Wilmar Trading Pte Ltd v Heroic Warrior Inc.

• Jurisdiction: Singapore
• Judge: Belinda Ang Saw Ean J
• Judgment Date: 04 June 2019
• Neutral Citation: [2019] SGHC 143
• Plaintiff Counsel: Mr Gurbani Prem Kumar and Ms Tan Hui Tsing (Gurbani & Co LLC)
• Date: 2019
• Docket Number: Admiralty in Personam No 33 of 2015
• Hearing Date: 25 January 2018,12 February 2018,18 January 2018,30 January 2018,22 February 2019,02 February 2018,26 January 2018,07 February 2018,01 February 2018,31 January 2018,09 February 2018,19 January 2018,23 January 2018,24 January 2018,17 January 2018,16 January 2018,08 February 2018
• Subject Matter: damage to cargo and vessel,Admiralty and Shipping,cargo claims,duty of care between registered owner and sub-charterer,cargo operations,bills of lading,Tort,negligence,contracting and performing carrier
• Published date: 20 June 2019
• Citation: [2019] SGHC 143
• Defendant Counsel: Mr Tay Twan Lip Philip and Ms Yip Li Ming (Rajah & Tann Singapore LLP)
• Court: High Court (Singapore)
• Year: 2019

Belinda Ang Saw Ean J: Introduction

The plaintiff, Wilmar Trading Pte Ltd, is a commodities trader. Pursuant to three sale contracts for various palm oil products, the plaintiff, as buyer on Free on Board (“FOB”) terms, nominated the Bum Chin as the carrying vessel for the shipment of a consignment of palm oil products to be loaded at Kuala Tanjung terminal in Indonesia for carriage to and delivery at Jeddah and Adabiyah. The defendant, Heroic Warrior Inc., is the registered owner of the Bum Chin, a Hong Kong flag oil/chemical tanker built in 2005. Her overall length is 145.35m, and there are 22 independent and segregated cargo tanks on board. She is classed with the Korean Register of Shipping.

The dispute in this action arises out of the loss and damage to part of the consignment of palm oil products due to an incident on board the Bum Chin on 17 April 2013. As the Bum Chin sustained physical damage in the incident, the plaintiff arranged another substitute vessel to transport the consignment of palm oil purchased under three aforementioned sale contracts that were made between PT Multimas Nabati Asahan (“MNA”) and the plaintiff.

The plaintiff’s pleaded claims are founded in contract and negligence. The averment in the statement of claim is that the defendant, as contracting carrier, failed in its duty to ensure that the Bum Chin was seaworthy and thus acted contrary to the Hague-Visby Rules (“Visby Rules”). The plaintiff also argues that the defendant, through its servants or agents, amongst other things, failed to take reasonable care of the cargo of RBD Palm Olein IV 64 (“ROL IV 64”) stowed in tank 4S. The plaintiff’s key contention is that tank 4S was not cargoworthy in that there were structural weaknesses present, and/or was over-pressurised due to insufficient venting of tank 4S or lack of control of the manifold valve. As a result, the longitudinal bulkhead of tank 4S buckled and the tank top fractured, thereby causing loss and damage to the cargo of ROL IV 64 stowed in tank 4S and the loss of use of the Bum Chin as the nominated carrying vessel to perform the voyage to the intended discharge ports, amongst other things. The proceedings also contain an assertion of ownership of the consignment of palm oil products.

The defendant counterclaims against the plaintiff for, inter alia, the cost of repairs to the Bum Chin. The nub of the defendant’s case is that the plaintiff is responsible for the damage sustained by the Bum Chin because the terminal involved in the loading of the cargo was acting as the plaintiff’s agent and the terminal had improperly performed its part of the cargo operations so much so that a sudden surge of air pressure was introduced into the liquid cargo in tank 4S at a high velocity. This led to the over-pressurisation of tank 4S that caused the bulkhead of tank 4S to buckle and other damage observed after the incident.

As stated earlier, the Bum Chin was the nominated carrying vessel for the shipment of a consignment of palm oil products. There were three charterparties involved in the carriage of the aforementioned consignment of palm oil: a head time charter, a sub-time charter and a voyage charter. None of the three charterparties were between the plaintiff and the defendant, and no bills of lading were ever issued for the parcel of ROL IV 64 in tank 4S or other palm oil products loaded in other tanks on board the Bum Chin. This judgment will first deal with the plaintiff’s claim founded on an express or implied contract derived from an intention in the charterparties to issue original bills of lading that incorporated the Visby Rules for the consignment in question. If it is adjudged that there is no contractual relationship between the plaintiff and the defendant as alleged, the plaintiff’s alternative cause of action is in negligence. In this regard, the plaintiff did not sue in common law bailment and the precise question to a claim in negligence is whether it is legally necessary for the plaintiff to have a proprietary interest in the cargo at the time of the incident before it is entitled to sue for substantial damages; or can a duty of care in negligence arise despite the absence of a proprietary interest in the consignment in question at the material time. As for the defendant, its counterclaim is premised on the existence of a contractual relationship between the parties and an agency relationship between the plaintiff and the terminal. If it is adjudged that there is no agency relationship as described, a related issue that arises is whether the plaintiff is entitled to hold the defendant wholly liable for the damages claimed even if the terminal is partly to blame for the incident. This issue would not arise if the terminal is not to be blamed for the incident at all. After addressing each parties’ title to sue under the respective claims and counterclaim, this judgment will then examine the merits of the parties’ respective cases on the cause of the incident and who is to be blamed for the incident.

The plaintiff is represented by Mr Prem Gurbani (“Mr Gurbani”) and assisted by Ms Tan Hui Tsing. The defendant is represented by Mr Philip Tay (“Mr Tay”) and assisted by Ms Yip Li Ming.

Background facts

The plaintiff brings this action as the owner and/or the party entitled to sue in respect of the following palm oil products: 9,650mt of RBD Palm Olein (“ROL”); 1,200mt of ROL IV 64; 5,780mt of RBD Palm Oil (“RPO”); and 2,240mt of RBD Palm Stearin (“RPS”). These were the quantities and quality of palm oil products stipulated for loading at the terminal in Kuala Tanjung for carriage to and delivery at Jeddah and Adabiyah under the voyage charterparty between the disponent owner of the Bum Chin, NHL-Development Ltd (“NHL”), and Raffles Shipping International Pte Ltd (“Raffles Shipping International) (nominating the plaintiff as charterer) (see [10] below).

Further or alternatively, the plaintiff brings this action as the owner and/or the party entitled to sue in respect of: 1,200.055mt of ROL IV 64; 2,327.944mt of ROL; and 1,146.451mt of RPO. According to the plaintiff, these were the actual volumes of the palm oil products already loaded on board the Bum Chin at the time of the incident. There appears to be a discrepancy in the loaded volume of ROL IV 64 stated in the pleadings, the affidavits of evidence-in-chief (referred to as “AEICs” in the plural and “AEIC” in the singular) and in parts of the closing submissions. “1,200.055” and “1,200.55” are both used. As the plaintiff’s damages are based on calculations that use the figure of 1,200.055mt, and the surveyor report adduced by the plaintiff uses the same figure, this judgment will take 1,200.055mt as the volume of ROL IV 64 that was loaded.

The plaintiff had purchased these palm oil products from an Indonesian seller, MNA, under three sale contracts. These contracts expressly state that the palm oil products were purchased FOB Indonesian Ports.¹ Under the sale contracts, MNA as FOB seller was responsible for loading the palm oil products on board the Bum Chin and the plaintiff was responsible for procuring the Bum Chin. MNA owned the Kuala Tanjung terminal. At the terminal, palm oil products in storage tanks are pumped through the terminal’s product pipelines terminating at flanges which are fitted with flexible hose lengths for connection to the loading vessel’s manifold system.

As stated earlier, the carriage involved three charterparties. The head charterparty was a time charterparty between the defendant as the registered owner and STX Pan Ocean as the head charterer. The sub-time charterparty was between STX Pan Ocean and NHL. The voyage charterparty was between NHL and Raffles Shipping International (nominating the plaintiff as charterer). There are ongoing arbitration proceedings between the various parties under the three charterparties.

For completeness, MNA, Raffles Shipping International and the plaintiff are related companies under Wilmar International Limited. Nothing turns on this relationship in this action.

Plaintiff’s causes of action against the defendant Plaintiff’s cause of action in contract

The essence of the plaintiff’s pleaded claim in contract against the defendant is that the defendant failed to render the Bum Chin seaworthy and/or make the holds and all parts of the vessel in which cargo is carried, fit and safe for the reception of goods, and that its servants or agents failed to take reasonable care in the loading, handling, storage, keeping and care of the cargo. The plaintiff asserts that there exists an express and/or implied contract of carriage between the parties. The issue for determination is whether the plaintiff and defendant are contracting parties.

The plaintiff’s contention that there exists an express contract of carriage between the plaintiff and defendant is ambiguous. As alluded to earlier, it is not controversial that the three charterparties involved in the carriage of the consignment of palm oil products are not between the plaintiff and the defendant. The head time charter is between the defendant and STX Pan Ocean, the sub-time charter is between STX Pan Ocean and NHL, and the voyage charter is between NHL and the plaintiff, as nominee of Raffles Shipping International (“NHL charter”). Hence, it is unclear how an express contract of carriage could arise between the parties.

As for the alleged implied contract, the plaintiff submits in its closing submissions that the implied contract of carriage between the plaintiff and the defendant is evidenced by original bills of lading that would have been issued to the plaintiff in Singapore by the defendant had tank 4S not been damaged and loading of the entire consignment of palm oil products on board been accomplished. The NHL Charter contemplates the issuance of bills of lading for shipments under the charter. The bills of lading as...