Malaysia: Shipping Case Digest

Trans Resources Corp Sdn Bhd v Inai Kiara Sdn Bhd & Ors [2015] 8 MLJ 157 (HC)

Eng Tou 110, a dumb barge ("Barge"), was towed by tugboat Inai Teratai 86 ("the Tug") along Sungei Loba Satubah, Sarawak when the Barge collided with the river bridge under construction by the plaintiff. The plaintiff sued the owners of the Tug and Barge, respectively, for damage suffered due to the negligence of the master on board the Tug. The Barge was in fact chartered to a third party, who in turn sub-chartered the Barge to the Tug owner.

The plaintiff sought to argue that the Tug and the Barge constituted "one boat" or "one vehicle", making the Barge owner a joint tortfeasor with the Tug owner. The High Court rejected this argument. The judge held that the liability of the Tug and tow was not a question of law, but one of fact. The issue of liability depended on who had control of the manner in which the work of the tug was done in relation to the relevant act or omission. In coming to its decision, the High Court followed 'The MV Hong Leong'; Owners of the Ship MV Hong Leong v Owners of the Ship MT Man Hua No 3 & Anor1 ("MV Hong Leong").

The High Court held that the Barge was not liable for the collision, given that it was at all material times under the control and management of the Tug and therefore, the Barge owner did not owe any duty to the plaintiff. The Tug owner was found vicariously liable for the negligence of its master.

Commentary

The decision raises two issues that were not specifically dealt with:

  1. Tug and Tow relationship; and
  2. Section 360 of the Merchant Shipping Ordinance 1952 ("the MSO").

Tug and Tow relationship

The "one ship" rule arose from a principle of admiralty law, developed in older cases, where one ship is in tow of another, the two ships are, for some purposes, regarded as one.2 The High Court in MV Hong Leong recognised that the "one ship" rule was not an accurate proposition. Notwithstanding that, interestingly, the High Court in MV Hong Leong and the present case continued to consider the "one boat" rule to the respective facts.

The modern and more readily accepted statement in this context is seen in The Bramley Moore,3 in which it was provided that where the tug is negligent (and those on board the tow are not), and the tow comes into collision with another vessel, then it is clear that the damage is caused through an act or omission of any person on board the tug.4 Unfortunately, this principle has not been tested by the Malaysian courts yet. The present case would have been an ideal platform for the courts to have considered the relationship between tug and tow in the Malaysian context.

Limitation of liability

This case did not deal with the issue of limitation of liability. However, if the issue did arise, it will be based on the tonnage of the tug alone since the control and management of both vessels was in the hands of the person on board the Tug.

This was observed in The Bramley Moore.5 The fact that the Tug was also the final charterers of the Barge does not provide a ground to include the tonnage of the Barge in computing the tonnage limitation.

(i) Prior to 1 March 2014

Before 1 March 2014, s 360 of the MSO — which adopts the International Convention relating to the Limitation of the Liability of Owners of Sea-Going Ships 1957 ("the 1957 Convention") — provides, inter alia, that where a ship causes any loss or damage to any property, the shipowner is entitled to limit his liability for such damage to an amount based on the tonnage of his ship and calculated in accordance with the formula provided in the section.

A shipowner is entitled to limit his liability if the loss or damage caused by the negligent navigation or management of his ship took place without his "actual fault or privity". The shipowner bears the burden of proving he was in no way in fault or privy to what occurred.

A shipowner who had knowledge that the vessel was unseaworthy but did little or nothing to rectify the defect would be disentitled from limiting his liability. In this regard, "knowledge" is not limited to "positive knowledge" but includes "turning a blind eye" — The Red Gold.6

Assuming the Tug owner was entitled to rely on s 360, it could have limited its liability under s 360(1)(bb) of the MSO, read with the Merchant Shipping (Limitation of Liability) (Malaysian Ringgit Equivalent) Order 1993. The Tug owner would have limited its liability according to the aggregate limitation of 1,000 gold francs (equivalent to RM203.07) for each ton of the vessel's tonnage.

(ii) After 1 March 2014

The limits of liability were revised7 with effect from 1 March 2014.8 The amended s 360 introduced the Sixteenth Schedule to the MSO and ratified the Convention on Limitation of Liability for Maritime Claims 1976, as amended by the Protocol of 1996 ("the 1976 Convention") in Malaysia, replacing the 1957 Convention.

Under the 1976 Convention, a shipowner shall not be entitled to limit his liability if it is proved that the loss resulted from his personal act or omission, committed with the intent to cause such loss, or recklessly and with knowledge that such loss would probably result.9

Three critical features stand out under the 1976 Convention:10

  1. a higher limit of liability;
  2. the burden of proof now rests on the party seeking to "break" the limit;
  3. the burden is (intentionally) a very heavy burden.

These features led Lord Philips MR to observe (in The Leerort) that:11

"These considerations demonstrate that when a claim is made for damage resulting from a collision, it is virtually axiomatic that the defendant shipowner will be entitled to limit his liability." (Emphasis added)

A summary of the applicable limits of liability under the amended s 360 is as follows:12

Tonnage
(Tons)
Unit of Account
(SDR units13)
Tonnage not exceeding 2,000 1,000,000
For each ton from 2,001 to 30,000 400/ton
For each ton from 30,001 to 70,000 300/ton
For each ton in excess of 70,000 200/ton

LH-AG

Footnotes

1 [1994] 3 MLJ 800; [1994] 4 CLJ 910

2 The Quickstep (1890) 15 PD 196 at 199; approved by the House of Lords in SS 'Devonshire' v Barge 'Leslie' [1912] AC 634 at 645; The 'Ticonderoga' (1857) Sw 215; The 'AL Smith' and 'Chinook' v Ontario Gravel Freighting Co [1915] SCR 39 at 70

3 Alexandra Towing Co v Millet (The Bramley Moore) [1964] 1 All ER 1054

4 The Bramley Moore, supra n 3 at 109. Followed by London Dredging Co Ltd v Greater London Council (The Sir Joseph Rawlinson) [1972] 3 All ER 590

5 The Bramley Moore, supra n 3

6 The Owners or Other Persons Interested in the Ship or Vessel the 'Red Gold' v Sarawak Shell Bhd and another appeal [2012] 4 MLJ 729. The Court of Appeal followed the test in The Eurysthenes [1976] 2 Lloyd's Rep 171.

7 Merchant Shipping (Amendment and Extension) Act 2011

8 Federal Government Gazette PU(B) 65/2014, for Peninsular Malaysia and Labuan

9 Article 4 of the Sixteenth Schedule of the MSO; see also The Leerort [2001] 2 Lloyd's Rep 291 at 293-294; Margolle v Delta Maritime Co Ltd [2003] 1 Lloyd's Rep 203, paras 16-17; and The MSC Rosa M [2000] 2 Lloyd's Rep 399, para 11.

10 Margolle, supra n 10, at para 16

11 The Leerort, supra n 10

12 Article 6 of the Sixteenth Schedule of the MSO

13 As at 27 May 2015, one unit of Special Drawing Rights (SDR) amounts to RM5.03

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions