The "Neptra Premier"

JurisdictionSingapore
CourtHigh Court (Singapore)
JudgeKan Ting Chiu J
Judgment Date15 August 2001
Neutral Citation[2001] SGHC 223
Citation[2001] SGHC 223
Docket NumberAdmiralty in Rem No 481 of 1998
Defendant CounselHaridass Ajaib and Augustine Liew (Haridass Ho & Partners),Goh Kok Leong, Chan Leng Sun and Yu Siew Fun (Ang & Partners)
Plaintiff CounselMichael Lai and Wendy Tan (Colin Ng & Partners)
Published date19 September 2003
Date15 August 2001
Subject MatterDefendants-carriers and third party-shippers Singapore companies,Parties in opening statements accepting Singapore law as law of contract of carriage,Whether defendants released cargo in compliance with third party's instructions,Defendants-carriers releasing cargo without production of bill of lading pursuant to letter of indemnity from third party-shippers,ss 2, 23 Money Lenders Ordinance (Cap 163) [HK],Whether plaintiffs acquiesced in or consented to delivery of cargo without production of bill of lading,Shipping to and releasing cargo in China,Whether plaintiffs proved loss,Whether proper law of contract Malaysian or Singapore law,Choice of law,Bills of lading as document of title,Admiralty and Shipping,Whether third party liable to indemnify defendants,Contract,Plaintiffs claiming entitlement to delivery of cargo upon production of bill of lading,Conflict of Laws,Contracts of indemnity,Guarantees and indemnities,Whether plaintiffs obtained bill of lading pursuant to and as security for illegal or unenforceable moneylending transaction,Loading cargo in Malaysia,Credit and Security,Bills of lading

:

The background



This is a case of a consignment of gasoil which went through several deals, and ended in litigation between the three parties in this action.

The plaintiffs are Fortune Hong Kong Trading Ltd, a company incorporated in Hong Kong. The defendants are the owners of the vessel Neptra Premier. They are identified as Neptra Shipping Pte Ltd, a company incorporated in Singapore, in the charterparty. The third party are Cosco-Feoso (Singapore) Pte Ltd, a Singapore incorporated company.

In late August 1997 the third party contracted to sell 5,500-6,000 metric tons of gasoil to Promises Petroleum Ltd, a company in Hong Kong, to be delivered to Shanya, Hainan, China. The third party chartered the Neptra Premier from the defendants under a charterparty dated 4 September 1997 to carry the gasoil to Shanya.

Promises Petroleum in turn sold the gasoil to Pacific Fond Ltd, another Hong Kong company, before paying the third party. Pacific Fond needed financial assistance to pay for the gasoil, and entered into an agreement with the plaintiffs for the plaintiffs to open the letter of credit for the purpose.

The agreement dated 26 August 1997 read in part:

Party A: Pacific Fond Limited
Suite 3, 15/F Sino Plaza,
255-257 Gloucestor Road,
Causeway Bay, Hongkong
Party B: Fortune Hong Kong Trading Limtied
Room 1601, Emperor Group Centre,
288 Hennessy Road, Wanchai
Hongkong



Both Parties A and B, upon friendly consultation, reach the following agreement on the matter of Party A`s entrustment of Party B to open a Letter of Credit in favour of Party C (Cosco Feoso (S) Pte Ltd, 400 Orchard Road [num ]13-05 Orchard Towers, Singapore 238875) on its behalf.

    (1) Party A`s responsibilities and obligation:
    1. To pay Party C 20% (US$183,000.00) of the value of the Letter of Credit in advance as deposit before the Letter of Credit is opened.
    2. To remit the amount of Letter of Credit (less the above-mentioned deposit) to the account designated by Party B two days before Party B honours the Letter of Credit and to fax the payment advice to Party B. In the event that Party A is not able to pay the balance to the account designated by Party B within the scheduled date, Party B is entitled to forfeit the deposit and the cargo under the said Letter of Credit as well as claim damages from Party A.
    3. To pay 2.5% of the total value of the Letter of Credit amounting to US$22,875.00 to Party B as agent fee during the validity of the Letter of Credit.
    4. To undertake of one`s own all the responsibilities and risks in respect of the cargo.
    (2) Party B`s responsibilities and obligation:
    1. To open Letter of Credit immediately upon receipt of Party A`s deposit.
    2. To honour payment of the Letter of Credit immediately upon receipt of the balance amount of the Letter of Credit and hand over all the documents in respect of the Letter of Credit to Party A.



Pursuant to the agreement the plaintiffs arranged for its bankers the Yien Yieh Commercial Bank Ltd to open an letter of credit. The letter of credit named the plaintiffs as the applicant and the third party as the beneficiary, and specified that the credit was available by negotiation against the presentation of the bill of lading and other documents.

The gasoil was loaded on board the Neptra Premier at Pasir Gudang, Malaysia on or about 8 September 1997 evidenced by a bill of lading of the same date. The bill named the third party as the shipper, the consignee was `to the order of Cosco-Feoso (S) Pte Ltd`, and the notify party was Sinochem Hainan Co Ltd.

The quantity of gasoil was stated in the bill of lading as 5,908.437 metric tonnes, in conformity with a certificate of quantity signed by the third party`s terminal supervisor, a surveyor and the master of the Neptra Premier. However, the quantity measured on board and recorded in the load ullage report was 5,860.690 metric tonnes.

On 11 September 1997 the defendants received a telex from the third party requesting the gasoil to be released to Sinochem Hainan Co Ltd without production of the bill of lading. The relevant part of the telex stated:

The above goods were shipped on the above vessel by Messrs Cosco-Feoso (S) Pte Ltd and consigned to order of Cosco-Feoso (S) Ltd but the relevant bills of lading have not yet arrived.

We hereby request you to deliver such goods to Sinochem Hainan Co Ltd at the port of Shanya, Hainan, China without the production of the bills of lading ...

In consideration of your complying with our above request we hereby agree as follows

    1. To indemnify you, your servants and agents and to hold all harmless in respect of any liability, loss or damage or what nature which you may sustain by reason of delivering the goods ( sic ) Sinochem Hainan Co Ltd at the port of Shanya, Hainan, China in accordance with our request.
    2. In the event of any proceedings being commenced against you or your servants or agents in connection with the delivery of goods as aforesaid to provide you or them from time to time sufficient funds to defend the same.
    3. If the vessel or any other vessel or property belonging to ( sic ) should be arrested or detained or if the arrest or detention thereof should be threatened to provide such bail or other security as may be required to prevent such arrest or detention to secure the release of such vessel or property and to inform you in respect or ( sic ) any loss, damage or expenses caused by such arrest or detention whether or not the same may be justified.



The Neptra Premier arrived at Shanya on 13 September, and the cargo was discharged by 15 September without the bill of lading pursuant to the letter of indemnity.

On 19 September the third party issued another letter of indemnity. This letter was issued to the plaintiffs to enable the third party to receive payment for the gasoil without presenting the bill of lading. The letter reads:

Letter of Indemnity



Date : 19 Sept 1997
Seller : Cosco-Feoso (S) Pte Ltd
400 Orchard Road
Hex 13-05 Orchard Towers
Singapore 238875
Buyer : Fortune Hong Kong Trading Limited
1601 Emperor Group Centre
288 Hennessy Road
Wanchai Hong Kong
Re : L/C No.: B-01-P-03889 issued by The Yien Yieh Commercial Bank Ltd Hong Kong Branch.
Shipped per: MV Neptra Premier
Bills of Lading dated 08 Sept 1997



Gentlemen,

We refer to a cargo of 5,500.000 mt of gasoil sold by us to you pursuant to contract no. C/CF/PI 065/97 dated 05 Sept 1997 and shipped on board the vessel MV Neptra Premier at the port of Pasir Gudang, Malaysia pursuant to B/L dated 08 Sept 1997.

Although we have sold the cargo to you we have been unable to provide you with the original bills of lading and the shipping documents covering the said sale.

In consideration of your paying to us the full purchase price of US$1,006,500.00, we hereby warrant that we have tittle free and clear of any lien or encumbrance to such material, and having the full right and authority, we herewith transfer such title and to effect delivery of the same to you.

We further agree to make all reasonable effort to obtain and surrender to you as soon as possible the original bills of lading and other shipping documents and to indemnity (sic), protect and hold you harmless from any all cost (including costs as between attorney or solicitor and own client), claims, losses, damages, demands and any
...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT