Pacific Inter-Link Sdn Bhd v OAS Asia Star: Voyage Charterparty Dispute over Unfit Cargo Tanks
In Pacific Inter-Link Sdn Bhd v OAS Asia Star, the High Court of Singapore addressed a claim by Pacific Inter-Link Sdn Bhd ('Pacific') against OAS, the owners of the vessel Asia Star, for damages resulting from the vessel's unfitness to carry refined palm oil. Pacific chartered the Asia Star to transport the oil from Belawan, Indonesia, and Pasir Gudang, Malaysia, to Turkey. Upon inspection, the vessel's cargo tanks were found unfit due to a severe breakdown of the epoxy coating. The court, presided over by Justice Tan Lee Meng, found OAS liable for breaching the fixture note and the charterparty by failing to provide a vessel fit for the agreed cargo. The court ruled in favor of Pacific, awarding damages to be assessed by the Registrar.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Judgment for Plaintiff
1.3 Case Type
Admiralty
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Voyage charterparty dispute over the vessel Asia Star's unfit epoxy-coated cargo tanks. The court found the shipowner liable for breach of contract.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Pacific Inter-Link Sdn Bhd | Plaintiff | Corporation | Judgment for Plaintiff | Won | |
| OAS | Defendant | Other | Claim Dismissed | Lost |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Tan Lee Meng | Judge | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| R Govintharasah | Gurbani & Co. |
| P Jeya Putra | AsiaLegal LLC |
| Magdalene Chew | AsiaLegal LLC |
4. Facts
- Pacific chartered the Asia Star to carry refined palm oil from Indonesia and Malaysia to Turkey.
- The fixture note stated the vessel was "epoxy coated/coiled".
- Pacific's surveyor found 40% of the epoxy coating in the cargo tanks had broken down.
- The surveyor reported loose scales, rust, and remnants of previous cargo in the tanks.
- Pacific rejected the vessel due to the poor tank coating and potential contamination.
- The shipowner's P & I Club surveyor confirmed the tanks were unsuitable for edible oil.
- The shipowner cancelled the charterparty due to the vessel's failure to load cargo.
5. Formal Citations
- Asia Star, Adm in Rem 30/2004, [2006] SGHC 115
6. Timeline
| Date | Event |
|---|---|
| Voyage charterparty dated | |
| Asia Star arrived at Belawan | |
| Notice of readiness to load tendered | |
| Asia Star moved alongside the berth | |
| Pre-loading cargo tank inspection by Intertek | |
| Charterer rejected the vessel | |
| P & I Club’s surveyors boarded the vessel | |
| Charterparty cancelled | |
| Invitation to re-inspect the Asia Star’s tanks | |
| Vessel was withdrawn | |
| High Court ordered that the issue of liability be determined at the trial | |
| Judgment reserved |
7. Legal Issues
- Breach of Contract
- Outcome: The court held that the defendant breached the fixture note and the charterparty by failing to provide a vessel fit for the agreed cargo.
- Category: Substantive
- Sub-Issues:
- Failure to provide a seaworthy vessel
- Breach of term in fixture note regarding epoxy coating
- Related Cases:
- [1912] 1 KB 229
- Seaworthiness
- Outcome: The court found that the vessel was not cargo-worthy and the defendant did not exercise due diligence to ensure the vessel was fit to receive the agreed cargo.
- Category: Substantive
- Sub-Issues:
- Fitness of vessel to carry cargo
- Due diligence in making vessel cargo-worthy
- Related Cases:
- [1912] 1 KB 229
- Interpretation of Charterparties
- Outcome: The court interpreted the clauses of the Vegoilvoy charterparty, giving effect to the obligation to exercise due diligence and resolving inconsistencies in favor of the agreed provisions.
- Category: Substantive
- Sub-Issues:
- Construction of clauses
- Inconsistency between clauses
- Related Cases:
- (1848) 11 QBD 852
- [1965] 2 Lloyd’s Rep 546
8. Remedies Sought
- Monetary Damages
9. Cause of Actions
- Breach of Contract
- Breach of Charterparty
10. Practice Areas
- Commercial Litigation
- Admiralty Litigation
- Shipping Litigation
11. Industries
- Shipping
- Commodities Trading
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Virginia Carolina Chemical Company v Norfolk and North American Steam Shipping Company | King's Bench Division | Yes | [1912] 1 KB 229 | England and Wales | Cited for the principle that a shipowner has an implied obligation to provide a seaworthy vessel fit to receive and carry the agreed cargo safely to its agreed destination. |
| Brown Jenkinson & Co Ltd v Percy Dalton (London) Ltd | Queen's Bench Division | No | [1957] 2 QB 633 | England and Wales | Cited as a cautionary tale regarding the practice of certifying a vessel that is not cargo-worthy as fit to carry the agreed cargo in exchange for the charterer’s indemnity. |
| AIC Ltd v ITS Testing Services (UK) Ltd | N/A | No | [2006] 1 Lloyd’s Rep 1 | England and Wales | Cited regarding the position of inspection companies and their duty of care when producing reports that others will rely on. |
| Hedley Byrne & Co Ltd v Heller & Partners Ltd | House of Lords | No | [1964] AC 465 | England and Wales | Cited regarding the situation where a person with particular expertise is instructed to produce a report which he knows will be passed on to another, who can be expected to rely on it. |
| Ford v Beech | Queen's Bench Division | Yes | (1848) 11 QBD 852 | England and Wales | Cited for the principle that an agreement should be construed to best effectuate the intention of the parties, collected from the whole agreement. |
| Sleigh v Tyser | Queen's Bench Division | Yes | [1900] 2 QB 333 | England and Wales | Cited for the principle that any restriction of the obligation to ensure seaworthiness must be express, pertinent, and apposite. |
| Sunlight Mercantile Pte Ltd v Ever Lucky Shipping Co Ltd | Court of Appeal | Yes | [2004] 1 SLR 171 | Singapore | Cited for endorsing the approach that any restriction of the obligation to ensure seaworthiness must be express, pertinent, and apposite. |
| The Brabant | N/A | Yes | [1965] 2 Lloyd’s Rep 546 | N/A | Cited for the principle that in the face of an inconsistency between the clauses of a standard form charterparty and printed or handwritten provisions agreed upon between the parties, the latter will prevail. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| No applicable statutes | |
15. Key Terms and Keywords
15.1 Key Terms
- Voyage Charterparty
- Epoxy Coating
- Seaworthiness
- Cargo-worthy
- Due Diligence
- Fixture Note
- Vegoilvoy Form
- Notice of Readiness
- Cargo Tank Inspection
- Contamination
- Refined Palm Oil
15.2 Keywords
- charterparty
- epoxy coating
- seaworthiness
- cargo
- palm oil
- shipping
- admiralty
17. Areas of Law
16. Subjects
- Admiralty
- Shipping
- Contract Law
- Charterparties
- Carriage of Goods