The Salina

• Jurisdiction: Singapore
• Judge: Karthigesu JA
• Judgment Date: 03 November 1998
• Neutral Citation: [1998] SGCA 68
• Docket Number: Civil Appeals Nos 98 and 122 of 1998
• Date: 03 November 1998
• Published date: 19 September 2003
• Year: 1998
• Plaintiff Counsel: Abbas Ali bin Fakhruddin and Ung Tse Yang (Joseph Tan Jude Benny)
• Citation: [1998] SGCA 68
• Defendant Counsel: Steven Chong SC, Toh Kian Sing and Anna Quah (Rajah & Tann)
• Court: Court of Appeal (Singapore)
• Subject Matter: Bills of lading,Whether cause of action arising under indemnity separate from cause of action arising under breach of warranty,Express warranty given that receiving party entitled to immediate possession,Admiralty and Shipping,Request for delivery of cargo without production of bills of lading,Indemnity also given for liability of time charterers releasing consignment

Judgment:

KARTHIGESU JA

(delivering the grounds of judgment of the court): The unusual feature of CA 122/98 is that although it arose from an application to strike out certain paragraphs of the statement of claim in an admiralty action in rem as disclosing no reasonable cause of action, the application was not made under O 18 r 19(1)(a) of the Rules of Court 1996, the order and rule which specifically deals with striking out a pleading or part of a pleading on the ground that no reasonable cause of action is disclosed, but it was made under the inherent jurisdiction of the court by challenging whether the in rem admiralty jurisdiction of the court could be invoked by the alleged claim pleaded by the paragraphs in question. The learned assistant registrar who heard the application in the first instance dismissed it but granted the appellants a stay of the action to enable the parties to proceed to arbitration, subject to the condition that the security furnished by or on behalf of the appellants to secure the release of the `Salina` being extended as security for the arbitration within 30 days, failing which the stay would be automatically lifted.

2.The appellants appealed to the judge-in-chambers against the assistant registrar`s order dismissing the `striking out application` but did not appeal against the ;stay order;. However they subsequently applied by summons-in-chambers to enlarge the time for extending the `security` to cover the arbitration until after the final disposal of their appeal against the assistant registrar`s order dismissing the `striking out application`. This application was dismissed by the assistant registrar. In the event the appellants duly extended the `security` to cover the arbitration by a solicitor`s letter of undertaking.

3.The appellants then applied to the judge-in-chambers to amend the notice of appeal to the judge-in-chambers appealing against the assistant registrar`s order dismissing the `striking out application` by adding a further prayer that the solicitor`s letter of undertaking extending the `security` to cover the arbitration be cancelled and returned to them.

4.The matter came before judicial commissioner Choo Han Teck, who not only dismissed the appeal against the assistant registrar`s order dismissing the `striking out application`, but also refused the application to amend the notice of appeal to the judge-in-chambers referred to in the paragraph above. The former came before us as CA 122/98 and the latter as CA 98/98. We dismissed CA 122/98 for the reasons which we will now give. Civil Appeal No 98 was also dismissed. The learned judicial commissioner`s judgment is reported at [1998] 3 SLR 76.

5. The circumstances leading to the appeal

The respondents (`Coscol Marine`) are a company incorporated in Houston, Texas and were at the material time the time charterers of a tanker called `Nordic Freedom`. The appellants, the owners of the vessel `Salina`, are a company incorporated in Thailand called International Oil-Tanking Co Ltd. The appellants will be referred to hereafter as `International Oil`.

6.By a tanker voyage charterparty concluded on 14 May 1996 (`the voyage charter`) International Oil chartered the Nordic Freedom from Coscol Marine for one voyage to carry two consignments of gas oil shipped by Hyundai Oil Refinery Co Ltd (`Hyundai`) from Daesan, Korea to Sriracha, Thailand. One consignment was called the `Philma cargo` and the other `Sunkyong cargo`. The voyage charter ended on 4 June 1996 by which date both consignments of gas oil had been discharged from the Nordic Freedom.

7.Clause 23 of the voyage charter, inter alia, provided as follows:

Should bill of lading not arrive at discharge port and also not available onboard vessel prior to schedule discharge, owners shall discharge entire cargo per charterer`s telex instructions against letter of indemnity as per owner`s P and I Club wording signed by charterer. No bankers guarantee nor countersigning of letter of indemnity by bankers shall be required.

8.The Nordic Freedom was expected to arrive at Sriracha, Thailand on 30 May 1996. Following an exchange of telexes between Coscol Marine and International Oil`s chartering brokers regarding the delivery of the consignments of gas oil on the vessel`s arrival at Sriracha without the production of the relevant bills of lading but against the provision of a letter of guarantee, International Oil telexed Coscol Marine on 27 May 1996 a specific request for the delivery of the Philma and Sunkyong cargoes to Marubeni International (S) Pte Ltd (`Marubeni`). The telex contained both an express warranty that Marubeni were entitled to immediate possession of both consignments and that delivery to them would not be in breach of any other party`s rights (`the warranty`) and an indemnity holding Coscol harmless in respect of any liability, loss or damage which Coscol Marine may sustain by reason of such delivery (`the indemnity`). The telex of 27 May 1996 was as follows:

The above goods (referring to (A) the Sunkyong cargo and (B) the Philma cargo) were shipped on the above ship (Nordic Freedom) by Messrs Hyundai Oil Refinery Co Ltd.

And consigned (A) made out or endorsed to the order of Sunkyong Trading (HK) Limited and (B) to order of Philma Petroleum Ltd. But the relevant bills of lading have not yet arrived.

We hereby request you to deliver the goods without production of the relevant bills of lading to the order of Marubeni International Petroleum (S) Pte Ltd. TPP terminal.

We warrant that they are entitled to immediate possession of the goods and delivery to them is not in breach of any other party`s rights. [This is the warranty.]

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

(1) To indemnify you and hold you harmless in respect of any liability loss or damage of whatsoever nature which you may sustain by reason by delivering the goods in accordance with our request.

(2) To pay on demand the amount of any loss or damage which you, the Master and/or agents of the vessel or any other of your servants or agents whatsoever may incur as a result of delivering the goods as aforesaid.

(3) Not relevant and not relied on by either party.

(4) If the vessel or any other property belonging to you should be arrested or detained or if the arrest or detention thereof should be threatened, to provide on demand such bail or other security as may be required to prevent such arrest or detention or to secure the release of such vessel or property and to indemnify you in respect of any loss, damage or expenses caused by such arrest or detention whether or not the same may be justified.

(5) to (8) Not relevant and not relied on by either party.

(Paragraphs (1), (2) and (3) constitute the indemnity).

9.We should note that International Oil from the beginning disputed the validity of the indemnity but for the purposes of their application to strike out certain paragraphs of the statement of claim and for the purposes of this appeal accepted its validity.

10.Be that as it may, Coscol Marine relying on the warranty directed the Master of the Nordic Freedom to deliver the cargoes of gas oil to the order of Marubeni without the production of the relevant bills of lading. This resulted in the holders of the bills of lading, Hyundai, suing the owners of the Nordic Freedom in admiralty in rem proceedings for the wrongful delivery of...