P.T. Bumi v Man B&W: Negligent Engine Design & Pure Economic Loss
In 2001, P.T. Bumi International Tankers ('Bumi') sued Man B&W Diesel S.E. Asia Pte Ltd ('MBS') and Mirrlees Blackstone Ltd ('MBUK') in the High Court of Singapore, alleging negligent design and/or manufacture of a ship's engine. Bumi claimed damages for pure economic loss resulting from frequent engine problems and its eventual breakdown in September 1997. Judith Prakash J. found that MBS and MBUK owed Bumi a duty of care and breached that duty by supplying a defectively designed engine. The court awarded Bumi US$939,589.675 for loss of hire and US$2,040,000 for the cost of a new engine.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Judgment for Plaintiff
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
P.T. Bumi sued Man B&W for pure economic loss due to a negligently designed ship engine. The court found a duty of care was owed and awarded damages.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Mirrlees Blackstone Ltd | Defendant | Corporation | Damages Awarded | Lost | |
| P.T. Bumi International Tankers (formerly known as P.T. Bumi Indonesia Tankers) | Plaintiff | Corporation | Judgment for Plaintiff | Won | |
| Man B&W Diesel S.E. Asia Pte Ltd (formerly known as Mirrlees Blackstone (S.E. Asia) Pte Ltd) | Defendant | Corporation | Damages Awarded | Lost |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Judith Prakash | Judge | Yes |
4. Counsels
4. Facts
- Bumi contracted with MSE to build an oil tanker.
- MBS supplied the main engine to MSE, manufactured by MBUK.
- There was no direct contract between Bumi and MBS or MBUK regarding the engine.
- The engine experienced problems shortly after delivery in December 1994.
- The engine broke down completely in September 1997, leading to the vessel being laid up.
- Bumi claimed the engine was negligently designed and/or manufactured.
- Bumi sustained economic losses due to the engine problems.
5. Formal Citations
- P.T. Bumi International Tankers (formerly known as P.T. Bumi Indonesia Tankers) v Man B&W Diesel S.E. Asia Pte Ltd (formerly known as Mirrlees Blackstone (S.E. Asia) Pte Ltd) and Another, Suit 149/2001, [2003] SGHC 152
6. Timeline
| Date | Event |
|---|---|
| Contract entered into between Bumi and MSE for construction of oil tanker. | |
| MBS sent a tender to MSE to supply one marine propulsion engine. | |
| Bumi notified MBS that it would be accepting the offer for engine supply. | |
| MSE confirmed purchase of engine from MBS. | |
| Bumi's representatives visited MBUK's factory for engine testing. | |
| Engine delivered to MSE in Malaysia. | |
| Engine installed in vessel. | |
| Construction of vessel completed. | |
| Sea trials held. | |
| Vessel formally delivered by MSE to Bumi. | |
| Engine governor malfunctioned. | |
| Engine reported to be overheating. | |
| Major repairs of the engine took place. | |
| Bumi sent complaint to MBS about engine malfunctioning. | |
| Turbocharger broke down again. | |
| Sea trials held to test engine after repairs. | |
| MBS informed engine's rpm could not be increased beyond 575 due to overheating. | |
| Engine completely broke down. | |
| Action commenced. | |
| Decision Date |
7. Legal Issues
- Negligence
- Outcome: The court found that the defendants were negligent in the design and/or manufacture of the engine.
- Category: Substantive
- Sub-Issues:
- Negligent design
- Negligent manufacture
- Duty of Care
- Outcome: The court held that the defendants owed the plaintiff a duty of care to provide an engine that was suitably manufactured and free from defect.
- Category: Substantive
- Sub-Issues:
- Proximity
- Foreseeability
- Assumption of responsibility
- Reliance
- Pure Economic Loss
- Outcome: The court held that pure economic loss was recoverable in this case.
- Category: Substantive
- Assessment of Damages
- Outcome: The court determined that an order for assessment of damages was not appropriate, as the damages were specific and calculable.
- Category: Procedural
8. Remedies Sought
- Damages for loss of hire
- Expenses incurred due to engine breakdown
- Cost of the original engine
- Cost of replacing the engine
- Continuing loss of use
9. Cause of Actions
- Negligence
10. Practice Areas
- Commercial Litigation
11. Industries
- Shipping
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| RSP Architects Planners & Engineers v Ocean Front Pte Ltd | Court of Appeal | Yes | [1996] 1 SLR 113 | Singapore | Cited for the applicable principles in determining whether a tortious duty can be imposed on one party to avoid negligently causing another party to sustain pure economic loss. |
| RSP Architects Planners & Engineers (Raglan Squire & Partners FE) v Management Corporation Strata Title Plan No 1075 | Court of Appeal | Yes | [1999] 2 SLR 449 | Singapore | Cited for reaffirming and explaining the principles set down in RSP Architects Planners & Engineers v Ocean Front Pte Ltd regarding the imposition of a tortious duty to avoid negligently causing pure economic loss. |
| Anns v Merton London Borough Council | English House of Lords | Yes | [1978] AC 728 | England | Cited as one of the English cases from which the two-stage test for determining the existence of a duty of care was derived. |
| Junior Books Ltd v Veitchi Co Ltd | English House of Lords | Yes | [1983] 1 AC 520 | England | Cited as a case where the English House of Lords held a sub-contractor liable in tort for pure economic loss, despite the absence of a direct contract with the plaintiff. The facts of this case are similar to the present case. |
| Murphy v Brentwood District Council | English House of Lords | Yes | [1990] 2 All ER 908 | England | Cited as a House of Lords decision where the anti-duty view won a resounding victory, and presently English law does not recognise a duty of care to prevent pure economic loss. |
| Bryan v Maloney | Australian High Court | Yes | [1995] 128 ALR 163 | Australia | Cited as a case dealing with a claim against the builder of a house by a subsequent owner, where the Australian High Court found sufficient proximity in the relationship to give rise to a duty of care. |
| Pacific Associates Inc v Baxter | N/A | Yes | [1989] 2 All ER 159 | N/A | Cited by the defendants as an authority to argue against imposing a tortious duty, but distinguished by the court on its facts. |
| Liesbosch Dredger v Edison SS | N/A | Yes | [1933] AC 449 | N/A | Cited by the defendants to argue that the plaintiff's financial difficulties should not be considered in assessing damages, as the impecuniosity did not arise from the tortious act. |
| Singapore Bus Service (1978) Ltd v Gwee Sok Ai t/a Chuan Bok Wong Trading | N/A | Yes | [1996] 3 SLR 662 | N/A | Cited by Bumi to argue that the defendants had to take Bumi as they found them and be liable accordingly for the delay in repairing the vessel. The court distinguished this case. |
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
- Pure economic loss
- Duty of care
- Negligent design
- Engine breakdown
- Off-hire
- Proximity
- Reliance
- Assumption of responsibility
- HFO
- MDO
15.2 Keywords
- Negligence
- Economic Loss
- Shipping
- Engine Design
- Tort
- Contract
- Damages
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Pure Economic Loss | 90 |
| Negligence | 80 |
| Negligent design and manufacture | 70 |
| Damages | 70 |
| Contract Law | 60 |
| Breach of Contract | 60 |
| Assessment of Damages | 60 |
| Commercial Disputes | 50 |
| Evidence | 40 |
| Shipping Law | 40 |
| Commercial Law | 30 |
| Formation of contract | 30 |
16. Subjects
- Tort Law
- Commercial Law
- Shipping Law
- Contract Law