Your World of Legal Intelligence
 Hong Kong | 1-800-335-6202

Calm Ocean Shipping S.a. v Win Goal Trading Ltd And Others

Judgment Cited authorities 2 Cited in Precedent Map Related
Vincent
Judgment Date21 May 2020
Neutral Citation[2020] HKCFI 801
Judgement NumberHCAJ118/2015
Subject MatterAdmiralty Action
CourtCourt of First Instance (Hong Kong)
HCAJ118C/2015 CALM OCEAN SHIPPING S.A. v. WIN GOAL TRADING LTD AND OTHERS

HCAJ 118/2015

[2020] HKCFI 801

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ADMIRALTY ACTION NO. 118 OF 2015

___________________________

BETWEEN
CALM OCEAN SHIPPING S.A. Plaintiff
and
WIN GOAL TRADING LIMITED 榮成貿易有限公司 1st Defendant
XIWANG INTERNATIONAL TRADE (QINGDAO) CO., LTD. 2nd Defendant
XIWANG SPECIAL STEEL COMPANY LIMITED 西王特鋼有限公司 3rd Defendant
SHANDONG XIWANG SPECIAL STEEL CO., LTD 4th Defendant
DEUTSCHE BANK (CHINA) CO LTD 5th Defendant
BANQUE DE L’AGRICULTURE ET DU DÉVELOPPEMENT RURAL 6th Defendant
ACIERIES DE L’OUEST SÁRL 7th Defendant
and
MED-ASIA SHIPPING BV Intervener

___________________________

Before: Hon Anthony Chan J in Chambers

Date of Hearing: 29 April 2020

Date of Reasons for Decision and Decision on costs: 21 May 2020

____________________________________

R E A S O N S F O R D E C I S I O N

A N D

D E C I S I O N O N C O S T S

____________________________________

1. This was the Plaintiff’s Summons filed on 24 October 2018 (“Summons”) by which it sought an order that :

(1) The 1st Defendant be appointed to represent all members of a Class of persons[1] wherever situated or incorporated and to defend this action for and on behalf of the Class (“Representative Action Application”);

(2) Alternatively, the Plaintiff be at liberty to join members of the Class as defendants under the style “Persons Unknown comprising each and all persons wherever situated or incorporated” (“Alternative Relief”); and

(3) Service out of jurisdiction and substituted service on members of the Class be allowed.

2. The Representative Action Application was resisted by the 1st to 4th Defendants (“D1-4”). They maintained a neutral stance in respect of the Alternative Relief. At the end of the hearing, I granted the Alternative Relief with modifications of the terms of the draft order. These were my reasons for doing so. In addition, this Decision deals with the costs of the Summons.

Background

3. There was no dispute over the factual background. The Plaintiff was the owner of the vessel “Sophia Z” (“Vessel”). It entered into a time charterparty dated 9 July 2015 with Med-Asia Shipping BV (the Intervener in this Action) as time charterer.

4. By a sale contract dated 4 May 2015 (“Sale Contract”), D1 as seller agreed to sell and D7 as buyer agreed to buy a consignment of 27,700 tons of carbon steel billets for US$11,190,800.

5. Pursuant to the Sale Contract, an irrevocable letter of credit (“LC”) dated 9 June 2015 was opened in favour of D1 for the amount of US$11,190,800, with D6 as issuing bank, D5 as nominated bank, and HSBC as advising bank.

6. Pursuant to ICC Uniform Customs and Practice for Documentary Credits 600 (“UCP 600”) which applied to the LC, if the nominated bank (D5) and issuing bank (D6) chose not to honour or negotiate the LC on grounds of non-compliance of the presented documents, they should give notice of refusal by the close of the fifth banking day following the day of presentation. Failure to do so would precluded them from claiming that the documents did not constitute a complying presentation.

7. On or about 24 July 2015, pursuant to the Sale Contract, the Cargo was shipped on board the Vessel in China, for carriage by the Plaintiff to D7 in Algeria. A bill of lading (“B/L”) was issued for the Cargo, which stated that: (i) the Plaintiff was the carrier; (ii) D1 was the shipper; (iii) consignee was “To the order of [D6]”; and (iv) D7 was the Notify Party.

8. On 10 August 2015, HSBC collected from D1 the documents required under the LC for payment, including the B/L. On 11 August 2015, the Documents were delivered to D5. On 13 August 2015, D5 forwarded the Documents to D6.

9. On 11 September 2015, the Cargo arrived at Algeria. Shortly thereafter, the Plaintiff received a notification of rejection of the Cargo. D7 refused to take delivery of the Cargo and purported to reject it on the basis that it was excessively radioactive.

10. Pursuant to UCP 600, the deadline for D6 as issuing bank or D5 as confirming bank to reject the Documents was 18 August 2015. D6 purported to reject the Documents on 14 September 2015 on grounds of non-conformity.

11. On or about 23 September 2015, the Vessel was forced to leave the berth in Algeria. Due to draft limits, the Vessel could not continue its journey to its next destination in Italy until the Cargo was discharged. Therefore, the Plaintiff sailed the Vessel to an alternative safe anchorage at Malta in accordance with new orders received from the Intervener, and anchored the Vessel there awaiting fresh instructions.

12. On 22 October 2015, the Plaintiff issued this Action and applied for an injunction requiring (inter alios) D1 to (i) surrender the B/L; and (ii) provide fresh instructions in respect of the discharge and sale of the Cargo. The Injunction Application was dismissed on 2 November 2015 on the grounds (inter alia) that: (i) D1 had a good arguable defence that it did not have the B/L in its possession and hence did not have ownership over the Cargo; and (ii) the court could not be satisfied to a high degree of assurance that the Plaintiff would be able to establish its rights against D1 at trial.

13. On or about 10 December 2015, the Plaintiff began unloading the Cargo in Italy.

14. On 25 March 2016, the Plaintiff sold the Cargo for US$200/MT in Italy. The total net amount received by the Plaintiff was US$5,677,815.92 (“Sale Proceeds”).

15. At the time of the hearing, the net balance of unencumbered funds out of the Sale Proceeds which was deposited in the Plaintiff’s bank account in Germany was US$2,471,917.17.

16. On 10 August 2016, the Plaintiff filed an application for interrogatories (“Interrogatories Application”), seeking information on D1-D4’s insurance in respect of the Cargo. The Interrogatories Application was dismissed on 2 December 2016.

The Plaintiff’s case

17. The Plaintiff said that it was innocent of any wrongdoing in the carriage of the Cargo but had incurred much cost as a result of events which were beyond its control. In this Action, the Plaintiff sought a number of protective declaratory relief, in effect the court’s approval as to the course of actions it undertook in Europe in light of the abandonment of the Cargo by the cargo interests, including D1.

18. It was important to note that the Plaintiff’s primary claim was against D1 for breach of the contract embodied in the B/L in failing to take delivery of the Cargo (when the intended receiver D7 had failed to do so). By way of self-help, the Plaintiff had compensated itself for its losses from the Sale Proceeds on an interim basis. If D1 was not the owner of the Proceeds, it might have to answer for the Plaintiff’s damages claim, and the Proceeds would have to be replenished by the Plaintiff (possibly with the damages received from D1).

19. In respect of the present application, the Plaintiff said that it had a legitimate concern that in future a party would approach it claiming as holder of the B/L and/or owner of an interest in the Cargo and alleging that the Plaintiff had dealt with the Cargo in an unauthorised manner and/or had committed mis-delivery or conversion and/or was not entitled to sell the Cargo or deduct its expenses from the Proceeds. Further, such a party might seek to attach the Plaintiff’s assets in Hong Kong or other jurisdictions as security for such claims.

20. With the Summons, the Plaintiff sought to bring all concerned parties before the court and, so far as possible, to protect itself against future claims.

The case of D1-4

21. To begin with, it was not very clear why D2 to D4 were sued in this Action. D2 was the Shipper of another bill of lading which, at the time of the hearing, the Plaintiff accepted as irrelevant. D3 and/or D4 were “the Production Plant as defined in the Sales Contract” (para 4 of the Amended Statement of Claim). The relevance of these Defendants to these proceedings was not readily apparent.

22. In so far as D1 was concerned, its stance had always been that it had no interest in the Cargo upon presentation of the B/L to D5 through HSBC. That might or might not be an answer to the Plaintiff’s claim for breach of contract. However, save for maintaining that under the terms of the LC it had a right to be paid by D6, and “whether or not [D1] has pursued and/or will pursue an action for breach of the [LC] is irrelevant”[2], there was no positive case advanced by D1.

23. The attitude adopted by D1 was not an attractive one in that it had steadfastly refused to provide relevant information to the Plaintiff which might enable it to identify the owner or person(s) entitled to the Cargo or its Proceeds, eg, whether D1 had been paid by its insurer in respect of the Cargo.

Potential claim(s) against the Plaintiff

24. There were clearly merits in the Plaintiff’s claim that it was an innocent party caught in circumstances beyond its control. There was no suggestion otherwise from D1-4.

25. The oddity of the case was that someone must have incurred a large commercial loss in respect of the Cargo but had not come forward and produce the B/L and sought the return of the Cargo or compensation for its value.

26. The Plaintiff said that, prima facie, the person who had suffered such a loss was D1, who sourced and shipped the Cargo but did not appear to have been paid for it by either D6 or D7. Yet, D1 asserted no interest in the Cargo.

27. The Plaintiff...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT