AS Nordlandsbanken v Nederkoorn: Guarantee, Time Charterparty Breach & Damages Assessment
In AS Nordlandsbanken and Another v Nederkoorn, the Singapore High Court addressed the assessment of damages following the breach of guarantees related to time charterparties for two tankers. AS Nordlandsbanken and Skandinaviska Enskilda Banken (London Branch) sued Robin Hoddle Nederkoorn for losses incurred after Tamar Shipping (Bermuda) Ltd failed to fulfill its obligations under the charters. The court, presided over by Justice G P Selvam, found Nederkoorn liable under the guarantees but limited the liability to a 24-month period as stipulated in the guarantee agreement. The court awarded $650,928.35 to the plaintiffs, accounting for deductions and credits.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Judgment in favor of the plaintiffs for $650,928.35.
1.3 Case Type
Admiralty
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
The High Court assessed damages for breach of a time charterparty guarantee, addressing the guarantor's liability and applicable principles for calculating losses.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| AS Nordlandsbanken | Plaintiff | Corporation | Judgment for Plaintiff | Won | |
| Skandinaviska Enskilda Banken (London Branch) | Plaintiff | Corporation | Judgment for Plaintiff | Won | |
| Nederkoorn | Defendant | Individual | Judgment against Defendant | Lost |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| G P Selvam | Judge | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Michael Hwang SC | Allen & Gledhill |
| Christine M Chan | Allen & Gledhill |
| Thomas Tan | Haridass Ho & Partners |
4. Facts
- Two time-charters were signed for the charter of two tankers.
- The defendant guaranteed the due performance of the charters for 24 months.
- The owners assigned the benefits of the guarantee to the plaintiffs.
- Tamar Shipping failed to take delivery of one vessel and repudiated the charter for the other.
- The owners operated the vessels on the spot market before selling them.
- The proceeds from the sale were insufficient to cover the bank loans.
- The plaintiffs sought to enforce the personal guarantees of the defendant.
5. Formal Citations
- AS Nordlandsbanken and Another v Nederkoorn, Suit 2040/1994, [2000] SGHC 272
6. Timeline
| Date | Event |
|---|---|
| Charters signed for The Sangstad (The `Tamar Song`) and The Sommerstad (The `Tamar Summer`) | |
| Defendant executed a guarantee in respect of each vessel | |
| Owners of each vessel transferred and assigned to the plaintiffs all benefits of `The Robin Nederkoorn Guarantee` | |
| Tamar Shipping took delivery of The `Tamar Summer` | |
| Tamar Shipping threw up The `Tamar Summer` | |
| Owners` P & I Club put forward a claim | |
| Actions instituted in the name of the owner of each vessel against the present defendant in Singapore | |
| Mortgagees took possession of both vessels and sold them | |
| Action filed by the plaintiffs, AS Nordlandsbanken and Skandinaviska Enskilda Banken (London Branch) | |
| A defence was filed | |
| Defendant consented to interlocutory judgment being entered against him | |
| Decision Date |
7. Legal Issues
- Breach of Contract
- Outcome: The court found that the charterers breached the contract by failing to take delivery of the vessel and subsequently repudiating the charter.
- Category: Substantive
- Sub-Issues:
- Wrongful repudiation of charterparty
- Failure to take delivery of vessel
- Related Cases:
- [1980] 1 Lloyd`s Rep 75
- [1981] 1 Lloyd`s Rep 521
- Enforcement of Guarantee
- Outcome: The court held that the guarantor's liability was limited to the 24-month period specified in the recital of the guarantee.
- Category: Substantive
- Sub-Issues:
- Time limitation of guarantor's liability
- Binding effect of recitals in guarantee
- Related Cases:
- [1841] 151 ER 1013
- [1899] AC 396
- Assessment of Damages
- Outcome: The court assessed damages based on the market rate for chartering a substitute vessel, taking into account the owners' decision to operate the vessels on the spot market and the subsequent sale of the vessels.
- Category: Substantive
- Sub-Issues:
- Mitigation of damages
- Calculation of losses
- Impact of sale of vessels on damages
- Related Cases:
- [1980] 1 Lloyd`s Rep 75
- [1981] 1 Lloyd`s Rep 521
8. Remedies Sought
- Monetary Damages
- Indemnification
9. Cause of Actions
- Breach of Guarantee
- Breach of Contract
10. Practice Areas
- Commercial Litigation
- Admiralty Law
- Shipping Law
- Banking Law
11. Industries
- Shipping
- Banking
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Canadian Pacific (Bermuda) Ltd v Nederkoorn Pte Ltd & Anor | High Court | Yes | [1992] 1 SLR 659 | Singapore | Cited as background information regarding the Mareva injunction issued against the defendant and his company. |
| Canadian Pacific (Bermuda) Ltd v Nederkoorn Pte Ltd & Anor | High Court | Yes | [1998] 3 SLR 309 | Singapore | Cited as background information regarding the Mareva injunction issued against the defendant and his company. |
| Canadian Pacific (Bermuda) Ltd v Nederkoorn Pte Ltd & Anor | High Court | Yes | [1999] 2 SLR 18 | Singapore | Cited as background information regarding the Mareva injunction issued against the defendant and his company. |
| Carpenter v Buller | Unknown | Yes | [1841] 151 ER 1013 | England and Wales | Cited for the principle that a distinct statement of fact in the recital of a bond, if a contract is made with reference to that recital, cannot be denied by the party bound. |
| Lainson v Tremere | Unknown | Yes | Lainson v Tremere | England and Wales | Cited as a strong instance of estoppel regarding a recital in a deed. |
| Lord Arlington v Merricke | Unknown | Yes | [1672] 85 ER 1215 | England and Wales | Cited for the principle that where the time for which sureties are to be liable is marked in the recital of the condition, it is not to be extended by any subsequent general words. |
| Liverpool Water Works v Atkinson | Unknown | Yes | [1805] 102 ER 1382 | England and Wales | Cited as establishing a rule that where the time for which the sureties are to be liable is marked in the recital of the condition, it is not to be extended by any subsequent general words. |
| Wardens of St. Saviour`s, Southwark v Bostock | Unknown | Yes | [1800] 127 ER 590 | England and Wales | Cited as establishing a rule that where the time for which the sureties are to be liable is marked in the recital of the condition, it is not to be extended by any subsequent general words. |
| Australian Joint Stock Bank v Bailey | Privy Council | Yes | [1899] AC 396 | United Kingdom | Cited to distinguish it from the present case, noting that in the cited case, the bond was specific in that it was an all money undertaking for advances in addition to those under the guarantee but subject to the limit of £2,000 plus interest, and there was no inconsistency. |
| The Elena d`Amico | Unknown | Yes | [1980] 1 Lloyd`s Rep 75 | England and Wales | Cited as a seminal case regarding the measure of damages in cases of premature wrongful repudiation of a time charter by the owners. |
| The Wave | Unknown | Yes | [1981] 1 Lloyd`s Rep 521 | England and Wales | Cited for adding a gloss to the principle enunciated in The Elena d`Amico, stating that it would not have been possible to obtain a replacement fixture immediately after the repudiation took place. |
| Yeoman Credit Ltd v McLean | Unknown | Yes | [1962] 1 WLR 131 | England and Wales | Cited for the principle that the accelerated receipt of proceeds from the sale of an item reduces the amount of capital laid out and increases the amount of profit. |
| Overstone Ltd v Shipway | Court of Appeal | Yes | [1962] 1 WLR 117 | England and Wales | Cited for the unanimous approval of the Court of Appeal regarding the soundness of the law stated by Master Jacob in Yeoman Credit Ltd v McLean. |
| The Mihalis Angelos | Unknown | Yes | [1971] 1 QB 164 | England and Wales | Cited for the rule of least benefit to the plaintiff and the principle that litigation must not be turned into a lottery. |
| Paula Lee Ltd v Zehil & Co Ltd | Unknown | Yes | [1983] 2 All ER 390 | England and Wales | Cited for the principle that the court is to look at the range of reasonable methods and select the one which is least unfavourable to the defendant. |
| Ruxley Electronics and Construction Ltd v Forsyth | House of Lords | Yes | [1996] AC 344 | United Kingdom | Cited for the principle that damages that are wholly disproportionate to the loss or damage will not be awarded. |
| Bunge Corp v Tradax Export SA | Unknown | Yes | [1981] 1 WLR 711 | England and Wales | Cited for the principle that where the contract-breaker has a choice of two methods of performance, damages will be awarded on the basis of minimum legal obligation. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Sale of Goods Act (Cap 393) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Time Charterparty
- Guarantee
- Repudiation
- Damages Assessment
- Spot Market
- Mitigation of Damages
- Recital
- Charterhire
- Vessel
- Assignment of Guarantee
15.2 Keywords
- time charter
- guarantee
- shipping
- damages
- admiralty
- contract law
17. Areas of Law
16. Subjects
- Shipping
- Contract Law
- Finance
- Admiralty