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DBS Hong Kong building case against Sinfeng over alleged ‘fraudulent misrepresentation and/or conspiracy’

The bank is filing an application for pre-action discovery at the High Court of the Republic of Singapore in order to ascertain its future direction of proceedings against Sinfeng, according to court documents.




Singapore High Court

Legal representatives of DBS Bank (Hong Kong) Limited will be submitting an application to the High Court of the Republic of Singapore on Wednesday (21 April) to start a suit against Sinfeng Marine Services Pte Ltd (Sinfeng, or defendant), according to documents obtained by Singapore bunkering publication Manifold Times from the court.

The financial institute is seeking pre-action discovery, for the release of relevant documents between Sinfeng and the defunct bunkering firm Coastal Oil Singapore Pte Ltd. (Coastal Oil), to determine the type of legal action it should commence against Sinfeng going forward.

Background of DBS involvement with Coastal Oil

DBS Bank Hong Kong (DBS, or plaintiff) earlier issued a USD 30 million credit facility to Coastal Oil and is seeking to recover the debt.

It claims Sinfeng entered into five contracts with Coastal Oil between October to November 2018, where Coastal Oil assigned to DBS its receivables. However, Coastal Oil was shortly placed in creditors’ voluntary liquidation on 13 December 2018.

The bunkering firm owed approximately USD 357 million to 79 companies, of which USD 354 million was owed to major banks (including DBS).

‘Curious relationship’ between Sinfeng and Coastal Oil

DBS noted it has received reports from liquidators of Coastal Oil which indicate there may have been fraudulent conduct where executed documents were not genuine.

A liquidator report on 2 December 2019 revealed a trading loop between Sinfeng, Coastal Oil and Arkanata Yasa Trading Pte. Ltd. (Yasa) where the details are as follows:

  • Coastal Oil sends deal recap emails to Sinfeng for confirmation, identifying Yasa as the end buyer
  • Instruction from Coastal Oil for transfer of funds: Coastal Oil transfers to Yasa; Yasa instructed to transfer to Sinfeng
  • Coastal Oil sends bunker delivery note to Sinfeng
  • Sinfeng transfers funds to Coastal Oil, completing the circular transaction / funds transfer loop.

The liquidator document further identified a former Coastal Oil Treasury Officer, who is currently facing 63 charges for allegedly creating fictitious sales contracts and submitting them to banks in order to obtain financing, placing Yasa as an end-buyer.

Further, the same report stated invoices issued to Sinfeng between July to December 2018 being accompanied by the Bunker Delivery Note issued by PT Farma Kimia Distribution, which is an unknown entity that the liquidators have not been able to locate or contact.

“At the bare minimum, the abovementioned circumstances call into question the authenticity of the transactions between the Defendant and Coastal Oil (which formed the basis of Coastal Oil’s Financing Applications with the Plaintiff),” stated the bank.

“Further, it lends itself to the possibility that the Defendant is part of a broader conspiracy with Coastal Oil.

“However, I am advised and verily believe that the Plaintiff requires additional documents before it is able to come to a firm landing as to whether it should commence action against the Defendant.”

DBS request for payment results in validity dispute

DBS sought payment from Sinfeng after Coastal Oil underwent voluntary liquidation on 13 December 2018 by sending a request to ask payment for US$27,190,988.28 from Sinfeng on 19 December 2018 regarding three contacts.

On 26 December 2018, the bank however received a letter from Sinfeng disputing the validity of the three contracts.

According to the bank, the Sinfeng contracts were affixed by its authorised representative, namely Liang Yu Wei (Mr Liang), with the company’s seal. However, further communication between DBS and Sinfeng suggested of Coastal Oil allegedly being in possession of Mr Liang’s signature stamp.

“The Defendant did not proffer any explanation as to how Coastal Oil would have come into possession of Mr Liang’s signature stamp, since Mr Liang was an authorised representative of the Defendant,” stated DBS.

“Even if the Sinfeng Contracts are revealed to be sham contracts as the Defendant claims, it would no doubt have been difficult for Coastal Oil to duplicate Mr Liang’s signature stamp without additional help.”

Reasons behind application for pre-action discovery

DBS alleged Sinfeng to date has not provided “any assistance” into the matter to ascertain whether the Sinfeng Contracts are genuine; as such, it is seeking pre-action discovery of the relevant documents to do so.

“I understand that based on the available facts, the Plaintiff believes that it potentially has a claim against the Defendant as an assignee of receivables under the Sinfeng Contracts, for fraudulent misrepresentation and/or conspiracy,” stated DBS.

“However, the Plaintiff is not in a position to commence proceedings yet as it presently has insufficient facts to mount a claim.”

The bank added: “If the Sinfeng Contracts are genuine, then the Plaintiff may proceed against the Defendant for failing to make payment under the Assignment.”

“On the other hand, if the Sinfeng Contracts are found to be sham contracts, then the Plaintiff may take action against the Defendant for losses suffered on account of the fraud perpetrated on the Plaintiff and/or the fraudulent misrepresentation exercised on the Plaintiff when the Defendant signed the Acknowledgements.”

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: Sinfeng Marine wins appeal to withhold additional documents from Coastal Oil liquidators
Related: Sinfeng appeals against release of Coastal Oil contract docs; China Merchants Bank suspects fraud
RelatedSingapore: Former Coastal Oil employees face forgery charges over fake sales contracts
RelatedCoastal Oil hearings progress, court grants liquidators access to Sinfeng documents
RelatedChina Merchants Bank legal suit with Sinfeng over alleged $13 million debt progresses
RelatedFraud 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: 20 April, 2021

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Kambara Kisen orders methanol dual-fuel bulker from Tsuneishi Shipbuilding

Firm ordered a 65,700-dwt methanol dual-fuel dry bulk carrier with Tsuneishi Shipbuilding; MOL signed a basic agreement on time charter for the newbuilding that is slated to be delivered in 2027.





Kambara Kisen orders methanol dual-fuel bulker from Tsuneishi Shipbuilding

Japanese shipowner Kambara Kisen has ordered a 65,700-dwt methanol dual-fuel dry bulk carrier newbuilding from Tsuneishi Shipbuilding Co., Ltd, according to Mitsui O.S.K. Lines (MOL) on Wednesday (20 September).

MOL said it signed a basic agreement on time charter for the newbuilding that is slated to be delivered in 2027. 

The vessel will be designed to use e-methanol produced primarily by synthesising recovered CO2 and hydrogen produced using renewable energy sources, and bio-methanol derived from biogas. 

The vessel's design maximises cargo space while ensuring sufficient methanol tank capacity set to allow the required navigational distance assuming various routes, at the same time maximising cargo space. 

MOL added the vessel is expected to serve mainly in the transport of biomass fuels from the east coast of North America to Europe and the U.K. and within the Pacific region, as well as grain from the east coast of South America and the U.S. Gulf Coast to Europe and the Far East.

Details on the time-charter contract:

Shipowner: Kambara Kisen wholly owned subsidiary
Charterer: MOL Drybulk Ltd.
Charter period 2027: -

Details on the newbuilding methanol dual fuel bulk carrier:

LOA: About 200 m
Breadth: About 32.25 m
Draft: About 13.80 m
Deadweight: About 65,700 MT
Hold capacity: About 81,500m3
Shipyard: Tsuneishi Shipbuilding Co., Ltd.

Photo credit: Mitsui O.S.K. Lines
Published: 22 September, 2023

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Argus Media: Alternatives may drive methanol market growth

Driven by low-carbon policies and regulations, the transportation sector — especially the marine fuels industry — could be a source of heightened demand, according to Argus.





RESIZED Argus media

The growth of sustainable alternatives to traditional methanol production sources likely will shape the market over the next several years, industry leaders said this week at the Argus Methanol Forum.

20 September 

Driven by low-carbon policies and regulations, the transportation sector — especially the marine fuels industry — could be a source of heightened demand.

"The aim is to be net zero by 2050 but [those solutions are] expensive today and one of the main challenges to build e-methanol or bio-methanol plants is a huge queue for these pieces of equipment that aren't available," Anita Gajadhar, executive director for Swiss-based methanol producer Proman, said.

Bio-based and e-methanol plants of commercial scale, like Proman's natural gas-fed 1.9 million metric tonne/yr M5000 plant in Trinidad and Tobago, are not ready today.

"But that's not to say 10 years from now they won't be there," Gajadhar added.

Smaller projects are popping up. Dutch fuels and gas supplier OCI Global announced plans last week to double the green methanol capacity at its Beaumont, Texas, facility to 400,000 t/yr and will add e-methanol to production for the first time. Production will use feedstocks such as renewable natural gas (RNG), green hydrogen and biogas.

The globally oversupplied methanol market will not get any major supply additions starting in 2024 until 2027. But that oversupply will not last long, Gajadhar said.

Global demand has slowed this year, driven by stagnate economic growth and higher interest rates, according to industry observers.

As much as half of methanol demand is tied to GDP growth, with total methanol demand estimates at 88.9mn t globally in 2023. This is essentially flat from 2022, but up from 88.3m t in 2021 and 87.7mn t in 2020, Dave McCaskill, vice-president of methanol and derivatives for Argus Media's consulting service, said.

Demand is not expected to rebound to 2019 levels of 89.6mn t until 2024 or 2025, he added.

The period of oversupply combined with lackluster demand places methanol in a transition period, Gajadhar said, which opens the door for sustainable feedstock alternatives to shape market growth.

Danish container shipping giant Maersk and French marine logistics company CMA-CGM announced earlier this week a partnership to drive decarbonization in shipping. The partnership seeks to develop fuel and operations standards for bunkering with alternative fuels. The companies will develop net-zero solutions, including new technology and alternative fuels.

Maersk has previously ordered dual-fuel methanol-powered vessels and CMA-CGM LNG-propelled vessels.

The demand for alternative feedstock-derived fuels is there, but the ability to scale-up such production lags. Certified lower-carbon methanol produced using carbon capture and sequestration — also known as blue methanol— can ramp up much more quickly, according to Gajadhar.

By Steven McGinn

Photo credit and source: Argus Media
Published: 22 September, 2023

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Royal Caribbean completes over 12 weeks of bio bunker fuel testing in Europe

Firm expanded its biofuel testing this summer in Europe to two additional ships — Royal Caribbean International’s “Symphony of the Seas” and Celebrity Cruises’ “Celebrity Apex”.





Royal Caribbean completes over 12 weeks of bio bunker fuel testing in Europe

Royal Caribbean Group on Tuesday (19 September) said it successfully completed over 12 consecutive weeks of biofuel testing in Europe. 

Royal Caribbean International’s Symphony of the Seas became the first ship in the maritime industry to successfully test and use a biofuel blend in Barcelona to meet part of her fuel needs. 

The company confirmed onboard technical systems met operational standards, without quality or safety concerns, demonstrating the biofuel blend is a reliable “drop in” supply of lower emission energy that ships can use to set sail across Europe and beyond. 

The tests across Europe also provided valuable data to understand the availability and scalability of biofuel in the region, the firm added. 

Jason Liberty, president and CEO, Royal Caribbean Group, said: “This is a pivotal moment for Royal Caribbean Group’s alternative fuel journey.”

“Following our successful trial of biofuels this summer, we are one step closer to bringing our vision for net-zero cruising to life. As we strive to protect and promote the vibrant oceans we sail, we are determined to accelerate innovation and improve how we deliver vacation experiences responsibly.”

President of the Port of Barcelona, Lluís Salvadó, said: “Royal Caribbean’s success is a clear example of how commitment to innovation makes possible the development of solutions to decarbonise the maritime sector.”

“In this case, it involves the cruise sector and focuses on biofuels, an area in which the Port of Barcelona is already working to become an energy hub, producing and supplying zero carbon fuels, such as green hydrogen and ammonia, and of other almost zero-carbon alternative fuels, such as methanol, biofuels or synthetic fuels. Innovation and collaboration between ports and shipping companies is key to accelerate the decarbonisation of maritime transport.”

The company began testing biofuels last year and expanded the trail this summer in Europe to two additional ships — Royal Caribbean International’s Symphony of the Seas and Celebrity Cruises’ Celebrity Apex

The sustainable biofuel blends tested were produced by purifying renewable raw materials like waste oils and fats and combining them with fuel oil to create an alternative fuel that is cleaner and more sustainable. The biofuel blends tested are accredited by International Sustainability and Carbon Certification (ISCC), a globally recognized organization that ensures sustainability of biofuels and verifies reductions of related emissions.

With Symphony of the Seas departing from the Port of Barcelona and Celebrity Apex departing from the Port of Rotterdam, both ships accomplished multiple sailings using biofuel and contributed critical data on the fuel’s capabilities. 

“These results will help accelerate Royal Caribbean Group’s plans to continue testing the use of different types of biofuels on upcoming European sailings this fall. The company is exploring strategic partnerships with suppliers and ports to ensure the availability of biofuel and infrastructures to advance the maritime energy transition,” the firm said. 

Photo credit: Royal Caribbean Group 
Published: 22 September, 2023

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