Keung Shek Cheung And Others v Pt Arpeni Pratama Ocean Line Tbk. And Another

Court:High Court (Hong Kong)
Judgement Number:HCA678/2014
Judgment Date:28 Dec 2016
HCA678/2014 KEUNG SHEK CHEUNG AND OTHERS v. PT ARPENI PRATAMA OCEAN LINE Tbk. AND ANOTHER

HCA 678/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 678 OF 2014

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BETWEEN
KEUNG SHEK CHEUNG 1st Plaintiff
SOO YING POOI 2nd Plaintiff
WONG HON CHAK 3rd Plaintiff

and

PT ARPENI PRATAMA OCEAN LINE Tbk. 1st Defendant
GRAND BULK SHIPPING LIMITED 2nd Defendant

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Before: Hon Chung J in Chambers
Date of Hearing: 28 September 2016
Date of Decision: 28 December 2016

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D E C I S I O N

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Introduction

1. The master’s order dated 3 August 2016 giving rise to the appeal of the 2nd defendant (“Grand Bulk”) in gist granted leave to Grand Bulk to defend this action conditional upon a payment-in. Grand Bulk now appeals against the said condition. On the other hand, the plaintiffs contend that the master ought not have given leave to defend at all, and the default judgment dated 19 June 2014 should stand (“cross appeal”).

Background

2. This action has its origin in a vessel (“the Vessel”) which was registered in the name of a company abbreviated as PSHL. The 4 shareholders of PSHL are the plaintiffs and Grand Bulk. The Vessel was rented out and the profits therefrom were distributed among the shareholders.

3. International shipping market has been quiet resulting in difficulties for the Vessel to be employed. A plan was conceived whereby the Vessel would be re-flagged with an Indonesian flag so as to enable it to enter the domestic Indonesian shipping trade.

4. The said plan was implemented by way of a registration transfer from PSHL to another company abbreviated in this action as SBS (“the Transfer”).

5. Both Grand Bulk and SBS are 100% owned by the 1st defendant, a company incorporated in Indonesia (“APOL”).

6. The Transfer was effected through the following documents:

(a) a Memorandum of Agreement dated 22 October 2008 between PSHL and SBS (“the MOA”);

(b) a letter of undertaking dated 13 November 2008. The parties named therein were PSHL and SBS;

(c) a letter of undertaking dated 14 November 2008 (“the LOU”). The parties named therein were Grand Bulk and APOL;

(d) a minutes of meeting dated 20 March 2013 (“the Minutes”);

(e) a document dated 7 October 2013 whereby Grand Bulk confirmed the said document to be an agreement between APOL (as debtor) and the plaintiffs (as creditors).

7. As regards profit distribution, the Minutes stated that APOL agreed to pay US$800,000 to the plaintiffs (by reason of their 25% interest in the profit). The plaintiffs accept that US$446,000 has been paid, and contend that they are owed US$354,000 (the subject-matter of this action).

This appeal (and “cross-appeal”)

8. Because this is Grand Bulk’s appeal and the plaintiffs’ “cross appeal”, it is unnecessary to consider the claim by the plaintiffs against APOL (except by way of background).

9. As regards the plaintiffs’ claim against Grand Bulk, it is based essentially on a verbal agreement made on 14 November 2008 among the plaintiffs, APOL and Grand Bulk to the effect that:

(1) the plaintiffs would remain entitled to their 25% interest in the Vessel (and hence the income of the Vessel);

(2) Grand Bulk promised to pay (or guarantee the payment to) the plaintiffs their share of the Vessel’s income.

(“the alleged agreement”)

10. Because the alleged agreement was verbal, naturally no...

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