Fal Energy Company Limited v Owners of the Ship or Vessel "Kiku Pacific"

• Jurisdiction: Singapore
• Judge: Choo Han Teck JC
• Judgment Date: 11 November 1998
• Neutral Citation: [1998] SGHC 370
• Published date: 27 February 2013
• Court: High Court (Singapore)
• Plaintiff Counsel: Belinda Ang Fong SC and Gan Seng Chee [Ang & Partners]
• Defendant Counsel: Steven Chong SC and Chua Choon King [Rajah & Tann]

Judgment :

1. The plaintiffs are a company incorporated in Sharjah, United Arab Emirates and were at all material times carrying on the business of fuel and oil suppliers. On 28 December 1995 their agents in the United Kingdom, Fal Energy (UK) Ltd received a telex from Martin Millard of Marine Supplies Services Ltd ("MSSL") as brokers for Forsythe International UK Ltd ("Forsythe"). The telex was an offer to purchase 100 metric tons of diesel oil

at US$193 per ton and 500-600 metric tons of intermediate fuel oil at US$118 per metric ton. The telex stated that the supply was on account of Forsythe. The vessel to receive the bunkers was the "Kiku Pacific", and the port where the bunkers was to be delivered was Fujairah (which is in the proximity of Khor Fakkan), and the estimated date of the vessel’s arrival was 1 January 1996. The seller was stated to be the plaintiffs. It was not disputed that the buyer in this telex was Forsythe. It was also stipulated that any overtime or other costs would be on the buyer’s account, and also a statement that the purchase was on the supplier’s terms and conditions. This offer was accepted by Fal Energy (UK) on behalf of the plaintiffs on the same day.

2. About 15 minutes after he sent the telex to Fal Energy (UK) Ltd, Martin Millard sent an almost identical telex to Albany Bunkers Ltd ("Albany") who were the brokers for the owners of the vessel. In this telex Millard proposed (as brokers for the sellers) to sell the same quantity of fuel oil and intermediate fuel oil to the owners ("defendants") to be delivered to the Kiku Pacific at Fujairah. The sellers were stated to be Maritime Brokers Ltd ("Maritime"), and the buyer was stated to be Tanker Pacific Management who were the managing agents of the defendants’ vessel, the Kiku Pacific. Alan Jermey of Albany replied by telex on the same day accepting this offer. There was a subsequent conversation between Millard and Jermey over the telephone in which a variation of the purchase agreement between the owners and Maritime was made. Due to draft constraints the intermediate fuel oil could not be delivered on 1 January 1996. The intermediate fuel oil was subsequently delivered on 6 January 1996. Nothing turned on this change save that it confirmed the telex exchange between them have been accepted and acted upon. The more significant difference was that in MSSL’s telex to Albany, the purchase prices for the diesel oil and intermediate fuel oil were US$190 and US$116.50 respectively. Thus it would appear that Forsythe bought the fuel at a higher price than that sold by Maritime to the defendants. MSSL were the brokers in both transactions but for different parties.

3. The Kiku Pacific called at the port of Khor Fakkan, next to Fujairah, on 1 January 1996. The marine fuel were delivered on 1 January and 6 January respectively by the plaintiffs to the vessel. Maritime received payment in full from the owners for the bunkers. Forsythe did not pay the plaintiffs. The plaintiffs arrested the Kiku Pacific in Singapore on 8 July 1996 but released her on 10 July after security was furnished by the defendant owners. Unbeknown to the plaintiffs and defendants at the time, their contracts with Forsythe and Maritime respectively were the two ends of a string contract. It transpired later that MSSL also brokered a sub-sale from Forsythe to Wm Scollay & Co Ltd who in turn sold the marine fuel to South Pacific Energy Trading Pty Ltd ("SPET") who sold to Maritime.

4. In this action the plaintiffs sued the defendants for the unpaid price of the marine fuel based on their contract price with Forsythe. The plaintiffs relied on the following documents namely, the telex from Fal Energy (UK) Ltd dated 28 December 1995, the delivery receipts dated 1 and 6 January 1996, and the invoices dated 1 and 6 January 1996 as evincing a contract between the defendants and themselves. The plaintiffs averred in their statement of claim that the request for the bunkers was made by the defendants or their agents, but at trial, it was rightly conceded that Forsythe contracted as principal, and not as agent for the defendants. This left the plaintiffs with the task of proving that the defendants contracted independently with them. It was also pleaded that the defendants had admitted the contract. This was based on the ex post facto conduct of the parties attempting to negotiate a settlement, and I find that it had no relevance to the issue of liability. A pleading of admission in this context is only a pleading of evidence.

5. In her opening address on behalf of the plaintiffs, Miss Ang, SC stated the plaintiffs’ case as follows:

"The designation of Forsythe International UK Ltd as the account holder indicated the party who placed the order. Insofar as the contract clearly incorporates the terms and conditions of sale of the plaintiffs in clauses 1.2, 2.1 and 3.4, Forsythe International together with the owners of the vessel the defendants were both independently and separately liable to pay the purchase price of the marine fuel."

6. That set the true ground of the plaintiffs’ claim and trial proceeded as such with much of the facts not really in dispute. The reasons for the conduct of SPET and Wm Scollay were not established with any degree of certainty although Mr Denvers, representing the plaintiffs and Mr Turner from Maritime both shared similar conclusions after their own investigations, but all that was not necessary for the purposes of this trial before me. To sustain her argument, Miss Ang relied on the following passage from the plaintiffs’ bunkering notice signed by the vessel’s chief engineer:

"The marine fuel described herein is delivered in accordance with Fal Energy Co Ltd Standard Terms and Conditions of Sale and on the credit of the vessel."

7. That notice referred to the applicability of Fal’s Terms and Conditions which by condition 3.4 provides as follows:

"All marine fuel sold and delivered by Fal is sold and delivered, and is hereby agreed by the Buyer on behalf of himself and owners and charterers of the Vessel to be sold and delivered on the faith and credit of the Buyer and on the faith and credit of the Vessel.

Fal shall have a maritime lien against the vessel in respect of all sums due to Fal hereunder...