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Sinohydro Corporation Ltd v The Ship "Run Fu 1" [2026] PGNC 51; N11725 (5 March 2026)

N11725

PAPUA NEW GUINEA
[NATIONAL COURT OF JUSTICE]

WS NO 575 OF 2025 (Comm/Admiralty) (CDS) and 7 related proceedings WS 564/25, WS 565/25, WS 566/25, WS 567/25, WS 568/25, WS 94/25 and WS 95/25

SINOHYDRO CORPORATION LIMITED (and 7 Ors in the related proceedings)
Plaintiffs

V

THE SHIP “RUN FU 1”
Defendant

WAIGANI: ANIS J
16 FEBRUARY, 5 MARCH 2026

NOTICES OF MOTION – seeking leave to effect substituted service of the originating process – Order 21 Rule 26(1) – Order 6 Rule 12 and Order 12 Rule – National Court Rules – leave to consolidate proceedings – Order 21 Rule 26(1)(a), Order 4 Rule 31(1), (2), and (3), Order 12 Rule 1 – National Court Rules and s.155(4) of the Constitution – consequential order to amend, file and serve a consolidated writ of summons and statement of claim – request for payment of security in the amount US$ 2.9 million or an amount mutually agreed with consequential orders to follow for non-compliance – Order 21 Rule 25(1), Order 21 Rule 26(1), Order 8 Rule 81, Order 14 Rule 29 and Order 12 Rule 1 of the National Court Rules – whether to hear all 3 relief or only 2 – whether sufficient materials are disclosed for the Court to deliberate on relief 3 – whether relief 3 should be struck out or reserved for further deliberation – consideration - ruling

Case cited

AGC (Pacific) Limited v Sir Albert Kipalan and Others (2000) N1944
Breckwoldt & The Co. (N.G. Pty Ltd) v Gnoyka [1974] PNGLR 106
Daws v Daily Sketch (1960) 1 W.L.R 126.
Harmer v. Bell, The Bold Buccleugh [1850] EngR 162
Horwood v British Statesman Publishing Company Ltd (1929) W.N. 38
In the Matter of Damansara Forest Products (PNG) Ltd (In Liquidation) (2005) N2789
Masket Iangalio and Electoral Commission v Wauni Wasi Ranyeta & Miki Kaeok (1998) SC568
Payne v British Time Recorder Company (1921) 2 K.B 1 at p.16
Ship ‘Federal Huron’ v. Ok Tedi Mining Ltd [1986] PNGLR 5
The Dictator (67 L.T. Rep. 563; 7 Asp. Mar. Law Cas. 251; (1892)
United Africa Co. Ltd v. The Tolten [1946] 2 All ER 372

Counsel

P Lowing with counsel assisting E Wangu, for the plaintiffs
G P Kult, for the defendant in WS 575 of 2025

DECISION

1. ANIS J: On 16 February 2026, I had before me a total of 8 notices of motion concerning the above matters. The present matter and the 7 related matters are led by the plaintiff in WS 575 of 2025. I reserved my ruling thereafter tentatively to 11:30am on 19 February 2026. The matter was further adjourned in Chambers to a date to be advised.

2. This is my ruling.

BACKGROUND

3. These are Admiralty proceedings commenced against property (in rem). The lead plaintiff Sinohydro Corporation Limited and 9 other plaintiffs in the 7 related proceedings are creditors or purported creditors who claim that their cargoes had vanished onboard a ship called Run Fu 3 (the capsized ship) which was a sister ship of the owners of Run Fu 1 (the defendant). The capsized ship sank somewhere in the Indian ocean on or around 11 June 2025 (the incident). They all commenced proceedings in the National Court to seek damages for the values of their cargoes which they claim had perished as a direct result of the incident. The defendant had been sited (tracked down) in the seas or shores of Papua New Guinea on various occasions in the recent months.

4. One of the creditors, Mafi Steel (Mafis) SARL, had in 2025 commenced an action in rem against the defendant in proceeding WS 64 of 2025. A warrant of Arrest of the ship was granted by this Court on 5 September 2025. Mafi Steel later discontinued the proceeding in September 2025 after the defendant had agreed to and had put up voluntary security by way of a Letter of Undertaking (LOU) dated 23 September 2025. The LOU was issued under the direction of the owners’ insurers called China P&I Services (Hong Kong) Ltd.

5. The 7 related pending proceedings are described as follows:

(1) WS 564 of 2025 – Jinan Goneng Power Technology Co., Ltd and Societe Nationale De Gestion Logistique Et Transport Le Guide v. The Ship “Run Fu 1”;

(2) WS 565 of 2025 – Tongya Automobile Co., Ltd and Societe Abdoul Fata v. The Ship “Run Fu 1”;

(3) WS 566 of 2025 – Bocoum Allaye Abary v. The Ship “Run Fu 1”;

(4) WS 567 of 2025 – Longstar Equipment Cameroun v. The Ship “Run Fu 1”;

(5) WS 568 of 2025 – Sorepco Sa v. The Ship “Run Fu 1”;

(6) WS 94 of 2025 – Dongping Co LTD v. The Ship “Run Fu 1”; and

(7) WS 95 of 2025 – Nantong Suzhong Construction Co. Ltd Chad Branch SARL v. The Ship “Run Fu 1”.

MOTIONS

6. As stated, I had 8 notices of motion that returned on 16 February 2026. Except for 2 of the relief, the rest of them are similar. It is pointless, in my view, to restate them individually so I will instead summarise or synchronize them for ease of reference.

7. For the plaintiff herein, its notice of motion was filed 6 February 2026 (plaintiff’s NoM), and it seeks the following:

• Relief 1 – an order to consolidate WS 575 of 2025 with the 7 related proceedings.
• Relief 2 – a consequential order that upon being granted the order for consolidation, that a further order be made to file and serve the consolidated or amended writ of summons and statement of claim upon Young & Willams Lawyers which shall be regarded as due service upon the defendant.
• Relief 3 – an order that the defendant pay into court a security in the amount of USD$2.9 million or an amount that is mutually agreed between the parties within 3 days of the date of the order of the Court, failing which judgment is to be entered against the Defendant in the sum of USD$1,882,527.09 with interest at a rate of 8% per annum pursuant to the Judicial Proceedings (Interest on Debt and Damages) Act 2015 from 11 June 2025, and interest to continue to accrue at the said rate thereafter; cost (which was sought as part of relief 3) against the defendant on an indemnity basis to be taxed if not agreed.
• Relief 4 – other orders as the court considers appropriate.
  

8. In regard to the 7 related matters, their notices of motion seek the following:

• Relief 1 – orders for substituted service of the originating processes and court documents to be served on the defendant, to be served upon Young & Willams Lawyers which shall be regarded as due or proper serve upon the defendant.
• Relief 2 – orders to consolidate the 7 related proceedings with WS 575 of 2025.
• Relief 3 – consequential orders that upon being granted the orders for consolidation, that further orders be made to file and serve the consolidated amended writ of summonses and statement of claims upon Young & Willams Lawyers to be regarded as due services upon the defendant.
• Relief 4 – orders for the defendant to pay the plaintiffs’ costs on an indemnity basis to be taxed if not agreed.
  

9. Evidence in support were read into the record of the proceeding.

PRELIMINARY MATTERS

10. At the start of the hearing, the defendant’s counsel notified the Court that he only had instructions to act for the defendant in WS 575 of 2025. Counsel informed the Court that premised on that, that he would confine his submissions on behalf of the defendant only in response to the plaintiff’s NoM.

11. The defendant proceeded on that basis at the hearing.

12. The plaintiff’s counsel, who also acts for the plaintiffs in the 7 related matters, confirmed Young & Williams’ said position and submitted that it was for that reason that they had not effected service of court documents including the originating processes for the 7 related matters upon the defendant.

13. Nevertheless, counsel for the plaintiffs proceeded with the applications.

14. For clarity and for this purpose, I will only hear and make a determination on the plaintiff’s NoM. This is despite the fact that all the 7 related motions were mentioned as also pending before me. In my view, the plaintiff’s NoM sufficiently addresses the relief that are sought in the 7 related motions. They will nevertheless be regarded or treated as the 9 plaintiffs’ intentions to join their proceedings with the lead plaintiff in WS 575 of 2025.

ISSUES

15. The main issues in my view are (i), whether the Court should grant relief 1 and 2 given that the defendant’s counsel did not have instructions to challenge or consent to them, (ii), if the Court grants relief 1 and 2, whether relief 3 should be set down for hearing at a different time to await consolidation and service of the proceedings, (iii), if relief 3 is considered now then later, whether the Court should order the defendant to provide security in the manner as proposed or submitted by the plaintiff, and, (iv), if the application is successful, what cost scale should the Court adopt to award cost against the defendant?

CONSOLIDATION & SUBSTITUTED SERVICE

16. The defendant did not give instructions to its lawyers to consent or oppose the 2 relief.

17. The plaintiff’s evidence on the 2 matter is unopposed.

18. Case law on point on consolidation of proceedings are settled and include In the Matter of Damansara Forest Products (PNG) Ltd (In Liquidation) (2005) N2789, AGC (Pacific) Limited -v- Sir Albert Kipalan and Others (2000) N1944, Breckwoldt & The Co. (N.G. Pty Ltd) -v- Gnoyka [1974] PNGLR 106, Masket Iangalio and Electoral Commission -v- Wauni Wasi Ranyeta & Miki Kaeok (1998) SC568, Payne -v- British Time Recorder Company (1921) 2K.B 1 at p.16; Horwood -v- British Statesman Publishing Company Ltd (1929) W.N. 38 and Daws -v- Daily Sketch (1960) 1 W.L.R 126.

19. The considerations include the following (my summary and inclusions):

- To save time and cost of the Court and the parties to the proceedings;
- Where common questions of fact and law arise out of the proceedings in question;
- Where common questions (questions of fact and law) have direct bearings on the main or crucial issues, making it possible for the Court to conveniently hear and dispose them;
- If the parties in the proceedings concerned are same, or regardless, if the defendant is the same person and the allegations raised are premised on the same background facts;
- If the parties in the proceedings concerned are same, or regardless, where they are represented by same lawyers and the proceedings concerned are premised on common questions (questions of fact and law) that have direct bearings on the main or crucial issues, making it possible for the Court to conveniently hear and dispose them;
- If the types of relief claimed by the parties are not different but same or similar, and again, if they are all premised on common questions (questions of fact and law) that have direct bearings on the main or crucial issues, making it possible for the Court to conveniently hear and dispose them.

20. I observe that the relief that is sought for service is consequential to the consolidation request.

21. When I weigh-up these considerations with the circumstances of the 8 related proceedings, I am minded to grant the 2 relief for reasons including the following:

• the defendant did not contest nor file any evidence to oppose them;
• evidence adduced by the plaintiff establishes a case where the 2 relief should be granted premised on similar and undisputed facts concerning all the 10 plaintiffs, that is, concerning their cargoes that they claim were lost out at sea that directly relate to the incident;
• evidence adduced shows a direct connection between the capsized ship and the defendant;
• evidence adduced shows the purported transfer of the defendant to the current purported owner or owners;
• the pleadings allege negligence and sham transfers of ownership of the defendant from its original owner which was Equal Best Group Ltd to a third party called United Shipping Ltd, 2 days after the sister ship (Run Fu 3) sank into the Indian ocean;
• granting the 2 relief is necessary for good administration of these 8 related proceedings;
• for relief 1, Young & Williams are the lawyers on record for the defendant and the owners or agents of the defendant in the present proceeding; and the defendant is the only named ship in all the 8 related proceedings, that is, the same defendant ship that Young & Williams acts for;
• all 8 claims are premised on the same facts and the incident;
• they all plead the same relevant facts and relief, and as for relief, the value of their cargoes that they claim perished because of the incident;
• they also seek security for these goods pending the outcome of the proceedings.
  

22. Relief 1 and 2 are granted.

SECURITY

23. Relief 3 states and I quote:

3. Pursuant to Order 21 Rule 25(1), Order 21 Rule 26(1), Order 8 Rule 81, Order 14 Rule 29 and Order 12 Rule 1 of the National Court Rules, the Defendant shall pay into court security in the amount of USD $2.9 million or an amount mutually agreed between the parties within 3 days of the date of this Order failing which judgment be entered against the Defendant in the sum of USD $1,882,527.99 with interest at a rate of 8% pursuant to the Judicial Proceedings (Interest on Debt and Damages) Act 2015 from 11 June 2025, the date in which the cause of action arose up to and including judgment and thereafter at the judgment rate of 8% per annum with indemnity cost to be paid to the Plaintiff by the Defendant to be taxed in (sic) not agreed.
   

24. The defendant does not challenge the merit of the relief sought. Counsel, however, made submissions on practice and procedures, that is, whether the Court should proceed to hear relief 3 if the Court grants relief 1 & 2, or whether it should be rescheduled for argument after the plaintiff and the 9 other plaintiffs in the 7 related matters, if the Court grants the 2 relief, file and serve their amended consolidated writ of summons and statement of claim. And second, the defendant challenges the jurisdictions invoked by the plaintiff under relief 3. The defendant submits that none of the rules cited refer to the correct jurisdiction required in an application for security thus the relief should be refused.

25. I will address the 2 matters.

26. Should I proceed to hear and determine relief 3 ahead of the 2 relief that I have now granted? Would proceeding on to deal with the matter in the manner as pursued by the plaintiff be in breach of court practice and procedures?

27. To answer, I make these observations:

• this is an action in rem as claimed and maintained by the plaintiff;
• it is not an action in personam;
• the submissions by counsel for the defendant in response to relief 3 are premised on the orthodox principles of an action in personam which has no application or relevance here;
• the normal court rules that apply to the requirements for service and the right to be heard may apply subject to or in conjunction with the Court’s power to act in Admiralty proceedings following its practice and procedures which have been developed over hundreds of years or so in the United Kingdom: cases: Ship ‘Federal Huron’ v. Ok Tedi Mining Ltd [1986] PNGLR 5, The Dictator (67 L.T. Rep. 563; 7 Asp. Mar. Law Cas. 251; (1892), United Africa Co. Ltd v. The Tolten [1946] 2 All ER 372, Harmer v. Bell, The Bold Buccleugh [1850] EngR 162;
• the plaintiff was entitled to move an urgent application for the arrest of the defendant at the material time which it had done on 3 December 2025;
• this Court granted the application on 5 December 2025 where orders were issued, amongst others, for the immediate arrest of the defendant;
• in an action in rem, an order for immediate arrest of a ship, which is normally heard exparte, is an essential preliminary step that a plaintiff would normally apply for to obtain as security;
• practice and procedures show that if a plaintiff in an action in rem is unsuccessful in securing arrest in rem, alternative security such as cash payment or undertaking may be sought in its stead against a defendant or its owners depending on the circumstances of the case as it unfolds;
• practice and procedures show that the alternative option to pay cash or provide a letter of undertaking may occur or is best utilized after the owners are joined or to avoid arrest of a ship or threat of its arrest;
• practice and procedures show that if the owners join or submit themselves to a proceeding that is commenced in rem, the proceeding may be converted into an action in personam, and the owners may provide alternative security for bail or release of the arrested ship;
• however, at this juncture, the position of the parties or the status quo are as follows:
  

(i) the action remains in rem;

(ii) the plaintiff still has the benefit or advantage of the warrant of arrest to arrest the defendant; the defendant had unsuccessfully tried to discharge the warrant of arrest before Cannings J on 6 January 2026;

(iii) The defendant had filed a conditional notice of intention to defend under Order 7 Rule 7 of the National Court Rules and had filed and moved a notice of motion (filed on 16 December 2025) where it had challenged the warrant of arrest and validity of this proceeding;

(iv) As stated, on 6 January 2026, Cannings J refused the defendant’s application;

(v) Earlier on 5 January 2026, His Honour also heard and dismissed term 2 of a notice of motion of the plaintiff that was filed on 23 December 2025; term 2 of the motion had sought this relief:

2. Pursuant to Rule 1 of the Admiralty Rules and Order 12 Rule 1 of the National Court Rules, Young & Williams Lawyers, shall cease to act for the Defendant forthwith and no other firm of solicitors be permitted to act on its behalf until such time as the Defendant and/or Young & Williams, do rectify the present contempt of court caused by:
   
   1. the Defendant evading arrest; and/or
   2. the Defendant, its representative, Young & Willams Lawyers and its Principal Shipping Agent Best Diamond Shipping Limited (Best Diamond) failing to disclose the location of the Defendant in breach of the Order of 5 December 2025 of this Honourable Court.
      

(vi) Given the above scenarios, one of the consequences, in my view, is that the conditional notice of motion has now become unconditional meaning that the defendant has subjected itself to the jurisdiction of this Court in WS 575 of 2025; this was further confirmed where the defendant appeared and contested the plaintiff’s NoM which is before me;

• the other relevant factor I consider is the fact that the plaintiff sought and has now been granted an order to consolidate the proceedings; this means that the pleadings herein have to be consolidated with the 7 related proceedings; changing of pleadings goes to the very heart of a claim(s), and in my view, it ought to be sorted out or clarified as a matter of priority before further relief may be considered or addressed by the Court;
• also, I consider the fact that the plaintiffs in the 7 related proceedings have yet to effect service of their originating processes on the defendant;
• I also observe that the plaintiff was prevented from producing its own summary or notes of what had transpired before Cannings J on the 5^th and the 6^th of January 2026; I note that I upheld the objection raised by the defendant at the hearing of the present motion because what was sought to be handed up to the Court was not sufficiently provided earlier to the counsel for the defendant and also that they were not the actual certified copies of the transcripts of the proceedings but rather the plaintiff’s own summary or notes taken of the two hearings;
• His Honour Cannings J gave extempore decisions on the 2 notices of motion filed by the parties;
• I am therefore handicapped in the sense that I do not know of the findings or reasonings of His Honour which may be relevant for me to consider the arguments that the parties may raise in regard to relief 3;
• I must be cautious to avoid inconsistencies of any orders or findings that may have been made by the Court earlier whether they be on points of facts, law or practice and procedures;
• I am also unable to verify and confirm whether all or some of the relief were dealt with in regard to the earlier motions that had been argued before Cannings J; if only some of them were dealt with then what orders were made on the balance of the motions?;
• These deficiencies have also made it difficult for me to proceed to hear relief 3, that is, without the benefits of the transcripts of proceedings of the 5^th and 6^th of January 2026;
• I do have the option dismiss relief 3 on that basis, however, it is perhaps best preserved for argument at a later date when I take into account all the factors stated herein.
  

28. For these reasons, I will answer the questions I posed earlier (i.e., Should I proceed to hear and determine relief 3 ahead of the 2 relief that I have now granted? Would proceeding to deal with the matter in the manner as pursued by the plaintiff be in breach of court practice and procedures?) in favour of the defendant.

29. As I have granted relief 1 and 2, I will issue consequential orders for filing and service of the consolidated proceeding on the defendant through their lawyers Young & Williams, and I will also issue directions for relief 3 including jurisdictional issues raised, to be reserved for arguments at a convenient date and time after service of the consolidated proceedings upon the defendant. I will issue further directions to the Transcript Section of the National Court to produce transcripts of the proceedings for the hearings of 5^th and 6^th of January 2026. I will require these for my benefit as well as for the benefit of the parties.

30. I will treat the matter as urgent so I will fix a return date for term 3 of the plaintiff’s NoM to return for argument as soon as the directions of the Court have been complied with.

SUMMARY

31 In summary, I grant relief 1 and 2 of the plaintiff’s NoM. I refuse to deal with the related 7 notices of motion for reasons as I have stated above. I, however, observe that they have now become obsolete given the decisions that I have now made.

32. Relief 3 of the plaintiff’s NoM remains pending to a date to be advised.

COST

33. An order for cost remains discretionary.

34 I will not make any order for cost at this stage but will reserve that to the application.

ORDERS OF THE COURT

35. I make the following orders:

1. The related National Court proceedings, WS 564 of 2025 – Jinan Goneng Power Technology Co., Ltd and Societe Nationale De Gestion Logistique Et Transport Le Guide v. The Ship “Run Fu 1”, WS 565 of 2025 – Tongya Automobile Co., Ltd and Societe Abdoul Fata v. The Ship “Run Fu 1”, WS 566 of 2025 – Bocoum Allaye Abary v. The Ship “Run Fu 1”, WS 567 of 2025 – Longstar Equipment Cameroun v. The Ship “Run Fu 1”, WS 568 of 2025 – Sorepco Sa v. The Ship “Run Fu 1”, WS 94 of 2025 – Dongping Co LTD v. The Ship “Run Fu 1” and WS 95 of 2025 – Nantong Suzhong Construction Co. Ltd Chad Branch SARL v. The Ship “Run Fu 1” shall be consolidated with this proceeding.
   
2. The plaintiffs shall file and serve a revised Consolidated and Amended Writ of Summons and Statement of Claim within 7 days from the date of this Order.
   
3. The Consolidated Amended Writ of Summons and Statement of Claim shall be served on the defendant through the office of its lawyers Young and Williams Lawyers.
   
4. The defendant would be at liberty to file and serve its defence within 14 days thereafter the date of service of the Consolidated Amended Writ of Summons and Statement of Claim or within further time with leave of the Court.
   
5. The National Court Transcript Section is ordered to provide sealed copies of the transcripts of the hearings of proceedings for WS 575 of 2025 that were held on 5^th and 6^th of January 2026.
   
6. The transcripts of the proceedings, once ready, shall be made available to the Court file for these now consolidated proceedings, and advice of that shall be issued immediately to my associate and the parties.
   
7. Term 3 of the plaintiff’s notice of motion filed 6 February 2026 shall survive the consolidation and is reserved for hearing immediately or soon after terms 1, 2, 3, 5 and 6 are complied with.
   
8. For clarity, also surviving the consolidation of the proceedings is the warrant of arrest of the defendant which was granted by this Court which remains binding.
   
9. The matter will return for directions at 9:30am on 16 March 2026 at which time the Court may list the pending motion for hearing.
   
10. Cost is reserved to the application.
    
11. The plaintiffs are directed to immediately take out the orders and have a sealed copy served on the Transcript Section for compliance.
    
12. Time for entry of these orders is abridged to the date and time of settlement by the Registrar of the National Court which shall take place forthwith.
    

The Court orders accordingly
________________________________________________________________
Lawyers for the plaintiffs: Leahy, Lewin, Lowing, Sullivan
Lawyers for the defendant: Young & Williams