The ASL Power

• Jurisdiction: Singapore
• Judge: Lai Siu Chiu J
• Judgment Date: 29 July 2002
• Neutral Citation: [2002] SGHC 164
• Docket Number: Admiralty in Rem No 65 of 2000
• Date: 29 July 2002
• Published date: 19 September 2003
• Year: 2002
• Plaintiff Counsel: S Appadurai and Tan Hui Tsing (Joseph Tan Jude Benny)
• Citation: [2002] SGHC 164
• Defendant Counsel: Loo Dip Seng, Goh Wee Ling and Mathiew C Rajoo (Ang & Partners)
• Court: High Court (Singapore)
• Subject Matter: ss 2, 5 Bills of Lading Act (Cap 384, 1994 Rev Ed),Whether title to goods passes on shipment or payment,Double-actionability rule,Conflict of Laws,Goods in transit,Admiralty and Shipping,Commercial Transactions,C & F contracts,Sale of goods,Bills of lading,Whether claim actionable as a tort in Singapore,Tort,Whether letter of undertaking binding on plaintiffs,Passing of title to goods,Letter of undertaking from defendants to apply Singapore law,Lex situs principle,Choice of law

Judgment Cur Adv Vult

GROUNDS OF DECISION

The facts

1. C M Van Sillevoldt Specerijen BV (the plaintiffs) are a Dutch company which deals in the processing and sale of pepper. The Owners of the ASL POWER (the tug) are Capitol Marine Pte Ltd (the defendants) which tug, at the material time, was chartered to Sindo Damai Marine Pte Ltd (the Third Party) to provide towing services to the Third Party's dumb barge INTAN 6 (the barge).

2. By a contract dated 23 April 1999 (the contract), the plaintiffs bought from an Indonesian company PT Putrabali Adyamulia (the sellers) 45 metric tons of muntok white pepper to be shipped from Pangkal Pinang, Indonesia to and be delivered at, Rotterdam, The Netherlands. Negotiations for the contract on the sellers' behalf were conducted by Keijzer & van Schilt (the brokers) while the plaintiffs negotiated through their representative Henricus Peter Tijssen (Tijssen). The contract was only one of several the plaintiffs had made over the years with the sellers, transacted through the same brokers. The brokers became the sellers' exclusive agents for Europe in 1999.

3. Under the contract, the first shipment of 15 metric tons (the cargo) was scheduled to be delivered in January 2000, with the balance to follow in two (2) shipments in the subsequent two (2) months. The contract was on C & F basis; other terms relevant for our purpose are as follows:

(i) Payment: Cash against documents at first presentation, buyer bank must release payment to seller bank maximum 14 days after B/L date. Any delay payment automatically buyer's bank have to pay the interest charges 11% per year and added to the invoice value. Sellers guarantee to present full set of documents to buyers bank within 14 days after B/L date.

(ii) This contract is made upon the terms and conditions including the rules of arbitration and appeal (of which the parties admit they have knowledge and notice) of contract no. 5 of the International General Produce Association

4. The cargo was shipped by the sellers through Sea Hawk Freight Pte Ltd (Sea Hawk) who issued an ocean bill of lading dated 27 January 2000 (the bill of lading) for combined transport or port to port shipment. The cargo was stuffed into a container and carried on the barge from Pangkal Pinang to Singapore after which it would be shipped on the vessel HANJIN DALIAN for the voyage to Rotterdam. The barge towed by the tug left the port of Pangkal Balam for Singapore on or about 30 January 2000. Unfortunately, due to heavy seas and gale force winds (according to the tug Master's report) encountered during the course of the voyage, the barge sank on 1 February 2000 and the containers on board, including that with the cargo inside, were lost. On 2 February 2000, the brokers notified the plaintiffs of the loss.

5. After the cargo had been loaded onto the barge and the bill of lading (3 sets) was issued by Sea Hawk, the sellers forwarded (on or about 22 February 2000) the bill of lading together with other documents such as the commercial invoice and packing list through Rabobank Duta Indonesia (the sellers' bank) to the plaintiffs' bank Mees Pierson (Mees Pierson), for the purpose of negotiating the letter of credit (for US$91,500) which the plaintiffs had established for the contract. The bill of lading named the plaintiffs as the notify party while the consignee was stated as 'to order of Rabobank Duta Indonesia'. The cargo was insured by the plaintiffs.

6. Notwithstanding the loss of the cargo, the sellers received payment under the plaintiffs' letter of credit. The plaintiffs in turn claimed on their insurers (Central Beheer) and were eventually paid US$100,650 for the value of the cargo, plus 10% for loss of profit. Hence, this claim is a subrogated right of the said insurers.

The pleadings

7. The plaintiffs filed this action on 3 March 2000. To pre-empt the arrest of the tug or her sister ships, the defendants' protection and indemnity club (the P&I Club) furnished security to the plaintiffs for this claim by way of a letter of undertaking dated 19 April 2000. The P&I Club agreed therein to submit to Singapore jurisdiction and agreed that Singapore law would apply, for any claim arising out of the loss of the cargo.

8. In the (amended) statement of claim, the plaintiffs alleged that they were the owners of the cargo at the time the barge sank. The plaintiffs pleaded that the defendants owed them a duty of care in tort to take reasonable care of the cargo, which duty they breached when the cargo was lost due to the sinking of the barge.

9. In the (amended) defence, the defendants pleaded that they were neither the carriers of the cargo nor the issuers of the bill of lading; neither were they involved in nor responsible for, the loading of the cargo or other containers on the barge. They averred that the tug was chartered to the Third Party to tow the barge from Pangkal Balam to Singapore. Consequently, the defendants pleaded, they had no contractual or other relationship with the plaintiffs such as to give rise to a duty of care. In the alternative, if such a duty of care did exist, it extended only to the provision of towing services for the barge which the defendants did provide.

10. In the further alternative, the defendants pleaded that in providing towing services to the barge, the tug's crew were the servants or agents of the Third Party. Hence the defendants were not in breach of any duty as alleged or at all.

11. Numerous other alternative defences were raised by the defendants which for purposes of this trial, are not necessary to be dealt with for reasons which will appear below.

12. Shortly after the defendants had entered an appearance to the writ of summons, the defendants filed a Third Party Notice and subsequently, joined the Third Party to these proceedings.

13. By an order of court dated 3 December 2001 made pursuant to the defendants' application for further directions, it was ordered that the following preliminary issue be first tried and determined before a trial of the plaintiffs' claim on its merits:

Whether the plaintiffs were on 1 February 2000, the date of loss of the cargo in respect of which action is brought, the owners of the said cargo and/or have title, interest or locus standi to sue the defendants in tort for the loss thereof or to maintain the present action?

The evidence

14. The preliminary issue only concerned the plaintiffs and the defendants, not the Third Party. For determination of the preliminary issue, both sides called expert testimony on Indonesian law.

(i) the plaintiffs' case

15. Besides their expert, the plaintiffs called a witness of fact. He was Tijssen, who was in charge of purchasing. Tijssen (PW1) testified that the plaintiffs gave written instructions to Mees Pierson on 23 February 2000 (1AB46), to release payment to the sellers on their letter of credit; presumably payment would have been released a day later. Tijssen referred to a letter (dated 3 February 2002) from Mees Pierson, forwarding to the plaintiffs documents which the bank had received, for purposes of negotiating the letter of credit. The documents included the bill of lading which reverse side (see 1AB12) had by then, been endorsed by Mees Pierson and the sellers' bank. After recording receipt of the documents, the plaintiffs returned them to Mees Pierson (on or about 4 February 2000) save for the bill of lading which they retained (and which reverse side they also endorsed), to enable them (through their agents) to obtain delivery of the cargo from the shipping line, upon the arrival of the vessel HANJIN DALIAN at Rotterdam.

16. Although he was said to be a witness of fact, it was very clear from Tijssen's cross-examination that, apart from negotiating the contract on the plaintiffs' behalf and perusing the documents for negotiation of the letter of credit, Tijssen had no personal knowledge of either the events leading to and the loss, of the cargo or, of what transpired between the sellers and the brokers at the time the contract was negotiated. No representative of the plaintiffs visited Indonesia after the sinking. Consequently, the court could not have regard to what was told to Tijssen by Mr Apeldoorn from the brokers' office, including Apeldoorn's telephone assurance (given sometime in 1999) that the sellers had agreed that property and title in the cargo would pass to the plaintiffs upon shipment, notwithstanding the express payment terms stated in the contract. Unfortunately, no representative from the sellers' or brokers' office(s) came forward to testify either. Indeed, counsel for the plaintiffs informed the court that the brokers refused to testify (N/E 27). Cross-examined on the payment terms, Tijssen had said payment had nothing to do with ownership of the cargo but, he confirmed he had no direct contact with the sellers. However, the plaintiffs and even the brokers, had always regarded the cargo as the plaintiffs' once it was shipped. Tijssen testified that the second and third shipments of the pepper were received by the plaintiffs as scheduled.

17. As earlier stated, each side called experts who testified on Indonesian law. The plaintiffs' expert was Achmad Suhardi Kartohadiprodjo (Achmad) who is a partner in a law firm in Jakarta and has been in practice since 1969. In arriving at his opinion that property in the cargo passed to the plaintiffs upon shipment and hence they had title to sue, Achmad (PW2) looked at:

(i) the contract;

(ii) the International General Produce Association Rules, contract no. 5 (the IGPA Rules);

(iii) the commercial invoice issued by the sellers;

(iv) the bill of lading;

(v) the letter dated 3 February 2000 from Mees Pierson to the plaintiffs;

(vi) a fax advice from the sellers’ bank to Mees Pierson enclosing the draft shipping documents.

However, Achmad was not shown or told about the letter of undertaking from the P&I Club, until informed by...