Philip Teoh
Head of Shipping,
Insurance and International Trade Department
Azmi & Associates
(603) 2118 5000 Ext. 5010
philip.teoh@azmilaw.com

Shipping and International Trade is an integral part of the Malaysian economy. The growth of shipping in Malaysia is supported by parallel development in dispute resolution facilities such as the establishment of the Admiralty Court and the revival of the Kuala Lumpur Regional Centre for Arbitration (“KLRCA”).

1976 LIMITATION CONVENTION.

There has been an important development in the area of tonnage limitation. With the Merchant Shipping (Amendment and Extension) Act 2011, the applicable limitation regime is no longer the ‘fault or privity’ regime under the 1957 Limitation Convention but the 1976 Limitation Convention. This brings the Malaysian regime in line with major jurisdictions such as England and Singapore.

CARRIAGE OF GOODS BY SEA

The Admiralty Court had occasion on 30 January 2013 to decide on the scope of the shipper / exporter’s duty of care in the shipment of dangerous goods in the case of Ing Hua Fu Marine Line Sdn Bhd v Vitachem (M) Sdn Bhd. The Admiralty Court held the Defendant shipper liable for the damages to the vessel where the shipper and his forwarding agent did not properly declare the dangerous chemicals under the IMDG Code. This decision was reversed on appeal. The Plaintiff obtained leave to appeal to the Federal Court. The issues raised in the pending appeal before the Federal Court will address the important duties of the shipper of dangerous goods.

MARITIME ARBITRATION

Under the vibrant leadership of its Director Datuk Professor Sundra Rajoo, the Kuala Lumpur Regional Centre had revised its existing rules to better adapt its rules to industry needs. The revamp of the KLRCA Fast Track Arbitration Rules took into account the requirements of the maritime industry.The availability of arbitration provides a real option to parties to maritime transactions. The most common type of disputes in maritime arbitration are charterparty disputes especially demurrage claims. The Arbitration Act 2005 provides for registration of awards from state signatories to the New York Convention 1958 (“NYC”). The NYC facilitates enforcement of arbitral awards within the framework of the convention. This framework is wider than the reciprocal enforcement laws for the registration of foreign judgment.

MARINE INSURANCE

The Malaysian Insurance market uses the forms / clauses approved by the Institute of London Underwriters. UK Marine Insurance Law is applied vide the application of English law provisions found in the Clauses as well as the reception of English law provisions of the Civil Law Act. The statutory basis of UK Marine Insurance Law is the Marine Insurance Act 1906 which sought to codify the pre-existing common law of marine insurance. Over the years the courts have through decided cases amassed a body of case law on marine insurance.

The Kuala Lumpur High Court had occasion to determine the scope of the duty of assured provision in a total loss only policy in the case of Saz Maritime Services Sdn Bhd v. MUI Continental Insurance Bhd. The assured’s offshore vessel which was moored was collided into by a runaway barge. The Plaintiff brought a claim under the marine hull insurance policy which was a total loss only policy. The Plaintiff failed to take action and preserve its claim against the owners. The Plaintiff’s claim was dismissed by the trial judge on the ground that it had failed to prove a claim for total loss and also for breaching the duty of assured duties to preserve the claim. The trial judge held that the duty of assured was a mandatory duty under the marine hull policy. The judgment was upheld on appeal. This case raises the important question – If I have insurance, do I need to do anything? The Court of Appeal decision is not the last word on the topic. The case is now pending before the Federal Court which will decide this question in the context of a marine hull insurance case.

1 The author is the Head of the Shipping, Insurance and International Trade Department at Azmi & Associates. He has over 25 years’ experience in the specialist area and handles both contentious and non-contentious matters. He is an accredited arbitrator with the Kuala Lumpur Regional Centre for Arbitration and has appeared at all levels of Malaysian Courts up to the apex Federal Court. He is also the author of Malaysian Forms and Precedents on Shipping, Insurance Claims, Wills and Trusts, Annotated Statutes on Sale of Goods Act, Merchant Shipping Ordinance, Merchant Shipping (Oil Pollution) Act, Collision Regulations, Halsbury’s Laws of Malaysia on Shipping, Carriers ( Land, Air and Sea), Conflict of Laws, Equity, Bailment and Liens. He has previously practised in Singapore and has spoken at Industry conferences in Malaysia and abroad.

2 In 2014, Malaysia ranked No. 25 in exports and 24 in imports in terms of trade volume and growth in trade average 5 % year to year from 2005 to 2013. Source: WTO website.

3 Set up in October 2010, the jurisdiction of the Court is wider than the traditional Admiralty jurisdiction: Practice Directions of 2012. The author acted for the Plaintiff cargo owner in the case of the Istana VI [2011] 7 MLJ 145 the inaugural reported decision of the Admiralty Court, a claim against a shipowner for delivering cargo without presentation of original bills of lading.

4 The Convention on Limitation of Liability for Maritime Claims 1976 as amended by the Protocol of 1996.

5 [2013] 9 MLJ 825.The author acted for the Plaintiff shipowner at the Admiralty Court and at the Court of Appeal and will continue to act in the appeal to the Federal Court scheduled for March 2015.

6 The author acted for the Defendant insurer in the case at the High Court and Court of Appeal. After a full hearing involving 7 witnesses for the Plaintiff and 2 for the Defendant, the trial judge dismissed the Plaintiff/ assured’s claim in the Kuala Lumpur Civil Suit No.: D-22-1194-2009. The dismissal of the claim was affirmed by the Court of Appeal in Civil Appeal No: W-02-2685-10/2011. The Plaintiff obtained leave to appeal to the Federal Court and the appeal to the Federal Court is due to be heard in April 2015.