Singapore Arbitration 2/19

Sale of ship – Clause 9: encumbrance clause – Breach of warranty in encumbrance clause – Indemnity provision – Maritime lien over bunker dispute – Bunker delivery - In rem claim – Duty of seller to assist buyer to contest claim

The claimant as the buyer entered into a memorandum of agreement (MOA) for the sale and purchase of a vessel with the respondent as the seller. The MOA contained a typical “encumbrances clause” in clause 9, which contained two provisions: the respondent warranted that, at the time of delivery, the vessel would be free from charters, encumbrances, mortgages, maritime liens and other debts, and was not subject to Port State or other administrative detentions (the “Warranty Provision”); and the respondent also undertook to indemnify the claimant against all consequences of such claims (the “Indemnity Provision”).