The issue is whether Petroleum Advance is eligible to bring an action in rem against the ship

owner of Bunga Kenanga, and if it is eligible, what procedure should Petroleum Advance
follow.

LAW

Ship arrest is a procedure that prevents a ship from trading or sailing until the subject at hand
is resolved. The intention of arresting a vessel in a rem action i.e., an action against the
vessel, is to acquire security for any judgement that the plaintiff or defendant may get in such
an action or counterclaim. In the event where the ship-owner fails to provide security, the
ship will be impounded until the plaintiff takes measures under the in rem process to petition
the court for an order of judicial sale of the vessel. In Malaysia, a ship may be arrested if the
arresting party's claim falls under any of the provisions of Section 20(2) and Section 21 of the
England and Wales' Supreme Court Act 1981. According to Clause (e) of the former section,
a maritime claim can be made for damage done by a ship which extends to any claim in
respect of a liability incurred under the Merchant Shipping (Oil Pollution) Act 1971, whereas
the latter section provided that "in the case of any such claim as is mentioned in Section 20(2)
(e), where (a) the claim arises in connection with a ship; and (b) the person who would be
liable on the claim in an action in personam was, when the cause of action arose, the owner or
charterer of, or in possession or in control of, the ship, an action in rem may be brought in the
high court against (i) that ship, if at the time when the action is brought the relevant person is
either the beneficial owner of that ship as respects all shares in it or the charterer of it under a
charter by demise; or (ii) any other ship of which, at the time when the action is brought, the
relevant person is the beneficial owner as respects all the shares in it." Hence, it can be
submitted that that these two provisions give authority to the damaged party to be entitled to
the right of ship arrest.

In addition to that, for the claimant who wishes to arrest a ship in Malaysia, they must be
rigorously follow The Rules of Order 70 of the Rules of Court 2012 (ROC 2012) which
regulate admiralty procedures in the Malaysian High Court. Pursuant to Rules 2 of ROC
2012, an action in rem is commenced by writ, and a writ in rem shall be in Form 146. The
validity of a writ in rem is six months from the date of issue. Besides that, Rules 2A added
that for any proceedings concerning on the liability of oil pollution, the claimant should
provide a notice in writing on the International Oil Pollution Compensation Fund together
with the writ. Moving on, a vessel is arrested when a warrant of arrest is served on it and
practically, the request for the issuing of an arrest warrant are usually filed at the same time
with the writ in rem. In reference to Rules 4, the claimant applies for the issuance of a
warrant of arrest in Form 147 and an affidavit leading to an arrest warrant must be filed by
the arresting party to support its request for a warrant of arrest. The content of the affidavit
must meet certain conditions; (a) the name, address and occupation of the applicant for the
warrant; (b) the nature of the claim in respect of which the warrant is required; c) the nature
of the property to be arrested and, if the property is a ship, the name of the ship and the port
to which she belongs; and (d) the amount of security sought. Failure to comply with these
procedures might result in the court rejecting the arrest warrant. In the case of Premium
Vegetable Oils Sdn Bhd v The Owners and/or Demise Charterers of The Ship or Vessel
‘Ever Concord’ of The Port of Zanzibar, Tanzania [2021] 9 MLJ 936, the defendant
claimed that the plaintiff failed to make a complete and honest disclosure in its arrest
affidavit, and further added that the plaintiff omitted to disclose material information and
misrepresented and suppressed material facts in order to obtain an ex parte warrant of arrest
from the court. The court then decided that the issuance of an arrest warrant is a right  of the
plaintiff rather than a discretionary remedy which means that as long as the arresting party
satisfy the requirements under Order 70 Rules 4, there will be no issue of whether a party
seeking to obtain an arrest warrant against a vessel has the duty of making full and frank
disclosure in its affidavit. Furthermore, as stated in Rules 9, a warrant of arrest is valid for
twelve months beginning with the date of its issue and shall not be executed until the
arresting party give the court a written undertaking that will pay the sheriff's fees, charges,
and expenditures while the property is in the sheriff custody. Upon the service of the arrest
warrant the property will be placed in the sheriff's possession until it is either freed or sold by
the court. Contempt of court is punishable by jail or a fine if someone violates the arrest or
interferes with the property while it is being held.