TIMUR JAYA CO LTD v. KARIM'S INTERNATIONAL (a firm)

1988, No. A6602

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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JUDGMENT

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1. This is by no means an easy case. The encounters between the parties to this action were clouded with obscurities from start to finish. The case is beset with difficulties in its pleadings, its presentation and the evidence adduced.

2. The plaintiff's case is that the defendant wrongfully failed to nominate a vessel or to open a proper Letter of Credit within the time stipulated. The Sales Contract (p.2 of the Agreed Bundle) entered into between the plaintiff and the defendant dated the 28th January 1988 provided for shipment, by the latest on the 15th March 1988. I shall call it "the said Contract". The Letter of Credit purportedly established under the said Contract put shipment date down as not later than the 31st March 1988. Shipment date and expiry date of the Letter of Credit had been extended a number of times, and by the plaintiff's telex dated the 20th April 1988 (p.29 of the Agreed Bundle), the last extensions of shipment date to the 30th April and Letter of Credit expiry date to the 16th May were both accepted. I. shall simply give the page reference for the Agreed Bundle.

3. Under the said Contract, a Letter of Credit was to reach the plaintiff not later than 12th February 1988 and nomination of the vessel was to be "at least 10 days before vessel's ETA loading port" which may be said to be 10 days before the contract shipment date, i.e. 10 days before the 15th March 1988.

4. In paragraph 3 of the Amended Statement of Claim, the plaintiff alleges in effect that the defendant should have nominated a vessel or opened a proper Letter of Credit by the 5th March 1988, or 21st March 1988 (i.e. under either of these two alternatives, 10 days before the respective shipment dates) or within a reasonable time thereafter. Mr Reyes, counsel for the plaintiff, no longer relies on any alleged breaches with reference to the two earlier dates, the 5th March 1988 and the 21st March 1988. The plaintiff's complaint" now is that the defendant was in breach by not nominating a vessel or by not opening a proper Letter of Credit within a reasonable time thereafter, latest, so Suggested Mr Reyes, by the 20th April 1988 (i.e. 10 days before the ultimately accepted shipment date, the 30th April 1988).

5. The defence is that the plaintiff orally agreed to vary the said Contract by (1) accepting the Letter of Credit as it then stood pending modifications, the amount on which was at the last stage increased by US$1/Metric Ton and (2) making available the cargo for inspection by the defendant before nomination of a vessel. The shipment date and the expiry date for the Letter of Credit were later, time and again, varied, including its amount. Therefore, that the said Contract could be varied by consent is not an issue. The question is whether these variations were indeed agreed as alleged. The plaintiff is thus said to have been content with the Letter of Credit first given on an assurance that all proper amendements in accordance with the contract terms and subsequent requests would be made. The defendant claims that it was, in fact, the plaintiff who broke the contract by failing to make available the contract goods for inspection. In the end, so it is contended, the plaintiff had deliberately incapacitated itself from giving any inspection by selling the cargo. As a result, so the defendant claim, they were driven to terminate their contract with their Bangladesh sub-buyers, thus sustaining damages for which they now counterclaim.

6. As against the defendant, the plaintiff seeks to recoup intself for loss of profits and the compensation it has allegedly paid to the Chinese supplier. The plaintiff has abandoned its claim for bank charges. The compensation allegedly paid to the Chinese supplier arose, according to Mr Michael Gan of the plaintiff, in this way: by an Agreement entered into in October 1987, the Chinese supplier was to deliver 7,000 metric tons of rapeseeds to the plaintiff by two equal monthly instalments of 3,500 metric tons each in December 1987 and January 1988. 1 shall call it "the Chinese Agreement". Naturally, the Chinese Agreement did not contain identical provisions. But there was, inter alia, an allowance given for 10% Assorted Granules. Mr Amdani of the defendant is highly critical of this exception which, he says, would have been utterly unacceptable. Mr Gan is adamant that they were goods satisfactory for acceptance under the plaintiff's said Contract with the defendant and that the crucial importance lay in the 38% oil content of the rapeseeds. In the defendant's case, an inspection was to be had, and therefore the actual goods could very well be quite acceptable to the defendant on inspection. The plaintiff was expecting to supply the said Contract with this consignment, and unless any breach is shown to have been committed, I am to assume as probable that the rapeseeds under the Chinese Agreement would meet the specifications of the said Contract. Under the Chinese Agreement, a Letter of Credit was to be opened before the 15th November 1987. The plaintiff had not been able to procure that Letter of Credit, and the time for its opening under the Chinese Agreement was extended to February 1988. It is noteworthy that the said Contract only came to be signed on the 28th January 1988 with its Letter of Credit to reach the plaintiff by the 12th February 1988. But, the Letter of Credit under the said Contract was not opened until the 3rd March 1988 (p.3). This Letter of Credit was transferred to the Chinese supplier almost immediately the next day, the 4th March 1988. In its telex to the defendant dated the 1st August 1988 (p.30), the plaintiff made a surprise disclosure that its Mainland supplier (not, be it noted, the plaintiff) had cancelled the Chinese Agreement. It is submitted by counsel for the plaintiff that both parties to the said Contract contemplated that in case of default, "the plaintiff could not and would not itself have used (its) resources for the opening of a Letter of Credit" under the said Chinese Agreement to finance the purchase from the Chinese supplier. See Trantrust SPRL v. Danubian Trading Co. Ltd., [1952]2 Q.B. 297 at p.302 per Somervell L.J. Hence, upon the defendant allegedly failing to open a proper Letter of Credit under the said Contract, it is said that this was not one of the cases in which the plaintiff could legitimately be called upon to search for another buyer for taking over the defendant's obligations. When the defendant allegedly failed to effect all the amendments to the Letter of Credit under the said Contract, so argued Mr Reyes, the plaintiff was not obliged to look for another buyer. The plaintiff could simply put an end to his supply contract and claim damages. This, as counsel submits, was precisely what the plaintiff did as it was entitled to. The plaintiff claims to have settled with its Chinese supplier. It claims loss of profits and reimbursement of the compensation it allegedly paid the chinese supplier in settlement.

7. The plaintiff through Mr Gan would have the Court believe that it was a case of termination of the said Chinese Agreement by itself, the plaintiff and not of cancellation by the Chinese supplier as stated in its said Telex of the lst August (p.30). Mr Gan claims that during the Guangzhou Trade Fair between the 20th to 25th April 1988, the Chinese supplier made known their wish to discuss the plaintiff's inability to open the requisite Letter of Credit. The plaintiff was hoping to pass the transferable Letter of Credit under the said Contract to the Chinese Supplier. It was in fact so transferred. Evidently the Chinese supplier's complaint was focused on the non-conforming conditions hampering the negotiation of the Letter of Credit. According to Mr Gan, the plaintiff was indecisive until the 27th April when shaken confidence in the defendant supplying a negotiable Letter of Credit was finally exhausted, and it terminated the said Chinese Agreement and settled with the Chinese supplier. Consequently compensation was paid.

8. But at times, Mr Gan's evidence was more in line with the version so clearly maintained in the plaintiff's telex of the 1st August (p.30), that is to say, it was the Chinese supplier who took the initiative of cancelling the said Chinese Agreement on the 27th April. If that be the case, the cancellation of the Chinese Agreement might have been caused by events for which the defendant could not be held responsible.

9. Settlement between the plaintiff and its Chinese supplier is said to have immediately followed, involving the Chinese Agreement and another agreement between them. The final amount was allegedly set at US$64,283 for $7,000 metric tons. A proper apportionment of US$64,283 to the quantity under the defendant's said Contract would yield US$45,916.43. That is the sum claimed as paid compensation. Mr Gan's evidence on the settlement and its prior negotiation is less than satisfactory. He claimed that the plaintiff's loss under the other agreement involved could easily be calculated but that the Chinese supplier produced rough calculations in the morning of the 27th April and furnished details later in the day, culminating in the signing of a settlement agreement in the evening. He was given sight of a few documents of which he could recall the warehouse charges. He could not give even the percentage of the Chinese supplier's claims as reflected in these warehouse charges bills he was shown. He kept no record or copies of any alleged documents. A more irresponsible account of what was said to be a US$64,283 settlement could not be imagined. I cannot accept such scanty oral evidence as proof of a fairly seizable claim of US$45,916.43 against the defendant. In my judgment, the plaintiff's claims against the defendant is thus reduced to its claimed loss of profits in the sum of US$50,000 together with interests and costs.

10. It is perhaps convenient to summarise the conflicting versions : by its telex dated 20th April 1988 (p.29), the plaintiff accepted the final extensions of shipment date to the 30th April 1988 and Letter of Credit expiry date to the 16th May 1988. In the same telex, the plaintiff sought nomination of a vessel and amendements to the Letter of Credit as previously requested. It is alleged that the defendant wrongfully failed to supply either. The plaintiff denies that it had agreed to accept, for the time being, the Letter of Credit as it then stood. It is further argued on behalf of the plaintiff that if ever there subsisted an agreement to allow the defendant an inspection before their vessel nomination, the defendant did not begin to treat the plaintiffs alleged failure so to give an inspection as repudiation until long after the plaintiff had itself treated the said Contract as ended on account of the defendant's alleged inability to open a proper Letter of Credit. Even with such mutual breaches, so submitted by counsel, the plaintiff had first taken advantage of it and that thereafter there was no subsisting contract for the defendant to repudiate. Counsel's submission stems from these facts : on the 20th April 1988 by its telex (p.29), the plaintiff demanded nomination of a vessel as well as requested L/C amendments. Hence, on that stance taken by the plaintiff, inspection should have been provided to the defendant in advance before the 20th April so as to enable a vessel to be nominated in time by that date. It could therefore be said that before the 20th April plaintiff must have been in breach of the alleged agreement to provide inspection. Though the plaintiff's alleged breach thus occurred before the defendant's alleged breach, it is submitted that by its telex of 1st August (p.30) the plaintiff treated the defendant's alleged breach as repudiation at a time when the defendant was still pondering over whether or not to seek to rely on the plaintiff's alleged breach. On the force of The "Samora", [1987]2 Ll. Rep. 236, counsel for the plaintiff argued that the plaintiff had, in any case, first taken advantage of a later alleged breach by the defendant and brought the said Contract to an end. The plaintiff chose to rely on its telex of the 1st August (p.30). As I have said, it is claimed that by the 1st August, the defendant were still undecided whether or not to treat the plaintiff's failure to give inspection as repudiation. The plaintiff is therefore said to be entitled to judgment on liability. Of course, all this is predicated upon the premise that the defendant would fail on their alleged oral agreement on the part of the plaintiff to accept the L/C as it then was.

11. As for the defendant, its version is that the plaintiff orally agreed to accept the then Letter of Credit pending amendments. Hence, the plaintiff could not complain of the L/C requirements. In any case, the defendant were entitled to and did, earlier in time, treat themselves as discharged on account of the plaintiff's alleged failure to provide inspection. The defendant was told early in June that the goods were sold, and the defendant claims that at the end of June, they terminated their corresponding contract with their Bangladesh sub-buyers.

12. The plaintiff had allegedly terminated the Chinese Agreement on the 27th April. It may well be, as the plaintiff did say more than once and repeated in its telex of the 1st August (p.30), that in truth it was the Chinese supplier and not the plaintiff who initiated the cancellation of the said Contract and that counsel for the plaintiff could not rely on the 27th April but sought to pin its repudiation on the 1st August. The Letter of Credit under the Chinese Agreement was to be opened before the 15th November 1987 and was later extended to February 1988. The transferable Letter of Credit under the said Contract was passed over to the Chinese suppliers only on the 4th March 1988 with non-complying L/C requirements which were never put right. The plaintiff must have displeased the Chinese supplier beyond his limit of tolerance. It is highly probable that the Chinese supplier simply took upon himself to cancel the Chinese Agreement. In any case, I need not speculate. Counsel for the plaintiff has categorically disregarded the 27th April, and that brings to a close all discussion on this topic. It has been suggested at one stage that there might exist another possible act of repudiation in June : the plaintiff told the defendant in early June that the cargo had been sold. But evidence given of this conversation hardly touchd upon the parties' reaction, their disposition and intention, and counsel agrees that it is not possible to reconstruct from the evidence what stand the parties took or were about to take; hence there was no or no sufficient evidence to infer an election on the part of any party to treat the said Contract as repudiated on that June conversation. The June date is not therefore continued to be pursued by counsel for the plaintiff.

13. The defendant has raised a belated "waiver" of their alleged breach in not providing a Letter of Credit with proper amendments. Such waiver is sought to be founded on the plaintiff's transfer of the defendant's Letter of Credit the next day after its opening i.e. on the 4th March 1988 and the transfer of its subsequent amendment on the 19th April 1988. The waiver point was doomed to failure. Such transfers were unknown to the defendant until pleadings were filed or discovery made. Therefore, in no way could the defendant have acted on any of these then unknown transfers to feed the alleged waiver.

14. I shall endeavour to set out the facts as I find them : the said Contract provided for shipment date, latest by the 15th March 1988 and nomination of the vessel "at least 10 days before vessels ETA loading port". I am prepared to assume that to mean 10 days before shipment. The L/C under the said Contract was to be opened not later than 12th February 1988. The L/C subsequently opened on the 3rd March 1988 put shipment date not later than the 31st March 1988 and L/C expiry date, 16th April 1988 (p.3). The L/C contained unauthorised requirements. By a telex of the 5th March 1988 (p.23), the plaintiff sought amendments to the L/C. On the 21st March 1988, by telex (p.24) the plaintiff requested the defendant to nominate vessel forthwith. Apparently, the defendant requested a further extension of the shipment date, and by a telex dated 25th March 1988 (p.26), the plaintiff agreed with the defendant to extend shipment date to be 21st April 1988 and L/C expiry date to the 7th May 1988. It is important to note that in this telex, the plaintiff requested, inter alia, a US$3 extra per metric ton. By a telex apparently sent on the 29th March 1988 (p.27), the defendant extended the shipment date to 30th April 1988 and L/C expiry date to the 15th May 1988. At the same time, two clear messages were also delivered : first, the defendant were strongly opposed to the increase of extra US$3 per ton and counter-offered an increase of US$1 per ton; secondly, the defendant confirmed :-

"VESSEL WILL BE NOMINATED AFTER 20TH APRIL AS I HAD INFORMED YOU VERY CLEARLY DURING OUR MEETING, AND BEFORE VESSEL NOMINATION, ONE OF OUR REPRESENTATIVE (SIC) WILL GO AND INSPECT THE CARGO WHICH WAS MUTUALLY AGREED UPON." (EMPHASIS IS MINE).

15. By a follow-up telex dated 31st March 1988 (p.28), the plaintiff informed the defendant that shipment date should be extended to the 21st April 1988 and L/C expiry date to 7th May 1988. In it, the plaintiff made a fresh proposal for an extra US$2 (not, be it noted, US$3) per metric ton. This follow-up telex categorically stated : "TO FINALIZE THIS CASE, WE NOW PUT FORWARD FOLLOWINGS FOR YOUR TELEX CONFIRMATION WITH US NOT LATER THAN 17:00 HOURS 6/4/88 HONG KONG STANDARD TIME" (emphasis added).

16. In the mean time, shipment date was extended by the defendant to the 30th April 1988 and L/C expiry date to the 16th May 1988. These dates were more favourable. There was no mention of any increase.

17. Mr Amdani claims that at a meeting in March 1988 prior to the plaintiff's telex sent on the 25th March 1988 (p.26), he agreed with Mr Gan that the L/C was to be accepted as it was with proper amendments to follow in due course before its negotiation and that insepction was to be provided before the nomination of a vessel. In addition, the plaintiff is said to have then agreed to an increase of only US$1 per metric ton. According to Mr Amdani, after the receipt of the plaintiff's telex dated the 25th March 1988 (p.26) demanding an extra US$3, he immediately contacted Mr Gan by telephone and was told that this telex was a mere formality and that another telex would come confirming all the "points" agreed at the March meeting. Not having received a further telex as assured, he despatched the defendant's telex dated the 29th March 1988 (p.27) allegedly confirming the agreed increase of a dollar, the agreed acceptance of the then L/C, and the agreed inspection prior to vessel nomination. This telex does not corroborate the version of Mr Amdani in full. There was no confirmation of any agreement for just an extra dollar increase. It was put on the basis of a plea that the defendant could only afford another dollar. Moreover, there was also no mention of the alleged agreement for accepting the L/C as it then stood.

18. As I have said earlier, the last reference in writing made to an increase was in the telex of the plaintiff dated the 31st March 1988 (p.28) for US$2. There was no subsequent confirmatory telex as requested or at all. The subject seemed to be left in abeyance. The shipment date was then about to be extended to the 30th April 1988 and the L/C expiry date to the 16th May 1988. 10 days before the final extended shipment date, on the 20th April 1988 the plaintiff telexed (p.29) the defendant confirming its acceptance of the last-mentioned extended shipment and L/C expiry dates with a winding-up request : "BY THE WAY, WOULD YOU ALSO AMEND OTHER POINTS AS PER OUR PREVIOUS TELEXES, AS WELL AS NOMINATE VESSEL SOONEST".

19. It is difficult to suggest how a Letter of Credit could then be suitably amended with the increase unsettled. Was it to be US$1 or US$2? The first demand was for an extra US$3. The defendant pleaded for a moderate US$1 raise but the plaintiff came hack with a fresh US$2 margin for confirmation. The Matter ended there. I do not accept Mr Amdani's evidence that the increase had been agreed at US$1 even before the plaintiff's demand by telex (p.26) for an extra US$3. As I have said, the defendant's telex dated the 25th March 1988 (p.27) did not corroborate this assertion of Mr Amdani's. I find that the negotiation of the parties had not been successfully concluded with at least an unsettled increase. In the absence of a confirmatory telex, the defendant could not be, as at the 20th April 1988, called upon to furnish a negotiable Letter of Credit. The defendant were never warned that the plaintiff was minded to return to the earlier terms of the said Contract, nor were they told what reasonable time limit they had for meeting these earlier terms. The plaintiff had also never specified what terms they were to be. The plaintiff's claim for loss of profits is baldly pleaded as US$50,000. The unresolved increase in price perhaps explains why counsel for the plaintiff discreetly steered away from offering the Court a detailed breakdown of its claim.

20. That plaintiff had allegedly accepted the Letter of Credit as it was does not bear close examination. It is fair to say that Mr Amdani's version is probably not inconsistent with the situation : the plaintiff must have been hard pressed to open a L/C for its Chinese supplier. In fact the L/C of the defendant's was immediately transferred. But Mr Amdani's claim is not even borne out by his own document he explains that he telexed the plaintiff on the 29th March 1988 (p.27) with a view to confirming, inter alia, Mr Gan's oral agreement to accept the then Letter of Credit. The telex so sent contained no reference to this alleged agreement. Mr Amdani's assertion is also at odds with the tenor of the plaintiff's telex of the 20th April 1988 (p.29) demanding Letter of Credit amendments. The Transfers of the Letter of Credit and its amendment cannot operate as a waiver. These transfers could well be otherwise explained, and they may not be taken as corroborative evidence of a prior agreement to accept the then Letter of Credit. Moreover, it would seem that Mr Amdani inserted those unwarranted L/C requirements for a specific purpose. He said in evidence :"I do not expect to pay $1M Letter of Credit with very clear terms without seeing the cargo and without knowing it and without knowing if it is the same stuff I am buying. I spoke to Mr Gan and it was agreed also that this amendment would be given upon nomination of vessel." According to Mr Amdani, L/C amendments could be hastily and inexpensively effected by a "two minutes' telex".

21. I am not persuaded that as alleged by Mr Amdani, there was any agreement for the plaintiff to accept the existing Letter of Credit pending promised amendments.

22. For the alleged agreement to provide inspection before the nomination of a vessel, the version of Mr Amdani seems to be well-supported by the documents. The wording in his telex of the 25th March 1988 (p.27) is clear. The strained interpretation offered by counsel for the plaintiff on the syntax of the quoted passage is interesting but clearly unhelpful. The plaintiff had never denied such a clear telex confirmation.

23. Mr Gan's excuses for not providing inspection were varying : first, he said that the defendant never specifically sought inspection nor made any endeavour to enquire where the goods were. According to Mr Gan, the goods had been ready since January 1988. There was no reason why the whereabouts of the goods had not been volunteered to the defendant even without any demand or request. After all, he did readily agree to inspection. Mr Gain then shifted his ground claiming that inspection was not provided because a valid Letter of Credit had yet to be given. The third excuse advanced by Mr Gan was that it was not a normal practice in a FOB contract to provide inspection. Mr Gan suggested yet a further excuse that there were already independent surveyors appointed in China, but he was driven to concede that in some of these China trade contracts, inspection was allowed. Mr Gan also maintained that inspection was promised to be given but was not made a condition for the contract. In any case, Mr Gan denied that he ever agreed for the nomination of a vessel to be dependent upon any promised inspection.

24. On this and other issues, I find Mr Amdani a more open witness than Mr Gan. Granted that a gentleman of his upbringing would be expected to speak with a more active tempo, but his evidence was indeed given without hesitation. On the other hand, Mr Gan seemed hesitant on some occasions. But the better impression gained from Mr Amdani alone is not sufficient to enable me to decide on the factual issues. I have tested the versions given with care and circumspection. I have derived not inconsiderable assistance from the documents available and the explanations offered by one side or another. I have no hesitation in accepting this aspect of Mr Amdani's evidence that the plaintiff did agree to provide inspection before the nomination of a vessel. In the result, the dispute as to the duty to nominate a port does not call for a determination. On strict interpretation, submission of counsel for the plaintiff seems to be well founded, but on facts there is much to be said for Miss Pinto's arguments. Mr Amdani explained that no only is the China coast vast, its ports well spread, but that with 200,000 bags in 100 wagons, it would not have been feasible in China trade to allow any buyer the right to nominate the loading port. I also accept that Mr Amdani told Mr Gan that he could not nominate any vessel without knowing the port and Mr Gan promised to let Mr Amdani know where the cago were. Even if the defendant had any duty to name the loading port, the plaintiff must allow inspection first and ought' therefore to have told the defendant where the cargo were in store for inspection. The duty to name a port under the said Contract has become peripheral.

25. As at the 20th April 1988, negotiation had not been concluded and there was no justification for demanding production of a negotiable Letter of Credit without the agreed price and settled terms. Presumably within a very short time after the 20th April 1988, understanding on all fronts might be reached, but as there was sufficient time to have the shipment date retained for the 30th April, inspection should have been given well before hand prior to the nomination of a vessel, which was in turn 10 days before the extended shipment date on the 30th April. After all, 30th April had been agreed. Assuming the on-going negotiation could in some way affect the final extended shipment date (but there is no evidence for it), there would have been no good reason for not giving information of the cargo location for inspection even if it was to coincide with L/C amendments. The plaintiff had promised inspection but failed so to provide one to the defendant. Alternatively, with negotiaiton not yet coming but likely to come to a fruitful conclusion, performance could not have then been demanded. Even after agreement, a reasonable time for implementation must, in the circumstances, be allowed. The plaintiff neither gave nor specified any reasonable time. Thus, the plaintiff was in breach in not affording inspection in sufficient time on the basis of the plaintiff's own arbitrarily selected crucial date i.e. the 20th April, whilst the defendant had not begun to become liable to provide a negotiable Letter of Credit until the conclusion of the then on-going discussion. In any case, the plaintiff never furnished particulars for such inspection thus, in effect, failed to allow it at all as agreed.

26. In early June, Mr Amdani was told by Mr Gan of the disposal of the rapeseeds under the said Contract. The plaintiff maintained, in as late as their telex of theist August 1988 (p.30), that "our Chinese supplier had cancelled our contract with them" and purported to treat the said Contract only then as at an end. Early June is not a date Mr Reyes relies on. The plaintiff has, for reasons best known to itself, chosen the 1st August. But the defendant terminated their sub-contract with the Bangladesh sub-buyers at the end of June. The defendant must have thereby accepted the plaintiff's breach as absolving them from all their obligations under the said Contract. It would seem, therefore, that the defendant had first treated the plaintiff's breach as discharging them from further performing the said Contract.

27. Mr Amdani discloses that the Bangladesh sub-buyers were considering a claim of US$25 a metric ton against the defendant. Mr Amdani explains that his Bangladesh sub-buyers were apparently sympathetic and prepared to accept his assurance of a reasonable settlement with them after these proceedings. The defendant have placed on record their accusation directed at the plaintiff for its failure to provide inspection. This failure must have been in the forefront of their mind when they cancelled the Bangladesh sub-contract. It was a rising market and apparently another sub-buyer could be easily found, but it must not be assumed that Mr Amdani and his company would have been prepared to risk business goodwill and the hazards of litigation by terminating the Bangladesh sub-contract unless there was no real hope of continuing to hold the plaintiff down on the said Contract despite its breach and disposal of the cargo. In my view, the defendant had, by their termination of the sub-contract with their Bangladesh sub-buyers at the end of June 1988, accepted the plaintiff as having deliberately incapacitated itself from performing its side of the bargain and treated themselves as discharged by reason of that breach of the plaintiff's. Read in its proper context, in their said telex and through Mr Amdani in his court evidence the defendant were, in effect, merely endeavouring to accentuate, with some exaggeration, their faultless conduct throughout the entire contractual relationship.

28. Apart from a casual mention of US$25 per metric ton, which was suspended, the Bangladesh sub-buyers' claim has not been formulated. It is difficult to tell whether the Bangladesh sub-buyers would abide by their reasonable attitude. The claim by the Bangladesh sub-buyers, if made, has yet to be assessed. It is decidedly more satisfactory that directions for the determination of the Bangladesh sub-buyers' claim, if any, should first be obtained. I would grant liberty to apply for directions as to how those issues, if arising, should be determined rather than acceding to a declaration of indemnity. See Bullin & Leak and Jacob's Precedence of Pleading 12th edn. p.822 and Trantrust Sprl v. Deanubain Trading Co. Ltd. supra p.307.

29. The plaintiff's claim must therefore be dismissed with costs. The defendant's Counterclaim succeeds. With US$45 per metric ton being allowed as the freight charges, the loss of profits to the defendant on the Counteclaim stands, I am told accurately, at US$30,000. On that understanding, I would give judgment on the Counterclaim in favour of the defendant in the sum of US$30,000 against the plaintiff with interest thereon at, subject to what counsel have to say, 8% from date of Counterclaim to to-day and costs.