The "Cherry" and others

"The plaintiffs have established their claims against the defendants on the bills of lading and in conversion in relation to the Cherry cargo that was not discharged at Fujairah." — Per Kan Ting Chiu J, Para 49

Case Information

• Citation: [2002] SGHC 68 (Para 0)
• Court: High Court (Para 0)
• Date: 05 April 2002 (Para 0)
• Coram: Kan Ting Chiu J (Para 0)
• Counsel for the plaintiffs: Vivian Ang, Corina Song and Kenny Yap (Allen & Gledhill) (Para 0)
• Counsel for the defendants: Lim Tean, Minn Naing Oo and Shem Khoo (Rajah & Tann) (Para 0)
• Case numbers: Adm in Rem 834/1998, 750/1998, 784/1998 (Para 0)
• Area of law: Admiralty and Shipping – Bills of lading – Bills of lading act; Tort – Conversion (Para 0)
• Judgment length: Not stated in the extraction (Para 0)

What Was This Consolidated Admiralty Trial About?

This was a consolidated trial of three actions arising from the shipment of fuel oil from Kuwait to Fujairah in the United Arab Emirates on three vessels, namely the Cherry, Epic and Addax, together with a related claim concerning the Hyperion cargo. The court identified the dispute as one about whether the plaintiffs could sue on the bills of lading, whether the defendants had discharged their contractual obligations, and whether the defendants were liable in conversion for cargo that was not delivered as instructed. (Para 1)

"This is a consolidated trial of three actions arising from the shipment of fuel oil from Kuwait to Fujairah in the United Arab Emirates on three vessels." — Per Kan Ting Chiu J, Para 1

The plaintiffs’ case was that they had purchased the oil, chartered the vessels, and issued discharge instructions requiring the cargo to be discharged at Fujairah. The defendants’ case, by contrast, was that they had complied with instructions given through Metro and that the plaintiffs lacked standing because they were not in physical possession of the bills of lading. The judgment therefore turned on the legal meaning of “possession” under the Bills of Lading Act, the effect of agency arrangements, and the consequences of discharging cargo without production of the original bills. (Paras 4, 8, 10, 14, 15, 16)

The court ultimately accepted the plaintiffs’ position. It held that physical possession was not indispensable where the bill was held by the plaintiffs’ agent, that the plaintiffs had title to sue in conversion, and that the defendants were liable because the cargo was not fully discharged at Fujairah in accordance with the plaintiffs’ instructions. Judgment was entered for the plaintiffs, with damages to be assessed by the Registrar. (Paras 21, 28, 35, 49, 52, 57)

How Did the Cargo Move From Kuwait to Fujairah, and Why Did the Dispute Arise?

The factual background began with the plaintiffs’ purchase of oil from Metro, which had itself purchased the oil from the Kuwait Petroleum Corporation on FOB Kuwait terms. The oil was loaded onto the Cherry on 3 December 1997 and arrived at Fujairah on 8 December 1997. Similar shipments were involved on the Epic and Addax, and the court treated the actions together because they raised the same legal issues. (Paras 4, 6, 1)

"The plaintiffs had purchased the oil shipped on the three vessels from Metro. Metro had in turn purchased the oil from the Kuwait Petroleum Corporation ("KPC") on FOB Kuwait terms." — Per Kan Ting Chiu J, Para 4

The plaintiffs, as voyage charterers, issued discharge instructions to Metro for the Cherry on 4 December 1997. Those instructions were accepted by the defendants, but the defendants then complied with Metro’s orders without requiring production of the bill of lading. The court recorded that only 32,000 mt of the Cherry cargo was discharged, while 55,972 mt remained on board and was carried to Singapore without the plaintiffs’ knowledge or consent. That factual sequence was central to both the contractual and tortious claims. (Paras 8, 10, 13)

"The plaintiffs as voyage charterers issued discharge instructions to Metro for the "Cherry" on 4 December 1997" — Per Kan Ting Chiu J, Para 8

"The defendants accepted those instructions and complied with Metro’s orders without the bill of lading being produced." — Per Kan Ting Chiu J, Para 10

"The action over this shipment arose because only 32,000 mt of the oil was discharged from the "Cherry" after she arrived at Fujairah. The remaining 55,972 mt remained on board and were carried to Singapore without the plaintiffs’ knowledge or consent." — Per Kan Ting Chiu J, Para 13

The court also noted that the defendants did not regard Metro as anyone’s agent and said they believed Metro were the owners of the cargo. That belief was important because it explained why the defendants dealt with Metro as they did, but it did not ultimately excuse the failure to discharge the cargo in accordance with the plaintiffs’ instructions and rights under the bills of lading. (Para 42)

Why Did the Defendants Say the Plaintiffs Could Not Sue on the Bills of Lading?

The defendants’ principal jurisdictional and standing objection was that the plaintiffs were not holders of the bills of lading because the bills were not in their physical possession. The bills were with Glencore UK, and the defendants argued that this meant the plaintiffs could not satisfy the statutory definition of “holder” under section 5 of the Bills of Lading Act. They also argued that the plaintiffs had no title to sue in conversion because they lacked the immediate right to possession when the alleged conversion occurred. (Paras 15, 16)

"The defendants argued that the plaintiffs cannot sue as the holders of the bill of lading because they were not in physical possession of the bill which was with Glencore UK." — Per Kan Ting Chiu J, Para 16

The court framed these objections as part of the “main points of the defence,” which also included the contention that delivery to Metro discharged the defendants’ obligations and that the plaintiffs had failed to prove causation. The standing point was therefore not an isolated technicality; it was the gateway issue on which the defendants hoped to defeat both the contractual and tort claims. (Para 15)

"At the end of the case, the main points of the defence were identified as" — Per Kan Ting Chiu J, Para 15

"(a) the plaintiffs had no title to sue on the bills of lading because they were not holders of the bills of lading as defined in the Bills of Lading Act (Cap 384) ("the Act");" — Per Kan Ting Chiu J, Para 15

"(b) the plaintiffs had no title to sue in conversion as they did not have the immediate right of possession of the oil when the alleged conversion took place in December 1997;" — Per Kan Ting Chiu J, Para 15

The court rejected the defendants’ narrow reading of possession. It held that section 5 referred to a holder “with possession” of the bill, but that possession was not confined to physical custody. The judgment treated possession as a flexible concept capable of including constructive possession through an agent. That approach was decisive because the plaintiffs had arranged for Glencore UK to keep the bill on their behalf. (Paras 16, 20, 21, 23)

"Section 5 of the Act refers to a holder of a bill of lading as a person "with possession" of the bill." — Per Kan Ting Chiu J, Para 16

"The Act does not define "possession," which is a sufficiently flexible concept to allow for the possibility of actual possession being held by one person and constructive possession being held, at least for some purposes, by another." — Per Kan Ting Chiu J, Para 20

"There is no justification to confine possession to physical possession in this case. The rights of the holder cannot be diminished because it had arranged for the bill to be kept by its agent which has no separate interest in it." — Per Kan Ting Chiu J, Para 21

How Did the Court Decide That the Plaintiffs Were “Holders” Even Though Glencore UK Held the Bills?

The court’s reasoning on holder status began with the statutory language and then moved to the commercial reality of the arrangement. It accepted that the Bills of Lading Act did not define possession and that the concept was flexible enough to accommodate actual possession by one person and constructive possession by another. On the evidence, Glencore UK was a wholly owned subsidiary of the plaintiffs and received the bill as the plaintiffs’ agent with no independent interest in it. (Paras 18, 20)

"Glencore UK is a wholly owned subsidiary of the plaintiffs." — Per Kan Ting Chiu J, Para 18

"When the bill of lading was sent to Glencore UK, they received it as the agent of the plaintiffs with no interest in it of their own." — Per Kan Ting Chiu J, Para 18

That finding allowed the court to conclude that the plaintiffs remained holders for the purposes of section 5. The court expressly rejected the proposition that possession must be physical possession in every case. Instead, it held that the rights of the holder could not be diminished merely because the holder had arranged for the bill to be kept by an agent. The legal consequence was that the plaintiffs retained standing to sue on the bills of lading notwithstanding the location of the paper document. (Paras 20, 21)

"There is no justification to confine possession to physical possession in this case." — Per Kan Ting Chiu J, Para 21

The court also relied on the agreement establishing Glencore UK as the plaintiffs’ agent for the relevant purposes. That agency relationship was not incidental; it was the mechanism by which the plaintiffs maintained constructive possession. The court therefore treated the plaintiffs as the relevant holders and rejected the defence that the absence of physical custody defeated the statutory claim. (Para 23)

"The agreement clearly established Glencore UK as the plaintiffs’ agent for the purposes stated." — Per Kan Ting Chiu J, Para 23

Why Did the Court Hold That the Plaintiffs Could Sue in Conversion?

The conversion issue depended on whether the plaintiffs had acquired title to sue when the bills were endorsed and delivered through the chain involving Credit Lyonnais and Glencore UK. The court held that title to sue in conversion could be transferred, and that the plaintiffs had acquired that title when the bills were endorsed to Credit Lyonnais and then delivered to Glencore UK as the plaintiffs’ agent. This meant that the plaintiffs were not strangers to the goods when the alleged wrongful dealing occurred. (Paras 27, 28)

"When they endorsed it to Credit Lyonnais which then endorsed and delivered them to the plaintiffs’ agent Glencore UK, that right was passed to the plaintiffs, and like the plaintiffs in the case discussed, the title to sue in conversion was transferred." — Per Kan Ting Chiu J, Para 28

The court’s reasoning drew support from the older authority of Bristol & West of England Bank v Midland Railway Co, which it treated as establishing that title to sue in conversion can be transferred even after goods have been released. The court also referred to the proposition that dealing with goods in a manner inconsistent with the rights of the true owner amounts to conversion. On the facts, the defendants had dealt with the cargo in a way inconsistent with the plaintiffs’ rights by allowing cargo to be dealt with and removed without proper discharge under the bills. (Paras 27, 55)

"It appears to me plain that dealing with goods in a manner inconsistent with the right of the true owner amounts to a conversion" — Per Kan Ting Chiu J, Para 55

The court therefore concluded that the plaintiffs had standing in tort as well as in contract. The conversion claim was not defeated by the defendants’ attempt to characterize Metro as the relevant party. Once the plaintiffs’ title to sue had been transferred through the bill of lading chain, the defendants’ inconsistent dealing with the cargo exposed them to liability in conversion. (Paras 28, 49, 57)

What Was the Court’s View of the Discharge Instructions and the Defendants’ Obligation to Deliver the Cargo?

The plaintiffs’ contractual case was that the defendants were obliged under the bills of lading to discharge the entire Cherry cargo at Fujairah. The court accepted that the plaintiffs’ instructions required full discharge into the designated facilities, and that anything short of that would not constitute full delivery according to those instructions. The defendants’ attempt to rely on Metro’s contrary instructions could not override the plaintiffs’ rights under the carriage documents. (Paras 14, 35)

"The plaintiffs claimed that the defendants were obliged under the bills of lading to discharge the entire Cherry cargo at Fujairah and alternatively, that they were liable in tort for conversion of the oil." — Per Kan Ting Chiu J, Para 14

"On the face of the plaintiffs’ instructions the carrier was to discharge all the oil into the facilities, and anything short of that would not constitute full delivery according to their instructions." — Per Kan Ting Chiu J, Para 35

The court rejected the suggestion that Metro could decide how much of the cargo should be discharged. It observed that Metro’s role was not to determine for the vessel or the cargo owners whether to discharge, or how much to discharge, once the vessel had arrived at Fujairah. That observation went to the heart of the contractual allocation of control: the carrier had to follow the proper discharge instructions, not the instructions of a party without the relevant entitlement. (Para 38)

"It cannot be his role to determine for the vessel or the cargo owners whether to discharge, or to decide how much to discharge when a vessel had arrived at Fujairah." — Per Kan Ting Chiu J, Para 38

The court also noted that the defendants had accepted Metro’s instructions and complied without production of the bill of lading. That conduct was inconsistent with the plaintiffs’ rights and with the contractual structure governing delivery. The result was that the defendants had not discharged their obligations merely by handing over or dealing with part of the cargo under Metro’s directions. (Paras 10, 35, 38, 49)

How Did the Court Treat the Evidence About False Discharge Documents and the Defendants’ Knowledge?

The court considered evidence that the discharge documentation was not truthful. It referred to a Dry Tank Certificate, an OBQ Report, a Tank Inspection Certificate signed by the chief officer with knowledge that they were untrue, and a Discharge Time Sheet signed by the master that was also untrue. Those documents mattered because they showed that the discharge process was not a straightforward or reliable record of proper delivery. (Para 39)

"These include a Dry Tank Certificate, a OBQ (On Board Quantity) Report, Tank Inspection Certificate, which the chief officer signed with the knowledge that they were untrue and a Discharge Time Sheet the master signed which was also untrue." — Per Kan Ting Chiu J, Para 39

The court also found that the defendants did not regard Metro as anyone’s agent and instead believed Metro were the owners of the cargo. That belief explained the defendants’ dealings, but it did not cure the legal defect in their conduct. The court’s analysis shows that mistaken assumptions about ownership do not displace the carrier’s obligations where the bills of lading and discharge instructions point in a different direction. (Para 42)

"The defendants did not regard Metro as anyone’s agents. Their case was that they believed that Metro were the owners of the cargo, and dealt with them on that basis." — Per Kan Ting Chiu J, Para 42

In practical terms, the evidence supported the court’s conclusion that the cargo was not properly discharged in accordance with the plaintiffs’ rights. The false or unreliable documents reinforced the conclusion that the defendants could not rely on the discharge paperwork to defeat the plaintiffs’ claims. The court therefore treated the evidential record as consistent with liability rather than as a defence to it. (Paras 39, 42, 49)

What Legal Meaning Did the Court Give to “Possession” and “Delivery”?

The judgment contains the court’s most important legal analysis. On possession, the court held that the Bills of Lading Act did not confine possession to physical custody. It expressly recognized that actual possession may be held by one person and constructive possession by another, at least for some purposes. That interpretation was necessary to avoid defeating commercial arrangements in which bills are held by agents on behalf of principals. (Paras 20, 21)

"The Act does not define "possession," which is a sufficiently flexible concept to allow for the possibility of actual possession being held by one person and constructive possession being held, at least for some purposes, by another." — Per Kan Ting Chiu J, Para 20

On delivery, the court drew a distinction between mere discharge and the “taking delivery” contemplated by the statutory and contractual framework. It quoted the proposition that taking delivery means the voluntary transfer of possession from one person to another, and then held that the delivery referred to in section 3 is the full transfer of possession of the relevant goods by the carrier to the holder of the bill of lading. That meant partial discharge or delivery to the wrong party would not suffice. (Paras 31, 35)

"Taking delivery in pars. (a) and (c) [of s 3(1) Carriage of Goods by Sea Act 1992] means, as I have said, the voluntary transfer of possession from one person to another." — Per Kan Ting Chiu J, Para 31

"The delivery to which s.3 is referring is that which involves a full transfer of the possession of the relevant goods by the carrier to the holder of the bill of lading." — Per Kan Ting Chiu J, Para 31

The court’s treatment of delivery was therefore not formalistic. It focused on whether the carrier had actually transferred possession of the cargo in the manner required by the bill and the instructions. Because the defendants had not done so for the cargo that remained on board, the plaintiffs succeeded on the contractual claim. (Paras 31, 35, 49)

How Did the Court Deal With the Authorities Cited by the Parties?

The defendants relied on The Shravan for the proposition that a plaintiff must be in possession at the commencement of the action. The court said that case was of little assistance because it did not address physical possession or possession through an agent. That distinction mattered because the present case turned precisely on whether constructive possession through an agent was enough. (Para 17)

"The Shravan" — Per Kan Ting Chiu J, Para 17

The court also referred to Carver on Bills of Lading, which discussed situations where bills are held by forwarding agents appointed by buyers to obtain delivery. The passage cited examples such as The Aramis, The Aliakmon, and White v. Jones, and the court used that discussion to support the proposition that possession may be held through an agent and that the modern statutory framework accommodates such arrangements. (Para 19)

"The Aramis" — Per Kan Ting Chiu J, Para 19

"The Aliakmon" — Per Kan Ting Chiu J, Para 19

"White v. Jones" — Per Kan Ting Chiu J, Para 19

For conversion, the court relied on Bristol & West of England Bank v Midland Railway Co as the main authority for the proposition that title to sue in conversion can be transferred. It also referred to Lloyd v. Grace Smith in the context of agency and fraud, and to Hollins v Fowler and Lancashire and Yorkshire Railway Company, London and North Western Railway Company, and Graeser Ltd v MacNicoll on the nature of conversion. These authorities were used to show that the defendants’ conduct, even if not motivated by dishonesty, could still amount to conversion if it was inconsistent with the true owner’s rights. (Paras 27, 55, 56)

"Bristol & West of England Bank v Midland Railway Co" — Per Kan Ting Chiu J, Para 27

"Lloyd v. Grace Smith" — Per Kan Ting Chiu J, Para 56

"Hollins v Fowler" — Per Kan Ting Chiu J, Para 56

The court also referred to Voyage Charters by Julian Cooke and others, British Shipowners v. Grimon, Chartered Bank v. British India S.N. Co., Knight v. Fleming, and The Berge Sisar in discussing delivery. These materials supported the distinction between discharge and delivery and reinforced the court’s conclusion that the carrier’s obligation was not satisfied by partial or misdirected discharge. (Paras 30, 31, 32, 33)

"The "Berge Sisar"" — Per Kan Ting Chiu J, Para 31

Why Did the Court Conclude That the Defendants Were Liable in Conversion?

The conversion analysis was tied to the defendants’ handling of the cargo after arrival at Fujairah. The court stated that dealing with goods in a manner inconsistent with the right of the true owner amounts to conversion. It then applied that principle to the defendants’ conduct in relation to the cargo that was not discharged or not fully discharged. Because the plaintiffs had title to sue and the defendants had dealt with the cargo inconsistently with the plaintiffs’ rights, the tort claim succeeded. (Paras 49, 55, 57)

"It appears to me plain that dealing with goods in a manner inconsistent with the right of the true owner amounts to a conversion" — Per Kan Ting Chiu J, Para 55

The court’s reasoning also addressed the defendants’ attempt to rely on their dealings with Metro. Even if the defendants believed Metro were the owners, that belief did not alter the legal character of the conduct once the plaintiffs’ rights under the bills of lading were established. The court therefore treated the defendants’ conduct as conversion in relation to the Cherry cargo that remained undischarged and in relation to the related claim where the same principle applied. (Paras 42, 49, 57)

Accordingly, the court entered judgment for the plaintiffs not only on the contractual claims but also in conversion. It did so with damages to be assessed by the Registrar, reflecting that liability had been established but quantum required further assessment. (Paras 49, 52, 57)

What Orders Did the Court Make on Liability, Damages, and Costs?

The court ordered judgment for the plaintiffs in the three actions for the cargoes which were not discharged or not fully discharged. It expressly directed that damages were to be assessed by the Registrar, which meant the trial resolved liability but not the final monetary amount. The order also included costs in the plaintiffs’ favour. (Para 52)

"I therefore order that judgment be entered for the plaintiffs in these three actions for the cargoes which were not discharged or not fully discharged with costs, with damages to be assessed by the Registrar." — Per Kan Ting Chiu J, Para 52

In the related conversion claim, the court likewise held that the plaintiffs were entitled to judgment and costs, again with damages to be assessed by the Registrar. The court’s treatment of the claims was therefore consistent across contract and tort: liability was established, but the precise quantum was left for assessment. (Para 57)

"Consequently the plaintiffs are also entitled to judgment and costs in this claim, with damages to be assessed by the Registrar." — Per Kan Ting Chiu J, Para 57

The court also certified that the plaintiffs’ costs were to be taxed for two counsel. That certification is a practical indicator of the complexity and importance of the case, and it reflects the court’s recognition that the matter warranted representation by more than one counsel. (Para 58)

"I certify that the plaintiffs’ costs are to be taxed for two counsel." — Per Kan Ting Chiu J, Para 58

Why Does This Case Matter?

This case matters because it clarifies that a bill of lading holder under section 5 of the Bills of Lading Act need not have physical possession if the bill is held by an agent on the holder’s behalf. That is a commercially important point in trade finance and shipping practice, where documents are often held by banks, subsidiaries, or other intermediaries. The court’s flexible approach to possession prevents formal custody from defeating substantive rights. (Paras 20, 21, 23)

It also matters because it distinguishes discharge from delivery. The court made clear that the carrier’s obligation is not satisfied merely by unloading some cargo or by following instructions from a party without the relevant entitlement. Delivery, in the statutory sense, requires a full transfer of possession to the holder of the bill of lading. That principle is significant for carriers, charterers, and cargo interests because it defines when contractual performance is complete. (Paras 31, 35, 38)

Finally, the case is important for conversion law because it confirms that title to sue can be transferred through endorsement and delivery of the bill, and that dealing with goods inconsistently with the true owner’s rights amounts to conversion. The judgment therefore links documentary title, agency, and tortious liability in a way that is highly relevant to disputes over misdelivery and cargo diversion. (Paras 28, 55, 57)

Cases Referred To

Legislation Referenced

• Bills of Lading Act (Cap 384, 1994 Ed), section 5 (Paras 16, 20) [CDN] [SSO]
• Carriage of Goods by Sea Act 1992, section 3(1) (Para 31) [CDN] [SSO]

Source Documents

• Original Judgment — Singapore Courts
• Archived Copy (PDF) — Litt Law CDN
• View in judgment: "The oil was loaded on the..."
• View in judgment: "Section 5 of the Act refers..."
• View in judgment: "At the end of the case,..."
• View in judgment: "Glencore UK is a wholly owned..."

This article analyses [2002] SGHC 68 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the full judgment for the Court's complete reasoning.