Pacific Orient Sea Transport Pte Ltd v The Owners of the Ship or Vessel 'Ever Wealthy'

• Jurisdiction: Singapore
• Judge: Judith Prakash J
• Judgment Date: 31 May 2000
• Neutral Citation: [2000] SGHC 101
• Court: High Court (Singapore)
• Year: 2000
• Published date: 12 March 2013
• Plaintiff Counsel: Oon Thian Seng with Collin Choo (Joseph Tan Jude Benny)
• Defendant Counsel: Belinda Ang, SC with Anna Quah (Ang & Partners)
• Citation: [2000] SGHC 101

JUDGMENT:

Background

1. The central issue in this case is whether there was ever a concluded time charter party in respect of the Panamanian vessel Ever Wealthy between the plaintiffs as charterers and the defendants as owners.

2. There are five parties who played a role in the negotiations relating to the charter. First, the plaintiffs: this company was incorporated in Singapore in order to carry on the business of shipping cargo from Far

Eastern and South East Asian ports to Australia. The plaintiffs did not own any ships and therefore had to use chartered vessels to carry the cargo. In early March 1997, the plaintiffs were looking for a suitable vessel to carry cargo that month and approached and appointed the second party, Southern Cross Maritime Service (Australia) Pty Ltd (‘Southern Cross’), an Australian company, as their brokers for this purpose.

3. Next, we have the defendants who carry on business as shipowners. Although they are incorporated in Panama, their president, Mr James Lan Chun Sheng, is Taiwanese and for all intents and purposes, they are run out of Taiwan. The defendants are the owners of various vessels among them the m.v. Ever Wealthy and m.v. Ever Forest.

4. The fourth party is Pescadores Shipping Pte Ltd (‘Pescadores’), a company incorporated in Singapore which acts as the defendants’ Singapore representative. In this instance, Pescadores is also alleged to have acted as the defendants’ brokers in connection with the charter of the Ever Wealthy.

5. Finally, there is Oldendorff Asia (‘Oldendorff’), a company carrying on business in Singapore as both a ship charterer and a shipbroker. At all material times, Oldendorff was the charterer of the Ever Forest and its Mr James Lough was often in communication with Mr Lan of the defendants and Mr David Chua of Pescadores. Oldendorff acted as a broker in relation to the charter of the Ever Wealthy but it is a bone of contention between the plaintiffs and the defendants as to whether Oldendorff was acting as the defendants’ broker or simply acting independently as an intermediate broker in the hope of earning commission should the charter be concluded. It is the defendants’ position that Oldendorff was never their broker in these negotiations whereas the plaintiffs pleaded that Oldendorff was the defendants’ broker and that the defendants were bound by Oldendorff’s actions.

6. The documents show that as early as 5 February 1997 Oldendorff informed Pescadores that the plaintiffs could be interested in chartering the Ever Wealthy for three or six months if she was able to call at Australian ports. At about the same time, Oldendorff told Southern Cross that the defendants would consider a charter of three to six months of the Ever Wealthy at a rate of US$5,500 per day. The initial correspondence was exploratory only, however, and it was not till March 1997 that negotiations became serious.

7. On 4 March 1997, Southern Cross informed the plaintiffs that the Ever Wealthy was available and would be free at the Chinese port of Zhanjiangang on or about 8 March 1997 and would be an ideal vessel for the plaintiffs’ purposes. The plaintiffs then requested Southern Cross to make an offer to the owners of the vessel for the time charter of the vessel by the plaintiffs. Southern Cross proceeded to relay the plaintiffs’ offer to Oldendorff. Oldendorff in turn relayed it to Pescadores. It should be noted that throughout the negotiations Southern Cross dealt only with Oldendorff and it was Oldendorff who was in contact with Pescadores and the defendants. Southern Cross considered Oldendorff to be the defendants’ broker as it was not aware of the role played by Pescadores.

8. The offer that Southern Cross made to Oldendorff was in the following terms:

‘ON BEHALF MY CLOSE CHTRS AM PLSD TO OFFER FIRM ASF FOR REPLY TO 60 MINS:

- ACCT PACIFIC ORIENT SEA TRANSPORT, SPORE (AUST/ SPORE/HKG/MSIA J/V – WILL REVERT WITH FURTHER DETAILS)

- VSL AS DESCR (PLS CNF SHE FULL AOK)

- DELY DLOSP ZHANJIANGANG ATDNSHINC

- L/C 7/11 MAR’ 97

- ABT 70-80 DYS WOG TRADING VIA SP’S FAR EAST/SE ASIA/ AUSTRALIA WITH INT HARMLESS STEEL AND TIMBER PRODUCTS, MACHINERIES, BULKS, LAWFUL GENERALS TC (CHTRS UNSTAND VSL IS NOT GRAIN FITTED)

- REDELY SP COLOMBO/JAPAN RANGE INCL FULL INDONESIA NOT EAST OF SURABAYA, PHILIPPINES, MALAYSIA, CHINA

- HIRE USD5000 DIOT PAYABLE EVERY 15 DAYS IN ADVANCE

- SUB BUNKERS: PLS ADV QTY ROB

- SUB DTLS CHTRS NYPE 93 WITH 2.5 ADPSTS

- SUB CHTRS BOARD APPROVAL LATEST 6 HRS AFTER FXG MAIN TERMS

AS ADVSD THERE IS A VERY GOOD CHANCE CHTRS CAN LOOK AT LONGER PERIOD BUT WILL DEFINITELY WANT TO SEE VSLS PERFORMANCE ON 1ST VOYAGE.

PLS BRING OWRS CLOSEST COUNTER (PLS CALL ME WHEN SENDING AS I MAY HV TO LEAVE THE OFFICE FOR AN HOUR OR SO)’

9. What the message quoted above meant was that Southern Cross on behalf of its close charterers (ie the plaintiffs) was pleased to make a firm offer for reply within 60 minutes. The offer went on to identify the charterers as Pacific Orient SEA Transport of Singapore (a joint venture between parties in Australia/Singapore/Hong Kong/Malaysia). Delivery was to be on departure of the vessel from the outer pilot station at Zhanjiangang after completion of discharge of the cargo carried on the current voyage. The charter period was to be about 70 to 80 days and the vessel was to trade between the Far East, South East Asia and Australia and carry steel and timber products, machinery and lawful general cargo. Redelivery would take place in the range of Singapore/Colombo/Japan including Indonesia. The hire was US$5,000 per day payable every 15 days in advance. The sentence in the offer ‘L/C 7/11 Mar’ 97’ meant that the laydays cancelling period (or as it is usually called, the laycan) was between 7 and 11 March. This was the period within which the vessel had to be delivered to the charterers failing which they would be entitled to cancel the charter.

10. The above were the main terms of the proposed charter. The offer was, however, made subject to agreement on three items: the bunkers, the charter party details (for this purpose the New York Produce Exchange – NYPE – form of charterparty was to be the basis of the negotiations) and approval from the charterers’ board of directors. In the correspondence these items were referred to as the ‘subs’.

11. As soon as it received Southern Cross’s offer, Oldendorff transmitted it to Pescadores in practically the same wording. Whilst Southern Cross had made its offer ‘on behalf my close chtrs’, the first line of Oldendorff’s message read ‘on behalf of POST [the plaintiffs] am pleased to offer firm as follows for reply in 60 mins’. At the end of its message, Oldendorff asked Pescadores to let it have the defendants’ closest counter offer.

12. Oldendorff’s message to Pescadores was sent at about noon on 4 March. Just before 1pm the same day, Oldendorff sent a message to Southern Cross reading as follows:

‘RE: EVER WEALTHY/POST

FURTHER TELECON OWNERS ACCEPT CHRS LAST. PLSE RUSH CHRS DTLS FOR OWNERS CONFIRMATION.

AWAIT YOURS.

BEST REGARDS’

Southern Cross and the plaintiffs regarded this message as an acceptance of the plaintiffs’ offer and therefore considered that the main terms of the charterparty had been fixed subject to agreement on the three ‘subs’ relating to the details, the bunkers and the plaintiffs’ board approval. There is, however, no document in the file from the defendants to Pescadores or from Pescadores to Oldendorff confirming the acceptance of the plaintiffs’ offer. The defendants’ stand is that they never accepted the plaintiffs’ offer and that Oldendorff’s acceptance was sent without authority or confirmation from them. The defendants say further that it is clear from the correspondence between the parties that there was no firm fixture for the following reasons:

(a) the vessel was not clean fixed in that the ‘sub’ on bunkers was never lifted;

(b) the plaintiffs and defendants did not reach a consensus on the issue of the vessel’s laycan;

(c) the plaintiffs did not submit a valid performance guarantee to the defendants and therefore did not comply with a condition precedent imposed by the defendants for a firm fixture.

13. To continue the narrative, that same day Southern Cross sent a copy of the plaintiffs’ proforma charterparty document to Oldendorff and also informed the latter that the plaintiffs were lifting their ‘sub’ on board approval so that the only ‘subs’ remaining to be satisfied were those relating to the charterparty details and the bunkers.

14. On either 4 or 5 March, the defendants told Oldendorff that they required a letter of guarantee from a Taiwan company to guarantee the plaintiffs’ performance of the charterparty. On 5 March, a company called Fantai Shipping Corp (‘Fantai’), the plaintiffs’ Taiwanese agents, issued a letter of guarantee in favour of the defendants. This letter was delivered to the defendants by hand but was subsequently returned to Fantai because its wording was not satisfactory. Corrections were then made to it and the letter was then re-delivered to the defendants.

15. In the meantime, on 5 March Oldendorff informed Southern Cross that the vessel had been delayed while loading in Jakarta and that the defendants were requesting whether laycan could be extended to 16 March. The defendants expected the vessel to be ready on 11 or 12 March. The plaintiffs were unhappy to receive this request and asked for further information on the vessel’s expected arrival date at Zhanjiangang and the amount of cargo on board. Oldendorff relayed this request to Pescadores and asked it to revert with accurate information soonest so that Oldendorff could discuss the matter further with the plaintiffs and ‘obtain extension’. The next day, Pescadores replied giving Oldendorff various details about the vessel and informing them that its ETA at Zhanjiangang was 9 March.

16. On 7 March Southern Cross contacted Oldendorff...