Cross-Border Rehabilitation: An Impediment to Ship Arrest in Singapore?

Abstract

Conflicts between admiralty law and cross-border rehabilitations have long caused legal difficulties with ship arrests in various jurisdictions. In Singapore, which is recognised as both a liberal ship arrest jurisdiction and a promising debt-restructuring hub, such issues are causing concern in the context of the current volatility of global shipping. Singapore case law in this regard reflects a shift in position from an admiralty-paramount to a pro-universalist view. While this trend is understandable, given Singapore’s intention to implement the UNCITRAL Model Law on Cross-Border Insolvency, it requires a consideration of how the Model Law can be reconciled with enforcement of maritime liens and other statutory liens in admiralty. Furthermore, it should be borne in mind that the Model Law does not purport to remove or alter existing protections of secured creditors in Singapore domestic law. It therefore appears inapt to interpret broadly the court’s inherent powers as a device permitting a blanket order overriding the provisions of the High Court (Admiralty Jurisdiction) Act in order to assist a foreign rehabilitation proceeding by staying all ship arrests. Striking a delicate balance between ship arrest and cross-border rehabilitation will benefit and strengthen Singapore in the long term as a regional twin-hub of maritime trade and debt restructuring.