Wartsila Singapore Pte Ltd v Lau Yew Choong and another suit

• Jurisdiction: Singapore
• Judge: Belinda Ang Saw Ean J
• Judgment Date: 10 April 2017
• Neutral Citation: [2017] SGHC 76
• Plaintiff Counsel: Anthony Lee, Angelyn Cheng and Wang Liansheng (Bih Li & Lee)
• Date: 10 April 2017
• Docket Number: Suit No 168 of 2013 and Suit No 521 of 2013
• Hearing Date: 18 August 2016,23 August 2016,01 November 2016,16 August 2016,25 August 2016,02 September 2016,17 August 2016,26 August 2016,19 August 2016
• Subject Matter: Duress,Principal,Negligence,Tort,Causation,Agency,Undisclosed,Exclusion clauses,Contractual Terms,Contract,Economic
• Year: 2017
• Defendant Counsel: John Sze Kian Chuan and Nicola Loh (Joseph Tan Jude Benny LLP)
• Court: High Court (Singapore)
• Citation: [2017] SGHC 76
• Published date: 13 April 2017

Belinda Ang Saw Ean J: Introduction

These two actions were heard together. Suit No 521 of 2013 (“Suit 521”) is an action brought by the plaintiffs, Geniki Shipping Pte Ltd (“Geniki Shipping”) and Aga-Intra Sdn Bhd (“Aga-Intra”), claiming damages from the defendant, Wartsila Singapore Pte Ltd (“Wartsila”), for the losses suffered by the plaintiffs as a result of engine breakdown which the vessel, Geniki Sarawak, sustained within three months of repairs that were carried out to her main engine by Wartsila from 25 November 2010 to 31 December 2010 (“the 2010 repairs”).

In the other action, Suit No 168 of 2013 (“Suit 168”), Wartsila is suing to recover the balance sum due to Wartsila for the repairs carried out to the main engine by Wartsila from March 2011 to June 2011 (“the 2011 repairs”). The defendant in Suit 168 is Lau Yew Choong (“LYC”), a director of Geniki Shipping and Aga-Intra. LYC’s defence, amongst others, is that the charges for the 2011 repairs are only payable by him if the engine breakdown on 19 March 2011, which necessitated the 2011 repairs, was not due to Wartsila’s poor workmanship and/or negligence in carrying out the repairs to the vessel’s main engine in 2010 (ie, the 2010 repairs).

The cause of the engine breakdown on 19 March 2011 is seriously disputed. In particular, the contest is over whether there is, factually, a causal connection between the breakdown and the 2010 repairs, which is now alleged to be done with poor workmanship and/or without reasonable care and skill. It is logical to deal with Suit 521 first.

Suit 521

After the 2010 repairs, the vessel resumed service on 13 January 2011. Unfortunately, after operating for 1,104.78 hours, the vessel’s main engine failed on 19 March 2011, and that failure necessitated another round of repairs to the very same crankshaft that was replaced in the 2010 repairs. It is not disputed that the 2010 repairs to the main engine included replacement and renewal of the crankshaft, complete sets of main and crankpin bearings and three connecting rods. The plaintiffs are understandably aggrieved that the vessel suffered various engine problems within three months of the 2010 repairs that were carried out under Wartsila’s warranty. Wartsila denies that the crankshaft seizure that led to main engine failure on 19 March 2011 had anything to do with the 2010 repairs and, instead, assigns blame to the vessel’s shipboard operation and maintenance procedure. Accordingly, Wartsila maintains that the cost of repairs incurred for the crankshaft and bedplate, which is the subject matter of the 2011 repairs and Suit 168, is payable by LYC.

The issues in Suit 521 are as follows: Is Aga-Intra entitled to claim damages even though Wartsila’s contract for repair of the Geniki Sarawak’s main engine was made with Geniki Shipping? Is Wartsila in breach of contractual duty and/or liable in tort for negligence in carrying out the 2010 repairs? Is the breach of contract and/or duty of care the cause of the engine breakdown on 19 March 2011 and thus the plaintiffs’ loss? Is Wartsila’s liability for all or part of the claim excluded or limited by any standard terms or conditions? Are the conditions of contract or any of them not available to Wartsila by reason of the Unfair Contract Terms Act (Cap 396, 1994 Rev Ed)?

The issue of causation is significant for the reason that Suit 521 can be disposed of if causation cannot be established on the balance of probabilities. It is, therefore, logical to look first into the factual issue of causation (assuming but without deciding on matters such as breach of contract or breach of duty of care). In this judgment, I will consider the explanations as to how the crankshaft seizure on 19 March 2011 happened and will also evaluate the expert witnesses’ theories and overall evidence to decide on whether the engine failure on 19 March 2011 was more likely than not due to Wartsila’s failure to carry out the 2010 repairs with reasonable care and skill.

Causation Engine failure on 19 March 2011

On 18 March 2011, while manoeuvring to berth at Singapore, the vessel’s main engine reportedly shut down suddenly, but the crew managed to restart it. After completion of cargo operations, the Chief Engineer inspected the bearings and connecting rods of the main engine and the crew cleaned three filters: the main filter, duplex filter and fine filter. Thereafter, the vessel departed Singapore for Port Klang.

On 19 March 2011, whilst manoeuvring to berth at Port Klang, the vessel’s main engine reportedly shut down again. The crankcase was opened for troubleshooting. Investigation by those on board the vessel revealed damage to main bearings No 4 and No 8, and that the crankshaft had stalled ─ the crankshaft turning gear was jammed. The main engine breakdown report dated 19 March 2011, signed by the Chief Engineer of the Geniki Sarawak, Aye Min Lwin (“Chief Engineer”), and acknowledged by the Master, Peter Gabriela Nyagom (“Master”) states:¹

Statement of Main Engine Breakdown

On the 18th, March, 2011 at s’pore vessel in the process of the berthing when vessel ahead to astern changed position, M/E suddenly shut-down and a few minutes start back. Completed loading sailing to port klang.

On the 19th, March, 2011 at port klang vessel at anchorage standby engine starting time all pressure and parameters were good conditions. When vessel process of the berthing M/E suddenly shut-down and cannot start. Vessel proceed to anchorage for further inspection. At 1033 hrs vessel drop anchor. At 1040 hrs engine crew immediately take action and proceeded to open the crankcase doors and carried out a full visual inspection on the M/E piston, con rod bearings and main bearings. All bearings condition, temperature and piston free movement were checked and all engine room parameters were checked too. At the same time all pressure were good condition, lub oil pressure is 0.55 Mpa. During the inspection we found out the unit No. 4 and 8 main bearings shall was damaged. No 4 and 8 unit main bearings were badly damage can be seen from the crankcase inspection. The con rod bearings were all good condition, further inspect on the unite No 8 piston, liner, piston rings and all unit con rod bearings were showed no damage and was in good condition. Crankshaft was can’t turn, because No 4 and 8 main bearings were jammed.

We’re request superintendent to call technician with special tools and assist engine crews to removed the unit No 8, 7, 6, 5, 4 and No 3 main bearings.

This report made to the best of my knowledged.

Wartsila’s personnel attended on board the vessel on 23 March 2011. Preliminary investigations revealed cracked lines at the centre area of both No 4 and No 8 main journals and an increase of hardness value. The vessel was subsequently towed to Wartsila’s yard in Singapore for repairs to the crankshaft and bedplate.

Investigations after the engine failure on 19 March 2011

Following the incident on 19 March 2011, Geniki Shipping sent the vessel’s lubricating oil for analysis by Maritec Pte Ltd (“Maritec”). Maritec’s report dated 1 April 2011 indicated that the lubricating oil used was normal and fit for further use. Wartsila also submitted lubrication oil samples to SGS Testing & Control Services Singapore Pte Ltd (“SGS”). SGS’s report dated 31 March 2011 revealed that there were no issues with the lubrication oil samples obtained from the vessel’s storage tank and sump. The samples’ parameters were within acceptable limits, and the lubrication oil was fit for use.

On 30 March 2011, Guangzhou Diesel Factory (“Guangzhou Diesel”), the engine maker, attended to investigate the nature, extent and cause of the engine breakdown. Physical damage that was visible was noted. Guangzhou Diesel, however, remarked in its report dated 28 April 2011 that the engine had been completely dismantled, leaving limited evidence available to enable it to assess the extent of the damage. Guangzhou Diesel’s report therefore did not specifically opine as to the cause of the breakdown.

Wartsila appointed Det Norske Veritas (“DNV”) to conduct a failure analysis on the damaged main bearings No 4, No 5 and No 7 in order to establish the mode and primary cause(s) of the main bearings failure. DNV also analysed a new set of main bearings for compliance with Chinese national standards. DNV’s first report no. 1-3B0R39 dated 12 May 2011 concluded that main bearings No 4 and No 5 failed in the manner of both abrasive and adhesive wear. DNV found in main bearing No 4 evidence of coating deficiency such as non-uniform coating layers, poor coating adhesion and chemical composition segregation. DNV’s second report no. 1-32UJSN-50 dated 22 July 2011 was on a new set of main bearings and it concluded that the bearings analysed were not in compliance with the Chinese national standard CB*3264-85. It appears that Guangzhou Diesel had rejected the correctness of DNV’s test results and the plaintiffs also did not agree with DNV that the failure of the bearings was due to coating deficiency citing problem-free bearings from the same source (Guangzhou Diesel). In the present case, the parties have not brought up defective material as contributing to the engine breakdown on 19 March 2011.

On 5 April 2011, Wartsila and Aga-Intra jointly appointed Braemar Technical Services Ltd (“Braemar”) to carry out a survey and report on the main engine breakdown on 19 March 2011. Braemar’s report GSS No. 309271 dated 10 October 2011 (“the Braemar Report”) stated, inter alia, as follows:² Nos 4, 7, 8, 9 and 10 main bearings were heavily wiped and scored. No 4 and No 8 main bearings showed signs of bearing metal disintegration and signs of overheating (No 4 and No 8 main journals exhibited signs of ovality with multiple heat cracks and hardness value exceeding allowable limit); Crankpins and crankpin bearings were all only lightly scored, with the...