In Re Bonvoy 1

• Jurisdiction: Singapore
• Judge: Tay Yong Kwang JC
• Judgment Date: 30 July 1999
• Neutral Citation: [1999] SGHC 195
• Citation: [1999] SGHC 195
• Court: High Court (Singapore)
• Plaintiff Counsel: Belinda Ang, S C and Anna Quah (Ang & Partners)
• Defendant Counsel: Leong Kah Wah and Lee Kin Meng (Joseph Tan Jude Benny)
• Published date: 07 March 2013

JUDGMENT:

GROUNDS OF DECISION

1 The Plaintiffs were the lawful holders of a bill of lading dated 1 August 1995 whereby the Defendants undertook for reward to carry cargo on their vessel, Bonvoy 1, from the port of Singapore to the Outer Port Limits for ship to ship transfer onto the vessel Stolt Aquamarine. The cargo was a consignment of 1,968.070 MT of Methyl Tertiary Butyl Ether ("MTBE"), a petrol chemical. Its final destination was Los Angeles, California, USA.

2 The contractual specification for the MTBE stipulated a maximum water content of 500 parts per million ("ppm") but 845.006 MT of MTBE delivered by the Bonvoy 1 to the Stolt Aquamarine’s tank number 10 CP were contaminated with water content above the specification. The Plaintiffs claimed US $140,401.16 (the difference between the sound market value of the MTBE in question and its value as damaged cargo) and US $15,223.50 as survey fees.

3 I found that the Plaintiffs had proved their case against the Defendants on a balance of probabilities and awarded the sum claimed together with interest and costs.

THE PLAINTIFFS’ CASE

4 The Plaintiffs were Phibro Division of Salomon Inc. while the Defendants, Land-Oil Trading Pte Ltd, were the owners of the Bonvoy 1. By a contract evidenced by a telex dated 7 July 1995, the Plaintiffs agreed to purchase 2000 MT, plus or minus 5% at buyers’ option, of MTBE from Itochu Asia Pte Ltd. Additional quantities of MTBE were also purchased from two other sellers but those were not part of the Plaintiffs’ claim here.

5 Under the sale contract, the risk and title to the MTBE passed to the Plaintiffs upon its passing the incoming flange of the Bonvoy 1 at the PCS Pulau Ayer Merbau terminal. The Bonvoy 1 would then sail from the said PCS terminal to the Outer Port Limits and perform a ship to ship transfer of the MTBE to the Stolt Aquamarine. The Stolt Aquamarine would then sail to the Oiltanking terminal and receive two other parcels of MTBE.

6 Saybolt (Singapore) Pte Ltd ("Saybolt") were the independent surveyors appointed for the entire operation from the PCS terminal to the Oiltanking terminal. Roger Chia was a cargo inspector in Saybolt’s employ at the material time. He led a team comprising two other Saybolt inspectors which attended the loading of the MTBE from the shore tank at the PCS terminal onto the Bonvoy 1 between 31 July and 1 August 1995 and then the ship to ship transfer to the Stolt Aquamarine between 2 August and 3 August 1995. Roger Chia was also one of the inspectors who attended the loading of the other two parcels of MTBE at the Oiltanking terminal.

7 The sample of MTBE taken from the shore tank at the PCS terminal showed the water content to be within specifications. The Bonvoy 1 was inspected before loading took place and the cargo tanks, the pumps and lines were found to be empty, dry and clean on visual inspection. 1968.070 MT of MTBE were loaded on board the Bonvoy 1 from the shore tank through a dedicated delivery system.

8 At the Outer Port Limits, before the ship to ship transfer took place, the quantity of MTBE on board the Bonvoy 1 was measured at 1967.568 MT.

9 The Saybolt inspectors entered and visually inspected the five tanks on the Stolt Aquamarine nominated to receive the MTBE from the Bonvoy 1, one of which was tank 10 CP. They were found to be clean and dry and suitable to receive the cargo. The relevant cargo line valves were open during the tank inspection. The manifold was also inspected and found to be clean and dry.

10 Discharge of the MTBE from the Bonvoy 1 commenced at about 7.45 pm on 2 August 1995 and proceeded until 6 am on 3 August 1995 when it was suspended without notice. Roger Chia was on board the Bonvoy 1 at that time. He had checked all the cargo tanks on the Bonvoy 1 and, save for tank 4 S, found them to be well drained of MTBE. He was in the process of checking tank 4 S when the discharge was suspended. Tank 4 S still had a quantity of MTBE in it.

11 The Master of the Bonvoy 1 went up to Roger Chia to advise him of the suspension of discharge, informing him that he was having problems and could not pump the MTBE from tank 4 S. He asked what would happen if the MTBE in tank 4 S could not be discharged. Roger Chia told him that he would not issue a Dry Tank Certificate and would issue a Protest.

12 The Master then went to talk with the Chief Officer. He returned to inform Roger Chia that he thought he could complete the discharge by first transferring the MTBE in tank 4 S to tank 3 S and asked whether that was alright. Roger Chia had no objections.

13 While waiting for the discharge to resume, Roger Chia boarded the Stolt Aquamarine and enquired from the Duty officer there how much cargo the Stolt Aquamarine had received. He was told that there were still 40 to 50 MT of MTBE not delivered to the Stolt Aquamarine.

14 Roger Chia then returned to the Bonvoy 1 but he did not measure the amount of MTBE remaining in tank 4 S. The discharge from tank 4 S resumed at 7 am on 3 August 1995. He noticed that the cargo level in tank 4 S began to drop and that cargo was entering tank 3 S. This went on until tank 4 S was empty. He did not know whether the cargo was being discharged simultaneously to the Stolt Aquamarine.

15 The discharge from the Bonvoy 1 was completed at 8.10 am on 3 August 1995. All the cargo tanks on the Bonvoy 1 were inspected again and found to be stripped of cargo. A Dry Tank Certificate was subsequently issued. A contemporaneous note of the above events was made by Roger Chia.

16 At the commencement of the pumping of the MTBE from the Bonvoy 1, a line sample was taken at the Stolt Aquamarine’s manifold connection. MTBE was at first pumped into all five designated tanks on the Stolt Aquamarine and after the first-foot samples were taken from each tank, the cargo was loaded into four tanks only, with tank 10 CP receiving the cargo only after those four tanks had been filled. Samples were also taken from all five tanks after completion of the ship to ship transfer.

17 At the Oiltanking terminal, which had a dedicated shore delivery system, the Stolt Aquamarine received more MTBE into tank 10 CP and various other empty tanks. Samples were taken from the shore tanks in question. First-foot samples were taken from the Stolt Aquamarine’s various receiving tanks during the loading. Running samples were also taken from those tanks after loading had been completed.

18 Tank 10 CP on the Stolt Aquamarine received 277.371 MT of MTBE from Bonvoy 1 between 2 and 3 August 1995 and 568.293 MT more from the Oiltanking terminal on 4 August 1995.

19 The samples of MTBE taken from the Stolt Aquamarine after transfer of cargo from the Bonvoy 1 were analysed only after 4 August 1995, i.e. after the Stolt Aquamarine had taken more MTBE into tank 10 CP at the Oiltanking terminal.

20 The analysis of the line sample taken at the commencement of the ship to ship transfer showed water content of 2038 ppm. The sample from tank 10 CP after completion of loading from the Bonvoy 1 showed water content of 1954 ppm. The samples from the other tanks which also received MTBE from the Bonvoy 1 were on-specification.

21 The samples taken from the tanks of the Stolt Aquamarine after loading at the Oiltanking terminal were all within the water content specification except that from tank 10 CP which now showed water content of 11035 ppm.

22 Roger Chia said they did not seal the sea valves on the Bonvoy 1 as there was no record of any seal number in his report. He acknowledged under cross-examination that he could not really recall as the matter happened so long ago. The inspectors did not have any instructions to check the sea valves.

23 After loading from the Bonvoy 1, the Stolt Aquamarine had apparently 6 MT more cargo than what was stated in the Bill of Lading. This discrepancy of 0.307% was slightly above the discrepancy level of 0.3% acceptable to Saybolt.

24 Roger Chia agreed that the Stolt Aquamarine had a total of 58 tanks, with each tank having its pump, its own manifold and its own pipeline and openings. Although he said in his affidavit of evidence-in-chief that he had entered and inspected the five tanks of the Stolt Aquamarine that were designated to receive cargo from the Bonvoy 1, he acknowledged under cross-examination that he could not recall whether he did so personally. It was common practice that another visual check would be made of the tanks when the loading ship came alongside.

25 Although nitrogen purging had been done on the Bonvoy 1 to ensure that the tanks and the pump lines were dry, there was no record of such having been done on the Stolt Aquamarine.

26 Roger Chia reiterated under cross-examination that the Master of the Bonvoy 1 had conversed with him about the pump problem but he did not tell Roger Chia that the pump had lost suction and needed to be primed or that the pump was leaking air. The Chief Officer of the Bonvoy 1 had also told Roger Chia that they had the pump problem before he (the Chief Officer) went to talk to the Master, who then came to talk to Roger Chia.

27 Later, Roger Chia was on the deck of the Bonvoy 1 and he saw the level of the cargo going down in tank 4 S and going up in tank 3 S. It was already morning and there was sufficient light. Both hatches of the said two tanks were open. The transfer from tank 4 S to tank 3 S did take place. Roger Chia had been an inspector for only one year at that time and the incident was the first he had come across. He therefore made a record of it. He did not show what he had recorded to the Master or the Chief Officer. It was just a rough record in case he had to make a Protest in respect of the ship to ship transfer but none was necessary because the cargo could be completely discharged from the Bonvoy 1 after discharge had been suspended for one hour.

28 Roger Chia agreed that if the first-foot sample was within specifications, there was a high probability that the rest of the cargo...