Antara Koh v. Eng Tou Offshore

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DMC/SandT/06/02
Antara Koh Pte Ltd v. Eng Tou Offshore Pte Ltd
Singapore High Court: Belinda Ang Saw Ean J: [2005] SGHC 166: 5 September 2005
TS Oon & Bazul and Just Law LLC for Antara Koh

Ang & Partners for Eng Tou
LIMITATION: SECTION 136 OF THE MERCHANT SHIPPING ACT: WHETHER LOSS OCCURRED WITHOUT ACTUAL FAULT OR PRIVITY OF OWNER
Summary
A crane that was on the barge "Antara Koh B8" collapsed and fell on the tug "Tambat". Six of the crew members and the crane operator perished in the casualty. The owners of the "Antara Koh B8", Antara Koh Pte Ltd ("Antara Koh") commenced a limitation action for a declaration that their liability was limited to a certain quantum pursuant to the Singapore Merchant Shipping Act. The only party contesting the limitation action was Eng Tou Offshore Pte Ltd ("Eng Tou"), the owners of the tug. The issue was whether the loss had occurred with or without the actual fault or privity of Antara Koh. A further issue was whether Antara Koh had proved its pleaded case that the cause of the loss was due to the negligence of the crane operator.

DMC Rating Category: Confirmed

This Case Note was contributed by Ang & Partners, the Websiteís International Contributors for Singapore

Facts
The tug "Tambat" was chartered to tow the "Antara Koh B8" to Sungei Johor to retrieve an anchor and anchor chain lying on the river bed. Mounted on "Antara Koh B8" was a crane. In the process of lifting the recovered anchor, the boom of the crane on the "Antara Koh B8"collapsed and fell on the "Tambat". The tug sank. Six of the crew members and the crane operator perished in the casualty. Eng Tou as owners of the "Tambat" sued Antara Koh. Antara Kohís Defence got struck out and Eng Tou entered default judgment against Antara Koh, with damages to be assessed. The assessment of damages was, however, ordered to be stayed, pending the determination of the limitation action commenced by Antara Koh. In the limitation action, the question was whether Antara Kohís liability could be limited pursuant to Section 136 of the Merchant Shipping Act1.

Judgment
(1) The legal consequence of the default judgment was that Antara Koh was liable entirely for the casualty. The question was what was the cause of the casualty. Eng Tou, as owners of the "Tambat", asserted that the loss occurred with the actual fault or privity of Antara Koh in that there was inadequate welding of the boom connectors at the bottom boom insert of the crane. Antara Koh blamed the negligence of the crane operator and argued that this constituted "any other act or omission of any person on board the ship" within the meaning of section 136(1)(d) of the Merchant Shipping Act.

(2) The onus was on Antara Koh to establish that Eng Touís loss was not caused by Antara Kohís "actual fault or privity". The Court found that the crane operator was an experienced one. The Court also accepted Eng Touís expertís opinion that when the crane boom suddenly swung to port, it was indicative of the crane operator having lost control of the crane rather than inadvertence on his part.

(3) It was agreed that there was inadequate welding of the boom. Eng Touís expert opined that this was due to poor workmanship. Antara Kohís expert did not provide any satisfactory challenge of this opinion. Antara Koh however had not pleaded this as a cause of the casualty entitling them to invoke limit. The Court thus found that Antara Koh had not established its pleaded case on this point. The Court further found that, if so pleaded, the use of a defective crane was improper management of equipment necessary for the bargeís operational purpose as a crane barge and, therefore, was within the meaning of section 136(1)(d).

(4) Whilst the above finding would have been sufficient to dispose of the limitation action, the Court also proceeded to rule that the use of the defective crane and the consequent damage had occurred with the actual fault or privity of Antara Koh. The Court examined the conduct of Koh, as the director who carried out the functions of management and spoke and acted as the company. There was no system of checks to ensure that managementís directions relating to crane maintenance were carried out. Koh was found to be at fault in failing to institute a proper system to ensure that the duties of the plant manager delegated to the site engineer were performed. Kohís omission contributed to the occurrence of the loss. Kohís fault was attributable to the company. Antara Koh was therefore not entitled to a limitation decree.

Comment

This case is probably the last case where a shipowner (yet again) failed to limit its liability under the old provisions of the Merchant Shipping Act, when Singapore was still bound by the 1957 International Convention relating to the Limitation of the Liability of Owners of Sea-Going Ships. The Convention on Limitation of Liability for Maritime Claims, 1976, with higher limits but that are more difficult to break, came into force in Singapore on 1 May 2005. Shipowners should find it easier to limit liability under the new regime.


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