Naora Global DMCC v Pemilik dan Semua Pihak Lain Termasuk Pinnacles Shipping Fzco yang Mendakwa Mempunyai Kepentingan Terhadap Kapal atau Vesel Mt Top Grand Dari Pelabuhan Panama (WA-27NCC-38-09/2024)

This Admiralty Action in Rem concerns the vessel, MT TOP GRAND (“the Vessel”).

The Plaintiff, Naora Global DMCC (“Naora”), claims to be the beneficial owner of 51% share in the Vessel, asserting that it has contributed AED 41,933,874.79 towards the purchase price of AED 81,433,874.79. The Defendant, Pinnacles Shipping FZCO (“Pinnacles”), denies Naora’s ownership and alleges instead that Pinnacles merely funded the purchase in full, either directly or through third-party investors, and that Naora was merely a “sleeve” for payments.

The issues at trial include: (i) whether Naora is a beneficial co-owner of the Vessel, (ii) whether Pinnacles contributed more than AED 39,500,000, (iii) the proper construction of the Investment Agreement dated 20.6.2023, (iv) whether a trust arises in favour of Naora, and if so for what percentage of the ownership of the Vessel, and (v) whether Pinnacles has a meritorious counterclaim for wrongful arrest.

In determining the issue of beneficial ownership, the Court has to deal with the applicable law governing the parties’ ownership claims and the fact that Naora did not procure any expert on Dubai law to counter the view expressed by Pinnacles’ expert that the equitable doctrine of resulting trust does not apply to the facts of this case.

Around early 2023, Pinnacles sought to purchase a vessel as an investment and business venture, where the vessel would be jointly bought and used for employment. The income generated by the vessel would be distributed among the joint-owners or investors in proportion to their share of ownership. Captain Ares, who is involved in ship chartering and management, collaborated with Pinnacles on this idea and approached Naora to see if Naora was interested in joining this proposed venture.

In this case, Naora did not have immediate cargo needs, but Pinnacles did. Pinnacles’ established cargo flow required a dependable vessel, and their market experience assured Naora of a viable investment with stable use. According to Naora, it saw this joint vessel ownership venture as an excellent strategic business development. At the same time, the business will benefit Pinnacles by securing reliable cargo transport while minimizing exposure to fluctuating charter rates. This aforementioned collaborative investment reflected Naora’s interest in a structured, secure investment, supporting Pinnacles’ operational needs and ensuring a stable asset for both parties in the volatile shipping market. Therefore, Naora agreed to the business venture proposal with Pinnacles.

Crucially, the first step was to find a suitable vessel for this purpose. Capt Ares was the contact point between Naora and Pinnacles. He has proper experience with the available cargo tanker vessels in the market and the requirements for transportation in the shipping industry. Capt Ares suggested approaching Jacob Joseph (“Jacob”) to find a suitable tanker vessel in the market.

Jacob is a highly qualified Shipping Manager with over 20 years of extensive experience in the shipping industry, particularly in vessel acquisitions, negotiations, and brokerage. Jacob is the legal owner of Armani Capital Investments LLC (“Armani”) and Armani Ship Management & Operation Est (“Armani Ship Management”) and collaborates closely with Capt Ares, who represents these entities.

Naora and Pinnacles agreed. The Parties then engaged Jacob, through Capt Ares, to find a suitable vessel in the market. Both Naora and Pinnacles trusted Jacob and his advice and agreed for him to proceed.

Capt. Ares provided Jacob with the specific requirements, namely a clean, medium-range tanker with a gross weight of 45,000 tons, valued between USD 19 to 20 million. Jacob’s role was to search the market for a suitable vessel and arrange its purchase, including concluding the Memorandum of Agreement up to the vessel's delivery. After reviewing several options, Jacob identified the vessel (known at the time as “Super Ruby”) as a suitable candidate for acquisition, meeting the criteria set by Capt. Ares, such as high cubic capacity, BWTS installed, no immediate need for dry dock, delivery in Singapore, and good cargo pumps.

On 25.5.2023, a Memorandum of Agreement was signed between Super Ruby Shipping Inc, as seller, and Naora, as buyer, for the purchase of the Vessel (then named Super Ruby) for USD 20.6 million (AED 81,433,874.79). Subsequently, the Seller and Naora entered into Addendum No. 1 dated 31.5.2023 and Addendum No. 2 dated 8.6.2023 (collectively, “MOA”).

Naora was designated as the “Buyer” because, as a DMCC-registered company with an established presence, Naora was positioned to facilitate negotiations and provide the necessary assurances for the Seller, Super Shipping, to proceed. Since prompt payment of the Deposit and Balance Purchase Price was crucial for a quick handover of the Vessel, naming Naora as the “Buyer” was a practical measure to enable the conclusion of the MOA.

The terms of payment under the MOA were as follows: a) Under Clause 1, the purchase price of the Vessel was USD 20,600,000, and Naora was given the option to pay the same in AED currency at the rate of 1 USD = 3.68 AED. b) Upon signing the MOA, Naora was to pay a deposit of 15% of the purchase price, i.e., AED 11,371,200.00 (“Deposit”). c) Under Clause 3 (ii), Naora was to pay the remaining 85% of the purchase price, AED 64,436,800, along with the estimated value of bunkers and lubricating oils remaining onboard the Vessel at the time of delivery and any other charges due under the MOA (“Balance Amount”), at least one day before the physical delivery of the Vessel. d) Under Clause 5, Naora was to pay liquidated damages of USD 18,000 per day for each day after three days from when Notice of Readiness is tendered.

Pursuant to the business venture, both Naora and Pinnacles entered into an Investment Agreement that took effect from 20.6.2023 (“the Investment Agreement”), under which Pinnacles would contribute 70% and Naora 30% of the purchase price.

The key terms of the Investments Agreement are as follows: “1. Vessel Acquisition: Pinnacles shall provide 70% of the funding for acquisition of The Vessel purchase, and Naora Global Company shall contribute 30% of the purchase amount.

Ownership: Pinnacle shall have full ownership rights over the vessel due to its contribution of 70% of the funding.

Bill of Sale: The vessel’s bill of sale shall be registered under the name of Solarix Shipping Ltd, the BVI company, with the provided company registration number.

Income Distribution: The income generated by the vessel shall be distributed as follows: • 70% to Pinnacles • 30% to Naora Global DMCC”

There is no dispute that the Vessel purchase price under the MOA was paid in full. The Seller invoiced Naora, as Buyer, for the sale of the Vessel according to the terms of the MOA as follows:

15% Deposit

85% Balance Amount

Bunkers and lubes onboard at the time of delivery of the Vessel

Liquidated damages for late delivery

Reimbursement for expenses incurred on delivery

Based on the cumulative invoices issued by the Seller, Naora paid the Seller a total of AED 81,433,874.79 for the purchase of the Vessel.

The Seller has properly acknowledged receipt of the full payment for the Vessel. Specifically, on 20.6.2023, after receiving the 15% deposit, the Seller executed a Bill of Sale in favour of Naora, transferring 100% ownership of the Vessel from Seller, Super Shipping, to Naora (“Naora Bill of Sale”).

On 15.8.2023, the Vessel was physically delivered to Naora. On 17.8.2023, Naora executed a further Bill of Sale transferring legal title to Solarix Shipping Limited (“Solarix”), a nominee entity and a special purpose vehicle, for registration purposes (“Solarix Bill of Sale”). It is not disputed that Solarix contributed no funds to the purchase of the vessel.

Thereafter, from August 2023 to March 2024, the Vessel was operated under joint commercial management with one Zovark, and all profits were duly distributed according to the agreed ownership proportions.

However, in or about March 2024, Pinnacles, without Naora’s consent and in breach of the parties’ agreement, unilaterally removed Zovark as the appointed commercial operator and took exclusive control of the Vessel. Both operational accounts and earnings have since been withheld from Naora.

On 6.9.2024, Naora terminated the Investment Agreement, demanded possession of the Vessel, and initiated these proceedings. Naora then arrested the Vessel on 11.9.2024.

Naora claims that Pinnacles actually contributed only AED 39,500,000.00, while Naora contributed AED 41,933,874.79. The AED 39,500,000.00 contributed by Pinnacles is roughly 49% of the AED 81,433,874.79 paid for the Vessel under the MOA. This payment was transferred to Naora directly by Pinnacles and through its affiliated company, Ozarka.

Although under the Investment Agreement, Naora’s obligation was limited to contributing 30% of the purchase price of the Vessel, Naora claims that because the MOA had named Naora as the sole Buyer, Naora had become contractually responsible to the Seller, Super Ruby, for the full purchase price and associated delivery costs. When Pinnacles failed to provide its 70% share promptly, Naora, acting in good faith and to avoid the collapse of the purchase, as well as to prevent incurring additional liquidated damages of USD 18,000 per day for each day of delay in settling the balance payment with the Seller, paid the outstanding balance from its own funds to complete the acquisition and take delivery of the Vessel. This additional payment amounted to AED 41,933,874.79, representing approximately 51% of the total sum of AED 81,433,874.79 paid to the Seller.

By making the payment, Naora not only fulfilled the payment obligation needed to complete the purchase and secure delivery but also prevented the Seller from imposing further liquidated damages. Naora’s payment of the additional 21% beyond its agreed 30% obligation was therefore made to protect the purchase, avoid further penalties, and preserve the value of the investment for both parties.

Pinnacles asserts that it has contributed more than AED39,500,000 (approximately 49%) towards the Vessel’s purchase. Besides this undisputed amount, Pinnacles states that an additional total of AED 61,701,608.40 was also paid towards the purchase price. a) A sum of AED 8,000,000.00 was made through an adjustment from freight alleged to be due on the vessel, MT Queen Sere, payable by Naora. This was set off pursuant to an internal arrangement between Sajith (of Petrogulf) and Pinnacles, which was accepted by the parties as Pinnacles’ contribution, or contribution on behalf of Pinnacles, towards the purchase of the vessel. b) A sum of AED 11,716,027.85 is said to have been paid as a payment adjustment from the proceeds of the sale of the vessel MT Queen Sere to Naora, pursuant to an internal arrangement between Sajith (of Petrogulf) and Pinnacles. The payment was accepted by the parties as Pinnacles’ contribution, or contribution on behalf of Pinnacles, towards the purchase of the Vessel. c) A total sum of AED 41,985,580.57 was paid by Petrogulf, Lakeside, and Thrive to Naora as Pinnacles’ contribution, or contribution on behalf of Pinnacles, towards the purchase of the Vessel. These payments were made under various Agreements for Investment and Vessel Acquisition (“AIVA”) and Payment Instruction Letters relied upon by Pinnacles.

The aforementioned AED 61,701,608.40, when added to the undisputed sum of AED 39,500,00.00 paid, will make Pinnacles’ contribution toward the purchase price to AED 101,201,608.00, a sum exceeding the total purchase price of AED 81,433,874.79 paid to the Seller, Super Ruby, for the Vessel. Admiralty in Rem action at the Kuala Lumpur High Court

On 8.9.2024, Naora filed this action under Section 20(2) of the Senior Courts Act 1981 (applied under Section 24(b) of the Courts of Judicature Act 1964) within the Admiralty jurisdiction of the High Court of Malaya regarding a claim under: a) Limb (a) pertains to its claims of ownership of approximately 51% shares in the Vessel, and possession of the Vessel based on that ownership, and b) Limb (b) concerns a question arising between Naora and Pinnacles as co-owners of a ship regarding possession, employment, or earnings of that ship. More specifically, Naora seeks (i) a declaration that it is the legal and/or beneficial owner of 51% of the Vessel; (ii) an account and settlement of earnings; and (iii) an order for possession, and if necessary, the sale of the Vessel to preserve its value ownership.

On 11.9.2024, the Vessel was arrested as security for its claim and placed under the custody of the Sheriff of the Kuala Lumpur High Court. Pinnacles challenged the arrest and, after a full consideration of the evidence and submissions, this Court dismissed Pinnacles’ application to set aside the arrest, upheld the arrest as lawful, and expressly held that the arrest was not tainted by mala fides or gross negligence.

The matter then proceeded to trial on an expedited basis.

From the pleaded facts and the outline provided above, the legal and factual issues to be determined are as follows: a) whether Naora contributed AED 41,933,874.79 towards the purchase price of the Vessel and whether Pinnacles contributed more than AED 39.5 million, including via alleged investors or set-offs; b) whether Naora is the beneficial owner of 51% of the Vessel through a resulting or constructive trust, and what the proper construction of Clause 2 of the Investment Agreement is; c) whether an order should be made for Pinnacles to provide a full and proper account of the Vessel’s earnings and disbursements, and if so, for which period; d) whether the arrest was wrongful and if Pinnacles’ Counterclaim is sustainable.

There is no doubt that the determination of the actual monetary contributions made by Naora and Pinnacles towards the purchase price of the Vessel involves a fact-finding exercise by this Court.

In this regard, this Court notes that Pinnacles’ narratives regarding its contribution toward the purchase price of the Vessel have been glaringly inconsistent. a) In its pleaded case, Naora was described as a “sleeve” from the beginning of the transaction with Pinnacles. b) In its Setting Aside Application, Pinnacles claimed that it had paid 70% of the purchase price in accordance with the Investment Agreement, referring to the sum of AED 39,500,000 (approximately 49% of the purchase price) and also the remaining AED 17,101,113.70 to meet their 70% share via (i) an alleged AED 8,000,000 freight offset under the MT Queen Sere charterparty through Petrogulf, and (ii) AED 11,716,027.85 allegedly paid from the sale proceeds of the Queen Sere through Petrogulf. c) However, at the trial, through its director DW3, his oral testimony was that Naora was initially an investor with a 30% stake under the Investment Agreement, but later became a “sleeve” after failing to pay. This meant that Pinnacles had paid the entire purchase price and even exceeded it, with the total paid being AED 101,201,608.00, that is, more than the total purchase price of AED 81,433,874.79. The AED 101,201,608.00 included AED 41,985,580.57 allegedly paid by its purported investors, Petrogulf, Lakeside, and Thrive vide their respective AIVA, which Pinnacles furnished the following payment Schedule: d) Significantly, in Pinnacles’ written submission filed after the trial, the amount of AED 24,916,321.91, said to have been contributed by Petrogulf under the AIVA and the Payment Instruction Letters issued by Pinnacles, was conspicuously omitted as payment towards the purchase price. The narrative has once again shifted, with Pinnacles now claiming that it contributed the undisputed AED 39,500,000.00, plus only the additional AED 17,069, said to have been contributed by Lakeside and Thrive. In other words, the claim is now that the total contributed sums amount to AED 56,601,113.70. The proceeds from the alleged sale of the vessel MT Queen Sere and the adjustment of freight between Petrogulf and Naora under an alleged charter were also omitted.

The reason for Pinnacles’ change of position in abandoning the contribution by Petrogulf under the AIVA is telling and actually critically undermines the legitimacy of its claims. The circumstances compelling the retraction of Petrogulf’s alleged contribution need to be highlighted.

At the trial, Naora provided a detailed explanation for each of the Petrogulf payments totalling AED24,916,321.91, along with relevant details and supporting documents. The documentary trail and evidence clearly show that these payments were related to other transactions involving the Gadani / HK Sihai charters, and not contributions toward the purchase of the Vessel as claimed by Pinnacles. While Pinnacles denied knowing Gadani and HK Sihai, the facts regarding the payments are not disputed, and Pinnacles did not produce any evidence to refute these payments.

In fact, Pinnacles’ key witness, the sole shareholder and director of Pinnacles and Solarix, DW3, made a critical admission during cross-examination, confirming that the two payments listed on the payment schedule below, which Pinnacles alleges were for the vessel's purchase price, were actually payments for freight for the vessel, MT Lady Ella. Specifically, DW3 referred to the payment schedule (prepared by Pinnacles), highlighting the two payments made on 29.5.2023.

DW3 stated that the payments in the red box were made by Petrogulf for the purchase of the Super Ruby. He also confirmed that the $3.6 million was paid first, followed by AED 3.5 million. Ok. I'm just going to touch on two points. A series of questions on two points. First, I would like you to refer to Enclosure 159, page 1265. There should be a table there. Would you agree that this is the table that was provided by your lawyer, Paul Aston, beside the red box and the red writing at the bottom? Is this the same table, can you confirm? JIBIN: Yes, it’s the same table. Aside from the red box, you confirm. Ok. I just want to look at the payments in the red box there. You will see two payments made on the 30th of May by Petrogulf, which you claim were for the purchase of the Super Ruby, correct? Ok. Just want to check with you, you would say that the AED3.6 million payment in terms of the time that was made first, correct? Then followed by the AED3.5 million – JJ: The balance.

Afterward, he was shown the payment receipts for the two payments made by Petrogulf, which were indicated in the red box.

He then reiterated that those two payment receipts were issued by Petrogulf for the purchase of the Super Ruby. On the same bundle, turn to page 1270. It’s just a few page in front. These are payment receipts for the payments that were referred to in the table, ok? JIBIN: Ok. Do you agree that AED3.6 million, the transfer amount is there? JIBIN: Yes, transfer amount is there. MJ: Ok. This is the transfer slip for the two payments, agree? JIBIN: Ok. Then you turn to page 1272, 359. That's the second payment slip,agree? JIBIN: Ok, AED3.5 million, ok. Yes. So, this is Petrogulf's statement and you agree that those two payments were for the payments in the box?

DW3 was then shown a third payment receipt made by Petrogulf for the sum of AED320,000 on the same day, 29.5.2023. He said that this payment was not one of the payments made for the Super Ruby: I turn you to page 1274. This is the third payment of AED320,000, which was not in the box, correct? JIBIN: Ok, yes.

Upon further questioning, DW3 confirmed that the timing of the first two payments, which he says were for the Vessel, and the third, supposedly unrelated payment, were made in the same five minutes: NOP 25.06.2025 page 12 line 12-37 MJ: No, I am asking you about what's the time, not whether it's for Super Ruby or whatnot. Just the time. You can see there, the first one, it says 5 or 17 in 24-hour time, 17609, correct? JIBIN: Ok, yes. 569 seconds, ok. Then you turn to page 1273. This is for the 3596, which you say is for the Super Ruby, which we deny, but you say it's for the Super Ruby. What time is it? 507, yes? JIBIN: Ok, yes. Ok, so that means it's about a difference of one minute. And then 1275, what time is it? JIBIN: 1709. Third one, right? Page 1275, the time is there, 1709? JIBIN: 1709. So that means you agree that these three payments were made in the span of five minutes, correct? JIBIN: Ok.

He was then confronted with Invoice No. SHP21-10636 dated 17.5.2023, which concerns freight for MT Lady Ella issued to Gadani Group FZCO (shown below) (“Lady Ella Invoice”). It was explained to him that the three payments mentioned earlier total AED7,516,677.47, equal to the invoice amount, and were made to settle this invoice, not for the Vessel, as falsely claimed.

DW3 did his own calculations and acknowledged that when combined with a third payment, the total payments matched perfectly the Lady Ella Invoice – the very sum that Naora demonstrated was for freight, not for the Vessel purchase. Ok, so let me explain to you. This is an invoice for my client to Gadani for freight, for the Lady Ella. I'm just reading from the invoice. The AED price is AED7,516,677.47. You can read it there. Now I want you to turn back to the table. If you add those two payments, AED3,600,000 and AED3,596,125, if you add those two payments, it will result in a total of AED7,196,125. Agree or do you want to check with the calculator? JIBIN: Can I use the calculator? Yes, if you only want to use the calculator, you can just confirm whether the number is correct. JUDGE: 7-? AED7,196,125. JUDGE: Where are you looking at now? Page 1265, My Lord. JUDGE: 1265? Yes. If you add those two numbers in the box, the AED3.6 million and the AED3,596,125, you will get a figure that is AED3,196,125. Correct? JIBIN: No, not 3, AED7,196,125. Ok, so just read the number to the Court, 7-? JIBIN: AED7,196,125. Agreed, correct. So that’s Mathematics, I mean we all have to agree to it. Can't run away from the maths. Now, if you go back to the invoice page, in page 1266, you have the calculator in front of you? Can you deduct the total figure AED7,516,677.47, you deduct AED7,196,125. What figure do you get? JIBIN: AED320,000. AED320,000. Read the figure (00:10:31) in full? JIBIN: The figures are ok. But what I'm telling, these are related to – No, just, no, I ask you to read the figures in full, just read the figures in full. Later your lawyer can – JIBIN: Yes. AED320,552.47. AED320,552.47. Now I want you to turn to page 1274. Look at the highlighted figure with the arrow pointed there. Is this figure the same with your shortfall there? JIBIN: Ok. That's what I am telling, the figures are – No, is this the same or not? JIBIN: Yes, the figures are right. Ok, the figures are the same, you have confirmed this in evidence. Ok, thank you. Alright

DW3 agrees that the 3rd payment (AED320,552.47) was not for the Vessel, and when combined with the 1st and 2nd payments (AED3,600,000 and AED3,596,125), it totals the value of the Lady Ella Invoice. Further, all three payments were made at the same time. This can only mean that the 1st and 2nd payments were actually for the Lady Ella Invoice but falsely presented as payments for the purchase of the Vessel.

The above are concrete, numerical facts that DW3 has direct knowledge of, and his sworn confirmation is direct evidence of the purpose of the payments. DW3’s admissions under cross-examination conclusively confirm that the (3) payments Pinnacles claimed were for the purchase of the Vessel were, in fact, payments of the Lady Ella Invoice. DW3’s admission definitively proves the true nature of the payments, i.e., payment towards the Lady Ella Invoice.

In fact, the cross-examination revealed an even more sinister fact - DW3 confirmed that the document disclosed by Pinnacles omitted the third payment, which is the shortfall amount of the Lady Ella Invoice. This omission was deliberate to hide the third payment, which would have clearly shown that three payments were made towards the Lady Ella Invoice.

DW3’s admission confirms Naora’s claim that Pinnacles selectively chose payments from the Payment Schedule they prepared, mixing unrelated payments to create the false impression that these payments from Petrogulf were Pinnacles’ contribution to the Vessel purchase price. This significantly damages Pinnacles’ credibility and the truthfulness of its entire testimony. To put it starkly, Pinnacles has been shown to engage in selective disclosure, intentionally leaving out key evidence. Despite having access to the full Petrogulf transaction records (confirmed by DW3 and their own materials), they chose only certain entries to support their story. By hiding the third payment entry, they misled the Court into thinking the payments only related to the Vessel, while concealing that an identical third payment was made, completing the payment for the Lady Ella Invoice. This omission was deliberate, not accidental. Payments under the AIVA and Payment Instructions

Notwithstanding the above and in any case, the total sum of AED41,985,581.57 alleged to be from Petrogulf, Lakeside, and Thrive as third-party investors is based on the Agreement for Investment and Vessel Acquisition or the AIVA executed with Pinnacles. More specifically, Pinnacles states that on 28.3.2023, it entered into the AIVA with Petrogulf, Lakeside, and Thrive to exclusively invest in the purchase of the Vessel, and accordingly, on 29.3.2023, it issued letters of instructions to each of them (“Letters of Payment Instructions”) requesting that they honour their respective investments by directly making payments to Naora’s bank account as per the payment terms in the AIVA.

However, there are simply too many questions surrounding the AIVA and Letters of Payment Instructions that raise serious doubts about their authenticity. For example:

each of the AIVAs in March 2023 states a specific investment amount by Petrogulf, Lakeside, and Thrive, which reflects their particular contribution toward the Vessel purchase price. However, the Vessel sale price was only negotiated and confirmed two months later in May 2023. The final price paid for the Vessel included bunkers surveyed and confirmed at delivery in June 2023, as well as liquidated damages calculated through August 2023. It also included reimbursement of expenses incurred during the delivery of the Vessel. Neither Pinnacles nor the purported Investors could have known these matters with such detail when the AIVA was signed in March 2023.

the total investment amount of AED41,985,580.57 in March 2023 seems to include Pinnacles’ contribution of AED39,500,000, which only began on 22.6.2023 onwards;

the AIVA was supposedly intended solely for the acquisition of the Vessel, but the total investment amount of AED41,985,580.57 does not match the total purchase price. The investment amount of AED41,985,580.57 differs from the AED41,933,874.79 payable to the Seller after deducting Pinnacles’ contribution of AED39,500,000.00.

Pinnacles’ contribution of AED39,500,000 is not specified in the AIVA;

Clause 3 of the AIVA states that the investment amount is to be deposited into Naora’s bank account, with full banking details provided. However, in March 2023, Naora and Pinnacles had not yet engaged, let alone finalized the Business Venture or the Investment Agreement (which was established in June), nor had the sale of the Vessel been concluded with the Seller, with Naora as the Buyer. How is it that the investors were asked in March to pay their respective investment portions to Naora when, at that time, it was not even known that Naora was involved or that Naora would be the named buyer in the MOA? Why weren’t they asked to pay Pinnacles instead?

in any case, Naora was not consulted about its agreement to be the nominated beneficiary, nor did it give its consent. Naora only learned about the AIVA and saw a copy when Pinnacles disclosed it in the affidavits filed in support of its Motion to Set Aside Application. Oddly, Clause 4.2 of the AIVA attempts to bind Naora to be jointly and severally liable with Pinnacles to the Investors if Pinnacles defaults on its repayment and reconciliation obligations, without Naora’s knowledge, consent, or involvement agreement;

there is no mention of the alleged investments by the Investors in the Investment Agreement. Instead, it states Pinnacles’ contribution as 70%.

the Investors were provided with undated cheques equal to the value of their respective investments as security, yet this crucial aspect of the investment arrangement was not mentioned in the AIVA. The undated cheques were given in August 2023, after the investments were made or were being made starting from April 1, 2023.

Further, there are similarly numerous discrepancies in the Letters of Payment Instructions that are not satisfactorily explained or resolved based on the evidence examples: a) there is no mention of the AIVA in the Letters of Payment Instructions. This is very important, yet DW3 was unable to provide an answer for this. The Letters of Payment Instructions specify payment on 29.3.2023, but the MOA for the Vessel was only finalized two months later 25.5.2023; b) the Letters of Payment Instructions referenced the name “TOP GRAND” when, at the time the vessel was known as “SUPER RUBY” in March 2023, and the name “TOP GRAND” was only first suggested later, 29.5.2023; c) the Letters of Payment Instructions specify precise investment amounts and direct payment to Naora on 29.3.2023, although the exact price for the purchase of the Vessel and the sums payable to the Seller under the MOA were only known and finalized five months later, 15.8.2023; d) the Letter of Payment instruction to Petrogulf was clearly a fabricated document, as it has already been shown above that the payments said to be from Petrogulf were, in fact, for the Lady Ella Invoice. e) the instruction to Thrive was acknowledged by DW1, who testified that he confirmed and agreed that Thrive would pay AED 6,707,922.90 as an investment to purchase the Vessel. However, on that date, DW1 had no connection to Thrive, he neither owned shares nor held any position in the company. In March 2023, Denny Jovin Francis Thomas was the sole owner of Thrive (then named Thrive Oil Drilling Rigs & Equipment Trading LLC). In this regard, DW1 claimed he acquired the company in April 2023 but provided no documentary proof. His Emirates ID confirms that he only became “General Manager” in

The presence of DW1’s name and role in a document allegedly created on 29.3.2023 is therefore inexplicable—except on the conclusion that the AIVA was fabricated and backdated by someone who did not realize that, at the time, the owner was a completely different person. This error is not just a technicality; it demonstrates retrospective document creation, which questions the authenticity of the entire AIVA and Letter of Instruction. f) a further inconsistency is the use of an incorrect company name in the AIVA and Letter of Payment Instructions. Both documents refer to “Thrive Refined Oil Products Trading LLC,” which is factually impossible for documents created on 2.3.2023, because at that time the company’s registered name was “Thrive Oil Drilling Rigs & Equipment Trading LLC.” The new name was only adopted later, after DW1 acquired the company. The use of a future name in documents purportedly created months earlier represents a clear chronological inconsistency and a significant indicator of backdating. This anachronism, repeated in both the AIVA and the Letter of Payment Instructions, strongly suggests that these documents were fabricated afterward by someone unaware of the company’s correct name in March 2023.

Suffice it to say that the above demonstrates that the AIVA and the Letters of Payment Instructions all exhibit characteristics of documents that are fabricated or manufactured. In fact, Naora engaged an independent expert, Darren Andrew Michael (PW2), a Digital Forensics Associate at Envista Forensics Pte Ltd, to conduct a detailed forensic analysis of the AIVA and Letters of Payment Instructions in their PDF format (metadata review, alteration detection, authenticity verification), and he prepared a formal report summarizing his findings. The expert issued his Independent Expert Analysis Report dated 17.10.2024 (“Envista Report”). His key findings are in Sections 6, 7, and 8, and he appeared as Naora’s witness at trial.

In the Envista Report, PW2’s concluded that the AIVA and Letters of Payment Instructions relied upon by Pinnacles are fabricated. He explained that although each PDF purports on its face to be dated 29.3.2023, the forensic analysis reveals that the embedded XMP metadata conclusively shows the documents were in fact created and last modified on 12.9.2024 - over a year later. The internal metadata directly contradicts the dates stated on the face of the documents.

PW2 explained in detail during cross-examination that the internal metadata is embedded within the document, so it remains unchanged regardless of the file system or whether it is transferred or copied. It generally cannot be altered. Importantly, any change to the internal metadata must be done intentionally. If a PDF document is opened and closed without making modifications, the last modification date on the PDF stays the same. However, if a change is made, the modification date and time will be updated. Without the source files, the exact nature of the alterations cannot be fully determined, but what is undeniable is that the dates displayed are false.

PW2 also explained that no security measures were applied in this case. The PDF was editable, allowing editing, printing, copying, page extraction, commenting, form filling, and assembly. Additionally, each of the three JPEG (JFIF) images on page 2 —"Signature,” “Company Stamp,” “Signature and Stamp"— is removable or relocatable. The "Signature” overlaps printed text (“Jibin Abdulkader..."). This indicates that it is possible to select the images separately and either remove them from one document or move them to a different part of the document.

Critically, PW2 found that the documents he examined were not physically signed in person nor physically stamped, but rather digital images embedded in the documents. Therefore, PW2’s overall conclusion based on his forensic analysis of these documents was that the (3) “Agreement” PDFs, though dated 29.3.2023 on their face, were created and modified on 12.9.2024.

Although counsel for Pinnacles sought to undermine PW2’s testimony, Pinnacles did not provide any expert to opine on the authenticity of the AIVA or the Letters of Payment Instructions or to contradict PW2’s conclusion. Contribution of AED 8,000,000.00 by way of adjustment from freight due on MT Queen Sere

Pinnacles claims that it contributed AED 8,000,000.00 towards the Purchase Price on the basis that Naora owes freight of USD 2.4 million (AED 8,000,000.00) for the charter of the MT Queen Sere. In support, it relies on WhatsApp messages and spreadsheets prepared by Capt Ares.

However, no documents were produced to support the existence of Naora’s charter of the MT Queen Sere at all. PW1 also confirmed that there is no entry in Naora’s account for such an amount of AED 8,000,000 as an adjustment for MT Queen Sere freight. Nor is there a record of any acknowledgment of receipt of this amount by Naora. There is also no accounting record showing that AED 8,000,000 was paid by Pinnacles as part of its contribution towards the purchase of the vessel.

More significantly, there is absolutely no evidence that Capt Ares had any authority to represent Naora at all. Capt Ares did not represent Naora in dealings regarding the Vessel. Capt Ares is neither an employee nor an authorized representative of Naora and has no authority to act for or on behalf of Naora and or bind Naora, whether orally, in writing, by conduct, or in the course of his dealings. No evidence was adduced to show that instructions were given by Naora to Capt Ares on the preparation of the Worksheets, and Capt Ares himself was never called to testify on the matter.

Accordingly, the contents of the WhatsApp and Worksheets relied on are purely hearsay and inadmissible. Contribution of AED 11,716,027.85 from proceeds of sale of the MT

Pinnacles claims that AED 11,716,027.85 from the proceeds of the sale of the MT Queen Sere was paid by Pinnacles as a contribution towards the Vessel purchase price. PW1 testified that this is absolutely not true based on Naora’s accounting records.

There are no documents from Pinnacles indicating that MT Queen Sere was sold or specifying the sale price. Naora’s account shows no entry for AED 1,716,027.85, which was supposedly paid from the sale proceeds of MT Queen Sere. Naora did not receive AED 11,716,027.85 from anyone as alleged proceeds of the sale. There is also no proof of payment or instructions from Pinnacles or any other party regarding the transfer of sale proceeds to Naora. Additionally, there is no record or acknowledgment of receipt of AED 11,716,027.85 by Naora for any sale proceeds of the MT Queen Sere, if such proceeds existed.

In the complete absence of any contemporary, traceable evidence that AED8,000,000 and AED11,716,027.85 were paid into Naora or attributed to or contributed by Pinnacles toward the purchase of the vessel, the claims that Pinnacles made these payments simply cannot be sustained.

As a result of the above, I judge that Pinnacles’ claims of having contributed an amount exceeding the undisputed sum of AED 39,500,000.00 are completely without merit and are hereby rejected.

That the total amount of AED 81,433,874.79 was paid by Naora from Naora’s bank to the Seller, Super Ruby, is not disputed.

Out of this amount of AED 81,433,874.79: a) Naora paid the 15% deposit of AED 11,371,200.00 entirely from its own funds. The payment is supported as follows: i) On 8.6.2023, the Seller issued Invoice 2023-01 for the 15% deposit of AED11,371,200.00.29; ii) Naora paid this amount in three payments on 9.6.2023; iii) PW1 produced the internal accounting records that show the 15% deposit was paid from Naora’s own funds, namely:

Banque Misr Payment Summary and MT103 Banque Misr Outward Customer Bank Report forms;

The dates when the (3) tranches of payment were made on 9.6.2023 tallied with the date of Super Shipping Invoice 2023-01 dated 8.6.2023;

The payment of 15% Deposit by Naora is further confirmed by the email trail on 9.6.2023 between Jacob and Asif Ali of Best Oasis Limited (the Brokers)

The balance monies under the MOA were paid partly by Naora and partly by Pinnacles. • 85% purchase price: AED64,436,800 • ROB bunkers: AED1,644,827.86 • late payment liquidated damages: AED 3,981,046.93 • disbursements on delivery: AED135,447.79

Pinnacles contributed AED39,500,000.00 directly and through Ozarka by twelve direct payments to Naora. This is not disputed. The remaining amount of AED30,562,674.79, along with the 15% Deposit of AED11,371,200.00, totaling AED41,933,874.79, was contributed by Naora from its own funds.

To demonstrate the difference paid by Naora, PW1 referenced the details of the total payment of AED 81,433,874.79 to the Seller. In this regard, a Total Payments Summary was presented before this Court:

PW1 explained that each Seller's invoice was paid using funds solely from Naora or solely from Pinnacles, and sometimes a combination of funds from both Naora and Pinnacles. a) For example, on 7.5.2023, Pinnacles contributed AED 2,000,000 to Naora, and Naora made a payment of AED 2,100,000 to the Seller. This means the AED 2,100,000 payment was made using AED 2,000,000 from Pinnacles and AED 100,000 from Naora. b) On 26.6.2023, Naora paid AED4,500,000 to the Seller. Similarly, on 5.7.2023, Naora made a payment of AED 2,100,000 to the Seller. In the Revised Annex A: Total Payments Summary, these payments were shown as coming from Pinnacles’ Contribution. In reality, the payments were not entirely from Pinnacles but instead a combined contribution from Naora and Pinnacles.; c) The payments of AED4,500,000 and AED2,100,000 were mainly made using funds from Pinnacles, which is why they are listed under the “Payments Made by Pinnacles” column—this is only for convenience reference; d) However, Pinnacles did not contribute the full amount. Naora estimates that Pinnacles provided about 90% of the AED 4,500,000 payment and roughly 95% of the AED 2,100,000 payment. Calculating Pinnacles’ exact contribution down to the last cent is difficult because these payments were made from Naora’s common account, which Pinnacles regularly contributes to; e) This is shown in the last column, which displays the percentage of contribution from Pinnacles on each payment. For example, Row 23 (Payment of AED 4,500,000) is approximately 90%, and Row 27 (Payment of AED 2,100,000) is approximately 95%.

PW1 definitively confirmed that the funds were transferred to the Seller’s bank account for the Vessel purchase price, as there is a specific description of the purpose of payment in the “Remittance Information” column, such as “Partial Payment For IN No 202301.”

Quite clearly, based on PW1’s testimony, she mainly relied on her own Total Payments Summary to prove that Naora indeed paid the sum of AED41,933,874.79 toward the Purchase Price. Under section 101 of our Evidence Act 1950, he who claims to have paid money bears the burden of proving his payment on the balance of probabilities. Such payments are usually supported by primary documents, e.g., bank statements, cheques, invoices, receipts. In this case, while it is undisputed that Naora paid the full Purchase Price to the Seller, the dispute lies in determining the parties’ respective contributions toward the Purchase Price.

The Total Payments Summary, though admissible on its own, constitutes secondary evidence, and its weight depends on the credibility of PW1 and how her testimony withstands cross-examination. This will show the reliability of the contents in the Total Payments Summary and the credibility of PW1’s testimony.

Although in most cases, simply producing a summary of payments as evidence of payment is unlikely to be enough to prove on a balance of probabilities that the payments described therein were actually made, since the document is merely self-serving, the fact that in this case, Pinnacles’ claims regarding its contribution to the Purchase Price except for the undisputed AED 39,500,000.00 have entirely collapsed, coupled with the Court’s view that PW1’s evidence on the payments has been consistent and largely unchallenged during cross-examination, and her testimonies are not inherently unbelievable, leads this Court to conclude that Naora has, in the circumstances of this case, met its burden on the balance of probabilities to prove it contributed AED 41,933,874.79 toward the Purchase Price.

My conclusion is strengthened by the fact that Pinnacles has altered its narratives not only regarding its contributions to the Purchase Price but also about Naora’s contributions as well. As mentioned earlier, Pinnacles’ argued that Naora only contributed 30% toward the purchase price, not 51% as claimed. However, it later argued that Naora was simply a ‘sleeve’ or conduit for its purchase of the Vessel. This stance shifted again when it was claimed that Naora had taken a AED 24,000,000.00 loan from Petrogulf, which is now found to be based on a fraudulent document.

Accordingly, this Court is satisfied that Naora has shown on the balance of probabilities that it has indeed disbursed AED 41,933,874.79 toward the Purchase Price. This, however, is not the end of the matter.

Clause 2 of the Investment Agreement stipulates thus: “Ownership: Pinnacles shall have full ownership rights due to its contribution of 70% of the funding.”

Based on the foregoing, Pinnacles asserts that it is the sole legal and beneficial owner of the Vessel regardless of the actual financial contributions from the parties.

Respectfully, I am unable to agree.

Quite clearly, the Investment Agreement outlines that Naora and Pinnacles shall contribute 30% and 70%, respectively, of the purchase price of the Vessel. In this regard, Pinnacles was supposed to “invest” in Naora, who will acquire the Vessel. The Agreement also envisions that the Bill of Sale for the Vessel will be registered under Solarix. In other words, once the full purchase price is paid to the Seller, the Vessel will be registered under Solarix. If Pinnacles had contributed its 70% towards the purchase price, then, under Clause 2 of the Investment Agreement, Pinnacles would have full ownership rights over the Vessel. This would imply that Pinnacles would be both the legal and beneficial owner of the Vessel in the ordinary sense. However, this is not the case.

As this Court has determined above, when the full purchase price was paid to the Seller under the Naora Bill of Sale, both Naora’s and Pinnacles’ respective contributions to the purchase price were 51:49, not 30:70 as agreed. This remains true even at the time the Vessel was later transferred to Solarix under the Solarix Bill of Sale. Since Pinnacles never contributed “70% of the funding," Clause 2 was not triggered.

Generally, when two parties contribute to buying a property, the common assumption is that they each have a beneficial interest proportional to their contribution. However, this can be challenged or overridden by a clear agreement between the parties showing a different intention.

In this case, the words in Clause 2 that “Pinnacles shall have full ownership rights due to its contribution of 70% of the funding” suggest that Naora, despite its 30% contribution, has no legal or beneficial interest in the Vessel at all but is only entitled to a 30% share of the profit arising from the use of the Vessel.

However, the parties’ stated intention only applies if Pinnacles contributed 70% of the funding, which, in this case, was not satisfied. When the Vessel was purchased, Naora's contribution was 51% and Pinnacles' was 49%. At this point, a resulting trust arises in proportion to these contributions. This means that at the time of the Naora Bill of Sale, although Naora was the registered owner and thus the legal owner of the Vessel, Naora only held a 51% beneficial interest, with the remaining 49% beneficial interest belonging to Pinnacles. This position remains unchanged despite the subsequent transfer of registered ownership from Naora to Solarix under the Solarix Bill of Sale.

The aforesaid would have been this Court’s conclusion on the percentage of ownership between Naora and Pinnacles of the Vessel but learned counsel for Pinnacles highlighted during oral submissions that Naora had in fact demanded Pinnacles to “reimbursed” the additional 21% of the Purchase Price that it had paid on Pinnacles’ behalf throughout the period before the termination of the Investment Agreement. What this means is that Naora had never intended its contribution towards the purchase of the Vessel to exceed 30% and that the additional 21% that it had disbursed was treated as an advance that Naora had made on Pinnacles’ behalf. Accordingly, if at all, any resulting trust based on financial contributions of the parties towards the Purchase Price of the Vessel must be based on the intention of the parties, meaning that the Vessel is beneficially owned 30% by Naora and 70% by Pinnacles but with Pinnacles owing to Naora the sum representing the 21% disbursed by Naora on its behalf.

The fact that, during the time when the Vessel was managed by Zovark, the profits from the Vessel's use were distributed 30:70 to my mind in fact supports the contention by learned counsel for Pinnacles. Notwithstanding that Naora had paid 51% of the Purchase Price, Naora never protested that the distribution of income from the use of the Vessel during the time the Vessel was managed by Zovark was made on the said 30:70 sharing basis.

Accordingly, this Court judges that Naora’s beneficial interest in the Vessel should be just 30% notwithstanding that it had contributed 51% of the Purchase Price. Naora, however, is entitled to be reimbursed the 21% of the Purchase Price that it had advanced to Pinnacles on its behalf from Pinnacles. It also follows from the aforesaid that Pinnacles’ beneficial interest in the Vessel is 70%.

The determination of the ownership above is notwithstanding DW5’s expert opinion that, under UAE Law, unlike common law jurisdictions, the doctrine of beneficial or equitable ownership is not recognized unless such rights are explicitly created by contract or arise under legally recognized structures such as agency or regulated investment structures. DW5 stated that without such express provisions, a party cannot claim ownership merely based on having contributed funds.

Regarding DW5’s opinion, this Court finds that his conclusion that the doctrine of resulting trust is not recognized under UAE law is not supported at all by any statutory provisions, judicial decisions, or authoritative commentaries. Foreign law is a question of fact and must be pleaded and proven through expert evidence. In this case, Pinnacles has never argued in its pleadings that, under UAE law, the doctrine of resulting trust is not recognized. Additionally, even though Naora has not engaged any expert on UAE law to counter DW5’s testimony, this Court is not required to accept his testimony at face value and is justified in rejecting DW5’s testimony as unpersuasive, given that his opinion is completely unsubstantiated, consisting of mere bare and general assertions without any underlying reasoning based on legal sources. Expert evidence, even if uncontested, must still withstand judicial scrutiny. Furthermore, DW5 did not come across as an independent and unbiased witness. He was too anxious to defend Pinnacles’ narratives.

The UK Supreme Court in Kennedy v Cordia LLP [2016] 1 WLR 597 held that unless the expert supplies the underlying basis and reasoning, the opinion is worthless: “An expert must explain the basis of his or her evidence when it is not personal observation or sensation; mere assertion or “bare ipse dixit” carries little weight, as Page 16 the Lord President (Cooper) famously stated in Davie v Magistrates of Edinburgh 1953 SC 34,

If anything, the suggestion that an unsubstantiated ipse dixit carries little weight is understated; in our view such evidence is worthless”. [emphasis added]

Again, in the well-known English case of The Ikarian Reefer [1993] 2 Lloyd’s Rep 68, the Court emphasizes that expert evidence must be the independent product of the expert and that an expert should state the facts and assumptions underpinning his opinion and not omit consideration of material facts that could detract from his conclusions. Regrettably, DW5’s report fails this standard – it reads as a partisan narrative, lacking independent research or balanced consideration. In short, DW5’s expert report lacks authoritative support and was seemingly crafted for litigation exigencies, and deserves little to no weight: “The duties and responsibilities of expert witnesses in civil cases include the following:

Expert evidence presented to the Court should be and should be seen to be the independent product of the expert uninfluenced as to form or content by the exigencies of litigation . . .

An expert witness should provide independent assistance to the Court by way of objective unbiased opinion in relation to matters within his expertise . . . An expert witness in the High Court should never assume the role of advocate.

An expert witness should state the facts or assumptions on which his opinion is based. He should not omit to consider material facts which detract from his concluded opinion . . .”

This means that this Court is entitled to apply the presumption that UAE law is presumed to be the same as the laws applied in this country.

Under the well-established equitable principles recognized by our laws, where one party provides all or part of the purchase price for property registered in another’s name, a resulting trust arises in favour of the contributor unless there is clear evidence to the contrary. The classic authorities oft-cited are Dyer v Dyer [1788] 2 Cox Eq 92 and Fowkes v Pascoe [1875] LR 10 Ch App 343: Dyer v Dyer: “The clear result of all the cases, without a single exception, is, that the trust of a legal estate, whether freehold, copyhold, or leasehold; whether taken in the names of the purchasers and others jointly, or in the name of others without that of the purchaser; whether in one name or several; whether jointly or successive, results to the man who advances the purchase-money. This is a general proposition supported by all the cases, and there is nothing to contradict it; and it goes on a strict analogy to the rule of the common law, that where a feoffinent is made without consideration, the use results to the feoffor. It is the established doctrine of a Court of equity, that this resulting trust may be rebutted by circumstances in evidence. The cases go one step further, and prove that the circumstance of one or more of the nominees, being a child or children of the purchaser, is to operate by rebutting the resulting trust; and it has been determined in so many cases that the nominee being a child shall have such operation as a circumstance of evidence, that we should be disturbing land-marks if we suffered either of these propositions to be called in question, namely, that such circumstance shall rebut the resulting trust, and that it shall do so as a circumstance of evidence. I think it would have been a more simple doctrine, if the children had been considered as purchasers for a valuable consideration. Natural love and affection raised a use at common law; surely then it will rebut a trust resulting to the father”. [emphasis added] Fowkes v Pascoe The case of the Plaintiffs is simply this: Certain sums of stock have been discovered to have been standing in the joint names of a lady deceased and the Defendant John Irving Pascoe. They were partly purchased with the lady's money, partly transferred from her name to the joint names. This, it is alleged, proves a resulting trust for the lady. And it is further alleged that the onus of rebutting the presumption of resulting trust is on the Defendant, and that he has failed to discharge himself. The Master of the Rolls was of that opinion, hence this appeal. [emphasis added]

In fact, Pinnacles, through its expert, submitted that in this case, the Purchase Price for the Vessel should be US$20,600,000 or AED 75,808,000.00 and not AED 81,433,874.79 as contended by Naora. The sum of AED 81,433,874.79 includes both the stated purchase price of AED 75,808,000.00 and miscellaneous charges such as bunkers and lube charges amounting to an additional AED 5,625,874.79 (“the Miscellaneous Charges”). It is the total sum actually paid to the Seller.

Taking the purchase price as AED 75,808,000.00, Pinnacles argues that it has contributed at least 52.11% of the purchase price based on its undisputed contribution of AED 39,500,000.00.

In my view, it doesn't matter whether the Purchase Price is considered to be AED 75,808,000.00 or AED 81,433,874.79. The reason is that contributions from both Naora and Pinnacles were paid into a common pool to cover the Seller’s invoice as a whole. Therefore, whether the purchase price was AED 75,808,000.00 or AED 81,433,874.79, the 51:49 contribution ratio still applies to the entire amount. In other words, the contributions from Naora and Pinnacles were proportionally applied across both the purchase price of AED 75,808,000.00 and the Miscellaneous Charges of AED 5,625,874.79.

In any case, the fact remains that the Miscellaneous Charges were included in the Seller’s invoice and constituted part of the total consideration needed to complete the sale. This indicates that paying the Miscellaneous Charges was a condition for the acquisition. Therefore, this Court also believes that the Miscellaneous Charges should be regarded as part of the Purchase Price when allocating the beneficial ownership of the Vessel.

As such, this Court judges that Naora has established, on the balance of probabilities, that it holds a 30% beneficial interest in the Vessel and that Pinnacles, in turn, owns the remaining 70% beneficial interest in the same. Pinnacles is obliged to reimburse the 21% Purchase price that Naora had advanced on its behalf (“the 21% Advance”). Jurisdiction to order Pinnacles to pay the 21% Advance

This Admiralty in Rem action is filed pursuant to section 20(2) of the Senior Court Act 1981, which expressly includes “any claim between co-owners of a ship relating to possession, ownership, operation or earnings of that ship and any question arising between them as to the possession, employment or earnings of a ship”.

Naora’s right to be repaid the 21% Advance is strictly speaking not an ownership claim but a claim in personam. The present action is filed as an in rem action, directed against the Vessel, not Pinnacles. It is premised on a statutory claim in rem, allowing Naora to arrest the Vessel and to proceed against her. The jurisdiction is founded on the arrest and service of the writ in rem.

The present action being an action filed in rem under the Admiralty Jurisdiction of this Court, does the Court have the jurisdiction to also entertain an in personam claim?

I judge that once Pinnacles entered unconditional appearance in Naora’s admiralty in rem action, this Court is empowered to also enter in personam judgment against Pinnacles, even in respect of the 21% Advance which, strictly speaking, does not fall within the limbs of Section 20(2) of the Senior Courts Act 1981.

The authorities make clear that once jurisdiction is validly invoked based on a maritime claim, as it has been here, by reason of the joint ownership dispute over the Vessel, the Admiralty Court is not devoid of its power to deal with other aspects of the dispute merely because they are non-maritime in character once the defendant had entered an unconditional appearance to the claims.

In The “PWM Supply” ex “Crest Supply 1 [2016] SGHC 117, it was held that an admiralty action in rem has a dual character; while it is initially directed against the res, once the defendant enters an unconditional appearance and submits to jurisdiction personally, the action may nonetheless proceed in personam and judgment may be rendered against him, even if there is no admiralty jurisdiction in respect of that claim.

In that case, the plaintiff ship manager sued in rem for sums due under a management agreement, including reimbursement of disbursements incurred on the vessel (which clearly fell within admiralty jurisdiction) as well as book-keeping, administrative and management fees (which did not fall within s 3(1)(o) of the Singapore High Court (Admiralty Jurisdiction) Act, equivalent to s 20(2) Senior Courts Act 1981). The defendant shipowner entered an unconditional appearance to the in rem writ. While the court found the management and administrative fees did not qualify as maritime claims, it nevertheless held that, by reason of the unconditional appearance, the plaintiff was entitled to judgment in personam against the defendant for those non-admiralty items. The relevant passages of the judgment are reproduced below: “[80] Admittedly, there is no room in Singapore for a hybrid writ that includes in rem and non-in rem claims. In The Nagasaki Spirit [1993] 3 SLR(R) 891, GP Selvam JC (as he then was) explained (at [8]) that whatever may have been the practice in the past, a hybrid writ cannot be issued in Singapore as the Rules of the Supreme Court 1970 do not provide for it and such a writ will lead to undesirable and embarrassing complications. However, whether or not a plaintiff in an in rem action is entitled to judgment in personam if his in rem claim fails is a different question altogether and the answer depends on whether or not the defendant has entered an unconditional appearance in the in rem action. The position is summed up in Toh Kian Sing SC, Admiralty Law and Practice (LexisNexis, 2nd Ed, 2007) (at pp 16-17) as follows: If the shipowner appears in the action and submits to jurisdiction personally, the action may nonetheless proceed in personam and judgment may be rendered against him, even if there is no admiralty jurisdiction in respect of the action in rem or if admiralty jurisdiction has not been validly invoked. If, however, the shipowner does not appear, then judgment of the action which remains purely in rem is limited to the value of the res or the bail or other security furnished in its place. It also follows that no judgment can be obtained against such a non-appearing shipowner personally. [emphasis added] [81] In The August Eighth [1983-1984] SLR(R) 1, where the question before the court was whether or not O 14 of the Rules of the Supreme Court 1970 applies to an in rem action, the Privy Council advised (at [23]) as follows: By the law of England, once a defendant in an admiralty action in rem has entered an appearance in such action, he has submitted himself personally to the jurisdiction of the English Admiralty Court, and the result of that is that, from then on, the action continues against him not only as an action in rem but also as an action in personam: The Gemma [1899] P 285 at 292 per A L Smith LJ. There is no reason to suppose that the admiralty law of Singapore differs from the admiralty law of England so far as this important principle is concerned. On the contrary there is every reason to suppose that it is the same. If then that principle is applied in the present case, the situation is that, from the time when the shipowners entered an appearance in the master’s action, as they did on 2 February 1978 the action continued not only in rem against the property proceeded against, namely, the ship, but also in personam against the shipowners themselves. [82] The above-mentioned passage was cited with approval by the Court of Appeal in The Ohm Mariana ex Peony [1993] 2 SLR(R) 113. In this case, the defendant’s assertion that the plaintiff’s claim for disbursements incurred and paid for by the plaintiff ship managers was not within the ambit of para (o) of s 3(1) of the High Court (Admiralty Jurisdiction) Act (Cap 123, 1985 Rev Ed) was rejected. It is noteworthy that the Court of Appeal observed that even if the defendant was right, the action could proceed as an action in personam. LP Thean J (as he then was), who delivered the judgment of the Court of Appeal, explained (at [39]-[40]) as follows: 39 Further, even if the action in rem was instituted in error on the ground that, when the cause of action arose, the respondents were not the owners of Ohm Mariana, that error was not fatal to the appellants’ claim at the trial. As we have held, the claim of the plaintiffs came within para

of s 3(1) of the Act, and the court has jurisdiction to hear and determine the claim. The defendants had not, at the initial or any subsequent stage of the proceedings, applied to set aside the writ and the warrant of arrest. They entered an appearance unconditionally and in so doing submitted to the jurisdiction of the court and from then onwards the action continued as an action in rem as well as an action in personam: see The Gemma [1899] P 285 and The August 8 [1983] 2 AC 450; [1983] 1 Lloyd’s Rep 351. ... 40 Accordingly, at the time the action came before the learned judicial commissioner, it was an action in personam as well as an action in rem. Assuming that the action in rem was wrongly instituted, the action in personam was clearly maintainable on the point of jurisdiction. There was no impediment to the plaintiffs bringing an action in personam against the defendants making the same claim as was made in this action. Equally, we can see no impediment to the action continuing as an action in personam. The subject matter of the claim was before the court and the court had jurisdiction to hear and determine it. In our judgment, the claim ought not to have been dismissed on the ground of lack of jurisdiction. [83] A similar approach was taken by Chan Seng Onn JC (as he then was) in The Trade Resolve [1999] 2 SLR(R) 107. In this case, the plaintiff instituted an action in rem to recover unpaid demurrage and the defendant, who entered an appearance in the action, applied to set aside the arrest of the vessel on the ground that the arrest was effected outside Singapore’s territorial waters and was thus wrongful. The judge stated as follows (at [47]-[48]): 47 On the facts, since both the service of the writ in rem and the arrest were outside jurisdiction (ie outside territorial waters), any submission to jurisdiction would only be to the extent of the jurisdiction of the court against the defendants in an action in personam. Thus the court could still determine the merits of the lien and the action, and award a judgment in personam against the defendants if the plaintiffs proved their claim. ... 48 In conclusion, by the defendants’ entry of an appearance and their submission to the court’s jurisdiction to determine the merits of the plaintiffs’ claim and their claim to the lien, they had submitted personally to the jurisdiction of the court. Under the unusual circumstances of this case where both the writ and warrant were served out of jurisdiction, the action would nonetheless continue and proceed as an action only in personam, and if judgment in personam was entered for the plaintiffs, the defendants would become liable for the full amount of the plaintiffs’ proved claim even though the judgment sum might eventually exceed the value of the vessel. [84] As PWM entered unconditional appearance in the present action on 16 May 2011, AKN Marine is entitled to judgment in personam for the book-keeping and administrative fees, which amounted to S$12,000. As for the management fees claimed by AKN Marine, it was clear that US$9,200 was payable per month by PWM in accordance with the Management Agreement. As PWM owes AKN Marine management fees for ten months, AKN Marine is also entitled to judgment in personam for the sum of US$92,000 for outstanding management fees. In relation to the judgment in personam for the book-keeping and administrative fees as well as the management fees, AKN Marine is entitled to interest at 5.33% per annum from the date of the writ to the date of judgment”. [emphasis added]

Quite clearly, the 21% Advance is a finding that arises out of the same subject matter of the in rem action or, at the very least, relates to the settlement of accounts between them concerning their respective contributions to the purchase of the Vessel. Put it simply, the 21% Advance is a matter that arises out of the same maritime transaction with the ownership disputes.

Accordingly, given that Pinnacles has entered unconditional appearance and thereby submitted to the Court’s jurisdiction, the Court’s admiralty jurisdiction has become both in rem and in personam, which means that this Court can render an in personam order that Pinnacles is to repay Naoro the 21% Advance. Further, Pinnacles is to pay Naora 21% of the purchase price, which is a personal repayment obligation, from Pinnacles’s share of the sale proceeds of the Vessel (which will be addressed below).

Naora has sought an order directing Pinnacles to render an account and settle the Vessel’s earnings from August 2023. This includes the period from August 2023 to March 2024 when the Vessel was under the management of Zovark, who was the manager jointly appointed by the parties. It seems to me that any accounts requested for this period should rightfully be directed at Zovark and not Pinnacles.

From March 2024, Pinnacles, without Naora’s consent and in breach of the parties’ agreement, unilaterally removed the appointed commercial operator and took exclusive control of the Vessel. During this period from March 2024 until September 11, 2024, when the Vessel was arrested, both operational accounts and earnings were withheld from Naora. Pinnacles must provide a complete account of any profits and expenses incurred during this period to Naora.

By way of its Counterclaim, Pinnacles is seeking damages for wrongful arrest or wrongful prolongation of arrest, as well as compensation for all wasted and unnecessary expenses incurred since the arrest of the Vessel.

In light of my findings above, it must follow that the Counterclaim is entirely without merit. In fact, this Court previously decided on 23.12.2024 that the arrest was not wrongful and that Naora had met the legal threshold to bring this admiralty action in rem against the Vessel and to effect the arrest. The Court also held that there was no mala fides or gross negligence on Naora’s part, and therefore, Pinnacles was not entitled to damages for wrongful arrest or its continuation. There was no appeal against the decision. The issue has been finally and conclusively resolved, and Pinnacles is estopped from re-litigating these matters in the present proceedings.

The Vessel has remained under arrest because both Naora and Pinnacles could not agree on the appropriate security for its release and had agreed to an early trial before this Court to finally determine their disputes. Vessel to be Sold

In the instant case, the Vessel was acquired pursuant to a business arrangement that has gone sour. The relationship between the parties has broken down, and there is no longer trust between them. The Vessel is also deteriorating physically and in value. In the circumstances, this Court judges that the most practicable, fair, and clean solution for the joint owners is for the Vessel to be sold. The proceeds, after settlement of claims, are to be divided and paid to Pinnacles and Naora in proportion to their ownership.

Counsel for both parties have sought directions from this Court as to whether the costs and expenses incurred in maintaining the Vessel whilst under arrest ought to be borne in the same proportion as to their respective ownership share as determined by this Court, namely, Naora to bear 30% and Pinnacles to bear 70%.

In admiralty practice, the expenses incurred for the preservation of the res (the arrested vessel) are regarded as maritime expenses or custodia legis costs. These are expenses incurred for the benefit of the parties in the action as they preserved the value of the asset pending its judicial sale. They take precedence over all claims against the sale proceeds, and are normally paid out of the sale proceeds before division between claimants or owners. Accordingly, all reasonable costs and expenses of preserving the Vessel during arrest are to be reimbursed from the sale proceeds as custodia legis expenses before any distribution between Naora and Pinnacles.

The party that has paid preservation expenses is entitled to full reimbursement of those reasonable expenses from the sale proceeds, before the balance is divided. Since these expenses are custodia legis expenses, they are not to be borne proportionately in the first instance. Rather, the actual payer is to be reimbursed in full (subject to proof of reasonableness) because the expenses benefited both owners equally. After reimbursing those preservation costs, the remaining balance of the sale proceeds should be distributed according to the ownership ratio as determined by this Court i.e 30:70.

In the premises, this Court hereby issues the following orders: a) A declaration that Naora is the beneficial owner of 30% of the Vessel; b) A declaration that Pinnacles is the beneficial owner of 70% of the Vessel; c) An order for the appraisal and sale of the Vessel immediately; d) An order that Pinnacles is to pay Naora the sum of AED 17,101,113.70 or its equivalent in Ringgit Malaysia as the exchange rate at the date of the arrest of the Vessel constituting the 21% Advance with interest fixed at 5% per annum from 1.9.2023 until full payment, which shall be set off from the net sale proceeds of the Vessel payable to Pinnacles; e) An order that Pinnacles provide a full and proper account of the Vessel’s earnings and disbursements from March 2024 to August 9, 2024, and that Pinnacles pay Naora 30% of the profits, if any; f) Pinnacles’ Counterclaim is dismissed; g) Pinnacles shall pay Naora costs fixed at RM 80,000.00 subject to allocatur. Dated the 24th day of October 2025 ONG CHEE KWAN HIGH COURT JUDGE (COMMERCIAL DIVISION NCC2 & ADMIRALTY) HIGH COURT OF KUALA LUMPUR IN THE FEDERAL TERRITORY, MALAYSIA Counsel for Plaintiff: Mr. Jeremy M. Joseph together with Ms. Vinodhini Samuel; and Ms. Siti Deelora Ahmad Rajkumar (Messrs. Joseph & Partners) Counsel for Defendant: Mr. Khoo Guan Huat together with Mr. Ragumaren Gopal; Ms Grace Teoh, Mr. Shoban Nair; Mr. Khoo Yuan Ping; and Ms. Naadia Hussain (PDK) (Messrs. G. Ragumaren & Co.- (Mr. Ragumaren, Mr. Shoban Nair, Ms. Naadia), Messrs Khoo Chambers - (Mr. Khoo Guan Huat, Ms. Grace Teoh & Mr.

Kennedy v Cordia LLP [2016] 1 WLR 597

The Ikarian Reefer [1993] 2 Lloyd’s Rep 68

Dyer v Dyer [1788] 2 Cox Eq 92

Fowkes v Pascoe [1875] LR 10 Ch App 343

The “PWM Supply” ex “Crest Supply 1 [2016] SGHC 117

Section 20(2) of the Senior Courts Act 1981

Section 24(b) of the Courts of Judicature Act 1964

Section 101 of our Evidence Act 1950

Section 3(1)(o) of the Singapore High Court (Admiralty Jurisdiction)