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Enron Mail |
FYI.
---------------------- Forwarded by Alan Aronowitz/HOU/ECT on 09/30/99 09:12 AM --------------------------- Matthias Lee 09/29/99 03:20 AM To: Robert Quick/LON/ECT@ECT cc: Alan Aronowitz/HOU/ECT@ECT, Anita Fam/SIN/ECT@ECT, Angeline Poon/SIN/ECT@ECT Subject: MT Pacific Valour - 3KT PX Daesan to Map Ta Phut Robert As spoken, I have been advising Russell Aeria here in Singapore on a contentious matter. Watson Farley & Williams ("WFW") have been retained as external counsel. Because the issues are to be determined under English law and your experience with admiralty matters, Alan has suggested that we seek your counsel as well. Below are the salient facts and issues. If you need and clarification or wish to discuss, please call me or let me know if we should schedule a time tomorrow to speak again. My numbers are : (65) 838 9103 (office); (65) 96919646 (mobile) Facts: 1. ECTS purchased 3KT PX from Hyundai Singapore Pte Ltd ("Hyundai") FOB Daesan, Korea; loading date range 14 - 20 Sept. ECTS sold the same 3KT PX to Tuntex (Thailand) Public Company Limited ("Tuntex") CFR Map Ta Phut Thailand; delivery date range 1 - 30 Sept. 2. ECTS chartered the Pacific Valour under asbatankvoy ETA Daesan 11/12 Sept, Laycan 14 - 20 Sept. The vessel was not able to meet ETA at Daesan apparently because of delays at the preceding port in China The vessel ultimately advised on 20 Sept ETA 22/pm, ie. 2 days beyond loading date range. 3. ECTS failed to secure alternative tonnage primarily because of a typhoon on 20 Sept. On 21 Sept, Hyundai terminated the agreemnet to supply the PX on grounds that loading date range has expired. ECTS cancelled the charter on the same day. 4. Alternative supply has been arranged for Tuntex. ECTS is considering possible actions against Hyundai and the vessel owners. 5. WFW has advised, subject to facts and evidence, ECTS has a reasonable chance against the vessel owner for failing in their duty of reasonable despatch to make the itinerary. We are comfortable with this opinion. WFW, however, has opined that WCTS does not have a reasonable cause of action against Hyundai, and it is in this regard we seek your comments. Issues& advice: a. Whether the loading date range is a condition of the contract with Hyundai such that ECTS's failure to load within the date range was a breach entitling Hyundai to rescind. WFW advise that it is a condition as time in commercial contracts are of the essence unless expressed otherwise. b. If prima facie a condition, whether the definition of "Default" in the confirmation (Enron's buyer form) with Hyundai under "DEFAULT, TERMINATION AND LIQUIDATION", namely, "...a material breach of this Agreement and fails to cure such breach within ten (10) daysafter written notice..." implies into a contract a cure period for material breaches. WFW advise that there is no legal basis to argue that the clause overrides Hyundai's right to terminate. I attach the Hyundai confirmation for your easy reference: c. Whether the taped conversation between Russel and Joseph Tan amounts to an election to affirm the contract on the part of Hyundai such that they cannot thereafter rely on ECTS's breach to terminate. I was given the transcript yesterday and examined it closer today. It is quite short and attached for your reference. The conversation took place on 20 Sept at about 9 am. I have today asked WFW for their opinion on the same and expect them to revert before the end of the day. My view is that it is difficult to construe an election from the conversation which amounts to Hyundai giving up their right to terminate. Even if it were an election, I am of the view that it would be limited to an extension untill 21 Sept. In this regard, the vessel did not arrive until 22 Sept and we advised Hyundai before they terminated on 21 Sept that ETA was 22/pm. Please let me have your comments notwithstanding. If you wish to review WFW's opinions, please let me know and I'll fax them across. I look forward to hearing from you soon. Many thanks Matt
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