Duty to make full and frank disclosure of all material facts in Singapore arrest proceedings

In UK Club’s QCR Winter 2021 the club covers the case of “BIG FISH” [2021]. SGHCR 7 sets out the principles governing the duty of full and frank disclosure for a party applying for a warrant of arrest in Singapore, and in particular, considers whether it is necessary to disclose a potential time bar defence.

The Plaintiff was the registered owner of the BPL 1. The Defendant was the registered owner of the Big Fish. On January 22nd 2019 the BPL 1 collided with the Big Fish within Indonesian territorial waters.

On January 21st 2021 the defendant commenced proceedings in the East Jakarta District Court ( the Indonesian Action), claiming for loss and damage arising out of the Collision.

On February 11th 2021 (which was after the two-year anniversary of the Collision): the Plaintiff issued an in rem writ against the defendant in Singapore for loss and damage suffered as a result of the Collision ( the Singapore Action) and obtained a warrant of arrest against the Big Fish.

On February 13th 2021 the Big Fish was arrested in Singapore.

The Defendant sought inter alia to set aside the warrant of arrest on the basis that there was material non-disclosure by the Plaintiff when obtaining the warrant of arrest. Of the material facts that the Plaintiff allegedly did not disclose, the chief complaint was the Plaintiff’s failure to disclose and draw the Court’s attention to the two-year limitation period under Article 742 of the Indonesian Commercial Code.

According to the Defendant, the Collision occurred in Indonesian territorial waters and would be governed by Indonesian law. The limitation period for collision claims is two years from the date of the collision pursuant to Article 742. As the limitation period for claims arising out of the Collision expired on January 22nd 2021, the Singapore Action that was commenced on February 11th 2021 was time-barred.

Amongst the various issues that the Singapore High Court decided on, it set aside the warrant of arrest for material non-disclosure.

It highlighted the following principles governing the duty of full and frank disclosure:

  1. A plaintiff who applies for an arrest on an ex parte basis is under a duty to make full and frank disclosure of all material facts, even if these facts are prejudicial to the plaintiff’s claim. A failure to do so is an independent ground to set aside the arrest.
  2. The touchstone for determining materiality is the relevance of that fact to the court’s assessment of whether to grant the warrant of arrest.
  3. There is generally no duty to disclose plausible defences that may be raised at trial, unless the defence is of such weight as to deliver a “knock-out blow” to the claim summarily.
  4. Whether a potential time bar defence should be disclosed depends on the circumstances. A key determinant is the existence of facts suggesting an abuse of the arrest process. For example, where the arresting party is put on notice, is aware, or ought to be aware of an applicable limitation period and commences an action after the said period, the arresting party should disclose the potential time bar defence and explain why the time bar is not applicable on the facts of the case. Conversely, where the arresting party is unaware of the existence of an alleged time bar, or would not have known had he made proper inquiries at the time of the arrest, a time bar defence would not be a material fact.

The Court found that there was material non-disclosure that justified the setting aside of the warrant of arrest. It said that the Plaintiff knew or must have known from the claim papers filed in the Indonesian Action that Article 742 would be highly relevant to the viability of its claim. It ought to have disclosed and brought the Court’s attention to two material facts:

  • The existence of Article 742, because the limitation period therein applied generally to vessel collision claims and was of such weight to deliver a “knock-out blow” to the Plaintiff’s claim summarily (if found to be applicable).
  • That the Defendant had pleaded this time bar in the Indonesian Action.

UK Club said that it was clear from the Singapore Court’s decision that an arresting party’s failure to satisfy its duty to make full and frank disclosure might result in the Court setting aside the arrest. The Court also pointed out that, in cases that turn on a point of foreign law, it was good practice for arresting parties to engage their foreign law experts early, i.e., by the arrest stage.