The court affirmed the principle that a shipping principal is liable for contractual obligations of their agent if the agency relationship is established and not disclaimed.

(Pursuant To An Order Of The Court Of Appeal)

Wong Kian Kheong JC:

A. Introduction

[1] This claim (Plaintiffs Claim) by the plaintiff company [a company incorporated in the Peoples Republic of China (Plaintiff)], and the counterclaim (Defendants Counterclaim) by the defendant company [a company incorporated in Malaysia (Defendant)] had been tried and decided by the Shah Alam High Court on 20 August 2014 (SAHCs Decision).

[2] Both the Plaintiff and Defendant have appealed to the Court of Appeal against the SAHCs Decision. On 4 March 2015, the Court of Appeal had ordered, among others, that this case be re-heard on its merits in the Kuala Lumpur High Court (Admiralty Division) (CAs Order). Hence, this case before me pursuant to the CAs Order (KLHC Proceedings).

B. Issues

[3] The following questions, among others, arise in this case:

(1) whether the Plaintiff was the principal of PK Shipping Agency Co. Ltd., Thailand (PKSA) when PKSA entered into 2 agreements with the Defendant in respect of the ship, "MV Vital Star" (Ship);

(2) whether the Defendant could deviate from the agreed journey of the Ship (to Kyauk Pyu, Myanmar) to Batu Ampar, Batam, Indonesia on the ground of the Ships engine problems;

(3) whether the Plaintiff is liable for the Defendants Counterclaim for freight in this case;

(4) whether the Defendant was entitled to a lien on the Plaintiffs steel bars and cement carried on the Ship (Cargo);

(5) in respect of PKSAs supply of bunker oil to the Ship (PKSAs Supply of Bunker Oil), whether PKSA had acted as the Plaintiffs agent and if "yes", whether the Plaintiff was liable to the Defendant under s 16 of the Sale of Goods Act 1957 (SGA);

(6) whether the Defendant is liable to the Plaintiff for the tort of detinue and/or tort of conversion in respect of the Cargo;

(7) whether the Plaintiffs Claim is barred by limitation; and

(8) whether the Defendant can rely on an exclusion clause as a defence against the Plaintiffs Claim.

C. Trial In SAHC

[4] In SAHC:-

(1) the Plaintiff called its only witness, Mr Yang Shengjun (PW1); and

(2) the Defendant called the following witnesses:-

(a) Dato Loo Son Yong (DW1);

(b) Mr Loo Tzeh Ming (DW2);

(c) Mr Loo Tzeh Kang (DW3);

(d) Encik Erwan bin Hassan (DW4); and

(e) Mr Soon Jin Kim (DW5).

D. KLHC Proceedings

[5] Before me, the parties agreed to a consent order dated 12 May 2015 (Consent Order). According to the Consent Order, among others:-

(1) both parties were at liberty to:-

(a) call new witnesses in the KLHC Proceedings; and

(b) re-call witness who had testified in SAHC (SAHC Witnesses), to give evidence in the KLHC Proceedings;

(2) all the documents filed in SAHC (SAHC Documents) were tendered as "Part B" documents in the KLHC Proceedings; and

(3) the notes of proceedings in SAHC (NOP) shall be admissible as evidence and may be relied on by both parties in the KLHC Proceedings.

[6] After the Consent Order, learned counsel for both parties informed this Court that:-

(1) both parties would not call any new witness in the KLHC Proceedings. Nor would parties re-call any of the SAHC Witnesses to testify in the KLHC Proceedings; and

(2) both parties would rely on their written submissions in the SAHC and CA. Both parties then applied for and obtained leave of this Court to file additional written submissions.

E. Evidence Which Had Been Adduced In SAHC Trial

E(1) Plaintiffs Case

[7] PW1 is a national of the Peoples Republic of China and is the "Commercial Manager" of the Plaintiff. In PW1s witness statement, PW1 testified as follows, among others:

(1) the Plaintiff has on-going projects in Myanmar, one of which is "Myanmar-China Crude Oil Pipeline Project-Crude Oil Wharf and Waterway Works". The Plaintiff had been engaged as a contractor to construct