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Arrest of vessels in Malaysia - No duty of full and frank disclosure

06 August 2021

The Malaysian Admiralty Court in Premium Vegetable Oils Sdn Bhd v The Owners and/or Demise Charterers of The Ship or Vessel ‘Ever Concord’ of The Port of Zanzibar, Tanzania [2021] 9 MLJ 936 has clarified a long debated question of whether a party wishing to procure a warrant of arrest against a vessel (“arresting party”) in Malaysia has a duty to make full and frank disclosure in its affidavit leading to the warrant of arrest (“arrest affidavit”).  The High Court held that there is no such requirement, and that the arresting party only has to comply with the relevant provision of the Malaysian Rules of Court 2012 (“ROC 2012”).
 
The case concerned an application by the defendant for, amongst others, the warrant of arrest to be set aside and for the vessel to be released from arrest, together with damages. The defendant alleged that the plaintiff had failed to make full and frank disclosure in its arrest affidavit, where according to defendant the plaintiff had failed to disclose material facts and misrepresented and suppressed material facts in order to obtain the ex parte warrant of arrest from the court.  
 
High Court’s analysis
 
After a review of the authorities, the High Court found that the position in Malaysia is the same as that in England, where the issue of a warrant of arrest is a right1 of the plaintiff, and not a discretionary remedy (applying the English Court of Appeal decision of The Varna [1993] 2 Lloyd’s Rep 253).
 
The Learned Judicial Commissioner carefully reviewed the wording of the ROC 2012, which contemplates that a warrant of arrest is merely issued, upon certain criteria being met. This is in contrast with the ROC 2012’s predecessor, the Rules of the High Court 1980 which provides that a party must apply for the issuance of a warrant of arrest.
 
The position in Singapore was also distinguished. There, the rules of court also provide that a party applies for a warrant of arrest. The High Court therefore held that cases such as The Vasiliy Golovnin [2008] 4 SLR 994 and The ‘Eagle Prestige’ [2010] 3 SLR 294 which imposed a requirement for full and frank disclosure are inapplicable in Malaysia, due to the differences in both sets of rules of court.
 
What needs to be in an arrest affidavit?
 
The High Court was of the view that the arresting party only has to satisfy the requirements under Order 70 rules 4(6) and 4(7) of the ROC 2012, which provide that an arrest affidavit must contain the following particulars2:
 
  1. the name, address and occupation of the applicant for the warrant

  2. the nature of the claim or counterclaim in respect of which the warrant is required and that it has not been satisfied;

  3. the nature of the vessel to be arrested and the name of the vessel and the port to which she belongs;

  4. the amount of security sought, if any;

  5. whether the vessel against which the action is brought is the vessel in connection with which the claim in the action arose; and

  6. that in the belief of the deponent the person who would be liable on the claim in an action in personam was, when the cause of action arose, the owner or charterer, or in possession or control, of the vessel in connection with which the claim arose and was also, at the time of the issue of the writ, either the beneficial owner of all the shares in the vessel against which the action is brought or the charterer of the vessel under a charter by demise; and

  7. the grounds of the deponent's belief.
 
Further, the High Court made clear that the general rule requiring a party seeking an order based on an ex parte application to make full and frank disclosure of material facts to the court is not applicable in a request for the issuance of a warrant of arrest where specific and different requirements apply.
 
Comments
 
It should be noted that in addition to making the above findings, the High Court went on to find that in any event, on the facts of the case, there was no non-disclosure of material facts which warranted a setting aside, and accordingly dismissed the defendant’s application. This, however, does not detract from the Learned Judicial Commissioner’s findings on whether there is a requirement of full and frank disclosure in relation to the arrest affidavit.
 
This decision provides much needed clarity on the duty owed by the arresting party when preparing an arrest affidavit. An arresting party should adhere to the requirements set out above, and notwithstanding the absence of a duty of full and frank disclosure, should exercise caution to ensure that the facts in the arrest affidavit are accurate. Otherwise, the arrest is liable to be set aside. Given that warrants of arrest often need to be issued at short notice so that the arresting party does not lose the opportunity to arrest the vessel before she leaves Malaysian territorial waters, an arresting party should have all relevant information and documentation readily available so that they can be collated expeditiously to ease the preparation of the arrest affidavit.
 
Alert prepared by Trishelea Sandosam (Partner) in the Maritime and Shipping Practice of Skrine
 
1 The exception to this issuance as of right is where the beneficial ownership of a vessel has, since the issue of the writ, changed as a result of a sale or disposal by any Court exercising admiralty jurisdiction (Order 70 rule 4(11), ROC 2012).
2 Note that Order 70 rules 4(7A) to 4(9) of the ROC 2012 set out additional information/documentation to be included in/annexed to the arrest affidavit, in the case of a claim in respect of a liability incurred under the Merchant Shipping (Oil Pollution) Act 1994, an action for possession of a ship or for wages, and a claim arising out of bottomry.
 

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