IMSML Website Article 25/2025: Mulair Oleg (Suing as Master of the Ship ‘Oriental Dragon’) and Another v The Owners and/or Persons in Possession or Control of the Ship ‘Oriental Dragon’ of the Port of Panama (Brit UW Limited and Others, Interveners) and Another Case [2023] MLJU 3050 - The Proper Date for the Conversion of the Equivalent in Ringgit Malaysia (RM) of Claims Made in Foreign Currencies

This unreported case is a follow up from IMSML Website Article 5/2024: Mulair Oleg (mendakwa sebagai Nakhoda Kapal ‘Oriental Dragon’) & Anor v Pemunya dan/atau pihak-pihak yang mempunyai milikan atau kawalan terhadap kapal ‘Oriental Dragon’ dari Pelabuhan Panama (BRT UW Ltd & Ors, interveners) [2022] MLJU 2599, Intervention with a Ship’s Arrest. This earlier case was argued before Mr Justice Nadzarin Wok Nordin. See https://imsml.org/article-52024

This subsequent case and subject-matter of this article, Mulair Oleg (Suing as Master of the Ship ‘Oriental Dragon’) and Another v The Owners and/or Persons in Possession or Control of the Ship ‘Oriental Dragon’ of the Port of Panama (Brit UW Limited and Others, Interveners) and Another Case [2023] MLJU 3050, was presided over by Mr Justice Ong Chee Kwan, Malaysia’s Admiralty Judge.

The Plaintiffs’ claims were made in USD currency via two Action in Rem suits (ie WA-27NCC-11-02/2021 and WA-27NCC-21-04/2021). The claims were made against a limited fund constituted in RM and all claimants against the fund were ranked differently according to the rules governing priority of claims, see Paragraph [2] and [3]. When the claim was originally made, the exchange rate of the Malaysia Ringgit (RM) to US dollar was RM4.123 to USD 1.00 (as at 20 April 2021). However, the value of the Ringgit plummeted to RM4.79 to USD1.00 (as at 21 August 2023), see Paragraph [1].

In the light of the fact that the conversion date to be used for payment of claims in US dollars, could have significant consequences for other Claimants to the constituted fund, Mr Justice Ong Chee Kwan had to explore the principle in the case of Miliangos v George Frank (Textile) Limited [1976] AC 443.

How was the Fund constituted?

When the vessel was arrested by the Master and crew, the registered owner of the vessel failed to put up security. As a result, the vessel was appraised and sold by judicial sale pendents lite (ie inclusive of her bunkers). The sale sum of RM20,802,988.49 was paid into Court. This Fund was then made available for the enforcement of any legitimate claims, see Paragraph [8].

What was the priority ranking between the various parties?

The High Court (see Paragraph [27]) ordered the proceeds of sale to be paid out the following parties in the following order of priorities:

[1] Senior Assistant Registrar of the High Court of Kuala Lumpur - RM520,099.71 for Sheriff’s Commissions for the sale of the vessel by public auction;

[2][a] Messrs Shearn Delamare and Co (the P’s solicitors) - RM1,731,366.42 + CNY529,468.14 (Renminbi) + GBP2,560.00 + RM9,616.35 for reimbursement of monies advanced by the Plaintiffs to the Sheriff’s account for expenses;

[2][b] Messrs Shaikh David (Solicitor’s of the 4th Intervener) - RM145,350 for port charges;

[3] Messrs Shearn Shearn Delamore and Co (Solicitors for the P) - RM340,444.97 for the costs of arrest, cost of the order of appraisement as well as Sale of the Vessel. This includes all attendances before the Sheriff and the Admiralty Judge, as well as Notice of Application of the determination of Priorities and for Payment Out;

[4] Messrs Shearn Delamore and Co - for the following maritime liens:

[a] USD117,608.02 (at the exchange rate of USD 1.00 to RM4.123 on 20 April 2021) and includes costs amounting to RM20,000 pursuant to a judgment in default;

[b] USD365,839 payable to the First Plaintiff, and USD1,615,512.28 payable to the Second Plaintiff (at the exchange rate of USD 1.00 to RM4.063 on 9 February 2021). These sums includes costs amounting to RM10,000 for a default judgment dated 1 September 2022.

[4][c] Messrs Shearn Delamare and Co - for the following statutory lien:

USD58,442.03 (at the exchange rate of USD 1.00 to RM4.123, as at 20 April 2021) - representing the statutory lien for Repatriation Costs payable and owing to the Plaintiffs.

Is the Applicable Conversion Date 9 February 2021 As Prayed for in the Writ in Rem and Statement of Claim?

The issue of the relevant date for conversion arose due to later documents. On 24 May 2023, when the Second Interveners (SD) corresponded with the Sheriff, SD did provide details of their RM account to receive payment, however, no USD account was provided by SD, see Paragraph [35].

On 28 June 2023, the Sheriff received an email from the POJ containing different rates of conversion, see Paragraph [36]. The POJ had converted the sums to be paid in USD, based on the existing exchange rate the RM currency at the the rate issued by ‘Jabatan Akauntan Negara Malaysia’ for the month go June 2023, see Paragraph [37]. If payment were made at this rate, the sum of RM20,802,988.49 in the Fund, would be reduced to RM1,701,210.13, see Paragraph [38].

On 20 July 2023, when SD corresponded with the Sheriff, it removed the ‘RM Equivalent’ from its documents. SD then provided details of both their RM account, and its USD account for payments to be received, see Paragraph [39]. All parties received a copy of SD correspondence, but SD did not enclose a copy of the Sheriff’s email dated 28 June 2023, see Paragraph [40]. Therefore, SD was in effect demanding that the sums paid from the constituted Fund were to be made in USD. The implication of this was that the costs for the conversion from RM to USD were to be borne by POJ, not SD, see Paragraph [41].

What were the Objections of the 3rd Intervener to SD’s Position?

In essence, the third intervener argued that the stipulated payment out of the Fund was to be in RM (ie the equivalent of the USD judgment sums) at the date of the respective Writ in Rem and the judgments in default, see Paragraph 42(c).

What was the effect of the POJ’s approach to currency conversion?

The exchange rate adopted by the POJ on 21 August 2023 at the rate of USD 1.00 to RM4.79 led to a pay out of RM20,988,404.90. The constituted Fund only contained RM20,802,888.78, see Paragraph [44]. In the words of Mr Justice Ong Chee Kwan, ‘this of course means that the POJ had erroneously paid out a sum of RM185,416 in excess of the total fund …’, see Paragraph [44].

POJ followed up on this with an email to attempting to recover the overpaid sums from Messrs Shearn Delamore and Co (SD), see Paragraph [45]. SD responded by stating that they were taking instructions from their clients and replied that they took the view that POJ would need to apply to Court for a refund of the said RM185,416, see Paragraph [46].

The over-payment from the Fund also meant that there was nothing left in the Constituted Fund to pay the claims of the Third Intervener against the Defendant, see Paragraph [47]. SD’s hesitancy in refunding the sum proved disconcerting for the Third Intervener, see Paragraph [48].

What happened at the case management asked for jointly by the Third Intervener and the Defendant on 4 October 2023?

SD undertook not to release the sum of USD4,088,837 in their custody until the final determination by the court, see Paragraph [50]. The Third Intervener argued that SD and the Sheriff had caused a position where the Plaintiffs and SD were effectively paid more than the amount available in the Consolidated Fund for the purposes of enforcement, see Paragraph [52]. The Third Intervener sought for the irregular payment made to SD to be rectified, see Paragraph [55]. The Plaintiffs of course argued that there was no over-payment by the court, see Paragraph [56]. The Plaintiffs also contended that the Court was now Functus Officio and that legally, it did not matter that the Sheriff did not issue a Bailiff’s Statement for the payments, see Paragraph [56].

Was the Court Functus Officio after ordering payment from the Consolidated Fund?

In a nutshell, ‘NO’. Mr Justice Ong Chee Kwan gave several reasons for this position. First, this was not a case of re-opening the original case or varying, altering or amending the final judgment order. In effect, following Stone World Sdn Bhd v Engareh (M) Sdn Bhd [2020] 12 MLJ 237 (FC), it was a consequential order giving effect to the original judgment originally handed down, see Paragraph [63]. As in the well established precedent of Fritz v Hobson [1880] 14 Ch D 542, such an application did not attract the rule of res judicatory and corollary to it the issue of estoppel and Functus Officio. Fry J at p 561 famously said that ‘I have the jurisdiction to grant this application as … all order of the Court carry with them in gremio (ie the Latin term which means ‘in the bosom of the law’) liberty to apply to the Court’. Mr Justice Ong Chee Kwan explained that Fry J’s view have been followed by the Malaysian Courts in cases such as (see Paragraph [34]):

[a] Sungai Blak Tin Mining

[b] Societe Des De Bayas Tudjuh v Woh Heng Mining Kongsi [1978] 2 MLJ 267 at p 270;

[c] Sungei Biak Tin Mines Ltd v Saw Choo Theng and Another (No 2) [1970] 2 MLJ 226 at p 227;

[d] Leong Ah Weng v Neoh Thean Soo and Anor [1983] 2 MLJ 119 at p 120

Second, there is liberty to apply for consequential orders in order to work out or to give effect to the final judgment order as this is well within the inherent jurisdiction of the court. Therefore, there is no transgression of the Functus Officio rule, see Paragraph [35] of the Federal Court in Stone World Sdn Bhd v Engareh (M) Sdn Bhd [2020] 12 MLJ 237.

Third, working out an earlier order, or making a complementary order, or enabling direction to work out the judgment of the court, would be allowed if it was intended to provide ‘succor’ to the original order, see Paragraph [37] of the Stone World case. Fourth, the approach of the Malaysian Courts is also found in case law decided in Singapore, for example, Tan Yeow Khoon & Anor v Tan Yeow Tat & Anor (No 2) [2000] 3 SLR 32 (High Court, Singapore).

What is the Correct Conversion Date for the Sheriff’s Expenses Incurred in USD?

Mr Justice Ong Chee Kwan explained that Malaysian Courts have the jurisdiction to pronounce judgment in a foreign currency, see Paragraph [64] of The Oriental Dragon [2023] MLJU 3050. His Lordship held that the conversion date for enforcement of foreign currency debts was determined by the House of Lords in the Miliangos v George Frank (Textile) Limited [1976] AC 443. The Miliangos case was approved in Malaysia by the Supreme Court in New Kok Ann Realty San Bhd v Development and Commercial Bank Ltd, New Hebrides (In Liquidation) [1987] 1 MLJ 57, see Paragraph [67]. The House of Lords held that debt could be paid in Swiss Francs, the conversion rate being at the date the court authorized the enforcement of the judgment in terms of Pound Sterling, see Paragraph [69].

A summary of the approach in the Miliangos case is as follows (as quoted by Mr Justice Ong Chee Kwan in The Oriental Dragon at Paragraph [64]):

[1] This date gets nearest to securing to the creditor exactly what he bargained for.

[2] The date of action brought, though favoured by Lord Reid and Lord Radcliffe in the Havana Railways case, seems to me to place the creditor too severely at the mercy of the debtor’s obstructive defences (cf. this case) or the law’s delay.

[3] The date of judgment is shown to be a workable date in practice.

[4] However, where there is an appeal, the date of judgment imposes on the creditor a considerable currency risk.

[5] For the case of a company in liquidation, the corresponding date for conversion is when the creditor’s claim (in terms of Sterling) is admitted by the Creditor.

Is there a confusion between date of payment and the date when the Court authorises the enforcement of the judgment?

Counsel for the Third Intervener, Mr Jeremy Joseph,  argued that in Malaysia, Re P Suppiah (Tara Rajaratnam, Judgment Creditor) [1989] 2 MLJ 479 supports the view of the House of Lords in the Miliangos that the conversion date is the date of payment. In Re P Suppiah, LC Vohrah J favored the date of payments as the choice of the judgment debtor to pay either the exact amount in sterling as taxed or the equivalent in Malaysian currency at the time of payment, see Paragraph [67] of The Oriental Dragon [2023] MLJU 3050. Mr Jeremy Joseph contended that:

[1] Where the judgment is expressed in a foreign currency, the appropriate conversion should be the ‘date of payment’. According to the House of Lords in the Milangos case, this means the date when the court authorises enforcement of the judgment in terms of local currency;

[2] In Re P Suppiah, the judge’s preferred the applicable conversion date was at the time when the bankruptcy notice was issued, ie rejecting the date when the costs were actually ordered.

When commenting on the submission of Mr Jeremy Joseph, Mr Justice Ong Chee Kwan relied on the views of both Lord Edmund-Davies and Lord Fraser of Tullyberton in the Miliangos case. His Lordship explained that ‘time of payment’ or ‘date of payment’ referred to:

[1] The date of actual payment; OR …

[2] If no such payment is made, the date on which the court authorises the enforcement of the judgment. 

Mr Justice Ong Chee Kwan clarified that Scenario [1] above, occurs where judgment is given in a foreign currency and the judgment creditor satisfies the judgment voluntarily without the need for the judgment creditor to take execution proceedings for enforcement, see Paragraph [70]. However, his Lordship continued that Scenario [2] above occurs when the judgment debtor fails to pay. Then the judgment creditor has to apply to the Court to enforce the judgment through execution proceedings. For this latter scenario, the conversion date is the date when the Court authorises the enforcement, see Paragraph [70]. The justification for this date is for ‘procedural efficacy’, in particular ‘those responsible for enforcing the judgment (whether by levying execution or otherwise) may know what steps are open to them and how far they can go’, see Paragraph [70].

Is the Miliangos factually similar to the Oriental Dragon case?

No. First, Mr Justice Ong Chee Kwan explained that the Miliangos is not a case that involved several Claimants over a limited fund. Second, his Lordship pointed out that in the Miliangos, there was no possibility that the available funds may not be sufficient to meet all claims. Third, in the Miliangos, there was no issue of a ranking of priorities among the various Claimants. His Lordship credited Miss Vinodhini (Co-counsel for the Third Intervener) for pointing out these differences, see Paragraph [71].

Are examples of decided cases that have not followed the Miliangos?

Yes. An example is the decision of Mr Justice Oliver in Re Dynamics Corporation of America [1976] 1 W.L.R. 757. His Lordship held that, in an insolvency, on the compulsory winding up of an insolvent registered company, a creditor’s claim for a debt in a foreign currency and any set-off in a foreign currency against such a debt, must be converted into sterling ‘at the date of the winding-up order’, see Paragraph [72]. Mr Justice Oliver clarified that in the case of a company undergoing liquidation, the corresponding date for conversion would be the date when the creditor’s claim in terms of sterling is admitted by the liquidator, see Paragraph [72]. This stems from statutory rules in the Companies Act 1948 that the liabilities of the company are ascertained among the Claimants pro rata according to the values of the claims at that time, see Paragraph [72].

Is there an example of a decided case where the facts are closer to that of the Miliangos?

 Yes, The Despina R; The Owners of the mv Eleftherotria v Owners of the mv Despina R  [1977] 3 All ER 874. This was a case on collision caused by negligence and the court had to determine whether damages against the defendant should be awarded  in the currencies in which expenditure or losses were directly and immediately incurred in RMB, yen, sterling or USD (ie currencies in which the Plaintiff operated). Mr Justice Brandon held that damages could be awarded as the amount of reasonable expenditure and loss expressed in USD or sterling equivalent as that was the currency in which the loss has effectively been borne. Under the Merchant Shipping Act 1894, Section 504, there will be a constituted fund for limitation of liability and there is a possibility that claims may exceed the limit. Mr Justice Brandon identified three possible dates for the conversion. First, the date of the decree of limitation. Second, the date of constitution of the limitation fund. Third, the date of proof of the claim against the fund, see Paragraph [76]. In the context of an Admiralty based litigation, Mr Justice Brandon noted that the equivalent to the date when proof of a creditor’s claim was admitted by liquidation in the Miliangos case, if one were follow the views of Lord Wilberforce and Lord Cross, was the ‘date on which the Admiralty registrar on the reference found a claim proved against the fund’. However, Mr Justice Brandon pointed out that these view were only obiter dicta, ie mere opinions and not binding, see Paragraph [76].

Mr Justice Brandon’s preferred view in The Despina R was that the corresponding date for the date of the winding up order, would be in the context of Admiralty limitation proceedings, the date of the decree of limitation, see Paragraph [76]. His Lordship justified this approach on the basis that ‘ … in a limitation action where the fund is insufficient to meet all the claims, where there is a claim in foreign currency, the conversion date ought to be the date of the decree of limitation equating the said date to the date of a winding up order’. His Lordship added that the “situation which arises when a tortfeasor limits his total liability under s.504 of the 1894 Act is a form of

statutory insolvency”, see Paragraph [77].

After reviewing the decisions in the Miliangos case, Re Dynamics and The Despina R, what did Mr Justice On Chee Kwan decide in The Oriental Dragon?

His Lordship started by identifying possible conversion dates, see Paragraph [78]:

[1] Date of constitution of the Fund, ie date when the proceeds of sale of the ship are paid into Court;

[2] Date of judgement against the Fund;

[3] Date when the Sheriff certifies the expenditure and claims;

[4] Date of determination of priorities;

[5] Date of payment out.

Next, his Lordship took the view that previous analogies were incorrect. Mr Justice Ong Chee Chee Kwan held that:

I would not equate the claims made against the Fund in the present case as akin to a liquidation process or limitation action where the premise is that the available pool of fund will be insufficient to meet and satisfy all the creditors’ claims, see Paragraph [79].

His Lordship further explained that the vessel is sold because the Defendant has chosen not to defend the suit, which allows the Plaintiffs to seek recovery for all their claims from the proceeds of the sale of the vessel, see Paragraph [79]. His Lordship therefore disagreed with the view of Brandon J in The Despina R that an Admiralty limitation action to constitute a fund is not a form of statutory liquidation to meet claims pursuant to an action in rem, see Paragraph [79].

Mr Justice Ong Chee Kwan stressed that it was important to have just one unit of account when there is a fund constituted for the claims of multiple plaintiffs. This inevitably is the currency of the Fund. This will ensure that the conversion is common to all claimant, unless otherwise agreed or ordered. According to his Lordship, in addition to dealing with the currency problem, this is to ensure fairness and equality of treatment among competing claims of different priority rankings, see Paragraph [80]. His Lordship added that a common conversion date is necessary to avoid the uncertainty which inevitably results from the fluctuations of currency payments using foreign currency debts, which can impact other claimants who are seeking compensation from the fund, see Paragraph [81].

According to Mr Justice Ong Chee Kwan, in a system of priority ranking, it is common that the time for payment will invariably be different for the different claimants. Remaining claimants that have a lower ranking will have to bear the risks of a diminishing fund. As the conversion date is based on the time of payment, foreign currency debtors with a higher priority ranking will receive payment in the equivalent Ringgit from the fund earlier, see Paragraph [88].

Should the Miliangos principle that the foreign debtor ought to be paid as possible for his actual loss be applicable when there are claims made against a limited fund consisting of different ranking of priorities?

Mr Justice Ong Chee Kwan, quoted with approval, the views of Michael Howard, John Knott and John Kimbell, authors of “Foreign Currency - Claims, Judgments and Damaged, see Paragraph [89]. Howard, Knott and Kimbell explained that there is a demand for a single date of conversion. Otherwise those whose interest are deferred the double disadvantage of not only being behind in the priority queue, but also have to endure the risk of exchange value of their claim diminishing whilst waiting in the priority line, see Paragraph [89].

Should the proposed date of conversion be when the Admiralty Sheriff expenses, or alternatively the date when the priority  order was determined and the payment out from the Consolidated Fund was made?

The submission made by Mr Jeremy Joseph (former president of the International Malaysian Society of Maritime Law and found partner of Joseph and Partners, one of Malaysia’s leading shipping law firms), was that:

[1] Sheriff’s expenses are a reimbursement of the costs incurred by the arresting party in its original currency;

[2] As these were to be determined and payable after they are taxed by the Sheriff, the correct conversion date should be the date of the Sheriff’s certificate, see Paragraph [90];

[3] In Admiralty Practice, it is standard practice to seek the approval of the Sheriff before incurring expense because the party incurring the expense (usually the arresting party) is only entitled to be reimbursed such expenses that are taxed and approved by the Sheriff, see Paragraph [92].

Therefore Mr Jeremy Joseph contended that this occurred when:

[1] There was an entitlement to claim for reimbursement of the Sheriff’s costs and expenses when all invoices, statements of accounts, bills, payment vouchers, receipt and all other document specified int eh Sheriff’s Bill of Costs were inspected and taxed by the Sheriff;

[2] This was evidenced by the Certificate that the Sheriff issued, see Paragraph [93];

[3] Hence the Sheriff’s certificate determines and fixes the amount recoverable by the arresting party, see Paragraph [94].

The approach submitted by Mr Jeremy Joseph ensures that the conversion at the date of the Sheriff’s certificate is more equitable. The fact that it will prove more costly to the Plaintiff is not a fact which is to be taken into consideration. The appropriate date for conversion is the date on which the amount to be paid can be ascertained and payment made, see Paragraph [94] and the case of Dilingham Corporation of Canada Ltd v The Ship Shinyu Maru [1980] 1 FC 303.

What are the shortcomings of adopting the date of the Sheriff’s Certificate? There are several (see Paragraph [95]):

[1] The Sheriff’s certificate only applies to Sheriff’s expenses;

[2] The Sheriff’s certificate has no relevance to other claims in foreign currencies made against the Consolidated Fund;

[3] The Sheriff’s certificate may be evidence that the Sheriff has confirmed the amount, but it is not a document authorising the enforcement of that said sum.

If the conversion date of the currency is the date of the Order of Priorities and Payment Out, could this be said to be the date of the enforcement of maritime claims made against the proceeds of sale of the res, ie the point in time when the court authorizes enforcement of the judgment in terms of local currency? 

The starting point to answer this is to look at trite Admiralty law. Mr Justice Ong Chee Kwan dismissed Mr Jeremy Joseph’s contention that the fact that a judgment in rem may be set aside as this does not mean that the judgment is not recognized or not enforceable. His Lordship said that it was important to focus on thew fact that the enforcement of claims is against the proceeds of sale of the vessel. Therefore, at the time of the judgment in rem, there may be no common fund existing (eg the Defendant may have provided alternative security to the Plaintiff), or the proceeds of the sale have not been constituted. His Lordship stressed that even if the fund from the proceeds of the sale were constituted, the judgment in rem could not be enforced against the fund until the claims have been determined and the order of priority has been made, see Paragraph [99].

So when is a Claimant entitled to be heard by the courts with respect to the proceeds of the sale?

Any interested person has that right when the proceeds of sale of the res has been accounted for.  When the proceeds of sale are paid into court, any party who has an in rem judgment, can apply to the Court (ie under Order 70, rule 21) for an order to determine the order of priority of claims against the proceeds of sale and the subsequent payment out of those claims, see Paragraph [100]. Once the priority of claims has been completed, the court will order payment of claims in accordance with priority, ie enforcing enforcement of judgment for the claims expressed in foreign currency as per the Milangos case, see Paragraph [101]. To use the word of Lord Edmund-Davis in the Miliangos, the claims ‘must be converted into (ie Ringgit Malaysia in this case) so that those responsible for enforcing the judgments (ie whether by levying execution or otherwise) may know what steps are open to them and how far they can go’, see Paragraph [101]. In other words, Mr Justice Ong Chee Kwan concluded that the ‘operative date when the Court authorises enforcement of the judgment in rem and the claims against the proceeds of sale of a res, would be the date when the Court makes an order to determine the priorities of the claims and order payment out in accordance with that priority’, see Paragraph [102]. On the present facts of this case concerning The Oriental Dragon, this would be the date of the Order of Priorities and Payment out of the constituted fund, ie on 20 March 2023, see Paragraph [103].

So what happened by 20 March 2023?

First, the vessel had been sold. Second, the proceeds of the sale had been paid into Court. Third, the Fund had been properly constituted. Fourth, the Sheriff’s costs and expenses have duly certified and given their priority. Therefore, an order for the payment out of the Fund to the account of the Claimant can be made and was in fact made, see Paragraph [103].

Is the approach adopted by Mr Justice Ong Chee Kwan equitable? By choosing the date of the Order of Priorities and Payment Out as the date of conversion, it arguably strikes a right balance between 2 things (see Paragraph [104]):

[1] Meeting the principle in the Miliangos (ie because payment is put as nearly as possible to the creditor’s loss in foreign currency); and

[2] The balance of not putting the other claimants ‘the double disadvantage of not only being behind in the queue (ie in the Order of Priorities), but also of having to endure the risk of exchange value of of their claim diminishing while they stand there on the other hand’.

Is the approach adopted by Mr Justice Ong Chee Kwan prejudicial to the foreign currency claimants?

It is less prejudicial to the alternative date of the earlier date of constitution of the Fund (ie the date of the proceeds of sale of the ship being paid into Court). This is due to the date of Order of Priorities and Payment Out being ‘nearer’ to the time of payment to the Claimants, see Paragraph [105].

Is the conversion date stated in the Plaintiffs’ Writs in rem were nothing more than common practice when filing a claim in a foreign currency to state the equivalent in Ringgit Malaysia, ie the Plaintiffs are therefore not barred from insisting on payment in a foreign currency? 

This was the submission put forward by Mr Tong Wei Hang (see Paragraph [109]), based on the English Civil Procedure Volume 1 (White Book 2023) at para 16.3.3. Mr Tong also cited The Gang Cheng; The Owners of Cargo carried in the Ship ‘Gang Cheng’ v. Owners and/or Persons Interested in the Ship ‘Gang Cheng’ (No 2) [1998] 6 MLJ 492 (see Paragraph [110]) in support of his submission. In the The Gang Cheng, the High Court had allowed the Plaintiff’s motion to amend an order (which had not been perfected) for damages to be awarded in USD because of the fall in the value of the RM. Based on this case, Mr Tong concluded that the Courts in Malaysia had the power and jurisdiction to pronounce judgment in a foreign currency, see Paragraph [111]. Mr Tong also cited the case of Inter Diam Pte Ltd v PJ Diamond Centre Sdn Bhd [2002] 7 MLJ 189, where Mr Justice Mohd Hishamudin held that where the contracting parties had agreed that payment should be in USD, it would be wrong to deny the plaintiff’s rights to be paid in USD. Using the Inter Diam case, Mr Tong put forward the proposition that a plaintiff should always be compensated in the currency that best expressed his loss, see Paragraph [115]. In the context of The Oriental Dragon, Mr Tong argued that since the wages and disbursements of Master and crew were paid in USD, the payment out of the Consolidated Fund representing the proceeds of sale of the vessel (in RM) should also therefore be converted to USD at the date of payment, see Paragraph [115].

Mr Tong’s submissions were rejected by Mr Justice Ong Chee Kwan for several reasons. First, Malaysia does not have an equivalent of the English White Book 2023. Therefore there is no similar requirement for a claim expressed in a foreign currency to convert the RM equivalent sum in the Writ or Statement of Claim as at the date of the claim, although it may be good practice to do so, see Paragraph [117]. Mr Justice Ong Chee Kwan explained that a Plaintiff claiming a sum in a foreign currency in Malaysia is, however, at liberty to pray his reliefs from the Court at the time of the judgment for payment of the foreign sum without specifying a conversion date, or specifying the conversion date at the time of the judgment or payment, see Paragraph [117]. On the facts of The Oriental Dragon, the Plaintiffs (see Suits 11 and 21) have unequivocally opted to recover their claims in RM instead of USD at the time of filing their Writs in REM, see Paragraph [118].

Second, the Plaintiffs never applied for any amendments to their Writs in Rem (for Suits 11 and 21), and were happy to express their claims in RM as at the date of the Writs in Rem, see Paragraph [120]. Mr Justice Ong Chee Kwan cited Den Norsk Bank ASA v The Owners of the ship or Vessel ‘Forum Alaska’ and Third Party [1998] MLJU 55 to support his Lordship’s views, see Paragraph [119].

Third, when the Plaintiffs applications for Priorities and Payment Out were made, it specifically fixed the RM equivalent of the judgments sums as at the date of the Writ in Rem actions, see Paragraph [121]. This means that the Plaintiffs are no longer entitled to expect payment in USD or its equivalent as at the date of payment, as the claims had already been converted into RM, see Paragraph [122].

What were the applicable dates for payment of interests, ie both pre-judgment and post-judgment? 

Interest runs from the date of the action, see Paragraph [123]. This sum should be paid on the RM equivalent as the judgment sums were paid in RM. In making this ruling, Mr Justice Ong Chee Kwan agreed with the contention put forward by Mr Jeremy Joseph, see Paragraph [124].

What was the legal status of the erroneous payments made by POJ?

In addition to using the wrong conversion date for the foreign currency, there was over-payment by POJ on RM185,416.49 in excess of the Consolidated Fund. Mr Justice Ong Chee Kwan made it clear that the over-payment is clearly in breach of trite law that claimants to the Fund are limited by the quantum that is represented in the Fund, see Paragraph [131].

What is the impact of the Sheriff not preparing a Bailiff Statement as to the details of the payment out to the Plaintiffs?

Nothing turns on the omission of the Bailiff Statement. The statement is not specifically provided for under the Rules of Court 2012, Order 70. It is unfortunate that this was not produced in this case, but it was good practice to do so, see Paragraph [134].

What should be done with the sum over paid by POJ?

Mr Justice Ong Chee Kwan held that the sum demanded to be returned to the POJ is in fact a sum that is over and above the balance of the Fund available at the material time. His Lordship ruled that a refund should be made of the sum. His Lordship added that under no circumstances should the POJ be made to bear the cost of the currency conversion, see Paragraph [136]. The remaining sum in the Fund will be distributed among the remaining Claimants in accordance with the Order of Priorities, see Paragraph [137].

Thank you for reading IMSML Website Article 25/2025

Stay tuned for the next IMSML Website Article 26/2025: Pemilik Dan/Atau Pencarter Demis Kapal Atau Vesel ‘Edzard Schulte’ v Pemilik Dan/Atau Pencarter Demis Kapal Atau Vesel ‘Setia Budi’ [2023] MLJU 2949

Signing-off for today,

Dr Irwin Ooi Ui Joo, LL.B(Hons.)(Glamorgan); LL.M (Cardiff); Ph.D (Cardiff); CMILT

Professor of Maritime and Transport Law

Faculty of Law

Universiti Teknologi MARA Shah Alam

Selangor, Malaysia

Tuesday,  24 June 2025

Note that I am the corresponding author for the IMSML Website Articles. My official email address is: uijoo310@uitm.edu.my