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Rajah & Tann Singapore gives insights into landmark court decision on trade finance and fraud

Law firm represented China Aviation Oil (Singapore), in a significant appeal in Singapore Court of Appeal of a complex trade finance dispute involving a cargo of gasoil and a series of back-to-back sale contracts.

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Rajah & Tann Singapore successfully represented the respondent, China Aviation Oil (Singapore) Corp Ltd, in a significant appeal before the Singapore Court of Appeal, acting through its Shipping & International Trade and Dispute Resolution team. 

The landmark judgement offers helpful guidance on how representations in payment LOIs are construed, and highlights the importance of commercial context and intention in interpreting ambiguous representations: 

In maritime trade, a letter of credit (“LC“) is a crucial payment method that assures sellers of payment while providing buyers with a secure way to fulfil payment obligations via an issuing bank. While LCs are ordinarily payable against presentation of the relevant shipping documents, including the original bill of lading (“BL“), there is a prevalent practice of using letters of indemnity (“LOIs“) to facilitate payment under LCs. This is particularly common in chain contracts involving back-to-back transactions of the same cargo through multiple parties, where the shipping documents will not be in the possession of every seller in the chain. 

What then is the effect of a LOI in the context of such LCs? Does it contain representations of fact made to the issuing bank? For the purposes of a claim in deceit, how should the contents of the LOI (including a statement as to the existence of BLs endorsed to the issuing bank) be construed? Does the issuing bank of the LC acknowledge that it will no longer have control over delivery of the cargo, and does this have bearing on the timing of the endorsement of the BL? These were the questions faced by the Court of Appeal in Banque de Commerce et de Placements SA, DIFC Branch and another v China Aviation Oil (Singapore) Corp Ltd [2025] SGCA 33. 

The Appellant in this case was the issuing bank of a LC under which payment had been made to the Respondent, which was one of the parties in a chain of back-to-back transactions. The disbursement was made upon the Respondent’s presentation of a LOI (rather than the relevant original shipping documents) in which the Respondent warranted the existence, authenticity and validity of the shipping documents, including the endorsed BLs. When the expected receivables did not materialise due to the cargo having in fact been sold to another party, the Appellant sought to claim against the Respondent in deceit, submitting that the representation in the LOI constituted a fraudulent misrepresentation. 

The Court of Appeal found in favour of the Respondent, holding that the representation in the LOI was neither false nor made fraudulently. The Court was of the view that the representation should not be construed literally to warrant the actual existence of BLs already endorsed to the Appellant at the time of presentation of the LOI, but rather should be construed contextually to mean that the original BLs had been issued, but were not available in that they had yet to be endorsed to the bank, and that the Respondent would endorse them to the bank once received. This meant that the receipt of the endorsed BLs would no longer be time-sensitive.

This decision provides guidance on the interpretation of representations in LOIs within chain contracts, the assessment of fraud in the context of ambiguous representations, and the application of the law of deceit in trade finance.

The Respondent was successfully represented by Toh Kian Sing, SC, Nathanael Lin, Marcus Chiang, Tan Zhi Rui and Muhammad Salihin bin Mohd Zahrin of Rajah & Tann Singapore LLP.

Note: The full article including background of the court case by Rajah & Tan Singapore can be viewed here. 

 

Photo credit: Manifold Times
Published: 28 October, 2025

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Winding up

Singapore: Nan Shan Maritime liquidator issues notice of intended dividend

Creditors will need to produce proofs of debt to liquidator of Nan Shan Maritime by 14 July, according to Government Gazette notice.
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July 1, 2026

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A notice to declare intended dividend of Nan Shan Maritime Pte Ltd to its creditors has been posted on the Government Gazette on Tuesday (30 June).

The following are the details of the notice of intended dividend:

Name of Company : Nan Shan Maritime (Pte.) Ltd. (In Creditors’ Voluntary Liquidation)
Unique Entity No. / Registration No. : 201701967H
Address of Registered Office : 10 Anson Road, #10-10, International Plaza, Singapore 079903
Last Day for Receiving Proofs : 14 July 2026
Name of Liquidator : Tam Chee Chong
Address : c/o 10 Anson Road, #10-10, International Plaza, Singapore 079903

 

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Published: 1 July, 2026

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Winding up

Singapore: Kekal Shipping Pte Ltd to undergo voluntary wind up

A liquidator has been appointed at an extraordinary general meeting held on 18 June for the purpose of winding up the company’s affair, according to Government Gazette notice.
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June 30, 2026

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A notice in the Government Gazette was published by the Director of Kekal Shipping Pte Ltd on Friday (26 June), regarding resolutions that were passed in relation to the winding up of the company.

The following resolutions were duly passed during an an Extraordinary General Meeting of the company, which was held at 1 Harbourfront Avenue, #14-07 Keppel Bay Tower, Singapore 098632 on 18 June at 10am:

SPECIAL RESOLUTION

RESOLVED that the Company be wound up voluntarily pursuant to Section 160(1)(b) of the Insolvency, Restructuring and Dissolution Act 2018.

ORDINARY RESOLUTION

RESOLVED that Ms Lee Yan Huei of Messrs Acclime Corporate Advisory Singapore Pte. Ltd. be appointed liquidator of the Company for the purpose of such winding up

 

Photo credit: Jo_Johnston from Pixabay
Published: 30 June, 2026

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Winding up

Singapore: Heng Tong Fuels & Shipping Pte Ltd to be wound up voluntarily

Nicholas James Gronow, director of the Singapore-based bunker tanker owner, filed a statutory declaration last year for the company, stating the firm cannot continue their businesses due to its liabilities.
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June 29, 2026

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Several written resolutions for Singapore-based bunker tanker owner Heng Tong Fuels & Shipping Pte Ltd (HTFS) were approved by the sole shareholder of the company on 19 June, according to a post in the Government Gazette on Friday (26 June).

Manifold Times previously reported a director of HTFS filing a statutory declaration (SD) with the Official Receiver’s office stating that the company cannot continue its business due to its liabilities.

The company was reportedly affiliated with troubled Singapore bunker player Coastal Oil (Singapore) Pte Ltd. 

The duly passed resolutions were:

SPECIAL RESOLUTIONS:

  • That the Company be wound up voluntarily pursuant to Section 160(1)(b) of the Insolvency, Restructuring and Dissolution Act 2018 (No. 40 of 2018).
  • That the Liquidators be authorised to exercise any or all of the powers provided under Section 144(1)(b), (c), (d), (e), (f) and (g) and 144(2) of the Insolvency, Restructuring and Dissolution Act 2018 (No. 40 of 2018).
  • That the Liquidators be and are hereby authorised to distribute in cash or in specie any or all of the assets of the Company remaining after satisfaction of all debts and liabilities.

ORDINARY RESOLUTIONS:

  • That Mr. Wong Pheng Cheong Martin and Ms. Koay May Yee, both care of FTI Consulting (Singapore) Pte. Ltd., One Raffles Quay #27-10 South Tower Singapore 048583 be and are hereby appointed the joint and several Liquidators of the Company for the purpose of such winding up and that the Liquidators be indemnified by the Company against all costs, charges, losses, expenses and liabilities incurred or sustained by them in the execution and discharge of their duties in relation thereto.
  • That the remuneration of the Liquidators be based on their normal scale rates for carrying out the engagement plus disbursements and the prevailing goods-and-services tax and that the Liquidators’ remuneration be paid out of the assets of the Company.

In another notice, the liquidators of Heng Tong Fuels & Shipping said creditors for the company are required on or before the 27 July to send in their names and addresses and particulars of their debts or claims, and the names and addresses of their solicitors (if any) to the liquidators. 

Liquidators may also require creditors to, “come in and prove their debts or claims at such time and place as shall be specified in such notice, or in default thereof they will be excluded from the benefit of any distribution made before such debts are proved.”

The liquidators can be contacted at the following address:

WONG PHENG CHEONG MARTIN
KOAY MAY YEE
JOINT AND SEVERAL LIQUIDATORS
of FTI Consulting (Singapore) Pte. Ltd.
One Raffles Quay
#27-10 South Tower
Singapore 048583

Related: Singapore: Director declares Heng Tong Fuels & Shipping’s inability to continue business
Related: Heng Tong Fuels & Shipping in court over DBS Bank bunker tanker loan
Related: Singapore: Bunker tanker “Coastal Neptune” arrested
Related: Heng Tong Fuels & Shipping, Coastal Logistics tankers enter S&P market

 

Photo credit: Benjamin child
Published: 29 June, 2026

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