Asia Capital Commodities Trade Sdn Bhd v The Owner of the Vessel “Oriental Dragon”

Appellant(s): Asia Capital Commodities Trade Sdn Bhd

Respondent(s): Worldport Corporation Limited, Hong Kong

• YA Dato' Che Mohd Ruzima Bin Ghazali
• YA Datuk Wong Kian Kheong
• YA Datuk Ismail Bin Brahim

• The defendant, owner of the vessel "Oriental Dragon", appointed the plaintiff as its operator for passenger cruise and casino businesses (the latter conducted in international waters).
• The plaintiff incurred substantial expenses for the vessel's operation and maintenance, which the defendant failed to reimburse after operations ceased due to the COVID-19 pandemic.
• The plaintiff terminated its operational role and initiated an admiralty action in rem to claim reimbursement for the expenses.
• The High Court dismissed the plaintiff's claim, holding that the plaintiff's appointment was part of a Memorandum of Understanding (MOU) between the defendant and a director of the plaintiff, thus the suit could not be maintained outside the MOU.

• Whether the contracts were illegal due to the casino business, especially considering the MOU's Hong Kong governing law and exclusive jurisdiction clause, and if this issue could be raised for the first time on appeal.
• Whether the plaintiff's claim for reimbursement constituted a valid admiralty action in rem under the Senior Courts Act 1981 (UK) and Courts of Judicature Act 1964, and if the pleadings adequately supported a contractual cause of action.
• Whether an agency relationship existed between the parties, obligating the vessel owner to indemnify the agent for expenses incurred, and if the High Court erred in conflating this agency with the separate MOU.

• The Court of Appeal allowed the appeal, ruling that the defence of illegality (gambling) was inapplicable as the MOU was governed by Hong Kong law and jurisdiction, and the contract encompassed both lawful and casino operations.
• The Court affirmed that the action was properly brought as an admiralty action in rem under sections 20(2)(p) and 20(2)(m) of the Senior Courts Act 1981 (UK) read with section 24(b) of the Courts of Judicature Act 1964, as the agent's payments constituted disbursements and supplies for the vessel's operation and maintenance.
• An agency relationship was established by the vessel owner's conduct and letters, obligating the owner to indemnify the agent for authorized payments under sections 175 and 176 of the Contracts Act 1950, and the High Court erred in linking this agency to the MOU.