IMSML Website Article 32/2025: Advantage Marine Services (M) Sdn Bhd v TS Maritime Sdn Bhd [2024] MLJU 1348 - Salvage Services for Re-Floating of the ‘Ocean Serene’ at Sungai Klang

This case concerns salvage services (valued at RM1,090,000.00) granted to the ‘Ocean Serene’ at the Klang River, see Paragraph [1]. When there was a failure to pay the sum owed, the Petitioner (salvor) issued a statutory notice (under the Companies Act 2016, Section466(1) on 21 November 2022) to the Respondent (shipowner) for a winding up, see Paragraph [2].

Were the Salvage Services Successfully Rendered?

This was an important question to answer as a salvage award was only payable if the salvage operation was successfully carried out. It is trite law that salvage services are subject to a ‘no cure, no pay’ contractual obligation. This success was evidence by a letter of accomplishment dated 19 May 2022, see Paragraph [6].

There was also a ‘Variation Agreement’ for additional charges that were to be paid over four (4) instalments, see Paragraph [7]. The Respondent had paid an initial deposit of RM350,000 upon accepting the initial salvage quotation. That left a balance of RM420,000 which was due under the original contract, see Paragraph [8]. The Respondent failed to pay this sum and the Petitioner issued a notice of demand on 17 August 2022, see Paragraph [9].

Why Did the Respondents Failed to Pay the Sums Owed?

On 30 August 2022, the Respondent replied and proposed to pay the balance sums owed in twelve (12) monthly instalments, see Paragraph [10]. This proposal was rejected by the Petitioner on 20 September 2022. A counter proposal was made by the Petitioner that a sum of RM670,000 would instead be paid over eight (8) monthly instalments, see Paragraph [11].

On 5 October 2022, the Respondent stated that it was not in a financial position to make any payment to the Petitioner, see Paragraph [13]. In the light of this development, the Petitioner then issued a statutory notice on 21 November 2022, see Paragraph [14]. The Respondent neither replied to the statutory notice, nor deny receiving it, see Paragraph [14]. The Respondent then filed the petition in Court to wind up the Respondent, see Paragraph [14].

Did the Respondent Shipowner have a Bona Fide Dispute on the Execution of the Salvage Services?

The Respondent argued that the work should be done within 45 days from the start of the salvage contract (ie 4 October 2021). According to the Respondent, this meant that the work should be completed by 28 November 2021, see Paragraph [15]. Since time was made of the essence, this breached the contract by failing to re-float the Vessel within the time prescribed, see Paragraph [16]. Evidence for this is the Non-Performance of Salvage Work dated 22 July 2022 from the ship manager of the Vessel’s Owner, see Paragraph [17]. Mr Justice Ahmad Murad Abdul Aziz found this allegation unusual as prior to the Petitioner’s demand, the Respondent had not made any reference to a breach of contract on the part of the Petitioner, see Paragraph [20].

The Respondent also claimed that the Petitioner failed to ‘de-water’ the ship. Thus it could not be towed to the shipyard to commence repair work, see Paragraph [18]. Mr Justice Ahmad Murad Abdul Aziz took the view that the Respondent could have overlooked to raised such an important issue in its correspondence with the petitioner. In PECD Construction Sdn Bhd v Freehold Point Sdn Bhd [2008] 3 CLJ 215 (which was quoted in David Wong Hon Leong v Noorazman Adnan [1995] 4 CLJ 155 by Gopal Sri Ram JCA, as he then was), the court held that when a person receives a letter, he must dispute the facts if he did not agree with the content of that letter, see Paragraph [20].

Mr Justice Ahmad Murad Abdul Aziz also found it strange that the notice from the Shipowner came one day after signing the Variation Agreement. As the shipowner and the Respondent had the same shareholders, surely as a related company, would have known regardless of the facts, regardless of capacity. His Lordship held that the notice of non-performance is therefore a concoction and afterthought by the Respondent, see Paragraph [20].

Given the facts above, his Lordship held that the Respondent failed to raise a bona fide dispute on substantial grounds to the sum claimed by the Petitioner, see Paragraph [21]. The order from the Petitioner for the sums owed was allowed together with the costs of RM7,000, payable out of the Respondent’s assets, see Paragraph [21].

Thank you for reading IMSML Website Article 32/2025

Stay tuned for the next IMSML Website Article 33/2025: Meck Petroleum DMCC v The Owners and/Or Demise Charterers of Ship Or Vessel The ‘Global Falcon’ of The Port of Cook Islands [2024] MLJU 1378 - Arrest of a Ship for Unpaid Bunkers Supplied to a Ship’s Cargo Tanks

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,  12 August 2025

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