Pacific Inter-Link Sdn Bhd v Asia Star: Breach of Charterparty & Damages for Failure to Provide Suitable Vessel
In 2004, Pacific Inter-Link Sdn Bhd sued the owner of Asia Star in the High Court of Singapore for breach of a voyage charterparty. The plaintiff claimed damages for the defendant's failure to provide a vessel with suitable tanks for refined palm oil. The trial judge found the defendant liable, and the appeal was dismissed. The Assistant Registrar awarded damages based on the freight differential between the contracted vessel and a substitute. Both parties appealed. Judith Prakash J allowed the plaintiff's appeal and dismissed the defendant's appeal, setting aside the Assistant Registrar's order and directing damages to be calculated according to the ordinary measure in a non-shipment case.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Plaintiff's appeal allowed; Defendant's appeal dismissed. Damages to be calculated based on the ordinary measure of damages in a non-shipment case.
1.3 Case Type
Admiralty
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Pacific Inter-Link sued Asia Star for breach of charterparty due to unsuitable vessel tanks. The court assessed damages after a failed appeal.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Pacific Inter-Link Sdn Bhd | Plaintiff, Appellant | Corporation | Appeal allowed | Won | |
| Asia Star | Defendant, Respondent | Corporation | Appeal dismissed | Lost |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Judith Prakash | Judge | Yes |
4. Counsels
4. Facts
- Pacific Inter-Link chartered Asia Star to carry refined palm oil to the Middle East/Turkey/Black Sea.
- Asia Star's tanks were found unsuitable on January 19, 2004, before any cargo was loaded.
- Pacific Inter-Link notified Asia Star of the breach and sought a substitute vessel.
- Asia Star canceled the shipment and stated it had no substitute vessel available.
- Pacific Inter-Link sought damages for losses, including canceled sales contracts and penalties.
- Pacific Inter-Link considered chartering the Puma as a substitute vessel but did not accept the owner's initial offer.
- Indomas and Agrima cancelled contracts with Pacific Inter-Link due to the delay.
5. Formal Citations
- The "Asia Star", Adm in Rem 30/2004, RA 230/2008, 234/2008, [2009] SGHC 91
6. Timeline
| Date | Event |
|---|---|
| Pacific Inter-Link entered into a voyage charterparty with the owner of Asia Star. | |
| Pacific Inter-Link sent Indomas a shipping instruction to load cargo on board the Asia Star. | |
| Pacific Inter-Link sent shipping instructions to Pamin and Pacoil to load cargo on the Asia Star. | |
| Indomas informed Pacific Inter-Link that Asia Star had not arrived for loading. | |
| Pacific Inter-Link sent out a cargo nomination setting out the breakdown of the intended cargo. | |
| Asia Star berthed at Belawan. | |
| Surveyors reported that Asia Star's tanks were not fit to load the cargo. | |
| Pacific Inter-Link notified the defendant of the breach of contract. | |
| Defendant notified Pacific Inter-Link of efforts to improve the tanks' condition. | |
| Defendant formally notified Pacific Inter-Link that it was withdrawing the vessel. | |
| Indomas cancelled all its sale contracts with Pacific Inter-Link. | |
| Agrima informed Pacific Inter-Link that it intended to cancel the bulk of the purchase contracts. | |
| Assistant Registrar delivered judgment. | |
| Judgment reserved. |
7. Legal Issues
- Breach of Charterparty
- Outcome: The court found that the defendant breached the charterparty by failing to provide a seaworthy and cargoworthy vessel.
- Category: Substantive
- Sub-Issues:
- Failure to provide seaworthy vessel
- Failure to provide cargoworthy vessel
- Mitigation of Damages
- Outcome: The court found that the plaintiff acted reasonably in its attempt to mitigate the loss it was facing in the light of the defendant’s breach of contract.
- Category: Substantive
- Sub-Issues:
- Reasonable steps to mitigate loss
- Duty to mitigate
- Measure of Damages
- Outcome: The court held that the plaintiff is not entitled to recover damages on the basis of its loss of profits in respect of the cancelled Indomas contracts or on the basis of the damages that it had to pay Agrima for failing to deliver cargo by mid February 2004.
- Category: Substantive
- Sub-Issues:
- Remoteness of damages
- Loss of profits
- Market value of goods
8. Remedies Sought
- Monetary Damages
9. Cause of Actions
- Breach of Charterparty
10. Practice Areas
- Admiralty Litigation
- Commercial Litigation
- Shipping Disputes
- Charterparty Disputes
11. Industries
- Shipping
- Commodities Trading
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| The “Kriti Rex” | N/A | Yes | [1996] Q.B. 171 | N/A | Cited for the principle that the charterers are entitled to recover the loss which flows naturally in the ordinary course of events from the breach of contract. |
| Nissho v Livanos | N/A | Yes | (1941) 69 Ll.L.Rep 125 | N/A | Cited in support of the principle that the charterers are entitled to recover the loss which flows naturally in the ordinary course of events from the breach of contract. |
| A/S D/S Heimdal v Questier Co. Ltd. | N/A | Yes | (1949) 82 Ll.L.Rep 452 | N/A | Cited in support of the principle that the charterers are entitled to recover the loss which flows naturally in the ordinary course of events from the breach of contract. |
| Rodocanachi Sons and Co v Milburn Brothers | N/A | Yes | (1886) XVIII QBD 67 | N/A | Cited by the defendant to argue that because there was an available market in Turkey for the cargoes in question, the plaintiff was not entitled to claim its loss of profit. |
| The Arpad | N/A | Yes | [1934] P 189 | N/A | Cited by the defendant to argue that because there was an available market in Turkey for the cargoes in question, the plaintiff was not entitled to claim its loss of profit. |
| The Pegase | N/A | Yes | [1981] 1 LLR 175 | N/A | Cited by the defendant to argue that because there was an available market in Turkey for the cargoes in question, the plaintiff was not entitled to claim its loss of profit. |
| Heskell v Continental Express Limited | N/A | Yes | [1950] 1 All ER 1033 | N/A | Cited by the defendant to argue that the plaintiff cannot claim its loss of profit in respect of the cancelled Indomas cargoes or to recover the damages it asserted it had had to pay Agrima. |
| Stroms v Hutchinson | N/A | Yes | [1905] AC 524 | N/A | Cited in Heskell v Continental Express Limited regarding the degree of knowledge that should be imputed to the carrier as an ordinary business man. |
| Victoria Laundry (Windsor), Ltd. v Newman Industries, Ltd. | N/A | Yes | [1949] 1 All ER 1001 | N/A | Cited in Heskell v Continental Express Limited regarding why the law is more ready to allow loss of profit as an item of damage against a vendor than against a carrier. |
| Dunkirk Colliery Co v Lever | N/A | Yes | (1878) 9 Ch.D. 20 | N/A | Cited for the criterion for reasonableness in mitigation, that the claimant is not “under any obligation to do anything other than in the ordinary course of business”. |
| Jewelowski v Propp | N/A | Yes | [1944] K.B. 510 | N/A | Cited for the principle that a claimant “cannot be called on to spend money to enable him to minimise the damages”; this would be “going far beyond the rule”. |
| Costello v Calgary (City) | N/A | Yes | [1995] A.R. Lexis 5614 | Canada | Cited for the principle that the plaintiffs need not incur unreasonable expenses to mitigate a loss caused by the Defendant. |
| C. Sharpe & Co Limited v Nosawa & Co. | N/A | Yes | [1917] 2 KB 814 | N/A | Cited for the principle that the market price of the cargo at destination at the time it ought to arrive there conceptually refers to the prevailing price in that market at time for delivery at that time it ought to arrive, and not for delivery at a later point of time. |
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
- Charterparty
- Voyage charter
- Seaworthiness
- Cargoworthiness
- Mitigation
- Damages
- Laycan
- Freight rate
- Dead freight
- Palm oil
- Shipping instructions
- Cargo nomination
15.2 Keywords
- Charterparty
- Breach of contract
- Damages
- Shipping
- Palm oil
- Mitigation
- Asia Star
- Pacific Inter-Link
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Shipping | 80 |
| Admiralty and Maritime Law | 75 |
| Shipping Law | 70 |
| Damages | 70 |
| Charterparty Disputes | 65 |
| Breach of Contract | 60 |
| Voyage Charterparty | 60 |
| Mitigation of Loss | 55 |
| Contract Law | 50 |
16. Subjects
- Shipping
- Admiralty
- Contract
- Charterparty
- Damages