VALLIANZ SHIPBUILDING & ENGINEERING PTE. LTD. v Owner of the vessel(s) ECO SPARK (IMO No. N.A.)

Facts

Aquaculture Centre of Excellence Pte Ltd (ACE), which runs fish farms in Singapore, bought the steel dumb barge "WINBUILD 73", a Singapore-registered barge previously classed as a deck barge and a pontoon, on 15 January 2021. By a contract dated 21 January 2021, Vallianz Shipbuilding & Engineering Pte Ltd agreed to convert it at a shipyard in Batam, Indonesia into a "Special Service Floating Fish Farm" named "ECO SPARK", for S$1,800,000, built under Bureau Veritas (BV) class rules and Singapore flag requirements. The contract had an arbitration clause. After launch, the vessel was towed across open sea to a fish farm site off Pulau Ubin on 28 February 2022, with BV certifying her for the tow. There she was spudded down, her three spud legs being embedded in the seabed.

Payment disputes followed. Vallianz claimed S$1,642,363.62, while ACE disputed the variation claims and asserted its own claim for uncompleted works. On 14 March 2023 Vallianz began Admiralty in Rem No 20 of 2023 and arrested the vessel. ACE applied in Summons No 1070 of 2023 to strike out the action and set aside the arrest, arguing that the vessel, with no engines, crew, navigation equipment, flag or class, and fixed to the seabed for her working life, was not a "ship" under s 2 of the High Court (Admiralty Jurisdiction) Act 1961 (HCAJA). It also sought damages for wrongful arrest and, alternatively, a stay in favour of arbitration, which Vallianz did not oppose.

Issues

1. Whether the floating fish farm was a "ship", meaning a vessel used in navigation, under s 2 of the HCAJA
2. Whether being used in navigation turns on a vessel's design and capability or on its actual current use
3. Whether the action and arrest should be set aside and damages awarded for wrongful arrest
4. Whether the action should be stayed in favour of arbitration

Holding

S Mohan J allowed ACE's application only in part. He held that the vessel was a ship, dismissed the applications to strike out the action, set aside the arrest and claim damages for wrongful arrest, and granted the unopposed stay in favour of arbitration on condition under s 7(1)(a) of the International Arbitration Act 1994 that the vessel stay under arrest as security for any award. Costs were to be heard separately.

Reasoning

Treating the question as the first time it was squarely raised here, the judge held that whether an object is a ship is a jurisdictional fact to be proved on the balance of probabilities, and that admiralty jurisdiction provisions are read broadly. After surveying cases from Singapore, England, Ireland, Australia and Canada, he adopted a multi-factorial approach. Physical features such as propulsion, rudder, crew and lights are relevant but not essential. At its irreducible minimum, the inquiry is whether the vessel is designed and capable of being used in navigation, meaning navigable and able to withstand the perils of the sea, assessed by its stability, unwieldiness and stationariness, past use, and classification and registration.

Adopting the distinction in The Winnie Rigg between "used in navigation" and "used for navigation", he held that actual current use and frequency of movement are not essential, respectfully disagreeing with The Von Rocks on that point. Nor need a vessel carry cargo or passengers, or do its real work while moving; tests from insurance and regulatory contexts were not apt for a statute conferring admiralty jurisdiction.

Applying these, the fish farm had been built on the unchanged structure of a barge that was undoubtedly a ship, kept its spud legs, and had been towed for tens of nautical miles across open sea under BV certification as a pontoon capable of unrestricted navigation. The spuds were removable, ACE had moved similar farms by de-spudding, and its licence contemplated moving the vessel if she became a hazard. Both the contract and the port authority required the vessel to keep BV class throughout her use, so the lapse in class was ACE's own failure. The missing usual attributes were not a departure drastic enough to take her outside the definition, so the arrest was valid.

From the judgment