The court ruled that investigation reports deemed hearsay were inadmissible, leading to the dismissal of the indemnity claim due to lack of evidence establishing liability under the charterparty agreement.

Introduction

[1] This is my judgment after full trial.

[2] The parties shall be referred to as follows:

[Synergy Marine and Executive Offshore shall collectively be referred to as "Third Party"]

[3] For the record:

(1) the action by PBJV as against Petrofac has been stayed pending arbitration;

(2) the action between PBJV, Asian Kaliber, and Bumi Armada has been bifurcated from the Third Party Action between Bumi Armada and the 1st and 2nd Third Party;

(3) the Trial only involved PBJV, Asian Kaliber and Bumi Armada.

[4] During the Trial, each party called only one witness respectively. They are:

[5] PBJV is seeking an indemnity under a charterparty agreement that it had entered into with Asian Kaliber in respect of Petrofac's claim for losses arising from damage done to its undersea pipes which had occurred during a mooring operation undertaken by the chartered vessel, ARMADA FIRMAN (which Asian Kaliber had chartered from Bumi Armada) with the assistance of an anchor handling tug, EXECUTIVE PRIDE.

[6] In seeking to prove that Asian Kaliber and or Bumi Armada is responsible for the said damage, PBJV relied on an investigation report by PBJV and Petrofac and an interim report by Petrofac as evidence establishing liability against them without procuring the attendance of the authors of these reports. Neither did PBJV secure the attendance of persons who were directly involved in the mooring operation to testify on the incident resulting in the damage to the pipelines. Significantly, both Asian Kaliber and Bumi Armada have not accepted the findings of the reports.

[7] The aforesaid gives rise to the question whether the contents of the reports are inadmissible as documentary hearsay and the consequences to PBJV's claim by reason thereof. There is also the question whether Bumi Armada is entitled to rely on the Knock for Knock and Himalaya clauses under the charterparty agreement in answer to PBJV's claims

Background Facts

[8] The parties' relationship in respect of the Contract No PM/PR/C/12001 for Provision for Hook-Up, Commissioning and Topside Major Maintenance Services for 2013-2018 ("the Project") can be summed up as follows:

(1) Petrofac was the Project Owner;

(2) PBJV was the Main Contractor for the Project;

(3) Asian Kaliber was PBJV's Sub-Contractor for the chartering of the accommodation work boat, ARMADA FIRMAN ("AF");

(4) PBJV entered into a Charterparty Agreement ("CPA") with Asian Kaliber for the charter of AF;

(5) Asian Kaliber, in turn, chartered AF from Bumi Armada, the owner of AF;

(6) Executive Offshore, was the owner of the anchor handling tug, EXECUTIVE PRIDE ("EP") which was assisting AF in the mooring operation on 6 November 2014.

The Incident

[9] As evident from the Statement of Agreed Facts between the parties, it is undisputed that an accident occurred on 6 November 2014 ("the Incident").

[10] The Incident occurred during the mooring operation of AF, assisted by the anchor handling tug, EP chartered by Petrofac from Executive Offshore whereby:

(1) AF's anchor was dropped to the seabed near the pipeline, Flexible Flowline #2 ("the Flowline") belonging to Petrofac;

(2) AF's anchor had damaged the Flowline.

[11] Following the Incident, Petrofac had incurred an additional cost of USD$1,190,676.82 towards the reparation works.

[12] Subsequently, Petrofac had issued a Notice of Arbitration to PBJV, claiming for the said sum of USD$1,190,676.82.

[13] In turn, PBJV filed the present action against Asian Kaliber and Bumi Armada.

PBJV