Singapore: risk of arrest security being lifted

Skuld and local law firm Incisive have issued an advisory indicating the impact of a change in the law in Singapore.

In the situation where a vessel owner who has a claim against a time charterer for failure to pay charter hire under an amended NYPE charterparty, which provides for all disputes to be referred to the exclusive jurisdiction of the English courts.

The owner commences Singapore proceedings and arrests one of the vessels owned by the charterer in Singapore. The charterer then applies for a stay of the Singapore proceedings to enforce the choice of English courts agreement.

Before October 1st this year the Singapore courts could refuse the stay and allow the vessel owner to keep the security obtained through the arrest.

Since then, with the enactment of the Choice of Court Agreements Act (the “CCAA”), the Singapore courts must stay the Singapore proceedings and may also release the obtained security.

At the time of writing, the HCCCA and the CCAA are yet to be tested by the Singapore court. In light of such uncertainties, Skuld says that Members “should consider using non-exclusive jurisdiction clauses or exclusive jurisdiction clauses that expressly exclude application of the HCCCA and the CCAA in their contracts. Alternatively, parties may incorporate arbitration agreements into all contracts until it becomes clear how the Singapore court would apply the HCCCA and the CCAA.”