The "Sumi Maru 9001"

• Judge: Chao Hick Tin J
• Judgment Date: 13 November 1992
• Neutral Citation: [1992] SGCA 80
• Citation: [1992] SGCA 80
• Defendant Counsel: Bernard Eder QC with Steven Chong (Drew & Napier)
• Published date: 19 September 2003
• Plaintiff Counsel: Bernard Rix QC with David Liew (Robert WH Wang & Woo)
• Date: 13 November 1992
• Docket Number: Civil Appeal No 97 of 1986
• Court: Court of Appeal (Singapore)
• Subject Matter: Tugowners 'not responsible for any loss, damage or delay whatsoever to the tow or for failure to complete towage services howsoever caused',Contractual terms,Exclusion clauses,Appeal,Causation,Admiralty jurisdiction and arrest,Whether appellants may raise arguments on breaches of obligations under towage contract,Whether appellants made concessions in lower court contrary to arguments on appeal,Salvage,Whether such arguments must be pleaded or pursued in lower court,Breach of contract,Whether tugowners liable for damages,Remedies,Payment of part of towage fee on 'no cure no pay basis',Breach of towage contract,Quantum of damages,Whether exemption clause effective,Efficiency of tug for towage operation,Damages,Admiralty and Shipping,Whether tugowners thereby relieved from liability in damages,Loss of tows,Whether relevant facts pleaded and adduced,Obligation to provide tug with sufficient bunkers,Towage contract,Contract

Cur Adv Vult

The appellants, Wiltopps (Asia) Ltd (`Wiltopps`), are a company incorporated in Hong Kong and at all material times were involved in the business of purchasing laid-up vessels in the international market and having them broken up in Taiwan for scrap. The first named respondents are Kyodogumi Co Ltd, a company incorporated in Japan (`the tugowners`), and at the material time were the owners of the tug, Sumi Maru 9001. The second respondents, The Japan Shipowners` Mutual Protection & Indemnity Association (`the club`), were at the material time the insurers of the tug.

In January 1979, Wiltopps purchased two laid-up tankers named Clytia and Micheal Carras respectively, both of which were then in Eleusis Bay, Greece. Soon after the puchase, Wiltopps entered into a towage contract in writing with the tugowners whereby the latter undertook the towage of the two tankers from Eleusis Bay, Greece, to Kaoshiung, Taiwan. The contract was dated 2 February 1979, being the date on which it was signed by one Taketoshi Sada on behalf of the tugowners; it was subsequently amended and the amended contract was signed on behalf of Wiltopps only on 21 February 1979. Under the contract Wiltopps agreed to pay to the tugowners a lump sum of US$530,000 as follows: (i) 20% on the signing of the contract, (ii) 30% on the sailing of the tug and tows from Greece, (iii) 25% on the tug and tows passing the Cape of Good Hope, and (iv) 25% on arrival of the tug and tows at the port of destination, Kaoshiung. It was also a term of the contract that the third and fourth instalments, in so far as they were not due and payable, were to be paid on `no cure no pay` basis. Under the contract, the tows were to be `ready for departure not later than end April 1979`. Pursuant to the contract, Wiltopps on 23 February 1979 remitted by telegraphic transfer to the tugowners` bank in Tokyo the first instalment of US$106,000, being 20% of the towage money.

The material terms of the contract are these. Clauses 4, 6(a) and (b) provide as follows:

(4) For account of tugowners

The tugowners shall provide pay for all wages, provisions, deck and engine room stores and bunkers in respect of the tug supplied by them for this operation. All port charges, pilotages, agencies, taxes, dues, duties, canal toll on the tug, and other expenses upon or in connection with the tug shall be for the account of the tugowners.

(6) For account of contractors

(a) The tugowners shall furnish the use of towing hawsers, bridles and other towing gear necessary for this towage service, and the work of towing arrangements shall be performed by the tugowners. The type of towing arrangement and connection is to be within the absolute discretion of the master of the tugowner`s tug with approval by London Salvage Association`s surveyor.

(b) The tugowners shall fit out and maintain the tow in such condition as to meet all requirements of regulatory bodies and underwriter`s surveyor, including, without limitation, lights, signal equipment, towing and canal bitts, lashings, breakwaters and any riding crew if on board.

Under cl 11, unless the circumstances were outside the contemplation of the towing service, the basis of the contract was `no claim for salvage`. The other material provision is cl 12 which we shall set out later when we deal with the issue raised on that clause.

The tug supplied by the tugowners for the towage was the Sumi Maru 9001. She was a twin-engined and twin-propellered ocean-going 11,000hp tug; she was built in Japan and was commissioned in early February 1977. Her fuel capacity was 1,200kl and she could carry a crew of 15. At the material time, the master in charge of the tug was one Tsugio Kuroda. The Sumi Maru 9001 arrived at Eleusis Bay, Greece on 8 June 1979. Soon after arrival the tug made fast to the Clytia and then moved alongside the Micheal Carras. Thereafter, the towage work stopped, and the reason was simply this. Prior to the arrival of the Sumi Maru 9001 in Greece, the price of bunkers in the international market had risen considerably, from about US$145 per kl (the price in February) to US$400 per kl. Plainly under cl 4 of the contract the obligation to provide the tug with necessary bunkers rested with the tugowners, whatever might be the price of bunkers. However, the tugowners were unable, owing to financial difficulties, to pay for and put on board the Sumi Maru 9001 the necessary bunkers at the increased price to enable her to set off with the two tankers on the first leg of their voyage, namely, from Greece to Las Palmas, a distance of about 2,307 nautical miles. Negotiations then took place between Wiltopps and the tugowners as to how the increase in bunker prices should be dealt with, and they finally came to an agreement as recorded in an addendum to the contract entitled Addendum No 1 dated 27 June 1979. Under the addendum, Wiltopps agreed to pay the second instalment of the towage fee, namely, US$159,000 `at the request` of the tugowners, which in effect meant immediate payment rather than as originally agreed upon sailing of the tug and tows from Greece, and the tugowners agreed that towage preparation of the Clytia and the Micheal Carras would be commenced within 24 hours and that the towing would commence not later than 9 July 1979 from Eleusis Bay `subject to bunker arrangement in Greece`. Pursuant to the addendum the second instalment was duly paid to the tugowners on the following day. However, the tug did not sail from Eleusis Bay for Las Palmas with the two tankers until 25 August 1979, and not, as agreed, on 9 July.

Unfortunately, the tugowners` problem of paying for bunkers was not so easily resolved by the advance payment made. Indeed that problem continued to haunt the towage until the end. Two days after the tug and tows had sailed from Greece, the tugowners by their telex dated 27 August 1979 requested Wiltopps to open letters of credit for the third and fourth instalments of US$132,500 each as soon as possible in accordance with the towage contract and to release to them the third instalment, even though under the amended towage contract the payment of the third and fourth instalments was to be made on `no cure no pay` basis. In their telex, the tugowners further claimed a bunker surcharge in the sum of US$81,060, the surcharge being the difference between the price actually paid for the bunkers by the tugowners in Greece and what notionally would have been paid in Japan on the date the tug sailed from Greece if there had not been an increase in the price of bunkers. By two subsequent telexes despatched on 31 August and 1 September, the tugowners again pressed for payment of the third instalment and the surcharge; both telexes contain, inter alia, the following warning: `Otherwise having possibility of same trouble as Greece. Therefore your hearty consideration and attention would be highly appreciated.` Wiltopps found themselves in a predicament and eventually succumbed partially to the demands of the tugowners. They opened a letter of credit in favour of the tugowners and on 14 September 1979 made an advance payment of US$66,250 being half of the third instalment and the sum of US$39,750 being part of the fourth instalment. A further sum of US$66,250 being the other half of the third instalment was paid by Wiltopps to the tugowners on 19 September 1979, and by a letter of undertaking dated 19 September 1979, the tugowners undertook `that the towage will be performed as per contract No OC79-0111 dated 2 February 1979`.

Meanwhile, on 16 September 1979 the Sumi Maru 9001 with the two tankers arrived at Las Palmas; she bunkered there and left for Cape Town on 22 September. By that date, the whole of the third instalment of the towage money and a part of the fourth instalment had already been paid. Not content with these payments, the tugowner pressed for payment of the bunker surcharge and the balance of the fourth instalment, but Wiltopps resisted the demand.

As the tug approached Cape Town, she encountered bad weather from 8 October, and from 1 November to 29 November, ie the date of arrival of the tug at Cape Town, the weather got steadily worse. To compound the situation, the starboard engine of the tug broke down and the tug could only operate on one engine until she reached Cape Town. The master kept his office in Japan informed of the deteriorating weather conditions and of the breakdown of the starboard engine. To his astonishment he began receiving messages from his office asking him to find an excuse to abandon the tows and to put the blame either on the failure of the tug engine or on the bad weather conditions. The master and the crew refused to follow these instructions and asked that no more messages to this effect should be sent. The tug arrived at Cape Town on 29 November 1979. At Cape Town the master did not enter the port as the port master had directed that she was not to come within 21 miles. While waiting for bunkers the tug was circling at the distance of more than 20 miles away from the shore as it was dangerous in the circumstances to anchor. At Cape Town repairs were effected to the failed starboard engine by the tug engineer with spares flown in from Japan. On 2 December the tug took on board some bunkers but this intake was merely to enable the tug to continue its circling operation until she received bunkers to continue her voyage. The tugowners again failed or were unable to provide the tug with the necessary bunkers for the next stage of the voyage.

Before the tug arrived at Cape Town, further communications between the tugowners and Wiltopps took place. As a result, they agreed to the towage contract being varied yet again. The variation was evidenced by the letter of the tugowners dated 7 December 1979 which stated that the towage fee was to be increased from US$530,000 to US$700,000, the increase of US$170,000 being on `no cure no pay` basis;...