Oon & Bazul contributed an exclusive country overview on Singapore’s maritime industry as published in Chambers Asia Pacific. The article is co-authored by Managing Partner & Head of Dispute Resolution, Bazul Ashhab, Shipping Partner Prakaash Silvam, and Associate Natalynn Ong.
In a commentary by Chambers, the firm’s shipping practice has been acknowledged as a “Highly regarded shipping litigation practice which is active on a wide range of contentious matters, from bills of lading and charter party claims to cases involving cargo damage and vessel arrests. Distinguished by its ability to advise on both Singaporean and Malaysian shipping matters. Additionally fields a well-experienced emergency response team that handles casualties, salvage and criminal litigation matters among other services. Regularly advises ship owners and shipping companies”. This reflects the continued strong performance of the Practice and the firm.
Singapore Shipping Overview
1. Bazul Ashhab, Managing Partner & Head of Dispute Resolution
2. Prakaash Silvam, Partner
3. Natalynn Ong, Associate
Singapore is Asia’s gateway for global leaders in ship financing, ship broking, risk management and marine insurance. Capitalising on its strategic location, sophisticated port facilities and shipyards, Singapore has developed into a premier International Maritime Centre where ships hub and essential ancillary services in shipping, commerce and logistics flourish.
Singapore is currently home to more than 5,000 maritime organisations and businesses. The pro-business government policies have established the country as a strategic centre for maritime business and a leading international maritime centre. Currently the world’s second-busiest port in terms of total shipping tonnage, Singapore is also the world’s second busiest transshipment port with connections to 600 other ports in 123 countries and spread over six continents. To provide some perspective, Singapore transships a fifth of the world’s shipping containers and half of the world’s annual supply of crude oil.
The Singapore government has adopted a very proactive approach in not only investing in and developing the port infrastructure, but also creating an ecosystem for the maritime industry. Where it was once her physical attributes that placed Singapore on the map, Singapore has since capitalised on her natural advantages to become an international maritime hub offering a full spectrum of maritime services to punch above her weight on the global stage, linking the fastest growing economies in ASEAN and the rest of Asia to the rest of the world. In 2019, Singapore ranked first in the Leading Maritime Capitals of the World 2019 report. This is testament to her all-rounded capabilities as a shipping centre in ports and logistics services, maritime technology, economic attractiveness and competitiveness, maritime financing and law.
A cornerstone supporting Singapore’s stability as a leading maritime city is her strong adherence to the rule of law and renowned presence in the region as a secure hub for legal services and dispute resolution for both domestic and international disputes. Singapore’s advantage as a dispute resolution centre lies in her possessing a strong, independent, and efficient judiciary, a shipping bar well-versed in the common law, seat neutrality, and her proximity to developing economies in the region.
Singapore offers a comprehensive legal framework based on internationally accepted practices. It is a favourable jurisdiction for parties seeking impartial arbitration. The Singapore Chamber of Maritime Arbitration (SCMA) serves to promote maritime arbitration and has an internationally renowned panel of arbitrators. Founded on English Law, Singapore’s Admiralty Court administers the rules and statutes concerning civil maritime financial and regulatory actions relating to ships and the sea, such as those arising out of collisions and international maritime treaties.
In the past few years, Singapore has also encouraged the use of mediation as an effective means of dispute resolution. Culturally speaking, mediation is not a new concept for Asians. However, unlike court judgments or arbitral awards, a settlement agreement had no direct means of enforcement. This meant that in the event of a breach of the settlement agreement, parties would have to expend further costs and time to enforce the settlement agreement by subsequently referring the breach for adjudication to arbitration or court. This position changed in August 2019, when 46 nations (including the trading behemoths of China and the United States of America) signed the United Nations Convention on International Settlement Agreements Resulting from Mediation (the “Singapore Convention”). The Singapore Convention provides a mechanism by which parties to a settlement agreement can enforce their rights under the settlement directly, much alike the direct enforcement of international arbitral awards under the New York Convention. As more nations become signatories to the Singapore Convention, it will become an international norm for effective enforcement of a settlement agreement. With the recent developments, mediation is beginning to be recognised as a mode of dispute resolution that parties in maritime transactions would like to have as a serious option.
Singapore has also continually developed her local legislation to reflect commercial practice and international norms, in order to complement her international attractiveness as a business centre. To illustrate, the Singapore government in 2018 moved to amend the Companies Act to exempt shipowner liens (i.e. liens over freight and sub-freight) from the requirement of registration under the Companies Act. This was a response to the decision by the Court of Appeal in Diablo Fortune Inc v Duncan, Cameron Lindsay and another  SGCA 26 that a shipowner’s lien was in the nature of a charge which had to be registered under section 131 of the Companies Act, otherwise it would be void as against a liquidator or any creditor of a company in insolvency. As can be expected, this decision was met with deep consternation in the industry given the practical and commercial obstacles to registering a shipowner’s lien. The proposed amendment to the Companies Act to exempt registration of the shipowners’ lien exemplifies how Singapore is quick to respond to the needs of commerce to ensure the ease of doing business in Singapore whilst respecting the independence of the judiciary to reach a learned decision notwithstanding the commercial consequences of its decision. The amendment was passed and the exemption of shipowners’ liens from registration is now enshrined as section 3AB of the Companies Act.
Singapore will continue to invest substantially in the maritime industry so as to keep building on its success. To reinforce her status as a leading transshipment port, Singapore has been in the midst of an ambitious project to construct the Tuas Terminal mega port since 2015. The Tuas Terminal mega port will harness automated port technology, and is slated to handle up to 65 million TEUs annually in a single location, featuring deep water berths capable of accommodating larger newbuild container vessels (> 20 million TEUs). Phase 1 of the Tuas Terminal mega port is slated to open in 2021, and to be completed by 2040.