For the purpose of constructing a factory in Indonesia, the claimant, a Hong Kong company, entered into a contract for the supply of freight forwarding services by the respondent, a Finnish company, and another company. The contract contained a clause stating that it should be governed and construed in accordance with the laws of England. The claimant alleged that it suffered losses as a result of delays in the services provided by the forwarders. In an interim award, the tribunal found in favour of the claimant and ruled on the amounts recoverable from the respondent in its final award.

Aux fins de construire une usine en Indonésie, la demanderesse, une société hongkongaise, a conclu un contrat de fourniture de services de transitaire avec la défenderesse, une société finlandaise, et avec une autre société. Le contrat contenait une clause stipulant qu'il serait régi et interprété selon les lois anglaises. La demanderesse a soutenu qu'elle avait subi un préjudice du fait de retards dans les services fournis par les transitaires. Dans une sentence intérimaire, le tribunal arbitral a tranché en faveur de la demanderesse et il a statué dans sa sentence finale sur les sommes recouvrables auprès de la défenderesse.

Con el fin de construir una fábrica en Indonesia, la demandante, una compañía de Hong Kong, concluyó un contrato para el suministro de los servicios de transitario por parte de la demandada, una compañía finlandesa, y otra compañía. El contrato contenía una cláusula estableciendo que debería ser regulado e interpretado según las leyes de Inglaterra. La demandante alegó que sufría pérdidas como consecuencia de los retrasos en los servicios proporcionados por los transitarios. En un lado interlocutorio, el tribunal falló a favor de la demandante y determinó las cantidades recuperables de la demandada en su laudo final.

'General observations as to burden of proof and the evidence presented to the tribunal

19. It is common ground that the claimant bears the burden of proving the amounts of its claims in all respects. Accordingly, it is for the claimant to establish on the balance of probabilities that each amount claimed is an amount which was reasonably incurred by the claimant in consequence of the particular breach of contract that the claimant relied upon, and that that amount incurred was paid by the claimant. The difference between the parties is that the claimant maintains that it has discharged the burden in all respects, while the respondent maintains that the claimant has failed to do so.

20. There is little doubt that at least some of the evidence available to the tribunal for assessment of the damages fell short of the standard which might be expected. As asserted strongly on behalf of the respondent, this was rather curious having particular regard to the fact that this was clearly a case where the claimant was heavily involved from the beginning and in which it should have been simple for the claimant to collect, maintain, and tender to the tribunal all the prime source documents.

21. The main problem in the case is that the claimant was not able to provide any original documentation, relying instead on copies. In some situations, there were not even copy documents available. The explanation of [Claimant witness] was that all the relevant documents had been stored by the claimant in boxes inside an old shipping container, and that when he . . . went to seek out the documents at the request of his solicitors, he discovered that they had been destroyed by termites.

22. It is pertinent at this stage to state that the tribunal is satisfied that the three witnesses called on behalf of the claimant . . . were witnesses for truth, as for that matter was the witness called for the respondent . . . The tribunal is impressed with the credibility of [two of the witnesses], who were clearly independent witnesses doing their best to recall events which occurred many years previously, and in which they no longer had any personal interest. [Another witness], whose evidence was critical to the claimant's case, may not have been as impressive as the other two, and indeed, the tribunal concluded that he may have been somewhat offhand and casual in dealing with many aspects of the case. That having been said, the tribunal is comfortable about his integrity and his credibility.

23. Before seeking to deal with precise details of the claimant's claim, the tribunal would like to note the principal criticisms made of the claimant's case on behalf of the respondent:

- Relevant documents, containing presumably important information had been destroyed by termites.

- There is no evidence of payment of any of the invoices by the claimant.

- The oral testimony of the claimant's witnesses was inconsistent with the affidavit evidence.

- The documents presented by the claimant are for alleged expenses and/or costs that none of the claimant's witnesses can justify in their oral testimony.

- The claimant's witnesses are unable to provide any explanation in respect of important documents such as charter parties.

- Despite the quantum of the loss, the claimant appears to have adopted a rather cavalier attitude with respect to the preservation of the relevant claim documents.

- Despite ongoing litigation for over ten years and right from the onset of the alleged costs and/or expenses, the claimant is unable to provide even the most basic documents such as charter parties, bills of lading and/or cargo manifests.

- The claimant had been put on notice by the respondent that the respondent was challenging the authenticity of the documents presented by the claimant but had not been able to establish authenticity.

24. A great deal of store was placed by the respondent on the fact that when this arbitration was commenced, it was commenced not only on behalf of the claimant, but on behalf of [the factory owner], that by our Interim Award of 4 April 2000, we found that the tribunal had no jurisdiction to entertain any claim by [the factory owner], and that despite the removal of [the factory owner] from the proceedings, there had been no change in the amount of the total claim. The respondent thus submitted that it was for the claimant to establish which of the alleged losses were suffered by the claimant, which were suffered by [the factory owner], and to limit the amount of the claim only to the losses sustained by the claimant.

25. At all times since the execution of contract number 6021, it has been clearly understood by the parties, and has been common ground, that the services for which the claimant contracted with the forwarders were services required for the construction by the claimant of a [factory] for [the factory owner].

26. It is perhaps useful here to repeat a portion of the preamble to contract number 6021 which was in fact set out in paragraph 29 of our Second Interim Award:

Whereas, the Owner (the claimant) intends to construct a [factory] . . . (hereinafter referred to as the "Project").

Whereas, the Owner desires the services of a competent and well-qualified Freight Forwarder to organize shipments of plant and equipment from various parts of the world to the job site . . .

It is also pertinent to note that under clause 11.1 of contract number 6021, it is provided that notices under the contract addressed to the Owner should be given to [the factory owner] at its address in . . . with a copy to the claimant in Hong Kong.

27. The relationship between the claimant and [the factory owner] was effectively confirmed and acknowledged by [the other forwarder acting with Respondent] in the document described as Supply Contract, under which [the factory owner] guaranteed to meet the claimant's financial obligations under contract number 6021, and under which, [the second forwarder] agreed that [the factory owner] was entitled to exercise the rights and discharge the obligations of the claimant and agreed that notices or instructions given by [the factory owner] should be treated as having been given by the claimant.

28. The basis for the above-described contractual arrangements was the turn-key contract between the claimant and [the factory owner], under which the claimant was to construct the [factory] for [the factory owner]. Responsibility for the construction process, including responsibility for arranging the necessary logistics, clearly lay with the claimant, and we are satisfied (subject to the accuracy of the amounts claimed) that the losses incurred as a result of the holding in storage at [port A] of cargoes discharged from the ships [1, 2 and 3], and the costs, expenses, and other losses incurred in consequence of the discharge of cargoes from the vessels [4, 5, 6 and 7] in Singapore are all losses sustained by the claimant. Viewed as a whole, the claimant's evidence, as presented by the witnesses . . . and as established in the available documentation is enough to satisfy the tribunal that the claimant has discharged the burden of proof. It is necessary, therefore, to now proceed to a consideration of the individual claims.

. . . . . . . . .

43. In contesting the quantum of the claims being presented on behalf of the claimant, the respondent placed reliance upon the words of Lord Mustill in the decision of the House of Lords in Ruxley Electronics & Constructions Ltd v. Forsyth (1995) 3 All ER 268 at 277 where His Lordship reminded us that "the test of reasonableness plays a central part in determining the basis for recovery" in assessing the damages payable for a breach of contract. The respondent challenged [two witnesses for Claimant] by suggesting that the prices paid by the claimant were unreasonable. [One of the witnesses] comfortably accepted that in some cases, in order to fulfil his company's obligation to the claimant, he was obliged to charter in vessels from other parties, and that in such cases, he marked up the cost between 15 and 20%. There was a debate as to the description by [the other witness] of "spot market rates", it again being implied on behalf of the respondent that the claimant had overpaid. For his part, [the witness] maintained that the claimant's position was desperate, that he was obliged to do what he could to extract the various cargoes from Singapore and have them delivered to Indonesia in the shortest possible time. For our part, we are again quite comfortable to accept the overall thrust of the evidence on behalf of the claimant, and to therefore conclude that it was reasonable indeed for the claimant to do what it did. We are satisfied that whilst the claimant was obliged to pay a higher price than might have been the case had the claimant been able to make appropriate contractual arrangements many months in advance, the arrangements made between [the two aforementioned witnesses] were perfectly reasonable commercial arrangements in the circumstances.

44. The respondent was critical of the claimant's case in a number of other respects, and observed that while the steaming time for a tug and barge from Singapore to [port B] was only a couple of days, the claimant had not only entered 30-day charter arrangements, but had in many cases extended the charter periods beyond 30 days. Further, the respondent maintained that many incidental items appearing in the claimant's claim were unproven and seemingly unrelated to any breach of contract by the forwarders. For instance, the respondent was critical of such things as the cost of cranage, the cost of demurrage, and the cost of repairs to some damage to a barge.

45. In reaching a conclusion, the tribunal remains cognisant of the matters stated in paragraph 33 above, i.e. that [one of the aforementioned witnesses for Claimant] had a major problem on his hands with substantial cargoes from a number of vessels stranded in Singapore incurring demurrage charges when they were required at [factory location]. We are therefore not only satisfied that he acted perfectly reasonably in contracting with the . . . Group for the forwarding of these cargoes to [port D]/[port B], but that in these circumstances, it was appropriate for the claimant to make whatever arrangements were reasonably necessary to overcome the undoubted and serious breaches of contract by the forwarders. We see no evidence that the claimant procured what might be called a "Rolls Royce" service, nor do we see any evidence that the claimant failed in any significant way to mitigate its loss, albeit that we accept that [Claimant witness's] focus was on achieving the best outcome, rather than on cutting costs. While it is not difficult, with the benefit of hindsight, to find reasons to criticize [Claimant witness], we must reject the respondent's criticisms as being unrealistic in the circumstances in which the forwarders placed the claimant.'