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under the laws of the Special Administrative Region of Hong Kong, with main
corporate address at Room 1, 17th Floor, Tower 1, World Financial Tower,
Causeway Road, Hong Kong. HONGKONG-PHILIPPINE INTERNATIONAL
the yard and at the same time arranged in terms of a back to back agreement to sell
the ship to HONGKONG-PHILIPPINE INTERNATIONAL NAVIGATION
Navigation only ever paid the first 10% deposit, but has defaulted on the
payment of the 90% balance of about US$ 1.8 million, despite the completion of
the vessel and its launch in December 2009.
6.
sell the vessel with the benefit of a charter but Navigation never made any attempt
to tender the outstanding purchase price to enable it to take delivery. In the end,
Masipag acknowledged that he was unable to find a buyer for the vessel and
Navigation failed to pay the 90% balance remaining due.
7.
to make good the deficiency of the purchase price which Navigation agreed to pay
for the vessel.
8.
The statutory demand which was served on Masipag and Navigation was
The issues which had to be determined by the Judge were whether the
claim which was being made by the plaintiff is chargeable to Juan Masipag as the
guarantor and whether there is a substantial dispute in the matter.
Courts Findings
10.
(2)
2.
3.
any other act or omission to act of any kind by you or any other
person or any other circumstance whatsoever which might
constitute a legal or equitable discharge of me.
It being my intention that the guarantee set out herein shall be irrevocable,
absolute and unconditional in any and all circumstances.
The guarantee herein contained shall remain in full force and effect until
final performance in full of all Contract Liabilities and performance in full
of all Contract Obligations whatsoever in accordance with the terms and
provisions of the Contract notwithstanding the insolvency or liquidation of
the BUYER or any other event whatsoever.
I hereby irrevocably waive acceptance of this guarantee, diligence,
presentment, discussion, demand, protest and notice of any kind
whatsoever and confirm that this guarantee may be enforced by you as
often as the need may arise.
I hereby also irrevocably waive my right of being informed by either the
BUYER or your company and/or any other company/person on any
modification or amendment on Specifications and/or drawing or on any
alteration or modification on any terms and conditions of the Contract, and
any such modification or amendment or alteration, if there is any, as if I,
as the guarantor, had been informed.
Until the whole of the Contract Liabilities shall have been paid in full and
the Contract Obligations fully performed, I shall not by paying off any
sum recoverable hereunder or under the Contract or by any other means or
on any other grounds claim any set-off or counterclaim against the
BUYER in respect of any liability to the BUYER or be entitled to the
benefit of any other security which you may now or hereafter hold for any
part of the Contract Liabilities or the Contract Obligations nor shall I have
any other right of surety discharging its liability, and I will not without
your prior written consent prove in the insolvency, winding-up or
liquidation of the BUYER in competition with you and will give you the
benefit of any proof to which I may be entitled and all moneys received in
respect thereof.
Any certificate by you of the amount due from the BUYER in respect of
the Contract Liabilities shall in the absence of manifest error be conclusive
and binding upon me.
I shall not be entitled to any rights of remedies, legal or equitable, of a
surety as regard any of the indebtedness, obligations or liabilities of
ourselves under or pursuant to this Guarantee.
I confirm that all necessary consents, permits and approvals applicable to
this guarantee, if any, have been granted.
This guarantee shall be in addition to and not in substitution for any other
rights which you may have under or by virtue of the Contract or any
collateral or security securing the BUYERs indebtedness and may be
enforced without requiring you first having recourse to any such rights and
without requiring you to take any steps or proceedings against the BUYER
This guarantee shall be governed by the laws of England and I hereby
irrevocably submit to the non-exclusive jurisdiction of the English Court
and appoint Marine Agency Limited, Bilbao House, 36/38 New Board
Street, London EC2M INH, England, as my agent to accept service of
proceedings in such courts.
Yours faithfully,
Sd. Juan Masipag
I hereby certify that Mr. Juan Masipag, who is 53 of age, has signed this
performance guarantee in my presence.
Sd. So Fuk Ching
Notary Public, Hong Kong.
William Sin & So
15 Oct 2009
11.
It was common ground that Navigation had been in breach of the terms
of the ship sale agreement and that relevant notices had been served upon them in
relation to the default. Navigation breached the ship sale agreement by failing to
pay the installment payments as and when they became due and payable.
Mr
Ambrose Ho SC for the defendant argued that in relation to the 4th (and final)
installment, the payment obligation was concurrent with the petitioners obligation
to deliver the vessel.
payment obligation has not arisen yet. With respect, Mr Hos argument ignores
two things:
(1)
11.
concurrent obligation upon Western Limited to deliver the vessel. What is apparent
from this passage is that an obligation to pay installments which have already
accrued is not extinguished when a agreement comes to an end.
Rather than
12.
installments. It managed only to pay one installment and failed to pay the other
three installments or take delivery of the vessel.
15.
and Mr. Masipag that, pursuant to Clause 4 of Article XI of the Ship Sales
Contract, the latter had defaulted in its installment payment. Respondents therefore
cannot claim lack of opportunity to settle the dispute without the aid of this court.
For despite demand by plaintiff, it failed to make the payments.
following:
USD 1,810,265.40 or its equivalent in Hong Kong
currency at the time of payment with legal interest from
December 28, 2012 until fully paid;
(1)
There is no reason why costs should not follow the event. I make a costs
order nisi that Masipag should pay Western Limited costs of this action with
certificate for counsel.
51.
I am impressed by the industry of both counsel and I thank them for their
able assistance.
(Kent Yee)
District Judge
Mr. John Scott SC, instructed by Messrs Deacons, for the Plaintiff
Mr Ambrose Ho SC and Mr Michael Yin, instructed by Messrs Hobson & Ma, for
the Defendants.