Mv “western Star” & Ors V. B.l. Lizard Shipping Company Limited (2013)

LawGlobal-Hub Lead Judgment Report – COURT OF APPEAL

CHINWE EUGENIA IYIZOBA, J.C.A. (Delivering the Leading Judgment)

By a writ of summons and Statement of Claim dated 20th November, 2006 but filed on the 22nd November, 2006, the Respondent as Plaintiff claimed against the Appellants/Defendants jointly and severally as follows:

“1. The sum of US$121,650 being the outstanding cost for the bunkers supplied to the 1st Defendant by the Plaintiff.

2. Interest on the above sum at the rate of 2% per month from the 26th March 2006 till judgment and thereafter at the rate of 10% per annum until the judgment debt, interest and costs are fully liquidated.
3. US$30,000 being the legal costs incurred by the Plaintiff in respect of this matter.
4. A declaration that the beneficial ownership of the 1st Defendant is vested in the 2nd Defendant Eastern Star Shipping Company Ltd.”

The Respondent’s case is that it is a registered foreign company engaged in the business of supplying bunkers and lubricants to ships. It pleaded that the 2nd Defendant/Appellant is the beneficial owner of the 1st Defendant/Appellant while the 3rd Defendant/Appellant is the Master of the vessel. It claimed that sometime in February 2006, the 2nd Defendant/Appellant through its agent, Interoil Trading S.A. contracted the Respondent to supply bunkers to the 1st Appellant.

The Respondent accordingly sourced the bunkers from Messrs Shipoil S.A. and supplied the bunkers to the 1st Appellant. The contract, it was claimed, was that the bunkers supplied must be paid for within 45 days from the date of delivery. Notwithstanding that the delivery and presentation of the invoice was done on the 10th of February, 2006, the Appellants have failed to pay for the bunkers valued at US$121,650 till date despite repeated demands and the fact that the 1st and 3rd Appellants acknowledged receipt of the bunkers supplied by the Respondent. The Respondent amended its pleadings by order of court dated 6th December, 2006.

The Appellants who also amended their pleadings on 13/3/07 denied liability to the claims. They admitted that the 2nd Appellant is the beneficial owner of the 1st Appellant and that the 3rd Appellant is the Master of the vessel but denied that the 2nd Appellant contracted the Respondent to supply bunkers to the 1st Appellant and that the 2nd Appellant was ever a party to any such contract. It was pleaded that at all times material to the purported contract, the 1st Appellant was neither in the possession and control of the 2nd Appellant nor was Interoil Trading S. A. the 2nd Appellant’s agent as alleged. The Appellants pleaded that the 1st Appellant was at the material time on time-charter to Reefer Lines Inc which includes Maistra Maritime Company, neither of which was an agent of the Appellants.

In paragraph 7 of their Amended Statement of Defence, the Appellants pleaded that in the unlikely event that they are to be held accountable for the 1st Defendant at the times material to the claims herein, they averred that the amount claimed by the Respondent as the cost of the aforementioned bunkers was fully settled by the said time-charterers who paid Interoil Trading S. A. for the said bunkers which were delivered by a company called Petrol Ofisi A, S. They claimed that they are not personally liable to the Respondent for the cost of the bunkers. The Appellants further pleaded that the party with whom the Respondent contracted are not the beneficial owners and or demise charterers of the vessel MV. “Western Star” and accordingly will pray the court to dismiss the suit on this ground also,

Trial started on 13th March, 2007 with the Respondent calling only one witness who tendered two documents: the bunkers delivery receipt No. 009641 dated 10/02/06 as exhibit A and the bunker Invoice No. NR060202 issued by the Respondent dated 24/02/06 as Exhibit A1. The Respondent’s witness in his evidence stated inter alia that the Appellants did not comply with the payment instructions contained in Exhibit A1 and that the 3rd Appellant duly acknowledged the bunker delivery invoice as the owner’s agent. He stated that the Respondent was not a party to the charter party agreement and that the Respondent supplied the bunker to the vessel and that the charterer has not paid for the bunker.

Under cross-examination, he said among other things that he did not play any role in the making of the contract and that he did not have a copy of the contract in court but that he has it in his headquarters in Europe. He said that it was the Respondent that took the bunker to the vessel directly. He admitted that Exhibit A1 is an original copy. He also said that he was in Nigeria at the time the contract was made and the bunker delivered. He did not know that the vessel was chartered to Reefer Lines Group and was not aware that the charterers had paid for the bunkers.

DW1, the sole witness of the Appellants tendered the alleged charter agreement as Exhibit B. He said that from clause 4 of Exhibit B it was the responsibility of the charterers to supply bunkers to the vessel during the charter patty agreement and not the owners. He said that the duration of the charter party was 6 months commencing from the date of delivery of the vessel which was scheduled for November, 2005 and that the charter party expired in April 2006. He said that the bunker in issue was supplied within the duration of the charter party. He said the bunker was ordered by the charterers who received an invoice from Interoil Trading S. A. which he tendered as Exhibit B1, He acknowledged Exhibit A1 as the bunkers delivery receipt.

He said the time-charterers ordered the bunkers from Interoil Trading S. A. but it was Petrol Ofisi that delivered it, He tendered payment confirmation letter from Interoil Trading as Exhibit B2. He said that by the custom of shipping trade, as bunker supplier is frequently not aware of the party ordering their bunker either as the master, owner or managing owner or operator of the vessel, the invoice is usually issued to all the persons enumerated above and that the Master usually signs the document of such delivery.

Under cross-examination, he stated that he does not work for the 2nd Appellant and that the 2nd Appellant is based in Panama while he is based in Antwerp. He stated that Exhibit B is strictly a document between Sea Trade Group NV and Reefer Lines Group Inc and that the 2nd Appellant and the Respondent are not parties to it. He stated that Exhibit A1 was incorrectly issued in the name of the 2nd Appellant.

After consideration of the evidence led and the addresses of the learned counsel for the parties, the trial Judge entered judgment in favour of the Respondent except with respect to its claims for the legal costs incurred which he dismissed as having not been proved.

Dissatisfied with the judgment, the Appellants appealed to this Court initially filing a Notice of Appeal containing 11 grounds of appeal. Pursuant to the leave of this Court; they amended the notice of appeal to include two additional grounds of appeal making a total of 13 grounds. Out of these 13 grounds of appeal, the Appellants formulated 11 Issues for determination while the Respondent formulated 4 issues. The Respondents four issues cover all the 11 issues of the Appellants. I shall therefore adopt the Respondent’s issues in the determination of this appeal. Thus the issues for determination are as follows: