Pan United v. Cendrawasih
This Case Note was contributed by Ang & Partners, the Website’s International Contributors for Singapore
On 18 October 2002, more than two years after the loss of the cargo, Cendrawasih claimed that they were the wrong party to be sued as the vessels were demise chartered at the material time to PT Armada Arung Samudra ("PT Armada") under a charter dated 19 July 2000. Pan United challenged the authenticity and/or existence of the alleged demise charter. Pan United submitted in the alternative that it would be unconscionable for Cendrawasih to rely on the demise charter to avoid liability as Cendrawasih had misled Pan United by granting time extensions for the claim, and Cendrawasih had never informed Pan United that the vessels were under demise charter to PT Armada, until after the claim against PT Armada, as the demise charterers, had become time-barred.
The following preliminary issues were tried before the Court:
2. The Judge held that Cendrawasih had failed to establish that the vessels were demise chartered to PT Armada, on the following grounds:a) Cendrawasih and PT Armada had signed more than one copy of the demise charter for the vessels, leading Pan United’s Counsel to suggest that documents were signed by them as and when requested by their solicitors for the purposes of the trial and that the demise charter dated 19 July 2000 was just another document generated for that purpose;
b)there was no evidence of payment made by PT Armada for the alleged demise charter;
c)there was no evidence that the terms of the alleged demise charter were complied with; for example, there was no on-hire survey conducted, no letter of guarantee was furnished by PT Armada, and PT Armada did not insure the vessels as required under the terms of the charter;
d) Cendrawasih made no claim against PT Armada for loss of the barge or damage to the tug; and
e) Cendrawasih and not PT Armada had made a general average claim for the casualty.
3. Further, in an attempt to support their case that there was a course of dealings between themselves and PT Armada, Cendrawasih produced copies of two other demise charterparties. The Judge found that the documents were flawed in many respects and questioned the credibility of the evidence.
4. The Judge considered it noteworthy that Cendrawasih had only raised the demise charter defence in October 2002, more than two years after the casualty in July 2000 and after the claim against the demise charterer had become time-barred and had only allowed inspection of the document on 2 December 2002.
5. As the Judge found in Pan United's favour on the first issue, there was no need to consider the second issue of estoppel.
Singapore law has been amended with effect 1 April 2004 to allow the arrest of a demise chartered ship. In a hypothetical situation where a shipowner, such as Cendrawasih, argues that the vessel was demise chartered to another company, the cargo claimant can still arrest the vessel even if it is the demise charterer, and not the shipowner, who is personally liable on the claim.
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