Kreuz Shipbuilding v The "Rainbow Star": Ship Repair, Negligence & Damages Assessment

Kreuz Shipbuilding & Engineering Pte Ltd ("the shipyard") sued the owner of the vessel Rainbow Star ("the owner") in the High Court of Singapore, Judith Prakash J, on 17 February 2011, for unpaid repair costs. The owner counterclaimed for damages due to the vessel's constructive total loss caused by the shipyard's alleged negligence. The appeal concerned the Assistant Registrar's assessment of damages, with the shipyard challenging awards related to invoice amounts, agency fees, loss of profit, and interest. The court allowed the appeal in part, adjusting the amounts awarded for steel work and mark-ups on non-standard items, and modifying the interest accrual date.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Appeal allowed in part.

1.3 Case Type

Admiralty

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Appeal regarding damages assessment after an explosion on the vessel Rainbow Star. The court addressed claims for repair costs and loss of profit.

1.7 Decision Date

16 February 2011

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
Kreuz Shipbuilding & Engineering Pte Ltd	Plaintiff, Appellant	Corporation	Appeal allowed in part	Partial	Thomas Tan of Haridass Ho & Partners
The "Rainbow Star"	Defendant, Respondent	Other	Counterclaim Allowed	Won	K Muralitherapany of Joseph Tan Jude Benny LLP

3. Judges

Judge Name	Title	Delivered Judgment
Judith Prakash	Judge	Yes

4. Counsels

Counsel Name	Organization
Thomas Tan	Haridass Ho & Partners
K Muralitherapany	Joseph Tan Jude Benny LLP

4. Facts

The owner sent the vessel to the shipyard for repair work in March 2008.
An explosion and fire occurred on the vessel on 8 June 2008.
The shipyard claimed costs for repair works carried out before the fire.
The owner counterclaimed for loss and damage caused by the shipyard's negligence.
The vessel was considered a constructive total loss.
The owner had a confirmed charterparty for one year at the time of the fire.
The charterers terminated the charter due to the vessel's damage.

5. Formal Citations

The “Rainbow Star”, Admiralty in Rem No 151 of 2008, [2011] SGHC 35

6. Timeline

Date	Event
2008-03-01	Vessel sent to shipyard for repair work.
2008-06-08	Explosion and fire occurred on the vessel.
2008-09-01	Shipyard commenced action claiming repair costs.
2009-10-01	Interlocutory judgment entered for damages to be assessed.
2010-09-08	Shipyard filed notice of appeal.
2011-02-17	Judgment issued.

7. Legal Issues

Reasonableness of Repair Costs
- Outcome: The court adjusted the amounts awarded for steel work and mark-ups on non-standard items.
- Category: Substantive
- Sub-Issues:
  - Yard tariffs
  - Lump sum charges
  - Mark-up on non-standard items
  - Sub-contractor pricing
- Related Cases:
  - [2007] SGHC 46
Loss of Profit Calculation
- Outcome: The court upheld the use of charter hire for the confirmed period but reduced it by 5% for contingencies.
- Category: Substantive
- Sub-Issues:
  - Utilisation factor
  - Operational costs
  - Contingencies
- Related Cases:
  - [1899] P 165
  - [1906] P 273
  - [1933] AC 449
  - (1913) 29 TLR 423
  - [2001] 1 Lloyd’s Reps 739
  - [1947] P 80
  - [1961] 1 WLR 351
Interest Accrual Date
- Outcome: The court varied the award so that interest will accrue from the date the counterclaim was filed.
- Category: Substantive
- Related Cases:
  - [1950] P 204

8. Remedies Sought

Monetary Damages

9. Cause of Actions

Breach of Contract
Negligence

10. Practice Areas

Admiralty
Commercial Litigation
Shipbuilding Disputes

11. Industries

Construction
Maritime

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
Abe Isaac (Pte) Ltd v Marieta Montalba Pacudan and Another	High Court	Yes	[2007] SGHC 46	Singapore	Cited regarding the burden of proving the quantum of a claim.
Sim Ah Song and Anor v Rex	Unknown	Yes	[1951] MLJ 150	Unknown	Cited regarding the evidential value of an expert's opinion.
R v Abadom (Steven)	Unknown	Yes	[1983] 1 WLR 126	England and Wales	Cited regarding the evidential value of an expert's opinion.
The Kate	Unknown	Yes	[1899] P 165	England and Wales	Cited for the principle that damages should account for the profitable character of a charterparty.
The Racine	Court of Appeal	Yes	[1906] P 273	England and Wales	Cited for the principle of awarding loss of profits on successive charters and accounting for contingencies.
Owners of Dredger Liesbosch v Owners of Steamship Edison	House of Lords	Yes	[1933] AC 449	United Kingdom	Cited for the principle of restituto in integrum and the measure of damages for loss of a profit-earning chattel.
The Northumbria	Unknown	Yes	(1869) LR 3 A & E 6	England and Wales	Cited for the measure of damages for total loss of a ship with cargo.
The Empress of Britain	Unknown	Yes	(1913) 29 TLR 423	England and Wales	Cited for the principle that the whole charterparty should be considered when assessing damages.
The “Asia Star”	Unknown	Yes	[2010] 2 SLR 1154	Singapore	Cited regarding the standard of reasonableness in mitigation.
Robertson Quay Investment Pte Ltd v Steen Consultants Pte Ltd	Unknown	Yes	[2008] 2 SLR 623	Singapore	Cited regarding the question of fact in mitigation.
Jia Min Building Construction Pte Ltd v Ann Lee Pte Ltd	Unknown	Yes	[2004] 3 SLR 288	Singapore	Cited regarding the burden of proof for mitigation.
Geest plc v Lansiquot	Unknown	Yes	[2002] 1 WLR 3111	England and Wales	Cited regarding the burden of proof for mitigation.
Voaden v Champion	Unknown	Yes	[2001] 1 Lloyd’s Reps 739	England and Wales	Cited regarding vessels with no engagements.
The Llanover	Unknown	Yes	[1947] P 80	England and Wales	Cited regarding the basis of valuation in determining whether or not to award the loss of profits for certain engagements.
Four of Hearts (Owners) v Fortunity (Owners)	Unknown	Yes	[1961] 1 WLR 351	England and Wales	Cited regarding the loss of profits that a motorcruiser would have made for the whole of the season.
Lord Strathcona Steamship Co. v. Dominion Coal Co	Privy Council	Yes	[1926] 1 AC 108	Canada	Cited regarding the difficulty in valuing a vessel for a future charter.
The Berwickshire	Unknown	Yes	[1950] P 204	England and Wales	Cited regarding the principle underlying the award of interest in Admiralty.

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

Ship repair
Constructive total loss
Charterparty
Yard tariffs
Lump sum
Mark-up
Utilisation factor
Contingencies
Restituto in integrum

15.2 Keywords

ship repair
damages
negligence
admiralty
charterparty
assessment
explosion
fire

17. Areas of Law

Area Name	Relevance Score
Shipping Law	90
Admiralty and Maritime Law	90
Assessment of Damages	80
Damages	70
Ship Repair Services	60
Contract Law	50
Breach of Contract	50
Contractual terms	30
Appeal	30
Evidence	30
Construction	30
Contracts	30

16. Subjects

Admiralty
Shipping
Damages
Negligence