Tort and implied contract in Singapore. The case of the ‘Bum Chin’.

 

In Wilmar Trading Pte Ltd v Heroic Warrior Inc (The “Bum Chin”) [2019] SGHC 143, Singapore High Court, an FOB buyer, Wilmar, nominated the ‘Bum Chin’ for shipping palm oil from Indonesia to Jeddah and Adabiyah.  An incident on the vessel caused physical damage to the vessel and loss of and damage to the cargo. Wilmar arranged for a substitute vessel to transport the palm oil purchased under the sale contracts and claimed damages from the registered owner on the grounds of contract and negligence. The registered owner counter claimed asserting that Wilmar was responsible for the damage sustained by the vessel because the loading terminal, as Wilmar’s agent, had improperly loaded the cargo.

Was there a contract between the parties? Wilmar relied on Pyrene v Scindia [1954] 1 Lloyd’s Rep 321, where there was found to be a  contract of carriage between the shipowner and the cargo interest. But Belinda Ang Saw Ean J found that here there was no such contract as the bills to be issued would have been charterers’ bills and the defendant was not the contractual carrier. Turning to tort, although Wilmar had no proprietary interest to found a cause of action in negligence since NTUC Foodfare Co-operative Ltd v SIA Engineering Co Ltd [2018] 2 SLR 588, pure economic loss was claimable under Singapore law and the question was whether the defendant owed a duty of care. The judge found that this was the case. The shipowner as performing carrier would have reasonably foreseen that its negligence would cause economic loss to a buyer of cargo who bore the risk of damage to or loss of the cargo. The requirement of legal proximity was also satisfied. The countervailing policy consideration of indeterminacy did not arise because the plaintiff as FOB buyer bore the risk of loss or damage to the cargo. In the absence of a contract of carriage, the defendant owed the plaintiff a duty to take reasonable care of the cargo loaded on board.

The counterclaim was dismissed on the basis that, absent a contract of carriage between the parties, Wilmar, who was not responsible for the actions in loading of the FOB seller in agency or otherwise, owed no duty of care to the defendant. On the evidence Wilmar’s loss was caused by the shipowner’s negligence as structural weaknesses were a cause of the failure of the tank which had caused leakage and contamination of the cargo.

Published by

Professor Simon Baughen

Professor Simon Baughen was appointed as Professor of Shipping Law in September 2013 (previously Reader at the University of Bristol Law School). Simon Baughen studied law at Oxford and practised in maritime law for several years before joining academia. His research interests lie mainly in the field of shipping law, but also include the law of trusts and the environmental law implications of the activities of multinational corporations in the developing world. Simon's book on Shipping Law, has run to five editions and is already well-known to academics and students alike as by far the most learned and approachable work on the subject. Furthermore, he is now the author of the very well-established practitioner's work Summerskill on Laytime. He has an extensive list of publications to his name, including International Trade and the Protection of the Environment. He has also written and taught extensively on commercial law, trusts and environmental law. Simon will be a member of the Institute of International Shipping and Trade Law, a University Research Centre within the School of Law, and he will teach on both the LLM (Carriage of Goods by Sea, Land and Air and Oil and Gas Law) and LLB programmes at Swansea.

Leave a Reply