Epic: Wrongful Detention of Cargo & Shipowner's Lien Dispute
In the case of *Petromar Energy Resources Pte Ltd v Cresta Shipping Ltd*, the Court of Appeal of Singapore heard an appeal regarding the wrongful detention of a fuel oil cargo. Petromar claimed damages for Cresta Shipping's interference with their cargo on board the vessel Epic. Cresta Shipping counterclaimed for unpaid hire. The court dismissed the appeal, finding that Cresta Shipping wrongfully detained Petromar's cargo and breached a collateral contract. The court held that the lien clause in the time charter was not incorporated into the bill of lading, and therefore Cresta Shipping had no right to exercise a lien over Petromar's cargo.
1. Case Overview
1.1 Court
Court of Appeal1.2 Outcome
Appeal dismissed.
1.3 Case Type
Admiralty
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
The Court of Appeal ruled against Cresta Shipping, finding they wrongfully detained Petromar's fuel oil cargo. The court held the lien clause was not incorporated.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Cresta Shipping Ltd | Appellant | Corporation | Appeal Dismissed | Lost | |
| Petromar Energy Resources Pte Ltd | Respondent | Corporation | Judgment for Respondent | Won |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Chao Hick Tin | Justice of the Court of Appeal | Yes |
| L P Thean | Justice of the Court of Appeal | No |
| Yong Pung How | Chief Justice | No |
4. Counsels
4. Facts
- Cresta Shipping chartered the Epic to Metro Trading International Inc. under a time charterparty.
- The time charterparty conferred on Cresta Shipping a lien upon all cargo and freights for any amounts due under the charter.
- Petromar entered into a contract with Sanko Oil for the purchase of fuel oil.
- Petromar nominated the Epic for the carriage of the fuel oil.
- A cargo of fuel oil was shipped on board the Epic under a bill of lading.
- Metro was in default of payment of the hire under the time charter.
- Dynacom, on behalf of Cresta Shipping, sent a notice of lien to Metro, Hin Leong Trading, and Sanko Oil.
- Petromar sent a telex to Dynacom requesting discharge of cargo and offering an indemnity.
- Dynacom initially confirmed the vessel would discharge the cargo but later reversed its position.
- Petromar commenced proceedings and obtained an ex-parte mandatory injunction ordering the appellants to discharge the cargo.
5. Formal Citations
- The "Epic", CA 186/1999, [2000] SGCA 28
6. Timeline
| Date | Event |
|---|---|
| Time charterparty between Cresta Shipping and Metro Trading International Inc. signed. | |
| Petromar Energy Resources Pte Ltd entered into a contract with Sanko Oil (Pte) Ltd for the purchase of fuel oil. | |
| Spot charter dated between Metro and Petromar. | |
| Cargo shipped on board the Epic under B/L No 3138. | |
| Metro representatives informed Dynacom of financial difficulties. | |
| Dynacom sent a notice of lien to Metro, Hin Leong Trading, and Sanko Oil. | |
| Petromar sent a telex to Dynacom requesting discharge of cargo. | |
| Dynacom sent a telex confirming the vessel would discharge the cargo upon receipt of the bank draft. | |
| Dynacom sent a second telex instructing the vessel not to discharge the cargo. | |
| Petromar replied to Dynacom's second telex. | |
| Credit Lyonnais sent a letter of indemnity to Dynacom. | |
| Petromar demanded a decision from the appellants on whether they would discharge the cargo. | |
| Credit Lyonnais wrote to Dynacom regarding the letter of indemnity. | |
| Petromar commenced proceedings against the appellants and obtained an ex-parte mandatory injunction. | |
| Order of court served on the Epic. | |
| Choo Han Teck JC varied the earlier court order. | |
| Petromar provided a letter of guarantee for the sum of US$577,564.362. | |
| Petromar presented the original B/L No 3138 to the master of the Epic, and discharge of the cargo took place. | |
| The amount of the guarantee was reduced to US$527,054.54. | |
| Judgment issued. |
7. Legal Issues
- Wrongful Interference and Detention of Cargo
- Outcome: The court found that the appellants wrongfully detained and interfered with the cargo.
- Category: Substantive
- Shipowner's Right of Lien over Cargoes
- Outcome: The court held that the shipowner did not have a valid lien over the cargo.
- Category: Substantive
- Incorporation of Lien Clause into Bill of Lading
- Outcome: The court held that the lien clause in the time charter was not incorporated into the bill of lading.
- Category: Substantive
- Formation of Collateral Contract
- Outcome: The court found that a collateral contract was formed between the parties.
- Category: Substantive
8. Remedies Sought
- Monetary Damages
9. Cause of Actions
- Wrongful Interference
- Wrongful Detention
10. Practice Areas
- Admiralty
- Shipping
- Commercial Litigation
- Charterparty Disputes
11. Industries
- Shipping
- Oil and Gas
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| The Chrysovalandou-Dyo | Lloyd's Law Reports | Yes | [1981] 1 Lloyd`s Rep 159 | England and Wales | Cited for the principle that a shipowner's right of lien on cargoes can only be enforced against the holder of a bill of lading if such provision has been incorporated into the terms of the bill of lading. |
| K/s A/S Seatem v Iraq National Oil Co (The Sevonia Team) | Lloyd's Law Reports | Yes | [1983] 2 Lloyd`s Rep 640 | England and Wales | Approved in relation to the interpretation of general references to charterparties in incorporating clauses. |
| The Nanfri | Lloyd's Law Reports | Yes | [1978] 1 Lloyd`s Rep at p 591 | England and Wales | Approved in relation to the position being less clear where it is a time charter, the terms of which are in many respects inapposite to the carriage of goods on a voyage. |
| The SLS Everest | English Court of Appeal | Yes | [1982] 2 Lloyd`s Rep 389 | England and Wales | Applied to determine which charterparty (voyage or time) was incorporated into the bill of lading. |
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
- Lien
- Time Charter
- Bill of Lading
- Spot Charter
- Collateral Contract
- Letter of Indemnity
- Sub-freight
- Wrongful Detention
- Incorporation Clause
15.2 Keywords
- Admiralty
- Shipping
- Lien
- Charterparty
- Bill of Lading
- Wrongful Detention
- Contract Law
- Singapore
17. Areas of Law
16. Subjects
- Admiralty
- Shipping
- Contract Law
- Charterparty