Court DecisionMY-HC

WA-27NCC-33-07/2025

OCM MARITIME GAS 3 LLC v Pencarter Demis Terdahulu PAROS SPECIAL MARITIME ENTERPRISE (No Syarikat Maritime Greek 4838) Dan Semua Pihak-Pihak Yang Mendakwa Mempunyai Kepentingan Terhadap Kapal Atau Vesel PAROS (IMO NO 9711511) Dari Pelabuhan Piraeus (WA-27NCC-33-07/2025)

High Court of Malaysia4 Dec 2025

The written judgment as the court issued it, with the coram, case number, and source links. Every paragraph has its own anchor.

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Outcome

What the court ordered

On 4.12.2025, I allowed Enclosure 25 in suit 29/06. I also allowed Enclosure 16 (default judgment application) in suit 33/07. Here are my reasons.
I set aside the rit and arrest in suit 29/06 for the following reasons :
The Plaintiffs do not have a proprietary or possessory interest or entitlement in or to the vessel. OCM is the registered owner of the vessel. Any entitlement to possession and control of the vessel by demise can only arise from a valid demise or bareboat charter. But the only demise or bareboat charter was the BBC, and it has been terminated.
The Plaintiffs claim is an internal shareholder dispute with the Defendants over the management and control of Paros SME. It has nothing to do with the owner, save that it gave rise to breaches and events of default that led to termination of the BBC. Even if the Plaintiffs assertions were taken to the highest, they establish no more than a personal or derivative interest arising from their corporate position within companies that were connected with the bareboat charter of the vessel. They do not establish any right or interest to or in the vessel. They do not confer on them a possessory or proprietary interest in the vessel. That interest can only come from the BBC, but it is terminated.
The Plaintiffs knew that the BBC was terminated when the action was filed and when they sought the warrant of arrest. But they did not disclose this to the court. Order 70 rule 4 (6) (b) of the Rules of Court 2012 ROC 2012 requires the Plaintiffs to state the nature of the claim in respect of which the warrant is sought and that it has not been satisfied before a warrant of arrest can be issued. Since the Plaintiffs bring this action on the basis that Paros SME is the demise / bareboat charterer, it is relevant to inform the court that the owner has served a notice of termination. If the BBC is terminated, the Plaintiffs do not have a claim which is proprietary, which is of the nature and type of claim under section 20 (2) (a) of the UK SCA 1981. The Plaintiffs procured the warrant of arrest without disclosing this material fact. This is a non - compliance of Order 70 rule 4 (6) (b) of the ROC 2012. Test for invocation of the admiralty jurisdiction of the court
For establishing admiralty jurisdiction and arrest of ships, Malaysia adopts the English position under the UK SCA 1981 by virtue of section 24 (b) of the Courts CJA 1964 To invoke the court s admiralty jurisdiction, and bring an action in rem against an offending ship, and exercise a right to arrest, a plaintiff must first satisfy that it has a cause of action under one of the limbs in section 20 (2) (a) to
of the UK SCA 1981 and that it has a right to institute an action in rem under one of the limbs of section 21 (1) to (4) of the UK SCA 1981.
Based on the indorsement of its claim and the arrest affidavit, the Plaintiffs bring this admiralty in rem action on a claim for immediate return of the vessel to them under the BBC as the rightful controlling shareholders of Paros SME. This follows a U.S. bankruptcy court order (not against Paros SME but against the 1st Plaintiff) and pursuant to section 20 (2) (a) of the UK SCA 1981 for any claim to the possession or ownership of . The Plaintiffs assert that they are entitled to enforce this claim against the vessel pursuant to section 21 (2) of the SCA 1981. Premised on this in rem admiralty jurisdiction invoked by writ, the Plaintiffs would then be entitled to exercise their right to arrest the vessel, pursuant to Order 70 rule 4 of the ROC 2012. - step of standard of proof for admiralty jurisdiction
In [2012] 4 SLR 546 at paragraph [112], the Singapore Court of Appeal outlined the various steps and respective standards of proof for invoking admiralty jurisdiction. Namely : Step 1 : (i) prove, on the balance of probabilities, that the jurisdictional facts under the limb it is relying on (the equivalent of section 20 (2) (d) to (q) of the UK SCA 1981) exist; and
show an arguable case that its claim is of the type or nature required by the relevant statutory provision. Step 2 : prove, on the balance of probabilities, that the claim arises in connection with a ship. Step 3 : identify, without having to show in argument, the person who would be liable on the claim in an action in personam. Step 4 : prove, on the balance of probabilities, that the relevant person was, when the cause of action arose, the owner or charterer of, or in possession or in control of, the ship. Step 5 : prove, on the balance of probabilities, that the relevant person was, at the time when the action was brought : (i) the beneficial owner of the offending ship as respects all the shares in it or the charterer of that ship under a demise charter; or (ii) the beneficial owner of the sister ship as respects all the shares in it.
The Bunga Melati test has been accepted in Malaysia. (See the High Court cases of New World P & I Service Co Ltd v The Disponent Owner and / or t the Port of Monrovia, Liberia (Huihong (Tianjin) Shipping Lease Co Ltd, intervener) [2024] MLJU 3653; Vitol Asia Pte Ltd v The Owners of the Ship or Vessel Malik Al Ashta interveners) [2017] 7 MLJ 87). The applicable jurisdictional test under section 20 (2) (a) of the UK SCA 1981
The Bunga Melati 5 - step test applies to situations where :
the claim is brought under our section 20 (2) (d) to (q) of the UK SCA 1981; and
the in rem action depends on establishing that the defendant is the relevant person , the owner, demise charterer or beneficial owner of the ship at two material times.
Hence, step 1, proving that the jurisdictional facts exist, is central where the statutory limb expressly ties jurisdiction to a relevant person test (like damage done by a ship, supply of goods, carriage, etc.).
In the present case, the Plaintiffs bring a possession claim under section 20 (2) (a) of the UK SCA 1981. This is the purely proprietary jurisdiction of the admiralty court. It does not depend on identifying a relevant person or satisfying the two - time ownership rule. Instead, the Plaintiffs standing and the nature of the claim are what ground jurisdiction. Steps 3 to 5 of the Bunga Melati test (relevant person and ownership timing) are not directly applicable to section 20 (2) (a) of the UK SCA 1981.
Thus, for the Plaintiffs to properly invoke the admiralty jurisdiction of the court on a possession claim, they must satisfy : Step 1 : (i) prove that a proprietary or possessory entitlement to the vessel exists at the time of the writ (jurisdictional fact); and
show an arguable case that the claim is of the type envisaged by section 20 (2) (a) of the UK SCA 1981, i.e. proprietary, not merely contractual (nature of claim). Step 2 : prove that the claim arises in connection with a ship.
The failure to meet their burden of proof would mean that the writ in rem would have to be set aside on the ground that the admiralty jurisdiction of the High Court was not properly invoked (i.e. the jurisdiction challenge). The court is empowered under Order 12 rule 10 of the ROC 2012 or under its own inherent power to set aside the writ in rem and the warrant of arrest if admiralty jurisdiction is not properly established.
At the setting aside stage, the owner is also entitled to challenge the Plaintiffs claim on the merits, whether in the form of a striking out under Order 18 rule 19 of the ROC 2012 or the inherent jurisdiction of the court. Where such challenge is mounted, the Plaintiffs would then need to show a good arguable case on the merits. This is not to satisfy admiralty jurisdiction, but to prevent its action from being struck out on the basis that it is obviously unsustainable (i.e. the merits challenge). The threshold is the same as ordinary striking out cases - the plain and obvious test. It is within the remit of the court to evaluate affidavit evidence and decide whether the threshold is passed.
The explanation of Toh Kian Sing, SC in Admiralty Law and Practice, 3rd edition is instructive. - An admiralty plaintiff would, however still need to show a good arguable case on the merits of its claims if challenged; not for the purposes of satisfying the High Court (Admiralty Jurisdiction) Act, but to prevent its action from being struck out under Order 18 rule 19 of the Rules of Court or the inherent jurisdiction of t
Applying the Bunga Melati test, I find that the Plaintiffs cannot invoke admiralty jurisdiction under section 20 (2) (a) of the SCA 1981. This is because the BBC, the sole source of any alleged possessory or proprietary right (on the Plaintiffs own case), had been terminated. There is evidence (i.e. the notices of termination, the owner s contemporary correspondence and English law expert opinion), which show that the BBC was at an end on 11.6.2025. Upon termination, Paros SME s right to possession and control of the vessel ceased. The Plaintiffs therefore have no subsisting possessory or proprietary entitlement, and the writ and the warrant of arrest must be set aside.
Even if it is assumed that the Plaintiffs have crossed the jurisdictional threshold, their claim for possession is still obviously unsustainable.
The BBC was terminated for multiple events of default under clauses 45 (a), (f), (m), (o), (s), (x) and (y) thereof. Including non - payment of six months of charter hire, the ongoing arrest of the vessel Kithnos and other events of default under the collateral charterers, the insolvency of Paros SME or the corporate guarantor, changes of control, material adverse effect and repudiatory breaches of the BBC.
These are not directly disputed. On the Plaintiffs own case, Paros SME did not pay the six months of charter hire and there was a change of control of Paros SME and the corporate guarantor during the charter period. The Plaintiffs arrest of the vessel is actually based on a change of control of all four Plaintiffs, including Paros SME and the corporate guarantor, to the Murchinson entities.
Upon termination of the BBC, Paros SME s possessory rights were extinguished. Any continued holding of the vessel was as a mere bailee for the owner, as per clause 29 of the BBC.
Hence, the Plaintiffs fail on both the jurisdiction challenge and the merits challenge. Here is my explanation. The writ and the warrant of arrest ought to be set aside
The Plaintiffs action proceeds on the premise that Paros SME remained the bareboat charterer of the vessel under the BBC at the time of filing. That premise is wrong. The evidence shows that the BBC was terminated on 11.6.2025, two days before the Plaintiffs filed the writ and procured the warrant of arrest herein. From that date, Paros SME ceased to have any right of possession or control in the vessel. The Plaintiffs, claiming only such a right through Paros SME, had no proprietary or possessory standing to bring an admiralty in rem claim against the vessel. The Plaintiffs attempt to deny termination rests on erroneous assertions and internal shareholder grievances unrelated to the BBC or to the owner. The material fact of termination remains unrebutted.
Under the Bunga Melati test, the court must be satisfied that the jurisdictional fact grounding an admiralty action exists. For a possession claim under section 20 (2) (a) of the UK SCA 1981, that fact is the arresting party s proprietary or possessory entitlement to the vessel at the time of the writ. Here, since the BBC was terminated, the jurisdictional fact is not proved. Accordingly, the Plaintiffs also cannot show an arguable case of the nature required by section 20 (2) (a) of the SCA 1981, i.e. a proprietary claim, as opposed to a contractual one. Hence, neither requirement is met. The Plaintiffs fail on the jurisdiction challenge. The Plaintiffs do not have a proprietary or possessory interest or entitlement in the vessel
The foundation of the Plaintiffs case collapses at the threshold. The Plaintiffs have no possessory or proprietary interest in the vessel capable of sustaining admiralty jurisdiction. The sole instrument under which possession could arise, i.e. the BBC, was terminated for multiple events of default.
Upon termination, Paros SME s rights to possession and control of the vessel ceased. It was thereafter under a contractual obligation to redeliver the vessel to the owner and allow the owner to repossess it (clauses 15 and 49 of the BBC). Until it does so, Paros SME holds the vessel only as a bailee for the owner. The Plaintiffs, who claim only through their alleged shareholding and corporate control of Paros SME, cannot acquire a maritime interest greater than Paros SME itself possessed.
Accordingly, at the time the writ was issued and the warrant of arrest obtained, no demise charter existed. No party other than the owner had lawful possession. The Plaintiffs claim for possession is therefore baseless. What remains is merely a corporate and shareholder dispute over control of Paros SME, which falls outside the admiralty jurisdiction of the court and is irrelevant to the vessel and to the owner.
The arrest was thus procured on a wrong premise and in abuse of process. Under the principles affirmed in the Bunga Melati, admiralty jurisdiction cannot be invoked absent proof of an existing proprietary or possessory right at the time of the writ. No such right existed here. The writ and the warrant of arrest must therefore be set aside. The BBC was terminated on multiple breaches and events of default Non - payment of charter hire
Charter hire remained unpaid for six months preceding termination (and still remains unpaid). The Plaintiffs do not dispute that the hire was unpaid. Non - payment of the charter hire constituted an event of default under clause 45 (a) of the BBC. This entitled the owner to terminate the BBC, and demand redeIivery under clause 46 and 29 for Paros SME s repudiatory breach of the BBC.
There is no requirement in the BBC for any demand to be made (including for any invoice to be sent) before charter hire was due and owing to the owner. Charter hire, which was made up of fixed hire and variable hire, could have been calculated by Paros SME without input or notice from the owner. It was payable on the date on which each payment was due, namely on each hire payment date. The monthly hire payment dates and the methods of calculation of charter hire were set out in detail in clauses 11, 34, 35 and 59 of the BBC and in the supplemental agreement to it.
The Plaintiffs argument that the owner was not entitled to terminate the BBC under clause 45 (a) for unpaid charter hire relate to the suggestion that:- (i) Paros SME s obligation to pay charter hire was conditional on receipt of an invoice; and (ii) the owner invoices for the sums in question were not sent or addressed in the required way so that the Plaintiffs / Murchinson entities were not aware of them or the sums due.
However, nothing in the BBC requires the owner to send invoices for charter hire or makes Paros SME s obligation to pay charter hire conditional on receipt of an invoice. The BBC in fact says the opposite. It states that charter hire is payable on a hell and high water basis (clause 34(e)) on the defined monthly hire payment dates. Time is of the essence for payment, making payment on time a condition of the BBC, breach of which gave the owner a right to terminate under clauses 46, 45 (a) or 45
thereof.
The Plaintiffs allege that they were not aware of the amount of variable hire to be paid for the six months for which charter hire was unpaid prior to termination. That is not the case. Paros SME had received invoices for the unpaid charter hire. Control over the email address for Paros SME in clause 57 (b) of the BBC is irrelevant. That was the email address which the owner was required to use for documents. Communications under the BBC and documents sent to it were deemed to be sent to Paros SME. Also, variable hire (and fixed hire) was ascertainable from the terms of the BBC.
Further, the Plaintiffs do not allege that they were unaware of the amount of fixed hire for the six months in question. They could have been in no doubt of the fixed hire element of charter hire as, like variable hire, its amount was plainly set out in the BBC. They did not, however, even pay fixed hire for those months. They did not pay the owner a cent, ask for confirmation of the amounts to be paid or ask for invoices to be sent to an email or postal address other than as set out in clause 57 (b) of the BBC (despite having a contractual right to make such a request). Additional events of default
Non - payment of charter hire was not the only event of default relied upon in the owner notice of termination. There were numerous additional events of default relied on by the owner in that notice. Any one event of default gave the owner the right to terminate the BBC under clause 46 and was a repudiatory breach of the BBC under clause 45 (y). The other events of default relied on by the owner in the notice of termination were as follows. The arrest of the vessel Kithnos
The arrest of the vessel Kithnos (collateral vessel B) and the failure of Kithnos SME (collateral charterer B), to release it or procure its release from arrest within 45 days or at all was an event of default under clause 45 (p) of the Kithnos BBC and therefore under clause 45 (x) of the BBC. This entitled the owner to terminate the BBC and demand redelivery and repossession of the vessel. It would have been easy for three of the Plaintiffs to have released the vessel Kithnos from arrest given that they were three of the arresting parties, together with Kithnos SME, which they control.
The vessel Kithnos arrest is indisputable. The Texas court s writ of arrest and bareboat charterparty are in evidence and unrebutted. The vessel Kithnos was recently permitted to sail from Texas pursuant to order of the Texas court. But expressly remains under arrest by order of the Texas court. Insolvency
Under clause 45 (f) (i) of the BBC, it was an event of default which entitled the owner to terminate the BBC and demand redelivery and repossession of the vessel if any transaction obligor is unable to pay its debts as they fall due or suspends making payments on any of its debts or if the value of its assets is less than its liabilities. Under clause 59 (a) of the BBC, transaction obligor meant Paros SME and collateral charterers A, B and C (amongst others).
Paros SME had not paid charter hire and other sums due under the BBC for six months as at the date of termination. It had therefore suspended making payments on those debts. Even though it is irrelevant because the above suspension of payment of debts by Paros SME is sufficient for an event of default under clause 45 (I) of the BBC, it can be reasonably inferred that charter hire was not paid for those six months because Paros SME was unable to pay its debts as they fell due.
Similarly, collateral charterers A, B and C had failed to pay charter hire for six months prior to termination of collateral charters B and C and five months prior to termination of collateral charter A. The same comments as set out above in respect of Paros SME apply to the collateral charterers as transaction obligors. Repudiation and rescission of agreements
Under clause 45 (m) of the BBC, it was an event of default which entitled the owner to terminate the BBC and demand redelivery and repossession of the vessel if any transaction obligor rescinds or purports to rescind or repudiates or purports to repudiate a relevant document.
Paros SME was in repudiatory or anticipatory repudiatory breach of the BBC as a result of its persistent failures to make the payments due and owing under the BBC, including six months of charter hire, as at the date of termination, which evinced an intention no longer to be bound by the terms of the BBC. Change of control
Under clause 45 (s) of the BBC, a change of control of Paros SME or the corporate guarantor from that existing on the date of the BBC, without the prior written consent of the owner, was an event of default. This entitled the owner to terminate the BBC and demand redelivery and repossession of the vessel.
The Plaintiffs themselves have alleged that a change of control occurred during the charter period. In fact, the Plaintiffs arrest of the vessel is based on a change of control of all of the Plaintiffs. There was therefore, on the Plaintiffs own allegation, an admitted event of default under clause 45 (s) of the BBC. It is disingenuous of the Plaintiffs to deny the validity of the termination in light of this admission. They do not provide any evidence that the owner consented to the change. The owner did not consent. Also, the change of control of the corporate guarantor was not permitted by clause 43 (o) (ii) of the BBC. Material adverse effect
There was an event of default under clause 45 (a) if any event or circumstance occurs which has or is reasonably likely to have a material adverse effect as defined in clause 59 of the BBC.
The change of control of Paros SME, the corporate guarantor and the approved manager alleged by the Plaintiffs themselves and the related litigation between the Plaintiffs and the Defendants around the world, including in the U.S. and Greece, were circumstances which, in the reasonable opinion of the owner, had or were reasonably likely to have a material adverse effect within the definition in clause 59. Those changes of control and litigation were independent events of default under clause 45 (a) of the BBC, that entitled the owner to terminate the BBC and demand delivery and possession of the vessel.
As mentioned earlier, there was a material adverse effect as a result of the change of control of the Plaintiffs and the litigation between the Plaintiffs and the Defendants given:- (a) the unarguable points they are advancing in these proceedings and in the English proceedings to arrest the vessel and cause delay to redelivery and repossession of the vessel by the owner; (b) the arrest of the vessel Kithnos; and (c) their failure to pay charter hire and other sums due under and perform other terms of the BBC. Their arrest of the vessel is further evidence of that material adverse effect, albeit occurring after termination. Collateral charters
Under clause 45 (x) of the BBC, it was an event of default which entitled the owner to terminate the BBC and demand redelivery and repossession of the v event of default as defined or to be defined in any collateral c an event of default in relation to a collateral charter, that was also an event of default under the BBC. That covered the arrest of the vessel Kithnos, as alluded to earlier. It also covered other breaches by the collateral charterers A, B and C of the bareboat charterparties to which they were party (for the M/Vs Astipalea, Kithnos and Dilos), including their failures to pay charter hire and other sums due under those charters. Fundamental term
Under clause 45 (x) of the BBC, term and condition of this charterparty that no event of default shall occur during the charterparty period and that the occurrence of an event of default shall entitle ... the owners at any time during the continuation of such event of default to accept the repudiation by charterers of this charterparty constituted by the occurrence of such event of default . Accordingly, the owner was entitled to accept the events of default referred to in the notice of termination as a repudiatory breach of the BBC. They did so in the notice of termination.
As such, the termination of the BBC was effective. The cumulative breaches, non - payment, arrest of the vessel Kithnos, insolvency, change of control and material adverse effects, fell squarely within the events of default enumerated in clause 45 of the BBC. The BBC was therefore at an end on 11.6.2025.
Alternatively, even if the termination of the BBC was not effective, all the events of default relied on in the 11.6.2025 notice of termination were still existing on 12.8.2025 when the owner s particulars of claim was filed in the English High Court proceedings that they commenced against Paros SME. The particulars of claim at paragraph 52 gave Paros SME notice of termination of the BBC, without prejudice to the 11.6.2025 termination, for continuing events of default. In addition to those events of default, the owner relied in their 12.8.2025 termination on the Plaintiffs arrest of the vessel in these proceedings. Which if the BBC remained in force at that time was an undisputable event of default under clause 45
of the BBC, having been ongoing for more than 45 days at that time.
Without a subsisting BBC, the Plaintiffs cannot establish any possessory or proprietary right capable of supporting an admiralty claim. (See the English High Court case of The Faial [2000] 1 Lloyd s Law Report 473; the Hong Kong High Court case of The Chong Bong [1997] 3 HKC 579). English law opinion upholds the termination of the BBC as valid
KC opinion ) concludes that the BBC was effectively terminated on 11.6.2025, following a valid notice of termination issued for multiple breaches. Clauses 28, 29 and 46 of the BBC expressly confer upon the owner the contractual right to terminate, without the need for physical redelivery and to repossess the vessel. Upon such termination, Paros SME held the vessel only as bailee without rights of possession or control.
The KC opinion states that the parties to a demise charter may agree that termination takes effect without physical repossession, and that a charterer cannot rely on its own default to resist the owner s termination. Even if termination on 11.6.2025 was disputed, the owner s notice of redelivery and repossession dated 18.6.2025 independently obliged Paros SME to redeliver the vessel.
The recent English Court of Appeal decision in Songa Product and Chemical Tankers III AS v Kairos Shipping II LLC [2025] EWCA Civ 1227 supports what is said in the KC opinion. To wit, that termination of a bareboat charterparty can take place prior to redelivery and repossessing of the vessel by the owner.
Briefly, the main issue in Songa Product (supra) was whether the owner (after notice of termination of a bareboat charterparty on grounds on insolvency was given by the charterer) was entitled to request the charterer to redeliver at a specific place and pay the costs of the voyage to that place. The court acknowledged that the bareboat charterparty was terminated before redelivery and repossession occurred. The court said : [43] In my judgment the legal and commercial features of a bareboat charter are indeed highly relevant to understanding the meaning of the provisions of clause 29, but in a different way. In each of sub - clauses 28 (a), (b) and (d) the termination is expressed to be with immediate effect by written notice (termination being deemed when the Vessel is an actual or constructive loss under clause 28 (c)). The result of such termination, whichever of those sub - clauses is triggered, is that the Vessel ceases to be at the disposal of the Charterers and they cease to be under any obligation to pay hire to the Owners, or to operate, maintain or insure the Vessel. Neither are the Charterers liable to indemnify the Owners for loss, damage or expense in relation to the Vessel. In those circumstances it is a legal and commercial imperative that the Owners, whose Vessel is no longer on hire and is without the benefit of the Charterers obligations to operate, maintain, insure and indemnify, should have the right to repossess it at the first opportunity, namely, at its current port (or its next port of call, if at sea) and that the Charterers should have a minimum obligation to care for the Vessel as gratuitous bailee in the interim. The quid pro quo for that obligation of the Charterers must be that the Owners should repossess the Vessel as soon as reasonably practicable so as to relieve them of that unremunerated burden. [50] It follows that I agree with the Judge that, if the Vessel is currently in port when the Charterparty is terminated under clause 29, the meaning and effect of the clause is that the Owners must repossess at that port unless it is impracticable or impossible for them to do so. The Plaintiffs are not in lawful possession and control of the vessel
vessel with effect from 11.6.2025. Paros SME is holding the vessel as bailee only.
This was explained in the Singapore High Court case of Samudra [2010] SGHC 18 : Similarly as rightly observed by Chao JC (as he then was) in The lnterippu, trol must mean possession or control an independent legal right : I am afraid there is hardly any evidence to show that Corporate Shipping were were therefore in control or possession of was at the relevant time a director of both companies, one being the holding company and the other a subsidiary company. Something more than just a common shareholding or manager / director is required to sustain a claim of corporate structures and entities. I am inclined to accept the submission of the Defendants that the t trol
must mean possession or control as an independent legal right; or at least the possession or control must be pursuant to a specific arrangement.
It does not refer to physical possession or control per se. Such a person would include a demise charterer (see The Span Terza [1982] 1 Lloyd s Rep 225 at 227), a salvor in possession (see The Evpo Agnic at 414), a purchaser under a conditional sale agreement (see The Permina 3001 [1977] 1 MU 141 at 144), and a person who is in a position of a demise charterer albeit not under a demise charter (see The Evpo Agnic at 414). It would also cover a mortgagee in possession who has taken over the vessel following the default of the mortgagor. The common denominator is that each of them has legally enforceable rights as regards possession or control of the vessel.
In the context of the present case, where Paros SME is holding the vessel as bailee following termination of the BBC, the case of The Ships Hako Endeavou Hako Excel Programmed Total Marine Services Pty Ltd [2013] 211 FCR 369 is instructive. There, the Federal Court of Australia held that the shipowner of Hako Fortress had validly terminated the demise charter upon Hako Offshore s receipt of the notice of termination. As such, Hako Offshore was not a demise charterer of Hako Fortress. But rather, it held Hako Fortress as a gratuitous bailee, at the time the proceeding against her was commenced.
The court said : [63] I am of opinion that as a matter of principle the terms of cll 28 and 29 of the Barecon 2001 form of charterparty can operate as they were intended without requiring the owners, first, to physically retake possession of the ship following her withdrawal and the termination of the charterparty : Reardon - Smith Lineat WLR 998 D - G ; All ER 576. The charterer becomes entitled to possession of the ship under and by virtue of the contractual rights that the owners confer on it by the terms of the demise. But that right to possession and control can be affected by another of the terms of the Barecon 2001 form. Thus, cl 29 provides
296 ALR 265 at 284 that upon withdrawal of the ship and termination of the charter, the nature of the charterer possession changes from possession for the charterer s use and benefit to possession as a gratuitous bailee for the owners. Possession of the latter kind is substantively different in character to the plenary right to possession and use of the ship formerly enjoyed by the charterer while the charter remained on foot. [64] When the charterer is in possession as a gratuitous bailee under cl 29, he holds the ship for the sole use and benefit of the owners. When, however, he is in possession because of the demise of the ship to him, the charterer holds her for his own use and benefit. The effect of withdrawal and termination of the charter under cl 29 is the same as a physical redelivery to the owners because the charterer has lost his contractual authority and right to use and / or employ the ship as he pleases. The concept of constructive delivery of chattels, without any change of physical possession, is well - established in the law of bailment. In the classic text by Pollock and Wright, An Essay on Possession in the Common Law, Oxford, 1888, pp 72 - 3, the learned authors discussed the position of a seller in possession of goods who could assent to holding what was sold on account of the buyer. [66] Hako Offshore contracted in cll 28 and 29 that it would become the owners gratuitous bailee of Hako Fortress upon the owner exercising ifs right of withdrawal and termination. That is, the parties contemplated and provided in their contract that the nature of Hako Offshore possession would change, if the ship was withdrawn and the charterparty terminated, from that of a contractual right to the full use and enjoyment of the ship to become that of gratuitous bailee for the owners, Dolphin 2. That change was , that Hako Offshore acknowledged receiving on 5 March 2012. Dolphin 2 had been entitled at that time to exercise its right to withdraw the ship and terminate the Barecon charterparty because Hako Offshore had not paid hire within 14 days of the notice of default that was sent on 21 October 2011. It is safe to infer that that letter would have been received in the ordinary course of post by not later than 28 October 2011. [67] Accordingly, after following Hako Offshore s receipt of the notice of termination on 5 March 2012, it held Hako Fortress from then on as a gratuitous bailee and not as a demise charterer. It follows that the requirement of s 18 (b) of the Act, that Hako Offshore be a demise charterer of Hako Fortress on 2 April 2012 when the writ against her was filed, was not satisfied. The proceeding below against Hako Fortress must be dismissed and the security provided for her release from arrest must be returned to Dolphin 2.
Since Paros SME is merely a bailee and not a demise charterer, there vessel vested in Paros SME that can be imputed to the Plaintiffs as the parties purportedly controlling Paros SME. The Plaintiffs own pleaded case discloses no such proprietary or possessory right. Their alleged interest in the vessel arises indirectly from their purported control of Paros SME as the former bareboat charterer following the U.S. Chapter 11 orders in the 1st Plaintiff bankruptcy. Even if such orders did give the Plaintiffs lawful control of Paros SME, they do not create a maritime proprietary interest in the vessel. At best, they regulate the internal governance of Paros SME and allocate shareholder control. That does not translate into a possessory right enforceable against the vessel.
The Plaintiffs reliance on the U.S. Chapter 11 orders and shareholder notices is a red herring. It cannot transform a bare shareholder controversy into a maritime lien or charter claim. Nor is it in any way relevant to the owner, whose contractual relationship was with Paros SME and not with its shareholders or directors. Consequently, the Plaintiffs interest is at best derivative, arising from alleged shareholding in Paros SME, and not an admiralty right recognised under admiralty law. The Plaintiffs knew that the BBC was terminated when it filed the action and arrested the vessel
The Plaintiffs were aware of the termination of the BBC prior to the filing of this admiralty in rem action and the arrest of the vessel, alternatively prior to serving the warrant of arrest. The notice of termination was expressly served by the owner on Paros SME. The owner complied with the clause 57 (a) and clause 57 (b) notice requirements, by sending the notice of termination on 11.6.2025 to the designated email and postal addresses specified in clause 57 (b) of the BBC. The notice of termination was sent by both letter and by email out of an abundance of caution, even though sending it in both ways was unnecessary given clause 57 (a) of the BBC. It was addressed in compliance with clause 57
of the BBC. It was sent by email to finance@eletson.com. It was also delivered by hand.
The owner also addressed and sent the notice to the address that Paros SME had provided with its KYC documents at the beginning of the charter period. The covering email attaching the notice of termination shows that it was sent to finance@eletson.com. That email alone is sufficient to ensure compliance with clause 57 of the BBC. In addition to this, Ms Jenny Haramaras, a legal assistant in HFW s Piraeus office, hand delivered the notice to both postal addresses referred to above on 12.6.2025. As a matter of courtesy, the notice of termination was also served by email on 13.6.2025 to Murchinson (as the Plaintiffs controlling entities). The owner s solicitors, HFW London confirmed that they did not receive any bounce - back for the emails dated 11.6.2025 to finance@eletson.com and 13.6.2025 to ml@murchinsonltd.com.
Even if the Plaintiffs were not aware that the BBC had been terminated and that Paros SME was no longer the bareboat charterer of the vessel when the action was filed, the Plaintiffs became aware of this position :
On or around 13.6.20256, when the notice of termination was emailed to the Murchinson entities; and
On or around 18.6.2025, when the notice of redelivery and repossession was validly served on Paros SME at its contractual notice address stipulated under clause 57 (b) of the BBC; and
On or around 18.6.2025, when the notice of redelivery and repossession was sent to the Murchinson entities (as the Plaintiffs controlling entities).
The owner, through their Malaysian solicitors, put the Plaintiffs on notice, vide email to the Malaysian solicitors dated 19.6.2025, that the BBC had been terminated on 11.6.2025 and Paros SME was no longer the bareboat charterer of the vessel. In the same email thread, the owner demanded that the Plaintiffs immediately release the vessel from arrest. They also provided the Plaintiffs solicitors with a copy of the notice of termination and the enclosed unpaid invoices, as well as the notice of redelivery and repossession via email on 20.6.2025. The Plaintiffs did not respond to refute knowledge of the notice of termination issued on 11.6.2025 or receipt of the HFW London emails on 11.6.2025 to finance@eletson.com or on 13.6.2025 to ml@murchinsonltd.com.
As mentioned earlier, the owner also gave a further notice of termination of the BBC, without prejudice to the notice of termination and to apply only if the BBC had not been terminated, in its particulars of claims in the English proceedings. This was served on the Plaintiffs English solicitors (who were authorized to accept service) on 12.8.2025. At that time (12.8.2025) :
The Plaintiffs had arrested the vessel in these proceedings and the arrest had been maintained for more than 45 days;
The Plaintiffs were aware of the outstanding sums, including six months of charter hire, due and owing under the BBC as at
11.6.2025. They had received the notice of termination which enclosed all outstanding invoices on 11.6.2025 and 13.6.2025 and in these proceedings. But did not pay them or any other sums to the owner;
The Kithnos was still under arrest in Texas;
The corporate guarantor, a transaction obligor, was unable to pay its debts as they fell due. This was a further event of default under clause 45 (f) of the BBC, it having failed to pay sums demanded by the owner as beneficiary under the guarantee on 28.7.2025; and
The events of default set out in the notice of termination were continuing. The Plaintiffs denial of the termination of the BBC is untenable
The Plaintiffs contention that the BBC was not properly terminated is unsustainable. The Plaintiffs principal argument, that Paros SME was incorrect.
The BBC imposes no requirement on the owner to issue invoices for charter hire at all or as a condition of payment. Clause 34 (a) stipulates that charter h hire payment dates. Clause 11 (a) makes time of the essence for payment. Clause 34 (e) confirms that the obligation of Paros SME to pay charter h , unconditional and absolute. Payment was therefore due regardless of any invoice.
With regard to interest, clause 11 (g) states - under sub - clause 11 (f) shall be made within seven (7) running days of the date of the Owners invoice specifying the amount payable or, in the That makes it clear that an invoice was not a condition of Paros SME s obligation to pay charter hire or interest, and that the sending of invoices by the owner was not a contractual obligation.
The owner nevertheless sent invoices for charter hire and the other sums due and owing under the BBC prior to termination to the agreed contractual email address for Paros SME set out in clause 57 (b) (finance@eletson.com). Paros SME had the contractual right to change that address by giving the owner five days notice, but never did so. The Plaintiffs assertion that invoices were not properly served is thus contrary to the express terms of the BBC and contradicted by the contemporaneous correspondence. They were served as per clause 57
and deemed received by Paros SME. The entity which controlled the email address referred to in clause 57 (b) is irrelevant to the sending of invoices, the sending of documents and communications connected with the BBC or the owner. Further, all previous invoices for charter hire and other sums were issued and sent in the same way as the unpaid invoices and Paros SME had been paying them with no complaint since mid - 2022. It is estopped from raising these objections regarding the sending / addressing of invoices now.
The Plaintiffs charter h hire was specified in the BBC. Variable hire was calculable from the same document. The Plaintiffs could have computed the amounts of charter hire themselves or requested confirmation of them from the owner if they were truly in doubt. But they chose not to do so and pay nothing for six months, despite knowing that charter hire was due for each of those months. Their non - payment cannot be excused by self - imposed ignorance.
The owners notice of termination of 11.6.2025 enclosed six unpaid invoices and was emailed to finance@eletson.com and, out of abundance of caution, to the Murchinson entities / the Plaintiffs at ml@murchinsonltd.com on 13.6.2025. No bounce - back was received. The invoices remain unpaid. Also remaining unpaid are the amended invoices for those same sums. The amended invoices were addressed in the way suggested by the Plaintiffs and sent to them on 11.9.2025.
The Plaintiffs other excuses for not paying charter hire are equally untenable. The Plaintiffs contend that the email address finance@eletson.com does not belong to them. This argument is irrelevant as service was properly effected under clause 57 of the BBC. The Plaintiffs contend that the owner had not sent the invoices to Paros SME / the Plaintiffs as at 26.6.2025. I reject this contention because :
It was only Paros SME that was under a contractual obligation under the BBC to pay charter hire to the owner. (The corporate guarantor is under a separate contractual obligation to pay sums to the owner under the corporate guarantee).
The owner was not required to send invoices to Paros SME (or any of the other Plaintiffs). Paros SME s obligation to pay charter hire was not conditional on the provision of invoices.
The owner did, however, send invoices to Paros SME to the email address specified in clause 57 (b) of the BBC. Paros SME cannot now allege that it did not receive the invoices. Moreover, charter hire was due whether the invoices were received or not.
In any event, the notice of termination (and the six unpaid invoices which were attached to it) were sent to the Plaintiffs by email to Mark Lichtenstein (Murchinson entities) by HFW on 13.6.2025. Mr Lichtenstein is employed by or acts on behalf of the Plaintiffs.
Despite having received the unpaid invoices (and the amended invoices), the Plaintiffs have still not paid them. The owner, without prejudice to its termination of the BBC on 11.6.2025, gave further notice of termination on 12.8.2025. The Plaintiffs / Murchinson entities had received the invoices by that time and have still not paid them.
The contractual provisions governing charter hire and payment are clauses 11, 34, 35 and 45 of the BBC. These confirm that Paros SME s payment obligations were unconditional, that non - payment constituted an event of default under clause 45 (a), that the BBC did not require the owner to send invoices for charter hire and that the termination was effective. The Plaintiffs reliance on estoppel, alleged mis - addressed invoices or absence of certification under clause 34 (k) is misconceived. The dispute is internal to Paros SME and does not give rise to an admiralty claim in the vessel
On the Plaintiffs own case, the underlying dispute concerns who lawfully controls Paros SME and its assets following the 1st bankruptcy process in the U.S. That is ultimately a matter of corporate governance, not maritime law. The court s admiralty jurisdiction is confined to maritime causes of action enumerated in section 20 (2) (a) to
of the UK SCA 1981. Shareholder or management disputes fall outside that list.
The Plaintiffs seek to use the arrest of the vessel as a proxy for asserting control over Paros SME or its asset. Such use of admiralty process is improper and amounts to an abuse of jurisdiction. Admiralty jurisdiction cannot be invoked to secure collateral or non - maritime disputes. Control of a company, whether through shareholding or management, does not constitute ownership or possession of that company s assets. Paros SME, as the former charterer, is a distinct legal entity. Paros SME s rights to possession of the vessel under the BBC was vested in it alone, not in its shareholders or controllers.
The Plaintiffs arrest affidavit is telling. It repeatedly refers to their v , but nowhere asserts an admiralty cause of action. There are no pleaded facts that give rise to an independent legal right to possession and control of the vessel. The relief sought, delivery of the vessel and recognition of control, belongs to the realm of corporate and insolvency law, not admiralty.
Therefore, even if the Plaintiffs had lawfully acquired control of Paros SME through the U.S. Chapter 11 process, that control does not translate into any proprietary or possessory right in the vessel. Their proper remedy, if any, lies in company law or insolvency proceedings, not admiralty jurisdiction.
Accordingly, derivative control over Paros SME is legally irrelevant to admiralty standing. It does not create an admiralty cause of action for possession under section 20 (2) (a) of the UK SCA 1981. The Plaintiffs attempt to arrest the vessel on that basis constitutes a collateral and abusive use of admiralty process. The Plaintiffs have no locus standi to maintain this action.
The only relevance that the disputes between the Plaintiffs and the Defendants as to ownership and control of Paros SME have on the termination of the BBC is that the existence or consequences of those disputes gave rise to events of default. It seems to me that the Plaintiffs are using the arrest to obtain leverage in an ownership or management dispute. The Plaintiffs true aim is to wrest operational control of Paros SME or its assets, not to vindicate any maritime lien or possessory right. The Plaintiffs possession claim is obviously unsustainable
Apart from challenging admiralty jurisdiction, the owner is also challenging the Plaintiffs claim on the merits. As discussed above, the Plaintiffs have failed to show an arguable case on the merits that their possession claim under section 20 (2) (a) of the UK SCA 1981 is obviously sustainable.
The principles governing striking out under Order 18 rule 19 of the ROC 2012 are well settled. Striking out is reserved for cases that are conspicuously unarguable or abusive. It is not a vehicle to test factual disputes but to cull actions that are groundless at law. (See the Court of Appeal case of UMBC Finance Bhd v Dat Dr M Mahadevan s/o Mahalingam [2008] MLJU 453; the Supreme Court case of Bandar Builder Sdn Bhd & Ors v United Malayan Banking Corporation Bhd [1993] 4 MLJ 36; [1993] 4 CLJ 7). As observed by the Court of Appeal in Middy Industries Sdn Bhd v Arensi - Marley (M) Sdn Bhd [2012] 1 LNS 830, the with no prospect of success, often advanced to embarrass or harass the opposing party.
The Plaintiffs conduct here fits that description. Their claim is devoid of any maritime foundation and is vexatious. Accordingly, the Plaintiffs writ and statement of claim should be struck out for want of jurisdiction and for being frivolous, vexatious and an abuse of the process of the court. Non - compliance of Order 70 rule 4 (6) for issue of the warrant of arrest
Order 70 rule 4 (6) (b) of the ROC 2012 requires that the Plaintiffs satisfy the court regarding the nature of the claim in respect of which the warrant is required before a warrant of arrest can be issued. This means that the Plaintiffs must show that Paros SME was the bareboat charterer under the BBC, was entitled to possession or control of the vessel, or had some form of proprietary or possessory interest in the vessel when the action was filed and arrest sought.
The evidence demonstrates that Paros SME knew about the termination of the BBC as a result of the notice of termination sent as per clause 57 (b) on 11.6.2025. Alternatively as a result of the sending of the notice of termination to the Murchinson entities (who purport to control the Plaintiffs) on 13.6.2025. A such, the Plaintiffs knew that Paros SME was not entitled to lawful possession and control of the vessel as bareboat charterer under the BBC when they brought this action and arrested the vessel.
The Plaintiffs knowledge of termination of the BBC is relevant to deciding whether or not to issue the warrant of arrest, which should properly be taken into consideration by the court. Yet the arrest affidavit did not disclose this crucial fact. Instead, paragraph 31 of the arrest a . It makes no mention of the termination just two days earlier. Or even that the termination had occurred but was disputed, which would have been expected as a minimum. This is a material omission, because the BBC was the sole foundation of their asserted possessory rights.
Apart from this, the Plaintiffs also omitted to inform the court of the following material facts that go directly to founding jurisdiction.
That one or more events of default had been committed under the BBC. For example, non - payment of charter hire for six months and the arrest of the vessel Kithnos.
The Plaintiffs presented the U.S. Chapter 11 orders in respect of the 1st Plaintiff as conferring upon them a proprietary entitlement to the vessel. When in fact those orders do not purport to transfer ownership or possession of any ship. The omission of that critical qualification gave a misleading impression that the U.S. bankruptcy court had authorised them to seize the vessel worldwide.
Had the Plaintiffs disclosed these matters in the arrest affidavit, or prior to obtaining the warrant of arrest, it is conceivable that the court could have refused the warrant of arrest since the BBC had been terminated when the action was filed and the vessel arrested on 13.6.2025. The Plaintiffs therefore failed to satisfy the requirement of Order 70 rule 4 (6)
of the ROC 2012 to obtain a warrant of arrest. Given the significance of this issue to the Plaintiffs alleged claim against the vessel, they must have with mala fides deliberately omitted to disclose the termination of the BBC. So that they could arrest the vessel on the pretext of an arguable case of possession and control under section 20 (2) (a) of the UK SCA 1981 arising out of the BBC. Even though they knew that they did not have one (or as a minimum that the owner s position was that they did not have one). Damages for wrongful arrest
Based on the foregoing, I find that the warrant of arrest against the vessel was executed with mala fides or gross negligence. That is the test to be applied in deciding whether to order an inquiry as to damages for wrongful arrest of a vessel, as held in the following authorities :
there is either mala fides, or that crass negligentia, which implies malice, is there or is there not, reason to say, that the action was so unwarrantedly brought, or brought with so little colour, or so little foundation, that it rather implies malice on the part of the plaintiff, or that gross negligence which is equivalent to it (See the Privy Council case of The Evangelismos [1858] 12 Moo. P.C. 352).
Two types of cases are thus envisaged. Firstly, there are cases of mala fides, which must be taken to mean those cases where on the primary evidence the arresting party has no honest belief in his entitlement to arrest the vessel. Secondly, there are those cases in which objectively there is so little basis for the arrest that it may be inferred that the arresting party did not believe in his entitlement to arrest the vessel. It is, as I understand the judgment, in the latter sense that such phrases ligentia gross negligence used and are described as implying malice or being equivalent to it. (See the English High Court case of The Kommunar (No. 3) Law Report 22).
From the evidence, I am satisfied that the Plaintiffs were motivated by mala fides to arrest the vessel and force security for a non - existent proprietary or possessory claim. At the very least, the Plaintiffs were grossly negligent in bringing an action with so little foundation, implying malice on their part. To reiterate :
The Plaintiffs were aware that the BBC was terminated when they filed the action and sought to arrest the vessel on 13.6.2025. Or at the very least, when they received notice of this from the owner on 19.6.2025. They did not inform the court or provide it with a copy of the notice of termination.
The Plaintiffs did not show cogent evidence before issuance of the warrant of arrest that Paros SME was the bareboat charterer of the vessel at the time when they filed the action. The mere production of the BBC alone for this purpose is insufficient. The Plaintiffs must show an entitlement to possession and control of the vessel.
The Plaintiffs have no genuine claim that falls within section 20
of the UK SCA 1981 that entitles them to admiralty action in rem and a right to arrest the vessel.
The Plaintiffs failed to satisfy the requirement of Order 70 rule 4
of the ROC 2012 to obtain a warrant of arrest.
Arrest is an oppressive tool that is not to be abused. It cannot be simply invoked without consequence. (See the Singapore Court of Appeal case of The Vasiliy Golovnin [2008] 4 SLR 994). Conclusion
In summary, the statutory requirements to bring this action and arrest the vessel are not satisfied. The Plaintiffs have no arguable basis to invoke the court s admiralty jurisdiction. They allege a claim for possession of the vessel, but the BBC was terminated. The Plaintiffs have shown no continuing demise charter or bareboat charter or ownership interest in the vessel after 11.6.2025. Theirs is an internal dispute for control of Paros SME. On the contrary, the evidence establishes that the bareboat charter to Paros SME had ended.
For the reasons above, I allowed Enclosure 25 in suit 29/06. I set aside the Plaintiffs writ and the warrant of arrest. I ordered damages for wrongful arrest of the vessel to be assessed and paid by the Plaintiffs to OCM. I awarded costs of RM 20,000 to OCM for Enclosure 25.
I also allowed Enclosure 16 in suit 33/07. I ordered that the possession and control of the vessel be decreed to OCM as the sole owner of the vessel. I awarded costs of RM 10,000 to OCM for Enclosure 16. Dated 31 December 2025 Quay Chew Soon Judge High Court of Kuala Lumpur (Commercial Division NCC 2 & Admiralty 9) Counsels Oon Thian Seng, Lionel Navin Noel, Tan Hui Ling and Ng You Xian (Messrs. T S Oon & Partners) for the Plaintiffs Jeremy Mark Joseph, Vinodhini Benjamin Samuel and Siti Deelora binti Nor Ahmad Rajkumar (Messrs. Joseph & Partners) for the Intervener Case reference 1. [2012] 4 SLR 546 2. New World P & I Service Co Ltd v The Disponent Owner and / or the Demise (Huihong (Tianjin) Shipping Lease Co Ltd, intervener) [2024] MLJU 3653 3. he Port of Malta (ING Bank NV & Anor, interveners) [2017] 7 MLJ 87 4. The Faial
The Chong Bong [1997] 3 HKC 579 6. Songa Product and Chemical Tankers III AS v Kairos Shipping II LLC [2025] EWCA Civ 1227 7. [2010] SGHC 18 8. Programmed Total Marine Services Pty Ltd [2013] 211 FCR 369 9. [2008] MLJU 453
Bandar Builder Sdn Bhd & Ors v United Malayan Banking Corporation Bhd [1993] 4 MLJ 36; [1993] 4 CLJ 7
Middy Industries Sdn Bhd v Arensi - Marley (M) Sdn Bhd [2012] 1 LNS 830
The Vasiliy Golovnin [2008] 4 SLR 994 Legislation reference 1. Section 21 (1) to (4) and section 20 (2) (a) of the UK Senior Courts Act 1981 2. Section 24 (b) of the Courts of Judicature Act 1964 3. Order 12 rule 10; Order 18 rule 19 and Order 70 rule 4 (6) (b) of the Rules of Court 2012

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Refers toJudicature ActExternal
“12. The Vasiliy Golovnin [2008] 4 SLR 994 Legislation reference 1. Section 21 (1) to (4) and section 20 (2) (a) of the UK Senior Courts Act 1981 2. Section 24 (b) of the Courts of Judicature Act 1964 3. Order 12 rule 10; Order 18 rule 19 and Order 70 rule 4 (6) (b) of the Rules of Court 2012 **Note : Serial number will”
Refers toUK Senior Courts ActExternal
“5. On 13.6.2025, the Plaintiffs obtained an admiralty writ in rem and arrested the vessel as security for a claim for possession and control of the vessel under section 20 (2) (a) of the UK Senior Courts Act 1981 UK SCA 1981 . To obtain and continue the arrest, the Plaintiffs claim that **Note : Serial number will be u”
Cites[2008] MLJU 453External
“arguable or abusive. It is not a vehicle to test factual disputes but to cull actions that are groundless at law. (See the Court of Appeal case of UMBC Finance Bhd v Dat Dr M Mahadevan s/o Mahalingam [2008] MLJU 453; the Supreme Court case of Bandar Builder Sdn Bhd & Ors v United Malayan Banking Corporation Bhd [1993]”
Cites[2010] SGHC 18Case
“62. This was explained in the Singapore High Court case of Samudra [2010] SGHC 18 : Similarly as rightly observed by Chao JC (as he then was) in The lnterippu, trol must mean possession or control an independent legal right : I am afraid there is hardly any evidence to show th”
Cites[2024] MLJU 3653External
“accepted in Malaysia. (See the High Court cases of New World P & I Service Co Ltd v The Disponent Owner and / or t the Port of Monrovia, Liberia (Huihong (Tianjin) Shipping Lease Co Ltd, intervener) [2024] MLJU 3653; Vitol Asia Pte Ltd v The Owners of the Ship or Vessel Malik Al Ashta interveners) [2017] 7 MLJ 87). The”

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Content

1 In the High Court of Malaya at Kuala Lumpur In the Federal Territory of Kuala Lumpur, Malaysia (Commercial Division) Admiralty Action in Rem No. : WA - 27 NCC - 29 - 06 / 2025 Admiralty Action in Rem against the Ship and / o (IMO No. : 9711511) of the Port of Piraeus Between 1) Eletson Holdings Inc 2) Eletson Corporation 3) Eletson Gas LLC 4) Paros Special Maritime Enterprise ... Plaintiffs And The Owner and / or the Demise Charterer and / or Persons in Possession or Control of the Ship o MO No. : 9711511) of the Port of Piraeus ... Defendants And OCM Maritime Gas 3 LLC ... Intervener Heard together with In the High Court of Malaya at Kuala Lumpur In the Federal Territory of Kuala Lumpur, Malaysia (Commercial Division) Admiralty Action in Rem No. : WA - 27 NCC - 33 - 07 / 2025 Admiralty Action in Rem against the Ship and / o (IMO No. : 9711511) of the Port of Piraeus Between OCM Maritime Gas 3 LLC ... Plaintiff And Former Demise Charterers, Paros Special Maritime Enterprise and all other Persons claiming to be interested in the Ship or Vessel MO No. : 9711511) of the Port of Piraeus ... Defendants And 1) Eletson Holdings Inc 2) Eletson Corporation 3) Eletson Gas LLC 4) Paros Special Maritime Enterprise ... Interveners Grounds of Decision The two suits

There are two separate suits before me.

The first suit is Kuala Lumpur High Court Admiralty Action in Rem No. : WA - 27 NCC - 29 - 06 / 2025 suit 29/06 Suit 29/06 is the basis that they are the rightful party controlling Paros Special Maritime Enterprise Paros SME following U.S. bankruptcy orders. The Plaintiffs assert that Paros SME is the bareboat charterer of the vessel, and so they are entitled to possession and control of the vessel.

(ii) The second suit is Kuala Lumpur High Court Admiralty Action in Rem No. : WA - 27 NCC - 33 - 07 / 2025 suit 33/07 Suit 33/07 is OCM Maritime Gas 3 LLC s ( owner OCM ) in rem action, where OCM re - arrested the vessel on a claim for possession and redelivery of the vessel as registered owner. This is on the basis that the bareboat charterparty is terminated and Paros SME is no longer in lawful possession and control of the vessel. The parties

The parties shall be identified by their respective capacities in suit 29/06.

The intervener, OCM, is the registered owner of the vessel P (IMO No. vessel . OCM intervened in suit 29/06 to set aside the Plaintiffs action and arrest of the vessel.

The Plaintiffs are the new directors, shareholders and controlling entities of the former bareboat charterer of the vessel, the 4th Plaintiff, Paros SME.

Paros SME is wholly owned by the 3rd Plaintiff, Eletson Gas LLC.

(ii) The common shares in the 3rd Plaintiff are owned by the 1st Plaintiff, Eletson Holdings Inc. There is an ongoing dispute about ownership of the preferred shares in the 3rd Plaintiff in proceedings before the U.S. court.

III

(iii) The 2nd Plaintiff, Eletson Corporation, was the manager of the vessel. It is said to be a subsidiary of the 1st Plaintiff.

(iv) The 3rd Plaintiff is also the corporate guarantor (as defined in the bareboat charter between OCM and Paros SME) under a guarantee dated 23.2.2022 between the 3rd Plaintiff as guarantor and OCM as beneficiary.

The 1st, 2nd and 3rd Plaintiffs are controlled by interests connected with Canadian hedge fund, Murchinson Ltd, and are referred to here Murchinson entities

According to the Plaintiffs, the Defendants are the former directors, shareholders and controlling entities of Paros SME, who no longer are entitled to possession of the vessel following the U.S. bankruptcy court orders and shareholder disputes. The Defendants have not entered appearance in this action.

The Plaintiffs rely on orders made in the U.S. bankruptcy proceedings to assert that they now control Paros SME, taking over control from the Defendants. The Defendants do not agree and are challenging the Plaintiffs for control in the U.S. and the Greek courts. Enclosure 25 in suit 29/06

On 13.6.2025, the Plaintiffs obtained an admiralty writ in rem and arrested the vessel as security for a claim for possession and control of the vessel under section 20 (2) (a) of the UK Senior Courts Act 1981 UK SCA 1981 . To obtain and continue the arrest, the Plaintiffs claim that they have been recognised as the controlling entities of Paros SME by the U.S. courts. Since Paros SME is the demise charterer of the vessel, they say that they have an admiralty in rem right to possession and control of the vessel.

The owner applied to set aside the writ in rem and lift the arrest on the ground that admiralty jurisdiction is not properly invoked. Alternatively, to strike out because the Plaintiffs claim is obviously unsustainable. By reason that the bareboat charterparty has ended and the Plaintiffs therefore have no in rem standing.

The Plaintiffs claim against the Defendants, whom they describe as the Greek entities, is based on their stated controlling right in Paros SME following the U.S. bankruptcy orders. They do not claim to have an independent proprietary right in the vessel. Hence, they do not have an arguable case for a claim of possession under section 20 (2) (a) of the UK SCA 1981.

The owner had entered into a bareboat charterparty with Paros BBC s multiple breaches and events of default, the owner has validly terminated the BBC by notice on 11.6.2025 ( notice of termination ), before the writ in rem was issued and the vessel arrested. This means that Paros SME (whether controlled by the Plaintiffs or the Defendants), had ceased to be the bareboat charterer when this action was brought and the vessel arrested. The dispute between the Plaintiffs and the Defendants is irrelevant to these proceedings.

On 26.6.2025, the owner obtained leave to intervene. On 25.7.2025, the owner filed a notice of application in Enclosure 25 to challenge the admiralty jurisdiction of the court. The owner thereafter applied in Enclosure 46 to amend Enclosure 25 to also challenge the Plaintiffs claim on the merits based on the affidavits filed in the Enclosure 25 proceedings. The amendment application in Enclosure 46 was allowed on 13.10.2025. Enclosure 16 in suit 33/07

The vessel is still lying under arrest under the custody of the Admiralty Sheriff of the Kuala Lumpur High Court. In order to take back possession and control of their vessel, the owner brought its own action for possession and re - arrested the vessel on 2.7.2025 in suit 33/07. In the owner s arrest, there is no appearance by the Defendants, Paros SME, the former bareboat charterer of the vessel. The owner has applied for judgment in default of appearance in Enclosure 16 dated 22.8.2025.

By Enclosure 16, the owner seeks judgment to be entered in default of appearance against the vessel, decreeing immediate possession and control of the vessel to them as registered owner, from the former bareboat charterer, Paros SME. Since the BBC pursuant to which Paros SME was previously entitled to possession of the vessel has been terminated and Paros SME is currently unlawfully holding over and refusing to redeliver the vessel to the owner.

Although the Plaintiffs claim that they control Paros SME, they did not enter appearance as Defendants but did so as Interveners. The Plaintiffs are challenging the default judgment application on the same grounds that they asserted in suit 29/06. To wit, that Paros SME is entitled to possession of the vessel under the BBC and the U.S. bankruptcy court in the bankruptcy of the 1st Plaintiff has made orders the effect of which is to permit them to control Paros SME.

Decision

On 4.12.2025, I allowed Enclosure 25 in suit 29/06. I also allowed Enclosure 16 (default judgment application) in suit 33/07. Here are my reasons.

I set aside the rit and arrest in suit 29/06 for the following reasons :

The Plaintiffs do not have a proprietary or possessory interest or entitlement in or to the vessel. OCM is the registered owner of the vessel. Any entitlement to possession and control of the vessel by demise can only arise from a valid demise or bareboat charter. But the only demise or bareboat charter was the BBC, and it has been terminated.

The Plaintiffs claim is an internal shareholder dispute with the Defendants over the management and control of Paros SME. It has nothing to do with the owner, save that it gave rise to breaches and events of default that led to termination of the BBC. Even if the Plaintiffs assertions were taken to the highest, they establish no more than a personal or derivative interest arising from their corporate position within companies that were connected with the bareboat charter of the vessel. They do not establish any right or interest to or in the vessel. They do not confer on them a possessory or proprietary interest in the vessel. That interest can only come from the BBC, but it is terminated.

The Plaintiffs knew that the BBC was terminated when the action was filed and when they sought the warrant of arrest. But they did not disclose this to the court. Order 70 rule 4 (6) (b) of the Rules of Court 2012 ROC 2012 requires the Plaintiffs to state the nature of the claim in respect of which the warrant is sought and that it has not been satisfied before a warrant of arrest can be issued. Since the Plaintiffs bring this action on the basis that Paros SME is the demise / bareboat charterer, it is relevant to inform the court that the owner has served a notice of termination. If the BBC is terminated, the Plaintiffs do not have a claim which is proprietary, which is of the nature and type of claim under section 20 (2) (a) of the UK SCA 1981. The Plaintiffs procured the warrant of arrest without disclosing this material fact. This is a non - compliance of Order 70 rule 4 (6) (b) of the ROC 2012. Test for invocation of the admiralty jurisdiction of the court

For establishing admiralty jurisdiction and arrest of ships, Malaysia adopts the English position under the UK SCA 1981 by virtue of section 24 (b) of the Courts CJA 1964 To invoke the court s admiralty jurisdiction, and bring an action in rem against an offending ship, and exercise a right to arrest, a plaintiff must first satisfy that it has a cause of action under one of the limbs in section 20 (2) (a) to

of the UK SCA 1981 and that it has a right to institute an action in rem under one of the limbs of section 21 (1) to (4) of the UK SCA 1981.

Based on the indorsement of its claim and the arrest affidavit, the Plaintiffs bring this admiralty in rem action on a claim for immediate return of the vessel to them under the BBC as the rightful controlling shareholders of Paros SME. This follows a U.S. bankruptcy court order (not against Paros SME but against the 1st Plaintiff) and pursuant to section 20 (2) (a) of the UK SCA 1981 for any claim to the possession or ownership of . The Plaintiffs assert that they are entitled to enforce this claim against the vessel pursuant to section 21 (2) of the SCA 1981. Premised on this in rem admiralty jurisdiction invoked by writ, the Plaintiffs would then be entitled to exercise their right to arrest the vessel, pursuant to Order 70 rule 4 of the ROC 2012. - step of standard of proof for admiralty jurisdiction

In [2012] 4 SLR 546 at paragraph [112], the Singapore Court of Appeal outlined the various steps and respective standards of proof for invoking admiralty jurisdiction. Namely : Step 1 : (i) prove, on the balance of probabilities, that the jurisdictional facts under the limb it is relying on (the equivalent of section 20 (2) (d) to (q) of the UK SCA 1981) exist; and

(ii) show an arguable case that its claim is of the type or nature required by the relevant statutory provision. Step 2 : prove, on the balance of probabilities, that the claim arises in connection with a ship. Step 3 : identify, without having to show in argument, the person who would be liable on the claim in an action in personam. Step 4 : prove, on the balance of probabilities, that the relevant person was, when the cause of action arose, the owner or charterer of, or in possession or in control of, the ship. Step 5 : prove, on the balance of probabilities, that the relevant person was, at the time when the action was brought : (i) the beneficial owner of the offending ship as respects all the shares in it or the charterer of that ship under a demise charter; or (ii) the beneficial owner of the sister ship as respects all the shares in it.

The Bunga Melati test has been accepted in Malaysia. (See the High Court cases of New World P & I Service Co Ltd v The Disponent Owner and / or t the Port of Monrovia, Liberia (Huihong (Tianjin) Shipping Lease Co Ltd, intervener) [2024] MLJU 3653; Vitol Asia Pte Ltd v The Owners of the Ship or Vessel Malik Al Ashta interveners) [2017] 7 MLJ 87). The applicable jurisdictional test under section 20 (2) (a) of the UK SCA 1981

The Bunga Melati 5 - step test applies to situations where :

the claim is brought under our section 20 (2) (d) to (q) of the UK SCA 1981; and

the in rem action depends on establishing that the defendant is the relevant person , the owner, demise charterer or beneficial owner of the ship at two material times.

Hence, step 1, proving that the jurisdictional facts exist, is central where the statutory limb expressly ties jurisdiction to a relevant person test (like damage done by a ship, supply of goods, carriage, etc.).

In the present case, the Plaintiffs bring a possession claim under section 20 (2) (a) of the UK SCA 1981. This is the purely proprietary jurisdiction of the admiralty court. It does not depend on identifying a relevant person or satisfying the two - time ownership rule. Instead, the Plaintiffs standing and the nature of the claim are what ground jurisdiction. Steps 3 to 5 of the Bunga Melati test (relevant person and ownership timing) are not directly applicable to section 20 (2) (a) of the UK SCA 1981.

Thus, for the Plaintiffs to properly invoke the admiralty jurisdiction of the court on a possession claim, they must satisfy : Step 1 : (i) prove that a proprietary or possessory entitlement to the vessel exists at the time of the writ (jurisdictional fact); and

(ii) show an arguable case that the claim is of the type envisaged by section 20 (2) (a) of the UK SCA 1981, i.e. proprietary, not merely contractual (nature of claim). Step 2 : prove that the claim arises in connection with a ship.

The failure to meet their burden of proof would mean that the writ in rem would have to be set aside on the ground that the admiralty jurisdiction of the High Court was not properly invoked (i.e. the jurisdiction challenge). The court is empowered under Order 12 rule 10 of the ROC 2012 or under its own inherent power to set aside the writ in rem and the warrant of arrest if admiralty jurisdiction is not properly established.

At the setting aside stage, the owner is also entitled to challenge the Plaintiffs claim on the merits, whether in the form of a striking out under Order 18 rule 19 of the ROC 2012 or the inherent jurisdiction of the court. Where such challenge is mounted, the Plaintiffs would then need to show a good arguable case on the merits. This is not to satisfy admiralty jurisdiction, but to prevent its action from being struck out on the basis that it is obviously unsustainable (i.e. the merits challenge). The threshold is the same as ordinary striking out cases - the plain and obvious test. It is within the remit of the court to evaluate affidavit evidence and decide whether the threshold is passed.

The explanation of Toh Kian Sing, SC in Admiralty Law and Practice, 3rd edition is instructive. - An admiralty plaintiff would, however still need to show a good arguable case on the merits of its claims if challenged; not for the purposes of satisfying the High Court (Admiralty Jurisdiction) Act, but to prevent its action from being struck out under Order 18 rule 19 of the Rules of Court or the inherent jurisdiction of t

Applying the Bunga Melati test, I find that the Plaintiffs cannot invoke admiralty jurisdiction under section 20 (2) (a) of the SCA 1981. This is because the BBC, the sole source of any alleged possessory or proprietary right (on the Plaintiffs own case), had been terminated. There is evidence (i.e. the notices of termination, the owner s contemporary correspondence and English law expert opinion), which show that the BBC was at an end on 11.6.2025. Upon termination, Paros SME s right to possession and control of the vessel ceased. The Plaintiffs therefore have no subsisting possessory or proprietary entitlement, and the writ and the warrant of arrest must be set aside.

Even if it is assumed that the Plaintiffs have crossed the jurisdictional threshold, their claim for possession is still obviously unsustainable.

The BBC was terminated for multiple events of default under clauses 45 (a), (f), (m), (o), (s), (x) and (y) thereof. Including non - payment of six months of charter hire, the ongoing arrest of the vessel Kithnos and other events of default under the collateral charterers, the insolvency of Paros SME or the corporate guarantor, changes of control, material adverse effect and repudiatory breaches of the BBC.

These are not directly disputed. On the Plaintiffs own case, Paros SME did not pay the six months of charter hire and there was a change of control of Paros SME and the corporate guarantor during the charter period. The Plaintiffs arrest of the vessel is actually based on a change of control of all four Plaintiffs, including Paros SME and the corporate guarantor, to the Murchinson entities.

Upon termination of the BBC, Paros SME s possessory rights were extinguished. Any continued holding of the vessel was as a mere bailee for the owner, as per clause 29 of the BBC.

Hence, the Plaintiffs fail on both the jurisdiction challenge and the merits challenge. Here is my explanation. The writ and the warrant of arrest ought to be set aside

The Plaintiffs action proceeds on the premise that Paros SME remained the bareboat charterer of the vessel under the BBC at the time of filing. That premise is wrong. The evidence shows that the BBC was terminated on 11.6.2025, two days before the Plaintiffs filed the writ and procured the warrant of arrest herein. From that date, Paros SME ceased to have any right of possession or control in the vessel. The Plaintiffs, claiming only such a right through Paros SME, had no proprietary or possessory standing to bring an admiralty in rem claim against the vessel. The Plaintiffs attempt to deny termination rests on erroneous assertions and internal shareholder grievances unrelated to the BBC or to the owner. The material fact of termination remains unrebutted.

Under the Bunga Melati test, the court must be satisfied that the jurisdictional fact grounding an admiralty action exists. For a possession claim under section 20 (2) (a) of the UK SCA 1981, that fact is the arresting party s proprietary or possessory entitlement to the vessel at the time of the writ. Here, since the BBC was terminated, the jurisdictional fact is not proved. Accordingly, the Plaintiffs also cannot show an arguable case of the nature required by section 20 (2) (a) of the SCA 1981, i.e. a proprietary claim, as opposed to a contractual one. Hence, neither requirement is met. The Plaintiffs fail on the jurisdiction challenge. The Plaintiffs do not have a proprietary or possessory interest or entitlement in the vessel

The foundation of the Plaintiffs case collapses at the threshold. The Plaintiffs have no possessory or proprietary interest in the vessel capable of sustaining admiralty jurisdiction. The sole instrument under which possession could arise, i.e. the BBC, was terminated for multiple events of default.

Upon termination, Paros SME s rights to possession and control of the vessel ceased. It was thereafter under a contractual obligation to redeliver the vessel to the owner and allow the owner to repossess it (clauses 15 and 49 of the BBC). Until it does so, Paros SME holds the vessel only as a bailee for the owner. The Plaintiffs, who claim only through their alleged shareholding and corporate control of Paros SME, cannot acquire a maritime interest greater than Paros SME itself possessed.

Accordingly, at the time the writ was issued and the warrant of arrest obtained, no demise charter existed. No party other than the owner had lawful possession. The Plaintiffs claim for possession is therefore baseless. What remains is merely a corporate and shareholder dispute over control of Paros SME, which falls outside the admiralty jurisdiction of the court and is irrelevant to the vessel and to the owner.

The arrest was thus procured on a wrong premise and in abuse of process. Under the principles affirmed in the Bunga Melati, admiralty jurisdiction cannot be invoked absent proof of an existing proprietary or possessory right at the time of the writ. No such right existed here. The writ and the warrant of arrest must therefore be set aside. The BBC was terminated on multiple breaches and events of default Non - payment of charter hire

Charter hire remained unpaid for six months preceding termination (and still remains unpaid). The Plaintiffs do not dispute that the hire was unpaid. Non - payment of the charter hire constituted an event of default under clause 45 (a) of the BBC. This entitled the owner to terminate the BBC, and demand redeIivery under clause 46 and 29 for Paros SME s repudiatory breach of the BBC.

There is no requirement in the BBC for any demand to be made (including for any invoice to be sent) before charter hire was due and owing to the owner. Charter hire, which was made up of fixed hire and variable hire, could have been calculated by Paros SME without input or notice from the owner. It was payable on the date on which each payment was due, namely on each hire payment date. The monthly hire payment dates and the methods of calculation of charter hire were set out in detail in clauses 11, 34, 35 and 59 of the BBC and in the supplemental agreement to it.

The Plaintiffs argument that the owner was not entitled to terminate the BBC under clause 45 (a) for unpaid charter hire relate to the suggestion that:- (i) Paros SME s obligation to pay charter hire was conditional on receipt of an invoice; and (ii) the owner invoices for the sums in question were not sent or addressed in the required way so that the Plaintiffs / Murchinson entities were not aware of them or the sums due.

However, nothing in the BBC requires the owner to send invoices for charter hire or makes Paros SME s obligation to pay charter hire conditional on receipt of an invoice. The BBC in fact says the opposite. It states that charter hire is payable on a hell and high water basis (clause 34(e)) on the defined monthly hire payment dates. Time is of the essence for payment, making payment on time a condition of the BBC, breach of which gave the owner a right to terminate under clauses 46, 45 (a) or 45

thereof.

The Plaintiffs allege that they were not aware of the amount of variable hire to be paid for the six months for which charter hire was unpaid prior to termination. That is not the case. Paros SME had received invoices for the unpaid charter hire. Control over the email address for Paros SME in clause 57 (b) of the BBC is irrelevant. That was the email address which the owner was required to use for documents. Communications under the BBC and documents sent to it were deemed to be sent to Paros SME. Also, variable hire (and fixed hire) was ascertainable from the terms of the BBC.

Further, the Plaintiffs do not allege that they were unaware of the amount of fixed hire for the six months in question. They could have been in no doubt of the fixed hire element of charter hire as, like variable hire, its amount was plainly set out in the BBC. They did not, however, even pay fixed hire for those months. They did not pay the owner a cent, ask for confirmation of the amounts to be paid or ask for invoices to be sent to an email or postal address other than as set out in clause 57 (b) of the BBC (despite having a contractual right to make such a request). Additional events of default

Non - payment of charter hire was not the only event of default relied upon in the owner notice of termination. There were numerous additional events of default relied on by the owner in that notice. Any one event of default gave the owner the right to terminate the BBC under clause 46 and was a repudiatory breach of the BBC under clause 45 (y). The other events of default relied on by the owner in the notice of termination were as follows. The arrest of the vessel Kithnos

The arrest of the vessel Kithnos (collateral vessel B) and the failure of Kithnos SME (collateral charterer B), to release it or procure its release from arrest within 45 days or at all was an event of default under clause 45 (p) of the Kithnos BBC and therefore under clause 45 (x) of the BBC. This entitled the owner to terminate the BBC and demand redelivery and repossession of the vessel. It would have been easy for three of the Plaintiffs to have released the vessel Kithnos from arrest given that they were three of the arresting parties, together with Kithnos SME, which they control.

The vessel Kithnos arrest is indisputable. The Texas court s writ of arrest and bareboat charterparty are in evidence and unrebutted. The vessel Kithnos was recently permitted to sail from Texas pursuant to order of the Texas court. But expressly remains under arrest by order of the Texas court. Insolvency

Under clause 45 (f) (i) of the BBC, it was an event of default which entitled the owner to terminate the BBC and demand redelivery and repossession of the vessel if any transaction obligor is unable to pay its debts as they fall due or suspends making payments on any of its debts or if the value of its assets is less than its liabilities. Under clause 59 (a) of the BBC, transaction obligor meant Paros SME and collateral charterers A, B and C (amongst others).

Paros SME had not paid charter hire and other sums due under the BBC for six months as at the date of termination. It had therefore suspended making payments on those debts. Even though it is irrelevant because the above suspension of payment of debts by Paros SME is sufficient for an event of default under clause 45 (I) of the BBC, it can be reasonably inferred that charter hire was not paid for those six months because Paros SME was unable to pay its debts as they fell due.

Similarly, collateral charterers A, B and C had failed to pay charter hire for six months prior to termination of collateral charters B and C and five months prior to termination of collateral charter A. The same comments as set out above in respect of Paros SME apply to the collateral charterers as transaction obligors. Repudiation and rescission of agreements

Under clause 45 (m) of the BBC, it was an event of default which entitled the owner to terminate the BBC and demand redelivery and repossession of the vessel if any transaction obligor rescinds or purports to rescind or repudiates or purports to repudiate a relevant document.

Paros SME was in repudiatory or anticipatory repudiatory breach of the BBC as a result of its persistent failures to make the payments due and owing under the BBC, including six months of charter hire, as at the date of termination, which evinced an intention no longer to be bound by the terms of the BBC. Change of control

Under clause 45 (s) of the BBC, a change of control of Paros SME or the corporate guarantor from that existing on the date of the BBC, without the prior written consent of the owner, was an event of default. This entitled the owner to terminate the BBC and demand redelivery and repossession of the vessel.

The Plaintiffs themselves have alleged that a change of control occurred during the charter period. In fact, the Plaintiffs arrest of the vessel is based on a change of control of all of the Plaintiffs. There was therefore, on the Plaintiffs own allegation, an admitted event of default under clause 45 (s) of the BBC. It is disingenuous of the Plaintiffs to deny the validity of the termination in light of this admission. They do not provide any evidence that the owner consented to the change. The owner did not consent. Also, the change of control of the corporate guarantor was not permitted by clause 43 (o) (ii) of the BBC. Material adverse effect

There was an event of default under clause 45 (a) if any event or circumstance occurs which has or is reasonably likely to have a material adverse effect as defined in clause 59 of the BBC.

The change of control of Paros SME, the corporate guarantor and the approved manager alleged by the Plaintiffs themselves and the related litigation between the Plaintiffs and the Defendants around the world, including in the U.S. and Greece, were circumstances which, in the reasonable opinion of the owner, had or were reasonably likely to have a material adverse effect within the definition in clause 59. Those changes of control and litigation were independent events of default under clause 45 (a) of the BBC, that entitled the owner to terminate the BBC and demand delivery and possession of the vessel.

As mentioned earlier, there was a material adverse effect as a result of the change of control of the Plaintiffs and the litigation between the Plaintiffs and the Defendants given:- (a) the unarguable points they are advancing in these proceedings and in the English proceedings to arrest the vessel and cause delay to redelivery and repossession of the vessel by the owner; (b) the arrest of the vessel Kithnos; and (c) their failure to pay charter hire and other sums due under and perform other terms of the BBC. Their arrest of the vessel is further evidence of that material adverse effect, albeit occurring after termination. Collateral charters

Under clause 45 (x) of the BBC, it was an event of default which entitled the owner to terminate the BBC and demand redelivery and repossession of the v event of default as defined or to be defined in any collateral c an event of default in relation to a collateral charter, that was also an event of default under the BBC. That covered the arrest of the vessel Kithnos, as alluded to earlier. It also covered other breaches by the collateral charterers A, B and C of the bareboat charterparties to which they were party (for the M/Vs Astipalea, Kithnos and Dilos), including their failures to pay charter hire and other sums due under those charters. Fundamental term

Under clause 45 (x) of the BBC, term and condition of this charterparty that no event of default shall occur during the charterparty period and that the occurrence of an event of default shall entitle ... the owners at any time during the continuation of such event of default to accept the repudiation by charterers of this charterparty constituted by the occurrence of such event of default . Accordingly, the owner was entitled to accept the events of default referred to in the notice of termination as a repudiatory breach of the BBC. They did so in the notice of termination.

As such, the termination of the BBC was effective. The cumulative breaches, non - payment, arrest of the vessel Kithnos, insolvency, change of control and material adverse effects, fell squarely within the events of default enumerated in clause 45 of the BBC. The BBC was therefore at an end on 11.6.2025.

Alternatively, even if the termination of the BBC was not effective, all the events of default relied on in the 11.6.2025 notice of termination were still existing on 12.8.2025 when the owner s particulars of claim was filed in the English High Court proceedings that they commenced against Paros SME. The particulars of claim at paragraph 52 gave Paros SME notice of termination of the BBC, without prejudice to the 11.6.2025 termination, for continuing events of default. In addition to those events of default, the owner relied in their 12.8.2025 termination on the Plaintiffs arrest of the vessel in these proceedings. Which if the BBC remained in force at that time was an undisputable event of default under clause 45

of the BBC, having been ongoing for more than 45 days at that time.

Without a subsisting BBC, the Plaintiffs cannot establish any possessory or proprietary right capable of supporting an admiralty claim. (See the English High Court case of The Faial [2000] 1 Lloyd s Law Report 473; the Hong Kong High Court case of The Chong Bong [1997] 3 HKC 579). English law opinion upholds the termination of the BBC as valid

KC opinion ) concludes that the BBC was effectively terminated on 11.6.2025, following a valid notice of termination issued for multiple breaches. Clauses 28, 29 and 46 of the BBC expressly confer upon the owner the contractual right to terminate, without the need for physical redelivery and to repossess the vessel. Upon such termination, Paros SME held the vessel only as bailee without rights of possession or control.

The KC opinion states that the parties to a demise charter may agree that termination takes effect without physical repossession, and that a charterer cannot rely on its own default to resist the owner s termination. Even if termination on 11.6.2025 was disputed, the owner s notice of redelivery and repossession dated 18.6.2025 independently obliged Paros SME to redeliver the vessel.

The recent English Court of Appeal decision in Songa Product and Chemical Tankers III AS v Kairos Shipping II LLC [2025] EWCA Civ 1227 supports what is said in the KC opinion. To wit, that termination of a bareboat charterparty can take place prior to redelivery and repossessing of the vessel by the owner.

Briefly, the main issue in Songa Product (supra) was whether the owner (after notice of termination of a bareboat charterparty on grounds on insolvency was given by the charterer) was entitled to request the charterer to redeliver at a specific place and pay the costs of the voyage to that place. The court acknowledged that the bareboat charterparty was terminated before redelivery and repossession occurred. The court said : [43] In my judgment the legal and commercial features of a bareboat charter are indeed highly relevant to understanding the meaning of the provisions of clause 29, but in a different way. In each of sub - clauses 28 (a), (b) and (d) the termination is expressed to be with immediate effect by written notice (termination being deemed when the Vessel is an actual or constructive loss under clause 28 (c)). The result of such termination, whichever of those sub - clauses is triggered, is that the Vessel ceases to be at the disposal of the Charterers and they cease to be under any obligation to pay hire to the Owners, or to operate, maintain or insure the Vessel. Neither are the Charterers liable to indemnify the Owners for loss, damage or expense in relation to the Vessel. In those circumstances it is a legal and commercial imperative that the Owners, whose Vessel is no longer on hire and is without the benefit of the Charterers obligations to operate, maintain, insure and indemnify, should have the right to repossess it at the first opportunity, namely, at its current port (or its next port of call, if at sea) and that the Charterers should have a minimum obligation to care for the Vessel as gratuitous bailee in the interim. The quid pro quo for that obligation of the Charterers must be that the Owners should repossess the Vessel as soon as reasonably practicable so as to relieve them of that unremunerated burden. [50] It follows that I agree with the Judge that, if the Vessel is currently in port when the Charterparty is terminated under clause 29, the meaning and effect of the clause is that the Owners must repossess at that port unless it is impracticable or impossible for them to do so. The Plaintiffs are not in lawful possession and control of the vessel

vessel with effect from 11.6.2025. Paros SME is holding the vessel as bailee only.

This was explained in the Singapore High Court case of Samudra [2010] SGHC 18 : Similarly as rightly observed by Chao JC (as he then was) in The lnterippu, trol must mean possession or control an independent legal right : I am afraid there is hardly any evidence to show that Corporate Shipping were were therefore in control or possession of was at the relevant time a director of both companies, one being the holding company and the other a subsidiary company. Something more than just a common shareholding or manager / director is required to sustain a claim of corporate structures and entities. I am inclined to accept the submission of the Defendants that the t trol

must mean possession or control as an independent legal right; or at least the possession or control must be pursuant to a specific arrangement.

It does not refer to physical possession or control per se. Such a person would include a demise charterer (see The Span Terza [1982] 1 Lloyd s Rep 225 at 227), a salvor in possession (see The Evpo Agnic at 414), a purchaser under a conditional sale agreement (see The Permina 3001 [1977] 1 MU 141 at 144), and a person who is in a position of a demise charterer albeit not under a demise charter (see The Evpo Agnic at 414). It would also cover a mortgagee in possession who has taken over the vessel following the default of the mortgagor. The common denominator is that each of them has legally enforceable rights as regards possession or control of the vessel.

In the context of the present case, where Paros SME is holding the vessel as bailee following termination of the BBC, the case of The Ships Hako Endeavou Hako Excel Programmed Total Marine Services Pty Ltd [2013] 211 FCR 369 is instructive. There, the Federal Court of Australia held that the shipowner of Hako Fortress had validly terminated the demise charter upon Hako Offshore s receipt of the notice of termination. As such, Hako Offshore was not a demise charterer of Hako Fortress. But rather, it held Hako Fortress as a gratuitous bailee, at the time the proceeding against her was commenced.

The court said : [63] I am of opinion that as a matter of principle the terms of cll 28 and 29 of the Barecon 2001 form of charterparty can operate as they were intended without requiring the owners, first, to physically retake possession of the ship following her withdrawal and the termination of the charterparty : Reardon - Smith Lineat WLR 998 D - G ; All ER 576. The charterer becomes entitled to possession of the ship under and by virtue of the contractual rights that the owners confer on it by the terms of the demise. But that right to possession and control can be affected by another of the terms of the Barecon 2001 form. Thus, cl 29 provides

2013

296 ALR 265 at 284 that upon withdrawal of the ship and termination of the charter, the nature of the charterer possession changes from possession for the charterer s use and benefit to possession as a gratuitous bailee for the owners. Possession of the latter kind is substantively different in character to the plenary right to possession and use of the ship formerly enjoyed by the charterer while the charter remained on foot. [64] When the charterer is in possession as a gratuitous bailee under cl 29, he holds the ship for the sole use and benefit of the owners. When, however, he is in possession because of the demise of the ship to him, the charterer holds her for his own use and benefit. The effect of withdrawal and termination of the charter under cl 29 is the same as a physical redelivery to the owners because the charterer has lost his contractual authority and right to use and / or employ the ship as he pleases. The concept of constructive delivery of chattels, without any change of physical possession, is well - established in the law of bailment. In the classic text by Pollock and Wright, An Essay on Possession in the Common Law, Oxford, 1888, pp 72 - 3, the learned authors discussed the position of a seller in possession of goods who could assent to holding what was sold on account of the buyer. [66] Hako Offshore contracted in cll 28 and 29 that it would become the owners gratuitous bailee of Hako Fortress upon the owner exercising ifs right of withdrawal and termination. That is, the parties contemplated and provided in their contract that the nature of Hako Offshore possession would change, if the ship was withdrawn and the charterparty terminated, from that of a contractual right to the full use and enjoyment of the ship to become that of gratuitous bailee for the owners, Dolphin 2. That change was , that Hako Offshore acknowledged receiving on 5 March 2012. Dolphin 2 had been entitled at that time to exercise its right to withdraw the ship and terminate the Barecon charterparty because Hako Offshore had not paid hire within 14 days of the notice of default that was sent on 21 October 2011. It is safe to infer that that letter would have been received in the ordinary course of post by not later than 28 October 2011. [67] Accordingly, after following Hako Offshore s receipt of the notice of termination on 5 March 2012, it held Hako Fortress from then on as a gratuitous bailee and not as a demise charterer. It follows that the requirement of s 18 (b) of the Act, that Hako Offshore be a demise charterer of Hako Fortress on 2 April 2012 when the writ against her was filed, was not satisfied. The proceeding below against Hako Fortress must be dismissed and the security provided for her release from arrest must be returned to Dolphin 2.

Since Paros SME is merely a bailee and not a demise charterer, there vessel vested in Paros SME that can be imputed to the Plaintiffs as the parties purportedly controlling Paros SME. The Plaintiffs own pleaded case discloses no such proprietary or possessory right. Their alleged interest in the vessel arises indirectly from their purported control of Paros SME as the former bareboat charterer following the U.S. Chapter 11 orders in the 1st Plaintiff bankruptcy. Even if such orders did give the Plaintiffs lawful control of Paros SME, they do not create a maritime proprietary interest in the vessel. At best, they regulate the internal governance of Paros SME and allocate shareholder control. That does not translate into a possessory right enforceable against the vessel.

The Plaintiffs reliance on the U.S. Chapter 11 orders and shareholder notices is a red herring. It cannot transform a bare shareholder controversy into a maritime lien or charter claim. Nor is it in any way relevant to the owner, whose contractual relationship was with Paros SME and not with its shareholders or directors. Consequently, the Plaintiffs interest is at best derivative, arising from alleged shareholding in Paros SME, and not an admiralty right recognised under admiralty law. The Plaintiffs knew that the BBC was terminated when it filed the action and arrested the vessel

The Plaintiffs were aware of the termination of the BBC prior to the filing of this admiralty in rem action and the arrest of the vessel, alternatively prior to serving the warrant of arrest. The notice of termination was expressly served by the owner on Paros SME. The owner complied with the clause 57 (a) and clause 57 (b) notice requirements, by sending the notice of termination on 11.6.2025 to the designated email and postal addresses specified in clause 57 (b) of the BBC. The notice of termination was sent by both letter and by email out of an abundance of caution, even though sending it in both ways was unnecessary given clause 57 (a) of the BBC. It was addressed in compliance with clause 57

of the BBC. It was sent by email to finance@eletson.com. It was also delivered by hand.

The owner also addressed and sent the notice to the address that Paros SME had provided with its KYC documents at the beginning of the charter period. The covering email attaching the notice of termination shows that it was sent to finance@eletson.com. That email alone is sufficient to ensure compliance with clause 57 of the BBC. In addition to this, Ms Jenny Haramaras, a legal assistant in HFW s Piraeus office, hand delivered the notice to both postal addresses referred to above on 12.6.2025. As a matter of courtesy, the notice of termination was also served by email on 13.6.2025 to Murchinson (as the Plaintiffs controlling entities). The owner s solicitors, HFW London confirmed that they did not receive any bounce - back for the emails dated 11.6.2025 to finance@eletson.com and 13.6.2025 to ml@murchinsonltd.com.

Even if the Plaintiffs were not aware that the BBC had been terminated and that Paros SME was no longer the bareboat charterer of the vessel when the action was filed, the Plaintiffs became aware of this position :

On or around 13.6.20256, when the notice of termination was emailed to the Murchinson entities; and

On or around 18.6.2025, when the notice of redelivery and repossession was validly served on Paros SME at its contractual notice address stipulated under clause 57 (b) of the BBC; and

On or around 18.6.2025, when the notice of redelivery and repossession was sent to the Murchinson entities (as the Plaintiffs controlling entities).

The owner, through their Malaysian solicitors, put the Plaintiffs on notice, vide email to the Malaysian solicitors dated 19.6.2025, that the BBC had been terminated on 11.6.2025 and Paros SME was no longer the bareboat charterer of the vessel. In the same email thread, the owner demanded that the Plaintiffs immediately release the vessel from arrest. They also provided the Plaintiffs solicitors with a copy of the notice of termination and the enclosed unpaid invoices, as well as the notice of redelivery and repossession via email on 20.6.2025. The Plaintiffs did not respond to refute knowledge of the notice of termination issued on 11.6.2025 or receipt of the HFW London emails on 11.6.2025 to finance@eletson.com or on 13.6.2025 to ml@murchinsonltd.com.

As mentioned earlier, the owner also gave a further notice of termination of the BBC, without prejudice to the notice of termination and to apply only if the BBC had not been terminated, in its particulars of claims in the English proceedings. This was served on the Plaintiffs English solicitors (who were authorized to accept service) on 12.8.2025. At that time (12.8.2025) :

The Plaintiffs had arrested the vessel in these proceedings and the arrest had been maintained for more than 45 days;

The Plaintiffs were aware of the outstanding sums, including six months of charter hire, due and owing under the BBC as at

11.6.2025. They had received the notice of termination which enclosed all outstanding invoices on 11.6.2025 and 13.6.2025 and in these proceedings. But did not pay them or any other sums to the owner;

The Kithnos was still under arrest in Texas;

The corporate guarantor, a transaction obligor, was unable to pay its debts as they fell due. This was a further event of default under clause 45 (f) of the BBC, it having failed to pay sums demanded by the owner as beneficiary under the guarantee on 28.7.2025; and

The events of default set out in the notice of termination were continuing. The Plaintiffs denial of the termination of the BBC is untenable

The Plaintiffs contention that the BBC was not properly terminated is unsustainable. The Plaintiffs principal argument, that Paros SME was incorrect.

The BBC imposes no requirement on the owner to issue invoices for charter hire at all or as a condition of payment. Clause 34 (a) stipulates that charter h hire payment dates. Clause 11 (a) makes time of the essence for payment. Clause 34 (e) confirms that the obligation of Paros SME to pay charter h , unconditional and absolute. Payment was therefore due regardless of any invoice.

With regard to interest, clause 11 (g) states - under sub - clause 11 (f) shall be made within seven (7) running days of the date of the Owners invoice specifying the amount payable or, in the That makes it clear that an invoice was not a condition of Paros SME s obligation to pay charter hire or interest, and that the sending of invoices by the owner was not a contractual obligation.

The owner nevertheless sent invoices for charter hire and the other sums due and owing under the BBC prior to termination to the agreed contractual email address for Paros SME set out in clause 57 (b) (finance@eletson.com). Paros SME had the contractual right to change that address by giving the owner five days notice, but never did so. The Plaintiffs assertion that invoices were not properly served is thus contrary to the express terms of the BBC and contradicted by the contemporaneous correspondence. They were served as per clause 57

and deemed received by Paros SME. The entity which controlled the email address referred to in clause 57 (b) is irrelevant to the sending of invoices, the sending of documents and communications connected with the BBC or the owner. Further, all previous invoices for charter hire and other sums were issued and sent in the same way as the unpaid invoices and Paros SME had been paying them with no complaint since mid - 2022. It is estopped from raising these objections regarding the sending / addressing of invoices now.

The Plaintiffs charter h hire was specified in the BBC. Variable hire was calculable from the same document. The Plaintiffs could have computed the amounts of charter hire themselves or requested confirmation of them from the owner if they were truly in doubt. But they chose not to do so and pay nothing for six months, despite knowing that charter hire was due for each of those months. Their non - payment cannot be excused by self - imposed ignorance.

The owners notice of termination of 11.6.2025 enclosed six unpaid invoices and was emailed to finance@eletson.com and, out of abundance of caution, to the Murchinson entities / the Plaintiffs at ml@murchinsonltd.com on 13.6.2025. No bounce - back was received. The invoices remain unpaid. Also remaining unpaid are the amended invoices for those same sums. The amended invoices were addressed in the way suggested by the Plaintiffs and sent to them on 11.9.2025.

The Plaintiffs other excuses for not paying charter hire are equally untenable. The Plaintiffs contend that the email address finance@eletson.com does not belong to them. This argument is irrelevant as service was properly effected under clause 57 of the BBC. The Plaintiffs contend that the owner had not sent the invoices to Paros SME / the Plaintiffs as at 26.6.2025. I reject this contention because :

It was only Paros SME that was under a contractual obligation under the BBC to pay charter hire to the owner. (The corporate guarantor is under a separate contractual obligation to pay sums to the owner under the corporate guarantee).

The owner was not required to send invoices to Paros SME (or any of the other Plaintiffs). Paros SME s obligation to pay charter hire was not conditional on the provision of invoices.

The owner did, however, send invoices to Paros SME to the email address specified in clause 57 (b) of the BBC. Paros SME cannot now allege that it did not receive the invoices. Moreover, charter hire was due whether the invoices were received or not.

In any event, the notice of termination (and the six unpaid invoices which were attached to it) were sent to the Plaintiffs by email to Mark Lichtenstein (Murchinson entities) by HFW on 13.6.2025. Mr Lichtenstein is employed by or acts on behalf of the Plaintiffs.

Despite having received the unpaid invoices (and the amended invoices), the Plaintiffs have still not paid them. The owner, without prejudice to its termination of the BBC on 11.6.2025, gave further notice of termination on 12.8.2025. The Plaintiffs / Murchinson entities had received the invoices by that time and have still not paid them.

The contractual provisions governing charter hire and payment are clauses 11, 34, 35 and 45 of the BBC. These confirm that Paros SME s payment obligations were unconditional, that non - payment constituted an event of default under clause 45 (a), that the BBC did not require the owner to send invoices for charter hire and that the termination was effective. The Plaintiffs reliance on estoppel, alleged mis - addressed invoices or absence of certification under clause 34 (k) is misconceived. The dispute is internal to Paros SME and does not give rise to an admiralty claim in the vessel

On the Plaintiffs own case, the underlying dispute concerns who lawfully controls Paros SME and its assets following the 1st bankruptcy process in the U.S. That is ultimately a matter of corporate governance, not maritime law. The court s admiralty jurisdiction is confined to maritime causes of action enumerated in section 20 (2) (a) to

of the UK SCA 1981. Shareholder or management disputes fall outside that list.

The Plaintiffs seek to use the arrest of the vessel as a proxy for asserting control over Paros SME or its asset. Such use of admiralty process is improper and amounts to an abuse of jurisdiction. Admiralty jurisdiction cannot be invoked to secure collateral or non - maritime disputes. Control of a company, whether through shareholding or management, does not constitute ownership or possession of that company s assets. Paros SME, as the former charterer, is a distinct legal entity. Paros SME s rights to possession of the vessel under the BBC was vested in it alone, not in its shareholders or controllers.

The Plaintiffs arrest affidavit is telling. It repeatedly refers to their v , but nowhere asserts an admiralty cause of action. There are no pleaded facts that give rise to an independent legal right to possession and control of the vessel. The relief sought, delivery of the vessel and recognition of control, belongs to the realm of corporate and insolvency law, not admiralty.

Therefore, even if the Plaintiffs had lawfully acquired control of Paros SME through the U.S. Chapter 11 process, that control does not translate into any proprietary or possessory right in the vessel. Their proper remedy, if any, lies in company law or insolvency proceedings, not admiralty jurisdiction.

Accordingly, derivative control over Paros SME is legally irrelevant to admiralty standing. It does not create an admiralty cause of action for possession under section 20 (2) (a) of the UK SCA 1981. The Plaintiffs attempt to arrest the vessel on that basis constitutes a collateral and abusive use of admiralty process. The Plaintiffs have no locus standi to maintain this action.

The only relevance that the disputes between the Plaintiffs and the Defendants as to ownership and control of Paros SME have on the termination of the BBC is that the existence or consequences of those disputes gave rise to events of default. It seems to me that the Plaintiffs are using the arrest to obtain leverage in an ownership or management dispute. The Plaintiffs true aim is to wrest operational control of Paros SME or its assets, not to vindicate any maritime lien or possessory right. The Plaintiffs possession claim is obviously unsustainable

Apart from challenging admiralty jurisdiction, the owner is also challenging the Plaintiffs claim on the merits. As discussed above, the Plaintiffs have failed to show an arguable case on the merits that their possession claim under section 20 (2) (a) of the UK SCA 1981 is obviously sustainable.

The principles governing striking out under Order 18 rule 19 of the ROC 2012 are well settled. Striking out is reserved for cases that are conspicuously unarguable or abusive. It is not a vehicle to test factual disputes but to cull actions that are groundless at law. (See the Court of Appeal case of UMBC Finance Bhd v Dat Dr M Mahadevan s/o Mahalingam [2008] MLJU 453; the Supreme Court case of Bandar Builder Sdn Bhd & Ors v United Malayan Banking Corporation Bhd [1993] 4 MLJ 36; [1993] 4 CLJ 7). As observed by the Court of Appeal in Middy Industries Sdn Bhd v Arensi - Marley (M) Sdn Bhd [2012] 1 LNS 830, the with no prospect of success, often advanced to embarrass or harass the opposing party.

The Plaintiffs conduct here fits that description. Their claim is devoid of any maritime foundation and is vexatious. Accordingly, the Plaintiffs writ and statement of claim should be struck out for want of jurisdiction and for being frivolous, vexatious and an abuse of the process of the court. Non - compliance of Order 70 rule 4 (6) for issue of the warrant of arrest

Order 70 rule 4 (6) (b) of the ROC 2012 requires that the Plaintiffs satisfy the court regarding the nature of the claim in respect of which the warrant is required before a warrant of arrest can be issued. This means that the Plaintiffs must show that Paros SME was the bareboat charterer under the BBC, was entitled to possession or control of the vessel, or had some form of proprietary or possessory interest in the vessel when the action was filed and arrest sought.

The evidence demonstrates that Paros SME knew about the termination of the BBC as a result of the notice of termination sent as per clause 57 (b) on 11.6.2025. Alternatively as a result of the sending of the notice of termination to the Murchinson entities (who purport to control the Plaintiffs) on 13.6.2025. A such, the Plaintiffs knew that Paros SME was not entitled to lawful possession and control of the vessel as bareboat charterer under the BBC when they brought this action and arrested the vessel.

The Plaintiffs knowledge of termination of the BBC is relevant to deciding whether or not to issue the warrant of arrest, which should properly be taken into consideration by the court. Yet the arrest affidavit did not disclose this crucial fact. Instead, paragraph 31 of the arrest a . It makes no mention of the termination just two days earlier. Or even that the termination had occurred but was disputed, which would have been expected as a minimum. This is a material omission, because the BBC was the sole foundation of their asserted possessory rights.

Apart from this, the Plaintiffs also omitted to inform the court of the following material facts that go directly to founding jurisdiction.

That one or more events of default had been committed under the BBC. For example, non - payment of charter hire for six months and the arrest of the vessel Kithnos.

The Plaintiffs presented the U.S. Chapter 11 orders in respect of the 1st Plaintiff as conferring upon them a proprietary entitlement to the vessel. When in fact those orders do not purport to transfer ownership or possession of any ship. The omission of that critical qualification gave a misleading impression that the U.S. bankruptcy court had authorised them to seize the vessel worldwide.

Had the Plaintiffs disclosed these matters in the arrest affidavit, or prior to obtaining the warrant of arrest, it is conceivable that the court could have refused the warrant of arrest since the BBC had been terminated when the action was filed and the vessel arrested on 13.6.2025. The Plaintiffs therefore failed to satisfy the requirement of Order 70 rule 4 (6)

of the ROC 2012 to obtain a warrant of arrest. Given the significance of this issue to the Plaintiffs alleged claim against the vessel, they must have with mala fides deliberately omitted to disclose the termination of the BBC. So that they could arrest the vessel on the pretext of an arguable case of possession and control under section 20 (2) (a) of the UK SCA 1981 arising out of the BBC. Even though they knew that they did not have one (or as a minimum that the owner s position was that they did not have one). Damages for wrongful arrest

Based on the foregoing, I find that the warrant of arrest against the vessel was executed with mala fides or gross negligence. That is the test to be applied in deciding whether to order an inquiry as to damages for wrongful arrest of a vessel, as held in the following authorities :

there is either mala fides, or that crass negligentia, which implies malice, is there or is there not, reason to say, that the action was so unwarrantedly brought, or brought with so little colour, or so little foundation, that it rather implies malice on the part of the plaintiff, or that gross negligence which is equivalent to it (See the Privy Council case of The Evangelismos [1858] 12 Moo. P.C. 352).

Two types of cases are thus envisaged. Firstly, there are cases of mala fides, which must be taken to mean those cases where on the primary evidence the arresting party has no honest belief in his entitlement to arrest the vessel. Secondly, there are those cases in which objectively there is so little basis for the arrest that it may be inferred that the arresting party did not believe in his entitlement to arrest the vessel. It is, as I understand the judgment, in the latter sense that such phrases ligentia gross negligence used and are described as implying malice or being equivalent to it. (See the English High Court case of The Kommunar (No. 3) Law Report 22).

From the evidence, I am satisfied that the Plaintiffs were motivated by mala fides to arrest the vessel and force security for a non - existent proprietary or possessory claim. At the very least, the Plaintiffs were grossly negligent in bringing an action with so little foundation, implying malice on their part. To reiterate :

The Plaintiffs were aware that the BBC was terminated when they filed the action and sought to arrest the vessel on 13.6.2025. Or at the very least, when they received notice of this from the owner on 19.6.2025. They did not inform the court or provide it with a copy of the notice of termination.

The Plaintiffs did not show cogent evidence before issuance of the warrant of arrest that Paros SME was the bareboat charterer of the vessel at the time when they filed the action. The mere production of the BBC alone for this purpose is insufficient. The Plaintiffs must show an entitlement to possession and control of the vessel.

The Plaintiffs have no genuine claim that falls within section 20

(a) of the UK SCA 1981 that entitles them to admiralty action in rem and a right to arrest the vessel.

The Plaintiffs failed to satisfy the requirement of Order 70 rule 4

(b) of the ROC 2012 to obtain a warrant of arrest.

Arrest is an oppressive tool that is not to be abused. It cannot be simply invoked without consequence. (See the Singapore Court of Appeal case of The Vasiliy Golovnin [2008] 4 SLR 994). Conclusion

In summary, the statutory requirements to bring this action and arrest the vessel are not satisfied. The Plaintiffs have no arguable basis to invoke the court s admiralty jurisdiction. They allege a claim for possession of the vessel, but the BBC was terminated. The Plaintiffs have shown no continuing demise charter or bareboat charter or ownership interest in the vessel after 11.6.2025. Theirs is an internal dispute for control of Paros SME. On the contrary, the evidence establishes that the bareboat charter to Paros SME had ended.

For the reasons above, I allowed Enclosure 25 in suit 29/06. I set aside the Plaintiffs writ and the warrant of arrest. I ordered damages for wrongful arrest of the vessel to be assessed and paid by the Plaintiffs to OCM. I awarded costs of RM 20,000 to OCM for Enclosure 25.

I also allowed Enclosure 16 in suit 33/07. I ordered that the possession and control of the vessel be decreed to OCM as the sole owner of the vessel. I awarded costs of RM 10,000 to OCM for Enclosure 16. Dated 31 December 2025 Quay Chew Soon Judge High Court of Kuala Lumpur (Commercial Division NCC 2 & Admiralty 9) Counsels Oon Thian Seng, Lionel Navin Noel, Tan Hui Ling and Ng You Xian (Messrs. T S Oon & Partners) for the Plaintiffs Jeremy Mark Joseph, Vinodhini Benjamin Samuel and Siti Deelora binti Nor Ahmad Rajkumar (Messrs. Joseph & Partners) for the Intervener Case reference 1. [2012] 4 SLR 546 2. New World P & I Service Co Ltd v The Disponent Owner and / or the Demise (Huihong (Tianjin) Shipping Lease Co Ltd, intervener) [2024] MLJU 3653 3. he Port of Malta (ING Bank NV & Anor, interveners) [2017] 7 MLJ 87 4. The Faial

The Chong Bong [1997] 3 HKC 579 6. Songa Product and Chemical Tankers III AS v Kairos Shipping II LLC [2025] EWCA Civ 1227 7. [2010] SGHC 18 8. Programmed Total Marine Services Pty Ltd [2013] 211 FCR 369 9. [2008] MLJU 453

Bandar Builder Sdn Bhd & Ors v United Malayan Banking Corporation Bhd [1993] 4 MLJ 36; [1993] 4 CLJ 7

Middy Industries Sdn Bhd v Arensi - Marley (M) Sdn Bhd [2012] 1 LNS 830

The Vasiliy Golovnin [2008] 4 SLR 994 Legislation reference 1. Section 21 (1) to (4) and section 20 (2) (a) of the UK Senior Courts Act 1981 2. Section 24 (b) of the Courts of Judicature Act 1964 3. Order 12 rule 10; Order 18 rule 19 and Order 70 rule 4 (6) (b) of the Rules of Court 2012

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Malaysian judgment

Case metadata

Court: High Court of Malaysia
Decision date: 4 Dec 2025
Case number: WA-27NCC-33-07/2025
Coram: YA Dato' Quay Chew Soon
Practice area: Admiralty – Set aside warrant of arrest – Whether bareboat charterparty terminated – Whether plaintiffs have right to possession of the vessel – Whether plaintiffs’ control over the charterer confer proprietary interest in the vessel – Order 70 rule 4(6)(b) of the Rules of Court 2012 – Whether plaintiffs must disclose termination of the charterparty in the arrest affidavit
Version: Alasan Penghakiman 1
Published: 6 Jan 2026
Source ID: c59fc224-55c7-41f0-b265-fc2fe55025b4

Catchwords

Admiralty – Set aside warrant of arrest – Whether bareboat charterparty terminated – Whether plaintiffs have right to possession of the vessel – Whether plaintiffs’ control over the charterer confer proprietary interest in the vessel – Order 70 rule 4(6)(b) of the Rules of Court 2012 – Whether plaintiffs must disclose termination of the charterparty in the arrest affidavit

Parties

OCM MARITIME GAS 3 LLC - plaintiff - ejudgment_parties
Pencarter Demis Terdahulu PAROS SPECIAL MARITIME ENTERPRISE (No Syarikat Maritime Greek 4838) Dan Semua Pihak-Pihak Yang Mendakwa Mempunyai Kepentingan Terhadap Kapal Atau Vesel PAROS (IMO NO 9711511) Dari Pelabuhan Piraeus - defendant - ejudgment_parties
ELETSON HOLDINGS INC - pencelah - ejudgment_parties

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