Judgment no. 08/2020/KDTM-PT dated june 1, 2020 on dispute over a bareboat charter

PEOPLE'S COURT OF HAI PHONG CITY

JUDGMENT NO. 08/2020/KDTM-PT DATED JUNE 1, 2020 ON DISPUTE OVER A BAREBOAT CHARTER

On June 1, 2020, at the headquarters of the People's Court of Hai Phong province, the public appellate hearing of the case No. 03/2020/TLPT-KDTM is held on January 13, 2020 in the matter of dispute over a bareboat charter.

As the first-instance business judgment No. 13/2019/KDTM-ST dated November 14, 2019 of the People's Court of District H, Hai Phong City was appealed.

According to the Decision to bring the case to appellate trial No. 34/2020/QD-PT dated April 13, 2020 and the Decision to adjourn the trial No. 69/2020/QD-PT dated May 26, 2020 between the following litigants:

- Petitioner: Bank A; address: TNR Building, No. 54A N, district D, Hanoi city.

Legal representative authorized by the petitioner:

Ms. Vu Thi Thu H; address:  No. 9, alley 82/6 N, district C, Hanoi city;

Ms. Do Thi Thanh N not appearing in court; address: T 21, ward T, district M, Hanoi city; appearing in court (authorized according to Power of Attorney No. 5229/2018/UQ-TGD14 dated December 20, 2018)

Respondent: Company B; address:  Floor 8/80 L, ward L, district H, Hai Phong city.

Authorized representative of the respondent:  Mr. Nguyen Manh H; residing at:  T 10, ward DH, district H1, Hai Phong city (authorized according to Power of Attorney dated May 31, 2019); appearing in court

Person with interests and obligations related to the case: Company C; address:  Room 2, 11th floor, Building P, No. 561A P, Ward F, T, Ho Chi Minh City. Not appearing in court.

- Appellant:  Respondent Company B

FACTUAL AND PROCEDURAL BACKGROUND

Representation of the petitioner in the lawsuit petition dated April 9, 2019 and in the course of lawsuit settlement: Bank A (hereinafter referred to as Bank) is the owner of HAI PHUONG 619 ship, according to the Certificate of registration for Vietnam sea-going ship No. VN-3984 –VT and Certificate of minimum safe manning No. 2957/DKTB-2016.HP issued by Hai Phong Seafarers and Ships Registry on April 20, 2016.

On March 7, 2017, the Bank and Company B signed a bareboat charter No. 01/2017/MSB-MD as follows: The Bank let Company B hire HAI PHUONG 619 ship for a period of 13 months (from March 7, 2017 to April 7, 2018), with the characteristics of the ship shown in Article 1 of the Charter, the charter hire is 400,000,000 VND/month (VAT inclusive), payment period from 10th to 20th of every month, in form of bank transfer.  Company B put down a deposit of VND 800,000,000. With regard to the fine for delayed payment, delayed bank transfer, they have agreed that any delay in payment of hire shall entitle the Owner to interest at the rate of 150% of benchmark rate as quoted by the State bank of Vietnam on the date when the hire fell due on according to the delayed amount and delayed time. As for the fine for delayed delivery, in addition to the sum of hire charged during the delayed period, the Charterer must also pay a fine at the rate of 150% of the charter hire for each day of delay. The governing law is the law of Vietnam.  If mediation cannot be negotiated, one of the parties has the right to request a competent court in Hanoi to settle, in addition to a number of other terms.

After the expiration of the above Charter, the two parties signed the bareboat charter No. 01/2018/MSB-MD dated April 7, 2018. Under the charter, the Bank let Company B continue to hire the ship for a period of 12 months with the same terms and conditions as the Charter in 2017.

On March 7, 2017, the Bank delivered the ship and legal documents of Hai Phuong 619 ship to Company B. However, Company B has breached its payment obligation from November 2017 so far.  The Bank has repeatedly sent written requests to Company B to perform its obligations, but Company B still does not perform it.

On January 29, 2019, the Bank sent Document No. 396/2019/CV-TGD 14 to Company B to notify the termination of the charter, request payment of debts and return the ship to the Bank no later than February 12, 2019. On February 14, 2019 and March 5, 2019, the Bank sent official documents requesting Company B to fulfill its contractual payment obligations and return the ship.  However, Company B did not cooperate, did not pay debts and still deliberately let Hai Phuong 619 ship operate in international sea routes, causing a lot of trouble to the Bank.  On June 8, 2019, the Bank and Company C in Southern area had to arrange people to go to Samalaiju port - Bintulu - Malaysia to receive the delivery of ship at the request of Company B.

Company B paid the Bank the amount of VND 2,280,645,157.  Company B has paid on behalf of the Bank VND 400,000,000 (fuel for Hai Phuong ship's main engine and lights in March 2017) according to the charter addendum 2017; the dry docking cost that Company B paid on behalf of the Bank in the period of May 2017 as both parties recorded at point a, clause 1, Article 5 of the charter 2018 is VND 849,931,885.  Company B put down a deposit of VND 800,000,000 to the Bank.

The Bank proposes the Court to force Company B to pay the Bank the following amounts:

- Total amount of charter hire owed by B to the Bank after deducting the amounts paid by Company B as mentioned above is: (VND 9,887,311,824 + VND 57,612,401) – (VND 2,280,645,157 + VND 400,000,000 + VND 849,931,885 + VND 800,000,000) = VND 5,614,347,183.

- Interest on delayed payment of charter hire: VND 976,124,275.

- The fine for delay delivery of the ship for 62 days (From April 7, 2019 to June 8, 2019) is (VND 400,000,000/30 days) x 62 days x 8% = VND 66,133,333.

Total amount B has to pay to the Bank until November 14, 2019 is: VND 6,656,604,791.

In addition, Company B must continue to pay the interest until all debts are repaid to the Bank.

Regarding the request to return Hai Phuong 619 ship: The Bank would like to withdraw this request because on June 8, 2019, Company B returned the ship to the Bank.

* During the settlement of the case, the representative of the respondent, Company B, presents as follows:  Company B confirmed that it signed the bareboat charter with the Bank on March 7, 2017 with the same conditions and terms as presented by the petitioner. In order to perform the Charter 2017, the Bank requested Company B to steer the ship from Ho Chi Minh City to Hai Phong for dry-docking, the fuel cost for this trip was VND 400,000,000 and was confirmed by both parties by the addendum to the Charter 2017 to deduct this cost from the hire of July 2017. However, since Company B paid the charter hire of July 2017 and August, September and October 2017, in the final accounts of the charter hire signed on November 30, 2017, the two parties agreed to deduct this amount from the charter hire of the November 2017. Thus, Company B has paid the charter hire until the end of November 2017 in full.

In addition, according to the terms at point d, clause 2, Article 5 of the charter, the deposit of VND 800,000,000 is deducted from the charter hire, so Company B paid the charter hire of December 2017 and January 2018. So upon the termination of the charter, Company B only owes charter hire of February and March 2018 with the amount of VND 400,000,000/month x 2 months = VND 800,000,000. This amount will be offset against the ship repair costs, when the Hai Phuong 619 ship was taken to service shipyard in the dry dock in April 2018. At that time, Company B had to spend repair costs on behalf of the Bank with the amount of VND 849,931,885 and this amount was agreed by the parties to offset against the charter hire, so upon termination of the Charter 2017 on March 7, 2017, Company B no longer owes charter hire, but on the contrary, the Bank owes Company B an amount of VND 49,931,885.

Because the Bank miscalculated the amount of debt between the two parties, the Bank believed that Company B owed the charter hire from November 2017 onwards, so the Bank did not issue a charter hire invoice to Company B. The two parties started come into conflict about the amount of debts, which led to the fact that Company B could not account for the charter hire of the Charter 2017. The tax authority did not allow Company B to account the charter hire for expenses in 2017, 2018 and Company was forced to pay corporate income tax and VAT. Thus, this fault of the Bank caused damage to Company B.

After the end of the Charter 2017, the ship entered a dry dock for regular repair and the two parties signed the 2018 Charter with the same terms and conditions as the Charter 2017 with charter period of 12 months. With the deposit amount of VND 800,000,000, the two parties agreed to carry the remaining deposit of the Charter 2017 forward. Company B must pay the outstanding amount after 01 month from the date of signing the Charter 2018.

In Clause 1, Article 5 of the Charter 2018, there is also an agreement that B has paid for the Bank the amount of VND 849,931,885 for repair costs during dry docking of the SS-1 for Hai Phuong Ship (VAT included), the amount of oil left on board received by the Bank is VND 57,612,401 (VAT included), after offsetting, the Bank must pay Company B VND 849,931,885 - VND 57,612,401 = VND 792,319,484. This amount shall be deducted from monthly charter hire.  Company B also transferred another VND 100,000,000 to the Bank.

Company B issued the invoice number 0000092 dated June 1, 2018 with the amount of VND 849,931,885 for ship repair costs to the Bank, but the Bank fails to issue an invoice of charter hire and oil charges to Company B. Since January 2018, the Bank neither issued any invoice nor signed the final account of monthly charter hire for Company B. Therefore, Company B has no basis to pay the charter hire to the Bank. This fault falls under the accountant in charge of debts of the Bank. The Bank did not send Company B the invoice of charter hire of November 2017 with the amount of VND 100,000,000 until April 2019. However, this invoice was incorrect.  The Bank needs to issue an invoice of charter hire for November 2017 with the amount of VND 400,000,000 (offset against the cost of oil running from Ho Chi Minh City to Hai Phong in March 2017), the charter hire for December 2017, January 2018 (offset against the amount of VND 849,931,885 for repair costs), the charter hire for February 2018, March 2018 (offset against the remaining deposit) and the invoice of oil expenses of VND 57,612,401 but the Bank failed to do that.  This is entirely the Bank's fault.

During the operation of the ship, because Hai Phuong Ship did not guarantee seaworthiness in all aspects, Company B also had to repair and upgrade equipment on the ship on behalf of the Bank, Company B also had to repair and upgrade equipment on board. In February 2019, Company B sent an official dispatch dated February 26, 2019 with a summary of the final accounts of expenses on behalf of the ship owner to maintain and upgrade the assets of Hai Phuong 619 ship, signed on February 25, 2019, requesting the Bank to deduct this amount from the charter hire of VND 2,115,483,726 but the Bank did not accept it.  In addition, during the time when the ship entered the dry dock for repair or upgrading, it is necessary to deduct the 30-day charter hire.

On December 3, 2018, the Bank sent Official Letter No. 4820/2018/MSB-TGDD to Company B requesting payment of the charter hire until October 2018 of VND 3,607,680,516, which is incorrect.

Now that the Bank is suing, Company B has the following views and requirements for each claim of the Bank:

By the end of March 2018, Company B paid VND 49,931,885 for the remaining charter hire, so temporarily until the end of the Charter (April 7, 2019), Company B agrees to pay the following:

- The charter hire from April 2018 to March 2019: VND 400,000,000 x 12 months = VND 4,800,000,000.

- The excess oil that Company B must pay to the Bank is VND 57,612,401.  Company B requires the Bank to deduct the amounts and advance paid by Company B on behalf of the Bank as follows:

- The amount Company B paid: VND 100,000,000

- The amount the company B paid on behalf of the ship owner to repair and upgrade to maintain the registration level:  VND 2,115,485,726.

- Deducting the charter hire for the days when the ship has to enter the dry dock for repairs of VND 400,000,000. The amount Company B owes the Bank is VND 2,242,128,675.  Company B agrees to pay this amount to the Bank.

- Do not accept the request for delayed payment interest since the Bank miscalculated, did not sign the final accounts, did not issue an invoice to Company B. Company B had no grounds to make payment to the Bank.  This fault is entirely on the Bank, so the Bank cannot ask Company B to pay this interest.

- Do not accept the request for a fine for late delivery of the ship:  Company B agreed in writing to deliver the ship, but the Bank and VSG have not yet received the delivery. It was the fault of the Bank and VSG. Therefore, Company B was not at fault.  On the other hand, Article 301 of the Commercial Law stipulates:  “The fine for breach of the contractual obligation or the total fine for multiple breaches shall be agreed upon by the parties to the contract but not exceeding 8% of the value of the contractual obligation which is breached, except for the case specified in Article 266 of this Law”.  But in the bareboat charter, the fine at Point b, Clause 1, Article 21 is 150% of the charter hire, which is null and void arrangement because it is contrary to the provisions of law, has no applicable value, so there is no basis to calculate the fine.

In addition, Company B believes that: Firstly, this case does not fall under the jurisdiction of the People's Court of District H but under the jurisdiction of the People's Court of Hai Phong city because the delivery of the ship between the parties is performed at the port of Samalaiju - Bintulu - Malaysia (terminal).  Secondly, B claims that the Charter between B and the Bank is completely wholly null and void because the Bank is only licensed to do business in banking activities, not licensed in maritime activities.

* Representation of the person with related interests and obligations, Company C, in the statement dated August 26, 2019: VSG is authorized by the Bank to comprehensively manage the fleet on hire owned by the Bank, including Hai Phuong 6919 ship hired by Company B. VSG has the right to negotiate, sign and decide issues related to the ship charter, as an authorized representative of the Bank to receive the ship's delivery from Company B.

Company B breached the payment of charter hire. Upon the expiry of the charter on April 7, 2019, Company B did not return the ship to the Bank. Company did not deliver the ship back to VSG until June 8, 2019 at Samalaiju port. - Bintulu - Malaysia.

Company deliberately neither pay the hire nor deliver the ship back to the Bank as agreed in the charter. This directly infringed on the rights and interests of the Petitioner.

According to VSG, it is completely legal for the Bank to sue Company B to request the fulfillment of its obligations.  Therefore, request the Court to resolve the case as per the law. Due to geographical distance, VSG requests trial in absentia from working sessions and court hearings on the case.

* In the first instance judgment No. 13/2019/KDTM-ST dated November 14, 2019, the People’s Court of district H held that:  Pursuant to Article 30, Clause 1, Article 35, Point a, Clause 1, Article 39, Article 144, Article 147 of the Civil Procedure Code in Viet Nam; Articles 116, 117, 119, 274, 275, 280, 351, 353, 356, 357, 360, 472, 481, 482 and Article 688 of the Civil Code in Viet Nam; Article 301, Article 302, Article 303 and Article 306 of the Commercial Law; pursuant to Points a and b, Clause 1, Article 13 of Resolution 01/2019/NQ-HDTP in Viet Nam dated January 11, 2019; Resolution 326/2016/UBTVQH14 in Viet Nam on rates of collection, exemption, reduction, collection, payment, management and use of court fees and charges dated December 30, 2016 of the Standing Committee of National Assembly.

Hereby judge:

1. Accept the Bank's lawsuit petition:

Force Company B to pay to the Bank the total debt until November 14, 2019 of VND 6,656,604,791; including:  The outstanding charter hire of VND 5,614,347,183; the interest on delayed payment of VND 976,124,275; the fine for delayed delivery of the ship of VND 66,133,333.

As for the aforesaid amount, from the next day of the first instance trial date on November 14, 2019 until the execution of all sums of money, the judgment debtor must also pay interest on the remaining amount at the interest rate of specified in Clause 2 of Article 468 of the Civil Code.

2. Terminate the settlement of Bank’s claim on forcing Company B to deliver HAI PHUONG 619 ship back to the Bank.

In addition, the judgment also states the court fee, right to appeal, and the right to enforce the judgment of the litigants.

* After the first instance trial: On November 28, 2019, the respondent, Company B, appealed the entire judgment for the following grounds:

- The People's Court of District H has no jurisdiction over this case. This case falls under jurisdiction of the Court of the province or central-affiliated city because the hired property was delivered by the parties, the charter ended in a foreign country, and the parties have reached an agreement that the dispute settlement body is the competent court in Hanoi, the applicable law is foreign law.

- The charter is declared null and void because the Maritime Bank is not licensed by the State Bank to do boat charter business.

- The term of the fine for delayed delivery is declared null and void as it violates Article 301 of the Commercial Law.

- The first instance court did not request the petitioner, did not collect the standard bareboat charter form of Bimco Barrecon 2001. This is contrary to the provisions of the Civil Code. At the appellate trial, the petitioner still sustains the lawsuit petition and the respondent still uphold the appeal, the litigants cannot reach agreement on the resolution of the case.

Representation of the respondent’s representative: The first-instance court has no jurisdiction to settle the case because the parties have agreed that the dispute settlement body is a competent court in Hanoi, the charter termination was made abroad. Therefore, the case should fall under the jurisdiction of the Provincial Court.  The first-instance court did not collect sufficient documents and evidence.  The charter signed between the Bank and Company B is declared null and void because the Bank is not licensed to do boat charter business. The term of the fine for delayed delivery is declared null and void as it violates the regulations and law. The delivery date was not June 8, 2019 as claimed by the Bank. The delivery date was actually June 3, 2019.

Representation of the petitioner’s representative: The ship that the Bank let Company hire is collateral which was disposed of upon the debtor’s default. After that, the Bank is the owner of the ship.  The Bank leasing the ship to Son Nguyen Xanh Company was essentially a credit processing solution while waiting for the sale of this ship to settle debts.  This activity is not a line of business of the Bank, so it is not recorded in the operating license. The Bank’s lease of the ship to Company B is completely consistent with the provisions of Circular No. 10/2014/TT-NHNN in Viet Nam dated March 20, 2014 (on amendments to Circular No. 22/2017/TT-NHNN in Viet Nam dated December 29, 2017 of the Governor of the State Bank and Article 13 of Decree No. 93/2017/ND-CP of Viet Nam dated August 7, 2017 of the Government. The first-instance court was right to accept the case, based on the address of the respondent's office.

The first-instance court was right to decide that the respondent must pay the charter hire from the date on which the charter was signed to the date of delivery of the ship as agreed by the parties.  According to the Charter, the parties have agreed that the fine for delayed delivery of the ship is 150% of the charter hire for each day of delayed delivery, but the Bank only requires a fine of 8% of the charter hire for each day of delayed delivery. This complies with Article 301 of the Commercial Law.

The representative of the People's Procuracy participating in the court hearing expressed opinions on the observance of the law and the point of view on the settlement of the case as follows:  From the time when the case was accepted to the judgment announcement, the judge, the trial panel and the involved parties has complied with the provisions of the civil procedure law.  The documents and evidence in the case file do not clearly show the date of delivery of the ship, but on June 3, 2019, the parties signed the minutes of fuel handover, minutes of handover of registration certificate and materials on board. Therefore, it is well-grounded to determine that the date of delivery of the ship was June 3, 2019. The principal and interest of June 2019 are incorrect.  The respondent's appeal is unfounded, so it is not accepted.  Propose the Trial Panel to amend the first-instance judgment in the direction of reducing the amount of charter hire the respondent has to pay corresponding to 05 days of charter.

JUDGEMENT OF THE COURT

After studying the documents contained in the case files which have been verified at the trial and based on the results of the oral argument at the trial, the People’s Procuracy representative and the Trial Panel determines:

Regarding legal proceedings:

[1] Regarding jurisdiction to resolve the case: According to Clause 3, Article 26 of the bareboat charter No. 01/2017/MSB-MD dated March 7, 2017 and No. 01/2018/MSB-MD dated April 7, 2018:  All disputes arising out of and in connection with this present charter will be resolved amicably…If it is not possible to negotiate… then one of the parties is entitled to request a competent court in Hanoi for settlement,…”.  Thus, the parties have agreed as to a competent court in Hanoi, but the parties do not specify which court of Hanoi has jurisdiction, so this agreement is not in accordance with Clause 1, Article 35, Article 37, and Clause 1, Article 39 of the Civil Procedure Code.  On the other hand, under the agreement, one of the parties has the right to demand but not the obligation.

[1.1]. The respondent argues that this case falls under the jurisdiction of the court of the province or central-affiliated city because there is a foreign element, in specific the termination of the charter occurred abroad as prescribed at Point b, Clause 1, Article 464 of the Civil Procedure Code; it is found that: According to point a, clause 2, Article 3 of the charter, the parties have agreed as follows:  “When this charter terminates, the ship will be delivered back to the owner at any wharf in Vietnam… ".  Thus, the fact that Company B returned the ship to the Bank abroad is not in accordance with the agreement.  Furthermore, Article 24 of the Charter does not provide the delivery of the ship not subject to termination of the charter.  On the other hand, the dispute between the Bank and Company B is a dispute about contractual payment obligations.

[1.2]. The respondent alleges that the parties have an agreement to apply foreign law.  Deeming that: According to Clause 1, Article 26, the parties agree:  “This charter is interpreted and governed by the laws of Vietnam.  Other terms not stated in this Charter shall be applied according to the “Form of Charter…of Bimco BARECON 2001”…”. The respondent also failed to provide other terms not stated in the Charter and the respondent also failed to provide a charter form.

From [1], [1.1] and [1.2], it is found that appeal is poorly-grounded.  The first-instance court, based on the respondent's head office address in District H, Hai Phong city, to accept and settle the case. This complies with Point a, Clause 1, Article 39 of the Civil Procedure Code.

[2]. The respondent argues that the first instance court's failure to collect the bareboat charter form of Bimco BARECON 2001 was against the provisions of the Civil Procedure Code.  Considering that during the settlement of the case, the petitioner's representative had submitted all documents and evidence to prove its claim, so the first-instance court did not collect the charter form of Bimco BARECON 2001. On the other hand, according to the provisions of Clause 1, Article 6 and Clause 2, Article 91 and Clause 1, Article 97 of the Civil Procedure Code, the respondent opposes the petitioner's request that it must collect documents and evidence to submit them to the Court.

[3] Regarding the absence of litigants: At the court hearing, the person with related interests and obligations, Company C does not appear in court with a request for trial in absence. Pursuant to Clause 2, Article 296 of the Civil Procedure Code, the Court still adjudicates the case.

With reference to content:

[4]. The respondent argued that the petitioner, the Bank, did not have the function of leasing ships, but was only allowed to operate under the license granted by the State Bank according to the provisions of Clause 1, Article 27 and Article 29 of the Law on Credit Institutions.  Deeming that:

According to Clause 1, Article 90 of the Law on Credit Institutions 2010 in Viet Nam on the permitted scope of operation of credit institutions:  “The State Bank regulates the scope of lines of banking business, other business activities of credit institutions in the License issued to each credit institution.”  According to Clause 3, Article 2 of Decision No. 68/NH-QD, dated June 8, 1991 by the Governor of the State Bank on the granting of the operation license to the Maritime Bank, it is stipulated:  “…and other services permitted by the State Bank.”  According to Article 12 of Decree No. 57/2012/ND-CP in Viet Nam dated July 20, 2012 (Article 13 of Decree No. 93/2017/ND-CP dated August 7, 2017) of the Government on the financial regime for credit institutions, foreign bank branches, it is stipulated that:  “Credit institutions, branches of foreign banks may lease mortgaged assets under their management and use according to the provisions of law to ensure efficiency, safety and capital development.”  The Certificate of registration for Vietnam sea-going ship No. VN-3984 –VT and Certificate of minimum safe manning No. 2957/DKTB-2016.HP issued by Hai Phong Seafarers and Ships Registry on  April 20, 2016 show that the Bank is the owner of Hai Phuong 619 ship.

According to Article 215 of the Maritime Code:  “A boat charter is a charter entered into between a ship owner and a charterer under which the ship owner assigns the right to use his ship to the charterer for a certain period of time for the purpose which may be agreed upon in the charter and to receive the charter hire to be paid by the charterer”.

Clause 1, Article 216 states that: “A boat charter is concluded in the form of a time charter or a bareboat charter.”  Clause 1, Article 229 states that: “A bareboat charter is a charter under which the ship owner provides the charterer with a ship that may not include crew.”   Base on above facts and matters, there are enough grounds to confirm that the bareboat charter No. 01/2017/MSB-MD dated 07/3/2017 and the bareboat charter No. 01/2018/MSB-MD dated 07/4/2018 signed between the Bank and Company B have legal effect.

[5]. Considering the performance of the charter by the parties:  After signing the charter, the petitioner has delivered the ship to the respondent for management and use.  The respondent received the ship and put it into operation but failed to fulfill the obligation to pay the charter hire. That is a breach of the agreement in Clause 1, Article 5 of the charter; Article 233 of the Maritime Code; Article 481 of the Civil Code.  Therefore, the petitioner is grounded to sue respondent to pay the unpaid amount.

[6]. Considering the claim for the charter hire:  According to the petitioner, the actual date of the ship's delivery was June 8, 2019 but the respondent claimed that the ship delivery date was June 3, 2019 and the parties could not provide supporting documents.  The documents sent via emails of the parties show that the delivery time of the ship from June 5 to 10, 2019 (case file p. 125, 126). Because the parties did not agree and there was no document clearly showing the date of delivery of the ship, the Trial Panel determines June 5, 2019 as the delivery date. According to Point b, Clause 1, Article 21 of the charter: “In case the charterer delays the delivery of the ship to the ship owner… in addition to the sum of hire charged during the delayed period,…”. Therefore, Company B must pay the charter hire according to the Charter until the ship is delivered on June 5, 2019.

[6.1]. At the appellate level, the petitioner presents that the charter hire for June 2019 is VND 6,414,347,183 rather than VND 6,14347,183 as presented in the spreadsheet submitted at the first instance level.  Therefore, the fine that Company B is liable for due to delayed payment must be VND 984,892,494.  The Trial Panel considers that the additional interest on the delayed payment at the appellate level goes beyond the scope of the lawsuit and the petitioner did not appeal, so the Trial Panel does not consider it.

Thus, the charter hire and interest on delayed payment is calculated from May 18, 2017 to June 5, 2019 after deducting the amounts (Company B paid VND 2,280,645,157, paid payment of 400 million VND for main engine and lights in March 2017, paid VND 849,931,885 for the dry docking in May 2017 and VND 800 million for deposit) of VND 5,574,347,182 and VND 975,784,001.

[7]. Considering the petitioner's request for the fine for delayed delivery of the ship:  According to Point b, Clause 1, Article 21 of the charter: “If the charterer delays the delivery of the ship back to the ship owner…the charterer must also pay a fine at the rate of 150% of the charter hire for each day of delay.” The petitioner only requests a fine of 8% of the charter hire for 62 days of delayed delivery (From April 7, 2018 to June 8, 2019). However, the petitioner did not have documents to prove that the date of delivery was June 8, 2019 and the Council only accepted that the delivery date was June 5, 2019 (59 days of delay in delivery).  Therefore, it is necessary to amend the first-instance judgment as to the respondent's fine for delayed delivery: VND 400 million /30 days x 8% x 59 = VND 62,933,333.

[8]. Thus, the total amount Company B must pay to the Bank is VND 5,574,347,182 + VND 975,784,001 + VND 62,933,333 = VND 6,613,064,516.

[9] Regarding court fee:

[9.1] Regarding first instance fee: The petitioner asked the respondent to pay an amount of VND 6,656,604,791 but the Court only accepted an amount of VND 6,613,064,516, so the petitioner had to pay a court fee corresponding to an amount of VND 6,656,604,791 - VND 6,613. 064,516 = VND 43,540,275.  The respondent must bear the first-instance court fee corresponding to the amount of VND 6,613,064,516.

[9.2]. Regarding appellate court fee: Since the appellate court corrects the first-instance judgment, the appellant of Company B does not have to bear the appellate court fee as prescribed in Clause 2, Article 148 of the Civil Procedure Code.

For the foregoing reasons,

DISPOSITION

Pursuant to Article 2 Article 308 of the Civil Procedure Code;

Pursuant to Article 30, Clause 1, Article 35, Point a, Clause 1, Article 39, Article 144, Article 147 of the Civil Procedure Code; Articles 116, 117, 119, 274, 275, 280, 282, 351, 356, 357, 360, 398, 468, 472, 481, and 482 of the Civil Code; Article 300, Article 301, Article 302, Article 303 and Article 306 of the Commercial Law; Article 90 of the Law on Credit Institutions; Articles 215, 216 and 299 of the Maritime Code; Resolution 01/2019/NQ-HDTP dated January 11, 2019; Resolution 326/2016/UBTVQH14 on rates of collection, exemption, reduction, collection, payment, management and use of court fees and charges dated December 30, 2016 of the Standing Committee of National Assembly.

Hereby judge: Correct the first-instance commercial judgment No. 13/2019/KDTM-ST dated November 14, 2019 of the People's Court of District H, Hai Phong City.

1. Accept a part of the Bank's lawsuit petition:

Force Company B to pay Bank A an amount of VND 6,613,064,516 (Six billion six hundred thirteen million zero hundred sixty four thousand five hundred and sixteen dong); including:  The outstanding charter hire of VND 5,574,347,182; the interest on delayed payment of VND 975,784,001; the fine for delayed delivery of the ship of VND 62,933,333.

As for the aforesaid amount, from the next day of the first instance trial date on November 14, 2019 until the execution of all sums of money, the judgment debtor must also pay interest on the remaining amount at the interest rate of specified in Clause 2 of Article 468 of the Civil Code.

2. Terminate the settlement of Bank’s claim on forcing Company B to deliver HAI PHUONG 619 ship back to Bank A.

3. With reference to court fees:

3. 1. Regarding first instance court fee:

Company B must bear VND 114,613,064 (One hundred and fourteen million six hundred and thirteen thousand zero hundred and sixty four dong) of the first-instance court fee.

Bank A incurs VND 300,000 (three thousand dong) of first instance civil court fee, but it is deducted from the court fee advance of VND 57,023,000 that has been paid according to receipt No. 0008218 dated May 16, 2019 at the Department of Civil Judgment Enforcement of Hai Phong city. Return to Bank A VND 54,023,000 (Fifty four million zero twenty thirty thousand dong)

3. 2. Regarding appellate court fee: Return to Company B VND 2,000,000 (Two million dong) of the advance paid according to the receipt No. 0008500, dated December 13, 2019 of the Sub-department of civil judgment of district H, Hai Phong city.

The appellate judgment takes legal effect from the date of pronouncement.

In case the judgment or court decision is enforced as per regulations in Article 2 of the Law on enforcements of civil judgments in Viet Nam, the judgment creditor and judgment debtor are lawfully allowed to reach an agreement on judgment enforcement, request judgment enforcement, be subject to voluntary execution or coercive judgment enforcement in compliance with regulations in Article 6, 7 and 9 of the Law on enforcement of civil judgments, and the effective period of judgment enforcement shall comply within provisions in Article 30 of the Law on enforcement of civil judgments./.


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Judgment no. 08/2020/KDTM-PT dated june 1, 2020 on dispute over a bareboat charter

Số hiệu:08/2020/KDTM-PT
Cấp xét xử:Phúc thẩm
Agency issued: Tòa án nhân dân Hải Phòng
Field:Kinh tế
Date issued: 01/06/2020
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