Newocean Petroleum Co Ltd v Rio Tinto Shipping (Asia) Pte. Ltd

Judgment Date20 December 2017
Subject MatterCivil Action
Judgement NumberHCA2265/2016
CourtHigh Court (Hong Kong)
HCA2265/2016 NEWOCEAN PETROLEUM CO LTD v. RIO TINTO SHIPPING (ASIA) PTE. LTD

HCA 2265/2016

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2265 of 2016

_____________

BETWEEN
NEWOCEAN PETROLEUM COMPANY LIMITED Plaintiff
and
RIO TINTO SHIPPING (ASIA) PTE. LTD Defendant

_____________

Before: Deputy High Court Judge Kwok SC in Chambers

Date of Hearing: 18 May 2017

Date of Decision: 20 December 2017

____________________

D E C I S I O N

____________________


The application

1. On 1 September 2016, the plaintiff issued the Writ in this Action (HCA 2265/2016), endorsed with a Statement of Claim, against the defendant.

2. By Order dated 8 September 2016 made on the ex parte application of the plaintiff (“Leave Order”), the Master granted leave for the plaintiff to issue a Concurrent Writ and serve a copy of it on the defendant out of jurisdiction in Singapore.

3. By a summons (“Summons”) issued on 10 January 2017, the defendant applied under Order 12, rule 8(1) and Oder 33, rule 7 of the Rules of the High Court, Cap 4A, for an Order that:

“ 1. The Concurrent Writ of Summons issued on 22 September 2016 and service of the same on the defendant be set aside;

2. The Order of [the Master] dated 8 September 2016 granting leaveto the plaintiff to issue the Concurrent Writ of Summons and serve the same on the defendant out of the jurisdiction in Singapore be discharged on the following grounds:-

(1) The plaintiff’s claim in this action does not fall within Order 11, rule 1(1)(f) of the Rules of the High Court and the Court had no jurisdiction to give leave for issuing and serving the Concurrent Writ of Summons on the defendant out of the jurisdiction; or

(2) Having regard to all the circumstances of the case it is not a proper case for service out of the jurisdiction within Order 11, rule 4 of the Rules of the High Court and the Court in its discretion should refuse to grant leave for such service; and/or

(3) The plaintiff failed to make full and frank disclosure in its ex parte application in respect of which [the Master] made the Order dated 8 September 2016;

3. The action and all claims against the defendant be wholly dismissedwith costs (including the costs of this application) to the defendant, to be summarily assessed.”

The background

4. The plaintiff is a company incorporated in Hong Kong carrying on the business of sales and distribution of fuel products in Hong Kong.

5. The defendant is a company incorporated in Singapore and is the time charterer of the Vessel MV Star Big (“Vessel”).

Transaction between OWB Far East and the defendant

6. (1) By a Sales Order Confirmation[1] dated 27 October 2014 issued by OW Bunker Far East (S) Pte Ltd (“OWB Far East”) to the defendant, OWB Far East acknowledged receipt of the defendant’s order for 2,100 MT of Fueloil 380-OST3.5% at US$479.00 per MT, with “New Oceaniow BDN” as “supplier” for delivery to the Vessel on terms that “the sale and delivery of marine fuels described above are subject to the OW Bunker Group’s Terms and Conditions of sale(s) for Marine Bunkers” (“OWB Terms and Conditions”).

(2) There was no mention in the Sales Order Confirmation dated 27 October 2014 issued by OWB Far East to the defendant of the plaintiff’s “General Terms and Conditions for Sales and Delivery of Marine Fuel” (“Plaintiff’s Terms and Conditions”) whether of the March 2014 version or any other version, and there was no incorporation, whether by reference or at all, of the Plaintiff’s Terms and Conditions, whether of the March 2014 version or any other version.

(3) On the contrary, the Sales Order Confirmation dated 27 October 2014 issued by OWB Far East to the defendant expressly stated that the sale and delivery of marine fuels were subject to the OWB Terms and Conditions.

Transaction between OWB Far East and OWB China

7. (1) The hearing bundles seem to contain no copy of any document in respect of the transaction between OWB Far East and OW Bunker China Limited (“OWB China”).

(2) It is alleged in §7.1 of the Statement of Claim that OWB Far East contracted with its affiliate, OWB China to “deliver or arrange for the delivery of the Bunkers to the Vessel on the standard terms of the OW Bunker Group (Edition 2013)”.

Transaction between OWB China and the plaintiff

8. (1) By a Bunker Sales Confirmation dated 27 October 2014 issued by the plaintiff to OWB China, the plaintiff confirmed the sale of 2,000 to 2,500 MT of IF 380 at US$477.50/MT for delivery to the Vessel.

(2) There was no mention of or reference to in the Bunker Sales Confirmation dated 27 October 2014 issued by the plaintiff to OWB China of the Plaintiff’s Terms and Conditions, whether of the March 2014 version or any other version, and the Bunker Sales Confirmation dated 27 October 2014 issued by the plaintiffto OWB China did not incorporate, whether by reference or at all,the Plaintiff’s Terms and Conditions, whether of the March 2014version or any other version. No explanation has been offered why there was no mention of or reference to or incorporation of the Plaintiff’s Terms and Conditions.

(3) By a Purchase Order Confirmation dated 28 October 2014 issued by OWB China to the plaintiff, OWB China confirmed the purchase of 2,100.00 MT of Fueloil 380-OST 3.5% at US$477.50/MT for delivery to the Vessel.

(4) There was no mention of or reference in the Purchase Order Confirmation dated 28 October 2014 issued by OWB China to the plaintiff of the Plaintiff’s Terms and Conditions, whether ofthe March 2014 version or any other version, and there was no incorporation, whether by reference or at all, of the Plaintiff’s Terms and Conditions, whether of the March 2014 version or any other version.

(5) There was also no mention of or reference in the Purchase Order Confirmation dated 28 October 2014 issued by OWB China to the plaintiff of the OWB Terms and Conditions.

(6) It is alleged in §§9, 10 and 11 of the Statement of claim that:

“ 9. The Plaintiff expressly contracted with [OWB China] that the Plaintiff was to retain title to the Bunkers pending payment, and that pending payment in full for the Bunkers, such Bunkerswould be clearly identified as product supplied by the Plaintiff and kept separate from any other fuel or lubricant. In the premises, the Plaintiff did not authorise, permit or license the use of the Bunkers pending payment for, or the passing of property in, such Bunkers.

10. In support of the matters pleaded in Paragraph 9 above the Plaintiff will rely on its General Terms and Conditions for Sales and Delivery of the Marine Fuel dated March 2014 (the ‘[Plaintiff’s Terms and Conditions]’) to which the Plaintiff will refer for their full terms, true meaning and effect[2]. [ThePlaintiff’s Terms and Conditions] provide inter alia as follow:-

[ The pleader went on to quote clauses 1(a), (b) & (c); 2(c); 3(a); 4(a); 5(a) & (b); 11(a), (b) & (c); and 15.]

11. The [Plaintiff’s Terms and Conditions] formed part of the [plaintiff–OWB China] Contract notwithstanding the fact that the Bunker Sales Confirmation did not expressly incorporate the [Plaintiff’s Terms and Conditions]:

11.1 It is standard industry practice that each bunker supplier will have its own terms and conditions which apply to orders placed with each bunker supplier and [OWB China] was aware of this practice.

11.2 It was agreed orally or by conduct in around 2014 on more than one occasion between Mr Alvin Wong (on behalf of [OWB China] and Mr Cheung Ting Pong (on behalf of the Plaintiff), that the [Plaintiff’s Terms and Conditions] would apply to all future sales. The Plaintiff sold and [OWB China] purchased bunkers upon the understanding the [Plaintiff’s Terms and Conditions] applied to each of the Plaintiff’s contracts of sale.”

The OWB Terms and Conditions

9. Clause “H” on “Title” of the OWB Terms and Conditions, Edition 2013, provided as follows:

“ H-1 Title in and to the Bunkers delivered and/or property rights in and such Bunkers shall remain vested in the Seller until full payment has been received by the Seller of all amounts due in connection with the respective delivery. The provisions in this section are without prejudice to such other rights as the Seller may have under the laws of the governing jurisdiction against the Buyer or the Vessel in the event of non-payment.

H-2 Until full payment of the full amount due to the Seller has been made and subject to Article G.14 hereof, the Buyer agreed that it is in possession of the Bunkers solely as Bailee for the Seller, and shall not be entitled to use the Bunkers other than for the propulsion of the Vessel, nor mix, blend, sell, encumber, pledge, alienate, or surrender the Bunkers to any third party or other Vessel.”

The Plaintiff’s Terms and Conditions

10. Clause 11 of the Plaintiff’s Terms and Conditions, March 2014 version, provided that:

“ 11. Passing of risk and retention of title

Subject to any provision to the contract [sic] in the Sales Contract and/or the Bunker Requisition Form:

(a) The Seller shall retain the legal and equitable title to the Marine Fuel which shall only pass to the Buyer when the seller [sic] has received in full the price and all amounts due in connection with the respective delivery.

(b) Prior to the Seller receiving the price and all amounts due referred to in sub-paragraph (a) hereof, the Buyer shall hold the Marine Fuel and/or the price and/or any proceeds of saleas bailee and/or trustee for the Seller without prejudice to the Seller’s right to assert a...

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