The first plaintiff was the registered owner of the Grand Ace12 and the second plaintiff was its demise charterer. The defendant was the demise charterer of the Caraka Jaya Niaga III-11. In April 2017, a collision occurred between the two vessels. Both the plaintiffs and the defendant claimed to have suffered loss and damage as a result of the collision. On 29 March 2019, the plaintiffs issued a writ in rem against the Caraka Jaya Niaga III-11. On 6 May 2019, the writ was served on the vessel. On 13 May 2019, the defendant issued a writ in rem against the Grand Ace12. The writ was not served and lapsed on or about 13 May 2020. The defendant applied on 12 June 2019 for an extension of time, pursuant to s 8(3) of the Maritime Conventions Act 1911 (Cap IA3, 2004 Rev Ed) (the MCA), which gives domestic effect to the Collision Convention 1910 in Singapore, to maintain its counterclaim against the plaintiffs, notwithstanding that the counterclaim was by then time-barred under s 8(1) of the MCA. The application was heard on 19 August 2019 by an Assistant Registrar and dismissed on 4 October 2019. No appeal was brought by the defendant. Accordingly, the defendant's claim or counterclaim against the plaintiffs arising out of the collision is time-barred.

On 11 June 2020, the plaintiffs and defendant entered into a consent judgment which provided that the plaintiffs would bear 40% of the blame for the collision and the defendant 60% of the blame. The parties applied for an answer to the following preliminary question of law:

Whether the Defendant is able, on the basis of the agreed facts annexed to this Order as Annex A, to rely on or raise the 'single liability principle' (as referred to in Annex B to this Order), in diminution and/or reduction of the Plaintiff’s claim in this action in circumstances where the Defendant’s counterclaim against the Plaintiff is time-barred.

Held: The preliminary question is answered in the negative.

The time bar

The time bar under s 8 of the MCA (which is based on art 7 of the Collision Convention 1910) prescribes a two-year time bar in respect of, among others, collision claims. Time bars may take effect by either: (a) barring the remedy sought by the party whose claim is not brought in time; or (b) extinguishing altogether the substantive rights underlying the claim. The time bar under s 8 of the MCA is procedural in nature and falls into the former category. A plaintiff’s failure to bring its claim within the time limit prescribed by s 8 of the MCA merely bars the remedy sought by the plaintiff (Aries Tanker Corp v Total Transport Ltd [1977] 1 Lloyd’s Rep 334, 402C (CMI2194)). In other words, s 8 of the MCA bars the 'maintainability' of proceedings by a plaintiff (MIOM 1 Ltd v Sea Echo ENE (No 2) (The Sea Echo) [2012] 1 Lloyd's Rep 140 [36], [78]). Section 8 of the MCA applies equally to counterclaims (The El Arish [1994] 1 SLR(R) 141; The Pearl of Jebel Ali [2009] 2 Lloyd's Rep 484 [32], [34]). The fact that the defendant’s counterclaim is time-barred prevents the defendant from seeking any remedy for its counterclaim, but does not extinguish the underlying rights which gave rise to the counterclaim.

The single liability principle

This is a reference to the principle applied in The Khedive (1882) 7 App Cas 795. At its core, the single liability principle may be summarised as follows. Where two vessels are involved in a collision for which both vessels are to blame, there does not exist two cross-liabilities in damages (ie, a separate liability on the part of one vessel to the owner of the other vessel for the proportion of its loss and vice versa). Instead, there is only a single liability for the difference between a moiety (ie portion) of the larger claim and a moiety of the smaller claim (see The Khedive at 801-807). That difference is then payable by the net payor to the net payee. The key point, however, is that the single liability principle as decided and applied in The Khedive presupposes the existence of valid or maintainable claims and cross-claims or counterclaims. This is so that the Court could then, following the procedure in the Court of Admiralty, pronounce a single judgment (or 'monition') in favour of the net receiving party for a moiety of its damage beyond the point of equality. On the facts of The Khedive, neither the claim nor the counterclaim was time-barred. The single liability principle, as a procedural rule, does not apply or operate in a case where s 8 of the MCA is applicable to prevent the defendant from bringing or maintaining proceedings (including a counterclaim) in the first place.

The defendant contended that the single liability principle is based on equity and fairness, in that one party should not be made to pay more than it should when the other party was also partly to blame for the collision. If that argument on fairness and equity were correct, it would effectively render s 8 of the MCA otiose or nugatory in a great many cases where a net paying defendant fails to mount its counterclaim in time.

The defendant also submitted that the single liability principle represents a form of set-off. Various passages in The Khedive and subsequent cases make it clear that the single liability principle does not pertain to set-off or constitute a form of set-off (see The Khedive 806-807; The Tojo Maru [1970] P 21). While the application of the single liability principle might in most cases have the same practical effect as applying set-off, the principle in its true unadorned form is a procedural mechanism based on a rule of some antiquity originating in the English Court of Admiralty. It has nothing to do with set-off. Teare J’s view in The Sea Echo at [81] that 'the principle in The Khedive is a form of set-off long recognised in Admiralty law' is therefore incorrect.