The Hong Kong High Court issued a Decision on 20/12/2017 dealing with a dispute of US$948,802.05 (as the price of bunkers supplied to a vessel) between a vessel charterer and a bunker supplier. [HCA2265/2016]
The background
The plaintiff Newocean Petroleum was a company incorporated in Hong Kong carrying on the business of sales and distribution of fuel products in Hong Kong.
The defendant Rio Tinto Shipping was a company incorporated in Singapore and was the time charterer of the Vessel MV Star Big (“Vessel”).
The application
On 1 September 2016, Newocean Petroleum issued the Writ in this Action (HCA 2265/2016), endorsed with a Statement of Claim, against Rio Tinto Shipping. By an affirmation affirmed on 1 September 2016, Pau Yin Ming of Newocean Petroleum applied ex parte for leave to issue and serve a concurrent writ on Rio Tinto Shipping out of the jurisdiction.
By Order dated 8 September 2016 made on the ex parte application of Newocean Petroleum (“Leave Order”), the Master granted leave for Newocean Petroleum to issue a Concurrent Writ and serve a copy of it on Rio Tinto Shipping out of jurisdiction in Singapore.
By a summons (“Summons”) issued on 10 January 2017, Rio Tinto Shipping applied under Order 12, rule 8(1) and Oder 33, rule 7 of the Rules of the High Court, Cap 4A, for an Order that:
“1. The Concurrent Writ of Summons issued on 22 September 2016 and service of the same on the defendant be set aside; 2. The Order of [the Master] dated 8 September 2016 granting leave to the plaintiff to issue the Concurrent Writ of Summons and serve the same on the defendant out of the jurisdiction in Singapore be discharged on the following grounds:-
(1) The plaintiff’s claim in this action does not fall within Order 11, rule 1(1)(f) of the Rules of the High Court and the Court had no jurisdiction to give leave for issuing and serving the Concurrent Writ of Summons on the defendant out of the jurisdiction; or (2) Having regard to all the circumstances of the case it is not a proper case for service out of the jurisdiction within Order 11, rule 4 of the Rules of the High Court and the Court in its discretion should refuse to grant leave for such service; and/or (3) The plaintiff failed to make full and frank disclosure in its ex parte application in respect of which [the Master] made the Order dated 8 September 2016;
3. The action and all claims against the defendant be wholly dismissed with costs (including the costs of this application) to the defendant, to be summarily assessed.”
Transaction between OWB Far East and Rio Tinto Shipping
(1) By a Sales Order Confirmation dated 27 October 2014 issued by OW Bunker Far East (S) Pte Ltd (“OWB Far East”) to Rio Tinto Shipping, OWB Far East acknowledged receipt of Rio Tinto Shipping’s order for 2,100 MT of Fueloil 380-OST3.5% at US$479.00 per MT, with “New Oceaniow BDN” as “supplier” for delivery to the Vessel on terms that “the sale and delivery of marine fuels described above are subject to the OW Bunker Group’s Terms and Conditions of sale(s) for Marine Bunkers” (“OWB Terms and Conditions”). (2) There was no mention in the Sales Order Confirmation dated 27 October 2014 issued by OWB Far East to Rio Tinto Shipping of Newocean Petroleum’s “General Terms and Conditions for Sales and Delivery of Marine Fuel” (“Plaintiff’s Terms and Conditions”). (3) On the contrary, the Sales Order Confirmation dated 27 October 2014 issued by OWB Far East to Rio Tinto Shipping expressly stated that the sale and delivery of marine fuels were subject to the OWB Terms and Conditions.
Transaction between OWB Far East and OWB China
It was alleged in §7.1 of the Statement of Claim that OWB Far East contracted with its affiliate, OWB China to “deliver or arrange for the delivery of the Bunkers to the Vessel on the standard terms of the OW Bunker Group (Edition 2013)”.
Transaction between OWB China and Newocean Petroleum
(1) By a Bunker Sales Confirmation dated 27 October 2014 issued by Newocean Petroleum to OWB China, Newocean Petroleum confirmed the sale of 2,000 to 2,500 MT of IF 380 at US$477.50/MT for delivery to the Vessel. (2) There was no mention of or reference to in the Bunker Sales Confirmation dated 27 October 2014 issued by Newocean Petroleum to OWB China of Newocean Petroleum’s Terms and Conditions. (3) By a Purchase Order Confirmation dated 28 October 2014 issued by OWB China to Newocean Petroleum, OWB China confirmed the purchase of 2,100.00 MT of Fueloil 380-OST 3.5% at US$477.50/MT for delivery to the Vessel. (4) There was no mention of or reference in the Purchase Order Confirmation dated 28 October 2014 issued by OWB China to Newocean Petroleum of Newocean Petroleum’s Terms and Conditions. (5) There was also no mention of or reference in the Purchase Order Confirmation dated 28 October 2014 issued by OWB China to Newocean Petroleum of the OWB Terms and Conditions. (6) It was alleged in §§9, 10 and 11 of the Statement of claim that:
“9. The Plaintiff expressly contracted with [OWB China] that the Plaintiff was to retain title to the Bunkers pending payment, and that pending payment in full for the Bunkers, such Bunkers would be clearly identified as product supplied by the Plaintiff and kept separate from any other fuel or lubricant. In the premises, the Plaintiff did not authorise, permit or license the use of the Bunkers pending payment for, or the passing of property in, such Bunkers. 10. In support of the matters pleaded in Paragraph 9 above the Plaintiff will rely on its General Terms and Conditions for Sales and Delivery of the Marine Fuel dated March 2014 (the ‘[Plaintiff’s Terms and Conditions]’) to which the Plaintiff will refer for their full terms, true meaning and effect. [The Plaintiff’s Terms and Conditions] provide inter alia as follow:- [The pleader went on to quote clauses 1(a), (b) & (c); 2(c); 3(a); 4(a); 5(a) & (b); 11(a), (b) & (c); and 15.] 11. The [Plaintiff’s Terms and Conditions] formed part of the [plaintiff–OWB China] Contract notwithstanding the fact that the Bunker Sales Confirmation did not expressly incorporate the [Plaintiff’s Terms and Conditions]:
11.1 It is standard industry practice that each bunker supplier will have its own terms and conditions which apply to orders placed with each bunker supplier and [OWB China] was aware of this practice. 11.2 It was agreed orally or by conduct in around 2014 on more than one occasion between Mr Alvin Wong (on behalf of [OWB China] and Mr Cheung Ting Pong (on behalf of the Plaintiff), that the [Plaintiff’s Terms and Conditions] would apply to all future sales. The Plaintiff sold and [OWB China] purchased bunkers upon the understanding the [Plaintiff’s Terms and Conditions] applied to each of the Plaintiff’s contracts of sale.”
The OWB Terms and Conditions
Clause “H” on “Title” of the OWB Terms and Conditions, Edition 2013, provided as follows:
“H-1 Title in and to the Bunkers delivered and/or property rights in and such Bunkers shall remain vested in the Seller until full payment has been received by the Seller of all amounts due in connection with the respective delivery. The provisions in this section are without prejudice to such other rights as the Seller may have under the laws of the governing jurisdiction against the Buyer or the Vessel in the event of non-payment. H-2 Until full payment of the full amount due to the Seller has been made and subject to Article G.14 hereof, the Buyer agreed that it is in possession of the Bunkers solely as Bailee for the Seller, and shall not be entitled to use the Bunkers other than for the propulsion of the Vessel, nor mix, blend, sell, encumber, pledge, alienate, or surrender the Bunkers to any third party or other Vessel.”
Newocean Petroleum’s Terms and Conditions
Clause 11 of Newocean Petroleum’s Terms and Conditions, March 2014 version, provided that:
“11. Passing of risk and retention of title Subject to any provision to the contract [sic] in the Sales Contract and/or the Bunker Requisition Form:
(a) The Seller shall retain the legal and equitable title to the Marine Fuel which shall only pass to the Buyer when the seller [sic] has received in full the price and all amounts due in connection with the respective delivery. (b) Prior to the Seller receiving the price and all amounts due referred to in sub-paragraph (a) hereof, the Buyer shall hold the Marine Fuel and/or the price and/or any proceeds of sale as bailee and/or trustee for the Seller without prejudice to the Seller’s right to assert a maritime lien, attachment or claim against the Vessel more particularly set out in Clause 5 hereof. (c) The Seller has accepted the order for delivery on the Buyer’s undertaking to authorize the Seller to give notice to the receivers and/or the Vessel, to which the Marine Fuel has been delivered, of the Seller’s right and title to the Marine Fuel and/or the price and/or sale proceeds as the Principal and/or Beneficiary.”
Clause 5(a) of Newocean Petroleum’s Terms and Conditions was a provision conferring on Newocean Petroleum the right to assert a maritime lien against the vessel and was expressed to be binding upon the buyer as well as the owner. Sub-clause (b) reads:
“(b) Without affecting the generality of item (a) above, the Buyer and the owner of the Vessel (if not being the Buyer) warrants that the Marine Fuel to which the Vessel is supplied shall:
(i) be for the operation of the Vessel and the Vessel only; and (ii) before payment of the price of the Marine Fuel has been made in full, the Marine Fuel shall be clearly identified as products supplied by the Seller and shall not be mixed with any other fuel or lubricant from any third party….”
Winding up of OWB China
OWB China was a company incorporated in Hong Kong. On OWB China’s own petition, Master M Wong ordered it to be wound up by order dated 25 February 2015.
Payment for the Bunkers
It was alleged in §13 of the Statement of Claim in this Action (HCA 2265/2016) that Newocean Petroleum:
“has never received payment for the Bunkers. [OWB China] went into liquidation without paying for the Bunkers.”
Conversion claim under Order 11 rule 1(1)(f)
In its application for leave to serve out of the jurisdiction, Newocean Petroleum relied on Order 11, rule 1(1)(f) of the Rules of the High Court, Cap 4A, which provides that:
“(1) Provided that the writ is not a writ to which paragraph (2) of this rule applies, service of a writ out of the jurisdiction is permissible with the leave of the Court if in the action begun by the writ—
… (f) the claim is founded on a tort and the damage was sustained, or resulted from an act committed, within the jurisdiction;”
Rio Tinto Shipping stressed that, for Newocean Petroleum to succeed, Newocean Petroleum must establish that the (tortious) damage:
(1) was sustained; or (2) resulted from an act committed;
within the jurisdiction.
Rio Tinto Shipping sought by the Summons to dismiss Newocean Petroleum’s claim summarily.
Retention of title and prohibition against mixing
There was a reason why Rio Tinto Shipping’s attempt to summarily dismiss the conversion claim failed.
Both Newocean Petroleum’s Terms and Conditions and OWB Terms and Conditions prohibited mixing of the bunkers:
(1) Clause 5(b)(ii) of Newocean Petroleum’s Terms and Conditions provided that the “Marine Fuel shall be clearly identified as products supplied by the Seller and shall not be mixed with any other fuel or lubricant from any third party”; and (2) Clause H-2 of the OWB Terms and Conditions provided that “… the Buyer agreed that it … shall not be entitled to … mix … the Bunkers …”.
By §15.1, §§15.3 – 15.4 and §16 of the Statement of Claim, Newocean Petroleum complained that:
“15. The Defendant asserted rights inconsistent with the Plaintiff’s rights as owner of the Bunkers, by impliedly or expressly, by itself or through its agents or servants:
… 15.3 Permitting and facilitating the Owner and its agents or servants, in those circumstances, to mix the Bunkers with other fuel on board the Vessel; 15.4 Undertaking that it had the right to grant such permission; and 15.5 Failing to procure the Owner and its agents or servants to segregate the Bunkers on board the Vessel.
16. In the premises, the Defendant converted the Bunkers to its own use.”
It was plain that Newocean Petroleum was also relying on “mixing” in its conversion claim. Newocean Petroleum was not relying solely on consumption of the fuel.
Pumping of the Bunkers commenced at 00:55 hours on 30 October 2014 and completed at 05:00 hours on the same date. The Vessel was within the jurisdiction throughout the pumping period. At the end of the period, the position in relation to Bunker P and Bunker S was as follows:
“Tank No(s)
Vessel remain on board quantity before bunkering (M/tons)
Vessel remain on board quantity after bunkering (M/Tons)
Bunker P
0.589
1,063.137
Bunker S
2.257
926.564 ”
This meant that:
(1) 1,063.137 M/Tons – 0.589 M/Tons = 1,062.548 M/Tons of the Bunkers had been mixed with 0.589 M/Tons of (unknown) substance in Bunker P; and (2) 926.564 M/Tons – 2.257 M/Tons = 924.307 M/Tons of the Bunkers had been mixed with 2.257 M/Tons of (unknown) substance in Bunker S.
The identity of the Bunkers had been lost upon mixing and it was not possible to identify, retrieve or return the Bunkers. The amount of Bunkers which had been mixed with unknown substance(s) or fuel totalled 1,062.548 M/Tons + 924.307 M/Tons = 1,986.855 M/Tons.
Rio Tinto Shipping argued that it was not possible to completely empty fuel oil from a tank. Assuming without deciding that it was so, mixing the Bunkers with what remained in Bunkers P and S before bunkering was still arguably in breach of Clause 5(b)(ii) of the Plaintiff’s Terms and Conditions and Clause H-2 of the OWB Terms and Conditions, as both prohibited any form of mixing, with no allowance for what remained in containers before pumping. In any event, there was no evidence that what remained in Bunkers P and S before bunkering could not be emptied.
Thus, Newocean Petroleum had a good arguable case as pleaded in §§15 and 16 of the Statement of Claim. The Judge held that Newocean Petroleum had a good arguable case on conversion.Irrespective of whether consumption took place within the jurisdiction, Newocean Petroleum had a good arguable case of conversion based on mixing of the Bunkers with unknown substance(s) or fuel and this mixing took place within the jurisdiction.
Material non-disclosure of Newocean Petroleum’s claim in contract in the ex parte application for leave
It is trite that the plaintiff must make full and frank disclosure in its ex parte application.
In the grounding affirmation for the ex parte application, Pau Yin Ming of Newocean Petroleum stated in §66 of his affirmation dated 1 September 2016 that:
“…the Plaintiff is not relying on Order 11 Rule 1(1)(d) or any claim in contract in the present proceedings.”
What Pau Yin Man did not say was that prayer (1) in the Statement of Claim was a claim by Newocean Petroleum against Rio Tinto Shipping:
“(1) A declaration that by the terms of its contract with [OWB China] and/or (insofar as such terms were binding on the Defendant) with the Defendant, the Plaintiff did not authorize or grant a permission or licence to use the Bunkers for the purpose of propulsion of the Vessel pending payment for, and the payment for, and the passing of property in, such Bunkers:”
This claim, somewhat convoluted, was (at least arguably) a claim in contract. It sought:
A declaration “by the terms of its contract with [OWB China] and/or … with the Defendant …”
Such claim was premised on “the terms of its contract with [OWB China] … (insofar as such terms were binding on the Defendant).” Newocean Petroleum went so far as to rely on “the terms of its contract … with the Defendant”.
In the Judge’s judgment, it was at least arguably a claim in contract and prayer (1) should have been expressly drawn to the attention of the Master in the plaintiff’s application for leave. There was material non-disclosure and the Judge set aside the Leave Order. The Judge declined to re-grant an order. Material non-disclosure is a serious breach of the duty of full and frank disclosure in applications where the court relies on the applicant to draw attention to all material matters. There was no explanation for the non-disclosure, Newocean Petroleum simply denying that there was no non-disclosure. This would not do.
Order
The Judge ordered that:
(1) the Leave Order be discharged; (2) the Concurrent Writ of Summons issued on 22 September 2016 and service of the same on the defendant be set aside; and (3) the costs of the Summons be paid by Newocean Petroleum to Rio Tinto Shipping, to be taxed if not agreed.
Please feel free to contact us if you have any questions or you would like to have a copy of the Decision.
23/F, Excel Centre, 483A Castle Peak Road, Lai Chi Kok, Kowloon, Hong Kong 香港九龍荔枝角青山道483A卓匯中心23樓 Tel: 2299 5566 Fax: 2866 7096 E-mail: gm@smicsl.com Website: www.sun-mobility.com A MEMBER OF THE HONG KONG CONFEDERATION OF INSURANCE BROKERS 香港保險顧問聯會會員
The Hong Kong District Court issued a Decision on 8 May 2020 upholding a summary judgment ordering one forwarder to pay outstanding airfreight charges of HK$440,000 to another forwarder. [DCCJ1202/2018] [2020HKDC307]
Without even knowing, we have published including this one 200 issues of the Chans Advice. As this is a monthly bulletin, 100 issues took more than 8 years and 200 issues took 17 years to run.
The Hong Kong High Court issued a Decision on 30 September 2021 holding a shipowner’s Defences as an abuse of process in a case of unpaid crew wages. [HCAJ 76/2020] [2021 HKCFI 2961] [HCAJ 91/2020]
Following the issue of Chans advice last month, we would like to report the latest decision issued by the court over this theft case. On 17 January 2023, the Hong Kong High Court dismissed Mr Ma’s application to withdraw HK$1.5 million out of his frozen assets for paying the legal costs for his appeal against conviction in theft. [HCA 619/2016] [2023 HKCFI 197]
The Hong Kong Court of Appeal issued a Judgment [CACV144/2017] [2018HKCA299] on 29/6/2018 upholding the High Court’s Judgment dated 2/6/2017 (which was reported in our Chans advice/201).
We have received some enquiries from our forwarder clients about the FCR e.g. what is FCR? How many types of FCR are there? What are the uses of FCR? We would like to discuss these in this issue.
The Hong Kong High Court issued a Decision on 22 Feb 2021 holding that the wreck removal claims of a ship sunk were not subject to the Convention on Limitation of Liability for Maritime Claims 1976. [HCAJ 98/2019] [2021 HKCFI 396]
Against the post-Covid tide, we ran an off-line real seminar on Uncollected and Undelivered Cargo on 28 May 2024. Attendance could not be compared with any webinars but the number of enthusiastic questions in the Q&A session reflected the demand for transport liability issue solutions. For the sake of recapitulations and sharing the Q&A among the Chan Advice readership, we like to report the Q&A in two issues. We welcome any other questions you may have on the following.
The Hong Kong Court of Appeal issued a Judgment on 4 October 2019 upholding the High Court’s Decision dated 9 April 2018 (reported in our Chans advice/208). [CACV593/2018][2019HKCA1101]
The High Court of Hong Kong issued a Decision on 21/9/2017 dealing with the principles in respect of the real risk of dissipation of assets in a case of Mareva Injunction involving a shipowner and a charterer. [HCMP 1010/2017]
The Hong Kong High Court issued a Decision on 29 January 2019 dismissing Changhong Group’s application for stay of the legal proceedings against it brought by the consignee and the insurer of the cargo on board the Sanchi. [HCAJ6/2018, 2019HKCFI263]
Our Chans advice/191 reported a Hong Kong High Court’s case concerning a shipping company’s restitution claim against its former deputy general manager (Mr Ma) for HK$387,655,303.70. The latest development of this case is: the Hong Kong High Court issued a Judgment on 1/2/2018 and a Decision on 9/2/2018 holding that Mr Ma was in contempt of Court as a result of his breach of a Mareva Injunction Order and that he be committed to prison for 4 months. [HCMP1115/2017] [2018 HKCFI176] [2018 HKCFI328]
The amendment to the International Convention for the Safety of Life at Sea (SOLAS) 1974 Chapter VI, Regulation 2 in respect of the verified gross mass of a container carrying cargo (laden container) is for entry into force globally on 1 July 2016.
The Hong Kong Court of Appeal issued a Judgment on 20 February 2019 dismissing Changhong Group’s appeal against the High Court’s Decision of 15 November 2018 (reported in Chans advice/215) because Changhong Group had not obtained leave to appeal from the Hong Kong High Court. [CACV576/2018] [2019HKCA246]
The Hong Kong High Court issued a ruling on 2/12/2016 dealing with a shipowner’s interrogatory application in relation to an uncollected cargo case. [HCAJ 118/2015]
The Hong Kong High Court issued a Judgment on 9/4/2018 dealing with a cargo total loss case in which a NVOC in Malta was wrongly sued (because it had the same name as that of the correct NVOC in BVI). [HCAJ 65/2016], [2018 HKCFI 699]
The High Court of Hong Kong issued a Decision on 15 November 2018 concerning the tragic collision between the cargo vessel CF Crystal and the tanker Sanchi, which happened on 6 January 2018 and led to the death of all the officers and crew of the Sanchi. [HCAJ3/2018] [2018HKCFI2474]
The Hong Kong High Court issued a Judgment on 13 August 2021 holding a forwarder liable to pay nominal damages of HKD1,000 to a shipper in a cargo misdelivery claim case of USD1,299,189.87. [HCA 937/2016] [2021 HKCFI 2310]
The Hong Kong District Court issued a Judgment on 26 April 2022 dealing with a case concerned with transfer of business and lifting the corporate veil, and held a forwarder and its shareholder and director jointly and severally liable for a debt of HK$975,733.71. [DCCJ 2104/2019] [2022 HKDC 289]
The Hong Kong High Court issued a Decision on 19 March 2018 dealing with some legal principles in relation to granting relief against unless orders in a ship collision case. [HCAJ 84/2017] [2018 HKCFI 609]
In the transport industry, the contracts of carriage (e.g. Bills of Lading, Air Waybills) usually contain an exclusive jurisdiction clause for settling disputes. However, it is not uncommon that the shippers and consignees sue the transport operators in a court other than the one specified in the exclusive jurisdiction clause. In Hong Kong, the transport operators may rely on the Foreign Judgments (Restriction on Recognition and Enforcement) Ordinance to tackle this kind of situation.
The Hong Kong High Court issued a Judgment on 16 January 2019 dealing with the appeal of the wasted costs’ case reported by our Chans advice/214. [HCA1919/2016] [2019HKCFI127]
Remember our Chans advice/165 (reporting the Hong Kong Court of Appeal holding the Hong Kong forwarder liable to pay US$852,339 plus costs and interest to the Indian bank in the air cargo misdelivery case)? On 19/5/2016, the Court of Final Appeal dismissed the Hong Kong forwarder’s application for seeking leave to appeal. [FAMV Nos 45 & 52 of 2015]
The Hong Kong High Court issued a decision on 31 May 2022 ordering a South Korean shipowner to provide a Hong Kong shipowner with security for costs in the amount of HK$600,000 in relation to a ship collision case that happened in Hong Kong during the super typhoon Hato in August 2017. [HCAJ 80-85/2019] [2022 HKCFI 1631]
The High Court of Hong Kong issued a Decision on 31/8/2018 concerning a feeder company’s claim against a shipping company’s lawyer for wasted costs. [HCA1919/2016] [2018HKCFI1879]
The English High Court issued a Judgment on 31/7/2015 dismissing a cargo owner’s conversion claim US $565,891.58 against a shipowner in an uncollected cargo case. [(2015) EWHC 2288 (Comm), (2015) 2 C.L.C. 415]
The Hong Kong High Court issued a Decision on 13 May 2021 to deal with an interpleader action concerning the stakeholding of US$700,000 in relation to a dispute over some management fees between two transport operators. [HCMP510/2020] [2021 HKCFI 1373]
The VGM laws have come into operation in Hong Kong since 1/7/2016. They are mainly contained in Section 3 and Section 3A of the Merchant Shipping (Safety) (Carriage of Cargoes and Oil Fuel) Regulation (Chapter 369AV) as follows:
In our Chans advice/244, we reported the Hong Kong High Court case [HCA937/2016] [2021 HKCFI 2310] that the forwarder was held liable to pay nominal damages of HKD1,000 to the shipper in the cargo misdelivery claim of USD1,299,189.87. On 20 October 2021, the Hong Kong High Court issued a Decision on Costs holding the shipper liable to pay the costs of the forwarder. [2021 HKCFI 3021]
In Chans advice/14 dated 28/2/2002, we discussed this topic 15 years ago. In its Judgment dated 16/10/2017, the District Court of New South Wales in Australia had to deal with, inter alia, a malpractice that a forwarder issued its own house B/Ls but signed off with as agent for China Ocean Shipping, Pacific International Lines, Mitsui O.S.K. Lines Limited or Orient Overseas Container Line without authority. [2017 NSWDC 279]
In Chans advice/191 and Chans advice/206, we reported a case relating to a shipping company’s claim against its former deputy general manager (Mr Ma) over the alleged theft of the company’s money. The Hong Kong High Court on 16 December 2020 sentenced Mr Ma to 15 years’ imprisonment. [HCCC 20/2018] [2021 HKCFI 195]
The High Court of Hong Kong issued a Decision on 23 May 2018 allowing a shipowner to be represented by 2 different firms of solicitors (one appointed by its hull underwriters and the other appointed by its P&I Club). [HCAJ84/2017] [2018HKCFI1136]
The limit of liability for international carriage of cargoes by air under the Montreal Convention has been revised from 19 SDR/Kg to 22 SDR/Kg of the gross weight of the cargoes effective from 28 December 2019. We have received many enquiries from freight forwarders about changing their house Air Waybills’ terms to cope with the new limit of liability. We would like to take this opportunity to discuss some essential terms in house Air Waybills.
The Hong Kong High Court issued a Judgment on 3/2/2017 holding Natural Dairy liable to pay HK$4,360,948.38 to Schenker being the outstanding freight charges. In the Judgment, the Judge also explained the principles regarding the meaning of notice of the forwarder’s standard trading conditions. [HCA 1755/2011].
The Hong Kong High Court issued a Decision on 22 January 2021 dealing with an appeal against a Small Claims Tribunal’s award concerning a dispute over a container terminal’s storage charges. [HCSA 44/2020] [2021 HKCFI 200]
Remember our Chans advice/171 of 31/3/2015 reporting that the Hong Kong Court of Appeal discharged the Mareva injunctions against Hin-Pro? The Hong Kong Court of Final Appeal issued a Judgment on 14/11/2016 reversing the Court of Appeal’s Judgment of 11/3/2015. [FACA No. 1 of 2016]
The Hong Kong High Court issued a judgment on 21/4/2016 and disallowed a cargo owner’s application for summary judgment against a forwarder in connection with a cargo (a diamond) missing claim of US$900,000. [HCCL 10/2015]
We reported in our Chans advice/252 that the Hong Kong High Court held Hyundai Hong Kong’s ex-Deputy General Manager (Mr Ma) liable to compensate HK$387,655,303.70 to Hyundai Hong Kong in the case of his theft of his employer’s money. On 23 December 2022, the Hong Kong High Court issued a decision ordering a sum of HK$500,000 (which was deposited by Mr Ma as bail money) to be released to Hyundai Hong Kong in partial satisfaction of Mr Ma’s judgment debt. [HCA 619/2016] [2022 HKCFI 3798]
The Ningbo Maritime Court issued a Judgment on 25/5/2016, and dismissed a cargo insurer’s (PICC Ningbo) recovery claim of USD25,238.40 against Mitsui O.S.K. Lines Ltd (“MOSK”) in relation to the vessel MOL Comfort sinking into the Indian Ocean on 17/6/2013.
The Hong Kong High Court issued a Judgment on 11 January 2019 dealing with a dispute of US$335,858.31 between a bunker supplier and a ship agent. [HCA119/2015] [2019HKCFI57]
The Montreal Convention is an international treaty agreed by 140 states in respect of governing carriers’ liability for injury or death of passengers, damage to or loss of baggage and cargo and losses caused by delays. Hong Kong has adopted it through the Carriage by Air Ordinance (Cap 500).
Remember our Chans advice/163 about the English High Court’s Judgment holding the Hague Visby Rules instead of the Hague Rules to apply to the cargo damage claim case in excess of US$3.6 million? The English Court of Appeal issued a Judgment on 24/2/2016 upholding the High Court’s conclusion but with different reasons. [Case No: A3/2014/1285, 2016 EWCA Civ 101, 2016 WL 00692394]
The Hong Kong Court of Appeal issued a Judgment on 20 September 2019 declining to give leave of appeal to Changhong Group in relation to the High Court Decision dated 29 January 2019 (reported in our Chans advice/221). [CAMP197/2019] [2019HKCA1061]
The Hong Kong Court of Appeal issued a Judgment on 12/2/2018 to deal with the cargo owners’ seeking leave to appeal against the High Court’s Judgment reported in our Chans advice/209 last month. [CAMP 38/2017] [2018 HKCA77]
We have received a lot of cargo claims from our forwarder clients in the recent months. In this issue, we would like to discuss in general how the forwarders should handle the cargo claims.
The United States District Court (Southern District of New York) issued an order on 29 November 2021 to deny a shipping company’s motion to rely on the Singapore jurisdiction clause in its bill of lading. [1:19-cv-5731-GHW-RWL]
More and more junior staff of the banks insist all the Bills of Lading to be signed and issued with the above remark “As agent for the Carrier”. This is of course right if the concerned Carrier does not have its own office in the place of issuing the Bill of Lading and therefore instruct its agent there to issue the Carrier’s Bill of Lading.
The Hong Kong High Court issued a Decision on 4 March 2020 dismissing a shipowner’s application for a stay of proceedings in favour of arbitration in a case of cargo misdelivery without presentation of original bill of lading. [HCAJ 5/2019] [2020 HKCFI 375]
The Hong Kong High Court issued a Judgment on 25/8/2017 to determine whether the Hong Kong Court or the Yangon Court was the natural and appropriate forum in an in rem legal proceedings in relation to a cargo damage claim of USD143,852.02. [HCAJ 101/2015]
The Hong Kong Court of Appeal on 1 December 2021 allowed a charterer’s appeal against a High Court’s Decision dated 13 April 2021 (which disallowed the charterer’s charter hire claims of US$234,955 against the shipowner because the High Court was not satisfied the claims were well founded). [CACV 294/2021] [2021 HKCA 1865]
Are Standard Trading Conditions (“STC”) equivalent to the House Bill of Lading (“HB/L”) terms or the House Air Waybill (“HAWB”) terms? We have been frequently asked this question by our forwarder clients.
The English Court of Appeal issued a Judgment on 13/12/2017 dealing with a cargo damage claim of EUR2,654,238 and a charter hire claim of USD1,012,740 in connection with a NYPE charterparty. [2017 EWCA Civ 2107] [2017 WL 06343564] [Case No. A3/2016/4770]
We mentioned in our Chans advice/225 that the limit of liability under the Montreal Convention for carriage of cargoes was increased from 19 SDR/kg to 22 SDR/kg of the gross weight of the cargoes effective on 28 December 2019. We have recently received some forwarders’ request asking us to talk about the major terms in the Montreal Convention. We in this issue would like to introduce the Montreal Convention’s major provisions as follows:
The Hong Kong District Court issued a Decision on 30 April 2021 dealing with a personal injury case in relation to a container terminal. [DCPI 110/2020] [2021 HKDC 463]
In our newsletter last month, we talked about some essential terms in house Air Waybills. In this issue, as the continuation of the loss prevention exercise for freight forwarders, we would like to discuss some essential terms in house Bills of Lading.
The Court of Appeal of Hong Kong issued a judgment on 28 March 2019 dealing with a matter concerning the sale pendente lite of an oil tanker Brightoil Glory. [CAMP49/2019][2019HKCA395]
In our last issue of Chans advice/253, the Hong Kong District Court’s judgment dated 26 April 2022 mentioned a case authority of China Ocean v Mitrans Shipping. We would like to discuss this judgment dated 11 July 1995 of the Hong Kong Court of Appeal in our Chans advice this month. [1995 No. 71 Civil]
On 12/4/2017, the Hong Kong High Court dismissed an application made by a cargo owner for stay of proceedings commenced by two forwarders in relation to an uncollected cargo case. [HCA 1927/2016]
We refer to our Chans advice/251 last month reporting the Hong Kong High Court’s decision to sentence Mr Ma (Hyundai Hong Kong’s former deputy general manager) to 15 years’ imprisonment. The High Court issued another Judgment on 27 April 2022 holding Mr Ma liable to compensate HK$387,655,303.70 to Hyundai Hong Kong. [HCA 619/2016] [2022 HKCFI 1153]
The Hong Kong High Court issued a judgment on 12/4/2016 to dismiss a cargo owner’s action in respect of breaking a barge owner’s tonnage limitation. [HCAJ 178/2014]
The Hong Kong High Court issued a Decision on 9/5/2017 allowing a time extension for some cargo interests to claim against the Tonnage Limitation Fund constituted by the owner of one of the two vessels involved in a collision that happened on 7/11/2013. [HCAJ 189/2013]
The Hong Kong High Court issued a Judgment on 2/6/2017 dealing with the liability apportionment among 3 vessels in 2 almost simultaneous collisions that happened near Hong Kong on 14/5/2011. [HCAJ158/2012 and HCAJ49/2013 and HCAJ48/2011]
In Chans advice/215, we reported the High Court of Hong Kong refused Changhong Group’s application to stay the Hong Kong action. The Court of Appeal also subsequently dismissed Changhong Group’s appeal. On 13 July 2020, the Court of Final Appeal finally dismissed Changhong Group’s application for leave to appeal. [FAMV No. 34 of 2020] [2020 HKCFA 24]
SMIC has finally jumped on the bandwagon of the cyber media rush by its presence on the Facebook. We would have done this for a long time had it not been for the daily chores and that we were then not too convinced of its value in the commercial world. Thereafter, it becomes obvious that more and more firms are capitalizing on this new media; and unlike the old economies where information flow was imperfect, consumers of the new economies tend to prefer looking up for information by themselves from the web, or augmenting information they are given.
The Hong Kong High Court issued a Decision on 2 October 2024 dismissing a shipping company’s application to strike out a forwarder’s third party indemnity claim in a cargo (frozen beef) damage case. [HCAJ 9/2023, HCAJ 22/2023, 2024 HKCFI 2708]
The Hong Kong High Court issued a Judgment on 22/8/2016 dealing with a case that a forwarder wanted to strike out a cargo misdelivery claim on the ground that the claim disclosed no reasonable cause of action. [HCCL 5/2015]
In the issue of our Chans advice last month, we talked about the major provisions of the Montreal Convention (which is for the international carriage of goods by air). In this issue, we would like to discuss the major terms of an equally important international convention for the international carriage of goods by sea, viz. the Hague Visby Rules.
To continue our recent series of loss prevention articles, we would like to discuss in this issue the major provisions of the PRC Maritime Code as far as the international carriage of goods by sea is concerned.
The Hong Kong Court of Appeal’s Judgment dated 11/4/2008 explained some legal principles relating to whether indemnity claims are allowed by in rem legal actions against vessels. [CACV 257/2007]
The Hong Kong High Court issued a Judgment on 18/11/2016 dismissing a shipping company’s application for summary judgment against its former deputy general manager (Mr Ma) for restitution of the sum of HK$387,655,303.70 on the ground of money had and received and/or unjust enrichment. [HCA 619/2016]
We recently have received a lot of uncollected cargo claim cases from our forwarder clients, which have kept our 6 claim handlers very busy. We would like to take this opportunity to talk about this troublesome problem of uncollected cargoes. Actually, the forwarders have been facing this real headache in at least these two decades.
In the last issue of Chans advice, we reported the case that the Hong Kong Court of Appeal rejected the mortgagee’s appeal against the High Court’s order of granting a stay until 24 April 2019 for the sale of the Vessel Brightoil Glory. On 17 May 2019, the Court of Appeal issued another judgment refusing the shipowners’ appeal in respect of their application for a further stay of the sale of the Vessel until 22 May 2019. [CAMP81/2019] [2019 HKCA 561]
The Hong Kong High Court issued a Decision on 21 July 2023 in relation to a case that an aircraft (worth at least USD 80 million) and its cargoes were destroyed by a fire caused by the goods of chlorine dioxide disinfection tablets. [HCA 837/2022] [2023 HKCFI 1896]
The Hong Kong High Court issued a Decision on 11 May 2021 staying a South Korea container terminal’s legal action in Hong Kong with respect to its allision claims of more than US$90,000,000 against the owners of a container ship. [HCAJ 31/2020] [2021 HKCFI 1283]
The PRC Supreme Court on 26/11/2015 issued a Judgment holding a shipping company’s container demurrage claim against a shipper time barred. [2015民提字第119號]
The Hong Kong High Court issued a Decision on 15 March 2021 converting a domestic Mareva injunction into a worldwide Mareva injunction in a shipowner’s freight and demurrage claim against a charterer. [HCMP 1190/2020] [2021 HKCFI 680]
The Hong Kong High Court issued a Decision on 25 February 2019 dealing with Changhong Group’s delayed application for leave to appeal in relation to the collision case reported in our Chans advice/218 and Chans advice/215. [HCAJ3/2018, 2019HKCFI542]
The High Court of Hong Kong issued a Judgment on 22/5/2017 holding that the District Court has jurisdiction to determine bill of lading and bailment cases. [HCAJ 150/2014]
This continues the Q&A in our off-line real seminar on Uncollected and Undelivered Cargo on 28 May 2024. Participants were keen to know more about seaway bills, how war plays in insurance? How modes of transport differ mis-delivery claims handling? What is insurers’ attitude towards transloading claims? And finally, why mis-delivery and uncollected cargo claims deserve special attention. SMIC deals with similar questions daily. Each case varies in its cause, and therefore healing recipe differs. But if you are conversant with fundamentals. They could be simple.
In Chans advice/215, we reported that the Hong Kong High Court refused Changhong Group’s application to stay the Hong Kong proceedings; and in Chans advice/234, we reported that the Court of Final Appeal dismissed Changhong Group’s application for leave to appeal. On 7 April 2022, the Hong Kong High Court issued a Decision dealing with Changhong Group’s action to re-litigate its stay application. [HCAJ 3/2018] [2022 HKCFI 920]
