ORIN ENERGY INVESTMENTS LTD FUTURA ASIA LIMITED (NO.SYARIKAT HONG KONG 2485758)

WA-27NCC-17-03/2021 Kand. 334 26/09/2024 09:10:34 IN THE HIGH COURT OF MALAYA AT KUALA LUMPUR IN THE FEDERAL TERRITORY, MALAYSIA (COMMERCIAL DIVISION) ADMIRALTY IN PERSONAM NO.: WA-27NCC-17-03/2021 BETWEEN ORIN ENERGY INVESTMENTS LTD [Company No.: LL14514] … PLAINTIFF AND FUTURA ASIA LIMITED [Hong Kong Company No.: 2485758] …DEFENDANT JUDGMENT Introduction [1] In this Suit, the Plaintiff, Orin Energy Investments Ltd (“Orin Energy”) sought for inter alia, various declaratory reliefs and damages (general, special, aggravated and exemplary) against the Defendant, Futura Asia Limited (“Futura”) premised on Futura's breach of an express and fundamental term of a sales contract when it delivered fuel oil of Venezuelan origin to Orin Energy. Orin Energy claimed that the aforesaid fuel oil was sanctioned oil. Orin Energy S/N ossnLMXfoUu9TN1MtzIqQw 1 **Note : Serial number will be used to verify the originality of this document via eFILING portal contended that Futura had fraudulently misrepresented the true origin of the fuel oil and had actively concealed the true origin of the same. [2] Further, Orin Energy also claimed that Futura had wrongfully induced a breach of the charterparty agreement that it had entered into with the owner of the vessel, MT “Nordic Sirius” to receive the fuel oil vide a ship-to-ship transfer from the vessel, MT “Eser K”. This had led the master of MT “Nordic Sirius” to refuse receiving onboard the vessel further fuel oil when he discovered the Venezuelan origin of the fuel oil. [3] Futura, on the other hand, claimed that Orin Energy had known all along that the fuel oil that it purchased originated from Venezuela. It is also its case that the fuel oil was not sanctioned oil. [4] Accordingly, Futura counterclaimed against Orin Energy inter alia for the balance purchase price of the parcel of fuel oil that was delivered to Orin Energy, the loss of profits or diminution in market value of the remaining parcels of fuel oil that were undelivered, demurrage for the vessel, MT “Eser K” and other wasted costs incurred by Futura after the ship-to-ship operation between the vessels, MT “Nordic Sirius” and MT “Eser K” was aborted on 18.9.2020. [5] Both parties had engaged experts on the U.S. Sanction Laws to testify at the trial. A protocol was agreed upon to receive the experts’ opinions by way of a ‘hot-tubbing’ exercise. The protocol is annexed to this judgment as a guide to future cases. S/N ossnLMXfoUu9TN1MtzIqQw 2 **Note : Serial number will be used to verify the originality of this document via eFILING portal [6] After reading the written submissions and the relevant cause papers and after hearing oral submissions from counsel, I did not find any merits in Orin Energy’s claims. On the contrary, I found as a matter of fact that Orin Energy had known all along that it was purchasing fuel oil originating from Venezuela. I also accepted the opinion of the expert engaged by Futura that the fuel oil was not sanctioned cargo at all. Background Facts The Parties [7] Orin Energy is a Labuan incorporated company pursuant to the Labuan Companies Act 1990 with its registered address at Level 4, Main Office Tower, Financial Park Complex, Jalan Merdeka, 87000 Wilayah Persekutuan Labuan, Malaysia. [8] Futura is a company incorporated in Hong Kong whose registered address is at Room 1501, 15/F, Prosperity Tower, 39 Queen’s Road Central, Hong Kong. The Sales Contract [9] On 25.7.2020, Orin Energy entered into a sale and purchase contract with Futura ("Sales Contract"), whereby Futura agreed to sell and Orin Energy agreed to purchase, 700,000 barrels (equivalent to 104,477 metric ton, at 1 metric ton = 6.7 barrels) of fuel oil (“the Fuel Oil”) that were onboard the vessel MT "Eser K" ("Eser K"). Futura was the charterer and party in control of the Eser S/N ossnLMXfoUu9TN1MtzIqQw 3 **Note : Serial number will be used to verify the originality of this document via eFILING portal K and one Rossi Marine Ltd ("Rossi Marine") was the registered owner and commercial operator of the Eser K at the material times. [10] Orin Energy purchased the Fuel Oil for the purpose of mixing and blending with oils purchased from its other suppliers to form a bituminous mixture to be sold to its purchasers in China. Futura was aware of Orin Energy’s blending plan at the material times. Futura was also aware that Orin Energy had 3 other vessels waiting at Linggi, Melaka with other oils on board to be blended with the Fuel Oil. [11] Under the Sales Contract, the agreed laytime was between 15.8.2020 to 25.8.2020, and to be narrowed by Orin Energy (as the buyer) to 7 days by 31.7.2020. This was the time during which the Eser K must arrive at the port of discharge in Linggi, Melaka ("Linggi Port") for the Fuel Oil to be delivered to a ship to be nominated by Orin Energy by way of ship-to-ship ("STS") transfer since the sale was based on FOB Eser K. This agreed laytime was narrowed to no later than 19.8.2020. [12] However, the Eser K encountered several issues during her voyage from Gibraltar to Linggi Port. As a result, the Eser K was delayed and only arrived in Linggi outside the agreed laytime on 27.8.2020. Consequently, Orin Energy had to reorganise the use of the vessels it chartered. The vessel that Orin Energy initially intended to use to take delivery of the Fuel Oil, MT “Evreti,” had gone on to carry other cargo and Orin Energy had to find another vessel in place of MT “Evreti.” S/N ossnLMXfoUu9TN1MtzIqQw 4 **Note : Serial number will be used to verify the originality of this document via eFILING portal The receiving vessel - Nordic Sirius [13] Thus, on 11.9.2020, Orin Energy chartered a vessel MT "Nordic Sirius" ("Nordic Sirius") to take delivery of the Fuel Oil ("Nordic Charterparty"). The registered owner of the Nordic Sirius at the material time was NAT Bermuda Holdings, a subsidiary of Nordic American Tankers Ltd, a U.S. entity. [14] Both the Eser K and the Nordic Sirius were managed by companies which were part of a global shipping management group of companies known as the V Ship group (“V Ship Group”). The Eser K’s technical operator at the material time was the International Tanker Management Limited ("ITM"). At the material time, the Nordic Sirius’ commercial operator was V Ships UK Ltd (“V Ship UK”), and its technical operator was V Ships Norway AS (“V Ship Norway”). The ITM, V Ship UK and V Ship Norway were all part of the V Ship Group. [15] Orin Energy had made arrangement to blend the Fuel Oil and its other oils onboard the Nordic Sirius to form about 1 million barrels of bituminous mixture and transport it to its purchasers in China. Orin Energy notified Futura of its nomination of the Nordic Sirius on 9.9.2020, and by email dated 11.9.2020, the Nordic Sirius was approved by Futura and the Eser K for the STS operation. [16] The Eser K arrived in Linggi on 27.8.2020, outside the agreed laycan under the Sales Contract. The Eser K tendered its Notice of Readiness only on 8.9.2020. On 15.9.2020, the Nordic Sirius arrived in Linggi to receive the Fuel Oil. S/N ossnLMXfoUu9TN1MtzIqQw 5 **Note : Serial number will be used to verify the originality of this document via eFILING portal The 1st Lot [17] On 16.9.2020, Orin Energy and Futura executed an addendum to vary the terms of the Sales Contract (“the Addendum”). As captured in the Addendum, Orin Energy was required to pay USD $4.5 million directly to the owners of Eser K, Rossi Marine, instead of to Futura, before the Eser K would discharge the first 35,000 metric tonnes of the Fuel Oil onto the Nordic Sirius (“1st Lot”). In this regard, it is not in dispute that Orin Energy had paid Rossi Marine USD $4.5 million towards the purchase price for the 1st Lot of the Fuel Oil. STS Operation Aborted [18] On 18.9.2020 at about 03:36 a.m., STS operations were carried out to discharge the 1st Lot of the Fuel Oil from the Eser K onto the Nordic Sirius. At about 10:00 p.m. on 18.9.2020, after about 34,242.852 (out of 35,000) metric tons of the 1st Lot had been delivered and discharged onto the Nordic Sirius, the Master of the Nordic Sirius instructed the STS operation to cease on the ground that the Fuel Oil was from Venezuela and that he could not accept Venezuelan oil onboard the Nordic Sirius. By an email dated 18.9.2020, the Master of the Nordic Sirius forwarded to Orin Energy an email from NAT Chartering Ltd (agent of the owners of the Nordic Sirius), attaching a certificate of origin of the Fuel Oil issued by one PdVSA Petroleo SA, a Venezuelan state oil company. For ease of reference, the registered owners of the Nordic Sirius, its parent company, and the agent are referred to throughout this judgment as “NAT.” S/N ossnLMXfoUu9TN1MtzIqQw 6 **Note : Serial number will be used to verify the originality of this document via eFILING portal Status of Fuel Oil when STS operation aborted – the Cargo, Balance of 1st Lot and the Remaining Lots [19] When the STS operation between the Eser K and the Nordic Sirius ceased on 18.9.2020, approximately 34,242.852 metric tons of Fuel Oil had been discharged onto the Nordic Sirius (“the Cargo”) with approximately 717.15 metric tons’ balance of the 1st Lot (“the Balance of the 1st Lot”) together with the balance of the Fuel Oil purchased under the Sales Contract not discharged onto the Nordic Sirius remaining onboard the Eser K (“the Remaining Lots”). The Dispute on Origin of Fuel Oil and actions taken post termination of the STS Operation [20] In this action, Orin Energy contended that it had disputed the said certificate of origin and demanded for proof that the certificate was in respect of the Fuel Oil. Orin Energy claimed that the certificate of origin was never shown or produced to it until after the STS operation ceased on 18.9.2020. Orin Energy stated that it had thought that the certificate of origin was false and a fabrication to disrupt the discharge of the Fuel Oil. In particular, Orin Energy referred to its email to NAT on 18.9.2020, which is reproduced below: “…Chtrs have reviewed owners edition of cert of origin allegedly coming from the vessel Eser K. Chtrs request owners to provide evidence that it is without doubt the cert of origin of the cargo currently onboard Eser K; which as per cargo inspectors Amspec has stated as Grade RMK Fuel Oil and origin of Gibralter. S/N ossnLMXfoUu9TN1MtzIqQw 7 **Note : Serial number will be used to verify the originality of this document via eFILING portal …In addition the alleged cert of origin is dated April and the cargo destined for Greece NOT Malaysia. The Eser K sailed from Algeciras to Malaysia. ... …The current cert of origin of the cargo on board the Eser K is with the cargo owners of the cargo on board the Eser K. This again supports the allegation that the cert of origin that is presented by the owners of the Nordic Sirius is either false or of previous cargo onboard the Eser K.This especially since the Cert of Origin is dated April 2020. …Owners of Nordic Sirius are also respectfully reminded that the Eser K 2010 built is LR classed and SKULD is the P&I Insurance provider. As such the allegations made by owners Nordic Sirius may be construed by these parties as malacious [sic]” [emphasis added] [21] Orin Energy further claimed that when it discovered that the certificate of origin was provided by the Master of the Eser K to the Master of the Nordic Sirius, it had thought that both the Eser K and the Nordic Sirius were colluding against it (since both vessels were managed by V Ship Group), to deprive Orin Energy of the Cargo that it had paid for and to induce a breach of the Nordic Charterparty for which advance freight had already been paid. [22] By email dated 18.9.2020, NAT inter alia insisted that Orin Energy instruct the Master of the Eser K to allow the Nordic Sirius to backload the Cargo onto the Eser K which Orin Energy rejected on the ground that it had legal rights over the Cargo, having paid USD $4.5 million as part of its purchase price. Further, Orin Energy maintained that it had constructive possession of the Cargo because it had been discharged onboard the Nordic Sirius which it chartered, and therefore had control over its employment. S/N ossnLMXfoUu9TN1MtzIqQw 8 **Note : Serial number will be used to verify the originality of this document via eFILING portal [23] By email dated 21.9.2020, despite Orin Energy's assurance that it would find a replacement vessel to take the Cargo that was onboard the Nordic Sirius, NAT insisted that the Cargo be backloaded onto the Eser K and alleged that Orin Energy was in breach of the Nordic Charterparty by having placed sanctioned cargo onboard the Nordic Sirius. [24] While Orin Energy was still looking for a suitable vessel to take the Cargo from the Nordic Sirius, Futura informed its broker (Allied Chartering) that it had received "a clear indication" from Orin Energy to backload the Cargo onto the Eser K and instructed Allied Chartering to obtain approval from the owners of the Eser K to "free that path for our clients." [25] At the same time, Futura kept pressuring Orin Energy to take delivery of the Remaining Lots of the Fuel Oil. Throughout this period, Orin Energy did not receive any response from NAT or confirmation that NAT would not instruct and or allow the Nordic Sirius to backload the Cargo onto the Eser K. [26] On 25.9.2020 (Friday), Orin Energy received an email from Futura's solicitors in Monaco, demanding Orin Energy to pay the balance USD $2.2 million to Futura for the Cargo within 2 hours and threatened Orin Energy that Futura would otherwise issue an invoice for the whole Fuel Oil, including demurrage and other costs and if Orin Energy failed to pay the said invoice by 29.9.2020 (Tuesday), Futura would terminate the Sales Contract. S/N ossnLMXfoUu9TN1MtzIqQw 9 **Note : Serial number will be used to verify the originality of this document via eFILING portal [27] With regards to the aforesaid, Orin Energy’s solicitors responded on 26.9.2020, refuting Futura's right to make such claims. [28] By email dated 26.9.2020, Futura forwarded to Orin Energy its invoice dated 25.9.2020 in the sum of USD $3,788,874.10, which included not only the USD $2.2 million balance in respect of the 1st Lot but also 22.5 days of demurrage. [29] Orin Energy disputed Futura's demand and invoice for being contrary to the terms of the Sales Contract and put Futura on notice inter alia of Futura's breach of the Sales Contract in delivering sanctioned cargo, and of Orin Energy's right to claim for costs, damages and expenses that it suffered as a result of the breach. [30] By an email from Futura’s solicitors dated 29.9.2020, Futura terminated the Sales Contract. [31] On 5.10.2020, Orin Energy arrested the Nordic Sirius. On 8.10.2020, Orin Energy obtained an ex parte injunction order against Futura in this Suit to inter alia restrain Futura from interfering with the Cargo and from threatening or demanding NAT or the Master of the Nordic Sirius from handling the Cargo in any manner contrary to Orin Energy's instructions (“the ex parte Injunction Order”). [32] By letter dated 27.10.2020, Orin Energy treated Futura’s termination of the Sales Contract as wrongful repudiation, accepted the repudiatory breaches and in turn terminated the Sales Contract. S/N ossnLMXfoUu9TN1MtzIqQw 10 **Note : Serial number will be used to verify the originality of this document via eFILING portal [33] It is not disputed that the Cargo that was transferred from the Eser K to the Nordic Sirius was eventually transferred out to another vessel, “Vera”/”Dazzle” for Orin Energy’s further action and shipment to its buyers in China pursuant to a settlement agreement between Orin Energy and the owner of the Nordic Sirius. Parties’ respective claims [34] In this Suit, Orin Energy sought inter alia various declaratory reliefs and damages (general, special, aggravated and exemplary) against Futura premised on a breach of what Orin Energy contended was an express and fundamental term of the Sales Contract, namely, that Futura had in breach of the said contract delivered sanctioned oil of Venezuelan origin to Orin Energy. [35] Orin Energy claimed that there was fraudulent misrepresentation, contending that Futura had actively concealed the true origin of the Fuel Oil. In addition, Orin Energy claimed that Futura had wrongfully induced a breach of the Nordic Charterparty. [36] On the other hand, Futura counterclaimed against Orin Energy inter alia for the balance purchase price of the Cargo, the loss of profits or diminution in the market value of the Remaining Lots, demurrage incurred by the Eser K and other wasted costs incurred by Futura after the STS operation was aborted on 18.9.2020. The Counterclaim was premised on the breach of the Sales Contract by Orin Energy in failing to pay for the balance purchase price for the Cargo and to take delivery of the Remaining Lots. S/N ossnLMXfoUu9TN1MtzIqQw 11 **Note : Serial number will be used to verify the originality of this document via eFILING portal [37] It was Futura’s case that Orin Energy, at the beginning and at all times, had knowledge that the Fuel Oil was from Venezuela. Premised on the fact that Orin Energy had knowledge of the Fuel Oil being purchased, its origin and specifications, and had accepted the Fuel Oil, Futura contended that Orin Energy had no basis to claim for misrepresentation (fraudulently or otherwise) as regards the origin of the Fuel Oil or the breach of the Sales Contract. [38] As regards the claim for inducing breach of the Nordic Charterparty, it was contended that there was hardly any evidence led in support of the same and by reason thereof, this claim was obviously unstainable and bound to fail. Legal and Factual Issues [39] Arising from the aforesaid contentions of the parties, it is necessary for this Court to consider and to determine the following issues: a) whether as a matter of fact, Orin Energy knew all along that the Fuel Oil that it purchased from Futura originated from Venezuela; b) whether Orin Energy was subject to the U.S. Sanction laws when it purchased the Fuel Oil from Futura. Connected to the aforesaid issue is whether the Fuel Oil was sanctioned oil by reason of the fact that the same originated from Venezuela. S/N ossnLMXfoUu9TN1MtzIqQw 12 **Note : Serial number will be used to verify the originality of this document via eFILING portal Court’s Considerations [40] The crux of Orin Energy’s claims is that prior to and at the time of the Sales Contract, it did not know that the true origin of the Fuel Oil onboard the Eser K that it purchased from Futura was from Venezuela, more specifically from Petroleos de Venezuela (“PdVSA”), the state-owned company of Venezuela. In fact, Orin Energy made a positive claim that Futura had represented that the Fuel Oil was from Gibraltar. [41] Orin Energy relied heavily on various contemporaneous documents to support its claim that it had purchased the Fuel Oil believing that its origin was from Gibraltar, contending that Futura had concealed the fact that the origin of the Fuel Oil was Venezuela. [42] Orin Energy mounted its causes of action against Futura for fraudulent misrepresentation, breach of contract and for conspiracy to injure and or inducing breach of contract. [43] In support of its claims, Orin Energy referred to: a) the Amspec Report, a document providing an analysis of the Fuel Oil, where next to the word ‘origin’ was the reference to ‘Gibraltar’. It was contended that this must mean or convey the meaning that the origin of the Fuel Oil that was sold to Orin Energy was from Gibraltar. It was submitted that the reference to ‘Gibraltar’ could not be intended to identify the location where the sample of the Fuel Oil was drawn as contended by S/N ossnLMXfoUu9TN1MtzIqQw 13 **Note : Serial number will be used to verify the originality of this document via eFILING portal Futura because the word ‘location’ would have been used instead of ‘origin’ if this was indeed the case; b) the Eser K March 2020 Q88, a document which showed the Eser K’s last 3 cargoes, charters and voyages. None of these had stated or referred to Venezuela and or PdVSA. Orin Energy contended that Futura had intentionally omitted any reference to the fact that the vessel, Eser K had called at Amuay Bay, Venezuela where the Fuel Oil was loaded; c) the BP Oil International Limited General Terms and Conditions for Sales and Purchases of Crude Oil and Petroleum Products, 2015 Edition, version 1.2 (“BPGTC”) which was expressly incorporated into the Sales Contract, in particular section 71.1 thereto which expressly provided that neither party shall be obliged to perform any obligation under the Sales Contract, which includes the obligation to pay or to accept (delivery of the Fuel Oil), if that would expose such party to punitive measures under inter alia laws of the United States applicable to parties relating to trade sanctions and foreign trade controls. By this, it was contended that the origin of the Fuel Oil from a non-sanctioned country or entity was made a fundamental term of the Sales Contract and the performance of the same. Alternatively, it is contended that in the Sales Contract, the parties agreed that the Fuel Oil sold would not be sanctioned cargo, that is, the same would not be subjected to any trade restrictions or that in dealing with such Fuel Oil, the parties would not be exposed to punitive measures, including secondary sanctions. S/N ossnLMXfoUu9TN1MtzIqQw 14 **Note : Serial number will be used to verify the originality of this document via eFILING portal [44] Further, Orin Energy contended that Futura had deliberately withheld providing the Material and Safety Data Sheet (“MSDS”), which was the safety data sheet containing information relating to the Fuel Oil. The MSDS was received by Futura from PdVSA at the load port between March and April 2020 and if provided, would have disclosed that the Fuel Oil was from PdVSA. For ease of reference, the Amspec Report, the Eser K March 2020 Q88, the BPGTC and the MSDS shall collectively be referred as the “Contemporaneous Documents” in this judgment. [45] Based on the aforesaid, Orin Energy contended that the only conclusion that this Court should arrive at is that the product that the parties had agreed to sell and purchase was Fuel Oil of Gibraltar origin, and not of Venezuelan origin. [46] Premised upon the aforesaid, Orin Energy contended that since the language of the Sales Contract (gleaned from the Contemporaneous Documents) being unambiguous and clear, there is no scope to consider the supposed intention of parties from the factual matrix that formed the background of the Sales Contract, particularly if the purpose is to contradict the express terms of the Sales Contract. [47] If accepted, this would preclude any examination and/or reliance on any or all pre-contractual communication between parties (which includes telephone conversations, exchange of WhatsApp messages and exchange of emails) in the interpretation of the terms of the Sales Contract. Orin Energy contended that all S/N ossnLMXfoUu9TN1MtzIqQw 15 **Note : Serial number will be used to verify the originality of this document via eFILING portal communications between the parties after the Sales Contract was executed were even more irrelevant and should be totally disregarded. [48] With respect, I am unable to agree. [49] At the outset, it must be noted that whilst Orin Energy claimed that it was induced to enter into the Sales Contract by reason of the fraudulent misrepresentation by Futura, nevertheless, it was not seeking to rescind the Sales Contract and instead had chosen to affirm the same, and for the repudiatory breach of the condition as to the origin of the Fuel Oil, Orin Energy had accepted the breach and terminated the Sales Contract. [50] Accordingly, the thrust of Orin Energy’s claims is based primarily on a cause of action for breach of the terms of the Sales Contract. [51] In this regard, whilst Orin Energy may be keen to confine the Court’s determination on the issue of knowledge of the origin of the Fuel Oil to only the Contemporaneous Documents, this Court cannot ignore the claim by Futura that both Orin Energy and Futura were fully aware of the fact that the Fuel Oil was of Venezuelan origin and had deliberately proceeded with the sale and purchase of the same by taking measures to conceal the Venezuelan origin of the Fuel Oil from other third parties. In other words, Orin Energy was complicit in avoiding any reference to the true origin of the Fuel Oil in the Contemporaneous Documents. S/N ossnLMXfoUu9TN1MtzIqQw 16 **Note : Serial number will be used to verify the originality of this document via eFILING portal [52] In any case, it is my judgment that the terms of the Sales Contract as evidenced from the Contemporaneous Documents are far from clear for the preclusion of any reference to extraneous pre- contractual communications and even post-contractual communications to determine the meaning of the terms of the Sales Contract and or in construing the intention of the parties, especially as regards the origin of the Fuel Oil. [53] Contrary to Orin Energy’s contention, it is Futura’s case that at all times, Orin Energy had full knowledge that the origin of the Fuel Oil was from Venezuela. Premised on the fact that Orin Energy had knowledge of the origin and specifications of the Fuel Oil purchased under the Sales Contract, Orin Energy would have no basis to allege that Futura had misrepresented (fraudulently or otherwise) the origin of the Fuel Oil and or that the word ‘origin’ in the Amspec Report was understood by Orin Energy to mean that the Fuel Oil had originated from Gibraltar [54] To my mind, there is ample evidence in support of Futura’s contention and I do find that, in fact and in truth, Orin Energy did know at the time of the Sales Contract that it was purchasing from Futura the Fuel Oil which originated from Venezuela. [55] The dealings between Orin Energy and Futura started on 4.6.2020, when Mr Don Lloyd (“PW1”) reconnected with Futura’s trader, one Mr Andre Klein. At that time Orin Energy had already been made aware via Skype messages that Futura was trading crude and fuel oil from Venezuela. The messages were not disputed by PW1 at trial, in particular the WhatsApp message which stated as follows: S/N ossnLMXfoUu9TN1MtzIqQw 17 **Note : Serial number will be used to verify the originality of this document via eFILING portal “I’m living in Germany, and working with a Hong Kong company called Futura Asia Limited. Trading crude and fuel oil from Venz” [emphasis added] [56] There is no dispute that “Venz” in this case meant Venezuela. [57] On the 12.6.2020, PW1 was provided with more details of the Fuel Oil on board the Eser K by Mr Andre Klein via an email with 2 attachments. This included the document known as the Amspec Q&Q for the RMK 700 which referred to the Fuel Oil on board the Eser K that was subsequently purchased by Orin Energy and a legal opinion by one Mr Bravo (“1st Legal Opinion”) of Messrs Badell & Grau. The said email stated thus: “Please see attached the Amspec Q&Q for our RMK 700 cargo onboard the Eser K, as well as Arturo Bravo’s legal opinion with regard to Futura Asia Limited for your review.” [emphasis added] [58] The 1st Legal Opinion, issued by Messrs Badell & Grau, was specifically to address the dealings between Futura and PdVSA, in particular, whether the U.S. sanctions would apply to Futura when it purchased oils from PdVSA. The 1st Legal Opinion concluded that Futura, being a non-U.S. person, would not be subject to the scope of the U.S. sanctions. [59] The 1st Legal Opinion was intended to assure Orin Energy that it would not be subject to any U.S. sanctions in its purchase of the S/N ossnLMXfoUu9TN1MtzIqQw 18 **Note : Serial number will be used to verify the originality of this document via eFILING portal Fuel Oil from Futura since Futura was not subject to the U.S. sanctions in doing business with PdVSA. [60] There is no dispute that PW1 had received the 1st Legal Opinion. In fact, on 15.6.2020, via WhatsApp, PW1 again confirmed that he had not only received but had also reviewed the 1st Legal Opinion: ANDRE KLEIN : Hey man, good morning. Did you review the Eser K Q&Q, as well as the legal opinion? DON : Yes thanks, We checking with end users. ANDRE KLEIN : Great Don, as soon as your clients bite, she can set sail. [emphasis added] [61] At the trial, PW1 had sought to get around the 1st Legal Opinion and the obvious reference therein that the Fuel Oil on board the Eser K was from Venezuela by stating that he had not read the contents of the same because he was supposedly on holiday at the time and or that the 1st Legal Opinion was an unsolicited document. This was what he testified when cross examined on the 1st Legal Opinion: PT : Yes. Just tell us what it’s about. DON : It has something to do with Futura, and something about Venezuela and some, it shows here relations and something to do with the executive order from the United States or something like that. But – PT : Do you agree this document is on the scope of the US sanctions against Venezuela as well as Venezuelan oil? S/N ossnLMXfoUu9TN1MtzIqQw 19 **Note : Serial number will be used to verify the originality of this document via eFILING portal DON : First of all, I must remind you that on the 13th, Mr Andre Klein sent me this document, which is late at night, and 14th I was on my holiday. I have no idea about this document, never bother to read. I'm not a legal person or I have no background of, in the legal system at all. So, I have no idea about this document and the only thing that he kept pushing me the last few days when I was on my holiday, did you check the report on the AmSpec. That's what I looked at and regards to this document, I've never seen this, only until the 18th of September because he actually asked me to have a look at all these documents [emphasis added] [62] PW1’s testimony was clearly inconsistent with his response to Mr Andre Klein on 15.6.2020 where he affirmatively confirmed having reviewed the 1st Legal Opinion. [63] In fact, after having received and reviewed the 1st Legal Opinion, PW1 had attached an article with the title “Special Report: How China got shipments of Venezuela oil despite U.S. Sanction” to Mr Andre Klien via WhatsApp. The said article had highlighted the sales to purchasers from China of bituminous mixture formed from fuel oil originating from Venezuela. [64] In this regard, it is not insignificant that in this particular case, Orin Energy had intended to blend the Fuel Oil purchased from Futura with other oils to form bituminous mixture to be sold to its purchasers S/N ossnLMXfoUu9TN1MtzIqQw 20 **Note : Serial number will be used to verify the originality of this document via eFILING portal in China, something similar to the activities referred to in the said article. [65] The aforesaid lends force to the contention that at all times, PW1 had always intended to purchase and resell the Fuel Oil which he knew originated from Venezuela to Orin Energy’s Chinese buyers as bituminous mixture. From the discussions between PW1 and Mr Andre Klein it is clear that PW1 was aware of ways to avoid the U.S. sanctions and PW1 had communicated this to Mr Andre Klein referencing the aforesaid article. [66] In fact, further to and in continuance of PW1’s discussions with Mr Andre Klein, on 19.6.2020, a follow-up email with an attachment of a second legal opinion by Messrs Badell & Grau (“2nd Legal Opinion”) was sent to PW1 by Mr Andre Klein: “As discussed, please review Arturo Bravo’s legal opinion, specifically related to Coral Energy. We can always ask him to provide a similar legal analysis for both our companies, subject to receipt of Orin’s KYC package” [emphasis added] [67] To my mind, the aforesaid is a significant email. The 2nd Legal Opinion deals with the intended purchase of the Fuel Oil on board the Eser K by one Coral Energy. It addressed the issue of the U.S. Sanctions relating to the sale and purchase of Venezuelan oil originating from PdVSA. It concluded that Coral Energy and Futura could ‘do business or transactions in connection with petroleum products (oil) originated in Venezuela (PdVSA) as part of their S/N ossnLMXfoUu9TN1MtzIqQw 21 **Note : Serial number will be used to verify the originality of this document via eFILING portal current business regardless of the prohibitions under the Executive Orders and the Venezuela-related Sanctions issued by OFAC and the Treasury Department.’ [68] The fact that Mr Andre Klein had specifically mentioned that ‘… a similar legal analysis for both our company…’ can be provided to PW1 suggests that Orin Energy was fully aware of the fact that the Fuel Oil on board the Eser K originated from Venezuela and that Orin Energy was contemplating a similar purchase from Futura. There would be no need for ‘a similar legal analysis for both our company’ if as contended by Orin Energy, it had purchased the Fuel Oil on the basis that the same had originated from Gibraltar. [69] Notwithstanding the aforesaid, PW1 would want this Court to believe that he was led to believe that the Fuel Oil on board the Eser K had originated from Gibraltar because the Amspec Report had referred to ‘Gibraltar’ as ‘origin’. [70] With respect, PW1’s testimony in this regard is disingenuous. This is because on 16.6.2020, PW1 was informed by Mr Andre Klein by WhatsApp that Amspec had samples of the Fuel Oil onboard the Eser K in Gibraltar. This was in response to PW1’s text message to Mr Andre Klein that the Plaintiff’s clients may need some test on the Fuel Oil. The WhatsApp messages are set out below: “Mr Andre Klein : Hey man, I have a call with my guys in half an hour … any progress on the RMK cargo? S/N ossnLMXfoUu9TN1MtzIqQw 22 **Note : Serial number will be used to verify the originality of this document via eFILING portal PW1 : Rmk. So far they will come back with some test needed. Will reply tomorrow. Mr Andre Klein : Don, pls give me a shout .. We should still have samples with Amspec in Gibraltar …” [emphasis added] [71] It is abundantly clear from the above WhatsApp messages that PW1 knew that the reference to Gibraltar was in respect of the samples that were in possession of Amspec at Gibraltar. [72] The contention that the Fuel Oil had originated from Gibraltar is simply untenable. Gibraltar is not an oil-producing country. Gibraltar has no oil refinery and Gibraltar only exports refined oil imported from other oil-producing countries. Hence, the Fuel Oil cannot originate from Gibraltar. As an experienced oil trader, PW1 would know this. In fact, Mr Emanuele Oste (“DW1”)’s testimony on this point was not contradicted at all by Orin Energy. [73] DW1 had testified that the specifications of the Fuel Oil on board the Eser K were unique to that originating from Venezuela. This was what he said: “My comment is, you can see that some elements like the vanadium, the viscosity, the sulphur, the asphaltenes is classic product originated, produced in Venezuela. Our fuel oil has always between 2.5 and 3% of sulphur. The viscosity is always above 380, always. The asphaltenes always above 6, the vanadium, it’s always around 400. This is what I can tell about and comment about this report. For example, if I see any Iranian fuel oil, the sulphur is around 3.5 but all the other elements, the S/N ossnLMXfoUu9TN1MtzIqQw 23 **Note : Serial number will be used to verify the originality of this document via eFILING portal viscosity is 380 always, the vanadium is very low and the asphaltenes is below 6”. [74] Again, this part of DW1’s testimony was not contradicted and or challenged at the trial. PW1 as an experienced oil trader would know of this fact as well. [75] In truth, the AmSpec Report was meant to be an Analytical Report of the testing by the surveyors in Gibraltar. The Defendant had purposely directed the vessel, Eser K to call at Gibraltar for this testing. That this was so is clear from the Addendum No. 2 to the Eser K Charterparty dated 2.5.2020 which clearly states that the Eser K was to be diverted to Gibraltar merely for sampling. “SAMPLING: CHARTERER’S OPTION VESSEL TO PROCEED TO GIBRALTAR FOR THE PURPOSE OF SAMPLING OF THE CARGO PROVIDED CHARTERERS TO REIMBURSE ALL TIME AND BUNKERS USED FOR THE DEVIATION FROM VESSEL’S TURNING POSITION IN CENTRAL MED TOWARDS GIBRALTAR”. [emphasis added] [76] No oil was loaded, much less originated, from Gibraltar. The Fuel Oil was already on board the Eser K when she was diverted to Gibraltar. The word “origin” in the Amspec Report clearly referred to Gibraltar not as the origin of the Fuel Oil but the origin where the samples were located and the tests on the samples were done. S/N ossnLMXfoUu9TN1MtzIqQw 24 **Note : Serial number will be used to verify the originality of this document via eFILING portal [77] A visual perusal of the Amspec Report itself shows two columns. On the left is the Sample Information and on the right is the Laboratory Information. The mention of “Gibraltar” is found under the left column under the Sample Information. This is because Gibraltar was the place where the sample was taken. [78] This was also explained in the letter from AmSpec dated 20.10.2020 which stated as follows: “For your information, since Amspec is accredited by ENAC as per ISO 17025, all our analytical reports must show the origin of where the fuel sample was taken. In this case, the sample was taken on board the M/T Eser K in Gibraltar, which is why Gibraltar is stated in the column “Origin”. The lab is not allowed to speculate the fuel’s load port origin. It should be clarified that our report do not and are not intended to show the load port or actual origin of the fuel oil but where the oil sample was drawn from.” [emphasis added] [79] The above was in fact agreed by PW1 under cross examination. PT : AmSpec is explaining, “Origin,” simply means where the sample was taken, you agree? From the explanation at 1367? DON : That’s what it says here. [emphasis added] [80] Whilst it is true that the aforesaid letter from Amspec was only issued after the action herein was filed, it is a confirmation that the word “origin” in the Amspec Report does not in fact refer to the S/N ossnLMXfoUu9TN1MtzIqQw 25 **Note : Serial number will be used to verify the originality of this document via eFILING portal country of origin for the Fuel Oil. PW1 knew that the samples were taken from the Eser K and to my mind, given his experience and the factual matrix of this case, could not have understood the word “origin” in the Amspec Report as intended to refer to the country of origin of the Fuel Oil. [81] PW1 had also sought to rely on the port clearance to establish that the origin of the Fuel Oil was from Gibraltar. However, a port clearance is simply the port authority’s written approval for the vessel to sail from that port. There is nothing in the port clearance that mentioned the cargo on board, much less the origin of this cargo. Other than the fact that the Eser K was given port clearance from the authority of Algeciras in Spain, nothing else in that document would suggest that the cargo onboard the Eser K, which was the Fuel Oil, had its origin from Gibraltar. In other words, the port clearance is merely a document that shows that the Eser K has the necessary approval to sail from the port. It does not show the origin of the cargo on board the Eser K at all. [82] Counsel for Orin Energy had put to DW1 that the sending of the port clearance to PW1 was an intention to deceive Orin Energy into believing that the Fuel Oil was from Gibraltar. With respect, this is simply untenable given that PW1 knew all along that the Fuel Oil originated from Venezuela. PW1, being an experienced trader, knew that a Certificate of Origin would have been the relevant document that shows the origin of the Fuel Oil and that this document was necessary to be provided to the port. If Orin Energy was indeed concerned with the origin of the Fuel Oil as contended, he would have demanded a copy of the Certificate of Origin and S/N ossnLMXfoUu9TN1MtzIqQw 26 **Note : Serial number will be used to verify the originality of this document via eFILING portal would not have relied on the Amspec Report and the Port Clearance. These two documents do not show the origin and are not meant for that purpose, a fact that PW1 agreed to under cross examination. [83] In fact, Orin Energy’s knowledge that the Fuel Oil was of Venezuelan-origin can be further established by the following WhatsApp correspondences between Orin Energy and Futura: a) in the WhatsApp messages dated 17.6.2024, it is clear that PW1 was aware that the Fuel Oil had originated from Venezuela and was concerned about sanctions. PW1 was actively looking for a “friendly” vessel that could carry Venezuelan-origin cargo. ANDRE KLEIN : As for the change of documents have to send a letter to the owner for approval. What documents other than the new B/L do you require the owner, and/or agent to sign? DON : At moment. Just option. Not needed yet. Finding vessel that will be friendly is the priority [emphasis added] In this regard, it is of significance that PW1 had testified that he was aware that by having a ‘switched’ Bill of Lading (“B/L”), there would be a new B/L issued and the purpose of doing this was to hide the actual origin of the cargo. S/N ossnLMXfoUu9TN1MtzIqQw 27 **Note : Serial number will be used to verify the originality of this document via eFILING portal PT : You agree that Venezuelan cargo if there is switching of bill of lading will not show the port of loading was in Venezuela? DON : Yes, some of them come in and tend to do that. This article says that. [emphasis added] b) in the WhatsApp messages dated 18.6.2024, it is again clear that PW1 was aware of the origin of the cargo and was trying to hide the origin through re-documentation or switching of the B/L in order to get a lightering vessel to transport the cargo to Orin Energy’s buyer: ANDRE KLEIN : Do you need me to assist you in identifying a friendly lightering vsl? DON : At moment no need. The client said they have 1. But need us to redoc. [emphasis added] c) In the WhatsApp messages dated 26.8.2020, PW1 was trying to conceal the origin of the cargo to Orin Energy’s bank and the Suezmax owner/master. ANDRE KLEIN : also question. sts with eser k he asked what we will have as cert of origin when he does the sts. to what concerns Icaria owner he wants to know keep in mind DON : Malaysia S/N ossnLMXfoUu9TN1MtzIqQw 28 **Note : Serial number will be used to verify the originality of this document via eFILING portal ANDRE KLEIN : Don, will the owner/master of the Suez see any Venz load port docs from either the Eser K, or your FSU, or will all the clearing docs refer to Malaysia origin at of the transshipment already? DON : None from mine Eser k. All docs done by us habibi ANDRE KLEIN : Reason why I’m raising this question, because Suezmax owner does not want see any docs relating to load port… This is why we are utilizing Letters of Indemnity… Perfect, let me get the offer over to you, and then call you. DON : For sure man. My bank also don’t want to see it. Cause today the whole interview was asking us wtf these companies we showing them. Are we doing anything with sanctioned. ANDRE KLEIN : Don, our cargo is as clean as it can get. We are literally examed, die to debt collection, and the way the company has been structured… [emphasis added] [84] The aforesaid put paid to Orin Energy’s reliance on the Eser K March 2020 Q88 (which shows the Eser K's last 3 cargoes, charters, and voyages) and the BPGTC terms of the Sales Contract (which prohibits trading of sanctioned cargo) in support of its claim that Futura had intentionally concealed the origin of the Fuel Oil from it. S/N ossnLMXfoUu9TN1MtzIqQw 29 **Note : Serial number will be used to verify the originality of this document via eFILING portal [85] The truth of the matter is that Orin Energy had actively taken measures to conceal the origin of the Fuel Oil from its financiers and from the master of the vessel that would be receiving the Fuel Oil through the ship-to-ship transfer at the Malaysian Linggi port. The entire conversation about the need to ‘re-do’ the documents to reflect the origin of the cargo to be from ‘Malaysia’ for the transhipment, the search for a ‘friendly’ vessel to receive the Fuel Oil and whether the master of the Suez would see “any Venz load port docs” was precisely because both Orin Energy and Futura knew that they were dealing with cargo that originated from Venezuela. This was also the reason the parties were trying to avoid payment in U.S. dollars. [86] Although Mr Andre Klein had provided PW1 with the 1st and 2nd Legal Opinions to assure Orin Energy that the Fuel Oil was not sanctioned cargo, nevertheless, the parties were acutely aware that third parties who may be risk adverse and who may not be fully informed of the U.S. Sanction laws (which are far from clear but with disastrous consequences) would not want to deal with the Fuel Oil that originates from Venezuela at all. [87] That Orin Energy was ‘in the know’ that it was purchasing Fuel Oil from Venezuela is further shown by PW1’s reaction when the Master of Nordic Sirius instructed the STS operation to cease on 18.9.2020, on the ground that the Fuel Oil was from Venezuela and that he could not accept Venezuelan oil onboard the Nordic Sirius. This is because PW1, instead of expressing surprise that the Fuel Oil was said to originate from Venezuela, responded by demanding to know how the Master got to know about the Fuel Oil’s origin. The following S/N ossnLMXfoUu9TN1MtzIqQw 30 **Note : Serial number will be used to verify the originality of this document via eFILING portal WhatsApp exchanges between PW1 and DW1 are conspicuously telling: On 18.9.2020: Don: Crazy mate. How the owners got the origin. Problem is both vessels are v ship On 19.9.2020 Don: Bad news. The vessel master eser K gave it out Emanuele: But to Who???? Don: The vessel master revealed to nat owners I guess must be some issues with eser k owners Now my vessels and team exposed. We are finding a solution. On 21.9.2020 Don: Yes. But he did not have to provide venz. None of the vessels here if they are. They don’t provide. Your loi is good enough. Plus your port calls and port clearance. [emphasis added] [88] The above, to my mind, is clear evidence that Orin Energy knew all along that it was purchasing from Futura Fuel Oil originating from Venezuela. PW1’s statement that “… the vessel master … did not have to provide venz” belies Orin Energy’s claim that it did not know that the Fuel Oil was of Venezuelan origin. [89] For Orin Energy to now come to court pleading that Futura had misrepresented the origin of the Fuel Oil to be from Gibraltar is not S/N ossnLMXfoUu9TN1MtzIqQw 31 **Note : Serial number will be used to verify the originality of this document via eFILING portal only completely against the weight of the contemporaneous evidence but is also, with respect, disingenuous. [90] The contention that the bill of lading dated 2.4.2020, the MSDS and the certificate of origin dated 2.4.2020, and the Q88 document dated 16-8-2020 which identified Amuay Bay as the last place of STS operation of the Eser K on 9.4.2020, all of which were within Futura’s possession before the Sales Contract was concluded, were intentionally not disclosed by Futura before the Sales Contract was concluded, to hide the true origin of the Fuel Oil, rings hollow in light of this Court’s finding that Orin Energy knew all along that the Fuel Oil on board the Eser K had originated from Venezuela. [91] Following from the aforesaid, it is the judgment of this Court that Orin Energy’s claims against Futura - that Futura should bear all Orin Energy’s losses and or damages arising from the decision of the Master of Nordic Sirius to cease the STS operation upon discovering that the Fuel Oil was from Venezuela - are wholly without any merits at all. [92] Orin Energy knew that it was dealing with Fuel Oil from Venezuela. In this regard, it was Orin Energy who had nominated the vessel Nordic Sirius to receive the Fuel Oil from the Eser K. Futura cannot be responsible for the decision by the Master of Nordic Sirius to cease the STS operation. This is so regardless of whether the Master of Nordic Sirius was legally correct to regard the Fuel Oil as blocked cargo under the U.S. Sanction laws. S/N ossnLMXfoUu9TN1MtzIqQw 32 **Note : Serial number will be used to verify the originality of this document via eFILING portal [93] At the trial, expert evidence was adduced by both parties on the U.S. Sanction laws in relation to oil originating from Venezuela. This was made necessary because Orin Energy had claimed that it had been led into believing that the Fuel Oil onboard the Eser K had originated from Gibraltar and not Venezuela. It was its contention that if the Fuel Oil was from Gibraltar, the STS operation would not have been halted and Orin Energy would not have suffered any losses. [94] The expert evidence was introduced to support Orin Energy’s claims that it did not and or could not have agreed to accept the Fuel Oil from Venezuela because of the drastic consequences of dealing with sanctioned cargo. According to learned counsel for Orin Energy, the testimony of the experts on sanctions is important to aid the Court in appreciating the effect of the Venezuela origin of the Fuel Oil, the importance of the terms of the Sales Contract on sanctioned cargo and the effect of Section 71 of the BPGTC in suspending further performance of contractual obligations under the Sales Contract once it came to light that the Fuel Oil was of Venezuelan origin. [95] In particular Section 71 of the BPGTC provides as follow: “71.1 Notwithstanding anything to the contrary elsewhere in the Agreement 71.1.1 Nothing in the Agreement is intended, and nothing herein should be interpreted or construed, to induce or require either party hereto to act in any manner (including failing to take any actions in connection with a transaction) which is inconsistent with, penalised or prohibited under any laws, regulations, S/N ossnLMXfoUu9TN1MtzIqQw 33 **Note : Serial number will be used to verify the originality of this document via eFILING portal decrees, ordinance, order, demand, request, rules or requirements of the United States of America applicable to such party which relate to international boycotts of any type; and 71.1.2 Neither party shall be obliged to perform any obligation otherwise required by this Agreement (including without limitation an obligation to (a) perform, deliver, accept, sell, purchase, pay or receive monies to, from, or through a person or entity, or (b) engage in any other acts) if this would in violation of, inconsistent with, or expose such party to punitive measures under, any laws, regulations, decrees, ordinance, orders, demands, requests, rules or requirements of the European Union, any EU member state, the United Nations or the United States of America applicable to the parties relating to trade sanction, foreign trade controls, export controls, non-proliferation, antiterrorism and similar laws ("Trade Restrictions"). 71.2 Where any performance by a party would be in violation of, inconsistent with, or expose such party to punitive measures under, the Trade Restrictions, such party (the "Affected Party") shall, as soon as reasonably practicable give written notice to the other party of its inability to perform. Once such notice has been given the Affected Party shall be entitled: 71.2.1 immediately to suspend the affected obligation (whether payment or performance) until such time as the Affected Party may lawfully discharge such obligation; and/or 71.2.2 where the inability to discharge the obligation continues (or is reasonably expected to continue) S/N ossnLMXfoUu9TN1MtzIqQw 34 **Note : Serial number will be used to verify the originality of this document via eFILING portal until the end of the contractual time for discharge thereof, to a full release from the affected obligation, provided that where the relevant obligation relates to payment for goods which have already been delivered, the affected payment obligation shall remain suspended (without prejudice to the accrual of any interest on an outstanding payment amount) until such time as the Affected Party may lawfully resume payment; and/or 71.2.3 where the obligation affected is acceptance of the vessel, to require the other party to nominate an alternative vessel." 71.3 Nothing in this Section shall be taken to limit or prevent the operation, where available under the governing law of the Agreement, of any doctrine analogous to the English Common Law doctrine of frustration.” [96] If, as a result of Futura’s concealment of the Venezuelan origin of the Fuel Oil, Orin Energy had come into possession and receipt of blocked or sanctioned cargo and exposed itself to secondary sanctions, it was contended that the performance of Orin Energy’s contractual obligation under the Sales Contract to pay the balance purchase price of the Fuel Oil would be suspended, and thus, Orin Energy was not in breach of the Sales Contract when it refused to accede to Futura’s solicitors' demand for payment on 25.9.2020. [97] When this Court enquired of counsel for Orin Energy as to whether the suspension of payment can still be maintained notwithstanding that Orin Energy had taken delivery of the 1st Lot and in fact sold the S/N ossnLMXfoUu9TN1MtzIqQw 35 **Note : Serial number will be used to verify the originality of this document via eFILING portal same to its Chinese buyers, learned counsel for Orin Energy contended that Section 71.2.2 stipulates that the suspension remains until such time when “… the Affected Party may lawfully resume payment …”. [98] With respect, I find this contention to be wholly untenable. It seems to me incredulous that Orin Energy can, on the one hand, contend that the 1st Lot is sanctioned cargo, which necessarily means that it cannot deal with the same, but on the other hand maintained that notwithstanding its sanction status, it could take delivery of the same from Nordic Sirius, sell it to its Chinese buyers and yet argue that its payment obligation to Futura is suspended. [99] In truth, Section 71 of the BPGTC was never invoked at all. This is because the Fuel Oil that Orin Energy had purchased from Futura was never subjected to the U.S. Sanctions law in this case. In this regard, I am persuaded more by the opinion of Mr Bravo to that of Mr Skoufalos. [100] Much time and costs had been spent by the parties in procuring their respective experts to address this Court on the U.S. Sanctions laws. In dealing with the experts’ opinions, I had departed from the traditional procedure where each party’s expert would testify through the process of examination in chief followed by cross- examination and re-examination. Instead, this Court had, by agreement of the parties, applied what is known as the concurrent expert evidence approach which is colloquially known as “hot- tubbing”. S/N ossnLMXfoUu9TN1MtzIqQw 36 **Note : Serial number will be used to verify the originality of this document via eFILING portal [101] To be clear, “hot-tubbing” is the practice where 2 or more experts at a hearing give their evidence concurrently, enabling simultaneous questioning and discussions on key issues. Before the trial, each expert had issued their written reports and had engaged in pre-trial meetings or conclaves to identify areas of agreement and disagreements. At the trial, the experts are sworn in together and the judge will chair a discussion between them, shaped by an agreed agenda derived from a joint statement or court-approved issues of contentions. [102] In the present case, both parties have sought from their respective experts their opinions premised upon a set of agreed facts and issues. An agreed procedural framework on how the experts’ testimonies shall be taken by the Court was also prepared and followed. As this “hot-tubbing” process and protocol may be useful for future cases and perhaps adopted with suitable modifications to suit the circumstances of the case, I have annexed the entire order and protocol that were adopted in this case as reference. [103] Coming to the substance of the expert opinions, the material differences in the opinions expressed by Mr Skoufalos, Orin Energy’s expert and Mr Bravo, the expert for Futura, come down to 2 issues: (i) First Issue: Whether a non-U.S. person is potentially exposed to a secondary sanction in buying and accepting the Fuel Oil and the consequences of such a secondary sanction; S/N ossnLMXfoUu9TN1MtzIqQw 37 **Note : Serial number will be used to verify the originality of this document via eFILING portal (ii) Second Issue: Whether the Fuel Oil was a blocked property or sanctioned cargo in the hands of Futura, and whether such sanctioned status remained throughout the subsequent sale of the Fuel Oil from Futura to Orin Energy (collectively, “the Sanctions Issues”). [104] The First Issue addresses the consequences, if any, to Futura when it purchased the Fuel Oil from PdVSA. [105] The main authority that issues directives and regulations pertaining to sanctions under the United States laws and system is the Office of Foreign Asset Control (“OFAC”). In this regard, written opinions and oral testimonies were provided by both experts at the trial and the Court has also been provided with the applicable sanctions and or appropriate Executive Orders (“EO/EOs”) issued by OFAC. [106] The Court can interpret these EOs not constrained by the interpretation of either sanction experts. Conversely, the Court can also be guided and choose to follow the view of any of the experts if the Court finds the reasoning in line with what the Court interprets. [107] This approach is supported in the English case of Bahamas International Trust Co Ltd v Threadgold [1974] 1 WLR 1514 which was also cited in the Malaysian case of Padiberas Nasional Bhd v Kontena Nasional Bhd [2010] 3 MLJ 134 stating that: “In a case which turns, as this one does, on the construction to be given to a written document, a court called on to construe the document in the absence of any claim to rectification, cannot be S/N ossnLMXfoUu9TN1MtzIqQw 38 **Note : Serial number will be used to verify the originality of this document via eFILING portal bound by any concession made by any of the parties as to what its language means. That is so even in the court before which the concession is made; a fortiori in the court to which an appeal from the judgment of the court is brought. The reason is that the construction of written document is a question of law. It is for the judge to decide for himself what the law is, not to accept it from any or even all of the parties to the suit; having so decided it is his duty to apply it to the facts of the case. He would be acting contrary to his judicial oath if he were to determine the case by applying what the parties conceived to be the law, if in his own opinion it were erroneous.” [emphasis added] [108] The two main Executive Orders relevant to the Sanctions issues are EO 13850 and EO 13884. The relevant provisions of the EOs are as follows: “Executive Order 13850 – Blocking Property of Additional Persons Contributing to the Situation in Venezuela Section 1 (a) All property and interests in property that are in the United States, that hereafter come within the United States, or that are or hereafter come within the possession or control of any United States person of the following persons are blocked and may not be transferred, paid, exported, withdrawn, or otherwise dealt in: any person determined by the Secretary of the Treasury, in consultation with the Secretary of State: (i) to operate in the gold sector of the Venezuelan economy or in any other sector of the Venezuelan economy as may be determined by the Secretary of the Treasury, in consultation with the Secretary of State; (ii) to be responsible for or complicit in, or to have directly or indirectly engaged in, any transaction or series of transactions S/N ossnLMXfoUu9TN1MtzIqQw 39 **Note : Serial number will be used to verify the originality of this document via eFILING portal involving deceptive practices or corruption and the Government of Venezuela or projects or programs administered by the Government of Venezuela, or to be an immediate adult family member of such a person; (iii) to have materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, any activity or transaction described in subsection (a)(ii) of this section, or any person whose property and interests in property are blocked pursuant to this order; or (iv) to be owned or controlled by, or to have acted or purported to act for or on behalf of, directly or indirectly, any person whose property and interests in property are blocked pursuant to this order. …. Sec. 4. The prohibitions in section 1 of this order include: (a) the making or any contribution or provision of funds, goods, or services by, to, or for the benefit of any person whose property and interests in property are blocked pursuant to this order; and (b) the receipt of any contribution or provision of funds, goods, or service from any such person. … Sec. 5. (a) Any transaction that evades or avoids, has the purpose of evading or avoiding, causes a violation of, or attempts to violate any of the prohibitions set forth in this order is prohibited. (b) any conspiracy formed to violate any of the prohibitions set forth in this order is prohibited. [emphasis added] [109] For our present purpose, I understand the EO 13850 to mean that once the Secretary of the Treasury, in consultation with the Secretary of State, makes a ‘determination’ that: S/N ossnLMXfoUu9TN1MtzIqQw 40 **Note : Serial number will be used to verify the originality of this document via eFILING portal a) a person is found to operate in “any other sector” of the Venezuelan economy as may be determined by the Secretary of the Treasury, in consultation with the Secretary of State; b) a person is found to have materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of a person determined by the Secretary of the Treasury, in consultation with the Secretary of State to be responsible for or complicit in, or to have directly or indirectly engaged in, any transaction or series of transactions involving deceptive practices or corruption and the Government of Venezuela or projects or programs administered by the Government of Venezuela, or to be an immediate adult family member of such a person; or c) a person is found to be owned or controlled by, or to have acted or purported to act for or on behalf of, directly or indirectly, any person whose property and interests in property are blocked pursuant to this order; then all property and interests in property of the aforesaid person that come within the possession or control of a U.S. person are blocked and may not be transferred, paid, exported, withdrawn, or otherwise dealt with. In other words, such property become “blocked property” in the hands of the U.S. person. [110] Executive Order 13884 provides: S/N ossnLMXfoUu9TN1MtzIqQw 41 **Note : Serial number will be used to verify the originality of this document via eFILING portal Executive Order 13884 – Blocking Property of the Government of Venezuela Section 1 (a) All property and interests in property of the Government of Venezuela that are in the United States, that hereafter come within the United States, or that are or hereafter come within the possession or control of any United States person are blocked and may not be transferred, paid, exported, withdrawn, or otherwise dealt in. (b) All property and interests in property that are in the United States, that hereafter come within the United States, or that are or hereafter come within the possession or control of any United States person of the following persons are blocked and may not be transferred, paid, exported, withdrawn, or otherwise dealt in: any person determined by the Secretary of the Treasury, in consultation with the Secretary of State: (i) to have materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, any person included on the list of Specially Designated Nationals and Blocked Persons maintained by the Office of Foreign Assets Control whose property and interests in property are blocked pursuant to this order; or (ii) to be owned or controlled by, or to have acted or purported to act for or on behalf of, directly or indirectly, any person whose property and interests in property are blocked pursuant to this order. … Sec. 3 The prohibitions in section 1 of this order include: the making of any contribution or provision of funds, goods, or services by, to, or for the benefit of any person whose property and interests in property are blocked pursuant to this order; and S/N ossnLMXfoUu9TN1MtzIqQw 42 **Note : Serial number will be used to verify the originality of this document via eFILING portal the receipt of any contribution or provision of funds goods, or services from any such person. … Sec. 4. Any transaction that evades or avoids, has the purpose of evading or avoiding, causes a violation of, or attempts to violate any of the prohibitions set forth in this order is prohibited. Any conspiracy formed to violate any of the prohibitions set forth in this order is prohibited person.” [emphasis added] [111] EO 13884 has the same effects as EO 13850 save that it applies to all property or interest in property of any person included on the list of Specially Designated Nationals and Blocked Persons maintained by the OFAC whose property and interests in property are blocked pursuant to the order, which come into the possession or control of a U.S person are similarly blocked and may not be transferred, paid, exported, withdrawn, or otherwise dealt in. [112] In short, once it is determined by the Secretary of the Treasury in consultation with the Secretary of State that an entity is caught under the EO 13850, then all property and interests in property of the said entity that come within the possession or control of a U.S. person are blocked and may not be transferred, paid, exported, withdrawn, or otherwise dealt with. In other words, the property and interests in property of such a person will only be blocked when they come under the possession or control of a U.S. person. S/N ossnLMXfoUu9TN1MtzIqQw 43 **Note : Serial number will be used to verify the originality of this document via eFILING portal [113] It is undisputed that PdVSA is on the SDN list. Hence, its properties are blocked property when they come within the possession or control of a U.S. person. Both the experts agree on this point. [114] However, the parties’ experts differ on the position where both the seller and buyer are non-U.S. persons, whether in such circumstances, the mere origin of the commodity from Venezuela would make the transaction subject to sanctions. This of course refers to the sale by PdSVA of the Fuel Oil to Futura, a non-U.S. person, and the subsequent sale by Futura to Orin Energy, both non-U.S. persons. [115] In this regard, Mr Skoufalos’ opinion is that if the Fuel Oil is property of the Government of Venezuela or PdVSA (both being SDNs), then the Fuel Oil would be considered blocked property immediately and even non-U.S. persons would be prohibited from entering into any transactions or activities involving the Fuel Oil. [116] Mr Skoufalos held the view that Futura, being a non-U.S. person, when it purchased the Fuel Oil from PdVSA would be exposed under the EOs to secondary sanctions, in particular, under E.O. 13884, at paragraph 1(b), which provides for the blocking of property or property interests of “any person” who ‘(1) providing material assistance (including financial, material or technological support) to sanctioned entities, including PdVSA and (2) owned or controlled, or acting on behalf of a designated entity, including PdVSA”. [117] Mr Skoufalos further opined that a blocked property, by reason of its being owned by a sanctioned entity, remained a blocked property S/N ossnLMXfoUu9TN1MtzIqQw 44 **Note : Serial number will be used to verify the originality of this document via eFILING portal despite having been sold to a subsequent non-sanctioned entity or entities. This is because the transfer of a blocked property is ‘null and void’, namely, the subsequent sale to a non-sanction entity is incapable of transferring an interest in the block property to the buyer. Reference was made to sections 581.201, 591.202 and 591.310 of 31 CFR 591, Venezuela Sanction Regulations. The subsequent buyers could still be exposed to secondary sanctions for flouting EO 13850 ‘for operating within the sector’ or for ‘material support of a blocked entity’ in dealing with the blocked property. [118] To be clear, Mr Skoufalos is saying that Futura, by purchasing the Fuel Oil from PdVSA, being a sanctioned or blocked entity, is subject to secondary sanctions by OFAC by the mere fact that it had purchased the Fuel Oil from a sanctioned or blocked entity. This is because the ‘purchase’ constitutes a ‘financial or material support’ and or an operation in the oil sector of Venezuela under EO 13850. [119] On the other hand, Mr Bravo opined that the mere purchase of the Fuel Oil without more cannot amount to providing ‘material or financial’ support, nor can it constitute treating Futura as operating in the oil sector of Venezuela. [120] In any case and more significantly, it is Mr Bravo’s opinion that the Secretary of the Treasury, in consultation with the Secretary of State had not made any such determination at all in the present case. According to Mr Bravo, the secondary sanctions against non-U.S. persons come in the form of OFAC placing the said persons in the SDN list upon the determination made. Until this is done, there is no secondary sanctions at all against the non-U.S. person which S/N ossnLMXfoUu9TN1MtzIqQw 45 **Note : Serial number will be used to verify the originality of this document via eFILING portal means that the said non-U.S. person could deal with anyone including a U.S person as regards the property purchased from PdVSA. [121] Thus, Mr Bravo opined that there is no prohibition for Futura, a non- U.S. person to purchase Fuel Oil from PdVSA, a sanctioned entity and there is also no prohibition for Futura to thereafter deal with the Fuel Oil with any third party including a U.S person since OFAC had not designated Futura as an SDN as a form of secondary sanctions. [122] Mr Bravo also disagreed with Mr Skoufalos’ view that the status of the blocked property would not change even with the transfer of the same to a third party by sale. According to Mr Bravo, once a sanctioned entity sells its property to a non-U.S. person, the property is no longer blocked property. The blocked status of the property ends when the sanctioned entity transfers the property to a non-U.S. third party. This means that once PdVSA sold the Fuel Oil to Futura, the Fuel Oil which he opined was blocked property was no longer treated as blocked property. Thereafter when Futura sold the Fuel Oil to Orin Energy, the parties were in fact not dealing with blocked property. In other words, even a U.S person may thereafter deal with the Fuel Oil without any exposure to the U.S sanction laws. [123] With respect to Mr Skoufalos, I am unable to agree with his interpretation of the EOs and its application to the facts of this case. I also do not agree with both the experts’ opinion that the Fuel Oil was considered as blocked property merely because PdVSA was at the material times designated as an SDN. S/N ossnLMXfoUu9TN1MtzIqQw 46 **Note : Serial number will be used to verify the originality of this document via eFILING portal [124] To begin, I am not persuaded that Futura, by its purchase of the Fuel Oil from PdVSA, is to be treated as having “materially assisted, sponsored, or provided financial, material, or technological support” to PdVSA. In this regard, I am more inclined to the view expressed by Mr Bravo that although there is no specific threshold as to what could be considered as “materially assisted” or “provided financial, material support”, one mere commercial transaction cannot be equated to “materially” assisting or “providing financial, material support” to the Government of Venezuela or PdVSA. [125] I agree with Mr Bravo that a mere purchase of PdVSA products is not “supporting” as there must be an overact (more than merely purchasing of the products). This is clear when one considers the examples of designated entities and individuals provided by Mr Skoufalos as having been found to have “materially assisted” or “provided financial or material support” to PdVSA. The circumstances in these examples can be distinguished from the facts in the present case. More particularly: (a) In the case of Elemento – it was listed as an SDN by OFAC as the entity had been purchasing oil directly from PdVSA and reselling it to third-party customers on behalf of another SDN (i.e. Bazzoni). Elemento was involved in multiple transactions of such nature, therefore falling under the definition of materially assisted, sponsored, or provided financial, material or technological support for PdVSA; (b) In the case of Swissoil – it was an entity based in Geneva, Switzerland which had participated in a scheme by assisting S/N ossnLMXfoUu9TN1MtzIqQw 47 **Note : Serial number will be used to verify the originality of this document via eFILING portal in the sale and shipping of Venezuelan-origin crude oil to buyers in Asia. Swissoil often acted as the consignee for the receipt of oil shipments brokered by Elemento, who is a designated entity; (c) The designation of D’Agostino (a Spanish-Venezuelan citizen), Bazzoni (Italian citizen), and Apikian (Swiss citizen) were the consequence of their roles involving Swissoil and oil from PdVSA. D’Agostino had been involved in the Venezuelan oil sector since 2012 and involved in several projects in the Venezuelan oil sector; Bazzoni is a core facilitator of the network connecting Elemento and Swissoil; Apikian is the director of Swissoil. These individuals play a significant role in the Venezuelan oil sector. [126] I agree with Mr Bravo that it would be disproportionate to compare the present commercial transactions with the transactions by the various entities cited above. The entities and individuals above clearly worked for the benefit of PdVSA and the Government of Venezuela. There were multiple transactions and most, if not all, of the transactions were done for the benefit of PdVSA. The transactions were also done by way of a scheme which would amount to deceptive transactions and conspiracy to avoid sanctions. This should be distinguished from the present facts of the case where it is not shown that Futura did play a significant role in the Venezuelan oil sector and or was involved in a scheme or network related to the Venezuelan oil sector. S/N ossnLMXfoUu9TN1MtzIqQw 48 **Note : Serial number will be used to verify the originality of this document via eFILING portal [127] The reference to OFAC’s FAQ number 629, to my mind, is instructive: “… OFAC expects to use its discretion to target those who operate corruptly in the identified sectors of the Venezuela economy, and not those who are operating legitimately in such sectors. This includes, for example, persons engaging in dishonest or fraudulent conduct, illicit activity, or deceptive transactions within identified Venezuela sectors, with the purpose or effect of misappropriating Venezuelan resources in those sectors for personal, professional, or political gain.” [emphasis added] [128] The sale of Fuel Oil between Futura and PdVSA and the subsequent sale of the Fuel Oil between Orin Energy and Futura in this current action do not contain any of the characteristics in the EOs above. It is merely a commercial transaction between two non-U.S. parties. [129] I accept Mr Bravo’s distinction between the OFAC’s country-based sanctions and secondary sanctions. OFAC’s Venezuelan Sanctions Program falls under the category of country-based sanctions whereby the primary sanctions target a designated country like Venezuela. [130] OFAC’s secondary sanctions, on the other hand, target non-U.S. persons that aid, help or materially assist a sanctioned entity or SDNs. The U.S. sanctions against Venezuela is not an open sanction. The entity or individual needs to be specified and determined by OFAC or by an executive order to be placed under S/N ossnLMXfoUu9TN1MtzIqQw 49 **Note : Serial number will be used to verify the originality of this document via eFILING portal the SDN list before a U.S. person is prohibited from dealing with them. [131] A determination by the Department of Treasury would have to be made whereby there should first be a subjective evaluation of the transaction(s) in question. One of the deciding factors that the Department of Treasury would take into account is whether an entity or individual has materially assisted PdVSA and or the Venezuelan Government. The interpretation of ‘materially assisted’ remains subjective and fully up to the discretion of the Department of Treasury. [132] As such, not every non-U.S. person conducting business with the Venezuelan market is automatically subject to secondary sanctions as contended by Mr Skoufalos. I agree with Mr Bravo that Mr Skoufalos’ assertion that simply engaging in any business activity of a Venezuelan entity will automatically equate to materially assisting PdVSA and or the Government of Venezuela is overly simplistic. [133] In fact, it is only after the determination has been made by the Secretary of the Treasury, in consultation with the Secretary of State, that a person has violated the EOs 13884 and 13850 that OFAC would enforce the violation by designating the person or entity as an SDN, which effectively cuts off the person or entity from a major portion of international business and financial transactions as no U.S. person could deal with the entity and it is cut-off from the US dollar denominated financial system. This position is shared by Mr Skoufalos: S/N ossnLMXfoUu9TN1MtzIqQw 50 **Note : Serial number will be used to verify the originality of this document via eFILING portal “12.8 As discussed in Paragraph 10.19 above, enforcement action against non-U.S. persons will vary. However, from a commercial standpoint, among the harshest actions OFAC can take is to designate a person/entity as a Specially Designated National (SDN) and add the person/entity to OFAC’s SDN List. 12.9 A person/entity placed on OFAC’s SDN List will be effectively cut off from a major portion of international business and financial transactions, access to most bank accounts and restrictions on international travel. U.S. nationals are prohibited from transactions of any kind with SDNs, and OFAC will act to block a designated person/entity’s assets in the U.S. Furthermore, all U.S. persons (including companies and financial institutions) are prohibited from engaging in transactions or conducting business with a designated party anywhere in the world, and the targeted party is cut off from the dollar-denominated U.S. financial system. All U.S. persons (including companies and financial institutions) would also be prohibited from engaging in transactions or conducting business with any subsidiary owned or controlled more than 50 percent by the listed/sanctioned person or entity”. [emphasis added] [134] Of importance for the present case is that the sanctions are only applicable to U.S. persons who trade with SDNs. The wording in the EOs itself mentioned “U.S. persons.” As mentioned above and as agreed by both Orin Energy’s and Futura’s experts, neither Orin Energy nor Futura is a U.S. person nor an entity that has been determined by the Department of Treasury. Neither do the parties have any U.S. nexus. If one is not placed under the SDN list, there is no risk as the blocking sanction only applies when one deals with another entity or individual designated under the SDN list. S/N ossnLMXfoUu9TN1MtzIqQw 51 **Note : Serial number will be used to verify the originality of this document via eFILING portal [135] Thus, it is my judgment that based on the EOs, it is only when the property of an SDN is in the possession or control of the U.S. person that the property is blocked, namely, the property may not be transferred, paid, exported, withdrawn, or otherwise dealt with. For this reason, I found that Section 71 of the BPGTC was never triggered since the sale of the Fuel Oil from PdVSA to Futura was a sale from an SDN to a non-U.S person, and hence did not become blocked or sanctioned property. Similarly, the sale from Futura to Orin Energy also did not attract the U.S. Sanction laws at all. [136] In fact, this was the reason why Orin Energy could take delivery of the 1st Lot from the Nordic Sirius and thereafter sell the same to its Chinese buyers. When the 1st Lot was loaded onto Nordic Sirius from the Eser K, it was a transfer from a non-U.S person and a non- SDN i.e. Futura to a U.S. person, i.e. Nordic Sirius. Such a transaction does not attract the U.S. Sanction laws at all. [137] Orin Energy had sought to refer this Court to the case of Unicious Energy Pte Ltd v The Owners and/or Demise Charterers of the Ship or Vessel “Alpine Mathilde” [2023] CLJU 2516 (“Unicious”) on the status of ‘blocked property’. In that case, I had said as follows: “[58] Once property is blocked, it cannot be unblocked by the sanctioned owner (like the Plaintiff in this case) by selling the property to a non-sanctioned third party. [See: 31 C.F.R. § 560.211(c)] This was made clear in the case of Zarmach Oil Services., Inc. v U.S. Department of Treasury, 750 F. Supp. 2d 150 (D.D.C. 2010). [emphasis added] S/N ossnLMXfoUu9TN1MtzIqQw 52 **Note : Serial number will be used to verify the originality of this document via eFILING portal [138] It was contended that because both experts had opined that the Fuel Oil was considered ‘blocked property’ because it had originated from PdVSA, the Fuel Oil remained blocked property and could not be unblocked. [139] With respect, I do not agree that the Fuel Oil is blocked property merely because it had originated from PdVSA. “Blocked property” means that it cannot be transferred, paid, exported, withdrawn, or otherwise dealt with. This is so only when the property is in the control or possession of a U.S. person. To hold that the Fuel Oil is blocked property by reason only of its origin from PdVSA would mean that OFAC has put a total embargo or ban on all products from PdVSA, prohibiting the whole world from dealing with its products. [140] To accept the aforesaid position would mean that the entire world will not be able to engage in any oil trade with the Government of Venezuela or PdVSA. It is not only a position that is inconsistent with the existing facts, since there are still some countries that continue to trade with Venezuela, but is also an impermissible exercise by a country of extraterritorial coercive powers which in any case can hardly be enforced. [141] The facts in Unicious are easily distinguishable. The plaintiff, Unicious Energy Pte Ltd was designated an SDN by OFAC and the owner of the vessel, Alpine Mathilde being a U.S. person was prohibited from dealing with the cargo belonging to the plaintiff which had come to its possession or control. In other words, by reason of the plaintiff being an SDN and the owner of Alpine Mathilde being a U.S. person, the cargo had become a “blocked property”. The S/N ossnLMXfoUu9TN1MtzIqQw 53 **Note : Serial number will be used to verify the originality of this document via eFILING portal plaintiff had sought to “unblock” the blocked cargo by seeking to sell the same to a third party so that the said third party could claim possession of the cargo from the master of the vessel. The remark that “once property is blocked, it cannot be unblocked by the sanctioned owner” was made in that context. [142] What this means is that the Master of Nordic Sirius had no legal basis to cease the STS operation on 18.9.2020 on the ground that the Fuel Oil had originated from Venezuela. This is because at the time when the Fuel Oil was being discharged into Nordic Sirius, the Fuel Oil was not a blocked property at all. Neither Orin Energy nor Futura was listed as an SDN by OFAC at the time. [143] In fact, if indeed the Fuel Oil was deemed as blocked property as contended by Mr Skoufalos, the cargo that was loaded onboard Nordic Sirius from the STS operation would have been treated as coming within the possession and or control of the owner of Nordic Sirius, who is undisputedly a U.S person. This must mean that it was not open to the owner of Nordic Sirius to deal with the cargo onboard without the license from OFAC. However, what had transpired after the cessation of the STS operation was that a settlement agreement was reached between the owner of Nordic Sirius with Orin Energy where the cargo onboard the vessel was released to Orin Energy. [144] Accordingly, it is my judgment that Futura was never in breach of Section 71 of the BPGTC since the Fuel Oil was never sanctioned property at all material times. Orin Energy was never entitled to suspend payment for the Fuel Oil at all. S/N ossnLMXfoUu9TN1MtzIqQw 54 **Note : Serial number will be used to verify the originality of this document via eFILING portal [145] In the premises, it is the judgment of this Court that Orin Energy’s claims in this action seeking inter alia various declaratory reliefs and claiming damages (general, special, aggravated and exemplary) against Futura, premised on Futura's breach of the express and fundamental term of the Sales Contract in delivering sanctioned oil of Venezuelan origin and premised on Futura’s fraudulent misrepresentation in concealing the true origin of the Fuel Oil from Orin Energy, are without any merits and must be dismissed. [146] Orin Energy has also failed to adduce any credible evidence in support of Futura’s purported wrongful act(s) in inducing a breach of the Nordic Charterparty and by reason thereof, this aspect of the claims is similarly without any merits and must be dismissed. Futura’s Counterclaims [147] The Court will now turn to Futura’s Counterclaims against Orin Energy for the balance purchase price of the Cargo that was delivered to Nordic Sirius, the loss of profits or diminution in market value of the Remaining Lots, demurrage claims in respect of the Eser K and other wasted costs incurred by Futura after the STS operation was aborted on 18.9.2020, premised on the breach of the Sales Contract by Orin Energy in failing to pay for the balance purchase price for the Fuel Oil and to take delivery of the Remaining Lots. [148] As a start, following from my findings above that Orin Energy knew of the true origin of the Fuel Oil and that the Fuel Oil was never a blocked or sanctioned property, it must follow that Orin Energy was S/N ossnLMXfoUu9TN1MtzIqQw 55 **Note : Serial number will be used to verify the originality of this document via eFILING portal not entitled to invoke Sections 71.1.2 and 71.2 of the BPGTC to suspend further performance of its obligations under the Sales Contract and to refuse the payment demanded by Futura on 26.9.2020. The termination of the Sales Contract by Futura on 29.9.2020 for Orin Energy’s breach of its obligation to pay was accordingly not wrongful. [149] The STS operation between the Eser K and the Nordic Sirius that was aborted cannot be used as a reason by Orin Energy not to make payment for the Fuel Oil. The STS operation ceased because of the decision by the Master of Nordic Sirius that the Fuel Oil was sanctioned property being a product from PdVSA. However, the Fuel Oil was not sanctioned or blocked property at the time of the STS operation. [150] Futura’s contractual duty was to provide Fuel Oil of agreed and acceptable quality as per the Sales Contract. In turn, Orin Energy was fully in charge of nominating and appointing the receiving vessel, the Nordic Sirius at Linggi, to receive the Fuel Oil from Futura’s nominated vessel, Eser K, which was to be transferred by STS operation. [151] The failure of delivery by STS to Orin Energy’s nominated vessel, the Nordic Sirius, which resulted in the failure to complete full delivery of the 1st Lot was not due to Futura and indeed could not be attributed to Futura at all. [152] The Sales Contract incorporated the BPGTC terms and pursuant to section 5.2.1 of the BPGTC, it is the Buyer’s (Orin Energy) duty to S/N ossnLMXfoUu9TN1MtzIqQw 56 **Note : Serial number will be used to verify the originality of this document via eFILING portal nominate a vessel to take delivery of the Fuel Oil from the Seller’s (Futura) Vessel, i.e., the Eser K. Although the BPGTC under section 5.5 gave Futura the right to reject the nomination of vessels by way of notice, it does not negate Orin Energy’s duty to nominate a suitable vessel. A suitable vessel in the present case was a vessel that is able to accept or carry onboard the type of Fuel Oil agreed between the parties. [153] Futura sold the Fuel Oil to Orin Energy under FOB terms. Under such terms, it would be for Orin Energy as the Buyer to nominate or charter the receiving vessel which in this case was the Nordic Sirius. Indeed, DW1 explained that Futura did not have the duty or play any part in the nomination of the Nordic Sirius as this lay entirely on Orin Energy to nominate a suitable vessel to take delivery of the Fuel Oil. In short, the charter of the Nordic Sirius was strictly a matter between the Plaintiff and NAT only. Futura was not a party to the contract. [154] Orin Energy’s claim that Futura had in fact sabotaged the STS transfer of the Fuel Oil into the Nordic Sirius is, with respect, fanciful and completely without any evidential basis. Indeed, as rightly pointed out by learned counsel for Futura, it is against Futura’s interests as seller of the Fuel Oil to frustrate the Sales Contract when it had every intention to complete the transaction and Orin Energy had shown every intention to pay Futura the remaining full price of the Fuel Oil. [155] The fact that the Master of Nordic Sirius had discovered the origin of the Fuel Oil from the documents provided to him during the STS S/N ossnLMXfoUu9TN1MtzIqQw 57 **Note : Serial number will be used to verify the originality of this document via eFILING portal operation cannot, without more, support the claim of sabotage or inducing breach of contract. As testified by PW1, Silk Straits is the port or shipping agent for both Orin Energy and Futura. Silk Straits dealt with TAG Marine directly in the STS operation, including handling the Certificate of Origin. PW1 confirmed that it is between the port and the vessel owner or charterer to provide the necessary documents for STS. At the trial, it was clear that PW1 well knew the STS procedures and the relevant documents required to be given to the port. [156] Moreover, as per the email from Silk Straits dated 23.8.2020, Silk Straits in requesting for a list of pre-arrival documents stated as follows: “Kindly be informed that as per new information/directives received from the Custom Department, the Service Provider shall not be allowed to commence STS operation unless the Authorities received all required documents for inward clearance on pre-arrival and also documents relating to STS Operations. As Port Agent and STS Service Provider Agent, we T.A.G Logistics Management Sdn Bhd need to process and submit a complete documents prior to STS Operation being granted and commence.” [emphasis added] [157] Amongst other documents provided by the Master of the Eser K was the MSDS i.e Material Safety Data Sheet. The MSDS also clearly showed that the Fuel Oil was from PdVSA, Venezuela. Clearly, the S/N ossnLMXfoUu9TN1MtzIqQw 58 **Note : Serial number will be used to verify the originality of this document via eFILING portal origin of the Fuel Oil would be known from the pre-arrival documents provided by the Master of Eser K as required by Silk Straits. [158] Futura’s act of providing such documents was merely to comply with the requirements and protocol for the STS operations. Similar to Silk Straits, the Master of Eser K had provided the Certificate of Origin upon the request of the Master of Nordic Sirius. Futura, again, was merely complying with the request of the relevant parties just to ensure the commencement of the STS operation. [159] As such, Orin Energy has failed to prove on the balance of probabilities that Futura did in fact interfere with the transfer of Fuel Oil into the Nordic Sirius. [160] There is no dispute that Orin Energy failed and/or refused to take delivery of the remaining Fuel Oil onboard the Eser K. Orin Energy had no reasons not to accept or take delivery of the remaining Fuel Oil, not only because Orin Energy knew of the origin from the beginning, but Orin Energy had in fact accepted the 1st Lot of Fuel Oil which was eventually delivered to their end buyers. [161] In this regard, Orin Energy contended that the Sales Contract was a divisible contract whilst Futura contended that the Sales Contract was an entire indivisible contract. To my mind, the distinction is irrelevant in this case, since it is my judgment that Orin Energy was obliged to take delivery of the entire Fuel Oil onboard the Eser K and this, Orin Energy had failed to do. Accordingly, Orin Energy was in breach of the Sales Contract for its failure to perform its contractual obligations as a Buyer of the Fuel Oil. S/N ossnLMXfoUu9TN1MtzIqQw 59 **Note : Serial number will be used to verify the originality of this document via eFILING portal [162] Section 40 of the Contracts Act 1950 states as follows: “When a party to a contract has refused to perform, or disabled himself from performing, his promise in its entirety, the promise may put an end to the contract, unless he has signified, by words or conducts, his acquiescence in its continuance.” [163] As Orin Energy had evinced a clear intention not to perform its obligation to take delivery and to pay for the remaining Fuel Oil onboard the Eser K, Futura was legally entitled to treat the refusal as a repudiatory breach and to terminate the Sales Contract by way of its email dated 29.9.2020. [164] It is also my judgment that Orin Energy’s claim that the Fuel Oil did not meet the contracted specifications is wholly without merits. The specifications of the Fuel Oil were never raised as an issue at all at the time Orin Energy terminated the Sales Contract. In fact, as conceded by PW1, prior to the commencement of the STS operation, Orin Energy had by its appointed surveyor taken samples of the Fuel Oil for testing. If indeed, the specifications of the Fuel Oil were inconsistent with the terms of the Sales Contract, Orin Energy would not have agreed to the commencement of the STS operation. [165] Furthermore, Orin Energy had accepted the Cargo and was able to on-sell the same to its purchasers in China. To my mind, Orin Energy is clearly blowing hot and cold. On the one hand, Orin Energy is contending that the Cargo was sanctioned property which would subject it to secondary sanctions for dealing with the same, yet, Orin Energy had refused to re-deliver the Cargo to Futura and S/N ossnLMXfoUu9TN1MtzIqQw 60 **Note : Serial number will be used to verify the originality of this document via eFILING portal was quite prepared to enter into an arrangement with the owner of the Nordic Sirius to take possession of the same for its onwards sale to its Chinese purchasers. [166] The truth is that Orin Energy knew all along that there were no risks for it to purchase Fuel Oil from Futura. The sanction risks did not attach to the Fuel Oil, as Futura was never designated as an SDN. Most importantly, neither party was a “U.S. person.” Futura’s Losses [167] Orin Energy has taken delivery of the Cargo but refused to take delivery of the Remaining Lots and the Balance of the 1st Lot. [168] In this regard, the pricing and calculation of the Fuel Oil is stipulated in the Sales Contract. However, Orin Energy disputed the accuracy of the amount owing and the loss of profit suffered by Futura. As such, Orin Energy had engaged a pricing expert, PW4, who testified at trial and who also rendered his expert report and opinion. [169] Futura is in fact relying on PW4’s expert testimony and opinion adduced at trial for the calculation of its loss of profit. [170] Addendum No.1 of the Sales Contract provides that Orin Energy had agreed to make payment of USD $11,400,000.00 alongside an acceptable Assignment of Proceeds (“AOP”) which would be fully cash backed at an amount covering the final sales price percentage due to Futura and that the pricing of the Fuel Oil is determined or calculated on basis of B/L+3. The AOP would allow Futura to S/N ossnLMXfoUu9TN1MtzIqQw 61 **Note : Serial number will be used to verify the originality of this document via eFILING portal demand payment from Barclays Bank London when presenting the final invoice. Once full payments had been received, the Remaining Lots and the Balance of the 1st Lot would be transferred and the title of ownership of the Fuel Oil accordingly would be transferred to Orin Energy. [171] In determining the market value of the Fuel Oil, PW4 had provided his calculation based on the Standard & Poor (“S&P”) Global Platts. PW4 provided his calculations based on the question posed to him by Orin Energy. As per the Sales Contract, PW4 was requested to provide the average mid quotations published in “Platts Fuel Oil, HSFO 380 CST” under the heading “Singapore, HSFO 380 CST ($/MT)” between 21.9.2020 and 23.9.2020. PW4 stated that no explanation as to the specific dates used in the calculation was given to him and that he was merely answering to the questions given to him. [172] Based on PW4’s testimony, the Cargo, comprising 34,242.852MT of Fuel Oil was transferred to the Nordic Sirius before the stoppage of the STS operation. Assuming that the remaining Fuel Oil is to be fully transferred within the 72+6 hours laytime stipulated in the Sales Contract, a Bill of Lading would have been issued at least 3 days after the beginning of the transfer, i.e., 20.9.2020. As stated in the Sales Contract, the price of the Fuel Oil should be the average mid quotations of 3 effective quotations published after the Bill of Lading being issued, i.e., 21.9.2020, 22.9.2020 and 23.9.2020. The price of the Fuel Oil should be for the price of the entire contract, which the parties agreed was for the final quantity of approximately 105,000MT. S/N ossnLMXfoUu9TN1MtzIqQw 62 **Note : Serial number will be used to verify the originality of this document via eFILING portal [173] As I have found above, the Sales Contract was an entire contract for the full payment to be made for the whole of approximately 105,000MT (+/-5%) of Fuel Oil. Orin Energy has failed to make the remaining payment of the Fuel Oil. As such, the money owed to Futura by Orin Energy would be the total price of approximately 105,000MT of Fuel Oil less the amount already paid by Orin Energy. [174] Referring to table 5 of PW4’s expert report, the average mid quotation was USD $241.95 for the transferred Cargo. Pursuant to the Sales Contract, USD $45.00 per MT discount was applicable, therefore, the price of the Cargo would be USD $196.94 per MT. This means that the total sum for the transferred Cargo should be USD $6,743,787.27 (being 34,242.853 MT x USD $196.94). [175] However, Orin Energy had only made payment of USD $4,500,000.00. Hence, it still owes to Futura the sum of USD $2,243,787.27 for the transferred Cargo that was accepted by Orin Energy. [176] In terms on the loss of profit for the Remaining Lots and the Balance of the 1st Lot, the total amount for all the Fuel Oil which Orin Energy agreed to purchase would be USD $20,678,700.00 i.e. 105,000 MT x USD $196.94. [177] Futura would have been paid another USD $13,934,912.70 (being USD $20,678,700.00 – USD $4,500,000.00 – USD $2,243,787.27) if not for Orin Energy’s breach of the Sales Contract. S/N ossnLMXfoUu9TN1MtzIqQw 63 **Note : Serial number will be used to verify the originality of this document via eFILING portal [178] In this regard, in mitigation, Futura had sold the Remaining Lots and the Balance of the 1st Lot to another buyer, i.e., Eastern Petroleum, for a total of USD $14,047,827.22. The sum is in fact higher than the said sum of USD $13,934,912.70 that Futura would have otherwise received from Orin Energy. Therefore, Futura had suffered no loss at all in respect of the Remaining Lots. [179] Futura is also entitled to claim for demurrage incurred for the Eser K due the stoppage of the STS operation. The Eser K was made to lay idle at the waters of Linggi when the STS operation was stopped and await further instructions on the continuation of the transfer, which did not happen. In this regard, learned counsel for Futura at the oral hearing confirmed that Futura is claiming demurrage only for the period from 28.9.2020 to 5.10.2020 given that the Notice of Readiness was tendered on 8.9.2020. This works out to be USD $184,000.00 based on the agreed demurrage rate of USD $23,000 per day. [180] The Defendant also claimed additional port costs for the Eser K due to the stoppage of the STS operation, amounting to USD $59,988.40 based on an invoice dated 7.10.2020, sum of USD $2,282.16 for Invoice dated 2.11.2020 and the further sum of USD $4,564.32 for Invoice dated 9.11.2020. However, Orin Energy has produced a receipt for the payment of only USD $53,141.92 for the invoice dated 7.10.2020. [181] Similarly, in respect of Futura’s claims in respect of USD $7,006.30 as additional ports charges, USD $91,750.00 incurred for the STS operation costs and USD $13,555.53 being survey costs and launch S/N ossnLMXfoUu9TN1MtzIqQw 64 **Note : Serial number will be used to verify the originality of this document via eFILING portal and transport costs arising from the sale of the remaining Fuel Oil to the new Buyer involving the vessel MT Prestigious, the documents relied upon are mere estimated costs and no evidence that payments had in fact been made by Futura in respect thereof was tendered to this Court. [182] Accordingly, in respect of Futura’s Counterclaims, it is my judgment that Orin Energy is liable to pay Futura the amount of USD $2,478,929.19 only, being the total from the following sums: a) the sum of USD $2,243,787.27 being the balance due for the transferred Cargo that was accepted by Orin Energy with interest thereon at the rate of 5% per annum from 18.9.2020 until full realisation; b) the sum of USD $184,000.00 for the demurrage charges for the period from 28.9.2020 to 5.10.2020 with interest thereon at 5% per annum from 5.10.2024 until full realisation; c) the sum of USD $51,141.92 for the additional port costs for the Eser K as a result of the stoppage of the STS operation with interest thereon at 5% per annum from 7.10.2020 until full realisation. Conclusions [183] In the premises, it is the judgment of this Court that the Plaintiff’s action against the Defendant is dismissed and the Defendant’s Counterclaims allowed for the sums stated in paragraph 182 above. S/N ossnLMXfoUu9TN1MtzIqQw 65 **Note : Serial number will be used to verify the originality of this document via eFILING portal The Plaintiff is to pay the Defendant the costs of the action and the Counterclaims fixed at RM 150,000.00 subject to allocator. Dated the 2nd day of September 2024 ONG CHEE KWAN Judge of the High Court of Malaya High Court of Kuala Lumpur, NCC2 & Admiralty Counsel: 1. Ms. Sitpah Selvaratnam, Mr. Alan Gomez, Mr. Kevin Wong, Ms. Rahayu Mumazaini, Ms. Ng Dee Ming, Mr. Daniel Tan and Mr. Ahmad Azad for the Plaintiff Messrs. Kevin Wong & Partners (Kuala Lumpur) 2. Mr. Philip Teoh together with Ms. Lim Wai Yee, Ms. Lee Jie Zing (PDK) and Ms. Laura Yew Quo Jane (PDK) for Defendant Messrs. Azmi & Associates (Subang Jaya) S/N ossnLMXfoUu9TN1MtzIqQw 66 **Note : Serial number will be used to verify the originality of this document via eFILING portal Case Reference: 1. Bahamas International Trust Co Ltd v Threadgold [1974] 1 WLR 1514 2. Padiberas Nasional Bhd v Kontena Nasional Bhd [2010] 3 MLJ 134 3. Unicious Energy Pte Ltd v The Owners and/or Demise Charterers of the Ship or Vessel “Alpine Mathilde” [2023] CLJU 2516 Legislation Reference: 1. Labuan Companies Act 1990 2. Section 40 of the Contracts Act 1950 S/N ossnLMXfoUu9TN1MtzIqQw 67 **Note : Serial number will be used to verify the originality of this document via eFILING portal Annexure Protocol For “Hot-Tubbing” Session IN THE HIGH COURT OF MALAYA AT KUALA LUMPUR IN THE FEDERAL TERRITORY OF KUALA LUMPUR (COMMERCIAL DIVISION) SUIT NO.: WA-27NCC-17-03/2021 Between ORIN ENERGY INVESTMENTS LTD (Labuan Company No. LL14514) ... PLAINTIFF And FUTURA ASIA LIMITED (Hong Kong Company No.: 2485758) ... DEFENDANT BEFORE THE JUDGE ONG CHEE KWAN IN CHAMBERS ON THIS 6 JUNE 2023 VIA ZOOM VIDEO CONFERENCE ORDER [Pre-Trial Case Management Directions] S/N ossnLMXfoUu9TN1MtzIqQw 68 **Note : Serial number will be used to verify the originality of this document via eFILING portal THIS SUIT came up for pre-trial case management on 6 June 2023 AND UPON HEARING Sitpah Selvaratnam (Kevin Wong and Rahayu Mumazaini with her) of Counsel for the Plaintiff and Philip Teoh (Gabrielle Lim Wai Yee with him) of Counsel for the Defendant. IT IS HEREBY ORDERED BY CONSENT THAT (1) the scope of the report and testimony of parties' experts on sanction laws are to be confined to the issues set out in APPENDIX A to this Order: and (2) the protocol for all expert evidence, not limited to experts on sanction laws is as set out in APPENDIX B to this Order, including the relevant timelines annexed as TABLE 1 to APPENDIX B. Dated 6 June ,2023 S/N ossnLMXfoUu9TN1MtzIqQw 69 **Note : Serial number will be used to verify the originality of this document via eFILING portal APPENDIX A SCOPE OF EVIDENCE: EXPERT WITNESS ON SANCTION LAWS In the context of the following set of facts, which are alleged but was not have all been proven: (a) the seller of 700,000 barrels of fuel oil ("Fuel Oil"), Futura Asia Limited ("Futura"), is a company incorporated and with a registered address in Hong Kong; (b) the buyer of the Fuel Oil, Orin Energy Investments Ltd ("Orin Energy"), is a company incorporated in Malaysia pursuant to the Labuan Companies Act, 1990; (c) the Fuel Oil purchased was onboard the vessel MT “Eser K” (“Eser K”); (d) the registered owner and commercial operator of the Eser K at the material times was Rossi Marine Ltd, a Maltese company; (e) the technical operator of the Eser K at the material times was International Tanker Management Limited, a United Arab Emirates (UAE) company; (f) based on the sale contract between Futura and Orin Energy, Orin Energy hired a vessel MT "Nordic Sirius" ("Nordic S/N ossnLMXfoUu9TN1MtzIqQw 70 **Note : Serial number will be used to verify the originality of this document via eFILING portal Sirius") to take delivery of the Fuel Oil by way of ship-to-ship transfer ("STS") operation with another vessel; (g) the registered owner of the Nordic Sirius at the material times was NAT Bermuda Holdings Limited, a company incorporated in Bermuda and carrying on business in the United States and listed on the New York Stock Exchange; (h) the technical operator of the Nordic Sirius at the material times was V.Ships Norway AS, a Norwegian company; (i) the commercial operator of the Nordic Sirius at the material times was V.Ships UK Ltd, a U.K. company; (j) at all material times, the Nordic Sirius was insured by GARD, a Norwegian insurance company; (k) during the STS operation in respect of the Fuel Oil, the Master of the Nordic Sirius ordered the transfer to cease, stating that the Fuel Oil was sanctioned cargo originated from Venezuela, which the Nordic Sirius would not accept; and (l) the origin of the Fuel Oil is in dispute, premised on the following documents and communication: i. communication between Futura (as Seller) and Orin (as Buyer) of the Fuel Oil; ii. the Analytical Report issued by AmSpec Iberia S.L. Unipersonal, which states Gibraltar as its origin; and S/N ossnLMXfoUu9TN1MtzIqQw 71 **Note : Serial number will be used to verify the originality of this document via eFILING portal iii. the Origin Certificate issued by PDVSA, which states that the Fuel Oil was produced in Venezuela, the experts on sanction laws are required to express their opinion on the following: (i) the basis, origin and scope of sanctions affecting oil originating from Venezuela; (ii) whether any and if so, which sanctions would be relevant for consideration by the Court of the conduct of the various parties identified above; (iii) whether such sanctions would be binding on any of the parties identified above; (iv) whether such sanctions extend in their application to Malaysia; (v) whether there would be consequences upon a US person in violating such sanctions; and (vi) whether there would be consequences upon a non US-person in violating such sanctions. • Those footnote in red are premised on agreed facts; those in blue are based on documents that have yet to be proven. S/N ossnLMXfoUu9TN1MtzIqQw 72 **Note : Serial number will be used to verify the originality of this document via eFILING portal APPENDIX B PROTOCOL FOR PREPARING AND GIVING EXPERT EVIDENCE BY PARTY-APPOINTED EXPERT WITNESSES 1. The expert written report should comply with the requirements set out in Order 40A, Rule 3 of the Rules of Court, 2012 and contains: (a) details of the expert's qualifications; (b) details of any literature or other material which the expert witness has relied on in making the report; (c) a statement setting out the issues which he has been asked to consider and the basis upon which the evidence was given; (d) if applicable, state the name and qualifications of the person who carried our any test or experiment which the expert has used for the report and whether such test or experiment has been carried out under the expert's supervision; (e) where there is a range of opinion on the matters dealt with in the report – (i) summarise the range of opinion; and (ii) give reasons for his opinion; (f) a summary of the conclusions reached; S/N ossnLMXfoUu9TN1MtzIqQw 73 **Note : Serial number will be used to verify the originality of this document via eFILING portal (g) a statement of belief of correctness of the expert's opinion; and (h) a statement that the expert understands that in giving his report, his overriding duty is to the Court and that he complies with that duty. 2. The experts shall hold a discussion pursuant to Order 40A Rule 5 of the Rules of Court, 2012 for the purpose of: (a) identifying and listing the issues upon which they are to provide an opinion in the proceedings; and (b) where possible, reaching an agreement on those issues. 3. Following a discussion between the experts, the experts shall prepare a statement for the Court showing: (a) the issue on which they agree; and (b) the issues on which they disagree and a summary of their reasons for disagreeing. [Order 40A Rule 5(3) of the Rules of Court, 2012] 4. The contents of the discussions between the experts shall not be referred to at the trial, unless the parties agree in writing to the disclosure [Order 40A Rule 5(4) of the Rules of Court, 2012]. S/N ossnLMXfoUu9TN1MtzIqQw 74 **Note : Serial number will be used to verify the originality of this document via eFILING portal 5. Where the experts reach an agreement on an issue during their discussions, the agreement shall not bind the parties, unless the parties expressly agree to be bound by the agreement disclosure [Order 40A Rule 5(5) of the Rules of Court, 2012]. 6. The timeline for the non-sanction law experts to prepare a report and confer shall be as stated in "TABLE 1". 7. The procedural framework for expert testimony shall be as follows: (a) the Court shall administer an oath or take an affirmation from each expert, before the expert begin their testimony. (b) Each expert shall confirm that the written evidence submitted by him/her is his/her own and shall identify any corrections that is to be made. (c) Each expert shall give oral presentation of his/her position. The Court shall determine the length of the presentations and the Order in which the experts shall make them. (d) After the presentation: (i) The Judge will question the experts in relation to the areas of disagreement, and on any other matter it considers appropriate; S/N ossnLMXfoUu9TN1MtzIqQw 75 **Note : Serial number will be used to verify the originality of this document via eFILING portal (ii) The Judge will ask each expert to express his/her views on each of the areas and why he/she disagrees with the views of the other expert; and (iii) The Judge shall give each expert an opportunity to respond to the evidence of another. (e) After the Judge has completed his questioning, each party's counsel may question the expert of the other party, and may invite their own party's expert to respond to the opposing expert's answer. (f) The Judge may at any time permit or invite discussion between the experts, or any of them, on any area of disagreement and on any other matter the Judge considers appropriate. S/N ossnLMXfoUu9TN1MtzIqQw 76 **Note : Serial number will be used to verify the originality of this document via eFILING portal