JUDGMENT

Wee Chong Jin CJ:

The appellants, C.F. Sharp & Company (Malaya) Private Limited (Sharp), are ship's agents and shipbrokers. They were instructed in January 1975 by the second respondents, Hai Nguan & Co. (Hai Nguan) to find vessels to carry triple phosphate sulphate, a fertiliser, from Rumania to Indonesia. Unknown to Sharp, Hai Nguan were acting on the instructions of a Mr. Hiswara of B.T. Bina Alam, an Indonesian firm. Hiswara had agreed to purchase 40,000 tons of the fertiliser from a Rumanian company but had arranged with Phillips Petroleum International Inc. (Phillips) for Phillips to be the purchaser who would re-sell the fertiliser to P.T. Bina Alam. By this arrangement Phillips would make a profit of US$80,000 although its part was that of a mere intermediary. Phillips was also asked by Hiswara to find vessels to carry the fertiliser to Indonesian ports for which they would receive a commission of 1.¼% of the charter fees.

The seeds for dispute had thus been planted by Hiswara by his instructing, unknown to each other, Phillips and Hai Nguan to find vessels for carrying the fertiliser. Phillips instructed shipbrokers Stott Nielson and Hai Nguan instructed Sharp. Sh