FYI.
---------------------- Forwarded by Alan Aronowitz/HOU/ECT on 09/30/99 09:12 
AM ---------------------------


Matthias Lee
09/29/99 03:20 AM
To: Robert Quick/LON/ECT@ECT
cc: Alan Aronowitz/HOU/ECT@ECT, Anita Fam/SIN/ECT@ECT, Angeline 
Poon/SIN/ECT@ECT 
Subject: MT Pacific Valour - 3KT PX Daesan to Map Ta Phut

Robert

As spoken, I have been advising Russell Aeria here in Singapore on a 
contentious matter.  Watson Farley & Williams ("WFW") have been retained as 
external counsel. Because the issues are to be determined under English law 
and your experience with admiralty matters, Alan has suggested that we seek 
your counsel as well. 

Below are the salient facts and issues. If you need and clarification or wish 
to discuss, please call me  or let me know if we should schedule a time 
tomorrow to speak again.

My numbers are : (65) 838 9103 (office); (65) 96919646 (mobile)

Facts:

1. ECTS purchased 3KT PX from Hyundai Singapore Pte Ltd ("Hyundai") FOB 
Daesan, Korea; loading date range  14 - 20 Sept. ECTS sold the same 3KT PX to 
Tuntex (Thailand) Public Company Limited ("Tuntex") CFR Map Ta Phut Thailand; 
delivery date range 1 - 30 Sept.

2. ECTS chartered the Pacific Valour under asbatankvoy ETA Daesan 11/12 Sept, 
Laycan 14 - 20 Sept.  The vessel was not able to meet ETA at Daesan 
apparently because of delays at the preceding port in China The vessel 
ultimately advised on 20 Sept ETA 22/pm, ie. 2 days beyond loading date 
range.  

3. ECTS failed to secure alternative tonnage primarily because of a typhoon 
on 20 Sept. On 21 Sept, Hyundai terminated the agreemnet to supply the PX on 
grounds that loading date range has expired. ECTS cancelled the charter on 
the same day. 

4. Alternative supply has been arranged for Tuntex. ECTS is considering 
possible actions against Hyundai and the vessel owners. 

5.  WFW has advised, subject to facts and evidence, ECTS has a reasonable 
chance against the vessel owner for failing in their duty of reasonable 
despatch to make the itinerary. We are comfortable with this opinion. WFW, 
however, has opined that WCTS does not have a reasonable cause of action 
against Hyundai, and it is in this regard we seek your comments.

Issues& advice:

a. Whether the loading date range is a condition of the contract with Hyundai 
such that ECTS's failure to load within the date range was a breach entitling 
Hyundai to rescind.

WFW advise that it is a condition as time in commercial contracts are of the 
essence unless expressed otherwise. 

b. If prima facie a condition, whether the definition of "Default" in the 
confirmation (Enron's buyer form) with Hyundai under "DEFAULT, TERMINATION 
AND LIQUIDATION", namely,  "...a material breach of this Agreement and fails 
to cure such breach within ten (10) daysafter written notice..." implies into 
a contract a cure period for material breaches.

WFW advise that there is no legal basis to argue that the clause overrides 
Hyundai's right to terminate.

I attach the Hyundai confirmation for your easy reference:



c. Whether the taped conversation between Russel and Joseph Tan amounts to an 
election to affirm the contract on the part of Hyundai such that they cannot 
thereafter rely on ECTS's breach to terminate.

I was given the transcript yesterday and examined it closer today. It is 
quite short and attached for your reference. The conversation took place on 
20 Sept at about 9 am.



I have today asked WFW for their opinion on the same and expect them to 
revert before the end of the day.

My view is that it is difficult to construe an election from the conversation 
which amounts to Hyundai giving up their right to terminate. Even if it were 
an election, I am of the view that it would be limited to an extension untill 
21 Sept. In this regard, the vessel did not arrive until 22 Sept and we 
advised Hyundai before they terminated on 21 Sept that ETA was 22/pm.  Please 
let me have your comments notwithstanding.

If you wish to review WFW's opinions, please let me know and I'll fax them 
across. I look forward to hearing from you soon.

Many thanks

Matt