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Legal analysis: Deep Sea Maritime Limited vs. Monjasa

Ananya Pratap Singh provides an in-depth legal analysis on the case involving the Hague rules.

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The following article has been written by Ananya Pratap Singh, an Indian lawyer and arbitrator, currently associated in international projects. He was called to the Bar Council of India in 2017 and to the Bar Council of Delhi, India in 2016; and has also been awarded the Member grade by the Chartered Institute of Arbitrators and the Singapore Institute of Arbitrators in 2018:

Article III, Rule 6 of the Hague rules provides that a carrier will be released from all liabilities except if the shipper sues the carrier within one year from the delivery (emphasis added) of the cargo thus creating a time bar.

But does the word 'delivery' include 'misdelivery' as well?

In a recent English case of Deep Sea Maritime Limited vs. Monjasa A/S EWHC 1495 (Comm), the court answered this question in affirmative.

In this case, Article III, Rule 6 was contractually incorporated into the bill of lading and the shipper discharged cargo to another ship without production of the relevant bill of lading thereby attracting a misdelivery claim.

Introduction
In the case of Deep Sea Maritime Limited vs. Monjasa A/S[2018] EWHC 1495 (Comm), the Commercial High Court (QB) dealt with the issue of whether the requirement in Article III Rule 6 that “suit is brought within one year after delivery of the goods or the date when the goods should have been delivered” can ever be satisfied if proceedings are commenced in the courts of one country, when the bill of lading incorporates a clause from a charterparty giving exclusive jurisdiction to the courts of another country. Detailed case analysis given below:

Factual Matrix
Owner of a Vessel, acknowledged shipment on board the vessel of some amount of bunker fuel by a bill of lading (Bill) for different purposes related with voyage. Monjasa was the shipper of the Cargo. Clause 1 of the Bill, printed on the reverse in the usual way, provided:
 

“All terms and conditions, liberties and exceptions of the Charter Party dated as overleaf, including the Law and Arbitration Clause are herewith incorporated”.

The Bill did not further identify the charterparty referred to. But later on it was agreed that this was a reference to a time charterparty between Owners and Unitaes Energy Sources Company Limited (“Unitaes”). Later, a company (Babecca) agreed to perform the obligations of Unitaes under the Charterparty.

Thereafter, Monjasa sold the Cargo to Unitaes under a contract of sale but payment under that letter of credit was declined due to alleged documentary discrepancies. Owners discharged the Cargo under instructions given pursuant to the Charterparty, without production of the Bill. Monjasa commenced four sets of proceedings in relation to the alleged non-delivery of the Cargo.

Arbitration Clause in Charterparty
Clause 46 of the Charterparty provided:
 

“This charter shall be governed and construed in accordance with English law and any dispute arising out of or in connection with this contract shall be referred to high court in London, England. In cases where neither claim nor any counterclaim exceeds the sum of united stated (sic) dollars 50,000 (or such other sum as the parties may agree) the arbitration shall be conducted in accordance with the LMAA small claims procedure current at the time when the arbitration proceedings are commenced”.

The words in clause 1 of the Bill were sufficient to incorporate clause 46 (“the Exclusive Jurisdiction Clause”) in the Charterparty into the Bill. The Hague Rules as set out in the 1924 Convention were incorporated into the Bill, taking effect as a matter of contract.

Applicable Legal Principles
Article III Rule 6 of the Hague Rules
 

“In any event the carrier and the ship shall be discharged from all liability in respect of loss or damage unless suit is brought within one year after delivery of the goods or the date when the goods should have been delivered.”

Analysis
Citing Parker LJ from Hispanica de Petroleos SA v Vencedor Oceanica Navegacion S.A. (The Kapetan Markos NL) [1986] 1 Lloyd’s Rep. 211 at 213, the Court observed in certain circumstances a defence under Art. III, Rule 6, might be defeated by the fact that another suit had been brought elsewhere. It was explained by giving following example:

“Suppose for example that a cargo-owner were to sue in New York within time and that there was no doubt but that the New York Court had jurisdiction to hear the claim. Suppose further that the shipowner, whilst acknowledging jurisdiction, applied for a stay on the ground that New York was a forum non conveniens and that the forum conveniens was London. Finally suppose that the shipowner lost at first instance but won by a majority in the Court of Appeal and that, time having expired in the meantime, the cargo-owner then issued a writ in London. In such circumstances it would appear at least arguable that art. III, r. 6, did not apply. If such a situation ever arises the matter will then fall for decision.”

This was termed as “enforced substitution” of proceedings in one forum for proceedings in another, where the action commenced by the claimant in a jurisdiction came to an end for reasons arising independently of the claimant’s conduct because a court decided that if the claim was to be pursued, it should be pursued in another forum.

The Court observed that one such context is where the bill of lading contract gives the parties, or the defendant, a right to elect in favour of arbitration after a dispute has arisen, and the election is exercised both after proceedings have been commenced timeously in court and after the expiry of the Article III Rule 6 period.

The other context in which there is enforced substitution of proceedings by reason of a court order is where proceedings are commenced in breach of an arbitration agreement, and a stay is sought under Section 9 English Arbitration Act.

The Court cited the case of Thyssen Inc v Calypso Shipping Corporation S.A. [2000] 2 Lloyd’s Rep. 243 where the Court considered the position when US proceedings had been brought in time but stayed in favour of London arbitration. It would have been possible to resolve the case by reference to the “enforced substitution”, with the claimant’s conduct in commencing the original proceedings in breach of the arbitration clause precluding the US proceedings from constituting the bringing of suit. However, the Court addressed the issue on a wider basis. It rejected the suggestion that the commencement of proceedings in a court with jurisdiction to determine the issue on the merits was sufficient, for all time, to prevent Article III Rule 6 operating in subsequent proceedings, describing this as a proposition “of breathtaking proportions” which would give “rise to absurd results”.

In the Thyssen case, the reference to arbitration occurred 7 days after the New York proceedings had been stayed, so that there was no point in the life of the second proceedings when the first set of proceedings remained “valid and effective”. This issue was considered in Fort Sterling Ltd and another v South Atlantic Cargo Shipping NV and others (The Finnrose) [1994] 1 Lloyd’s Rep. 559 in which cargo interests had responded to the application to strike out for want of prosecution by issuing fresh proceedings. In The Finnrose the Court inter alia held an action brought in breach of an exclusive jurisdiction or arbitration clause, is not, at any rate under English law, a nullity.

Conclusions
Drawing these strands together with regard to the issue of whether the English Court will regard proceedings commenced in a foreign court in breach of an exclusive jurisdiction or arbitration clause as “suit” for the purposes of Article III Rule 6 in respect of the issue of whether proceedings before the English Court are time-barred, the Court responded in negative holding ordinarily the English Court will not do so.

That will be the case even if the foreign court might itself allow the proceedings there to continue notwithstanding the clause (e.g. because they adopt a different test of incorporation of jurisdiction or arbitration clauses or because of different concepts of ordre publique).

The held that however, it does not follow that the English Court should always be willing to give a declaration that a claim brought in a foreign court in breach of an arbitration or exclusive jurisdiction clause is time-barred in the proceedings before a foreign court. In particular, it might be argued that the particular issue of what constitutes the bringing of “suit” in a jurisdiction involves questions peculiar to that jurisdiction, rather than simply issues of English law as the proper law of the bill of lading contract.

The Court further gave a reason for caution stating that it is possible to conceive of circumstances in which an English Court might allow proceedings commenced here in breach of an exclusive jurisdiction clause to continue, and, if it did so, it seems eminently arguable that those proceedings could be relied upon as an answer to any Article III Rule 6 defence advanced in that action.

Published: 6 July, 2018
 

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Business

Notice of intended dividend issued for defunct bunkering firm Coastal Oil Singapore

Company’s former Chief Finance Officer received a nine-year jail sentence in 2021 after pleading guilty to 15 charges for conspiring with others to defraud eight banks into approving USD 320 million in loans.

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RESIZED Coastal Oil Singapore Pte Ltd

A notice was published in the Government Gazette on Wednesday (16 April), regarding the second and final intended dividend to creditors of defunct bunkering firm Coastal Oil Singapore Pte Ltd.

The following are details of the notice of intended dividend of the company:

Name of Company : Coastal Oil Singapore Pte. Ltd. (In Creditors’ Voluntary Liquidation)
Unique Entity No. / Registration No. : 200413975N
Address of Registered Office : 1 Raffles Quay, #27-10, South Tower, Singapore 048583
Last Day of Receiving Proofs : 30 April 2025
Name of Liquidator : Yit Chee Wah
Address : c/o FTI Consulting (Singapore) Pte. Ltd.,1 Raffles Quay,#27-10, South Tower, Singapore 048583

In 2021, the former Chief Finance Officer of Coastal Oil Singapore received a nine-year jail sentence at the State Courts of Singapore.

Ong Ah Huat earlier pleaded guilty to 15 charges; the charges include three counts of engaging in a scheme to defraud and nine counts of forgery for conspiring with accomplices to defraud eight banks into approving USD 320 million in loans.

The banks involved were: China Merchants Bank (Singapore), Bank of Communications (Hong Kong), BNP Paribas (Hong Kong), Cooperative Rabobank (Hong Kong), DBS Bank (Hong Kong), HSBC (Hong Kong), OCBC (Hong Kong), and Standard Chartered Bank (Hong Kong).

In 2019, Manifold Times reported Hong Kong-listed COSCO SHIPPING International (Hong Kong) Co., Ltd stating its indirect wholly-owned bunkering subsidiary Sinfeng suspecting fraud to be involved in the liquidation of Coastal Oil Singapore during December 2018.

It was believed Coastal Oil Singapore owed approximately US $357 million to 79 firms. Out of the total USD 357 million, banks were the hardest hit taking up about US $354 million, or 99.1%, of total credit owed.

A complete coverage of the events leading to the current development has been arranged by Singapore bunker publication Manifold Times (in descending date order) below: 

Related: Former CFO of defunct bunkering firm Coastal Oil Singapore receives nine-year jail sentence
Related: Former Coastal Oil CFO admits to defrauding eight banks of USD 320 million in loans
Related: Singapore: Former Coastal Oil employees face forgery charges over fake sales contracts
Related: Coastal Oil hearings progress, court grants liquidators access to Sinfeng documents
Related: China Merchants Bank legal suit with Sinfeng over alleged $13 million debt progresses
Related: Fraud suspected in Coastal Oil Singapore case, says COSCO
Related: Coastal Logistics owned “Atalanta”, “Babylon” to undergo auction
Related: Singapore: Bunker tanker “Coastal Mercury” arrested
Related: Heng Tong Fuels & Shipping in court over DBS Bank bunker tanker loan
Related: Coastal Logistics owned MR tanker “Babylon” arrested
Related: Fraud suspected in Coastal Oil Singapore case, says COSCO
Related: Coastal Oil Singapore: Creditor list surfaces in bunker market
Related: Singapore: Bunker tanker “Coastal Neptune” arrested
Related: Coastal Oil Singapore creditors meeting scheduled on 10 Jan
Related: Coastal Oil Singapore in US $380 million debt to at least 10 banks
Related: Singapore: Coastal Logistics owned MR tanker “Atalanta” arrested
Related: Heng Tong Fuels & Shipping, Coastal Logistics tankers enter S&P market
Related: Coastal Oil Singapore to hold creditors meeting on 28 Dec
Related: Breaking news: Coastal Oil Singapore under liquidation

 

Photo credit: Benjamin-child
Published: 17 April, 2025

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Business

Singapore: Director of Sinco Shipping declares inability to continue business

Sharma Mohit Krishnabhagwan, director of Sinco Shipping, lodged a statutory declaration stating the company cannot by reason of its liabilities continue its business; liquidators have been appointed as well.

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RESIZED Drew Beamer

A director of Sinco Shipping Pte Ltd filed a statutory declaration (SD) stating that the company cannot continue its business due to its liabilities, according to a 15 April (Tuesday) notice on the Government Gazette.

In the SD, the director, Sharma Mohit Krishnabhagwan, said meetings of the company and of its creditors have been summoned for 28 April. 

According to SGP Business website, a business platform for business and individuals, the company’s main business was in shipping including chartering of ships and boats with crew (freight) with renting. 

In another notice, it was stated that Mr Lau Chin Huat and Mr Yeo Boon Keong, Licensed Insolvency Practitioners, both of Technic Inter-Asia Pte Ltd, c/o 50 Havelock Road #02-767 Singapore 160050, have been appointed as joint and several provisional liquidators of the company on 11 April.

In a third notice on the Government Gazette, the liquidators said a meeting of creditors of the company will be held by way of video conference via Zoom (deemed venue : 50 Havelock Road, #02-767 Singapore 160050) on 28 April at 11:30am, for the following purposes:

  • To lay a full statement of the company’s affairs together with a list of creditors and the estimated amounts of their claims;
  • To nominate Liquidator(s) or confirm the nomination of Liquidator(s) by member(s);
  • To consider and if thought fit, appoint a Committee of Inspection consisting of not more than 5 persons, whether creditors or not, for the purpose of winding up the company; and
  • Any other business.

To attend, creditors have to nominate and vote thereat their Proof of Debt and a proxy form must be lodged with the liquidators no later than 4pm on 25 April 2025.

A copy of the Proof of Debt form, proxy form, a statement showing the names of all creditors and the amount of their claims . This notice has been dispatched to all known creditors of the company. 

Any other person claiming to be a creditor of the company as at this date may write to the liquidators to request for copies.

Creditors would need to register their attendance by email to [email protected] no later than 4pm on 25 April 2025 to receive instructions on how to join the video conference via Zoom.

 

Photo credit: Drew Beamer on Unsplash
Published: 16 April, 2025

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Winding up

Singapore: Creditors’ meeting scheduled for Vasi Shipping Pte Ltd

Meeting will be held via audio visual communication at 3pm to appoint a liquidator and receive a statement of the company’s affairs together with a list of creditors, according to Government Gazette notice.

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A creditors’ meeting for Vasi Shipping Pte Ltd has been scheduled to take place on 28 April, according to a Government Gazette notice by the company’s director on Thursday (10 April). 

The meetings will be held via audio visual communication at 3pm. 

The agenda of the meetings will be as follows:

  • receiving a statement of the company’s affairs together with a list of creditors and the estimated amounts of their claims;
  • appointing Liquidator(s);
  • appointing a committee of inspection of not more than 5 members, if thought fit;
  • any other business.

According to the company’s website, Vasi Shipping provides end-to-end shipping solutions and provides ocean freight management services, specialising in the movement of fertilisers, minerals and chemicals within Asia and beyond.

Note: 

  • A creditor entitled to attend the above meeting may appoint a proxy to attend in his stead. A proxy need not be a creditor of the Company. The instruments appointing a proxy must be lodged in the following manner:
  • by email to the email address at ([email protected]); or
  • by post to 11 Collyer Quay, #07-02 The Arcade, Singapore 049317; not later than 3.00 p.m. two days before the meeting or adjourned meeting at which it is to be used.
  • Arrangements relating to attendance at the meeting via electronic means (including arrangements by which the meeting can be electronically accessed via live audio-visual webcast), will be sent by email upon receipt and verification of the proxy form. The email will contain meeting ID and password details, as well as the link to access the live audio-visual webcast.
  • Pursuant to Section 445 of the IRDA, should creditors(s) with at least 10% in value of the total creditors’ claims require a place for the meeting be specified, please notify the Liquidators’ office by 14 April 2025.

 

Photo credit: steve pb from Pixabay
Published: 14 April, 2025

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