Legal Case Summary
Occidental Worldwide Investment Corp v Skibs A/S Avanti (The Siboen and The Sibotre) [1976] 1 Lloyd’s Rep 293
Contract – Fraudulent Statement – Misrepresentation – Duress
Facts
The Defendant owned two tankers that were chartered to the Plaintiff for three years. The Plaintiff approached the Defendant requesting reduced charter rates, representing that the company had suffered massive losses and depended on its parent company to keep it afloat. Those representations were untrue. Several other innocently untrue statements were made about the Plaintiff’s finances. The Defendant agreed to reduce the hire rate. The market then improved which led the Defendant to discover that the Plaintiff was making profits from the rental, so they proposed that the original hire rate be restored or the charters cancelled. The Defendant withdrew the vessels and the Plaintiff claimed damages on the ground that the vessels had been wrongfully withdrawn. The Defendant claimed the right to rescind the hire reductions for misrepresentation or duress, and to withdraw the vessels for underpayment of hire.
Law Teacher writing support
Writing a law essay?
We choose a writer who is an expert in your area of law and qualified to at least the academic level you select. Most of our writers hold a master’s degree or PhD, have teaching experience, or both.
Send us your question and, if you wish, any marking criteria. We’ll write an essay to your instructions.
Issues
Whether the hire reductions could be set aside for misrepresentation or duress, whether withdrawal of the vessels was justified, and what remedies were available.
Held
Judgment was granted to the Defendant in part. The Plaintiff was found to have acted fraudulently in making representations which induced the Defendant to reduce the charter hire. Although the Defendant was under pressure when the Plaintiff requested reduced hire, this did not amount to duress. Kerr J recognised that economic pressure could in principle vitiate consent, but commercial pressure alone was insufficient.
The Plaintiff could claim ordinary damages for the wrongful withdrawal of the vessels during the remaining charter periods. It was not entitled to an account of the profits which the owners made by employing the vessels more lucratively elsewhere. That claim concerned the owners’ profits following withdrawal, rather than profits from the charterers’ misrepresentations.
Sources: Lloyd’s Law Reports, [1976] 1 Lloyd’s Rep 293; Kerr J’s duress passage at p 336 is quoted in Pao On v Lau Yiu Long [1979] UKPC 17, and his damages passage at p 337 in Friis v Casetech Trading Pte Ltd [2000] SGCA 35.
