Roll SG Pte Ltd v Cong Ty Co Phan Van Tai Lien Hiep Huy Hoang

• Jurisdiction: Singapore
• Judge: Anselmo Reyes IJ
• Judgment Date: 25 April 2023
• Neutral Citation: [2023] SGHC(I) 5
• Court: International Commercial Court (Singapore)
• Docket Number: Suit No 9 of 2021
• Hearing Date: 24 February 2023,12 January 2023
• Citation: [2023] SGHC(I) 5
• Year: 2023
• Plaintiff Counsel: Lee Soong Yan, Kevin (sole proprietor) (instructed), Eunice Lau Guan Ting and Samuel Wittberger (Drew & Napier LLC)
• Defendant Counsel: the defendant absent and unrepresented.
• Published date: 25 April 2023

Anselmo Reyes IJ: Introduction

The dispute arises out of several crane rental agreements (collectively, the “Contract”) between the plaintiff, Roll SG Pte. Ltd. (“Roll”), and the defendant, Cong Ty Co Phan Van Tai Lien Hiep Huy Hoang (“HTL”). Under the Contract, Roll agreed to lease to HTL a CC6800 crawler crane (the “Crane”). The Crane was to be used for HTL’s construction and installation works at the Tra Vinh Wind Farm Offshore Project (the “Project”) in the Mekong Delta of Vietnam. On 2 November 2020, the Crane was severely damaged while being transported by HTL.

Roll seeks damages against HTL for breach of the Contract. More specifically, Roll claims the cost of repairing the Crane, unpaid invoices for the rental and demobilisation of the Crane, and late payment interest. Roll contends that it is entitled to damages of €5,108,764.93, US$1,215,844.13 and S$96,641.60 in respect of the repair and return of the crane, plus outstanding sums relating to the rental of the crane and late payment interest amounting to at least US$3,982,351.60. In correspondence, HTL denied the Singapore International Commercial Court’s (“SICC”) jurisdiction to hear this case and has not appeared to defend the action. HTL has not stated why it contends that the SICC lacks jurisdiction to hear this case.

The main issues that I have to determine in this dispute are: Does the SICC has jurisdiction over the parties’ dispute? Did HTL breach the Contract by failing to repair the Crane and return it in good condition to Roll? Did HTL breach the Contract by failing to pay outstanding invoices for the rental and demobilisation of the Crane? Is Roll entitled to late payment interest for sums outstanding on Roll’s unpaid invoices? If Roll is entitled to damages, what is the quantum of the same? How should the costs of this action be dealt with?

Background The parties

Roll is a Singapore company and a subsidiary of the Roll Group. The Roll Group rents out heavy lifting equipment, particularly for construction and installation applications in the energy industry, among other business.

HTL is a Vietnamese company. It provides logistics, transportation, equipment installation, and construction services in Vietnam, especially for offshore wind turbine projects off the Vietnamese coast.

The Contract and its performance

On 30 March 2020, Ms Bach Mai Huynh (“Ms Mai”) of HTL wrote to Mr Tan See Ann Gilbert (“Mr Tan”) of Roll, enquiring about the possibility of renting a CC6800 crawler crane for HTL’s use on the Project. Roll had leased the Crane from P. van Adrighem B.V (“PVA”), a Dutch company.

Following months of negotiation, Roll and HTL entered into a rental agreement on 12 May 2020 (the “1st Rental Agreement”). Under the 1st Rental Agreement, Roll would lease the Crane to HTL for a minimum period of nine months from 15 August 2020 to 15 May 2021.

Sometime in June 2020, to assist HTL’s bank financing application, the parties agreed to split the nine months rental period into two separate periods: first, a four-month rental agreement from 15 August to 14 December 2020 (the “2nd Rental Agreement”) and second, a five-month rental agreement from 15 December 2020 to 14 May 2021 (the “3rd Rental Agreement”). The 1st, 2nd and 3rd Rental Agreements expressly incorporated the Roll Group’s Standard Terms and Conditions (the “Standard T&Cs”) and Special Terms and Conditions (the “Special T&Cs”). Apart from the rental periods, the material terms of the three agreements are identical. The Rental Agreements collectively comprise the Contract.

The material terms of the Contract were as follows: Roll would lease the Crane to HTL from 15 August 2020 to 15 May 2021. In return, HTL would pay Roll a monthly rental of US$175,000 for the Crane, together with a one-off payment of US$75,000 for the demobilisation of the Crane (collectively, the “Payment Obligation Clauses”). HTL was responsible for returning the Crane to Roll undamaged. If the Crane was damaged during the rental period, HTL would rectify the damage and be responsible for all costs associated with the repair of the Crane and its return to Roll (collectively, the “Damage Rectification Clauses”). HTL would pay Roll default interest, in the event of delay in paying Roll’s invoices, at a rate of 1.5% per month, accruing from the due date of each invoice. Disputes under the Contract were to be referred exclusively to the Singapore Court.

On or around 22 to 23 August 2020, Roll delivered the Crane to HTL at Cai Mep Port in Vietnam. The document certifying the handover of the Crane by Roll to HTL (the “Handover Document”) stated that “no physical damages were detected, and all the crane parts are received in good condition”.

On 28 September 2020, PVI Insurance Corporation (“PVI Insurance”) issued a Domestic Transport Insurance (Certificate No. 20/25/01/VCND/P00154) for the Crane. The PVI Insurance policy required HTL to properly sea-fasten the Crane and procure a Certificate of Approval from a Marine Warranty Surveyor prior to the Crane being towed to the Tra Vinh Wind Farm. A breach of this condition would lead to the PVI Insurance policy being invalidated.

In October 2020, HTL transported the Crane from Cai Mep Port to Long Anh International Port (“Long Anh Port”). The Crane was assembled by HTL at Long Anh Port before being towed by sea to the Tra Vinh Wind Farm on 2 November 2020.

On 2 November 2020, the Crane was severely damaged while being towed to the Tra Vinh Wind Farm.

On 4 November 2020, Crawford & Company (Nederland) B.V. (“Crawford”) was engaged to investigate the incident and prepare a report on the cause, nature, and extent of the damage to the Crane as well as the cost of recovering and repairing the Crane. Reports were prepared based on inspections of the Crane from 4 November 2020 to 29 June 2021.

On 25 November 2020, PVI Insurance rejected HTL’s claim for insurance on the ground that “the sea fastening of Dolly was not completed prior to the intended towage of the barge” and “there was no Marine Warranty Surveyor (MWS)’s Certificate of Approval for the towage from Long An International Port to Tra Vinh Windfarm project site ... [This] is a non- compliance to the Warranted Conditions of the Policy, or in other words ‘Breach of Warranty’”. On or about 26 November 2020, through emails passing between Mr Tan and Ms Mai, Roll learned that PVI Insurance had rejected HTL’s claim.

From November 2020 to March 2021, Roll repeatedly requested that HTL repair and return the Crane in compliance with its obligations under the Contract. HTL did not do so, apparently because it was in a disagreement with its main contractor, Vestas Wind Technology (Vietnam) LLC (“Vestas”), over the damage to the Crane. Vestas was a wind turbine construction and installation company which had subcontracted part of the construction work on the Tra Vinh Wind Farm to HTL.

Eventually, on 6 to 7 February 2021, HTL brought the Crane down from the inverted V-position which it had been in since 2 November 2020. However, HTL refused to remove the Crane from Vestas’ barge. In late March 2021, Vestas arranged for the Crane to be dismantled and removed from its barge and transported to PV Shipyard in Vietnam.

On 29 March 2021, HTL sent a letter to Roll (“HTL’s 29 March 2021 Letter”), which stated:

As you are aware, we have not had use of the crane for the purpose we hired the said crane, as a result of extensive damage that was caused to the crane during transit from Long An International Port to Tra Vinh Windfarm Project Work Site, S.R. Vietnam. The said damage was caused by the acts, neglect and omissions on the part of a third party, that is, Vestas Wind Technology (Vietnam) LLC, who were in control of and managed the transfer of the crane to the work site.

As a result of the said damage, we have been deprived of the use of the crane, and as far as we are concerned, the agreement for the use of the crane came to an end on 2 November 2020.

As you are aware, Vestas have now unilaterally moved the crane from site to the PV shipyard in Vung Tau, for purposes only known to them. We do not have knowledge of how the move was undertaken, what the actual condition of the crane was prior to and after the move, and whether the crane has been further damaged during the move. If your good company is minded to retrieve the crane, we would ask that your good company liaise directly with Vestas, who are well aware that you are the owner of the crane.

In the meantime, we reserve all our rights in this matter and place you on notice that we will be seeking to recover the sums paid by way of rental from 2 November 2020, as we did not have the use of the crane from this date.

On 6 April 2021, Roll’s Vietnam and Singapore solicitors sent a letter in response to HTL’s 29 March 2021 Letter (“Roll’s 6 April 2021 Letter”). The letter asserted that HTL had breached the Contract by failing to return the Crane to Roll undamaged and by failing to rectify the damage to the Crane. It also rejected HTL’s position in HTL’s 29 March 2021 Letter.

Following Roll’s 6 April 2021 Letter, HTL and Roll continued to exchange email correspondence. On 18 May 2021, Ms Mai emailed Mr Tan stating:

We acknowledge our obligation of redelivery this crane [sic] to Roll as stipulated in the Rental Agreement. Though, we're still trying to survive through this crisis with Vestas while putting our last coins into the early stages of delivering our new projects which we expect to harvest at the end of this year. Thus, we're seeking for Roll's support to pay upfront the load-out cost at PV Shipyard as a part of your kind action to mitigate loss that you've been doing ever since the incident happened. This cost, together with the overdue payments, shall be paid to Roll when HTL collects revenue from its on-going projects.

On 29 June 2021, following an inspection of the Crane...