289, the court imposed that security of USD50,000 be provided for arbitration in London. In KVC Rice Intertrade Co Ltd v Asian Mineral Resources Pte Ltd and another suit [2017] 4 SLR 182, the condition imposed was that the defendant was not permitted to raise objections to the jurisdiction of the President of the Singapore International Arbitration Centre to appoint an arbitrator if parties were unable to agree to the appointment of an arbitrator. In The “Navios Koyos” [2021] SGCA 99, the question was whether the stay of court proceedings ought to be granted unconditionally or on condition upon a waiver of the time bar defence. The court found, inter alia, that the imposition of such a condition would deprive the respondent of an accrued and substantive defence and, hence, the stay was granted unconditionally.

Profits derived from the operation of a Singapore-registered vessel are exempt from Singapore income tax. The exemption applies to the profits gained from the operation of the activities outside the limits of the port of Singapore, as set out at Section 13A(1) read with Section 13A(16) of the Income Tax Act. These activities include:

• the carriage of passengers, mail, livestock or goods outside the limits of the port of Singapore;
• towing or salvage operations outside the limits of the port of Singapore;
• the charter of ships outside the limits of the port of Singapore;
• the use outside the limits of the port of Singapore of the ship as a dredger, seismic ship or ship used for offshore oil or gas activity;
• the use outside the limits of the port of Singapore of the ship for offshore renewable energy activity or offshore mineral activity; and
• the finance leasing of the ship for use outside the limits of the port of Singapore, but only where the income in question is derived from the finance leasing on or after 12 December 2018 and is not derived by the shipping enterprise as part of a business of trading in ships or constructing ships for sale.

For foreign vessels, tax exemption applies to income derived from the carriage of passengers, mail, livestock or goods uplifted from Singapore, except where that carriage arises solely from trans-shipment from Singapore, or is only within the limits of the port of Singapore (Section 13A(1) read with Section 13A(16) of the Income Tax Act).

Singapore law relating to force majeure largely follows the English position, which is that force majeure is premised on a contractual term that allows the parties to suspend or terminate their obligations to perform the contract, when specified disrupting events take place that are beyond their control. The force majeure clause must be expressly provided for in the existing contract.

Where a force majeure clause is incorporated into a contract, the question of whether the COVID-19 pandemic constitutes a force majeure event will depend on the wording of the force majeure clause, as well as on when the contract was entered into. It is arguable that the pandemic will be covered for events that have been identified, such as “epidemic” or “acts of government/government regulations”. Conversely, if the contract were made after the outbreak of COVID-19, it would be difficult to argue that the pandemic was an unforeseeable event.

As Singapore is party to the International Convention for the Prevention of Pollution from Ships of 1973 as modified by the Protocol of 1978 (MARPOL), the MPA has enforced the IMO 2020 regulations.

Limit on Sulphur Content of Fuel Oil

The MPA has amended its Pre-Arrival Notification (PAN) to reflect the requirements for reporting on the use of compliant fuel in accordance with the IMO 2020 Fuel Oil Sulphur Limit post 1 January 2020. The MARPOL Annex VI Regulation stipulates that after this date the sulphur content of any fuel oil used on board ships shall not exceed 0.50% mass by mass (m/m).

The revised PAN will require ships calling at the port of Singapore to declare their method of compliance – ie, whether the ship will be using compliant fuel (sulphur content not exceeding 0.50% m/m) or an exhaust gas cleaning system (scrubber). Ships using non-compliant fuel (sulphur content exceeding 0.50% m/m) are also required to declare and provide reasons for non-compliant fuel.

Enforcement Actions

The MPA will inspect Singapore-registered ships as well as foreign-registered ships in the port of Singapore. Compliance with the IMO 2020 requirements will be part of the MPA’s flag state control and port state control inspections to ensure ships are compliant with the relevant statutory regulations.

Singapore has enacted domestic regulations that implement trade sanctions imposed by UN Security Council resolutions. These domestic regulations are enacted by the Minister of Home Affairs pursuant to the United Nations Act 2001. Singapore currently implements trade sanctions against:

• the Central African Republic;
• the Democratic People’s Republic of Korea;
• the Democratic Republic of the Congo;
• Iran;
• Iraq;
• Lebanon;
• Libya;
• Somalia;
• South Sudan;
• Sudan; and
• Syria.

Specific measures have also been imposed on Russia under the Strategic Goods (Control) Order 2021. All items under the Military Goods List are prohibited for export to Russia, as well as certain items in Category 3 (Electronics), Category 4 (Computers) and Category 5 (Telecommunications and Information Security).

The primary authority responsible for enforcing Singapore’s trade sanctions is Singapore Customs, which has wide investigation powers under the Regulation of Imports and Exports Act 1995 (RIEA), including the power to:

• compel an importer/exporter or their agent to produce trade documents on demand;
• search vessels, aircraft and vehicles;
• examine any package, box, chest or other article in Singapore where a reasonable suspicion exists that it is being imported/exported contrary to Singapore’s trade sanctions, and to remove the article to a police station or examination station if more convenient; and
• arrest without warrant any person where there is reasonable suspicion that the person has committed an offence under the RIEA (including failure to comply with Singapore’s trade sanctions) and powers to search the person and seize articles as evidence.

The war in Ukraine has given rise to frustration of contracts resulting from sanctions imposed by Singapore against Russian entities and certain trades, as well as actual hostilities between Ukraine and Russia. These cases have largely been arbitrated.

The working language in Singapore is English and whilst oral evidence may be adduced in a foreign language in court (subject to interpretation at a hearing in court), all documents submitted in the course of litigation in Singapore need to be translated into English by a certified translator for use in court.