Goldenlotus Maritime Ltd v European Chartering and Shipping Inc

• Jurisdiction: Singapore
• Judge: Goh Phai Cheng JC
• Judgment Date: 03 November 1993
• Neutral Citation: [1993] SGHC 262
• Docket Number: Originating Motion No 110 of 1992,Originating Motion No 39 of 1993
• Date: 03 November 1993
• Published date: 19 September 2003
• Year: 1993
• Plaintiff Counsel: Ajaib Hari Dass and Srivathsan (Haridass Ho & Pnrs)
• Citation: [1993] SGHC 262
• Defendant Counsel: Christopher Lau and Ho Chien Mien (Allen & Gledhill)
• Court: High Court (Singapore)
• Subject Matter: Construction of order of remission by court,Arbitral tribunal,Arbitration,Whether arbitrators acted in excess of jurisdiction in revising award,Whether arbitrators could make new findings of fact outside terms of court order on remission,Jurisdiction,Remission of award to arbitrators

Cur Adv Vult

This is an application made pursuant to O 69 r 2(3) of the Rules of Supreme Court 1990 for:

(a) a declaration that an award made by the arbitrators on 30 September 1992 in a dispute between the parties as revised by the arbitrators on 7 June 1993 is not binding on the plaintiffs because it was made without jurisdiction;

(b) an order remitting the revised award to the arbitrators for them to recalculate the damages due to the defendants in the arbitration strictly in accordance with an order made by this court on 2 February 1993 in Originating Motion No 110 of 1992 and not otherwise; and

(c) other reliefs.

The background

The plaintiffs (whom I shall call `the owners`) in this application were the owners of the vessel Asean Friendship. The defendants (whom I shall call `the charterers`) were the charterers of the vessel under a time charterparty dated 23 December 1987 made between the parties. The charterers were the claimants and the owners were the respondents in an arbitration held between 27 July and 5 August 1992. A dispute arose between the parties under the charterparty. The charterers claimed against the owners damages for a breach of the charterparty. On 30 September 1992, the arbitrators awarded the charterers damages of US$715,000 and interest thereon. After deducting the agreed counterclaim of the owners, the arbitrators held that the net amount due to the charterers was US$552,266.47.

Paragraphs 5.50 to 5.54 of the award made by the arbitrators on 30 September 1992 state:

5.50

Para 4

We find that the [charterers] are entitled to the following damages:

5.51

We find that the market rate for the balance of the charter (29 September 1989 to 6 September 1990) was US$7,250 [per day].

5.52

We find that, within the spirit of the charterparty, there would be more than one sub-charter, and we have allowed for six sub-charters with an average of four days off-charter between charters. The balance of the charter is thus reduced for the purposes of calculating the earnings.

342 - (6 x 4) = 318 days (hours and minutes ignored)

5.53

Using the profit sharing formula (US$)

(7,250 - 3,500) x 0.6 = 2,250 daily earnings

Total earnings = 318 x 2,250 = 715,500

5.54

Interest at 8% pa.

It is to be observed that, in their award, the arbitrators computed the damages on the basis that the vessel would have performed six further sub-charters at a daily hire rate of US$7,250 had the charterparty not been terminated.

On 12 October 1992, the owners applied in Originating Motion No 110 of 1992 for the leave of the court to appeal against the award. The application was heard by me. The owners failed on all the issues that were raised in the said application except for one issue, namely, what is the proper method for calculating damages due under a time charterparty which has been prematurely terminated by the charterers as a result of the owners` repudiatory breach? On that issue this court held that leave to appeal against the quantum of damages awarded by the arbitrators should be granted. [See [1993] 2 SLR 278 .] On 2 February 1993, at the suggestion of counsel for the charterers, this court remitted the award to the arbitrators to make such further findings of fact as may be necessary for them to determine the voyage costs and thereby recalculate the damages due to be paid by the owners to the charterers for a breach of the charterparty.

The parties` submissions to the arbitrators

Following the remission of the award, the parties made submissions to the arbitrators on the direct voyage costs to be deducted. In their submissions dated 6 April 1993 to the arbitrators, the charterers` solicitors stated that, in their opinion, there was no need for the arbitrators to amend their award. They submitted that since the arbitrators had in para 5.53 of the award referred to the figure of US$7,250 as the `daily rate earned`, it would appear that the arbitrators may have taken that figure as a net figure. They also submitted that the expert evidence was that the market rate for the relevant period was US$7,500 and, in adopting a rate of US$7,250, the arbitrators had taken into account direct voyage costs. The charterers` solicitors also submitted that a sum of US$250 was sufficient to cover the direct voyage costs and urged the arbitrators to confirm their award.

On 13 April 1993 the owners` solicitors made submissions to the arbitrators. I am not referring to them as a copy of their submissions is not before me. In their reply dated 15 April 1993 to the owners` submissions of 13 April 1993, the charterers further maintained their original stand in that if the rate of US$7,250 was a net rate, then there was no need for them to address the arbitrators any further. They requested the arbitrators to indicate if that rate was a net rate or a gross rate and that if it was a net rate, they urged the arbitrators to restate their original award to reflect that.

The charterers` solicitors further submitted a reply submission dated 21 April 1993. In that submission, the charterers merely restated their stand that the arbitrators had already taken into account direct voyage costs in arriving at the rate of US$7,250 for the daily market rate. They also submitted in the alternative that if their case as set out above was wrong or if the arbitrators had deducted a notional figure of US$250 per day from the daily earning rate by way of an allowance for direct voyage costs and felt that they should therefore give consideration to the arguments advanced by them that further costs should be taken into account, then a proper deduction should be made by the arbitrators for the direct voyage costs as set out in their submissions.

The arbitrators had difficulty fixing an early date for an oral hearing. In a letter dated 28 April 1993 to the parties` solicitors, the arbitrators suggested the following alternative:

We would suggest that both parties, having already stated their case and seen the opposing case, now restate their case and this statement be delivered to the tribunal simultaneously, allowing the tribunal to settle the matter on the merits of both the submissions and this final statement ...

It is also noted that both parties have relied on the voyage accounts contained between pp 34-54 in the [charterers`] Bundle 1. These documents were part of the pleadings and were subject to dispute, which was settled privately at the hearing.

The tribunal directs that the parties examine these documents and agree the figures in accordance with the settlement made in August 1992. Any alterations should be crossed through, and the corrected figure written nearby. The revised document, signed and initialled by both parties to the effect that they both agree the figures, should then be delivered to the tribunal.

The owners` solicitors, by their letter dated 30 April 1993, advised the arbitrators that they would be able to inform the arbitrators of the basis of the settlement shortly. By a letter of the same date to the arbitrators, the charterers` solicitors informed the arbitrators that it would be `almost impossible` for the parties to do so.

In their letter of 3 May 1993 to the solicitors for the parties, the arbitrators said:

(3) No new evidence may be submitted. Reference to evidence should, in all cases, be to that already made available at the hearing in July/August 1992.

(4) The purpose of requiring the voyage accounts to be agreed between the parties is to eliminate any further dispute on the use of the figures therein, as both parties have made use of these documents which are subject to an unresolved dispute.

No agreement was reached on the breakdown of the lump sum settlement of the accounting issues between the parties. The charterers` submissions of 12 May 1993 to the arbitrators on this issue reiterated their initial stand. They emphasized that if the arbitrators had already taken into account a sum of US$250 for direct voyage costs, then all that the arbitrators had to do was to restate their original award and explain that due allowance had already been made for total direct voyage costs in arriving at the net amount due in favour of the charterers. The charterers submitted that alternatively if, after having read the detailed submissions of the parties, the arbitrators were of the view that the direct voyage costs would exceed the sum of US$250 which they had already found, that finding was unassailable. They also submitted that if the arbitrators` award was based on a gross daily hire rate, then the maximum deduction for the direct voyage costs would be the figures given in their reply submissions dated 21 April 1993.

The charterers also filed an affidavit...