the Charterers' right to possess and operate the Vessel shall immediately cease and the Charterers shall, upon the Owners' request, be obliged to immediately (and at the Charterers' own cost) redeliver the Vessel to the Owners at such ready and nearest safe port as the Owners may require; …” [emphasis added] [57] The Notice of Termination had demanded for payment of the Termination Sum within 5 days of receipt of the notice and if EVCL failed to pay the Termination Sum or any part thereof, they were “… requested and shall immediately redeliver the Vessel to the Owner …” and “Charterer shall procure the Master and crew promptly follow all orders and directions of Owner in relation to the Vessel”. [58] Subsequent to the Notice of Termination and after the expiry of the notice period to pay the Termination Sum, there was no communication between EVCL and Huihong up to the time when the Writ in rem was filed. [59] It was Huihong’s contention that pending physical repossession of the Vessel, in accordance with Clause 29 of the Demise Charter set out below, EVCL was holding the Vessel as gratuitous bailee only to Huihong. More specifically, Huihong contended that EVCL was no longer in authorised possession and control of the Vessel as demise charterer when New World’s alleged cause of action arose, and S/N BaIV2mgpwkq3Zdyki0Yiug when it commenced the action on 4.6.2024 and arrested the Vessel the next day. Clause 29 stipulates: “29. Repossession In the event of termination of this Charter in accordance with the applicable provisions of this Charter, unless the Owners are obliged to transfer title to the Vessel to the Charterers in accordance with this Charter, the Owners shall have the right to repossess the Vessel from the Charterers at her current or next port of call, or at a port or place convenient to them without hindrance or interference by the Charterers, courts or local authorities. Pending physical repossession of the Vessel in accordance with this Clause 29, the Charterers shall hold the Vessel as gratuitous bailee only to Owners, and the Charterers shall procure that the master and crew follow the orders and directions of the Owners. ….. [emphasis added] [60] It was contended that as a matter of English law (being the governing law of both the Demise Charter and Eversea CP), the exercise of a contractual right of termination by way of issuing the Notice of Termination sufficed to terminate the Demise Charter, such that EVCL was no longer a “charterer by demise” for the purposes of Section 21(4) of the UK SCA 1981 at the time when the Writ in rem was filed. S/N BaIV2mgpwkq3Zdyki0Yiug [61] In other words, as a matter of law, the Notice of Termination which Huihong issued in exercise of its contractual right to terminate under the Demise Charter sufficiently brought the demise charter relationship to an end, in that EVCL’s status changed from that as demise charterer to a mere gratuitous bailee only pending physical redelivery of the Vessel. Physical redelivery is not a legal requirement for termination to be valid. [62] Both EVCL and Huihong contended that the fact that EVCL had continued to use the Vessel to perform its obligations under the Cargill CP in breach of their obligations to redeliver possession and control of the Vessel did not alter its status as a mere gratuitous bailee. After the termination of the Demise Charter, the use of the Vessel, if any, was without the authority or consent of Huihong as the Demise Charter had already come to an end with the Notice of Termination. [63] Expert legal opinions were adduced by the parties on the following question: “When the registered owner has issued a notice of termination under a demise charter on an amended charter on the Barecon 2001 form with rider clauses, but the bareboat charterer/ remains in possession of the vessel at the time the Plaintiff’s cause of action arises and at the time of arrest, is the demised charterer still the charterer by demise for the purposes of s.21(4) of the Senior Courts Act”. S/N BaIV2mgpwkq3Zdyki0Yiug [64] Mr Nigel Cooper KC gave an opinion as the Plaintiff’s expert whilst opinions were sought from Mr. Henry Byam-Cooke KC for the Receivers and Mr. Timothy Young KC for EVCL. Mr Nigel Cooper KC’s Opinion [65] Mr Cooper KC began his analysis by stating that the key to determining whether a person is a charterer of a vessel under a demise charter is by establishing if possession and control of the vessel has been parted by the owner to that person. This is following the judgment of Lord Esher M.R. in Baumwoll v. Gilchrist [1893] 1 QB 253 at 259 as approved by the House of Lords at [1893] AC 8 (“Baumwoll v Gilchrist”). [66] Reference was also made to Evans LJ in The Guiseppe di Vittorio [1998] 1 Lloyd’s Rep. 138 (“The Guiseppe di Vittorio”) where at p. 156 he said: “What then is the demise charter? Its hallmark … is that the legal owner gives the charterer sufficient of the rights of possession and control which enable the transaction to be regarded as a letting – a lease, or demise, in real property terms – of the ship. Closely allied to this is the fact that the charterer becomes the employer of the master and crew. Both aspects are combined in the common description if a ‘bareboat’ lease or hire arrangement.” [67] More specifically, in dismissing the appeal against the decision at first instant of Clarke J, Lord Evan LJ had opined that in considering the jurisdiction of the admiralty court, for the purpose of Art 3(4) of S/N BaIV2mgpwkq3Zdyki0Yiug the International Convention for the Arrest of Ships 1953 (“the Arrest Convention”) and section 21(4) of the UK SCA 1981, the Court should not be restricted to the relationship created by the private agreement between the parties. Instead, in determining whether there was a demise charter under section 21(4) of the UK SCA 1981, the Court should be looking at whether possession and control is vested with the charterer and who manages the vessel and employs the crew. Such an approach would safeguard the interest of third parties dealing with the vessel and consistent with the purpose of both the Arrest Convention and the UK SCA 1981. [68] Mr Cooper KC had opined that the English Courts would most likely follow the decision of Steven Chong J in The Chem Orchid [2015] SGHC 50; [2015] 2 Lloyd’s Rep 666 (“The Chem Orchid”) where the learned judge had by way of obiter dicta, after referring to a number of authorities from England, Australia and New Zealand, expressed his view that a notice of termination will not be sufficient on its own to terminate a demise charter without the physical redelivery to the owner of the vessel. Steven Chong J also opined that the parties cannot contract out of the need for physical redelivery. Mr Cooper KC agreed with the observation of Steven Chong J in The Chem Orchid that even if the demise charterer did not dispute or challenge the efficacy of a termination notice by the owner, the charter by demise was still subsisting at the time of arrest if physical redelivery of the Vessel had not occurred. [69] Mr Cooper KC noted that Tamberlin J in The Turakina (1998) 154 ALR 666 (“The Turakina”), in reaching his decision had dealt into an extensive discussion of the English law authorities dealing with the S/N BaIV2mgpwkq3Zdyki0Yiug distinction between the withdrawal or termination of a time charter for which physical redelivery was not necessary and the withdrawal or termination of a demise charter for which physical redelivery was necessary. Tamberlin J’s view was in fact upheld and applied by Giles J in the New Zealand High Court case of The Rangiora [2000] 1 Lloyd’s Rep 36 (“The Rangiora”). [70] Mr Cooper KC acknowledged that there are contrarian views. More specifically, in The Socofi Stream [1999] FCA 1419 (“The Socofi Stream”) Moore J of the Federal Court of Australia, New South Wales held that the charterer had ceased to be a demise charterer from the time of termination notice based on a clear contractual right to terminate. Moore J was of the view that the contractual provisions in the case before him was different from that in The Turakina. [71] In this regard, Mr Cooper KC agreed with the view expressed by Steven Chong J in The Chem Orchid that there was in fact no material difference between the clauses in the two demise charters found in The Turakina and The Socofi Stream and that neither clause changed the fact that the bareboat charterer had continued to enjoy actual possession and control of the vessel. Although he was not dealing with the revised Barecon 2001 form which succeeded the Barecon 89, Steven Chong J opined that the purpose of clauses 28 and 29 of the Barecon 2001 was to address the practical difficulty faced by ship owners in retaking possession of their vessels when the bareboat charter is terminated while the vessel is on the high sea citing the decision of Rares J in The Hako Fortress (2013) 296 ALR 265 (“The Hako Fortress”) and the decision of Filkelstein J in ASP S/N BaIV2mgpwkq3Zdyki0Yiug Holdings v Pan Australia Shipping Pty Ltd (2006) 235 ALR 554 (“ASP Holdings”). [72] Based on the authorities cited, Mr Cooper KC concluded that under English law, physical redelivery of the vessel is required in order to terminate a demise charter. He concluded that this would be consistent with: a) the nature of the demise charter which passes both control and possession of the vessel to the demise charterer until the vessel is redelivered back to the owner; b) the purpose of section 21(4) of the UK SCA 1981 and the in rem jurisdiction which is to give a third party with a valid admiralty claim against the vessel with the security of knowing its claim is protected whether the vessel is in the possession and control of the owner or the demise charterer; c) the weight of the authorities as discussed, in particularly the judgment of Steven Chong J in The Chem Orchid. [73] Mr Cooper KC also considered it to be the position of the English law that parties would not be able to rely on a contractual provision to effectively terminate a demise charter without physical redelivery at least for the purposes of Section 21(4) of the UK SCA 1981. Like Steven Chong J, Mr Cooper KC also did not consider it helpful to introduce the doctrine of constructive redelivery when considering if a demise charter has been terminated. S/N BaIV2mgpwkq3Zdyki0Yiug [74] In any event, Mr Cooper KC opined that if such a contractual provision is effective, the Court will still have to examine if the charterer is acting as a gratuitous bailee following the service of the Notice of Termination, that is, whether the parties are continuing with the relationship where the charterer is exercising its rights and obligations as a demise charterer. Similarly, if the doctrine of constructive redelivery is necessary, whether any of the parties had taken steps that can properly be construed as constructive redelivery of the Vessel. Mr Timothy Young KC’s Opinion [75] On the contrary, according to Mr. Young KC, under Clause 29 of the Barecon 2001 form, the demise charter embodied in it ends with the service of a notice of termination. Physical handover by the charterer to the owner is not required to achieve the determination of the charter. The character of the charterers’ possession of the vessel is as gratuitous bailee, not as charterer. The parties have thus contracted for the termination of the charter rather than contracting out of any relationship which might avail a third-party claimant. [76] In essence, a charterer’s legal possession of the vessel ceases on termination of the charter. Any claims against charterers arising out of the vessel's operation between termination and physical redelivery are not within the provisions of Section 21(4) of the UK SCA. 1981. Any other result would be fundamentally at odds with the judgment in Baumvoll v Gichrest which lies at the very heart of the English jurisprudence on demise charters. S/N BaIV2mgpwkq3Zdyki0Yiug [77] In Baumvoll v Gilchrist, the plaintiff was, as the court found, relevantly ignorant of the underlying contractual arrangement, but that did not alter its analysis, which was dependent on the contractual analysis whereby the registered shipowner effectively contracted out of being a carrier under the bill of lading. [78] Mr Young KC also relied on the Australian Federal Court case of Dan-Bunkering (Singapore) Pte Ltd v the Ship ‘Yangtse Fortune (No.3) [2024] FCA 219 (“Dan-Bunkering”) which he thinks the English Court is more likely to accept compared to the obiter dictum of Steven Chong J in The Chem Orchid relied on Mr. Cooper KC because it is a case at appellate level and the material part of the court’s reasoning was ratio decidendi of the decision. He opined that Dan-Bunkering would be afforded appropriately high respect by the English Courts more so since it is the more recent decision. [79] In Dan Bunkering, it was argued (by a bunker supplier claiming against the vessel’s proceeds of sale) that the notice of termination was ineffective to determine the demise charter until the vessel was actually repossessed by the registered owners and thus the demise charter was still in existence at the date that the fund came into being following the completion of the sale. The court rejected that argument holding that once a notice of termination had been served, the charterparty terminated even without some other act of repossession. To the extent that the charterers remained in possession of the vessel, they did not do so as contractual charterers but rather as gratuitous bailees and so, while the charterers owed duties in respect of the vessel, they were as bailees and not as charterers. The court relied for this analysis on the decision on The S/N BaIV2mgpwkq3Zdyki0Yiug Ship Hako Endeavour v Programmed Total Marine Services Pty Ltd [2013] FCAFC 21 (“the Hako Endeavour”) and Taxidiortiki-Touristiki-Natuiliaki v MV Columbus [2021] Lloyd’s Rep Plus 67 (“The MV Columbus”). The charterparty in The Hako Endeavour was on Barecon 2001 form and it was held that, once the notice of termination was issued, both control and possession of the ship were also terminated, the charterer merely holding the vessel on bailment for the owner. [80] Mr. Young KC’s reasons for preferring Dan Bunkering are as follows: a) the characteristic feature of a demise charterer is that he must have ‘possession and control’ of the vessel. Hence, the starting point is to look at what the contractual terms in the Demise Charter say about “possession and control”. That would be the clause on termination and repossession, ie. Clause 29. The Barecon 2001 is the result of a BIMCO conference and agreement, and BIMCO intended to strengthen the hand of the owner of a demise-chartered vessel. It would be appropriate to interpret Clause 29 from that point of view; b) the quintessence of Clause 29 is to alter the fundamental nature of the relationship between owner and charterer once a notice of termination has been validly given. As held in Dan-Bunkering the relationship is no longer that of owner/charterer but of owner/bailee and the bailee’s possession and control of the vessel is not that of a charterer but of a person acting as agent of the owner. He can no longer control the vessel S/N BaIV2mgpwkq3Zdyki0Yiug otherwise than for and on behalf of the owner. He certainly cannot trade the vessel for his own account. His function and legal character both change and change significantly; c) referring to Mr. Cooper KC’s contention that the gratuitous bailment relationship is intended to deal only with the period between notice of termination and physical repossession, which he seems to regard as ‘short-term’ and discrete where there is an obstacle to the taking-over of possession, Mr Young KC disagreed saying that this seems to be premised upon that period indeed being short and the obstacle being transient which Mr. Young KC opined that there is no reason for that limitation especially so when the ‘obstacle’ was the charterer’s own unlawful refusal; d) referring again to Mr. Cooper KC’s contention, following Steven Chong J in The Chem Orchid that taking the notice of termination as effective to bring the demise charter to an end would prejudice an innocent third party having an in rem claim, Mr Young KC stated that this assumed that the innocent third party had in rem claim and should not be deprived of it. Instead he opined that the correct approach should be to ask whether the third party had an in rem claim in the first place; e) Mr Young KC accepted that Steven Chong J was concerned with the rights of ignorant third parties, but he opined that there is no dominating reason why those rights should or can have priority over the rights of shipowners. The case of Baumvoll v Gilchrist indicates powerfully that such priority should not be S/N BaIV2mgpwkq3Zdyki0Yiug given or afforded, and it must be acknowledged that it is most unlikely that third parties will bother (or able) to inquire into the contractual relations between owners and charterers and between master/crew and those entities before entering into a transaction. In this connection, the reasoning of Steven Chong J and Mr Cooper KC would tend to lead to the unattractive result that a defaulting charterer can unlawfully retain possession and unlawfully confer lawful benefits upon the third party (even perhaps if the third party knows of the unlawfulness). This is a very odd result not least since ‘innocent’ third parties must, by definition, have in personam rights which remain enforceable (there could be no in rem rights without such in personam rights). f) In respect of the Cargil CP, Mr. Young KC opined that it did not turn on anything. Just because the Vessel was engaged in offloading a cargo tells one nothing about who was in possession of, or ‘trading’, the Vessel. All one can say was that the Vessel’s staff were working to effect the discharge so as to render the Vessel cargo-free, whoever may have materially given them orders so to do. It did not establish the status of EVCL as “demise charterer”. Mr Henry Byam-Cooke’s Opinion [81] Mr. Henry Byam-Cook KC shared the view expressed by Mr Young KC that a demise charter can come to an end without physical redelivery of the vessel. He referred to the English Court of Appeal’s case of “The Munster” [1983] 1 Lloyd’s Rep 370 (“The Munster”) S/N BaIV2mgpwkq3Zdyki0Yiug where the owner’s acceptance of a repudiatory breach of the charterer was held to be sufficient to bring the demise charter to come to an end. [82] He also referred to The Guiseppe di Vittorio focussing in particular to Lord Justice Evans’ remark that “ … in order to discover what the charterers’ rights are and whether they are sufficient to amount to a letting of the ship, it is necessary to consider the terms of the charter agreement, when such an agreement exists” concluding that where there is a written contract between the owner and the charterer, the court will analyse that written contract to determine the charterer’s rights. More specifically, Mr Byam-Cooke KC relied on the following passage of Lord Justice Evans’ judgment: “When there is a charterparty, meaning a consensual agreement between owner and charterer, then it is necessary to consider to what extent the owner has relinquished to the charterer his rights of possession and control, including the right to employ master, officers and crew, in deciding whether there is a letting of the ship which is equivalent in its legal effects to a demise of real property. The letting will usually be for a fixed period, but it will also be terminable by the owner/lessor in specified circumstances and generally in the event of a repudiatory breach by the charterer/lease” [83] According to Mr Byam-Cooke KC, the aforesaid passage meant that the owner under a charter by demise can terminate the charter i.e. bring to an end such that the charterer ceases to be the “charterer of it under a charter by demise” within Section 21(4) of the UK SCA 1981 by (i) the operation of a contractual right to terminate or (ii) S/N BaIV2mgpwkq3Zdyki0Yiug terminating the contract at common law on the basis of a repudiatory breach. [84] He referred to The Munster as an example of termination at common law. That was a case where the charterers had repudiated the demise charter and the repudiation was accepted by the owner on the same day. The Court of Appeal upheld the owners’ argument that the owners’ acceptance was sufficient to terminate the demise charter which meant that physical redelivery was not required. [85] Based on the aforesaid, Mr Byam-Cooke referred to the contractual terms in the Demise Charter and the circumstances set out in which the Demise Charter may be terminated and opined that once the Huihong exercised its contractual rights under the terms of the Demise Charter to issue the Notice of Termination, the consequence would be that the Demise Charter would come to an end and EVCL would cease to be “the charterer of [the Vessel” under a charter by demised” within Section 21(4) of the UK SCA 1981. This did not depend at all on physical redelivery of the Vessel. [86] In dealing with Steven Chong J’s judgment in The Chem Orchid, Mr. Byam-Cooke KC commented that the learned judge’s view on the need for physical redelivery was mere obiter. In any case, he opined that Steven Chong J’s view that under the common law, physical redelivery is necessary to terminate a demise charter was wrong as he did not consider the case of The Guiseppe di Vittorio and The Munster. S/N BaIV2mgpwkq3Zdyki0Yiug [87] Mr. Byam-Cooke KC also relied on the Federal Court of Australia’s case of The Hako Endeavour quoting Rares J’s and Buchanan J’s judgment in support of his opinion, which he opined as persuasive authority by the English Court. Mr. Byam-Cook KC disagreed with Mr Cooper’s view that under English law, the owner is required to take steps to bring to an end the charterer’s possession and control of the vessel after the notice of termination. He referred to Buchanan J’s judgment in The Hako Endeavour who rejected a similar argument. [88] Finally, Mr. Byam-Cooke KC also found no evidence of acquiescence on the part of Huihong to the continued possession and control of the Vessel by EVCL. Court’s Considerations on the Jurisdiction Challenge [89] The provisions in Section 21(4) of the UK SCA 1981 are to give effect to Article 3(4) of the 1952 Arrest Convention which allows for the arrest of a ship under ‘a charter by demise’. [90] There are clearly 2 divergent views in connection with whether a ship is, in law, under a charter by demise during the period after the owner has purported to exercise a right of termination of the bareboat charterparty but the vessel is still in the possession of the charterer, i.e. before physical redelivery of the vessel to the owner. [91] Having considered the opinions expressed by the experts above, I am inclined to follow the approach taken by Steven Chong J in The Chem Orchid which Mr Cooper KC also accepted as the position S/N BaIV2mgpwkq3Zdyki0Yiug likely to represent the English law on the termination of a demise charter in the context of the jurisdictional issue under Section 21(4) of the UK SCA 1981. [92] To my mind, the Court must look at the actual relationship between the owner and the charterer at the commencement of the proceedings in answering the question whether the vessel was subject to ‘a charter by demise’. In this regard, Lord Justice Evans in The Guiseppe di Vittorio had held that the existence or otherwise of a demise charter is to be determined by the nature of the relationship and not by any contract. The off-cited passage states: ‘What then is the demise charter? Its hallmark … is that the legal owner gives the charterer sufficient of the rights of possession and control which enable the transaction to be regarded as a letting - a lease, or demise, in real property teems – of the ship. Closely allied to this is the fact that the charterer becomes the employer of the master and crew. Both aspects are combined in the common description of a ‘bareboat’ lease or hire arrangement.’ [93] Thus, where the owner has served a notice of termination and has asserted its right to take possession of the vessel but the charterer is permitted to continue with possession and control of the operation of the vessel, the nature of the relation has not been altered at all. As a result, the charterer continues to be able to assume debts and liabilities as it trades with third parties who would have no knowledge of the termination and who, if the charter by demise is deemed terminated, will not be able to pursue its claims against the vessel. This would be inconsistent with what is envisaged under Article 3(4) S/N BaIV2mgpwkq3Zdyki0Yiug of the Arrest Convention and the statutory provisions under Section 21(4) of the UK SCA 1981. [94] I agree with Steven Chong J that as between the owner and third parties, the Court should strike a balance in favour of the latter so that they can deal with the vessel safe in the knowledge that they can arrest the vessel for their claims regardless of whether the party whom they directly transact is the owner of the demise charter. Indeed, as rightly pointed out by Steven Chong J, to hold that a demise charter may be terminated by a notice of termination based on a valid contractual termination may expose a third party who deal with the vessel after contractual termination but prior to physical redelivery no effective remedy at all. At para [79] of the judgment, Steven Chong J succinctly put this unsatisfactory position as follows: “79. In my judgment, holding that a valid contractual termination suffices to bring a bareboat charter to an end in the absence of physical redelivery may upset the aforementioned balance. This is because third parties will find that it is no longer safe to assume that they have contracted with either the owner or bareboat charterer of a vessel in all circumstances. If they deal with the vessel after contractual termination but before redelivery, it is possible that they may have in fact dealt with neither – the owner certainly does not have control and possession of the vessel during this curious period where she is in “limbo” whereas the party in full possession and control is no longer the bareboat charterer following contractual termination. In that event, the third party will have no basis for arresting the vessel and is left without security for its claim. This appears to me to cut against the spirit of the 2004 Amendment which, as I have stated, was aimed at S/N BaIV2mgpwkq3Zdyki0Yiug lifting third parties from the burden of determining the true state of the relationship between the owners and the charterers.” [95] The more recent case of Dan Bunkering was a decision made in reliance on The Hako Endeavour where effect was given to the relevant clauses in the Barecon 2001 form, more specifically, clauses 28, 29 and 44.2. Rares J had held that these clauses had the effect of terminating the charterparty with the erstwhile charterer retaining possession not as bareboat charterer but as gratuitous bailee. [96] The Hako Endeavour (The Ship “Hako Endeavour” v Programmed Total Marine Services Pty Ltd (Wad 189 of 2012) (2013) 296 ALR 265) was in fact referred to by Steven Chong J in The Chem Orchid who opined that because the question of repossession goes right to the heart of whether the bareboat charter remains in force, the mere constitution of the charterer as ‘gratuitous bailee’ under the contract, cannot without more, amounts to the transfer of possession and control back to the owner. This is because despite the characterisation of the charterer as ‘gratuitous bailee’, the reality is that the charterer retains possession and still mans and supplies the vessel. [97] The aforesaid is all the more so when it is the charterer who has been delinquent in redelivery of the vessel. In this regard, I cannot agree with Mr Young KC’s view that clause 29 is applicable even when the ‘obstacle’ for redelivery is the charterer’s own unlawful refusal. To my mind, the very refusal to redelivery by the charterer must surely be anathema to the status as ‘gratuitous bailee’. S/N BaIV2mgpwkq3Zdyki0Yiug [98] I am also not persuaded by Mr Young KC’s position that the reasoning of Steven Chong J and Mr Cooper KC as regards third party rights would ‘tend to lead to the unattractive result that a defaulting charterer can unlawfully retain possession and unlawfully confer lawful benefits upon the third party (even perhaps if the third party knows of the unlawfulness)’. Mr Young KC himself acknowledged that it is most unlikely that third parties will bother (or able) to inquire into the contractual relations between owners and charterers and between master/crew and those entities before entering into a transaction. Thus, I fail to understand how a third party who deals with the charterer after a termination notice had been issued can be said to be dealing ‘unlawfully’ with the charterer and not having any in personam claims against him arising from the dealings. After all, the master of the vessel continues to be employed by the charterer and he surely cannot be treated as an agent of the owner (unless there is some representation made to such effect by the owner to the third party). In fact in The Guisppe in Vittorio, the Court of Appeal held thus: “Generally, the judgments show that the court was concerned with the issue whether the master of a demise-chartered ship, dealing with third parties who have no knowledge of the charter terms, has the power to, as it was put, pledge the owner’s credit. The House of Lords’ judgment, in my respectful view, can be restated in a contemporary idiom, as follows: when the vessel is demised chartered in fact, then without more the master does not have ostensible authority to bind the registered or ‘actual’ owners of the vessel.” S/N BaIV2mgpwkq3Zdyki0Yiug [99] Accordingly, Mr Young KC’s contention that “the approach of protecting third party dealing with a vessel in ignorance of the parties’ contract is wrong because this assumes that the innocent third party has in rem claim and should not be deprived of it when the correct approach should be to ask whether the third party has an in rem claim in the first place, because the third party never had any in personam claims to begin with”, is with respect, simply not supported by established legal principles. Indeed, one should ask the question whether any third party would deal with the party who are in actual possession and control of the vessel at all if it would not be able to pursue its claim against vessel? The rights of the parties inter se under the contractual provisions of the demise charter cannot and ought not to override the third party’s right to invoke the admiralty jurisdiction of the Court to obtain security for its claim in respect of a trade that the third party would not have otherwise entered into but for the fact that the owner had allowed the possession and control of the vessel to be in the hands of the charterer. [100] As regards Mr Byam-Cooke’s opinion, he premised his conclusion that Steven Chong J’s view about the common law position requiring physical redelivery of the vessel to terminate a demise charter was wrong on the learned judge’s failure to make any reference to the passage referred to above of Lord Justice Evans in The Guiseppe di Vittorio and the omission of any reference at all to The Munster. [101] With respect, in The Munster, the issue of redelivery of the vessel was moot because the charterers in their telex to the owners to state that they were not able to pay for the hire anymore, had also relinquished the possession and control of the vessel to the owners. S/N BaIV2mgpwkq3Zdyki0Yiug More specifically, the charterers had informed the owners that the crew had been signed off and that the vessel was laying alongside in Egersund requiring repairs. In accepting the repudiation, the owners stated that they ‘… noted your proposals for early re-delivery at Liverpool … The engineering superintendent is leaving Dublin this evening to make arrangements for the re-delivery to Liverpool.” [102] The Court of Appeal in The Munster was only considering the issue whether there was an acceptance by the owners of the repudiation by the charterers. The case was proceeded on the basis that redelivery had already taken place. It is to my mind not a case that stands for the proposition that under the common law, the termination of a demise charter is effective merely upon an acceptance of a repudiation breach without the need for physical redelivery of the vessel. On the contrary, The Munster in fact supports Steven Chong J’s views in The Chem Orchid as physical redelivery had been effected in that case. [103] Similarly, in The Guisppe di Vittorio, the focus of the Court of Appeal was to determine whether a document which records a consensual agreement between the parties is necessary for the statutory provision that there is ‘a charter by demise’ to be satisfied. The Court of Appeal through the judgment of His Lordship Justice Evans unanimously held that there was no necessity for any written contract. Instead what would constitute a demise charter is where the relationship between the owners and the charterer was such that “… the legal owner gives the charterer sufficient of the rights of possession and control which enable the transaction to be regarded as a letting - a lease, or demise, in real property terms – of the ship. S/N BaIV2mgpwkq3Zdyki0Yiug Closely allied to this is the fact that the charterer becomes the employer of the master and crew. Both aspects are combined in the common description of a ‘bareboat’ lease or hire arrangement’. [104] It was in the aforesaid context that Evans J opined that when an agreement exists, the Court should consider the terms of the charter agreement to see what the charterers’ rights are and whether they are sufficient to amount to a letting of the ship to qualify as a demise charter. The Court of Appeal did not look at the issue whether physical redelivery of the vessel is necessary before the demise charter can be brought to an end at all. [105] In my respectful view, when Lord Justice Evans said that ‘the letting will usually be for a fixed period, but it will also be terminable by the owner/lessor in specified circumstances and generally in the event of a repudiatory breach by the charterer/lessee’, His Lordship was merely referring to the circumstances giving the owner the contractual rights to terminate. Lord Justice Evans was not addressing the manner of termination necessary to effectively bring the demise charter to an end. [106] Accordingly, Mr Byam-Cooke KC’s premise that based on the decisions in The Munster and The Guiseppe di Vittorio, the position under the English common law is that a demise charter is brought to an end where termination is issued pursuant to an express contractual right to terminate or when the owner accepts a repudiatory breach by the charterer without a need for physical redelivery of the vessel is, with respect, not correct. S/N BaIV2mgpwkq3Zdyki0Yiug EVCL was not a gratuitous bailee [107] I have already expressed my agreement with Steven Chong J’s view that the mere constitution of the charterer as ‘gratuitous bailee’ under the contract, cannot without more, amounts to the transfer of possession and control of the vessel back to the owner. However, assuming that I am wrong in that Clause 29 of the Barecon 2001 can turn EVCL’s position from that of a demise charterer to a gratuitous bailee, to my mind, the facts of this case are such that EVCL had never treated itself as a gratuitous bailee of the Vessel at all, notwithstanding receipt of the Notice of Termination by Huihong. [108] As a gratuitous bailee under Clause 29, the charterer is to hold the vessel for the sole use and benefit of the owners whereas as a charterer by demise, the charterer holds the vessel for his own use and benefit. Rares J in The Hako Endeavour held that ‘[t]he effect of the withdrawal and termination of the charter under clause 29 is the same as a physical redelivery to the owners because the charterer has lost his contractual authority and right to use and employ the ship as he pleases’. [109] In this case, notwithstanding the Notice of Termination, EVCL had continued to use the Vessel as if there was no termination at all of the Demise Charter. As stated above, between the Notice of Termination issued on 11.5.2024 until 4.6.2024 when the Writ in rem was filed, EVCL had continued to utilise the Vessel to trade. The Vessel sailed from Port Klang to Johor to Kandla, India and then to Panjang, Indonesia before going back to Port Klang, when she was then arrested. It is not a disputed fact that the Vessel was on time S/N BaIV2mgpwkq3Zdyki0Yiug charter to Cargill until 20.7.2024 under the Cargill CP and at the time the Vessel was arrested, the Vessel had cargo laden on board. [110] Further, at no point in time did EVCL make any attempt to communicate with Huihong on the redelivery of the Vessel or for that matter, for instructions on the use of the Vessel. Up till the arrest of the Vessel, EVCL was still the employer of the Master and crew on board and was responsible for her management. The Master and crew remained under the orders of EVCL. [111] Significantly, whilst EVCL had purported to terminate the Eversea CP, it did not terminate the Cargill CP, suggesting that EVCL was still utilising the Vessel to perform the time charter with Cargill. In fact, EVCL had even asked Huihong to withhold the termination of the Demise Charter. [112] There were also no instructions from Huihong during this period to EVCL or to the Master of the Vessel to redeliver her to the possession and control of Huihong. The excuse given by Huihong that it was concerned about breaching the Injunction Orders issued by the Hong Kong in the HK Suit 1458/2023 is, with respect, unacceptable. No evidence was placed before this Court to show that this was in fact the reason for Huihong’s failure or omission to give instructions for redelivery of the Vessel. Further, Huihong had already appointed ReedSmith, an established law firm as its legal advisor and ReedSmith was in fact served with the Injunction Orders. There was no evidence adduced that ReedSmith had expressed concerns that any instructions by Huihong to EVCL to redeliver the Vessel would be a breach of the said court orders. S/N BaIV2mgpwkq3Zdyki0Yiug [113] Based on the aforesaid above, notwithstanding that Clause 29 seeks to turn the demise charter at the point of the notice of termination to that of a gratuitous bailee, the said provision was in actual fact never effected at all because as demonstrated by EVCL’s conduct above. EVCL simply never assumed the role as gratuitous bailee upon receipt of the Notice of Termination. Instead, EVCL had continued with the Demise Charter with Huihong’s acquiescing to the same by its failure or omission to give any instructions for redelivery of the Vessel. [114] Accordingly, for the reasons above, I am in agreement with learned counsel for New World that EVCL had continued to be the demise charterer of the Vessel at the time the Writ in rem was filed and that Section 21(4) of the UK SCA 1981 requiring the Vessel to be under a ‘charter by demise’ was satisfied. The Merits Challenge [115] Before I proceed to consider the Merits Challenge, I must first address the contention by learned counsel for New World that since the parties were relying solely on affidavit evidence at this stage and since no application had been made by EVCL and or Huihong in these proceedings to cross examine the deponents of the affidavits filed, this Court should not make any determination of the factual issues on the balance of probabilities but should allow the matter to proceed to full trial where there would be discovery and cross examination of the witnesses. S/N BaIV2mgpwkq3Zdyki0Yiug [116] In support, learned counsel for New World referred to the judgment by Chief Justice Chan Sek Keong in The Bunga Melati 5 where the learned Chief Justice held: “123 The Judge’s view on the standard of proof of such factual disputes is set out as follows (the GD at [98]): … the court [is] obliged to find, on a balance of probabilities, as a pre-condition to deciding whether the plaintiff’s claim [falls] within s 3(1)(l) of the HCAJA … [is] a jurisdictional fact which [has] to be found at the outset. That fact-finding might be rendered difficult as a result of the preliminary nature or urgency of the action, or the evidence being in affidavit form, [does] not detract from the task of the court…. The task of the court as set out at [86] of the GD is as follows: As a practical matter, it would of course be said ( as it was by the learned SAR in his grounds of decision) that at such a preliminary stage of the action, in the absence of discovery and cross examination of witnesses, it would be inappropriate to insist on a standard of proof normally applicable to full trials. However, that was not a principled way of dealing with the point that when the court’s entire jurisdiction to adjudicate the action rested upon a disputed question of (jurisdictional) fact, that question of fact had to be resolved once and for all, using a standard of proof that was consistent with that used for proof of facts in general (in the absence of statutory language stating otherwise). Further, such pragmatic objections have not convinced courts in admiralty cases to abandon S/N BaIV2mgpwkq3Zdyki0Yiug the standard of a balance of probabilities where proving jurisdictional facts was concerned (I Congreso del Partido at 535-536; The Aventicum [1978] 1 Lloyd’s Rep 184] at 186 and 190; and [Vostok Shipping Co Ltd v. Confederation Ltd [2000] 1 NZLR 37 at [21]).