Subiaco v Baker Hughes: Interpretation of 'Free In Stowed' Term in Shipping Contract
In Subiaco (S) Pte Ltd v Baker Hughes Singapore Pte, the Singapore High Court addressed a dispute over liability for damage to a vessel during cargo loading. Subiaco, the vessel owner, sued Baker Hughes, the charterer, for damages, alleging negligence by stevedores during loading operations. The central issue was the interpretation of the 'free in stowed' term in the booking note. The court dismissed Subiaco's claim, holding that the term did not transfer the risk of loading operations to Baker Hughes.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Subiaco’s action fails and is dismissed with costs.
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Singapore High Court case concerning the interpretation of 'free in stowed' term in a shipping contract and liability for damage during loading.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Subiaco (S) Pte Ltd | Plaintiff | Corporation | Claim Dismissed | Lost | |
| Baker Hughes Singapore Pte (trading as Baker Hughes Inteq) | Defendant | Corporation | Judgment for Defendant | Won |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Belinda Ang Saw Ean | Judge | Yes |
4. Counsels
4. Facts
- Subiaco owned the vessel Achilles.
- Baker Hughes booked space on the Achilles to carry barite.
- The booking note included the term 'free in stowed l/s/d/liner out hook'.
- Damage occurred to the vessel during loading operations at Haiphong.
- Subiaco claimed Baker Hughes was liable for the stevedore's negligence.
- Baker Hughes argued the 'free in stowed' term did not transfer loading risk.
- VCM Mineral & Chemical Co Ltd was the FOB seller of the cargo.
5. Formal Citations
- Subiaco (S) Pte Ltd v Baker Hughes Singapore Pte (trading as Baker Hughes Inteq), Suit No 42 of 2009, [2010] SGHC 265
6. Timeline
| Date | Event |
|---|---|
| Achilles vessel built. | |
| First shipment of bagged barites from Haiphong to Dampier and Darwin. | |
| BHDF Aberdeen purchased consignment of barite from VCM Mineral & Chemical Co Ltd. | |
| Booking Note signed. | |
| Damage sustained by the vessel and crane during loading operations at Haiphong. | |
| Liner bills of lading issued. | |
| Action filed by Subiaco. | |
| Consent order for bifurcation of liability and quantum. | |
| Transcripts of Evidence. | |
| Judgment reserved. |
7. Legal Issues
- Interpretation of 'Free In Stowed' Term
- Outcome: The court held that the 'free in stowed' term in the booking note did not transfer the risk of loading operations from the shipowner to the charterer.
- Category: Substantive
- Sub-Issues:
- Allocation of risk for loading operations
- Responsibility for stevedore negligence
- Breach of Contract
- Outcome: The court found no breach of contract by the defendant, as the responsibility for loading operations remained with the plaintiff.
- Category: Substantive
- Sub-Issues:
- Failure to ensure competent stevedores
- Negligent damage to vessel
8. Remedies Sought
- Monetary Damages
9. Cause of Actions
- Breach of Contract
- Negligence
10. Practice Areas
- Commercial Litigation
- Shipping Litigation
11. Industries
- Shipping
- Oil and Gas
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| G H Renton & Co Ltd v Palmyra Trading Corporation of Panama | House of Lords | Yes | [1957] AC 149 | England and Wales | Cited for the principle that parties can expressly agree to vary their responsibilities under the Hague or Hague-Visby Rules. |
| Pyrene Company Ltd v Scindia Navigation Company Ltd | Queen's Bench | Yes | [1954] 2 QB 402 | England and Wales | Cited for the principle that the Hague Rules define the terms on which service is to be performed, and parties can decide the extent to which loading and discharging are brought within the carrier’s obligations. |
| Jindal Iron and Steel Co Ltd and Another v Islamic Solidarity Co Jordan Inc | English Court of Appeal | Yes | [2003] 2 Lloyd’s Rep 87 | England and Wales | Cited to confirm that a provision that cargo will be carried at the rate of freight f.i.o.s.t or any variant of the f.i.o.s.t clause will not of itself transfer from the shipowner to the charterer the responsibility for proper performance of the loading and stowage operations. |
| The Sea Joy | Not Available | Yes | [1998] (1) SA 487 | South Africa | Cited in the judgment of The Jordan II (HC) for the principle that a freight clause, while apt to transfer liability for the expense of cargo operations, may not clearly transfer responsibility for the proper performance of cargo operations. |
| Canadian Transport Company Limited v Court Line Limited | House of Lords | Yes | [1940] 1 AC 934 | England and Wales | Cited regarding the interpretation of charterparty clauses related to loading, stowing, and trimming cargo and the transfer of responsibility for cargo operations. |
| The Flintermar | Not Available | Yes | [2005] 1 Lloyd’s Rep 409 | England and Wales | Cited regarding the principle that stevedores appointed and paid for by the charterer’s clients would, as between the shipowner and charterer, be regarded as the charterer’s stevedores. |
| The Apostolis (No 2) | Not Available | Yes | [2000] 2 Lloyd’s Report 337 | England and Wales | Cited regarding facts whereby there were clear words which transferred the obligation to carry out the cargo operations to the charterers or shippers. |
| Brys & Glysen v Drysdale | Not Available | Yes | [1920] 4 Lloyd’s Rep 24 | England and Wales | Cited regarding facts whereby there were clear words which transferred the obligation to carry out the cargo operations to the charterers or shippers. |
| Olbert Metal Sales Ltd v Cerescropt Inc (T.D.) | Federal Court of Canada, Vancouver | Yes | [1997] 1 FC 899 | Canada | Cited for the principle that the term FISLO (i.e., Free in stow, liner out) indicated the shipper’s obligation to load and stow with the cost of the discharge included in the freight. |
| Lee Chee Wei v Tan Hor Peow Victor | Not Available | Yes | [2007] 3 SLR(R) 537 | Singapore | Cited regarding the use of background facts, prior conduct and/or previous course of dealings as an aid to construction. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Article III r 2 of the Hague or Hague-Visby Rules | Not Available |
15. Key Terms and Keywords
15.1 Key Terms
- Free in stowed
- Liner out hook
- Booking note
- Stevedore
- Loading operations
- Charterparty
- Hague-Visby Rules
- FOB
- Demurrage
- Laytime
15.2 Keywords
- Shipping contract
- Free in stowed
- Liability
- Negligence
- Loading operations
- Singapore High Court
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Shipping Law | 75 |
| Contract Law | 70 |
| Breach of Contract | 65 |
| Interpretation of contractual terms | 60 |
| Remedies | 30 |
16. Subjects
- Shipping
- Contract
- Commercial Law