The "Feng Hang and Others"

• Jurisdiction: Singapore
• Judge: Kan Ting Chiu J
• Judgment Date: 28 December 2001
• Neutral Citation: [2001] SGHC 378
• Docket Number: Admiralty in Rem No 496 of 1998
• Date: 28 December 2001
• Year: 2001
• Published date: 19 September 2003
• Plaintiff Counsel: Jainil Bhandari and David Tan (Rajah & Tann)
• Citation: [2001] SGHC 378
• Defendant Counsel: Leong Kah Wah and Derek Tan (Joseph Tan Jude Benny Anne Choo)
• Court: High Court (Singapore)
• Subject Matter: Condition unacceptable to plaintiffs,Admiralty and Shipping,Lifting of order,Plaintiffs abandoning cargo,Chinese claimant obtaining detention order preventing release of cargo from Chinese port,Whether issuance of second bill of lading effective or dominant cause of port authority's demand or plaintiffs' decision to abandon cargo,Defendant in breach of contract of carriage and negligent as carrier by issuing second bill of lading to buyer,Defendant disputing causation of loss,'But for' test,Whether second bill of lading used to obtain detention order,Bills of lading,Port authority insisting on acceptance of its quantification of cargo,Defendant-carrier issuing bill of lading to plaintiffs-shippers

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The parties

The first plaintiff is Tata Iron & Steel Co Ltd of India. The second plaintiff is another Indian company, MMTC Ltd, and the third plaintiff is MMTC Transnational Pte Ltd, a Singapore company. The defendant is COSCO Container Lines of the Republic of China.

The original transactions

The transactions related to 10,000mt of chrome ore. The third plaintiff entered into an agreement to buy it from the second plaintiff which purchased it from the first plaintiff. The third plaintiff was not the end-purchaser of the chrome ore. It sold it on to TNW Pte Ltd, a Singapore company (`TNW`), which I am informed is now dormant.

The ore was shipped from Paradip, India to Huangpu in China on the defendant`s vessel Feng Hang. A bill of lading dated 24 July 1997 was issued by the defendant`s agents in India, The Oceanic Shipping Agency Pvt Ltd to the second plaintiff for the account of the first plaintiff. The consignee was `To order` and the notify party was TNW. The goods were stated as 9,999.8mt chrome ore.

TNW arranged for the United Overseas Bank Ltd to issue a letter of credit in favour of the third plaintiff in payment for the ore. When the third plaintiff sought payment under the letter of credit, discrepancies were found in the documents tendered. TNW assured the third plaintiff that it accepted the discrepancies, but it did not instruct the bank to do that. The letter of credit expired without payment on 14 August 1997.

The ore was discharged from the Feng Hang at Huangpu into the custody of the port authority there upon its arrival in August. The port authority released 4,500mt of the ore without presentation of the bill of lading upon discharge from the Feng Hang to a third party, the Loudi Ferroalloy Factory of Loudi City, Hunan.

The plaintiffs commenced these proceedings against the defendant, and obtained judgment in this action in respect of the loss of the 4,500mt on 31 March 2000. The trial before me was concerned with the ore remaining in the custody of the port authority.

The second set of bills of lading

On 28 July the defendant`s agents in Singapore, Costar Shipping Pte Ltd issued a second set of bills of lading for the same cargo. This set of bills of lading, also dated 24 July, identified the shipper as `TNW Pte Ltd for and on behalf of MMTC Limited a/c The Tata Iron & Steel Co Ltd`. The consignee was `To order` and the party to be notified was the Hunan Leadar International Metals and Minerals Corp. This set of bills of lading was issued and released to TNW against a letter of indemnity from TNW. The first set of bills of lading was not returned for cancellation and the consent of the plaintiffs was not obtained for this exercise.

In the event, the second set of bills of lading was not used to obtain the delivery of the remaining ore to any party.

The remaining ore at Huangpu

The remaining ore was subject of legal proceedings in China. The Hunan Provincial Native Produce Animal By Products Import & Export Corp (hereinafter referred to as `the Hunan corporation`) obtained a detention order from the Furong District People`s Court of Changshan City on 24 September 1997 in connection with a claim by the Hunan corporation arising out of an earlier transaction in manganese ore between it and TNW. The order prevented the port authority from releasing the remaining ore while it was in force.

The order was in force till 24 April 1998 when it was lifted. This was apparently brought about by further dealings between TNW and the Hunan corporation whereby TNW sold the remaining ore to the Hunan corporation.

When the Hunan corporation claimed the remaining ore, the defendant disputed its claim, and the matter was brought before the Guangzhou Maritime Court. The Hunan corporation`s claim was dismissed at the first instance, but on appeal, the Guangdong High Court held in its favour on 16 July 1999.

While this was going on, the plaintiffs took steps to dispose of the ore when they did not receive payment from TNW. They were hampered in their efforts because of the uncertainty over their ability to take delivery of the ore.

The plaintiffs and the defendant entered into negotiations to overcome the problem. They came to an agreement the terms of which were set out by the plaintiffs` solicitors on 8 May and confirmed by the defendant on 14 May 1998. The agreement provided that:

(1) [The plaintiffs] will present the original Bill of Lading No. 1 dated 24 July 1997 ("the Bill of Lading") at your office in Singapore, and such presentation of the Bill of Lading at Singapore will be deemed as presentation to [the defendant] (or their agents) at the discharge port (Huangpu).

(2) [The defendant] agrees that the presentation of the Bill of Lading at Cosco KSH`s office in Singapore as aforesaid amounts to presentation at the discharge port and will not require a further presentation of the Bill of Lading to be made at the discharge port.

(3) Upon presentation of the Bill of Lading as aforesaid, [the defendant] shall issue two delivery orders covering the entire shipment of 9,999.800MT of chrome ore to the party nominated by [the plaintiffs].

(4) The aforesaid delivery order(s) shall be provided at [the plaintiffs`] option to [the plaintiffs] in Singapore or to such of their nominated agents at Huangpu, as the case may be.

(5) [The defendant] confirms that the cargo remaining at Huangpu will be delivered against presentation of their delivery order(s) provided that the lien/detention order imposed by the Hunan Local and Animal By Products Imports and Exports Corporation is not in...