Toptip v Mercuria: Voyage Charterparties & Contract Formation Dispute

In Toptip Holding Pte Ltd v Mercuria Energy Trading Pte Ltd, the Singapore Court of Appeal heard cross-appeals regarding the formation of a charterparty agreement. Toptip sought damages for breach of contract after Mercuria denied the existence of a charter agreement for the vessel m.v. Pan Gold. The court allowed Toptip's appeal, finding that a valid charterparty was formed and Mercuria repudiated the contract. The court awarded damages to Toptip.

1. Case Overview

1.1 Court

Court of Appeal of the Republic of Singapore

1.2 Outcome

Appeal Allowed

1.3 Case Type

Admiralty

1.4 Judgment Type

Judgment

1.5 Jurisdiction

Singapore

1.6 Description

Singapore Court of Appeal case involving Toptip and Mercuria, addressing contract formation in voyage charterparties and the impact of 'subject to review' clauses.

1.7 Decision Date

22 November 2017

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
TOPTIP HOLDING PTE LTD	Appellant, Respondent	Corporation	Appeal Allowed	Won	Tan Boon Yong Thomas of Haridass Ho & Partners Amirul Hairi of Haridass Ho & Partners
MERCURIA ENERGY TRADING PTE LTD	Respondent, Appellant	Corporation	Appeal Dismissed	Lost	Yip Li Ming of Rajah & Tann Singapore LLP Tay Twan Lip Philip of Rajah & Tann Singapore LLP

3. Judges

Judge Name	Title	Delivered Judgment
Sundaresh Menon	Chief Justice	No
Andrew Phang Boon Leong	Justice of the Court of Appeal	No
Judith Prakash	Justice of the Court of Appeal	Yes

4. Counsels

Counsel Name	Organization
Tan Boon Yong Thomas	Haridass Ho & Partners
Amirul Hairi	Haridass Ho & Partners
Yip Li Ming	Rajah & Tann Singapore LLP
Tay Twan Lip Philip	Rajah & Tann Singapore LLP

4. Facts

Toptip entered into a contract with Samarco to buy iron ore pellets for shipment to China.
Toptip contacted Mr. Shu to find a vessel for the shipment.
Mercuria offered a freight rate of US$18.40 per metric tonne, subject to review of charterers' pro forma.
Toptip accepted Mercuria's bid.
Mercuria nominated the Vessel but Samarco rejected it due to concerns over the owner's financial health.
Mercuria rejected the Draft CP, stating the subject failed on CP review.
Toptip secured a substitute charter at a higher freight rate of US$25.25 per metric tonne.

5. Formal Citations

Toptip Holding Pte Ltd v Mercuria Energy Trading Pte Ltd, Civil Appeal No 131 of 2016, [2017] SGCA 64
Toptip Holding Pte Ltd v Mercuria Energy Trading Pte Ltd, Civil Appeal No 132 of 2016, [2017] SGCA 64
Toptip Holding Pte Ltd v Mercuria Energy Trading Pte Ltd, , [2016] SGHC 173

6. Timeline

Date	Event
2014-10-10	Toptip entered into a contract with Samarco to buy iron ore pellets.
2014-10-13	Toptip sent an Enquiry to Mr. Shu to find a vessel.
2014-10-14	Mercuria sent the Bid to Mr. Shu.
2014-10-14	Toptip accepted Mercuria's bid.
2014-10-16	Mr. Shu asked Mr. Lee for the working charterparty in word format.
2014-10-16	Mr. Lee sent the Australian CP to Mr. Shu.
2014-10-23	Mercuria nominated the Vessel.
2014-10-24	Samarco rejected the Vessel.
2014-10-24	Mr. Shu sent the Draft CP to Toptip and Mercuria for comments.
2014-10-29	Mercuria rejected the Draft CP.
2014-11-05	Toptip terminated the charterparty.
2014-11-08	Toptip chartered the Vessel from RGL Shipping Pte Ltd.
2016-09-01	The Judge's decision was given.
2017-07-26	Judgment reserved.
2017-11-23	Judgment delivered.

7. Legal Issues

Breach of Contract
- Outcome: The court found that Mercuria repudiated the charterparty contract.
- Category: Substantive
- Sub-Issues:
  - Repudiation of contract
  - Failure to perform
  - Interpretation of contract terms
Contract Formation
- Outcome: The court held that a valid charterparty contract was formed between Toptip and Mercuria.
- Category: Substantive
- Sub-Issues:
  - Offer and acceptance
  - Intention to create legal relations
  - Effect of 'subject to review' clauses
Uncertainty of Contract Terms
- Outcome: The court held that the contract was not void for uncertainty.
- Category: Substantive
- Sub-Issues:
  - Vagueness of 'logical amendment'
  - Lack of defined timeframe

8. Remedies Sought

Monetary Damages

9. Cause of Actions

Breach of Contract

10. Practice Areas

Commercial Litigation
Shipping Law
Charterparties
Contract Disputes

11. Industries

Shipping
Commodities Trading

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
Star Steamship Society v Beogradska Plovidba (The “Junior K”)	Lloyd’s Rep	Yes	[1988] 2 Lloyd’s Rep 583	England and Wales	Cited as an example of cases where negotiations include clauses like 'subject to details', and a binding contract will not be formed until there is full agreement on the details.
Hyundai Merchant Marine Co Ltd v Americas Bulk Transport Ltd (The “Pacific Champ”)	Lloyd’s Rep	Yes	[2013] 2 Lloyd’s Rep 320	England and Wales	Cited to show that a binding contract can be formed notwithstanding the presence of a 'subject to' clause, depending on the context and whether the parties intended to defer legal relations until full details were agreed.
Aircharter World Pte Ltd v Kontena Nasional Bhd	Court of Appeal of Singapore	Yes	[1999] 2 SLR(R) 440	Singapore	Cited for the definition of an offer as an expression of willingness to contract made with the intention that it shall become binding on the person making it as soon as it is accepted by the person to whom it is addressed.
Midlink Development Pte Ltd v The Stansfield Group Pte Ltd	High Court of Singapore	Yes	[2004] 4 SLR(R) 258	Singapore	Cited to support the principle that it is always a question of fact whether silent inactivity after an offer is made is tantamount to an acceptance.
MK (Project Management) Ltd v Baker Marine Energy Pte Ltd	High Court of Singapore	Yes	[1994] 3 SLR(R) 823	Singapore	Cited for the principle that while legal conclusions drawn from facts need not be pleaded, material facts must still be pleaded.
Tat Seng Machine Movers Pte Ltd v Orix Leasing Singapore Ltd	High Court of Singapore	Yes	[2009] 4 SLR(R) 1101	Singapore	Cited for the principle that facts pertaining to a defence should be pleaded so as to properly demarcate the parameters of the case and to prevent the other party from being caught by surprise at the trial.
CPC Consolidated Pool Carriers GmbH v CTM CIA Transmediterranea SA (The “CPC Gallia”)	Commercial Court	Yes	[1994] 1 Lloyd’s Rep 68	England and Wales	Cited to support the definition of 'logical amendments' as amendments that were in any event required to give effect to the main terms thus far negotiated and agreed.

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

Voyage charterparty
Charterparty
Subject to review clause
Laycan
Pro forma charterparty
Freight rate
Demurrage
Disponent owner
Repudiatory breach
Logical amendment

15.2 Keywords

charterparty
contract formation
voyage
shipping
breach of contract
subject to review
admiralty

17. Areas of Law

Area Name	Relevance Score
Voyage charterparties	80
Shipping Law	75
Admiralty and Maritime Law	75
Carriage of goods by sea	75
Contract Law	70
Formation of contract	65
Breach of Contract	60

16. Subjects

Contract Law
Shipping Law
Charterparty Agreements
Admiralty Law