PT Soonlee Metalindo Perkasa v Synergy Shipping Pte Ltd (Freighter Services Pte Ltd, Third Party)

• Jurisdiction: Singapore
• Judge: Judith Prakash J
• Judgment Date: 27 July 2007
• Neutral Citation: [2007] SGHC 121
• Docket Number: Admiralty in Personam No 143 of 2005
• Date: 27 July 2007
• Year: 2007
• Published date: 31 July 2007
• Plaintiff Counsel: Loo Dip Seng and Charmaine Fu (Ang & Partners)
• Citation: [2007] SGHC 121
• Defendant Counsel: Wendy Tan and Anand Su Yin (Haq & Selvam),Bazul Ashhab Bin Abdul Kader and Kelly Yap Ming Kwang (T S Oon & Bazul)
• Court: High Court (Singapore)
• Subject Matter: Whether third party liable to indemnify carrier of goods for loss caused by unseaworthiness of barge,Voyage charterparties,Carriage of goods by sea,Seaworthiness,Whether clauses sufficient to exclude or limit carrier's liability,Third party providing unseaworthy barge to carrier of goods,Whether clauses in bill of lading incorporated into contract of carriage,Contract,Goods falling overboard during voyage,Bill of lading specifying goods "shipped on deck at shipper's risk" and containing limitation clause,Whether loss of goods caused by unseaworthiness of barge or inadequate lashing,Contract of carriage,Whether any implied or express term that carrier would only use its own barge to carry goods,Admiralty and Shipping,Limitation of liabilities,Contractual terms,Whether barge unseaworthy

27 July 2007 Judgment reserved.

Judith Prakash J

Background

1 This is a claim arising out of the carriage of goods by sea. The plaintiff, PT Soonlee Metalindo Perkasa, an Indonesian entity, was the owner of 300 bundles of deformed steel bars (81,000 bars in all) (“the cargo”) that the defendant, Synergy Shipping Pte Ltd, contracted to carry by sea from Singapore to Batam. The cargo was carried on board the barge “Limin XIX” (“the Barge”) which was supplied to the defendant by the third party, Freighter Services Pte Ltd. On arrival of the barge at Batam, the cargo was not on board so the defendant was unable to deliver it to the plaintiff as contracted. The plaintiff accordingly sued the defendant for damages and the defendant in turn took out a third party claim to be indemnified by the third party against the plaintiff’s claim on the basis of the contractual arrangements existing between it and the third party.

2 The defendant was incorporated in 2001. Its primary business was to provide a daily liner service between Singapore and Batam using tugs and barges as the mode of transportation. The third party was in the same business.

3 By an agreement dated 12 July 2004 (“the JO Agreement”), the defendant and the third party agreed to establish a joint operation whereby each party would contribute one set of vessels comprising one tug and one barge so that each of them could offer its respective customers six voyages per week between Singapore and Batam. The sailing schedule from Singapore was to be on Mondays, Wednesdays and Fridays for one set of vessels and on Tuesdays, Thursdays and Saturdays for the other set. Each party was to be able to utilise half the stowage capacity of each barge on each trip. The agreement was to be effective for a period of one year from 12 July 2004 to 11 July 2005.

4 In the meantime, the plaintiff had been doing business for many years with a Singapore supplier called Sin Aik Hardware Pte Ltd (“Sin Aik”). Sin Aik sold goods to the plaintiff on an FOB basis and it made the arrangements, on behalf of the plaintiff, for the shipment and carriage of the goods from Singapore to Batam for delivery to the plaintiff at its factory in Batam. Sin Aik started using the defendant’s liner service for this purpose after October 2004.

5 In January 2005, the plaintiff purchased 1,300 tons of deformed steel bars from Sin Aik at the price of US$410 per ton. This sale was, as usual, on an FOB basis. The goods sold to the plaintiff were imported by Sin Aik from South Korea and they arrived in Singapore some time in mid March 2005. Sin Aik then arranged with the defendant to take the goods to the plaintiff in Batam. The goods were delivered in full to the defendant on 21 March 2005. Subsequently, however, Sin Aik were informed that on that day only 500 metric tons of the goods could be loaded on the carrying barge and that the balance of the goods would have to be shut out and sent on another occasion. In the event, the defendant managed to load 598.8 metric tons of the goods onto the Barge and this became the cargo with which I am now concerned.

6 At the material time, the defendant owned a barge called “Synergy 1801”. For the purposes of the joint operation with the third party, on its sailing days, the defendant used its barge “Synergy 1801”. The third party on its sailing days generally used a barge called “Royal Freighter”. Some time in February 2005, however, as certain work had to be carried out on the “Royal Freighter”, the third party chartered the Barge in order to carry cargo between Singapore and Batam on the days when it was the third party’s turn to provide a set of vessels pursuant to the JO Agreement. At the material time, the Barge was about 12 years old.

7 On 21 March 2005, the third party duly provided the Barge in tow of the tug “Fajar Putra” (“the Tug”) for the purposes of the JO Agreement. The cargo was loaded onto the Barge by the defendant’s stevedores at Jurong Port. The third party also loaded its own cargo onto the Barge. After loading operations were completed, the Barge in tow of the Tug, left Singapore at about 1750 hours. At about midnight, the third party was informed that most of the goods loaded on board the Barge had fallen overboard.

8 On 22 and 23 March 2005, a surveyor appointed by the defendant attended on board the Barge at Batu Ampar port, Batam. Mr Stephen de Silva reported that he observed on his visit that although the Barge was stated to have been fully loaded with cargo, at the time of his attendance, only four 20 foot containers, one steel round bar and one 20 foot ISO tank remained on board. He ascertained that the cargo had not been lashed (this was not disputed by either the defendant or the third party). In his opinion, the Barge was in very poor condition. He also noted that the aft-most port tank (no. 6 Port) was open to the sea and that the water level in this tank was at the same level as the sea. There was also water in the aft-most starboard tank (no. 6 Starboard) and the water level here was about 0.4 metres higher than the level of the water in no. 6 Port.

9 The cargo was not recovered and therefore the plaintiff’s claim was for its total loss and for the sum of US$245,508 representing its value.

What was the cause of the loss?

10 I must first determine the most important factual issue and that is what caused the loss of the cargo. Having established that, I will be in a better position to deal with the issues regarding liability of the defendant vis-à-vis the plaintiff and liability of the third party vis-à-vis the defendant.

11 The plaintiff’s position is that the loss was due to the unseaworthiness of the Barge. In addition, the plaintiff alleged that the evidence showed that the defendant had failed to care for the cargo whilst it was in the defendant’s possession for carriage. This failure arose from the defendant’s deliberate decision not to lash and/or secure the cargo on board the Barge so as to prevent it from shifting and/or from falling off the Barge.

12 The defendant accepted that it had deliberately decided not to lash the cargo on board the Barge but disagreed that this failure was a breach of its duty of care in respect of the cargo. It also disagreed that its failure to lash or secure the cargo caused the loss. As far as the defendant is concerned, the loss arose solely by reason of the unseaworthiness of the Barge arising from the poor condition of its hull and deck equipment (including the sideboards).

13 The defendant’s case was that some time during the Barge’s voyage from Singapore to Batam, it started taking in water via a hole or holes in the external plating of no. 6 Port. The water in no. 6 Port found its way into no. 6 Starboard via a hole in the bulkhead between the tanks, such hole having been caused by corrosion. The Barge subsequently took on a port list/stern trim causing the cargo on board to shift. The port and stern sideboards which ought to have easily contained such a shift gave way on account of their corroded condition thus causing the cargo to slip overboard via the Barge’s port quarter.

14 The third party denied that the loss had been caused by the unseaworthiness of the Barge as pleaded by the defendant. It did not put forward a positive case on the cause of the loss but concentrated on attacking the defendant’s theory of the loss. The third party did not dispute that seawater had entered the Barge through no. 6 Port and from there had moved into no. 6 Starboard through a hole in the bulkhead. Further it did not dispute that the cargo on board the Barge was lost at the port stern of the Barge. It also accepted that the Barge must have listed to port at the time of the loss and that this list must have been a substantial list in order to shift the unsecured cargo and cause it to fall overboard. The third party, however, did not accept that the entry of seawater into no. 6 Port through a hole in the steel plate resulting from corrosion had caused that substantial list. The third party produced no evidence that, while en route to Batam, the Barge had come into contact with an external object or that this contact caused a sudden and substantial ingress of water into the tanks of the Barge such that the substantial list was created and the cargo fell overboard. The third party, however, argued that this was a possible cause of the loss as the evidence produced by the defendant showed that any list which could have been created by a slow entry of water into no. 6 Port through a corrosion hole was insufficient to cause the cargo on board to even start to shift. The third party’s main argument was therefore that the defendant had not been able to establish on the balance of probabilities that the loss was caused in the way posited by the defence.

The evidence on the condition of the Barge

15 The plaintiff produced no evidence on the condition of the Barge at the start of the voyage or even thereafter. All evidence relating to this aspect of the case came from the defendant and the third party. It should be noted, however, that there was no first hand account of the loss. None of the crew members of the Tug came to court to testify as to what had happened on the night in question. The theories as to how the loss occurred came from the parties’ surveyors and their expert witnesses.

16 On the defendant’s part, its witness of fact was the surveyor Mr de Silva. He stated that during his attendance on board the Barge on 22 March 2005, he saw that the main deck had several deep indentations and was wasted in areas which had been torn due to the movement of cargo. The deck fittings were also found to be largely wasted, with the result that most of the support stanchions were no longer able to support the sideboards. Cracks and tears were visible at the edges of the deck and side shell plating at both port and starboard sides. The Barge’s side shell plating was generally rusted with no paint...