The Vasiliy Golovnin

• Jurisdiction: Singapore
• Judge: Ang Ching Pin AR
• Judgment Date: 10 July 2006
• Neutral Citation: [2006] SGHC 247
• Court: High Court (Singapore)
• Year: 2006
• Published date: 29 April 2008
• Plaintiff Counsel: Kenny Yap and Joanne Chia (Allen & Gledhill)
• Defendant Counsel: Steven Chong SC, Ian Teo and Kohe Hassan (Rajah & Tann)
• Citation: [2006] SGHC 247

10 Jul 2006

Ang Ching Pin, Assistant Registrar

To Strike Out Proceedings

Ct: Orders in terms of prayers (2), (3), (4) of the defendants’ application.

Query (6) for striking out of the first plaintiffs’ names?

DC: That is by consent

PC: Not necessary as Your Honour is granting (2) and (3).

Ct: Submissions on costs?

DC: There were 13 affidavits filed with foreign lawyers involved. It went on for two days with many authorities and would think that it is better if costs are fixed before Your Honour. Submit costs of $20,000 excluding disbursements.

PC: Leave it in Your Honour’s hands. Would be about $20,000 inclusive of disbursements so would submit $15,000 without disbursements.

Ct: Costs fixed at $20,000 to the defendants exclusive of disbursements,

PC: My clients are asking to appeal and wondering if Your Honour wants to grant a stay at this stage.

Ct: Would rather the plaintiffs file a former application.

PC: Suggesting a stay unitl a formal application for the stay of the order is heard.

DC: The amount of security is about US$7m and we explained that there is counter security by cash. Suggesting that Your Honour directs Learned Friend to file the application for stay within 48 hours for it be heard by Friday.

Ct: The plaintiffs are to file their application for stay of the order pending appeal by Wednesday 12 July 2006 4pm, failing which the security will be returned forthwith to the defendants.

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Ct: My grounds of decision are as follows:

1) The defendants, Far Eastern Shipping Co Plc (“FESCO”), were at all material times the owners of the Chelyabinsk. Under a charterparty dated 9 September 2005, FESCO chartered the Chelyabinsk to Sea Transport Contractors Ltd (“STC”) who in turn sub-chartered it to Rustal SA (“Rustal”(. The plaintiffs are Swiss banks who provided financing to Rustal and were holders of certain bills of lading issued by FESCO to set aside the writ of summons and warrant of arrest of the Vasily Golovnin, a sister vessel of the Chelyabinsk, in respect of the plaintiff’s claim against FESCO for, inter alia, losses sustained in relation to cargo carried on the Chelyabinsk. Extensive affidavits from both sides were filed, dealing with the history of the matter as well as interpretations of Togolese law by the parties’ respective Togolese lawyers. Be that as it may, I was satisfied that it was possible to determine the issues at hand on the affidavit evidence.

Background

2) In September and October 2005, rice cargo were loaded onboard the Chelyabinsk at China and India respectively under eight separate bills of lading. Only four of them are relevant for present purposes. The first bill of lading, Chelyabinsk 01-A, was dated 17 September 2005 and pertained to the loading of cargo at Nanjing for discharge at “any African port”. The other three bills of lading, KKD/LT/01, KKD/LT/02 and KKD/LT/04 were dated 10 October 2005 and pertained to the loading of cargo at Kakinada for discharge at “Lome, Togo”. The second plaintiffs, Credit Agricole Suisse SA (“CA”) were the holders of Chelyabinsk 01-A, KKD/LT/01 and KKD/LT/02, while the third plaintiffs, Banque Cantonale Geneve (“BCG”) were the holders of KKD/LT/04.

3) Another bank, BNP Paribas, were the holders of bills of lading Chelyabinsk 01-B and Chelyabinsk 02 which provided for the discharge of cargo at “any African port”. BNP Paribas were not parties to the present proceedings. In addition, another two bills of lading, KKD/LT/03 and KKD/LT/05, owned by CA and BCG respectively, provided for discharge at “Lome, Togo”. These four bills of lading were not the subject of the plaintiffs’ claims.

4) After the cargo had been loaded in China and then in India, the Chelyabinsk proceeded to the port of Abidjan in the Ivory Coast to discharge the cargo under bills KKD/LT/03 and KKD/LT/05. The cargo discharged under these two bills of lading were subject to letters of indemnity issued by STC which had instructed FESCO to discharge the cargo at Abidjan instead of the contractual port of discharge at Lome. Thereafter, pursuant to the other bills of lading, the remaining cargo would have been bound for Lome and/or any African port.

5) In early December 2005, Rustal requested STC to switch the bills of lading to change the discharge port from Lome to Douala. On or about 5 December 2005, STC made the request known to FESCO who were in principle agreeable to the request provided the original bills of lading were surrendered in exchange. The arrangements for the switch were made between FESCO’s agents in the United Kingdom, Cornavin Shipping, and Rustal’s London solicitors, Middleton Potts. The parties agreed to effect the switch at Cornavin’s office on 12 December 2005 but neither Rustal nor Middleton Potts attended at Cornavin’s office on that day or any other subsequent date for that purpose.

FESCO’s version of events

6) It was FESCO’s position that the switched bills of lading providing for discharge at Douala were never issued and the contracts of carriage continued to be governed by the original bills of lading which stipulated Lome as the port of discharge. FESCO claimed that whereas STC had initially directed that the Chelyabinsk proceed to Douala for discharge, STC had revoked these instructions on or about 13 December 2005. STC then directed on 14 December 2005 that FESCO should not switch the bills of lading until further instructions from STC to do so. The next day, on 15 December, STC reminded the Master of the Chelyabinsk that it should not enter and beth in Douala without STC’s approval. On 19 December 2005, STC instructed FESCO to proceed to Lome to discharge the cargo. As such, the Chelyabinsk proceeded to Lome to discharge the cargo in accordance with the bills of lading.

7) On 21 December 2005, FESCO received a request from BCG’s solicitors, Waterson Hicks, to discharge the cargo under KKD/LT/04 in Douala, in exchange for a letter of indemnity. FESCO rejected the request. Following FESCO’s reply that it would not accede to BCG’s request, Waterson Hicks sent another email on the same day seeking confirmation that the cargo would be discharged in Lome in accordance with BCG’s instructions.

8) FESCO acknowledged that CA also requested to discharge the cargo under their bills of lading at Douala but FESCO disputes the date that the request was received. While CA claimed that they had sent their request on 16 December 2005, FESCO maintained that the request was only received on 29 December 2005.

The plaintiffs’ version of events

9) The plaintiffs’ position was that FESCO, STC and Rustal had agreed to the switching of the bills of lading and that the cargo should be discharged at Douala. On or about 12 December 2005, the Chelyabinsk had in fact sailed to the port of Douala in Cameroon and tendered notice of readiness to discharge the cargo. The plaintiffs asserted that there had been no attendance at Cornavin’s office because they had received a “bizarre fax” from STC’s solicitors advising that the Chelyabinsk was being withdrawn from charter service. They further asserted that the switch did not take place only because FESCO reneged on the agreement to do so.

10) The plaintiffs contended that on 14 December and 16 December 2005, BC had instructed FESCO to discharge the cargo under the bills of lading held by them in Douala. On 16 December 2005, CA also instructed FESCO to re-cut the bills of lading held by them and discharge the cargo under the bills of lading at Douala. However, FESCO did not comply with the instructions given on all these occasions. On 21 December 2005, the Chelyabinsk departed from Douala without discharging any cargo and arrived in Lome on 23 December 2005.

Events in Lome

11) On 22 December 2005, STC obtained a court order in Lome (“Ruling No. 2062/2005”) for the arrest and detention of the cargo onboard the Chelyabinsk as security for STC’s claim against Rustal for unpaid hire under the sub-charterparty. It was the plaintiffs’ contention that their lawyer, Mr Robert Parson, had warned FESCO on the same day not to proceed to Lome as STC had obtained a lien order on the cargo. This was disputed by FESCO. On 24 December 2005, Rustal obtained a court order from the Lome Court (“Ruling No. 2081/2005”) to prevent the discharge of the cargo from the Chelyabinsk.

12) After the Chelyabinsk arrived in Lome on 23 December 2005, Ruling No. 2062/2005 was duly served on it. STC then obtained a court order on 27 December 2005 (“Ruling No. 2093/2005”) that the cargo be unloaded and discharged into the custody of the Compagnie Maritime d’Agence et d’Affretement, the agent for the Chelyabinsk.

13) On 29 December 2005, the banks applied to the Lome Court to set aside Ruling No. 2093/2005 and reinstate Ruling No. 2081/2005 obtained by Rustal. FESCO was also granted a right of audience by the Lome Court in the proceedings by the banks. On 16 January 2006, the Lome Court set aside Ruling No. 2081/2005 obtained by Rustal and ordered the cargo to be discharged in Lome (“Ruling No. 0023/2006”). The Lome Court also found that STC was entitled to retain the cargo as security for their dispute with Rustal. Shortly after Ruling No. 0023/2006 was delivered, both Rustal and the banks obtained separate rulings for a temporary stay of execution of the ruling.

14) On 2 February 2006, the Lome Court of Appeal ordered the lifting of the stay of execution of Ruling No. 0023/2006. In compliance with Ruling No. 0023/2006, FESCO commenced discharge of the cargo on 4 February 2006 which discharge was completed in about mid February. As STC alleged that there was damaged and missing cargo, the Chelyabinsk’s P&I Club issued security for STC’s claim in the sum of €113,411. On 17 February 2006, STC obtained from the Lome Court an order for the arrest of the Chelyabinsk as security for its claim for damage to some of the cargo. This arrest order was set aside on 21 February 2006 but on the same day,...