SINGAPORE Law and Practice Contributed by: Mathiew Christophe Rajoo, Probin Dass and Tan Hui Tsing, DennisMathiew
However, the procedure for, and the effect of, a Mareva injunction or freezing order in respect of a vessel is not the same as arresting a vessel. 4.9 Releasing an Arrested Vessel A ship may be released upon the provision of alternative security in several forms, including: • an LOU from a P&I club; • a bank guarantee from a first-class bank in Singapore; or • payment into court. 4.10 Procedure for the Judicial Sale of Arrested Ships The practice of the Singapore courts is to con - sider applications for the judicial sale of ships if security is not provided, so as to avoid the depreciating value of a ship under continual arrest. The sale of a vessel pendente lite is pos - sible. The arresting party is liable for maintaining the vessel at all times while under arrest. Under Order 33 Rule 22 of the Rules of Court 2021 (previously Order 70 Rule 21 of the Rules of Court 2014), where the court has ordered the ship to be sold in an action in rem against a ship, any party who has obtained, or obtains, judgment against the ship or proceeds of sale of the ship may apply to the court by summons for an order determining the order of priority of the claims against the proceeds of sale of the ship. As regards the order of priorities, it is as follows: • port dues; • Sheriff’s costs and expenses; • plaintiff’s legal costs of arrest; • maritime liens that arose prior to arrest; • possessory liens; • maritime liens post-arrest; • mortgagee’s claim; and
• claims by other claimants having statutory liens over the vessel. Generally, in actions against the proceeds of sale of the ship, costs have the same priority as the claim in respect of which they have been incurred. See the decision of The “Songa Venus” [2021] 2 Lloyd’s Law Rep 365; [2020] SGHC 74, in which the court also held that a similar result would have been obtained under Order 29 Rule 6 of the Rules of Court 2014, under which the court might order a possessory lien holder to surrender the property in question to its own - er, upon the owner paying into court the sum claimed by the possessory lien holder together with interests and costs. Thus, the court held that it was just and equitable, as well as princi - pled, to accord the costs the same priority as the possessory lien holder. Private sales have been allowed. The applicant has to identify the existence of “powerful special features” or “special circumstances”, but this is an exception rather than the norm: The Turtle Bay [2013] SGHC 165. 4.11 Insolvency Laws Applied by Maritime Courts In 2017, Singapore adopted some aspects of the Chapter 11 United States Bankruptcy Code, including: • an automatic moratorium that starts from the date of the moratorium application; and • a worldwide moratorium. Where there is a moratorium for a scheme of arrangement in place, the court may restrain further proceedings from being commenced or continued. However, in relation to in rem proceedings, Section 64(12) of the Insolvency, Restructuring and Dissolution Act 2018 (IRDA)
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