Linsen Transport International Ltd v Humpuss Sea Transport PTE Ltd
| Jurisdiction | England & Wales |
| Judge | THE HON MR JUSTICE FLAUX,The Hon Mr Justice:Flaux,MR JUSTICE CHRISTOPHER CLARKE,Mr Justice Christopher Clarke |
| Judgment Date | 14 September 2011 |
| Neutral Citation | [2010] EWHC 303 (Comm),[2011] EWHC 2339 (Comm) |
| Docket Number | Case No: 2009 FOLIOS 1652 & 1653; 2010 FOLIOS 1343–1346,Case No: 2009 FOLIO 1652 |
| Court | Queen's Bench Division (Commercial Court) |
| Date | 14 September 2011 |
[2010] EWHC 303 (Comm)
Before: Mr Justice Christopher Clarke
Case No: 2009 FOLIO 1652
Case No: 2009 FOLIO 1653
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
AND IN THE MATTER OF THE ARBITRATION ACT 1996
IN THE MATTER OF AN ARBITRATION
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
M. N. Howard QC and Mr Turlough Stone (instructed by Brookes & Co)
for the Claimants
Mr Stuart Isaacs QC (instructed by Clyde and Co) for the Defendants
Hearing dates: 5 th and 12 th February 2010
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
Mr Justice Christopher Clarke:
On 17 th December 2009, on the application of the claimants, Gross J made a worldwide freezing order against Humpuss Sea Transport Pte Ltd (“HS”) and PT Humpuss Intermoda Transportasi TBK Ltd (“HIT”) (together “the Defendants”) in the sum of $ 89,569,290.79. The Defendants apply to set aside the order on the grounds of what they claim to have been a failure to make full and frank disclosure of all material facts and circumstances and the absence of any real risk of dissipation. Alternatively they seek to reduce the amount specified in the order. The claimants resist both applications and seek further disclosure from the Defendants. In order to address these issues it is necessary to set out the history as it appears from the evidence in a little detail.
The Claimants
The four claimant companies (“the Owners”) are all companies within the group of companies of which Empire Chemical Tanker Holdings Inc (“Empire”) is head. In about May/June 2007 Empire entered into negotiations with a number of yards for the construction of 12 chemical tankers of either 17, 000 or 25,000 DWT for delivery between December 2008 and early 2011. Thereafter an agreement was reached whereby what became in the end seven of those vessels would be chartered by companies in the HIT group. HS is a Singaporean company and a wholly owned subsidiary of HIT. HIT is an Indonesian company listed on the Indonesian stock exchange.
Between October 2007 and January 2008 each of the Owners chartered one of the tankers to HS for 5 years on more or less identical terms. The charters which, together with charters for three other vessels, were all executed at HIT's offices in Jakarta on 24 th October 2008, each have a London arbitration clause. The charterers’ liabilities were, at least in two cases, guaranteed by HIT. The guarantees have London jurisdiction clauses.
The details of the four charters in suit are as follows
The performance history
| Owner | Ship | C/p date | Delivery | Daily hire |
| Linsen | EMPIRE MATARAM | 9/10/07 | 20/2/09 | U.S. $16,800 |
| Nelson Cove | EMPIRE MAJAPAHIT | 9/10/07 | 20/3/09 | U.S. $16,800 |
| Elspeth | EMPIRE PAJAJARAN | 29/1/08 | 10/1/09 | U.S. $16,700 |
| Romford | EMPIRE TULANG BAWANG | 29/01/08 | 14/5/09 | U.S. $16,700 |
HS did not pay the hire due under the first three charters by the due dates and fell into arrears. In April 2009 the Owners reluctantly agreed, at the charterers’ insistence and against the threat of redelivery, to amendments to the charters to reduce the hire for any invoices issued from the monthly anniversary date in April in respect of the first three charters and the date of delivery in respect of the TULANG BAWANG until 31 st December 2009. The hire was to be reduced to $ 15,300 per day in the case of MATARAM and MAJAPAHIT and $ 15,200 in the case of PAJAJARAN and TULANG BAWANG. The terms on which that was done, as reflected in Addenda Nos 3 or 4 to the charters, dated 9 th April 2009, was that it was to be a condition of the charter that all hire was to be paid on time: clause 1. By clause 2 it was a condition of clause 3, which was the clause reducing the hire, that all outstanding hire withheld was to be paid immediately, failing which the “Addendum is null and void”. After 31 st December 2009 the difference between the reduced and the original rate of hire was to be paid to the Owners over the remainder of the charter period. Clause 4 provided that, if HS failed to make proper and punctual payment at the new agreed rate, the Owners were to have the right to have the hire retrospectively adjusted so as to be payable at the original rate from the day when the rate was reduced until the default was rectified.
Thereafter immediate payment of the amounts outstanding at 9 th April 2009 was not forthcoming. Nor was full payment of the reduced hire made under the four charters (the TULANG BAWANG was delivered to HS by Romford on 14 th May 2009) when due, and HS incurred debt at a faster rate than it cleared it.
The meeting of 18th June
On 18 th June 2009, Mr Vasilis Koutroulis of Cass Technava Maritime Ltd (“Cass”), the Owners’ brokers, flew to Singapore and met Captain Thanabalasingam (“Captain Thana”), who had become a director of HS on 21 st January 2009 and its Managing Director and Chief Executive Officer on 25 th February 2009 (he resigned on 17 th November 2009). Also present were Captain Manuhar Durgude, HS’ Deputy Director and its current CEO, and Mr Darin Wong of Clarkson Asia Pte Ltd, the defendants’ Singapore brokers. Captain Thana is said to have said that payments were in a mess due to non performance by the Chief Financial Officer, Mr Hari Soeroso, who had now been dismissed as part of a huge clean-up of most of the board members and the higher management due to corruption. The Group Financial Officer was helping out but the CFO post had not been filled. Income from the Empire vessels had been used to discharge other liabilities. He had instructed the CFO to send the whole amount to Empire and top up with whatever was necessary. The vessels were earning $ 11-13,000 per day (i.e. less than was necessary to pay even the reduced hire), which would change, and funds coming from the operation of the Empire vessels would be directed back to Empire. He promised to prepare a payment schedule for the then outstanding $ 2.5 million. He was not able to say how long it would take to repay the Owners but he estimated that it would be within about two months. He had given instructions that a payment of $ 400-500,000 be made within the day or early the following week (in the event only $ 300,000 was paid – the next day).
Captain Thana explained that HS was the Singaporean arm of HIT. Up to 18 th June 2009, most of the decisions were taken in Jakarta but since most of the board of HIT 1 had been dismissed, the power was passing to him in Singapore and he fully intended to have a complete operation out of Singapore. They did not intend to redeliver the vessels but to honour the contracts. He explained that Jakarta was now fully following his instructions.
In the course of the discussion he revealed the existence of a Rule B attachment 2 in the sum of $ 400,000 against HS in New York obtained by Hanjin Overseas Bulk Ltd (“Hanjin”). He indicated that he was thinking of moving the Owners’ tankers into a separate company, so that the operations would not be affected by Rule B attachments. It was pointed out to him that there would be a problem with that, not least because of the guarantees, and he said he would discuss the matter if the question arose. He also explained that the Charterers had changed from having Sokana Chartering Inc (“Sokana”) as their commercial managers for two of the vessels because of their very high fees, a portion of which was diverted back to a company associated with the former board of HIT.
On 19 th June 2009 June Captain Thana sent a payment schedule providing for 7 payments, 4 in June, 1 in July, and 2 in August. The first four were made, by Silverstone Development Inc (“Silverstone”), a Panamanian wholly owned subsidiary of HS; the next two payments were made in part by Silverstone; the last was not.
By 15 th July 2009 some $ 4.14 million was outstanding. Thereafter requests for payment by Mr Leonidas Polemis (“Mr Polemis”), the Chief Executive Officer of Empire, and the Owners’ Club produced no payment, despite promises by Captain Thana that payment would be made shortly.
The Owners now considered making Rule B attachments in New York themselves. They discovered that two others had already done so: (i) Parbulk II AS (“Parbulk”) against HIT and one of its subsidiaries in the sum of about $ 2.24 million and (ii) Sandigan Ship Services Inc (“Sandigan”) and Seaquest Sandigan Pte Ltd against HS, HIT and two HIT subsidiaries in the sum of about $ 752,000; and that they could not do so because HS had registered itself as a foreign business corporation in the State of New York. A Rule B attachment is not available against a corporation with a presence within the jurisdiction of the US District Court of the Southern District of New York.
On 4 th August 2009 two of the Owners, Linsen International Ltd and Nelson Cove Shipholding S.A., being companies which had HIT guarantees in their possession, obtained a Rule B attachment against HIT and Silverstone, which was sued as HIT's alter ego and paying agent. In May, June and July 2009 Silverstone had made payments in discharge of HS liabilities under the charters.
The 4th August meeting
On 4 th August 2009 a meeting took place between Mr Polemis and Captain Thana in Athens. Captain Thana said that he...
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