The "Patraikos 2"

JurisdictionSingapore
CourtHigh Court (Singapore)
JudgeLai Siu Chiu J
Judgment Date09 May 2002
Neutral Citation[2002] SGHC 103
Citation[2002] SGHC 103
Docket NumberAdmiralty In Rem No 81 of 1996
Plaintiff CounselLeong Kah Wah, Navinder Singh and Aileen Boey (Joseph Tan Jude Benny)
Date09 May 2002
Defendant CounselHaridass Ajaib, Augustine Liew and Kueh Ping Yang (Haridass Ho & Partners)
Published date19 September 2003
Subject MatterClaim against defendants for damage to cargo,Carriage of goods by sea,Burden on defendants to prove exercise of due diligence,Burden on plaintiffs to prove unseaworthiness,Proper care of cargo,Seaworthiness of vessel,Defendants' obligation to exercise due diligence to "properly man" the vessel,Manning requirement,Whether defendants can rely on exception to liability under art IV of Hague Rules,Nature of such obligation,Whether plaintiffs own or have or possessory title to cargo at time of grounding,Sch art III paras 1 & 2 & art IV para 2 Carriage of Goods by Sea Act (Cap 33, 1998 Ed),Exception to defendants' liability under Hague Rules,ss2(1) & 5(2) Bills of Lading Act (Cap 384, 1994 Ed),Whether plaintiffs holders of bills of lading or consignees of cargo,Title to sue,Admiralty and Shipping,Grounding of vessel and flooding of cargo holds,Sch art III para 1 & art IV para 2 Carriage of Goods by Sea Act (Cap 33, 1998 Ed)

Cur Adv Vult

:

Background



The plaintiffs (numbering 42) were shippers of cargo loaded on board the ship Patraikos 2 (`the vessel`) formerly named MSC Carla, from various European ports. The vessel`s owners are Chester Shipping Co Ltd (the defendants) while her managers (since 1989) are Dioryx Maritime Corp of Athens, Greece (`the managers`). At the material time, the vessel was manned by a crew of 27 whose principal officers were Greek, including the Master Efstathious Katsoulis (`the master`) and the chief officer (Sporidis Aristotelis), while her second officer was a Filipino by the name of Ben Gallardo Orlanda (`Orlanda`). The rest of her crew was mainly Filipino and Egyptian. The vessel is a general cargo ship built in Belgium in 1979, with four (4) cargo holds fitted `tween decks; she has a deadweight capacity of 19,863 tonnes and a service speed of about 19 knots; she is registered at the port of Limassol, Cyprus.

At the material time, the vessel was time-chartered to Rickmers-Line GMBH (`the charterers`) for about 50 days, by a charterparty dated 21 November 1995. Just prior thereto, the vessel was dry-docked at Rotterdam for extensive maintenance and repairs works, carried out at a total cost of DFl 409,210. Thereafter, the vessel loaded cargo (about 13,066.13mt consisting of containers, steel products and assorted machinery) at Immingham, Antwerp, Hamburg and Genoa. She sailed from Genoa on 19 December 1996, first to Port Said and then to Penang.

After discharging some cargo at Penang, the vessel left on 6 January 1996 heading south for Map Ta Phut (Thailand). On the afternoon of 7 January 1996, while she was sailing in the Singapore Straits after crossing the Phillip Channel, the vessel ran aground on the rocks of Horsburgh Lighthouse. At the material time the crew keeping watch on the bridge was Orlanda and able-bodied seaman (`ABS`) Abdelmoneim Moustafa Ibrahim Mohamed (`Mohd`) from Egypt; the master had left the bridge at about noon.

The owners declared general average as a result of the casualty. The plaintiffs and their underwriters executed Lloyd`s Average Bonds or Average Guarantees in favour of the defendants, and surrendered their bills of lading in exchange for their cargo. The vessel was refloated on or about 7 April 1996, 103 days after the grounding, the salvage operation being carried out by Smit International (`the salvors`) who managed to retrieve the cargo particularly that stored in holds Nos 1 and 4. The salvors discharged approximately 11,566mt of cargo (including containers) into barges which were towed to Singapore`s Jurong Commercial Wharf between 25 January and 21 April 1996. The remaining steel cargo (approximately 1,500mt) in the No 2 lower hold was discharged and landed at Sembawang Shipyard on 19 April 1996.

After refloating, the vessel was delivered to Sembawang Shipyard on or about 18 April 1996 and drydocked. She remained there for some three (3) months, undergoing repairs (at a cost of about S$6.5m) until 20 July 1996. On or about 30 July 1996, the plaintiffs arrested the vessel. She was released from arrest after which the vessel left Singapore for Manila on 1 August 1996.

Claim



In the statement of claim, the plaintiffs pleaded they were the owners of the cargo and or endorsees of the bills of lading for the same, to whom property in the cargo passed upon or by reason of the endorsement. They alleged that the defendants were under a duty as bailees and/or carriers for reward to take reasonable care of their cargo and to deliver the same in the same good order and condition as shipped. They alleged that the defendants breached that duty as, by reason of the grounding, their cargo was damaged by seawater.

The plaintiffs alleged that the defendants breached art III paras 1 and 2 of the Hague Rules in that, the defendants failed to exercise due diligence to make the vessel seaworthy and that they failed to properly store, carry and discharge the cargo.

In the defence, the defendants admitted they were parties to the contract of carriage (although the bills of lading were issued by the charterers) by reason of cl 4(2) of the document; they claimed the benefit of the clause which states:

The Merchant undertakes that no claim or allegation shall be made against any person whomsoever by whom the carriage or any part of the carriage is performed or undertaken (other than the Carrier) ...

Without prejudice to the foregoing every [such] person shall have the benefit of all provisions herein benefiting the Carrier as if such provisions were expressly for his benefit; and in entering into this contract, the Carrier, to the extent of these provisions, does so not only on his own behalf, but also as agent and trustee for such person.



The defendants, however, put the plaintiffs to strict proof of their right to sue. If the plaintiffs indeed had a right to sue, the defendants pleaded that the relationship between themselves and the plaintiffs would then be governed exclusively by the Hague Rules, by virtue of cl 4(2) of the bills of lading, in the alternative, by reason of the sub-bailment of such cargo by the charterers to the defendants, on the terms of the bills of lading. Whilst they admitted the grounding, the defendants denied that they had breached their duties as carriers of the cargo or that they failed to exercise due diligence to make the ship seaworthy.

The defendants blamed the grounding solely on the negligence of the second officer, Orlanda. They particularised how Orlanda had plotted the course for the voyage prior to the grounding, in particular for the Traffic Separation Scheme of the Singapore Straits. They alleged that Orlanda had failed to alter course at the waypoint as instructed by the master and, when he realised he was off-course, he had steered the vessel hard to port at the last minute. By then it was too late and nothing could be done to avoid the grounding; the defendants relied on art IV of the Hague Rules as their defence.

The defendants contended that they were entitled to general average loss and expenditure (including salvage charges) based on the General Average Report of Clancey, Sons & Stacey dated 30 September 1999 as well as the Addendum dated 24 March 2000. In the alternative, the defendants alleged that by Lloyd`s Average Bonds, the plaintiffs undertook to pay the defendants their proportion of salvage and/or general average and/or particular and/or other charges in consideration for the release of the cargo by the defendants to the plaintiffs. They counterclaimed for general average contributions, relying on cl 22(2) of the bills of lading.

According to Stephen Foster (`Foster`), the plaintiffs had been paid by their respective underwriters for their damage/loss and this action is subrogated to the pool of underwriters who paid the cargo-owners. Foster (PW1) is a director of PT Radita Hutama Internusa (`Radita`) who were the casualty managers engaged in the recovery action of each cargo interest. The parent company of Radita is Richards Hogg International, London average adjusters. Foster said Radita was tasked with obtaining all the necessary documents to support the plaintiffs` claims herein, duly authorised in writing by the pool of underwriters.

Counsel for the defendants questioned the plaintiffs` entitlement to sue - had the plaintiffs either bought the cargo or paid for it? Foster was able in some instances to produce original bills of lading from the consignees, together with invoices showing the terms of sale, letters of credit and proof of payment. Despite his best efforts, however, he was unable to obtain all the original bills of lading from the individual plaintiffs. Neither did he personally deliver the original bills of lading to the carriers/the charterers, that was done by his colleague, albeit under his direction. However, without production of the bills of lading for the cargo, he said the carrier would not have released the cargo from the vessel to the individual plaintiffs, which they did. Foster was closely involved in the salvage sale in Singapore for some of the cargo which was badly damaged. In those instances, Foster said the consignees endorsed the reverse of the bills of lading to enable him to obtain the release of the cargo. Whilst he had no personal knowledge of payment having been made by the individual cargo-owners, Foster was also not aware of any adverse claims to-date, against the interests of the parties stated on the bills of lading.

Cargo that could be, was transhipped with the assistance of the charterers. Some of the consignees arranged transhipment themselves, in order to get the cargo to Indonesia as quickly as possible. In those instances, Foster understood that original bills of lading had to be surrendered to enable the cargo to be released for transhipment. Some of the bills of lading were not `straight` but multi-modal bills of lading. When it came to payment, however, underwriters paid not the forwarding companies under those bills of lading but the actual consignee.

Foster had no personal knowledge of when or if, payment was made by the named consignees, for the goods shipped under the individual bills of lading. It was noted that some of the bills of lading produced before the court (PCB1-322) were not originals, those had been surrendered in exchange for cargo released from the vessel.

The plaintiffs did call two (2) consignees to testify, the first was PT Semen Gresik Persero (`Gresik`), which had ordered cement-making machinery from a Danish, a German and an American company. The German order was shipped under the charterers` bill of lading (No 3) while for the Danish and American orders, the bills of lading were multi-modal transport bills of lading issued by DanTransport A/S followed by those issued by the charterers. The head of their insurance section (Oggy Sedyobasuki) testified that his company paid the sellers (in full) by means of letters (3) of...

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    ...courts in cases where it was disputed whether the claimant(s) had the requisite title to the damaged property (see The “Patraikos 2” [2002] 1 SLR(R) 966 at [137] and Sato Kogyo (S) Pte Ltd and another v Socomec SA [2012] 2 SLR 1057 at [42]). I accept the defendants’ submission that the plai......

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