Singapore: Yangzijiang Shipping to be wound up over excess USD 4.8 million newbuilding quality claim

The General Division of The High Court of the Republic of Singapore on Friday (17 March) issued a winding up order against Yangzijiang Shipping Pte. Ltd. (YSPL) due to a compensation claim in excess of USD 4.8 million from Liberia-based Trinity Seatrading S.A. (Trinity). Trinity was represented by Singapore-based multi-disciplinary law firm Helmsman LLC.

Trinity on 20 December 2018 agreed to purchase a 157,000 dwt oil tanker from a group of Chinese firms namely YSPL, Jiangsu Tianchen Marine Import & Export Co., Ltd., and Jiangsu New Yangzi Shipbuilding Co., Ltd. (the sellers), according to court documents obtained by Manifold Times.

Technical dispute arises to London arbitration and award

Disputes related to the vessel’s construction arose and the parties proceeded to arbitration, culminating in a 10-day hearing from 20 June 2022 in London under London Maritime Arbitrators Association (LMAA) Terms 2017.

On 18 July 2022, the tribunal awarded the return of a USD 12 million [exact: USD 12,127,500] deposit and damages of USD 3.25 million plus interest to Trinity.

Transfer of YSPL subsidiaries to BVI-incorporated firm

Between August to September 2022, YSPL transferred shares of at least 40 subsidiaries to Pleasant Way Analyse Development Limited (Pleasant Way), a British Virgin Island-incorporated firm owned by Yangzijiang Shipbuilding (Holdings) Ltd.

On 23 September 2022, Agricultural Bank of China performing the role of Refund Guarantor returned the USD 12 million deposit to Trinity; however, the sellers have not paid damages in excess of USD 3.25 million and the interest awarded to Trinity to date.

In light of the sellers’ non-payment, on 7 October 2022, Helmsman LLC representing Trinity issued a Statutory Demand on YSPL in Singapore claiming for total USD 4.8 million [exact: USD 4,838,908.11].

Sellers file cross-claim against Trinity, DNV and LISCR in PRC court

The sellers on 21 October 2022, meanwhile, filed a civil complaint against Trinity, Det Norske Veritas (China) Company (DNV), and the Liberian International Ship & Corporate Registry LLC (LISCR) with the Nanjing Maritime Court in the People’s Republic of China.

They alleged, amongst others, that Trinity conspired with DNV and LISCR to prevent the issuance of a Class Certificate and Cargo Ship Safety Construction Certificate. The claim was for exactly the same amount as the sum demanded by Trinity in the Statutory Demand.

In response, Trinity obtained an interim anti-suit injunction (ASI) from the London Commercial Court on 17 November 2022 to restrain the sellers from proceeding against Trinity at the Nanjing Maritime Court.

As a result, the sellers discontinued the Nanjing Maritime Court proceedings against Trinity. The Nanjing Maritime Court later added Trinity as a ‘third party’ to the PRC Civil Complaint. The hearing is currently pending.

Singapore court grants winding up order to Trinity

YSPL did not make payment of the sum demanded by Trinity in the Statutory Demand. As there was no dispute that the debt was owing and unpaid, and there was no cross-claim by YSPL against Trinity, Trinity applied for a winding up order to be made against YSPL. The winding up application came up for a hearing before the Singapore High Court on 17 March, and the Judge issued a winding up order against YSPL.

Related: Singapore: High Court to hear Yangzijiang Shipping winding up application on 20 January
Related: Singapore: Helmsman celebrates firm’s strategic transformation with formation of five new practice groups
Related: Helmsman evolves into multi-disciplinary law firm; expands Singapore and Hong Kong practices to meet growing demand

Photo credit: Manifold Times
Published: 23 March, 2023