IMSML Website Article 40/2025: MCP International Corp & Anor v SIMS Metal BV (Maersk A/S, intervener) [2024] MLJU 3226 - Ex-Parte Orders to Freeze, Detain and Preserve, as well as Take Samples from Cargo Entering Malaysia on the Maersk’s ‘Ever Gentle’ Container Ship

P1 was P2’s procurement agent. The Ps entered into a contract with the D for the supply of 350 metric tonnes of zinc-aluminium alloy scrap for USD623,000, see Paragraph [5]. The cargo of 23 containers was to enter Malaysia via the Maersk containership, the ‘Ever Gentle’., under bills of lading MAEU223194170 and MAE222894685, see Paragraph [1]-[2]. The Ps alleged that the D had shipped scrap metal and not the goods purchased by the Ps. By now, the Ps considered the D a fraudster who had a modus operandi of shipping cargo and changing the consignee when the containers are in transit to deceive genuine buyers, see Paragraph [6].

The D was a Belgium entity, with not other assets in the jurisdiction. The D has not appeared in the action and no one has been able to contact the D. The Ps argued there was a risk that the D would order the cargo to leave the jurisdiction in order to frustrate any judgment, see Paragraph [7]. Therefore, the Ps applied for an Ex-Parte Order against the D for breach of the sales contract, see Paragraph [5].

On 10 February 2023, the Ps sought urgent ex-parte orders to freeze, detain and preserve, as well as take sample from he cargo containers. On 16 February 2023, the ex-parte orders were granted, see Paragraph [1].

On 4 April 2023, Maersk applied to intervene in the action. Maersk’s application was granted on 19 September 2023, see Paragraph [3]. On 3 October 2023, Maersk sought to set aside the Ex-Parte Order and claim damages from the Ps which arose as a result of complying with the ex-parte order, see Paragraph [4].

Note that according to the Mareva Injuction (ie issued in Bahasa Malaysia), the D or its agent was prevented from dealing, assigning, removing, disposing, transferring any assets on the containership, see Paragraph [8].

On 20 February 2023, Maersk was sent a notice, reminding it to comply with the Court order. Maersk did not respond to this. On 9 March 2023, the Ex-Parte Order lapsed (after 21 days). No inter-partes was ever held, see Paragraph [9].

Could Maersk set aside the Ex-Parte Order that had Lapsed Without Prior Challenge?

The Ps argued that Maersk’s failure to apply to set aside or discharge the Ex-Parte Order before it lapsed meant that it accepted the validity of the Ex-Parte Order, see Paragraph [11], relying on the case of Elias bin Mooin and Anor v Dato’ Zainal Abidin bin Johari [1997] 5 MLJ 359 and Middy Industries Sdn Bhd & Ors v Arensi-Marley (M) Sdn Bhd [2013] 3 MLJ 511 (CA).

At the Shah Alam High Court, Elaine Yap Chin Gaik JC rejected both these authorities. Her Ladyship took the view that in both cases, no such application to set aside an ex-parte interim injunction had been made after it lapses, see Paragraph [15]. Her Ladyship explained that an inordinate delay may be relevant in the exercise of the Court’s discretion not to order an assessment of damages, but there is no reason in principle why an application to set aside an ex-parte interim injunction cannot be made after the order has lapsed, see Paragraph [16]. There are several reasons for this approach:

[1] The purpose of the application was to determine if the ex-parte injunction should have been granted at all, see Paragraph [17];

[2] A party served with such an order arrives at the scene with a significant disadvantage, and should not be deemed to have accepted that the ex-parte injunction was properly taken out by reason only of a delayed reaction, see Paragraph [17];

[3] Both cases cited by the Ps concerned claims for damage given by the Ps for any damage suffered by the D. The position of an innocent third party such as Maersk cannot be equated to that of a D, as there may be impediments beyond the control of Maersk, see Paragraph [18].

The foundation of Maersk’s case against the Mareva Injunction is that that the Ps had not met the elements of that ex-parte order, ie the Detained Cargo were not assets belonging to the D, see Paragraph [29]. The Ps responded by arguing that the two bills of lading were made to the order of the D as shipper and the D had reserved the right of disposal, see Paragraph [32]. Therefore, the Ps argued that this precluded the passing of property from itself to any other party, see Paragraph [33].

Elaine Yap Chin Gaik JC noted that both bills of lading were specifically consigned to named consignees identified as Rainbow Metal Recycle Sdn Bhd and LLS International Trasding Sdn Bhd, see Paragraph [34]. Maersk took the position that it was unable to ascertain who were the lawful owner(s) of the Detained Cargo, see Paragraph [36]. Later it emerged that both Rainbow Metal and LLS International were not claiming ownership over the Detained Cargo. However, it was also not clear it they indeed had ownership rights, or they had simply abandoned the cargo, see Paragraph [37]. Her Ladyship also noted that it became apparent later on that the Detained Cargo turned out to be more trouble than they were worth. No one wanted to be saddled with it. Even the Ps who moved the Court for a Mareva Injunction was not interested in the Detained Cargo, see Paragraph [38].

The ownership of the Detained Cargo was disputable on the face of the documents as there was no endorsement on the Bills of Lading that they were made to the order of the D to raise a presumption of reservation of title / right of disposal, see Paragraph [42]. Even if it was subsequently ascertained that the D did not own the Detained Cargo, this does not necessarily mean that the Ex-Parte Order was wrongly granted, see Paragraph [43]. The grant of the Ex-Parte Order was an exercise of discretion by the Judge hearing the matter, who had at the forefront of his mind, whether justice requires that the urgent injunction be granted, see Paragraph [44].

After reviewing the fact, law and evidence in the case, Elaine Yap Chin Gaik JC concluded that the Ps did overstate its case for a Mareva Injunction. Her Ladyship said that the Ps presumed the fact of ownership of all the cargo identified in the Ex-Parte Order as the D’s, without drawing to the Court’s attention, the speculative basis for that presumption, see Paragraph [46]. The end result of this was that the Ps failed to make full and frank disclosure to the Court that the Bills of Lading were inconclusive, and that there may be multiple ownership claims to the cargo in question. There was no evidence that the D pretended to ship the cargo with no intention to transfer property in it to defraud buyers, see Paragraph [47]. The Ex-Parte Order was therefore wrongly granted, see Paragraph [48].

Was the Cargo Located Outside the Jurisdiction?

The cargo covered by the two bills of lading were being shipped from Antwerp, Belgium to Ningbo, China. Maersk had informed the court that the containers had been sent back to its port of origin in Antwerp, Belgium, see Paragraph [49]. This fact was not disputed by the Ps. Hence, the cargo were not assets of the D that were within the jurisdiction of the Court. On the basis of these facts, the Mareva Injunction should not have been granted in respect of the containers, see Paragraph [50].

So what was the Subject-Matter of the Litigation?

It later emerged that the Detained Cargo, was not in fact the subject-matter of the action against the D. he Ps were in fact making a claim for breach of the sale contract relating to cargo in 10 containers shipped on the same vessel under CMA CGM Bill of lading HBG1708173E and CMA CGM Waybill HBG1708173D which were being shipped from Hburg to Port Klang, see Paragraph [52]. The Detained Cargo identified in the Ex-Parte Order was unrelated to the sales contract under the current legal dispute, as the Detained Cargo was simply assets sought by the P to be secured in order to satisfy a prospective judgment in this action (ie by preventing it from being removed from the jurisdiction), see Paragraph [53].

Therefore, the Ex-Parte Order should not have been granted in the first place. This is not a reflection of the Court’s assessment on the validity of the Ps’ claim. Rather, it was a reflection of the standards to be met when making an ex-parte interim injunction, especially when third party rights may be adversely affected. This is a reflection of the Court of Appeal’s view in Galaxia Maritime SA v Mineral Import-export; The Eleftherios [1982] 1 All ER 796 where a Mareva Injunction which restrained a cargo of coal was discharged. The cargo had been loaded on a vessel belonging to another shipowner which was at the port because the injunction was an ‘unwarrantable act of interference with the business of the third party, the shipowner’, see Paragraph [56]. The Court of Appeal in The Eleftherios held that third party rights prevail over the P’s desire to secure the D’s assets for himself against the day of judgment. The Court of Appeal made it clear that mere proffering of an indemnity in whatever form does not displace that balance, see Paragraph [57].

Based on the above, Elaine Yap Chin Gaik JC held that the Ex-Parte Order is set aside and the accompanying damage suffered by Maersk is to be assessed, see Paragraph [58].

What are the Quantum of Damages that Maersk is Entitled to?

Maersk contended that its rights as a Carrier were interfered with by the Ex-Parte Order which restrained the Detained Cargo under the disputed bills of lading, in particular, see Paragraph [59]:

[1] Daily storage / detention costs for 23 Containers detained from 16 February 2023 to 3 May 2023 (R*M113,160.00);

[2] Legal costs incurred for being served with the Ex-Parte Order (RM261,302.38);

[3] Survey fees owed to Links Survey (M) Sdn Bhd (RM10,416.00)

The survey (ie No [3] above) was carried out under a consent order. It was carried out from 27 April 2023 to 3 May 2023. The parties agreed that it was Maersk’s cost and Elaine Yap Chin Gaik JC disallowed the claim as damages see Paragraph [62].

Her Ladyship also disallowed the storage charges for the Detained Cargo for the period between 6 April 2023 and 3 May 2023 as these were necessitated by the Consent Order, not the Ex-Parte Order. The storage charges were a part of the contemplated out-of-pocket disbursements associated with the Survey, see Paragraph [67]. There is also no basis for storage charges from 16 February 2023 and 20 February 2023 as the Detained Cargo was already discharged on 2 February 2023, quite independently of the Ex-Parte Order. Plus, from 6 April 2023 onwards, Maersk was at liberty to disregard the Ex-Parte Order, see Paragraph [66].

The Intervener Legal Fees include fees payable to lawyers and were not claimable as damages, see Golden Star & Ors v Ling Peek Hoe & Anor and Another Appeal [2024] 6 CLJ 487 (FC). However, as they were connected almost exclusively to this litigation (eg attending to communications with Ps’ solicitors reviewing and drawing up court papers, attending court proceedings and giving legal advice to set aside the Ex-Parte Order), they fall within the meaning of ‘costs;’ and are recoverable as part off the legal proceedings, see Paragraph [68]-[69].

Also closely connected to the Intervener’s Legal Fees, are the Intervener’s Cost in the Proceedings. Elaine Yap Chin Gaik JC awarded these costs to Maersk opt an indemnity basis. In Project Development Co Ltd SA v KMK Securities Ltd [1983] 1 All ER 465, the Court held that the Intervener should be indemnified for the expenses it had reasonably incurred (and reasonable in amount)  in successfully applying to vary an order, see Paragraph [70]. Hence, her Ladyship allowed all Intervener costs except those that were unreasonable in amount, or those that were unreasonably incurred, see Paragraph [71].

Thank you for reading IMSML Website Article 40/2025

Stay tuned for the next IMSML Website Article 41/2025: Baharat International F.Z.C v Lai Kim Lian [2024] MLJU 3261 - Application of Mr Justice Ong Chee Kwan’s Decision in The ‘Oriental Dragon’ 2023] MLJU 3050.

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,  7 October 2025

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