CASE NO A 32/2006

IN THE HIGH COURT OF SOUTH AFRICA

DURBAN AND COAST LOCAL DIVISION(Exercising its Admiralty Jurisdiction)

NAME OF SHIP : m.v. ASEAN SEA 01

In the matter between

SEAGULL CHARTERING AND OPERATING LIMITED Applicant

and

MV ASEAN SEA O1 Respondent

VINASHIN PETROLEUM INVESTMENT &TRANSPORT JOINT STOCK COMPANY

Intervening Respondent

_________________________________________________________

Delivered :March 2007

J U D G M E N T

LEVINSOHN DJP :

On 22nd March 2006 this Court ordered the

arrest of the respondent. The purpose of the arrest

was to provide security to the applicant in the sum

of

US$679 239 plus interest and costs in respect of the

applicants claim against the Vinashin Petroleum

Investment & Transport Joint Stock Company which was

to be submitted to arbitration in London.

In broad outline the case made out in the

founding affidavit was the following. The

respondent was previously owned by Sea Unity Limited

of Piraeus and it was called the mv Sea Unity.

Some time prior to 17th February 2006 the respondent

was sold to Vinashin Petroleum Investment & Transport

Joint Stock Company, also known as Shinpetrol and

hereinafter referred to as Shinpetrol. The sale

was concluded through Optima Ship Brokers. It

appears that the vessel was delivered to Shinpetrol

some time during the period 27th February to 2 March

2006.

Almarine Shipping acting on behalf of Metaltrade concluded a voyage charter of the respondent to carry a cargo of scrap steel from South African ports to Indonesia. On the same day, namely 20th February 2006, the applicant represented by Almarine Shipping concluded a charterparty with Shinpetrol as the owners of the respondent.

Annexure VN13 is a copy of the fixture email sent by the broker Sopas Maritime Corporation (SOPAS) to Almarine Shipping. In its terms the email constitutes a valid and binding contract for

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the charter of the vessel. Subsequently Badock representing Almarine sent the duly prepared full charterparty to SOPAS for signature. That is also put up as annexure VN 14. The charter agreement between Metaltrade and the applicant was in the exact same terms.

The deponent testified that prior to this

Badock had concluded four charter parties through

Sopas Corporation. These were performed without any

difficulties.

On 8th March 2006 Badock received an email from SOPAS which clearly foreshadowed that the vessel owners did not intend to honour the charter agreement. Badock in turn indicated that his client would look to the owners of the vessel for damages arising from its repudiation. Badock subsequently learned that the vessel had been chartered to MUR through Optima Shipbrokers. The applicant makes the case that it has suffered damages and will pursue its claim therefor before an arbitration tribunal in London. The purpose of the present proceedings was to obtain security for the said claim.

On 23rd May 2006 the intervening respondent sought leave to intervene in the application. It also asked for an order setting aside the deemed arrest together with other consequential relief. For ease of reference I shall refer to the intervening respondent hereafter as Shinpetrol I proceed now to summarise in broad outline the case made out in Shinpetrols founding affidavit.

Shinpetrols fundamental assertion is that SOPAS were never authorised either expressly or impliedly to act on behalf of Shinpetrol, nor indeed, were they the vessels managers.

Shinpetrol then goes on to set forth certain background facts. It testifies that SOPAS was the local Vietnamese correspondent of Optima Ship Brokers of Greece. The latter acted as brokers when

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Shinpetrol bought the respondent. A Mr Hoquoc Hung was employed by Shinpetrol as its deputy manager in the operations department. The said Hung was a minority shareholder of SOPAS. The deponent then explains that because of this relationship between Hung and SOPAS the latter became aware that the respondent would be available for hire after delivery had taken place in Mombasa Kenya. SOPAS took it upon itself without the knowledge of Shinpetrol to negotiate a charter party of the respondent to the applicant. SOPAS held itself out to be the manager of the vessel. SOPAS sought to charter the respondent from Shinpetrol on more favourable terms than that which it had negotiated with the applicant. The idea was that the charter to the applicant would in effect be a sub-charter and Shinpetrol would profit thereby. However when Shinpetrol was approached to conclude a voyage charter of the respondent to SOPAS it refused to do so. SOPAS was therefore unable to implement its scheme.

The general director and the operations manager of Shinpetrol respectively travelled from Vietnam to Mombasa, Kenya, at the end of February 2006 to take formal delivery of the respondent. At that stage no managers for the respondent had been appointed, nor had any charterparty been arranged at that stage.

On 1st March 2006 Shinpetrols local agent in Mombasa produced to the said general director and operations manager a purported fixture note which was dated 20th February 2006 which related to the conclusion of a charterparty in respect of the respondent concluded by Shinpetrol to Sopas Corporation of Singapore. Apart from the fixture note there was a draft form of charterparty containing standard terms and conditions which had already been signed on behalf of SOPAS as the charterer. The foregoing appears clearly from the documentation put up as annexures PP2 and PP3 to the founding affidavit. According to the deponent these documents were sent as attachments to an email addressed by Mr Hoquoc Hung to Mr Gachanjay on the

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evening of Monday, 27th February 2006 and re-sent on Wednesday, 1st March 2006.

The said general director and the operations manager were not prepared to conclude a charterparty with SOPAS. Their attitude was that the fixture note was clearly a fabrication and purported to reflect the culmination of negotiations to which Shinpetrol had not been a party. According to the deponent Hoquoc Hung had no authority whatsoever to involve himself in negotiation for the charter of Shinpetrols vessels. His functions were restricted to the day to day operation of the six small tankers operated by Shinpetrol. It was the function of the general director, Mr Nguyenduy Hung, to do so.

Shinpetrol had commenced negotiations to

charter the respondent. It had been in contact with

Optima Ship Brokers and Tramp Maritime Enterprises

Ltd, the latter being the former managers of the

respondent when it was owned by the seller of the

vessel.

The deponent disputes that Shinpetrol had a business relationship with SOPAS. More particularly it disputes the applicants contention that an inference can be drawn from SOPASs previous dealings with the Vinashin Lines or the Vanlang Shipping Lines.

The applicant delivered an answering

affidavit in opposition to the intervening

respondents application. I do not propose to

summarise this affidavit in any detail. Much of

what is contained therein is in effect argument

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directed at demonstrating the improbability of the

intervening applicants case. The applicant

concedes that in the nature of things it would have

no knowledge about the relationship between

Shinpetrol and SOPAS. It would perforce have to

rely on the relevant documents received by way of

discovery and argue on the general probabilities

arising therefrom.

In this regard the applicants first submission is that Hung was a servant of Shinpetrol and in doing what he did he was acting in the course and scope of his employment by Shinpetrol. If he was fraudulent Shinpetrol would be liable vicariously for this delict.

In order to demonstrate SOPASs apparent authority the applicant refers to an email VN 23 from SOPAS to Moztrans in Beira dated 22nd February 2006 in which SOPAS was investigating appointing Moztrans as the owners agent in Beira for the vessels forthcoming call there in March. This email is quoted in full hereunder : -

HOT MESSAGE

HAVE A GOOD DAY!

THANK YOU FOR YOUR EMAILWE WOULD LIKE TO NOMINATE YOUR COMPANY AS OWNER

AGENCY PLS, CALCULATE AND SUPPLY PORT DISBURSEMENT TO US ESTIMATED WITH INFO AS :

SHIP NAME : ASEAN SEA 01O/A BEIRA PORT, MOZAMBIQUE : 3 5 MARCH 2006TOTAL TIME LOADING CARGO AT BEIRA PORT : 2 DAYCALLING O : BEIRA PORT FOR LOADING : 4000 MT

SCRAP

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LAST PORT : MOMBASA PORT, KENYA/NEXT PORT :

DURBAN FOR ARRIVAL DRAFT 6.5 M (NO CARGO ON

BOARD BEFORE CALLING

WAITING YOUR INFORMATION SOON! (CAN ADV INFO TO

US TODAY BY FAX OR EMAIL?)The applicants deponent draws attention to

the fact that as at 20th June 2006 Mr Hung was still

employed by Shinpetrol. Given that Shinpetrol

alleges that Mr Hung perpetrated a fraud

alternatively was party thereto it seems strange that

some months after the event he would still be working

for Shinpetrol.

The applicant highlights the fact that on Shinpetrols version the charterparty proposal from SOPAS was rejected by Shinpetrol on or about 1st

March 2006. It was not until 8th March 2006 that SOPAS advised Almarine that Shinpetrol would not be able to perform