New practice direction governs admiralty and maritime claims

Ambit of maritime claims
Registry of Kuala Lumpur Admiralty Court
Administration of warrants of arrest
Sheriffs and assistant sheriffs
Discharge of cargo
Filing issues

The Admiralty Court recently issued Practice Direction 1/2012 in relation to admiralty and maritime claims. The practice direction is to be followed in relation to admiralty and maritime matters at the high courts. This update provides an insight into various aspects of the practice direction.

Ambit of maritime claims

The Kuala Lumpur Admiralty Court(1) and the other high courts(2) shall hear all matters pertaining to 'maritime claims', which comprise the following:

• claims and disputes relating to the 18 categories of admiralty matters identified in Paragraph 24(b) of the Courts of Judicature Act 1964, read together with the relevant provisions of the English Supreme Court Act 1981;
• claims relating to the carriage of goods by sea;
• the limitation of actions for maritime claims, including actions seeking to limit liability or to extend the time where the limit of liability or the time for commencement of proceedings is prescribed by maritime convention or legislation;
• disputes pertaining to marine insurance and reinsurance contracts, including marine insurance agents and brokerage contracts;
• disputes arising from shipbuilding agreements, including issues with regard to the construction, design, maintenance and repair of ships;
• disputes arising from the sale and purchase of ships;
• civil claims arising out of marine pollution;
• claims related to marine or shipping-related agencies, freight and multimodal transport and warehousing of goods at any port in peninsular Malaysia;
• claims related to ship financing and documentary credit for the carriage of goods by sea;
• claims for death or personal injury, loss or damage arising out of a marine activity in or about a marine facility, which include ports, docks, berths or any form of structure defined as a 'ship' under maritime law;
• civil claims arising from any breach of any marine regulations, notices, bylaws, rules or guidelines;
• disputes pertaining to the welfare of any seaman, including wages and contract of service;
• applications in connection with maritime arbitrations, including applications for the preservation of assets pending maritime arbitration and the review, setting aside and enforcement of maritime arbitration awards; and
• appeals in respect of a maritime claim determined by the subordinate courts.

The practice direction stipulates that subject to the consent of all parties, any appeal in respect of a maritime claim from a subordinate court may be transferred to the Kuala Lumpur Admiralty Court.

Registry of Kuala Lumpur Admiralty Court

The practice direction further allows for the registry of the Kuala Lumpur Admiralty Court to be notified and updated regarding the filing of admiralty instruments in other high courts. For example, where an admiralty writ of summons, warrant of arrest, instrument of release or caveat against arrest or caveat against release is filed, issued, entered or withdrawn at a high court other than the Kuala Lumpur Admiralty Court, the respective registrar of such high court shall notify the registrar of the Kuala Lumpur Admiralty Court of such event on the day of its filing or, if filed after 3:00 pm, by noon the following day. A copy of the filed writ of summons, warrant of arrest, instrument of release or caveat shall be dispatched to the Registry of the Kuala Lumpur Admiralty Court for recordal within two working days of such event.

All maritime claims filed in another high court shall be transferred to the Kuala Lumpur Admiralty Court only with the consent of all parties.

The Registry of the Kuala Lumpur Admiralty Court will now maintain a Register of Maritime Claims Cause Book.(3) Complete details of all writs of summons relating to maritime claims filed in the Kuala Lumpur Admiralty Court and other high courts shall be recorded in the Register of Maritime Claims Cause Book.

The Registry of the Kuala Lumpur Admiralty Court will also maintain the Register of Central Maritime Warrants and Caveats Book.(4) Complete details of all admiralty warrants of arrest, caveats against arrest or caveats against release lodged with the registry of the Kuala Lumpur Admiralty Court and any other high court shall be recorded in the Register of Central Maritime Warrants and Caveats Book.

The deputy registrar of the Kuala Lumpur Admiralty Court shall ensure that all information on admiralty warrants of arrest, release and caveat is entered on the caveats and warrants webpage.(5)

The Kuala Lumpur Admiralty Court shall hear all applications from the Kuala Lumpur sheriff or assistant sheriffs with regard to admiralty matters relating to any property under arrest, including applications for an omnibus order.

Administration of warrants of arrest

A key aspect of the practice direction is the administration of warrants of arrest. The practice direction now provides that all applications for warrant of arrest in rem actions are to be heard by the Kuala Lumpur Admiralty Court judge or another high court judge or, as may be directed, the deputy registrar or the senior assistant registrar of the high court.

A warrant of arrest is valid for 12 months from the date of its issuance. This does not prevent the issuance of a new warrant of arrest if the writ of summons remains valid.

In respect of maritime claims in an in rem action in which a certificate of urgency has been filed and the warrant of arrest requires immediate execution, the arresting party shall file the necessary papers and documents through the electronic filing (e-filing) system if e-filing procedures are in place at the relevant high court. The deputy registrar of the high court shall be informed immediately upon the e-filing of such papers. Counsel for the arresting party shall attend court on the day of such e-filing with the printed form of all the documents filed electronically for the documents to be processed and issued and the warrant of arrest executed.

A senior assistant registrar of the Kuala Lumpur High Court shall be on duty after office hours on rotation to attend to urgent matters relating to an arrest. For the other high courts, a deputy registrar or a senior assistant registrar shall fulfil this duty.

Where the warrant of arrest is to be executed immediately, the arresting party's representative shall accompany the sheriff, assistant sheriff or bailiff to execute the warrant of arrest against the property. In circumstances where the execution of the warrant of arrest causes difficulties, the sheriff, assistant sheriff or bailiff may secure the assistance of the harbour master or the marine police in executing the warrant of arrest.

The document of release of a property under arrest may be served by solicitors of either party to the proceedings on the property, without the attendance of a court officer, at the option of the releasing party. An affidavit of service of the document of release shall be affirmed and filed in court by the relevant solicitor.

Guards shall be appointed by the arresting party only on application by the arresting party to the court for an appropriate order. The costs of appointing guards shall be borne by the arresting party directly. The reasonable and proper costs of appointing the guards shall stand as the sheriff's expenses.

Sheriffs and assistant sheriffs

The deputy registrar and the senior assistant registrars of the Kuala Lumpur High Court are the Kuala Lumpur Admiralty Court's sheriff and assistant sheriffs, respectively. Other administrative assistants (eg, bailiffs, process servers and other subordinate officers) shall assist the sheriff or assistant sheriffs in carrying out their duties. In the context of maritime claims, the sheriff or assistant sheriffs must execute all warrants of arrest and serve all writs of summons, orders, notices, commands and other process of any court which are given to them by the court for that purpose. In addition, they must make the return of the warrants of arrest, writs of summons, orders, notices, commands and other processes, together with the manner of the execution or service, to the court from which the process is issued.

Upon the issuance of a warrant of arrest, the following measures are to be taken immediately by the sheriff or assistant sheriffs:

• The documents for execution on the property to be arrested shall be collated, including the sealed warrant of arrest and writ of summons.
• Letters accompanying a copy of the warrant of arrest shall be prepared for issuance to the relevant Marine Department, Customs Department, Immigration Department, Port Authority and licensed terminal operator.
• The sheriff, assistant sheriff or bailiff, together with the arresting party's representative, shall proceed to the port nearest to the property to be arrested to execute the warrant of arrest.
• The sheriff, assistant sheriff or bailiff shall deliver a copy of the warrant of arrest, together with the covering letter, to the relevant Marine Department, Customs Department, Immigration Department, Port Authority and licensed terminal operator, and thereafter execute the warrant of arrest on the property to be arrested. If there is any foreign crew onboard the arrested ship, the sheriff, assistant sheriff or bailiff shall inform the Immigration Department immediately.
• Upon executing the warrant of arrest on the property, the sheriff, assistant sheriff or bailiff shall prepare and affirm an affidavit on the execution of the warrant of arrest and service of the writ of summons. The affidavit shall be filed in the high court where the process is issued.

The sheriff or assistant sheriff, or the arresting parties on behalf of the sheriff, may immediately or at any time (based on the urgency of the matter) apply to the court under Order 70, Rule 11 of the Rules of the High Court 1980 for an omnibus order for directions in respect of the preservation, management or control of the property under arrest in the proceedings. The high court may, at any stage of proceedings, make appropriate orders with respect to the preservation, management or control of the property under arrest. The deputy registrar, sheriff or assistant sheriff shall send a copy of any omnibus order made to all parties in the action and to the relevant authorities.

Upon the grant of an omnibus order by the court, the arresting party shall appoint a shipping agent to assist the sheriff or assistant sheriff in the preservation, management or control of the property under arrest. All expenses incurred by the shipping agent shall be paid directly by the arresting party. The shipping agent shall give a daily report on the management and control of the property under arrest to the sheriff or assistant sheriff. All expenses reasonably and properly incurred by the shipping agent and paid by the arresting party shall stand as sheriff's expenses.

The repatriation of the master or crew of a ship under arrest shall be arranged as soon as possible by the arresting party in consultation with the sheriff or assistant sheriff and the harbour master. If the master or crew are repatriated and the harbour master or Marine Department requires that a substitute master and crew be engaged, the appropriate court order shall be obtained before the repatriation of the master or crew by the arresting party. In matters of urgency, the sheriff or assistant sheriff may direct the arresting party to obtain the appropriate court order to repatriate the master or crew of a ship under arrest. All repatriation costs shall be borne by the arresting party and shall stand as sheriff's expenses.

Where a warrant of arrest has been executed by the sheriff, assistant sheriff or bailiff against a property, but no further action is taken by the parties in the proceedings, the sheriff or assistant sheriff may direct the arresting party to take the necessary measures pursuant to Order 70 of the Rules of the High Court; otherwise, the property arrested shall be released by the court.

Discharge of cargo

The practice direction also addresses the practical problems faced by cargo owners caught in the middle of a dispute leading up to the issuance of a warrant of arrest.

Pursuant to the practice direction, an arrested ship it shall not be allowed to work without the sheriff's express permission. If the ship has commenced loading before the arrest takes place, then immediately after execution of the arrest warrant, the sheriff or assistant sheriff shall direct the master to cease all cargo-loading operations. However, if at the time of the arrest a cargo which is not under arrest is being unloaded by the cargo owners and the sheriff or assistant sheriff allows the loading to continue, he or she shall require the cargo owners or demise charterers of the ship or their agents to furnish a letter of indemnity with regard to the sheriff's liability if there is an accident while unloading cargo. However, if unloading is not permitted or ceased at the sheriff's direction, a person who is entitled to immediate possession of the cargo may have the cargo discharged from the ship, without intervening in the action, by requesting that the sheriff, assistant sheriff or the arresting party to take appropriate steps to enable the cargo to be discharged. If the sheriff, assistant sheriff or the arresting party considers the request to be reasonable and the cargo owners undertake to pay the sheriff's costs and expenses, the sheriff, assistant sheriff or arresting party shall apply to the court for appropriate orders. Alternatively, the cargo owners can intervene in the action and apply to the court to discharge the cargo from the ship. The costs of discharging the cargo shall be the responsibility of the cargo owners.

Where a ship is not under arrest but the cargo onboard is, and the shipowners wish to discharge the cargo under arrest, they may, without intervening in the action, request the arresting party, sheriff or assistant sheriff to take the appropriate steps to enable the cargo to be discharged. If the arresting party, sheriff or assistant sheriff considers the request to be reasonable, or if the applicant gives a satisfactory undertaking in writing to the arresting party, sheriff or assistant sheriff to bear all costs and expenses of discharge, the arresting party, sheriff or assistant sheriff shall apply to the court under Order 70, Rule 11 of the Rules of the High Court for the appropriate order. Alternatively, the shipowners may intervene in the action in which the cargo is under arrest and apply by summons for an appropriate order for the discharge of the cargo and for direction as to fees and expenses of the sheriff regarding the discharge and storage of the cargo pursuant to such order.

Filing issues

Under the practice direction, all maritime claims in an action in personam must be filed through the e-filing system where e-filing procedures are in place at the relevant high court.

Regarding maritime claims involving collisions of ships to which Order 70, Rule 17 of the Rules of the High Court applies, parties shall attend court to file and deliver in a closed envelope to the deputy registrar the original preliminary act, which shall be duly sealed by the deputy registrar and placed in a physical file opened for the action.

For further information on this topic please contact Rajasingam Gothandapani at Shearn Delamore & Co by telephone (+60 3 2070 0644), fax (+60 3 2078 5625) or email ([email protected]).

Endnotes

(1) High Court of Malaya at Kuala Lumpur designated to hear maritime claims.