Pt Berlian Laju Tanker Tbk and another v Nuse Shipping Ltd
| Jurisdiction | England & Wales |
| Judge | MR JUSTICE CHRISTOPHER CLARKE |
| Judgment Date | 16 June 2008 |
| Neutral Citation | [2008] EWHC 1330 (Comm) |
| Docket Number | Case No: 2007 Folio1297 |
| Court | Queen's Bench Division (Commercial Court) |
| Date | 16 June 2008 |
[2008] EWHC 1330 (Comm)
MR JUSTICE CHRISTOPHER CLARKE
Case No: 2007 Folio1297
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice
Strand,London, WC2A 2LL
Richard Southern QC (instructed by Clyde & Co LLP) for the Claimants
Christopher Hancock QC & Ben Olbourne (instructed by Ince & Co) for the Defendant
Hearing dates: 16 th & 17 th April 2008
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.
This is an appeal against an award of an experienced arbitral tribunal (Messrs Christopher Moss, Mark Hamsher and Alexander Kazantzis) which raises important questions of law in relation to the proper construction of a contract for the sale of a ship on the Norwegian Sale Form 1993. Mr Justice Andrew Smith granted the Buyers permission to appeal on 2 nd November 2007 on the ground that three questions were of general public importance.
The Sellers, the respondents to the appeal, are Nuse Shipping Ltd, a one-ship Maltese corporation. The Buyers under the contract are PT Berlian Laju Tanker TBK, an Indonesian corporation, which nominated Brotojoyo Maritme Pte Ltd, a Singaporean corporation, to purchase the vessel. The vessel was managed by Capital Ship Management Ltd of Piraeus.
That the dispute between the parties remained unresolved is somewhat surprising. There is no issue as to what the purchase price of the vessel was, or as to the Buyers' willingness to pay it. What is at issue is how and where the Buyers were obliged to pay the price. In the end the dispute only related to 10% of it. The dispute arose and developed in the following way
a. Before the vessel was ready for delivery an issue arose as to where the Buyers were obliged to pay the purchase price. The Buyers claimed to be entitled to pay (or tender) the purchase price in Singapore, with 10% of it being produced by the release of the Singapore located deposit. The Sellers claimed to be entitled to require payment of the full purchase price in Greece and to nominate, as they did, the National Bank of Greece, Piraeus (“NBG, Piraeus”), which was their mortgagee bank, to receive payment of it.
b. The Buyers agreed, as a concession, to pay 90% of the purchase price on the day of delivery at NBG, Piraeus. But they maintained that they were not required to pay the 10% deposit there. That deposit was already lodged in a joint account at HSBC Singapore. The Buyers indicated that they would pay the balance of 10% on the day of delivery by releasing the deposit to the Sellers in Singapore in accordance with what they believed to be the terms of the MOA.
c. The Sellers took the view that this amounted to an anticipatory breach of condition by the Buyers and accepted it as terminating the contract before the Vessel was ready for delivery. Delivery of the vessel was never tendered.
d. The arbitrators held that the Buyers were in anticipatory repudiatory breach of contract, and that in those circumstances the Sellers were entitled to forfeit the deposit.
The contract
The Buyers agreed to purchase the vessel “Aktor”, a 1986 built product tanker with a deadweight of 29,990 metric tons, then under the Maltese flag, for a total price of US $8,400,000. The agreement was made through the sale and purchase department of the London Shipbrokers, EA Gibson, who set out the terms agreed in a recap email (“the Recap”) dated 21 May 200The Recap was based on Gibson's own pro forma contract which was the template used by the parties for their negotiations.
The Recap is annexed to the Award. Its important terms were as follows.
“ 1. Price: USD 8,400,000 cash on delivery ……
10 pct deposit to be lodged in an interest earning joint account between Sellers and Buyers, to Sellers nominated bank in Singapore within 3 banking days after MOA …
Balance of 90 pct… to be paid on day of delivery at Sellers nominated bank against delivery documents needed by Buyers to register the vessel under her new flag and delivery of the vessel …
Place of Closing / Exchange of Documents to be Singapore.
3. Vessel to be delivered charterfree at a safe port, safe berth / anchorage always safely afloat in Singapore or Indonesia in Sellers option.
Otherwise terms as per NSF 93 suitably amended to incorporate the above.”
The deposit was paid into an account at HSBC, Singapore, the bank nominated by the Sellers.
A Memorandum of Agreement (“MOA”) was thereafter drawn up by EA Gibson and (after certain corrections) signed by the parties by 2 nd June. It is, also, annexed to the Award. It provided as follows (the underlined words being those which are not part of the NSF form):
“… the Sellers have agreed to sell, and … [the Buyers] have agreed to buy … the Vessel, on the following terms and conditions:
1. Purchase Price US$8,400,000 CASH…
2. Deposit
As security for the correct fulfilment of this Agreement the Buyers shall pay a deposit of 10% … of the Purchase Price within 3 … banking days from the date of this Agreement being signed … This deposit shall be placed with Sellers nominated Bank in Singapore and held by them in an interest earning joint account for the Sellers and the Buyers, to be released in accordance with joint written instructions of the Sellers and the Buyers. Interest, if any, to be credited to the Buyers. Any fee charged for the opening / holding the said account shall be borne equally by the Sellers and the Buyers.
3. Payment
The said Purchase Price together with extra payment for bunkers ROB and for luboils, against delivery documents … shall be paid in full free of bank charges to Sellers nominated bank on delivery of the vessel, but not later than 3 banking days after the Vessel is in every respect physically ready for delivery …
……
Notices, time and place of delivery
…
b) The Vessel shall be delivered charterfree and taken over safely afloat at a safeport, safe and accessible berth or Anchorage, always safely afloat in Singapore or Indonesia ports in the Sellers' option.
……
8. Documentation
The place of closing: exchange of documents to be in Singapore.
In exchange for payment of the Purchase Price the Sellers shall furnish the Buyers with delivery documents, a list of same to be mutually agreed and added to this Memorandum of Agreement as Appendix A.
9. Encumbrances
The Sellers warrant that the vessel, at the time of delivery, is free from all charters, encumbrances, mortgages, and maritime liens or any other debts or claims whatsoever.
……
13. Buyers' default
“Should the Purchase Price not be paid in accordance with Clause 3, the Sellers have the right to cancel the Agreement in which case the deposit together with interest earned shall be released to the Sellers…….”
The MOA provided for a cancelling date of 16 th July 2004. On 28 th May the Sellers nominated HSBC Singapore for payment of the 10% deposit and NBG, Piraeus for payment of the balance. The deposit was paid in Singapore on 2 nd June. In late June the cancelling date was extended to 15 th September 2004, without prejudice to Buyers' claim for late delivery (for which the arbitrators awarded them $ 481,445.50.)
The dispute about place of payment blew up in August. The Buyers said that they were required to pay the 90% balance at the Sellers' nominated bank i.e. the Bank in Singapore nominated by the Sellers (HSBC), with the balance of 10% coming from the release of the deposit: as per clause 1 of the recap. The Sellers said they were entitled on completion to receive 90% of the price at NBG, Piraeus, the bank nominated by them under clause 3 of the MOA, and also to have the 10% made available to them there. On 26 th August the buyers agreed to pay the 90% at NBG, Piraeus.
On 30 th August the parties were in communication about the closing procedure. The Sellers made it clear to Buyers that they were prepared for the deposit to be used in part payment but they required it to be paid to the NBG, Piraeus on the same day as the 90% was paid. The Buyers maintained that all they were required to do was to sign joint instructions to HSBC Singapore to release the deposit to the Sellers in Singapore. In the evening of 30 th August Sellers indicated that if the Buyers did not accept Sellers' current proposal (which involved payment of the 10% in Greece by production at NBG's premises in Piraeus by an authorised officer of HSBC in Piraeus of either a letter from HSBC in Piraeus confirming same date value remittance to NBG, Piraeus or a banker's draft in favour of NBG) by 1000 Greek time on 31 st August, Sellers would be free to consider Buyers in repudiatory breach of the MOA. That acceptance was not forthcoming and on 31 st August Sellers terminated the contract.
In the arbitration the Sellers claimed to forfeit the deposit (as the arbitrators decided they were entitled to do) and the Buyers sought its return with interest together with damages for delayed delivery, loss of the contract, and loss of profits. They also sought rectification of the MOA to make clear what they claimed to have been agreed namely that the purchase price was to be paid as to 10% by way of release of the deposit.
The grounds of appeal
The Buyers' appeal is based on three grounds. Firstly, they say that under the MOA they were not bound to pay any part of the purchase price in Greece. Secondly, if that is wrong, they say that they were only obliged to pay 90% of the purchase price in Greece, the place of payment of the remaining 10% being in Singapore. Thirdly, if both of the first two points are wrong, and the Buyers were obliged to pay 100% of the purchase price in Greece, they say that...
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