Business

Malaysia: Success of limitation action following oil spillage damages

Owner of the vessel MT “Trident Star” brought a limitation action to limit its liability regarding pollution damage or loss in relation to a spillage of fuel oil carried on board the vessel in 2016.

Published

2 years ago

February 10, 2023

Admin

The following article was written by Rajasingam Gothandapan, who is a partner at law firm Shearn Delamore & Co, elaborating on a 2016 case where a plaintiff brought a limitation action to limit its liability regarding pollution damage or loss in relation to a fuel oil spillage incident, on the basis that the incident had occurred by no act of omission of the plaintiff:

Facts

Plaintiff one was the owner of the vessel MT "Trident Star" (the vessel). On 24 August 2016, while the vessel was berthed at the terminal, a spillage of fuel oil carried on board the vessel as cargo occurred (the incident).(1)

On 7 November 2016, plaintiff one brought a limitation action pursuant to the Merchant Shipping (Liability and Compensation for Oil and Bunker Oil Pollution) Act (MSA) 1994(2) to limit its liability regarding pollution damage or loss in relation to the incident, in accordance with part I of the rst schedule to the MSA 1994, on the basis that the incident had occurred by no act or omission of plaintiff one.

On 17 February 2017, plaintiff one's limitation action was allowed. On 21 March 2017, plaintiff one set up a limitation fund by depositing into court a security for the amount of 4,510,000 special drawing rights (or its Malaysian ringgit equivalent as at the date of constitution of the limitation fund) plus interest at the rate of 5% per annum from 24 August 2016 up to and including the date of the constitution of the limitation fund. The security was in the form of a letter of undertaking (LOU) dated 16 March 2017 issued by the insurer of the vessel, the Shipowners' Mutual Protection and Indemnity Association (Luxembourg).

On 11 May 2017, the court further ordered for advertisements pertaining to the limitation fund be placed in two local newspapers. The advertisements provided that all persons claiming oil pollution damage or loss resulting from the incident should:

enter an appearance in this action;
file claims; or
take out a notice of application to set aside the limitation decree.

In response to the advertisements, within the time limit, 19 defendants entered the limitation action to claim for loss and damage from the plaintiffs arising from the incident. None of them disputed plaintiff one's right to limit its liability.

In view of the possibility that plaintiff one's liability to pay compensation could exceed the limitation fund,(3) plaintiff two (ie, the International Oil Pollution Compensation Fund 1992) was added to the action.

Subsequently, all the defendants' claims were settled by plaintiff one on condential terms and all the defendants led their notices of discontinuance. No payment was made out from the limitation fund.

Plaintiff one's application

Plaintiff one sought an order that the LOU be discharged and be returned by the registrar to plaintiff one's solicitors for cancellation with liberty to apply. Plaintiff one also sought leave to discontinue the present action with no order as to costs. Plaintiff one submitted that the application herein required the invocation of the inherent jurisdiction of the court under order 92 rule 4 of the Rules Of Court 2012 as there was no provision for the discharge and release of the security that constituted the limitation fund.

Decision

The court held that the LOU should be discharged and returned to plaintiff one for cancellation, as they had settled all the claims made by the defendants without recourse to the LOU or the limitation fund. The time limit for bringing claims had also expired, as the advertisements had been published ve years previously and the time limit for making claims had expired 60 days after the publication of the advertisements. Thus, plaintiff one's application was allowed and the action was discontinued.

For further information on this topic please contact Rajasingam Gothandapani at Shearn Delamore & Co by telephone (+60 3 2027 2911) or email ([email protected]). The Shearn Delamore & Co website can be accessed at www.shearndelamore.com.

Endnotes

(1) Rising Star Shipping Sdn Bhd & Anor v Pelabuhan Tanjung Pelepas Sdn Bhd & Ors [2022] MLJU 1299
(2) Section 6(2) read together with section 7(1).
(3) Pursuant to section 19 of the MSA 1994 and by way of a court order dated 21 September 2017.

Editor’s Note: This article was originally edited by, and first published on www.lexology.com/commentary

Photo credit: Shearn Delamore & Co
Published: 10 February, 2023

Alternative Fuels

SMW 2025: Singapore to launch new standard for electric harbour craft this week

MPA and Enterprise Singapore will launch the Technical Reference 136 to provide guidelines for the development and operation of charging and battery swap systems for electric harbour craft, says minister.

Published

6 hours ago

March 24, 2025

Admin

SMW 2025: Singapore to launch new standard for electric harbour craft this week

Minister of State for Transport Murali Pillai on Monday (24 March) said Singapore will launch a new standard for electric harbour crafts this week as part of Maritime and Port Authority of Singapore’s (MPA) efforts in facilitating decarbonisation for domestic harbour craft to achieve the republic’s national target of net-zero emissions by 2050.

“MPA and Enterprise Singapore will launch the new Technical Reference 136 this week to provide guidelines for the development and operation of charging and battery swap systems for electric harbour craft,” Murali said during his speech at the opening ceremony of the Singapore Maritime Week 2025 (SMW 2025).

“This will enhance the safety and interoperability of electric harbour craft charging infrastructure.”

This is one of the initiatives MPA is undertaking to prepare for the bunkering of alternative marine fuels and decarbonising Singapore’s domestic maritime sector.

The minister said Singapore is taking steps to support the use of various fuels by the industry and position Singapore as a leading bunkering hub for alternative fuels.

“Over the past two years, we have supported trials of alternative fuels such as ammonia and methanol. These have contributed to the development of new technical references and IMO guidelines to enable the safe and efficient use of these marine fuels,” he said.

“MPA and Enterprise Singapore published the new Technical Reference 129 on Methanol Bunkering earlier this month, and we plan to launch a new standard for ammonia bunkering later this year.”

He added MPA has also recently allowed licensed bunker tankers to carry and deliver biofuels up to B30.

“Pilots for up to B100 are ongoing, and we welcome bunker suppliers to engage in these pilots,” he said.

At the opening ceremony of SMW 2025, Senior Minister Lee Hsien Loong, together with Murali, also launched Singapore’s first Maritime Digital Twin, an advanced simulation model developed by MPA in partnership with the Government Technology Agency of Singapore (GovTech) that integrates real-time data to enhance decision-making and improve management of maritime operations in Singapore waters.

Murali said the digital twin will integrate data from different sources and provide a platform for information sharing. This will enable the development of tools to optimise port efficiency and reliability above, at and below the sea surface.

“For example, the digital twin will enable scenario simulations and dispersion modelling, which can inform standard operating procedures for the safe bunkering of alternative fuels such as methanol and ammonia,” he said.

The minister added MPA will roll out the digital twin to pilot users later this year, before progressive implementation for the wider industry.

“In future, we can extend this to the global maritime ecosystem through our Green and Digital Shipping Corridors with other countries and ports,” he said.

Photo credit: Maritime and Port Authority of SingaporePublished: 24 March, 2025

Alternative Fuels

TFG Marine welcomes first of four ‘L’ series IMO type II bunkering tankers of Consort Bunkers

TFG Marine to operate Consort Bunkers’ bunkering tanker “Pearl Lavender”, capable of carrying methanol, biogrades up to B100, as well as conventional fuels, at Singapore port from April onwards.

Published

6 hours ago

March 24, 2025

Admin

TFG Marine welcomes first of four 'L' series IMO type II bunkering tankers of Consort Bunkers

Global marine fuel supply and procurement firm TFG Marine on Friday (21 March) said it attended the delivery ceremony of bunker tanker Pearl Lavender at China Merchants Jinling shipyard in Nanjing.

The IMO type II chemical bunkering tanker newbuilding is amongst others under long-term time charter from Singapore-based bunker supplier and logistics services provider Consort Bunkers Pte Ltd (Consort).

"This state of the art vessel, capable of carrying methanol, biogrades up to B100, as well as conventional fuels, will be operational at the Port of Singapore from April 2025, further advancing our product offering to our client base in the APAC region," said TFG Marine.

"As the first of four barges in this order, this investment builds on our commitment to low-carbon fuel bunkering infrastructure, reinforcing our vision for a multi-fuel future.

"With methanol, biofuels, ammonia, and other alternative fuels playing an increasingly significant role alongside traditional marine fuels, we continue to support the industry's transition towards cleaner energy solutions."

Manifold Times previously reported that Consort first contracted six ‘L’ series 6,500 dwt IMO Type II bunker tankers with China Merchants Jinling Shipyard (Nanjing) Co., Ltd. in April 2023.

The ‘L’ series of bunker tanker newbuildings gained recognition from the China Association of The National Shipbuilding Industry (CANSI) as amongst the Chinese shipbuilding sector’s top 10 innovative vessels for 2024.

Last year, TFG Marine announced the signing of a long-term time charter agreement with Singapore-based bunker supplier and logistics services provider Consort Bunkers for four newbuild bunker tankers.

Photo credit: TFG Marine
Published: 24 March, 2025

Sanctions

US OFAC sanctions first Chinese teapot refinery and oil tankers over Iranian links

Shandong Shouguang Luqing Petrochemical and its chief executive officer were added to OFAC’s sanctions list for purchasing and refining hundreds of millions of dollars’ worth of Iranian crude oil.

Published

6 hours ago

March 24, 2025

Admin

The US Department of the Treasury’s Office of Foreign Assets Control (OFAC) on Thursday (20 March) sanctioned a “teapot” oil refinery and its chief executive officer for purchasing and refining hundreds of millions of dollars’ worth of Iranian crude oil, including from vessels linked to Ansarallah, commonly known as the Houthis, and the Iranian Ministry of Defense of Armed Forces Logistics (MODAFL).

Shandong Shouguang Luqing Petrochemical Co., Ltd (Luqing Petrochemical), a teapot refinery in Shandong Province, has purchased millions of barrels of Iranian oil worth approximately half a billion dollars.

Luqing Petrochemical received Iranian oil transported by shadow fleet vessels, some of which have been sanctioned for their role transporting Iranian petroleum linked to the Houthis and MODAFL, including the MEHLE (IMO: 9191711) and the KOHANA (IMO: 9254082). In mid-2022, Luqing Petrochemical was identified as a buyer of Iranian oil associated with the Iranian military and Iranian military forces.

Luqing Petrochemical is being designated pursuant to E.O. 13902 for operating in the petroleum sector of the Iranian economy. PRC national Wang Xueqing serves as the chief executive officer and legal representative of Luqing Petrochemical, and is being concurrently designated pursuant to E.O. 13902 for having acted or purported to act for or on behalf of, directly or indirectly, Luqing Petrochemical.

“Teapot refinery purchases of Iranian oil provide the primary economic lifeline for the Iranian regime, the world’s leading state sponsor of terror,” said Secretary of the Treasury Scott Bessent.

“The United States is committed to cutting off the revenue streams that enable Tehran’s continued financing of terrorism and development of its nuclear program.”

OFAC additionally imposed sanctions on 19 entities and vessels responsible for shipping millions of barrels of Iranian oil, comprising part of Iran’s “shadow fleet” of tankers supplying teapot refineries like Luqing Petrochemical.

Iranian crude oil is transported to teapot refineries via a “shadow fleet” of vessels that usually engage in deceptive shipping practices, including automatic identification system (AIS) manipulation.

OFAC sanctioned eight vessels that constitute part of this fleet, including the Comoros-flagged NATALINA 7 (IMO: 9310147), Panama-flagged CATALINA 7 (IMO: 9310159), AURORA RILEY (IMO: 9181649), and VIOLA (IMO: 9254915), San Marino-flagged MONTROSE (IMO: 9281695), Barbados-flagged VOLANS (IMO: 9422988) and BRAVA LAKE (IMO: 9232876), and the currently unflagged TITAN (IMO: 9293741).