FIMBANK PLC PEMILIK DAN/ATAU PENCARTER DEMIS KAPAL ATAU VESEL NIKA

02(i)-31-04/2023(W) Kand. 31 1 19/10/2023 11:03:22 IN THE FEDERAL COURT OF MALAYSIA (APPELLATE JURISDICTION) CIVIL APPEAL NO.02(i)-31-04/2023(W) BETWEEN FIMBANK PLC (MALTA COMPANY NO.C17003) … APPELLANT AND PEMILIK DAN/ATAU PENCARTER DEMIS KAPAL ATAU VESEL “NIKA” KINI DIKENALI SEBAGAI “BAO LAI” (NO. IMO 9254513) … RESPONDENT In the Court of Appeal of Malaysia (Appellate Juridiction) Civil Appeal No.W-02(IM)(ADM)-1031-06/2022 Between Fimbank PLC (Malta Company No.C17003 ) … Appellant And S/N AMpNCesOrEa6k8Y5x3eEqQ **Note : Serial number will be used to verify the originality of this document via eFILING portal 2 Pemilik Dan/Atau Pencarter Demis Kapal Atau Vesel “Nika” Kini Dikenali Sebagai “Bao Lai” (No. IMO 9254513) … Respondent In the Matter of High Court of Malaya in Kuala Lumpur (Commercial Division) Admiralty in Rem No. WA-27NCC-37-05/2019 Between Fimbank PLC (Malta Company No.C17003) … Applicant And Pemilik Dan/Atau Pencarter Demis Kapal Atau Vesel “Nika” Kini Dikenali Sebagai “Bao Lai” (No. IMO 9254513) … Respondent CORAM: NALLINI PATHMANATHAN, FCJ MARY LIM THIAM SUAN, FCJ RHODZARIAH BINTI BUJANG, FCJ S/N AMpNCesOrEa6k8Y5x3eEqQ **Note : Serial number will be used to verify the originality of this document via eFILING portal 3 GROUNDS OF JUDGMENT INTRODUCTION 1. The issue before the Federal Court concerns the number of times an admiralty writ in rem may be renewed. In this jurisdiction, the renewal of a writ is governed by O 6 r 7 of the Rules of Court 2012 (‘the Rules’). More particularly, O 6 r 7(2) of the Rules expressly provides that the validity of a writ in an admiralty action may be extended five times where efforts to serve the writ on a defendant have been unsuccessful. 2. The instant appeal turns on whether the court may exercise its inherent powers to renew a writ in rem beyond the fifth time to prevent injustice to a plaintiff where the service of the writ is an impossibility. Both the courts below were of the view that they could not override the express terms of O 6 r 7(2) of the Rules to renew a writ in rem for the sixth time even in a situation where the writ could not be served through no fault of the plaintiff. 3. We reversed the decisions of the courts below and now provide our reasons for doing so. BACKGROUND FACTS 4. The appellant, Fimbank PLC (‘Fimbank’) is a Maltese bank and a trade financier. Fimbank had financed the purchase S/N AMpNCesOrEa6k8Y5x3eEqQ **Note : Serial number will be used to verify the originality of this document via eFILING portal 4 of a cargo of approximately 17,300 MT of Ukrainian Milling Wheat (‘the cargo’) by its borrower-customers. In exchange, Fimbank obtained the original bills of lading to the cargo as security for the financing extended. The cargo was shipped on board the vessel “NIKA” (‘the vessel’) for carriage from Chornomorsk, Ukraine to an Egyptian Mediterranean Port. At the material time, the vessel was owned by the respondent (‘the vessel owners’). 5. On 17 May 2019, Fimbank filed an admiralty writ in rem in the High Court at Kuala Lumpur (‘the writ’) against the vessel owners on the grounds that the vessel owners misdelivered the cargo to unauthorised third parties without presentation of the original bills of lading, thereby causing loss to Fimbank. It is noted that this cause of action is well-established in this jurisdiction (see: Minmetals South-East Asia Corp Pte Ltd v Nakhoda Logistics Sdn Bhd [2018] 6 MLJ 152; [2019] 3 CLJ 198) . 6. The following principles govern the service of the writ: (i) The writ is to be served on the vessel itself as stipulated under O 70 r 7(1) of the Rules: “…a writ by which an action in rem is begun shall be served on the property against which the action is brought …” (ii) The manner in which the service of the writ is to be physically effected against the vessel is prescribed by S/N AMpNCesOrEa6k8Y5x3eEqQ **Note : Serial number will be used to verify the originality of this document via eFILING portal 5 O 70 r 10 of the Rules. Substituted service of the writ is not permitted. (iii) The writ also cannot be served out of the jurisdiction. This is stated under O 70 r 3(3) of the Rules: “Service out of jurisdiction of notice of writ (O 70 r 3) (1) Subject to the following provisions of this rule, service out of the jurisdiction of a notice of a writ, containing any [admiralty] claim … is permissible with the leave of the Court … … (3) Paragraph (1) shall not apply to an action in rem.” [Emphasis added] (iv) It follows that the writ can only be served on the vessel if the vessel comes into Malaysian waters. The rationale for this rule was explained by the High Court of Australia in Aichhorn & Co KG v The Ship “MV Talabot” (1974) 132 CLR 449: “Since the jurisdiction of the court to e ntertain an action in rem is based on the presence of the res within the territory of the state under whose authority the court sits, and since the purpose of such an action is to enable the judgment to be satisfied out of the res, it must follow … that a writ in an action in rem can only S/N AMpNCesOrEa6k8Y5x3eEqQ **Note : Serial number will be used to verify the originality of this document via eFILING portal 6 be served if the res is within the jurisdiction. ” (v) The writ is valid in the first instance for six months from the date of its issue as provided under O 6 r 7(1) of the Rules: “For the purpose of service, a writ … is valid in the first instance for six months beginning from the date of its issue…” 7. The cumulative effect of the above provisions is that the writ, which was filed by Fimbank on 17 May 2019, was required to be physically served on the vessel within Malaysian waters on or before 16 November 2019. However, Fimbank was unable to do so as the vessel had not entered Malaysian waters since the writ was issued. 8. Therefore, Fimbank applied to the court to extend the validity of the writ pursuant to the following pr ovisions: (i) O 6 r 7(2) of the Rules states that where a plaintiff has been unsuccessful in its efforts to serve an admiralty writ, the court may extend the validity of the admiralty writ five times for a period not exceeding six months at any one time: “Subject to paragraph (2A), where efforts to serve a writ on a defendant have been unsuccessful, the Court may by order extend the validity of the writ twice (in Sabah and Sarawak thrice and in admiralty S/N AMpNCesOrEa6k8Y5x3eEqQ **Note : Serial number will be used to verify the originality of this document via eFILING portal 7 actions five times ), not exceeding six months at any one time, beginning with the day next following that on which it would otherwise expire, as may be specified in the order.” [Emphasis added] (ii) O 6 r 7(2A) of the Rules sets out the procedure to be followed when making an application to renew the writ: “An application for a renewal of writ must be made before the expiry of the writ, ex parte by notice of application supported by affidavit showing that efforts have been made to serve the defendant within one month from the date of the issue of the writ and that efforts have been made subsequent thereto to effect service.” 9. Between 15 November 2019 and 10 November 2021, Fimbank made a total of five applications to renew the writ on the grounds that the vessel had not been in Malaysian waters for service of the writ to be effected. The High Court allowed all five applications and accordingly extended the validity of the writ five times consecutively for a period of six months each time. The fifth extension granted by the High Court had extended the validity of the writ until 16 May 2022. S/N AMpNCesOrEa6k8Y5x3eEqQ **Note : Serial number will be used to verify the originality of this document via eFILING portal 8 THE HIGH COURT 10. On 13 April 2022, Fimbank filed an application to extend the validity of the writ for the sixth time premised on the reason that the writ remained unserved due to the vessel not having entered Malaysian waters since the issuance of the writ. This assertion was made based on Fimban k’s consistent monitoring of the movements of the vessel through the use of services provided by Lloyd ’s List Intelligence and Marine Traffic. Fimbank accordingly argued that it had not had any reasonable opportunity to effect service of the writ and that its inability to serve the writ was not due to any default or lack of effort on its part. 11. Fimbank further highlighted that the ownership of the vessel had changed three times since the cause of action arose. At that time, the vessel was owned by Discover Investment Corp (‘Discover’). However, following the issuance of the writ, the ownership of the vessel had been transferred three times: first, from Discover to Anchor Nautical SA (‘Anchor’); second, from Anchor to Bluefish Marine Corp (‘Bluefish’); and third, from Bluefish to Bao Yi Shipping Co Ltd (‘Bao Yi’), who is the current owner of the vessel. 12. As a result of these changes in ownership of the vessel, Fimbank argued that it could not now issue a fresh writ in rem for the same claim. This was because Fimbank’s claim in rem falls under a category of maritime claims known as S/N AMpNCesOrEa6k8Y5x3eEqQ **Note : Serial number will be used to verify the originality of this document via eFILING portal 9 a statutory right of action in rem or ‘statutory lien’. Such a claim requires Fimbank to establish liability in personam on the part of the owner of the defendant vessel at the time the writ in rem is issued. However, the present owner of the vessel, Bao Yi, is not the party liable for Fimbank ’s claim in personam. In other words, the change in ownership of the vessel had th e effect of defeating any fresh claim in rem brought by Fimbank against the vessel owners. In any event, the limitation period for Fimbank ’s claim had expired. 13. Fimbank thus argued that its substantive rights against the vessel owners were now vested in a nd contingent on the writ as issued on 17 May 2019 and that if the writ was not renewed, it would be deprived of its substantive rights through no fault of its own, amounting to manifest injustice. 14. Premised on the above, Fimbank urged the High Court to use its inherent powers under O 92 r 4 of the Rules to renew the writ beyond the fifth time. O 92 r 4 of the Rules reads as follows: “For the removal of doubt it is hereby declared that nothing in these Rules shall be deemed to limit or affect the inherent powers of the Court to make any order as may be necessary to prevent injustice or to prevent an abuse of the process of the Court. ” 15. Fimbank’s arguments did not find favour with the High Court. On 12 May 2022, the High Court dismissed S/N AMpNCesOrEa6k8Y5x3eEqQ **Note : Serial number will be used to verify the originality of this document via eFILING portal 10 Fimbank’s application to extend the validity of the writ for the sixth time holding, amongst others, as follows: (i) The inherent powers of the court should only be exercised where there is a lacuna in the Rules. There is no lacuna in this case as O 6 r 7(2) of the Rules prescribes the maximum number of times an admiralty writ in rem can be renewed. (ii) The court cannot usurp the powers and functions of the Rules Committee, which had recognised the need to fix a limit on the number of times a writ in an admiralty action could be renewed. (iii) If the court were to allow the writ to be renewed for the sixth time, there would be uncertainty in the event that the writ is still not served within the next six months for the same reasons. THE COURT OF APPEAL 16. Dissatisfied with the decision of the High Court, Fimbank appealed to the Court of Appeal. On 15 November 2022, the Court of Appeal dismissed the appeal and affirmed the findings of the High Court on the following grounds: (i) The court is not permitted to ov erride the five-time limit prescribed by O 6 r 7(2) of the Rules for the renewal of a writ in an admiralty action. S/N AMpNCesOrEa6k8Y5x3eEqQ **Note : Serial number will be used to verify the originality of this document via eFILING portal 11 (ii) Since there is no lacuna in the Rules in relation to the number of times an admiralty writ can be renewed, the court cannot invoke its inherent powers pursuant to O 92 r 4 of the Rules. (iii) If the court were to continue granting extensions of the writ until the vessel comes into Malaysian waters, the purpose of O 6 r 7(2) of the Rules would be defeated. THE FEDERAL COURT 17. On 31 March 2023, Fimbank was granted leave to appeal to the Federal Court on the following questions of law: (i) Whether O 6 r 7(2) of the Rules places an absolute cap and/or limit upon the number of times an admiralty writ in rem may be extended and/or renewed. (ii) Whether O 6 r 7(2) of the Rules applies in circumstances where personal service of an admiralty writ in rem is an impossibility. (iii) Whether O 6 r 7(2) of the Rules is intended to abrogate or defeat a claimant ’s accrued statutory rights to prosecute its claim in rem and to security for its claim. S/N AMpNCesOrEa6k8Y5x3eEqQ **Note : Serial number will be used to verify the originality of this document via eFILING portal 12 (iv) Whether the language of O 6 r 7(2) of the Rules precludes the court from exercising its in herent jurisdiction to extend the validity of an admiralty writ in rem when the court is of the view that the justice of the case requires it. THE PURPOSE AND OBJECT OF O 6 R 7(2) OF THE RULES 18. The primary issue that arises for consideration in this appeal is the construction of O 6 r 7(2) of the Rules. In this context, it is necessary to examine the purpose and object of O 6 r 7(2) of the Rules. 19. In the Federal Court case of Duli Yang Amat Mulia Tunku Ibrahim Ismail Ibni Sultan Iskandar Al -Haj Tunku Mahkota Johor v Datuk Captain Hamzah bin Mohd Noor and another appeal [2009] 4 MLJ 149; [2009] 4 CLJ 329, Zaki Azmi CJ made the following observations on the purpose and object of O 6 r 7(2A) of the Rules of the High Court 1980, which is in pari materia with O 6 r 7(2A) of the Rules: “[39] I strongly believe that O 6 r 7(2A) of the RHC was introduced to prevent abuse by the plaintiffs in filing writs and sleeping on them without making efforts to serve them. This practice of inactivity is something which courts loathe. It is against the administration of justice. It creates a backlog and results in a false number of pending cases. In my opinion, courts should take serious S/N AMpNCesOrEa6k8Y5x3eEqQ **Note : Serial number will be used to verify the originality of this document via eFILING portal 13 a (sic) view of such case s. If not, they will continue to remain in the list of outstanding cases. As such, O 6 r 7(2A) of the RHC must be strictly enforced as required by the rule. [40] When the plaintiffs apply to extend the validity of writs, courts should examine closely the affidavits filed in support of applications for extensions. Before granting an extension, courts must be satisfied that serious efforts had been made to serve. A simple and plain statement that efforts had been made to serve cannot be a sufficient ground. The affidavits must provide detailed facts as to when, where and how attempts to serve were made. Otherwise O 6 r 7(2A) of the RHC will become a dead letter. The object of the rule will be defeated. ” [Emphasis added] 20. It is therefore clear that the purpose and object of O 6 r 7(2) of the Rules is to stop a plaintiff from sleeping on a writ without making any efforts to serve the same. It is in such a circumstance that the cap on the number of renewals of an admiralty writ under O 6 r 7(2) of the Rules is intended to operate. 21. O 70 of the Rules is the primary provision under the Rules that governs admiralty causes and matters . O 70 r 1(1) of the Rules reads as follows: “Application and interpretation (O 70 r 1) (1) This Order applies to Admiralty causes and matters, and S/N AMpNCesOrEa6k8Y5x3eEqQ **Note : Serial number will be used to verify the originality of this document via eFILING portal 14 the other provisions of these Rules apply to those causes and matters subject to the provisions of this Order.” [Emphasis added] 22. In other words, in the event that there is a conflict between O 70 of the Rules and other provisions of the Rules in respect of an admiralty cause or matter, O 70 of the Rules would prevail. 23. As stated earlier, O 70 of the Rules envisages that an admiralty writ in rem can only be served on the defendant vessel when it is within Malaysian territorial waters. If the vessel does not enter the jurisdiction, the service of the writ simply cannot be effected. In such a circumstance, O 6 r 7(2) of the Rules cannot be logically read to impose a five-time renewal limit for the writ. 24. Crucially, O 6 r 7(2) of the Rules contains a proviso that “efforts to serve a writ on a defendant have been unsuccessful”. O 6 r 7(2A) of the Rules further mandates that “efforts have been made to serve the defendant within one month from the date of the issue of the writ and that efforts have been made subsequent thereto to effect service”. However, if the defendant vessel never enters Malaysian waters, there is no opportunity for the plaintiff to make “efforts” to serve its writ in rem. S/N AMpNCesOrEa6k8Y5x3eEqQ **Note : Serial number will be used to verify the originality of this document via eFILING portal 15 25. The rationale of O 6 r 7(2) of the Rules in the context of admiralty claims is to guard against indolent litigants who fail to take serious steps to serve a writ in rem on a defendant vessel that is within the jurisdiction. Therefore, on a purposive reading of O 6 r 7(2) of the Rules, the court may refuse to extend the validity of a writ in rem where no serious attempt was made by the plaintiff to serve the writ after the defendant vessel comes into Malaysian territorial waters. This same reasoning was adopted in Societe Generale v The Owners and/or Demise Charterers of and/or Other Persons Interested in The Ship or Vessel "MAPLE" [2018] 1 LNS 927, where the failure of a plaintiff to effect service of an admiralty writ in rem on a vessel when it did in fact enter Malaysian waters was found by the High Court to militate against the exercise of the court ’s discretion under O 6 r 7(2) of the Rules to extend the validity of the writ. 26. An admiralty writ in rem ought to be contrasted from an ordinary civil writ. The two-time limit placed by O 6 r 7(2) of the Rules on the renewal of an ordinary writ is complemented by other provisions of the Rules that cater for situations where a plaintiff encounters difficulties in effecting service of the writ. Where a defendant is evading service or cannot be traced, O 62 r 5 of the Rules allows the writ to be served by way of substituted service. If the defendant is not within the jurisdiction, O 11 of the Rules permits the plaintiff to apply for service of the writ out of the jurisdiction in order to bring the defendant within t he S/N AMpNCesOrEa6k8Y5x3eEqQ **Note : Serial number will be used to verify the originality of this document via eFILING portal 16 court’s jurisdiction. These provisions, however, do not apply to an admiralty writ in rem, which is required under O 70 of the Rules to be served through that single means, that is, personally on the defendant vessel if and when it enters Malaysian waters. 27. Ultimately, the purpose and object of O 6 r 7(2) of the Rules is to ensure the prompt service of a writ on a defendant. O 6 r 7(2) of the Rules does not cater for, and is therefore inapplicable to, situations where it is impossible for a plaintiff to effect personal service of an admiralty writ in rem. Where the defendant vessel never comes into the jurisdiction, the five -time limit on the number of renewals of an admiralty writ simply does not apply. This is the proper interpretation to be accorded to O 6 r 7(2) of the Rules. THE POSITION IN OTHER J URISDICTIONS 28. The above reading of O 6 r 7(2) of the Rules is in line with the laws of other leading maritime jurisdictions, such as Singapore, England, Hong Kong and Australia, where there is no cap or limit on the number of times the validity of an admiralty writ in rem can be extended. 29. In Singapore, although O 6 r 3 of the recently amended Rules of Court 2021 has introduced a limit on the number of times an ordinary writ can be renewed, the said limit is expressly precluded from applying to admiralty writs. The S/N AMpNCesOrEa6k8Y5x3eEqQ **Note : Serial number will be used to verify the originality of this document via eFILING portal 17 relevant provision is reproduced below: “Duration and renewal of originating claim or originating application (O 6, r 3) (1) Subject to this Rule, an originating claim or an originating application is valid for service for 3 months beginning with the date of its issue. … (4) Except in a special case, the Court may extend the validity of the originating claim or originating application only twice and by not more than 3 months each time. … (6) Paragraphs (1) and (4) do not apply to an originating claim relating to Admiralty causes and matters.” [Emphasis added] 30. Admiralty writs are thus treated differently from ordinary civil writs, as they ought to be, because the service of an admiralty writ is dependent on when and whether the defendant vessel is within the jurisdiction. 31. Similarly, the procedural rules in England, Australia and Hong Kong do not impose any limit or cap on the number of times an admiralty writ can be renewed (see: r 61.3(5) of the Civil Procedure Rules 1998 (UK) ; r 20 of the Admiralty Rules 1988 (AU); O 6 r 8(2) of the Rules of the High Court (HK)). S/N AMpNCesOrEa6k8Y5x3eEqQ **Note : Serial number will be used to verify the originality of this document via eFILING portal 18 32. Furthermore, the courts across these jurisdictions recognise that the absence of the defendant vessel from the jurisdiction amounts to a good reason to allow the renewal of an admiralty writ in rem (see: The Lircay [1997] 1 SLR(R) 699; The Berny [1979] 1 QB 80; The Chong Beng [1997] 3 HKC 579)). The practice of the courts in these jurisdictions is to regularly renew writs in rem until the defendant vessel calls into a port within the jurisdiction, thereby affording the plaintiff a reasonable opportunity to serve the writ. 33. In Pan United Shipyard Pte Ltd v The Ship 'Rodolfo Mata' [2004] FCA 117, the Federal Court of Australia emphasised that the court has a discretion to repeatedly renew a writ in rem where the defendant vessel has not entered the jurisdiction for service to be effected: “[10] … the Court has power to extend the time within which a writ in rem may be served by granting leave to serve the writ beyond a period of twelve months. Such leave may be in respect of a specific occasion or may be granted in general terms. It would seem t o follow that the power to grant leave would not be exhausted upon the use of the power and further leave may be granted if circumstances warrant the exercise of that discretion . … [12] If the plaintiff shows that it has taken reasonable steps to be informed of the whereabouts of the ship the subject of the writ, and it appears that the ship has not entered Australia , or has not been present in Australia for a sufficient period to provide the plaintiff with a reasonable S/N AMpNCesOrEa6k8Y5x3eEqQ **Note : Serial number will be used to verify the originality of this document via eFILING portal 19 opportunity to effect service o n the vessel, then leave to serve beyond the effective term of the writ may be granted.” [Emphasis added] 34. The Court of First Instance in Hong Kong made similar observations in The Al Dhabiyyah [1999] 4 HKC 414: “The essence and purpose of admiralty jurisdiction in rem is the obtaining of security by the plaintiff …It is the statutory right of the plaintiff in action in rem to obtain security and he has the option … to choose the security he wishes to obtain and the timing of obtaining of such security, so long as it is within the period of the validity of the writ or its extended valid period if the writ is allowed to be renewed. If no vessel comes in at all, he will normally also be granted a renewal of the writ to enable him to obtain security during the extended period of the writ. It is not unknown for a writ to be renewed many times due to the inability of the plaintiff to obtain security and therefore serve the writ in rem.” [Emphasis added] 35. A harmonious reading of O 6 r 7(2) and O 70 of the Rules gives rise to an approach that is consistent with the position of law in other like jurisdictions. Since an admiralty writ in rem can only be served on the defendant vessel within the territorial jurisdiction of the court, it necessarily follows that the court ought to allow the writ to be renewed for as long as the defendant vessel does not S/N AMpNCesOrEa6k8Y5x3eEqQ **Note : Serial number will be used to verify the originality of this document via eFILING portal 20 enter the jurisdiction. FIMBANK’S STATUTORY RIGHT OF ACTION IN REM 36. As mentioned earlier, Fimbank has, through the commencement of its claim in rem, acquired a statutory right of action in rem to proceed against the vessel. A statutory right of action in rem crystallises upon the issuance of a writ, conferring upon the plaintiff the status of a secured creditor (see: Re Aro Co Ltd [1980] 1 Ch 196; Deutz MWM Far East (Pte) Ltd v Owners of and Other Persons Interested in the Ship or Vessel ‘Hull No. 308’ (Standard Chartered Bank, Interveners) [1991] 3 MLJ 393; [1991] 3 CLJ 2984). This right cannot be defeated by a subsequent change in ownership of the res, even if the writ has not been served (see: The Monica S [1968] 2 WLR 431). 37. In the present appeal, although the ownership of the vessel has changed three times since the issuance of the writ, Fimbank’s statutory right of action in rem persists. O 6 r 7(2) of the Rules cannot be utilised to defeat this right. Nor can it be used to deny a claim that has been brought within time where there is no factual or legal basis to do so as is the case here. O 6 r 7(2) of the Rules, being subsidiary legislation, cannot eradicate or annihilate a statutory right of action in rem that has accrued within the limitation period. S/N AMpNCesOrEa6k8Y5x3eEqQ **Note : Serial number will be used to verify the originality of this document via eFILING portal 21 38. A plain or grammatical reading of O 6 r 7(2) of the Rules, where the words in O 6 r 7(2) of the Rules are taken in vacuo without consideration of the rest of the provisions in the Rules, would result in a construction that there is an absolute limit of five renewals of the writ that can be sought by Fimbank. However, such an interpretatio n would defeat Fimbank’s statutory right of action in rem and effectively override its status as a secured creditor, resulting in manifest injustice to Fimbank. This could not have been the intention behind O 6 r 7(2) of the Rules. 39. Fimbank has not slept on the writ, nor has it forsaken any steps to effect service of the same. In fact, it has diligently monitored the movements of the vessel throughout the period of validity of the writ. Fimbank cannot be faulted for the non-arrival of the vessel into Malays ian waters, rendering service of the writ an impossibility. The changes in ownership of the vessel after the writ ’s issuance are similarly beyond Fimbank’s control. 40. The purpose of the Rules is to facilitate the administration of justice; not to incapacitate it. To read O 6 r 7(2) of the Rules in a manner which places an absolute cap or limit on the number of times a writ in rem may be renewed, as the courts below have done, diverges from the purpose of the Rules and punishes a diligent litigant . Manifest injustice would result to Fimbank in the event that its statutory right to prosecute its claim in rem and to obtain security for its claim are defeated by reason of a pedantic S/N AMpNCesOrEa6k8Y5x3eEqQ **Note : Serial number will be used to verify the originality of this document via eFILING portal 22 reading of O 6 r 7(2) of the Rules. This is a situation that warrants the invocation of the court ’s inherent powers to prevent injustice. THE INHERENT POWERS OF THE COURT 41. The courts below held that the inherent powers of the court pursuant to O 92 r 4 of the Rules should only be invoked where there is a lacuna in the Rules. In arriving at this conclusion, the High Court below relied on Yomeishu Seizo Co Ltd & Ors v Sinma Medical Products (M) Sdn Bhd [1996] 2 MLJ 334; [1996] 2 BLJ 142 (‘Yomeishu Seizo’), which posited as follows: “…where there is a lacuna in the rules and practice, then and only then, may the aforesaid inherent jurisdiction be invoked. ” 42. The foregoing proposition, however, cannot be read so as to confine the exercise of the court’s inherent powers only to situations where there is a lacuna in the Rules. The absence of a lacuna in the Rules cannot of itself fetter the exercise of the court’s inherent powers. In Ho Yoke Kwei & Anor v Ong Eng Hin [1997] 4 MLJ 292; [1997] 1 CLJ 603, Augustine Paul JC (as he then was) observed that: “…the inherent power of the court is not confined to merely filling in gaps in the rules but extends to mould remedies where no provision is made for them in the rules. ” S/N AMpNCesOrEa6k8Y5x3eEqQ **Note : Serial number will be used to verify the originality of this document via eFILING portal 23 43. In a similar vein, the then Supreme Court in Permodalan MBF Sdn Bhd v Tan Sri Dato’ Seri Hamzah bin Abu Samah & Ors [1988] 1 MLJ 178; [1988] 1 CLJ 31 held as follows: “We read [O 92 r 4 of the Rules of the High Court 1980] to mean that the rules cannot i nterfere with the exercise of the inherent powers by the court so long as it deems it necessary to prevent any injustice or any abuse of its own process. It follows that where the rules contain provisions making available sufficient remedies, the court wil l not invoke its inherent powers .” [Emphasis added] 44. The court will therefore decline to resort to its inherent powers where there are other remedies provided for in the Rules. To this end, the reasoning of the courts below that there was no lacuna in the Rules was, with respect, flawed and incorrect because the lack of a lacuna nec essarily indicates the availability of alternative remedies to an aggrieved litigant. No such alternative remedy was available to Fimbank in this case. 45. The case of Arab-Malaysian Credit Bhd v Tan Seang Meng [1995] 1 MLJ 525; [1995] 1 CLJ 773 (‘Arab- Malaysian Credit’) was an instance where the Court of Appeal exercised its inherent powers to extend the validity of writs beyond what was expressly stipulated in the Rules. In this case, the plaintiff had served the writ on the S/N AMpNCesOrEa6k8Y5x3eEqQ **Note : Serial number will be used to verify the originality of this document via eFILING portal 24 defendant by way of substituted service. Subsequently, a default judgment was entered against the defendant. However, the defendant managed to set aside the judgment on the basis that the order for substituted service was fatally flawed. The plaintiff was consequently required to re-serve the writ on the defendant. This placed the plaintiff in a conundrum as, by the time the default judgment was set aside, the writ had long expired and could no longer be validly served. At that time, O 6 r 7(2) of the Rules of the High Court 198 0 provided as follows: “Where a writ has not been served on a defendant, the Court may by order extend the validity of the writ from time to time for such period, not exceeding 12 months at any one time , beginning with the day next following that on which it would otherwise expire, as may be specified in the order, if an application for extension is made to the Court before that day or such later day (if any) as the Court may allow. ” [Emphasis added] 46. Under O 6 r 7(2) of the Rules of the High Court 1 980, the plaintiff could not obtain more than one order at a time for the renewal of a writ for a 12-month period. In order to overcome this conundrum, the plaintiff simultaneously applied for and obtained eight separate 12 -month extensions of the validity period of the writ. The defendant was successful in its application before the High Court to set aside the eight extensions. The plaintiff appealed. S/N AMpNCesOrEa6k8Y5x3eEqQ **Note : Serial number will be used to verify the originality of this document via eFILING portal 25 47. In allowing the appeal, the Court of Appeal held that, notwithstanding O 6 r 7(2) of the Rules of the High Court 1980, the court “had ample jurisdiction” to grant the eight extensions sought by the plaintiff. The Court of Appeal reasoned that it could overcome the restriction of granting more than one extension of 12 months at any given time as expressed in O 6 r 7(2) of the Rules of the High Court 1980 by having resort to O 92 r 4 of the Rules of the High Court 1980, which reserved the inherent powers of the court to make any order as may be necessary to prevent injustice. 48. The High Court below declined t o follow Arab-Malaysian Credit on the grounds that the decision was premised on the old O 6 r 7(2) of the Rules of the High Court 1980, which did not contain a cap on the number of times a writ could be renewed. In taking that approach, the High Court , with respect, did not appreciate the essence of the decision in Arab-Malaysian Credit which recognised that the recourse to the inherent powers of the court under O 92 r 4 of the Rules is a matter of judicial discretion. 49. We note that the Rules Committee in 2000 introduced an amendment to O 6 r 7(2) of the Rules of the High Court 1980 by limiting the number of times a writ can be renewed to twice for ordinary writs in Peninsular Malaysia, thrice for ordinary writs in Sabah and Sarawak and five times for admiralty writs. This provision is in pari materia with O 6 r 7(2) of the Rules. Nonetheless, in our view, the 2000 S/N AMpNCesOrEa6k8Y5x3eEqQ **Note : Serial number will be used to verify the originality of this document via eFILING portal 26 amendment does not preclude the court from exercising its inherent powers to extend the validity of an admira lty writ in rem beyond the fifth time to prevent injustice to a litigant. The courts below, with respect, erred in holding that they did not have the power to renew a writ in rem for the sixth time, notwithstanding the injustice that will result to Fimbank, by sole reason of the express wording of O 6 r 7(2) of the Rules. 50. The construction accorded to O 6 r 7(2) of the Rules by the courts below ignores the practical difficulties faced by plaintiffs in effecting service of a writ in rem where the defendant vessel never comes into the jurisdiction. It also potentially incentivises owners of a vessel to evade liability by keeping their vessel out of the jurisdiction until the limitation period for the claim expires. Therefore, O 6 r 7(2) of the Rules cannot be construed so as to impose an absolute cap or limit on the number of times an admiralty writ in rem can be renewed. The ultimate discretion to decide whether to allow the renewal of a writ in rem in the interests of justice rests with the court. 51. In our respectful view, the Rules Committee ought to consider amending O 6 r 7(2) of the Rules to remove the five-time limit on the number of renewals of an admiralty writ. Such an amendment would inevitably prevent unjust situations such as the one that arose in the instant appeal and also be in keeping with the laws of other major maritime jurisdictions. S/N AMpNCesOrEa6k8Y5x3eEqQ **Note : Serial number will be used to verify the originality of this document via eFILING portal 27 ADDITIONAL ORDERS SOUGHT BY FIMBANK 52. In addition to the four questions of law posed for our determination as set out in paragraph 17 of this judgment, Fimbank also sought the following orders from this court in the course of the hearing of the instant appeal: (i) That the identities of the parties and the vessel, including the name and International Maritime Organisation (‘IMO’) number of the vessel, be anonymised in any judgment to be issued by this court. (ii) That the key facts of the instant appeal, such as port names, cargo type and quantity, bill of lading numbers and dates, be anonymised or stated generically to the extent possible. 53. In seeking the above orders, learned counsel for Fimbank submitted on the following grounds: (a) The conduct of the vessel owners strongly indicates that they will deliberately keep the vessel out of Malaysian waters should they come to learn that there is an extant writ against the vessel. Following the issuance of the writ, the vessel owners sold the vessel under highly suspicious circumstances with the likely intent of evading liability. S/N AMpNCesOrEa6k8Y5x3eEqQ **Note : Serial number will be used to verify the originality of this document via eFILING portal 28 (b) The fact that the judgments of both the courts below were published without any redactions does not render the redactions sought by Fimbank in the instant appeal futile or otiose. There is a possibility that the vessel owners are unaware of the existence of these judgments. Even if they are aware of the same, their knowledge would be limited to the fact that the courts below declined to renew the writ. (c) A judgment of the Federal Court will inevitably attract a wide readership, making it all the more necess ary that the redactions sought are granted. (d) The claim underlying the instant appeal is the subject matter of an arbitration seated in London, England. The claim herein was commenced by Fimbank for the purpose of obtaining security for any award made in the arbitral proceedings. As such, the redactions sought are necessary to protect arbitral confidentiality. 54. Having considered the above submissions, we are of the view that there are no compelling circumstances to grant the orders sought by Fimbank. The al legations raised against the vessel owners in the instant appeal are true of every vessel owner. The facts of this appeal are not extraordinary and do not warrant the granting of the redactions sought. Moreover, the instant appeal is distinct and separate from any arbitral proceedings between the S/N AMpNCesOrEa6k8Y5x3eEqQ **Note : Serial number will be used to verify the originality of this document via eFILING portal 29 parties and therefore has no bearing on arbitral confidentiality. In the circumstances, we do not think it is necessary to grant the orders sought by Fimbank. THE QUESTIONS OF LAW 55. For the reasons we have enunciated at length above, we answer the questions of law as follows: (i) Question 1: Whether O 6 r 7(2) of the Rules places an absolute cap and/or limit upon the number of times an admiralty writ in rem may be extended and/or renewed. Answer: No, O 6 r 7(2) of the Rules does not. (ii) Question 2: Whether O 6 r 7(2) of the Rules applies in circumstances where personal service of an admiralty writ in rem is an impossibility. Answer: No, O 6 r 7(2) of the Rules does not apply in such S/N AMpNCesOrEa6k8Y5x3eEqQ **Note : Serial number will be used to verify the originality of this document via eFILING portal 30 circumstances. (iii) Question 3: Whether O 6 r 7(2) of the Rules is intended to abrogate or defeat a claimant ’s accrued statutory rights to prosecute its claim in rem and to security for its claim. Answer: No, that is not the intention of O 6 r 7(2) of the Rules. (iv) Question 4: Whether the language of O 6 r 7(2) of the Rules precludes the court from exercising its inherent jurisdiction to extend the validity of an admiralty writ in rem when the court is of the view that the justice of the case requires it. Answer: No, the language of O 6 r 7(2) of the Rules does not preclude the inherent jurisdiction (or more accurately, the inherent powers) of the court to extend the validity of an admiralty writ in rem in order to prevent injustice. S/N AMpNCesOrEa6k8Y5x3eEqQ **Note : Serial number will be used to verify the originality of this document via eFILING portal 31 56. Following from the above, we unanimously allowed Fimbank’s appeal with costs in the cause. Signed NALLINI PATHMANATHAN Judge Federal Court of Malaysia Dated: 16 October 2023 COUNSEL: For the Appellant: Arun Krishnalingam (Aaron Siva, Loh Yan Shuang with him) MESSRS. CHRISTOPHER & LEE ONG Advocates & Solicitors Level 22, Axiata Tower No.9, Jalan Stesen Sentral 5 Kuala Lumpur Sentral 50470 Kuala Lumpur S/N AMpNCesOrEa6k8Y5x3eEqQ **Note : Serial number will be used to verify the originality of this document via eFILING portal