ASSET WONDER LTD v. STELLAR SHIPPING CO. LLC, THE BAREBOAT CHARTERER OF THE SHIP “RUBY STAR”

HCAJ 129/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ADMIRALTY ACTION NO 129 OF 2013

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Admiralty action in rem against: the ship or vessel
“RUBY STAR” (IMO No. 9516703, Call Sign VREW7)

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J U D G M E N T

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1.  There is before this court an application by the plaintiff’s summons dated 6 November 2013 for final judgment on admissions against the defendant for:

(1) The interim sum of AED 43,799,927.05 in partial payment of the remaining unpaid charter hire for the remaining length of the Charter as at the time of termination thereof as admitted in paragraph 34(1) of the Defence;

(2) The sum of AED 9,592,904.00 in respect of outstanding hire due and payable as at the time of termination of the Charter as admitted in paragraph 34(2) of the Defence; and

(3) The sum of AED 1,568,495.25 as interest on earned hire as at the time of the termination of the Charter as admitted in paragraph 34(3) of the Defence.

2.  Upon clarification with Mr Toms for the plaintiff, insofar as the application for judgment on admission is concerned, the plaintiff is seeking an in rem judgment against the defendant.  The application is opposed by the defendant.

3.  By way of background I shall say this. The plaintiff is and was the registered owner of Ruby Star (“the Vessel”), that is paragraph 1 of the statement of claim.  Paragraphs 2, 4 and 5 of the statement of claim read as follows:-

“2.  The Plaintiff is a wholly owned subsidiary of Abu Dhabi National Leasing LLC (“ADNL”), a non-banking finance company operating primarily in the business of leasing. In the circumstances, the Plaintiff has been represented by ADNL in many of its dealings with the Defendant as set out herein. References to communications from or to the Plaintiff should accordingly be read as references from or to the Plaintiff or ADNL on its behalf.

…

4.  In 2009, ADNL provided sums to the Defendant for the purposes of the purchase by the Defendant of the Vessel pursuant to a shipbuilding contract dated 22 April 2008 (“the SBC”). It was agreed between ADNL and the Defendant that, in consideration of that financing, on delivery of the Vessel under the SBC: (i) the Vessel would be registered in the absolute ownership of the Plaintiff; and (ii) the Defendant and the Plaintiff would enter into an 84 month bareboat charter for the Vessel, at the end of which and assuming due performance of the Charter’s terms, the Defendant would become the owner of the Vessel.

5.  The Plaintiff and Defendant duly entered into a bareboat charterparty dated 14 January 2010 (“the Charter”). The Charter provided, inter alia, that:-

“9. PAYMENT OF HIRE AND OTHER MONEYS

9.1 The Charterer shall throughout the Charter Period pay to the Owner Charter Hire for the Vessel in advance, commencing on the signing of this Charter and continuing until the date and hour of her redelivery to the Owner pursuant to Clause 28 (or, as applicable, the date and hour of her transfer to the Charterer by way of sale pursuant to Clause 36) on the dates and at the rates specified in Schedule 2, being:

9.1.1 the sum of up to AED227,174 (United Arab Emirates Dirhams two hundred and twenty seven thousand, one hundred and seventy four) on 31 July 2009; and

9.1.2 the sum of up to AED306,190.5 (United Arab Emirates Dirhams three hundred and six thousand, one hundred and ninety thousand point five) on 31 August 2009; and

9.1.3 the sum of up to AED296,313.5 (United Arab Emirates Dirhams two hundred and ninety six thousand, three hundred and thirteen point five) on 30 September 2009; and

9.1.4 the sum of up to AED383,005.5 (United Arab Emirates Dirhams three hundred and eighty three thousand, and five point five) on 31 October 2009; and

9.1.5 the sum of up to AED453,989.5 (United Arab Emirates Dirhams four hundred and fifty three thousand, nine hundred and eight nine point five) on 30 November 2009; and

9.1.6 the sum of up to AED211,861.5 (United Arab Emirates Dirhams two hundred and eleven thousand, eight hundred sixty one point five) on 14 December 2009;

9.1.7 the sum of AED1,199,112.5 (United Arab Emirates Dirhams one million one hundred and ninety nine thousand, one hundred and twelve point five) per month from 30 December 2009;

providing always that Charter Hire shall be payable per month and pro rata for any part of a month.

…

9.9 The Charterer shall pay on demand by the Owner interest on any sum due under this Charter and unpaid or not paid on the due date for payment thereof, from and including the date upon which it fell due for payment (subject as provided below) until the date of actual payment (as well after as before judgment) at the rate of 2% per month, in advance provided always that where the Owner pays or incurs any such costs, charges, expenses, claims, liabilities, losses, penalties, fines, duties, fees, taxes or other moneys as are stated in this Charter to be payable by the Charterer to the Owner or recoverable by the Owner from the Charterer, or in respect of which the Charterer may be liable to indemnify the Owner, interest shall accrue thereon at the rate specified above from and including the date on which such cost, charge, expense, claim, liability, loss, penalty, fine, duty, fee, tax or other money is paid or incurred by the Owner.

9.10 For so long as the default referred to in Clause 9.9 continues such rate of interest shall be recalculated on a similar basis at the end of each successive period so determined by the Owner. Any such interest which is not paid when due shall be compounded at the end of each such period determined by the Owner for so long as it remains unpaid.

…

22. TITLE AND ENCUMBRANCES

22.2 The Charterer shall take all steps which may be necessary to safeguard the title and rights of the Owner in the Vessel as notified to the Charterer and in particular (but without limitation):

…

22.2.3 will promptly pay and discharge or secure all debts, damages and liabilities whatsoever that are not Permitted Encumbrances which the Charterer shall have been called upon to pay, discharge or secure and which have given, or may give, rise to maritime or possessory liens on or claims enforceable against the Vessel, and in the event of arrest of the Vessel pursuant to legal process, or in the event of her detention in exercise or purported exercise of any such lien as aforesaid, to procure the release of the Vessel from such arrest or detention forthwith upon receiving notice of the same by providing bail or otherwise as the circumstances may require;

…

25. TERMINATION

25.1 Each of the following events shall be a Termination Event for the purposes of this Charter:

25.1.1 if the Charterer fails to make any payment of hire or other moneys due under this Charter or, in respect of moneys payable on demand (unless otherwise specifically provided) forthwith upon such demand being made, and, but without prejudice to Clause 9.9, shall fail to make payment of the relevant sum within seven (7) Banking Days of receipt of notice from the Owner of such failure of payment;

25.1.2 if the Charterer is in breach of any one or more of the provisions of this Charter relating to the Insurances such as to prejudice the insurance cover of the Vessel;

25.1.3 if the Charterer fails to observe or perform any provision of this Charter other than those referred to in Clauses 25.1.1 and 25.1.2, and, in the reasonable opinion of the Owner, such default is either not remediable or, in the case of any such default which the Owner considers capable of remedy, is not remedied to the Owner’s entire satisfaction within twenty one (21) days after the Owner, by written notice to the Charterer, requires the same to be remedied;

…

25.1.17 if the management of the Vessels should change other than to an Approved Manager who shall have entered into an Approved Manager’s Undertaking and the same shall not be rectified within fourteen (14) days thereafter;

…

25.1.19 if any change shall occur with respect to the financial position of the Charterer or the Charter Guarantor which in the reasonable opinion of the Owner has a material adverse effect upon the ability of the Charterer or the Charter Guarantor to observe and perform their respective obligations under this Charter and the Charter Guarantee;

…

25.1.22 if the Charterers financial condition suffers a deterioration that in the opinion of the Owner materially affects the ability of the Charterer to perform its obligations under this Charter; or

26. OWNER’S RIGHTS ON TERMINATION EVENT

26.1 A Termination Event shall constitute (as the case may be) either a repudiatory breach of, or breach of condition by the Charterer under this Charter or an agreed terminating event (as set out in Clause 25) the occurrence of which will (in any such case) entitle the Owner thereupon and at any time thereafter to take any one or more of the actions specified in Clauses 26.2 to 26.5 inclusive.

26.2 The Owner may:

26.2.1 by written notice to the Charterer demand the immediate payment of the remaining unpaid charter hire for the life of this Charter together with all earned Charter Hire, all interest accrued thereon, whereupon the same shall become immediately due and payable.

26.2.2 proceed by appropriate court action or actions to enforce performance of this Charter and/or to recover damages for the breach thereof; and/or

26.2.3 take any and all such action as it may consider necessary or desirable to cure any such Termination Event. If the Owner thereby suffers any loss in curing the same, or otherwise incurs any expenditure or liability in respect of the Vessel which should have been incurred by the Charterer, the Owner shall be entitled (without prejudice to its other rights hereunder) to recover such expenditure, or an amount equal to such liability, from the Charterer together with interest thereon (as well after as before judgment) at the Default Rate in accordance with the provisions of Clause 9.9 from the date on which any relevant loss is suffered or any relevant expenditure or liability is incurred by the Owner until the date of receipt of payment thereof by the Owner.

26.3 The Owner at its option, and without any liability may by notice to the Charterer, declare the Charterer to be in default and terminate the letting and hiring of the Vessel under this Charter and withdraw the Vessel from the service of the Charterer either immediately or on such date as the Owner may specify, in which event:

26.3.1 the Vessel shall no longer be in the possession of the Charterer with the consent of the Owner;

26.3.2 the Charterer shall, at the Charterer’s expense, redeliver the Vessel or cause the Vessel to be redelivered to the Owner with all reasonable dispatch in the manner and in the condition required by this Charter; and

26.3.3 without prejudice to the Charterer’s obligation under Clause 26.3.2 above, the Owner shall be entitled, without legal process (or any obligation to institute legal process), to retake the Vessel (wherever she may be) together with all outfit, machinery, equipment, spare parts, appliances, furniture, fittings, furnishings, consumable stores, unused lubricating oils and bunkers on board the Vessel irrespective of whether the Charterer, any sub-charterer or any other person/s are in possession of the Vessel, and for that purpose the Owner or its agent may enter upon any dock, pier or other premises where the Vessel may be, and the Charterer agrees to indemnify the Owner for any liability, damages, costs or expenses whatsoever caused or incurred thereby.

26.4 Following the redelivery or retaking of possession of the Vessel, the Owner may sell the Vessel by public or private sale, or otherwise dispose of, hold, use, operate, charter to others or keep idle the Vessel, as the Owner in its sole discretion may determine, all free and clear of any rights of the Charterer and without any duty to account to the Charterer with respect to such action or inaction or for any proceeds with respect thereto.

26.5 The Owner may recover the amounts specified in Clause 26, without prejudice to the Owner’s rights to claim damages and/or to exercise any other right or remedy to which the Owner may be entitled to under this Charter or at law, in equity or otherwise as a consequence of the occurrence of a Termination Event.

26.6 Termination of the chartering of the Vessel and/or repossession of the Vessel by the Owner shall not relieve the Charterer from any of its obligations under this Charter and the Charterer shall continue to comply with its obligations under this Charter until such time as the Owner has unconditionally received all amounts payable by the Charterer under Clause 27.

27. TERMINATION PAYMENTS

27.1 Following termination of the chartering of the Vessel hereunder pursuant to Clause 26 or after any repudiation of this Charter by the Charterer which is accepted by the Owner, whether or not amounting to a Termination Event, the Charterer shall be and become obliged to pay to the Owner the following amounts:

27.1.1 forthwith upon such termination all arrears of hire which are due and payable under Clause 9 before the date of termination of the chartering of the Vessel hereunder and all other moneys then payable to the Owner, together with interest thereon (as well after as before judgment) at the Default Rate in accordance with the provisions of Clause 9.9 from the date on which such hire or other sums fell due for payment to the date of payment; and

27.1.2 on demand all amounts of unpaid hire for the remaining length of this Charter, being the sum of all 89 instalments set out in Schedule 2 less Charter Hire that has already been paid by the Charterer to the Owner under the terms of this Charter at the time of such Termination Event;

27.1.3 on demand all costs and expenses of and in connection with or arising out of the retaking of possession of the Vessel by the Owner or redelivery of the Vessel to the Owner pursuant to this Charter, including (without limitation) all costs and expenses suffered or incurred in moving, storing, laying up, insuring and maintaining, the Vessel and in carrying out any works or modifications required so as to enable the Vessel to comply with the requirements of Clause 28, together with interest thereon (as well after as before judgment) at the Default Rate in accordance with the provisions of Clause 9.9 from the date on which the expenditure was incurred to the date of payment; and

27.1.4 on demand all other losses, costs, expenses (including without limitation legal fees and expenses on a full indemnity basis) of whatsoever nature suffered or incurred by the Owner as a result of such termination or repudiation, including, without limitation, loss of profit, together with interest thereon (as well after as before judgment) at the Default Rate in accordance with the provisions of Clause 9.9 from the date on which such losses, costs and expenses were suffered or incurred to the date of payment.

27.2 The Owner shall take reasonable steps to mitigate any amount which it is entitled to demand under this Clause 27.

27.3 If the Owner shall exercise its right of public or private sale under clause 26.4, then if such sale proceeds are sufficient to discharge all amounts owed to the Owner by the Charter under clause 27.1, any excess proceeds of such sale shall be paid to the Charterer.

27.4 If the Vessel is not sold under clause 26.4 and is retained by the Owner, then upon discharge of all amounts owed to the Owner by the Charterer under Clause 27.1, the Vessel shall be transferred to the Charterer in accordance with Clause 36, providing always that such transfer shall take place when the Vessel is charter-free at a time and place nominated by the Owner.

…

Schedule 2
Hire

Instalment No.	Date	Instalment (AED)
…	…	…
42.	30.11.2012	1,199,112.50
43.	30.12.2012	1,199,112.50
44.	30.01.2013	1,199,112.50
45.	28.02.2013	1,199,112.50
46.	30.03.2013	1,199,112.50
47.	30.04.2013	1,199,112.50
48.	30.05.2013	1,199,112.50
49.	30.06.2013	1,199,112.50
50.	30.07.2013	1,199,112.50
51.	30.08.2013	1,199,112.50
52.	30.09.2013	1,199,112.50
53.	30.10.2013	1,199,112.50
54.	30.11.2013	1,199,112.50
55.	30.12.2013	1,199,112.50
56.	30.01.2014	1,199,112.50
57.	28.02.2014	1,199,112.50
58.	30.03.2014	1,199,112.50
59.	30.04.2014	1,199,112.50
60.	30.05.2014	1,199,112.50
61.	30.06.2014	1,199,112.50
62.	30.07.2014	1,199,112.50
63.	30.08.2014	1,199,112.50
64.	30.09.2014	1,199,112.50
65.	30.10.2014	1,199,112.50
66.	30.11.2014	1,199,112.50
67.	30.12.2014	1,199,112.50

4.  The Charter and its terms are not in dispute.  For the present purpose, one should concentrate on the terms of clause 26 entitled “Owner’s Rights on Termination Event” and clause 27 entitled “Termination Payments”. The Vessel was delivered to the defendant under the Charter on 21 January 2010 and the Charter was performed without any relevant incident until February 2011.

5.  Between November 2012 and June 2013, the defendant failed to pay to the plaintiff the following instalments of hire in accordance with clause 9 and Schedule 2 of the Charter:

(1) AED 1,199,112.50 due in November 2012;

(2) AED 1,199,112.50 due in December 2012;

(3) AED 1,199, 112.50 due in January 2013;

(4) AED 1,199,112.50 due in February 2013;

(5) AED 1,199,112.50 due in March 2013;

(6) AED 1,199,112.50 due in April 2013;

(7) AED 1,199,112.50 due in May 2013;

(8) AED 1,199,112.50 due in June 2013.

6.  By way of telefax dated 22 January 2013, the plaintiff notified the defendant under clause 26.2.1 of the Charter that, inter alia the plaintiff demanded payment of the outstanding hire and remaining unpaid charter hire for the life of the Charter, together with interest and costs, in the (then) total sum of AED 59,482,459.

7.  By letter dated 30 April 2013, the plaintiff was informed by Stellar Ocean Transport LLC (“SOT”) that SOT had been managing the Vessel (providing full management services in the areas of technical management, personnel management, commercial management, post fixture management, insurance and accounting) pursuant to a ship management contract dated 20 December 2009 between the defendant and SOT (“the SMC”).

8.  Further, by letter dated 30 April 2013, SOT informed the plaintiff that, despite several notices to the defendant, SOT had not been paid the management fee and the Vessel operating cost due under the SMC and amounting to US$3,593,902 as at 31 December 2012. In view of which, SOT claimed to be entitled to exercise a maritime claim against the registered owner of the Vessel. The defendant was therefore in breach of its obligations under clause 22.2.3 of the Charter.

9.  By a writ of summons dated 18 July 2013, the plaintiff commenced the present in rem proceedings in HCAJ 129/2013 against the Vessel/the defendant, seeking payment of all sums owing to it under the Charter, together with interest and costs. The plaintiff further applied to arrest the Vessel and an arrest warrant was duly issued on 19 July 2013 and served on the Vessel on 20 July 2013.

10.  The plaintiff’s claims are summarised in paragraph 34 of the statement of claim :

“(1) (a) Pursuant to clause 26.2.1 of the Charter, the sum of AED 62,723,258.25 in respect of the remaining unpaid charter hire for the life of the Charter, earned charter hire and interest thereon; alternatively

(b) Pursuant to clause 27.1.2, the sum of AED 51,561,859.00 in respect of the remaining unpaid charter hire for the remaining length of the Charter as at the time of termination thereof; and

(c) Pursuant to clauses 9, and/or 27.1.1, the sum of AED 9,592,904.00 in respect of outstanding hire due and payable as at the time of termination of the Charter, together with interest thereon in the sum of AED 1,568,495.25.”

11.  As stated in paragraph 1 of the plaintiff’s summons, the admissions by the defendant are all made in paragraph 34 of the defence:

“34. As to sub-paragraph 34(1)(a):

(1) It is denied that the Plaintiff is entitled to the sum of AED 51,561,859.00 in remaining unpaid hire as at the time of termination of the Charter. The Defendant avers that it is liable and indebted to the Plaintiff in the sum of AED 43,799,927.05 in remaining unpaid hire as at the time of termination of the Charter, to be discounted in the case of each instalment from its respective due date to the time of termination of the Charter at the appropriate rate(s) of interest. As to discounting, the Defendant repeats sub-paragraph 27(2) above.

(2) It is admitted that the Plaintiff is entitled to the sum of AED 9,592,904.00 in earned hire as at the time of termination of the Charter.

(3)          It is admitted that the Plaintiff is entitled to the sum of AED 1,568,495.25 in interest on earned hire as at the time of termination of the Charter.”

12.  Mr Smith SC, on behalf of the defendant, made two points in relation to the plaintiff’s application for judgment on admission.  First, the defendant has a counterclaim against the plaintiff for breach of his duty under clause 27.2 of the Charter for failing to agree to a private sale of the Vessel in July 2013, as suggested by the defendant.  Clause 27.2 of the Charter provided that the plaintiff shall take reasonable steps to mitigate any amount which it is entitled to demand under clause 27 of the Charter.  The plaintiff has failed to do that.  By a letter dated 11 July 2013, the defendant sought the plaintiff’s agreement to sell the Vessel by way of a private sale which the defendant proposed to arrange.  The plaintiff and the defendant had previously agreed this course of action in respect of the vessel “Super Star”, which was a sister ship.  The plaintiff has failed to confirm why it did not agree to proceed with the private sale for the Vessel.

13.  By an email dated 14 July 2013, the defendant provided the plaintiff with a copy of the valuation certificate dated 12 July 2013, issued by Arrow Valuations, and the plaintiff’s lawyers confirmed by a fax dated 16 July 2013 that the plaintiff was agreeable in principle to such a sale.  The Vessel was valued at approximately US$19.5 million. 

14.  Then the defendant complained that in breach of clause 27.2 of the Charter, the plaintiff had failed to take reasonable steps to mitigate the amount which it was entitled to demand under clause 27. 

15.  I should mention three more events.  On 15 July 2013, SOT issued an in rem writ against the Vessel in HCAJ 126/2013.  On 29 July 2013, the Charter was terminated.  On 10 September 2013, the plaintiff applied in these proceedings for the sale of the Vessel pendente  lite.  The application was granted by this court unopposed.  According to the defendant, the reason for not opposing the application for sale pendente lite was because the plaintiff had a discretion under clause 26.4 of the Charter whether or not to agree to a sale of the Vessel.  Clause 26.4 of the Charter provides as follows:

“26.4 Following the redelivery or retaking of possession of the Vessel, the Owner may…”

And I stress the word “may”:

“...sell the Vessel by public or private sale, or otherwise dispose of, hold, use, operate, charter to others or keep idle the Vessel, as the Owner in its sole discretion may determine, all free and clear of any rights of the Charterer and without any duty to account to the Charterer with respect to such action or inaction or for any proceeds with respect thereto.”

16.  In my view, that is a complete answer to the defendant’s first point, i.e. the plaintiff has failed to agree to a private sale of the Vessel in breach of clause 27.2.  If the plaintiff had a sole discretion, it cannot be under a duty at the same time.

17.  The second point made by Mr Smith, SC on behalf of the defendant is that the plaintiff should first recoup itself from the sale proceeds of the Vessel before coming after the defendant for the balance of its claims.  So either this court should not give judgment on admission today or it should grant a stay of execution of the judgment.  This court does not accept this argument either.  Clause 27.3 provides that:

“27.3 If the Owner shall exercise its right of public or private sale under clause 26.4, then if such sale proceeds are sufficient to discharge all amounts owed to the Owner by the Charter under clause 27.1, any excess proceeds of such sale shall be paid to the Charterer.”

18.  What the clause does not provide is that the plaintiff’s right to seek whatever judgment it is legally entitled to is dependent upon the plaintiff’s public or private sale of the vessel.  It also does not provide that the plaintiff’s execution of any judgment must be stayed until the plaintiff has sold the Vessel and demonstrated that the sale proceeds are not sufficient to cover the plaintiff’s claims. 

19.  For these reasons, this court would not accede to the defendant’s suggestion of not giving judgment on admission or to grant a stay of execution pending the sale of the Vessel by court in these proceedings. 

20.  There is also before this court an application by the plaintiff for summary judgment against the defendant in terms of paragraph 2 of the summons dated 6 November 2013.  Paragraph 2 of the summons claims:

“2. Final summary judgment be entered that Stellar Shipping Co LLC does:-

(1) Pay the additional sums of AED 7,761,931.95 and USD 924,195.46 together with interest thereon; and

(2) Indemnify the Plaintiff in respect of any sums that may be found to be due to Stellar Ocean Transport LLC (“SOT”) in action HCAJ 126 of 2013 (or otherwise) presently claimed by SOT to be USD 924,195 (plus interest and costs) and/or in respect of any sums that SOT may recover following any sale of the Vessel.”

21.  Upon clarification with Mr Toms, the plaintiff is seeking judgment in personam against the defendant in this application.  This is because of the provisions in RHC Order 14 rule 1(2)(c) which says that the rule applies to every action begun by writ, other than an admiralty action in rem.  There is a passage in the Hong Kong Civil Procedure 2013, paragraph 14/1/1, which says: “Although Order 14 does not apply to an admiralty action in rem, it does apply to an admiralty action in personam”.

22.  In the course of the hearing, Mr Toms, for the plaintiff, invited this court to adjourn paragraph 2(2) of the summons which claimed an indemnity in respect of any sums that may be found to be due to SOT, the ship manager, in action HCAJ 126/2013.  Since, at the moment, it is not clear whether SOT has a good claim against the defendant charterer/the Vessel in respect of unpaid expenses and disbursements, and hence whether the plaintiff has a good claim for indemnity, so this judgment will deal only with the claim for summary judgment under paragraph 2(1) of the summons.

23.  The application is opposed by the defendant.  Paragraph 2(1) of the summons seeks summary judgment of two sums.  One is AED 7,761,931.95, the other is USD 924,195.46.  I will deal with the claim for AED 7.7 million odd first. 

24.  In relation to this claim, the defendant’s position is that it comprises two elements.  One is for one month’s instalment in the sum of AED 1.1 million, which the defence says should be claimed as a past instalment of hire due rather than a future instalment. Two, AED 6.6 million, consisting of the interest element of future hire which is arguably a penalty because it is, in effect, an accelerated payment of interest on future hire. 

25.  This court does not accept that the AED 1.1 million should be claimed as a past instalment of hire.  Under the charterparty, the monthly instalment is payable on the 30th of each month.  The charterparty was terminated on 29 July 2013, so in relation to that one instalment, it was not yet due when the charterparty was terminated.

26.  This court also does not accept the submission that the claim for AED 6.6 million should be treated, or should arguably be treated as a penalty on the ground that it is, in effect, an accelerated payment of interest on future hire.  The charterparty does not provide for a division of instalments into a principal element and interest element. 

27.  The only basis put forward by the defendant as to this division between principal and interest was a one-page document which can be found at bundle B, page 211.  The only explanation about this document in the defendant’s draft affirmation in opposition was paragraph 30, which says: 

“30. However, I refer to item 32 under the “Balance Principal” column of a hire repayment schedule provided by the Plaintiff to the Defendant (Hire Repayment Schedule) at pages [69 to 70], which states that the Defendant was liable and indebted to the Plaintiff in the sum of AED 44,701,033.16 in respect of the remaining unpaid charter hire as at 16 July 2013. I verily believe that the Defendant was so liable and indebted to the Plaintiff.”

28.  If the defendant wishes to argue that the Charter has been amended by that one-page document, or if the defendant wishes to argue that the parties had indeed agreed that each monthly instalment of hire consists of a principal and interest element, even though the Charter does not say so, it is incumbent on the defendant to condescend on particulars.  The defendant has not done so. 

29.  In these circumstances, this court concludes that the defendant has failed to show a defence sufficient to resist an application for summary judgment for the sum of AED 7,761,931.95 as claimed, and will give summary judgment accordingly.

30.  As for the claim for USD 924,195.46, according to Mr Toms, the claim is predicated upon the defendant’s failure to allow inspection of the vessel and failure to provide financial information to the plaintiff, and it is made pursuant to clauses 26.2.3 and 27.1.4 of the charterparty. 

31.  In the plaintiff’s affirmation in support of the summary judgment application, the claim pursuant to those two clauses is for all the losses, costs and expenses incurred by the plaintiff in curing any termination event and/or the defendant’s repudiation of the charter.  In the statement of claim, the plaintiff has pleaded the sum of USD 753,002.63 as such costs and expenses. 

32.  In the affirmation in support of the summary judgment, the plaintiff has referred to further expenses in the sum of USD 189,192.83 as having been incurred since the date of the statement of claim.  The total sums claimed were USD 942,195.46.

33.  In the defendant’s draft affirmation in opposition to the summary judgment application, Mr Lafir has set out the defendant’s case regarding the alleged breaches of the failure to allow inspection and failure to provide financial information to the plaintiff. 

34.  I have considered the matters stated in the draft affirmation, the exhibits, as well as the defence and counterclaim filed by the defendant.  I take the view that the defendant has sufficiently shown cause that it has a defence on the merits to this part of the claim. 

35.  In these circumstances, I will give unconditional leave to defend the claim for USD 924,195.46 as claimed in paragraph 2(1) of the summons.

36.  As far as costs of the action to date, the plaintiff is entitled to them because it has obtained judgment on a substantial part of its total claims.  So I order costs of the action to date be to the plaintiff, to be taxed if not agreed.

37.  Costs of paragraph 1 of the summons dated 6 November 2013 be to the plaintiff, to be taxed if not agreed.

38.  As far as costs of paragraph 2 of the summons dated 6 November 2013 are concerned, the costs in relation to the claim for AED 7,761,931.95 be to the plaintiff, to be taxed if not agreed.  The costs in relation to the claim for USD 924,195.46 be costs in the cause.  The costs in relation to paragraph 2(2) of the summons, that is for the claim for indemnity, should be reserved. 

39.  And when I say costs of the summons, I include costs of today’s hearing.