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China Merchants Bank legal suit with Sinfeng over alleged $13 million debt progresses

Singapore judge favours ‘pre-action discovery’ against Sinfeng Marine Services over disputed payment terms in USD 10.0 million bunkers contract with Coastal Oil.

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China Merchants Bank Co Ltd (CMB) is currently engaged in a legal suit against Sinfeng Marine Services Pte Ltd, the indirect wholly-owned bunkering subsidiary of Hong Kong-listed Cosco Shipping International (Hong Kong) Co., Ltd, at the High Court of the Republic of Singapore over total debt of USD 12.5 million (exact: USD 12,464,691.05).

The case involves Singapore-based Coastal Oil Pte Ltd, which is a supplier of oil products to Sinfeng.

Justice Tan Siong Thye on Friday (4 October) granted a ‘pre-action discovery’ decision in favour of CMB; the decision allows the bank to obtain relevant case documents from Sinfeng in support of its debt recovery.

The document written by Justice Tan, seen by Manifold Times, noted Coastal Oil allegedly entering into a bunkers contract with Sinfeng for the supply of 25,000 metric tonnes (mt) of fuel oil on 26 September 2018. CMB verified the bunkers contract with the reference number TGS/1809-034 on 90-day payment terms with both parties and allowed draw down of USD 10 million (exact: USD 9,971,752.84) under a loan facility to Coastal Oil.

However, Coastal Oil went into voluntary liquidation on 13 December 2018 and this resulted in CMB’s cancellation of the loan facility on 14 December 2018.

On 14 December 2018, CMB’s representatives went to Sinfeng’s office to seek confirmation that Sinfeng would be paying the assigned proceeds to CMB under invoices from Coastal Oil totalling USD 12.5 million.

However, a Sinfeng staff denied there was a contract with the reference number TGS/1809-034 on 90-day payment terms and further claimed Sinfeng’s stamp and his signature on the 90-day contract were forged.

Instead, he said he had signed the acknowledgement for a different contract with Coastal Oil bearing the same reference number which was on cash-in-advance (CIA) payment terms.

He also denied Sinfeng owing Coastal Oil any money as it alleged that all transactions, including the payment on the invoices, between Coastal Oil and Sinfeng had been performed.

Sinfeng’s lawyers on around 16 January 2019 further emailed CMB’s lawyers with alleged copies of the CIA contract and Sinfeng’s bank remittance advice evidencing payment of USD12,486,600.00 to Coastal Oil’s bank account with CMB, amongst other documents.

CMB’s lawyers subsequently wrote to Sinfeng several times seeking further documents to support Sinfeng’s claim that the 90-day contract was a sham. Sinfeng did not accede because the documents provided were in its view sufficient.

Eventually, CMB took out OS 635/2019 at the High Court of the Republic of Singapore to seek pre-action discovery of the following documents from Sinfeng.

“I was satisfied that discovery of the documents sought in OS 635/2019 should be granted in relation to Sinfeng as CMB required the information to frame an appropriate cause of action,” stated Justice Tan in his Grounds of Decision document.

“The gap in CMB’s knowledge was whether the CIA contract was genuine. That was a critical gap to fill because, as CMB submitted, whether CMB had any basis to bring a claim in misrepresentation, fraud or conspiracy to injure would turn on the answer to that question. It was incorrect for Sinfeng to state that CMB had an assignment claim regardless of whether the CIA contract was genuine. In an assignment, the benefits of the contract are transferred to an assignee, with the assignor remaining bound to perform its obligations under the contract.

“Thus, CMB’s claim as an assignee was inextricably dependent on the validity of the underlying contract, which in this case was the 90-day contract. But because the CIA contract and the 90-day contract bore the same reference number, the genuineness of both contracts was a serious issue that formed CMB’s pivotal consideration in deciding whether to proceed against Sinfeng. It would be unlikely for both versions of the contract to be genuine at the same time unless there was an honest careless mistake somewhere, which neither party contended was the case.”

Justice Tan further wrote: “Pre-action discovery would also enable CMB to decide whether to bring a fraud action against only Sinfeng or to join CO [Coastal Oil] and its directors on grounds of conspiracy to defraud, as the bunkers contract (for which CMB was a beneficiary) was entered into between CO [Coastal Oil] and Sinfeng. In my view, OS 635/2019 was necessary for CMB to frame proper causes of action against the appropriate defendants. Therefore, pre-action discovery was necessary for costs savings and also for fair disposal of the matter.”

“Sinfeng in its submissions alleged that it had paid CMB US$12,486,600 for the bunkers deal and so CMB suffered no loss. In the course of the hearing, I sought clarification from Sinfeng’s counsel and it was disclosed that the payment of US$12,486,600 was paid to CO [Coastal Oil], which had an account with CMB. I informed Sinfeng’s counsel that payment to CMB and payment to CO [Coastal Oil]’s bank account with CMB were completely different. She acknowledged the mistake. Therefore, it was incorrect and misleading for Sinfeng’s counsel to state categorically that Sinfeng had paid CMB US$12,486,600.”

A complete coverage of the events leading to the current development has been arranged by Singapore bunker publication Manifold Times (in descending date order) below:

Related: Fraud suspected in Coastal Oil Singapore case, says COSCO
RelatedCoastal Logistics owned “Atalanta”, “Babylon” to undergo auction
RelatedSingapore: Bunker tanker “Coastal Mercury” arrested
RelatedHeng Tong Fuels & Shipping in court over DBS Bank bunker tanker loan
RelatedCoastal Logistics owned MR tanker "Babylon" arrested
RelatedFraud suspected in Coastal Oil Singapore case, says COSCO
RelatedCoastal Oil Singapore: Creditor list surfaces in bunker market
RelatedSingapore: Bunker tanker “Coastal Neptune” arrested
RelatedCoastal Oil Singapore creditors meeting scheduled on 10 Jan
RelatedCoastal Oil Singapore in US $380 million debt to at least 10 banks
RelatedSingapore: Coastal Logistics owned MR tanker "Atalanta" arrested
RelatedHeng Tong Fuels & Shipping, Coastal Logistics tankers enter S&P market
RelatedCoastal Oil Singapore to hold creditors meeting on 28 Dec
RelatedBreaking news: Coastal Oil Singapore under liquidation

Photo credit: Manifold Times
Published: 11 October, 2019

 

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Winding up

Singapore: DBS Bank submits court winding up application against AMS Marine

Bank is a creditor AMS Marine, part of the AMS Marine Group compromising of a sister firm in Malaysia.

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DBS Bank on 6 June submitted a winding up application to the High Court of the Republic of Singapore against Singapore-based AMS Marine Pte Ltd, according to a Government Gazette post on Friday (13 June).

The bank is a creditor AMS Marine, part of the AMS Marine Group compromising of a sister firm in Malaysia offering a full suite of engineering services encompassing piping, steelworks, and afloat repair to oil & gas vessels.

The winding up application is directed to be heard before the Judge sitting in the General Division of the High Court of the Republic of Singapore at 10.00 a.m. on 4 July 2025.

Any creditor or contributory of AMS Marine desiring to support or oppose the making of an order on the winding up application may appear at the time of hearing by himself or his counsel for that purpose.

A copy of the winding up application will be furnished to any creditor or contributory of AMS Marine requiring the copy of the winding up application by the undersigned on payment of the regulated charge for the same.

The Claimant’s address is 12 Marina Boulevard, Marina Bay Financial Centre Singapore 018982. The Claimant’s solicitors are Shook Lin & Bok LLP of 1 Robinson Road #18-00, AIA Tower, Singapore 048542.

Note: Any person who intends to appear on the hearing of the winding up application must serve on or send by post to the Claimant’s solicitors, notice in writing of his intention to do so. The notice must state the name and address of the person, or if a firm, the name and address of the firm, and must be signed by the person, firm, or his or their solicitor (if any) and must be served, or, if posted, must be sent by post in sufficient time to reach the abovenamed not later than 30 June 2025 (at least 3 clear working days before the day appointed for the hearing of the winding up application).

 

Photo credit: Manifold Times
Published: 16 June 2025

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Legal

Helmsman on Inter-Pacific Petroleum legal battle: When ignorance meets fraud

Lester Ho, Associate Director of law firm Helmsman shared his timely key takeaways on the recent case of Goh Jin Hian against defunct Singapore bunker supplier Inter-Pacific Petroleum.

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Lester Ho Helmsman

Lester Ho, Associate Director of multi-disciplinary law firm Helmsman LLC shared his timely key takeaways on the recent case of Goh Jin Hian v Inter-Pacific Petroleum when the Appellate Division of the High Court in Singapore overturned the High Court’s finding that Mr Goh’s breach had caused IPP to incur the losses:

The collapse of a company often prompts a search for blame, especially where the downfall stems from deliberate misconduct such as fraud that appears avoidable in hindsight. Unsurprisingly, a company’s directors are frequently perceived as the root of the problem and become prime suspects in the inevitable witch hunt for accountability. The recent case of Goh Jin Hian v Inter-Pacific Petroleum Pte Ltd (in liquidation) [2025] SGHC(A) 7 is a timely reminder of a director’s duties as well as the legal risks in the event of breach.

The downfall of Inter-Pacific Petroleum Pte Ltd (“IPP”) is well-documented. The Maritime Port Authority of Singapore suspended IPP’s bunker craft operator licence after discovering that the mass flow meter of a bunker tanker chartered by IPP had been tampered with. Concerns raised by IPP’s banks in relation to its business led its non-executive director, Mr Goh Jin Hian, to discover that it was heavily indebted to the banks. It was also discovered that the facilities had been used on sham sale and purchase transactions.

IPP was subsequently placed in compulsory liquidation, and Mr Goh was sued for breach of his director’s duties. It was alleged that the sham transactions could have been prevented had Mr Goh discharged his duties and that he was therefore responsible for IPP’s losses. At first instance, the High Court found that Mr Goh had breached his duty of care and ordered him to compensate IPP for approximately US$146 million in losses (Inter-Pacific Petroleum Pte Ltd (in liquidation) v Goh Jin Hian [2024] SGHC 178). Among other things, the High Court found that Mr Goh was in breach because he was entirely ignorant of IPP’s cargo trading business.

The Appellate Division of the High Court upheld the finding that Mr Goh had breached his duty for having been unaware of IPP’s cargo trading business. However, it overturned the High Court’s finding that Mr Goh’s breach had caused IPP to incur the losses. The Appellate Division found that IPP failed to prove that Mr Goh would have uncovered the sham transactions even if he had discharged his duty. Accordingly, Mr Goh was absolved of his liability to compensate IPP.

There are two broad takeaways from the decision.

The first takeaway is that every director, both executive and non-executive, is held to a minimum standard of care. This standard requires directors to take reasonable steps to put themselves in a position where they can guide and monitor the management of the company. Put simply, ignorance of a company’s business is no defence, even for non-executive directors that are not involved in everyday operations. Accordingly, although Mr Goh was a non-executive director, the fact that he was unaware that IPP was carrying on the business of cargo trading meant that he was in breach of his duties.

It may be surprising that a director could be entirely unaware of an important part of a company’s business. But the reality is that modern day companies have become commercial behemoths with complex and layered operations that makes it all too easy for directors (especially non-executive directors) to delegate oversight over critical business decisions and lose visibility of what their companies do. It is therefore important for directors, regardless of their formal titles, to ensure that there is a robust chain of reporting and command such that they have sufficient knowledge of the company’s operations to discharge their duties.

The second is that, while the law imposes high standards on directors, it does not demand unrealistic standards. As noted, the Appellate Division accepted that Mr Goh had breached his duties for having been unaware of IPP’s cargo trading business. However, it was not persuaded that, even if Mr Goh had discharged his duties and had been properly informed of IPP’s activities, the sham transactions could have been prevented. IPP was affected by what the Appellate Division considered a “deep-seated fraud” that had gone undetected even by IPP’s auditors. In the circumstances, it was far from clear that Mr Goh could have prevented the loss even if he had discharged his duty.

However, just because the law does not expect directors to be superhuman does mean that directors can afford to be complacent. Directors would still do well to take reasonable and diligent steps to ensure that they have a good grasp of the company’s operations and engage competent professionals (e.g., auditors) to help surface risks that they may otherwise miss. In a sense, Mr Goh avoided liability not because his breach was minor, but because the extent of the fraud perpetrated meant that the gravity of his breach cannot be said to have caused the loss. In other words, a less sophisticated or extensive fraud might have yielded a drastically different outcome – directors should take heed.

A timeline organised list of events preceding the current development of Inter-Pacific Petroleum has been recorded by Manifold Times below:

Related: Singapore: Ex-Director of Inter-Pacific Petroleum wins appeal against former company

Related: Singapore: Ex-Director of Inter-Pacific Petroleum appeals High Court decision
Related: Singapore: Former auditors of Inter-Pacific Petroleum undergo private oral examination at court
Related: Singapore: Civil trial between Inter-Pacific Petroleum and Dr Goh Jin Hian begins
Related: Former Singapore Director of Inter-Pacific Petroleum sued for USD 156 million
Related: Inter-Pacific Petroleum creditors authorised to fund lawsuit against former Director
Related: New Silkroutes under investigation over possible breach of Securities and Futures Act
Related: Judicial Managers considering to take former Singapore Director of Inter-Pacific Petroleum to court
Related: Singapore: Inter-Pacific Group receives winding up order from High Court
Related: Singapore: Inter-Pacific Group files for winding up application at High Court
Related: MPA revokes Inter-Pacific Petroleum Pte Ltd bunker supplier licence
Related: Co-heads of Trade and Commodities Finance for Asia-Pacific leave SocGen
Related: Inter-Pacific Group, Inter-Pacific Petroleum to hold creditors’ meet
Related: NewOcean detains Singapore-flagged bunker tanker “Pacific Energy 28”
Related: SocGen lawsuit against NewOcean Petroleum dropped, party to counterclaim
Related: MPA revokes Inter-Pacific Petroleum bunker craft operator licence
Related: Magnets on MFMs: Trial starts for former bunker clerk of “Consort Justice
Related: First suspect charged over MFM tampering in landmark case
Related: With nearly $180 million of debt, IPP proposes interim judicial management
Related: Inter-Pacific Group, Inter-Pacific Petroleum under judicial management
Related: Magnets on MFMs: “Consort Justice” crew pleads ‘not guilty’ to tampering charge
Related: IPP responds to temporary suspension of bunker craft operator licence
Related: MPA temporarily suspends IPP bunker craft operator licence
Related: Singapore: Bunker Cargo officer, crew face charges over alleged MFM tampering

 

Photo credit: Helmsman
Published: 13 June, 2025

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Biofuel

BIMCO subcommittee launched to develop bio bunker fuel clause for time charters

Newly formed subcommittee marks a proactive step toward addressing legal and operational challenges posed by the growing use of biofuels in shipping.

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International shipping association BIMCO on Wednesday (4 June) launched a new subcommittee to develop a Biofuel Clause for Time Charter Parties, marking a proactive step toward addressing the legal and operational challenges posed by the growing use of biofuels in shipping. 

With regulatory frameworks like the EU ETS, FuelEU Maritime, and the upcoming IMO Net-zero Framework measures reshaping fuel strategies, biofuels are becoming an increasingly attractive option for reducing emissions. Yet, their integration into charter agreements remains complex, often raising questions around fuel quality, engine compatibility, and liability. 

The newly formed subcommittee, comprising shipowners, charterers, P&I representatives and technical experts, met for the first time on 7 April 2025. Its work will focus on defining the scope and standards for biofuels, clarifying how they may be supplied and handled, and ensuring that their use aligns with performance expectations and regulatory obligations. 

The clause will also consider the practical realities of biofuel use, such as blending with conventional fuels, onboard storage, and the implications for speed and consumption warranties. By addressing these issues, BIMCO aims to provide a flexible yet robust contractual solution that supports compliance without compromising vessel reliability. 

A draft clause is expected to be presented at BIMCO’s Documentary Committee meeting in October 2025. Once adopted, it will offer much-needed clarity for charterers and owners navigating the transition to low-carbon operations.

Related: BIMCO adopts FuelEU Maritime clause for charter parties

 

Photo credit: BIMCO
Published: 9 June, 2025

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