Faith Maritime v Feoso: Demurrage, Bills of Lading & Cargo Conversion Dispute

In two consolidated actions, Faith Maritime Company Ltd (‘Faith’) sued Feoso (Singapore) Private Limited (‘Feoso’) in the High Court of Singapore, Woo Bih Li JC presiding, concerning a dispute over demurrage, bills of lading, and cargo conversion. Faith claimed demurrage for the vessel ‘Daphne L’ and alleged entitlement to a lien on the cargo. Feoso counterclaimed for breach of contract and conversion, asserting rights under certain bills of lading. The court found that Feoso lacked standing to sue for conversion and that Faith was entitled to exercise a lien for demurrage. The court declared that Faith was entitled to exercise a lien for US$1,890,000 with interest and ordered that the sale proceeds of the cargo be released to Faith in part settlement of the lien. Feoso's claims were dismissed.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Judgment for Plaintiff

1.3 Case Type

Admiralty

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Faith Maritime sued Feoso over demurrage and cargo conversion. The court found for Faith, holding Feoso lacked standing to sue.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Feoso (Singapore) Pte LtdDefendantCorporationClaims DismissedLost
Faith Maritime Co LtdPlaintiffCorporationLien DeclaredWon

3. Judges

Judge NameTitleDelivered Judgment
Woo Bih LiJudicial CommissionerYes

4. Counsels

Counsel NameOrganization
Thomas TanHaridass Ho & Partners
Ajaib HaridassHaridass Ho & Partners
Richard KuekGurbani & Co.
R GovintharasahGurbani & Co.

4. Facts

  1. Faith owned the vessel ‘Daphne L’.
  2. Feoso entered into a contract to buy heavy crude oil from Ever Bright Energy Co Ltd.
  3. Feoso entered into a contract to sell 380 CST Fuel Oil to Titan Oil Pte Ltd.
  4. Faith entered into a Tanker Voyage Charter Party with Persing Energy Corp.
  5. Persing entered into a voyage charter party with Nordic Long Term Lease Limited.
  6. The cargo was loaded at Kharg Island between 16 October 1999 and 20 November 1999.
  7. The Master issued a Bill of Lading KHA-001 describing the goods as crude oil slops.
  8. The Vessel was diverted to Singapore for sampling of the cargo.
  9. A second set of bills of lading (No KHA 002/003/004) were issued describing the cargo as fuel oil.
  10. Faith objected to B/L No 2, 3 and 4.
  11. The Vessel arrived at Gui Shan anchorage, off Huangpu on 21 December 1999.
  12. Faith ordered the Vessel to sail from Huangpu to Singapore on 13 January 2000.
  13. The cargo was eventually sold to Kary International Limited for US$1,607,638.12.

5. Formal Citations

  1. Faith Maritime Co Ltd v Feoso (Singapore) Pte Ltd, Adm in Per 32/2000, Adm in Rem 21/2000, [2002] SGHC 229

6. Timeline

DateEvent
Feoso entered into a contract with Ever Bright Energy Co Ltd to buy heavy crude oil.
Feoso entered into a contract with Titan Oil Pte Ltd to sell 380 CST Fuel Oil.
Faith entered into a Tanker Voyage Charter Party with Persing Energy Corp.
Persing entered into a voyage charter party with Nordic Long Term Lease Limited.
Loading operations at Kharg Island began.
Loading operations at Kharg Island completed.
Master issued Bill of Lading KHA-001.
The Vessel departed Kharg Island with the cargo.
Feoso sent a fax to New Orient Petroleum Pte Ltd requesting a survey report showing the cargo as Fuel Oil (3.5S).
Master received discharge instructions.
Nordic requested owners to authorize Nordic to sign and issue B/L No 2, 3 and 4.
ALS Technichem (S) Pte Ltd issued a report suggesting the cargo was fuel oil.
Meridian sent a fax to DLP Maritime stating agents have kept master's correspondence which was sent in error.
Nordic forwarded a letter of indemnity to both Faith and to Persing.
The Master of the Vessel sent a telex to Meridian to seek confirmation that B/L No 1 had been cancelled.
Faith sent a fax to Meridian to object to B/L No 2, 3 and 4.
The Vessel arrived at Gui Shan anchorage, off Huangpu.
Master tendered Notice of Readiness.
Nordic sent a fax to Meridian to say that B/L No 2, 3 and 4 had already been released to the buyer, meaning Feoso.
Ince & Co, acting for Nordic, sent a fax to A. Bilbrough & Co, to inform them that Ever Bright had surrendered the original set of three bills of lading relating to B/L No 1.
Mr Fung Tze Tat of Feoso received B/L No 2, 3 and 4.
Faith obtained advice from BMT Murray Fenton, marine consultants in London, on ALS’ report.
Faith ordered the Vessel to sail from Huangpu to Singapore.
The Vessel reached the Outer Port Limits of Singapore.
The Vessel came in to Singapore.
Faith obtained an order from the High Court of Singapore for the cargo to be appraised and sold by the Sheriff.
The cargo was completely discharged in Singapore.
Judgment Date

7. Legal Issues

  1. Entitlement to Demurrage
    • Outcome: The court found that Faith was entitled to claim demurrage.
    • Category: Substantive
    • Sub-Issues:
      • Whether vessel was an 'arrived ship'
      • Period of demurrage claimable
  2. Validity of Bills of Lading
    • Outcome: The court found that Feoso could not rely on s 2(1) of the Bills of Lading Act as it was not claiming any right under the bills of lading.
    • Category: Substantive
    • Sub-Issues:
      • Authority to issue bills of lading
      • Reliance on bills of lading by a party
  3. Entitlement to Lien
    • Outcome: The court found that the lien provision in the head charter party had been incorporated into B/L No. 1 and that Faith was entitled to assert a lien as it had not relinquished possession of the cargo.
    • Category: Substantive
    • Sub-Issues:
      • Incorporation of lien provision from charter party into bill of lading
      • Whether lien was relinquished
  4. Conversion of Cargo
    • Outcome: The court found that Faith had acted reasonably and did not convert the cargo, and that Feoso had no locus standi to sue for conversion.
    • Category: Substantive
    • Sub-Issues:
      • Essence of conversion
      • Locus standi to sue for conversion

8. Remedies Sought

  1. Demurrage
  2. Damages for Conversion

9. Cause of Actions

  • Breach of Contract
  • Conversion

10. Practice Areas

  • Admiralty Litigation
  • Commercial Litigation
  • Shipping Disputes

11. Industries

  • Shipping
  • Oil and Gas

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Bristol & West of England Bank v Midland Railway CoQueen's Bench DivisionYes[1891] 2 QB 653England and WalesCited to support the principle that the title to sue may be transferred from a preceding party to the plaintiff after the act of conversion.
The Cherry and OthersHigh CourtYes[2002] 3 SLR 431SingaporeCited for the principle that a person who wants to sue in conversion must have actual possession or the immediate right to possession at the time of conversion, but noting that the rule is not inflexible.
The MiramarHouse of LordsYes[1983] 2 Lloyds Law Rep 319United KingdomCited for the principle of incorporating the lien provision in the Head Charter Party.
The Trade ResolveHigh CourtYes[1999] 4 SLR 424SingaporeCited for the principle of incorporating the lien provision in the Head Charter Party.
Wah Yuen Petroleum Marine Pte Ltd v Hai Yin Diesel Trading Pte LtdHigh CourtYesSuit No. 2010 of 1997SingaporeCited as an example of a case where a vessel was detained by Chinese authorities for four months due to suspicions of smuggling.
Steelmet Pte Ltd v APL Co Pte LtdHigh CourtYesSuit No. 1736 of 1999SingaporeCited for the principle that for a seller to sue for conversion, it must be the person who had the right to possess the goods at the time they were converted or misdelivered.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
Bills of Lading Act (Cap 384)Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Demurrage
  • Bill of Lading
  • Charter Party
  • Lien
  • Conversion
  • Crude Oil Slops
  • Fuel Oil
  • Arrived Ship
  • Notice of Readiness

15.2 Keywords

  • Admiralty
  • Shipping
  • Bills of Lading
  • Demurrage
  • Lien
  • Conversion
  • Faith Maritime
  • Feoso
  • Singapore
  • Crude Oil
  • Fuel Oil

17. Areas of Law

Area NameRelevance Score
Admiralty and Maritime Law90
Shipping Law90
Bills of Lading80
Carriage of goods by sea75
Contract Law70
Demurrage70
Lien65
Conversion60
Torts60
Breach of Contract50
Damages30
Bailment30
Evidence20

16. Subjects

  • Admiralty
  • Shipping
  • Bills of Lading
  • Demurrage
  • Liens
  • Conversion