Business

Golden Star Marine wins legal suit against Star Formula Marine Services in Vietnam bunker project dispute

GSM awarded USD 1.85 million as well as SGD 5,800; Judge finds SFM Director ‘ungrateful and dishonest in his dealings with Bernard and the plaintiff,’ according to Court Judgement seen by Manifold Times.

Published

4 years ago

May 3, 2021

Admin

The High Court of the Republic of Singapore on 21 April published a judgement decision regarding a legal case between Singapore-based maritime firms Golden Star Marine Pte Ltd (GSM, or plaintiff) and its former business partner Star Formula Marine Services Pte Ltd (SFM, or defendant).

Summary of the Facts

The case involves GSM Director Bernard Chew filing a suit against SFM Director Martin Chua over a bunkering project at Vietnam, where a client wanted to purchase a large quantity of marine gas oil (MGO) in early 2016, according to the document obtained by Singapore bunkering publication Manifold Times.

Martin, who was in the brink of bankruptcy during the period, approached Bernard for help with the Vietnam project where he would use GSM’s funds to purchase MGO to sell to the Vietnamese buyer.

The bunkers were supplied through Bunkers Marine Pte Ltd in the Vietnam project, while Bernard and Martin agreed to share the profits on a 50:50 basis.

At the material time, three vessels Eustance, the Sea Frontier and Victoria Strike which have been earlier owned by the now defunct Searights Maritime Services Pte Ltd (Searights) were sold/mortgaged to a company called RS Marine Investments Pte Ltd.

Bernard and Martin equally owned the vessels; Martin’s role was to procure the vessels while Bernard would manage the vessels and provide the facilities for their operations through Shipmate (another firm where Bernard is a Director).

Both further agreed that, once full payment was made for the vessels their ownership would be transferred to MB Marine Pte Ltd which is a new company jointly owned by them where Bernard had 50% holding of the shares.

Operation of the vessels commenced after Shipmate sourced and hired crew for the vessels.

Problems Emerge

Initially, the end-buyer would transfer the required funds directly to GSM for any purchase of MGO; however, a change in payment occurred on 8 March 2017 where payment was made to Bunkers Marine after the end-buyer paid SFM – without Bernard’s knowledge or consent.

Bernard, who later found out of the arrangement, held discussions with Martin to change the structure of MB Marine to manage the accounts and receive funds from the Vietnam Project. It was also agreed that upon full payment, the ownership of the vessels would be transferred to MB Marine.

Consequently, GSM supplied MGO or marine fuel oil (MFO) to SFM from 2016 onwards. However, troubles deepened when Martin used SFM’s account to make payment of the last two instalments for the bareboat charter of the vessels.

He went further and subsequently transferred the vessels to parties other than MB Marine, in breach of his agreement with Bernard.

Disappointed, Bernard decided he did not want to have any more dealings with Martin and SFM; Bernard subsequently requested SMF pay up all outstanding sums but was “shocked” to find out claims of USD 691,483.77 owed to RS Marine during a 31 July 2018 meeting.

Martin further presented invoices to GSM for bareboat charters and supply of marine lubrication oil totalling SGD 1,587,000 on 12 July 2019 which Bernard disputed the sum to be monies owed by Martin and SFM to GSM.

Findings by the Court

“There is no doubt on the evidence that the plaintiff and the defendant had a 50:50 partnership in the joint venture until Martin unilaterally took over the entire project and cut out the plaintiff’s share,” stated Senior Judge Lai Siu Chiu.

Judge Lai found the evidence provided by GSM accountant Carmen Lee, GSM Director Doris Ng (also Bernard’s wife) and Bernard to be credible over material from Martin and his assistant Lee Cheng Guan (known as Tony) who was in charge of accounts for SFM in the Vietnam Project.

“I should add that Carmen was not only a credible but also a competent witness, unlike her counterpart Tony from the defendant,” said the Judge.

“Every statement of account disputed by the defendant could be corroborated by her from the plaintiff’s documents, while payments the defendant claimed were not taken into account by the plaintiff were refuted by Carmen’s testimony and/or Tony’s cross-examination.

“As compared with Carmen’s evidence, Tony’s cross-examination showed that the defendant kept poor records and that its version of its running account with the plaintiff was unreliable.

“Despite being in charge of the defendant’s accounts, Tony came across as disorganised if not incompetent – he was not even aware of certain payments made by the plaintiff notwithstanding the undisputed evidence produced by the plaintiff.”

Though Judge Lai noticed Bernard not speaking in complete sentences during cross-examination, she did not find him to be either dishonest or evasive in manner.

“Indeed, Bernard fared much better as a witness than Martin. Martin’s lengthy cross-examination elicited rambling and irrelevant testimony, and he prevaricated and was often evasive. What emerged from his cross-examination was that portions of his AEIC [ affidavit of evidence-in-chief] were clearly false – he was shown to have been untruthful in many instances,” she adds.

“The court finds that the plaintiff and Bernard tolerated Martin’s behaviour despite the frustrations Martin caused because it was Martin who brought the Vietnam Project to the plaintiff as business and the plaintiff had no contact whatsoever with the buyer(s).

“The plaintiff had no choice but to put up with Martin’s misconduct, which culminated in Martin taking away from the plaintiff the Vietnam Project and the vessels from MB Marine.

“Martin’s contention that the plaintiff did not contribute anything to the Vietnam Project ignores the fact that, without the plaintiff’s participation and guarantee to Bunkers Marine, Jack would not have agreed to supply MGO to Martin for the Vietnam Project.

“Moreover, through Shipmate, Bernard crewed, managed and maintained the vessels throughout the duration of the Vietnam Project until Martin cut the plaintiff off.

“In addition, save for the first instalment, which Martin paid from the advance payment made by the cargo buyer under the Vietnam Project, the plaintiff paid to RS Marine the hire purchase instalments (disguised as charter hire) for the vessels. As Bernard alleged, Martin then diverted the vessels away from MB Marine.

“The court not only did not find Martin to be a credible witness, he was ungrateful and dishonest in his dealings with Bernard and the plaintiff.”

Final Judgement

After analysing the facts and findings, Judge Lai decide to award final judgment with costs for the balance sum of USD 1.85 million (exact: USD 1,854,803.66), after taking into account a contra exercise, as well as SGD 5,804.50 in favour of GSM.

She also dismissed SFM’s counterclaim with costs to GSM.

“Martin’s claim for charter hire allegedly due to the defendant was nothing less than dishonest,” she remarked.

GSM v SFM chart

Note: The original High Court of the Republic of Singapore judgement document can be viewed here.

Photo credit: Manifold Times
Published: 3 May, 2021

Business

Shell MGO bunker heist: Bunker clerk pleads guilty to helping Sentek acquire misappropriated fuel

Wong Wai Meng, who received more than USD 286,000 from Sentek Marine & Trading for his assistance, pleaded guilty to 12 counts of intentionally helping the firm acquire the misappropriated marine gas.

Published

8 hours ago

December 2, 2024

Admin

A bunker clerk, Wong Wai Meng, who received more than USD 286,000 (SGD 384,681) from Singapore-based Sentek Marine & Trading (Sentek) for his assistance, pleaded guilty to 12 counts of intentionally helping the company acquire misappropriated marine gas oil, The Straits Times reported on Friday (29 November).

The 58-year-old Singaporean was employed at the Sentek when he assisted in acquiring more than 28,000 metric tonnes (mt) of the misappropriated fuel worth USD 13.58 million (SGD 18.26 million).

Wong committed the offences over 46 occasions between August 2014 and December 2017.

Wong is among the three bunker clerks previously employed by Sentek, who were charged for offences under the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act (CDSA) and the Prevention of Corruption Act (PCA).

Another bunker clerk among the three charged, Wong Kuin Wah, 61, was sentenced to seven years and six months’ jail on 18 November for his role in misappropriating more than 27,000 tonnes of gas oil worth around USD 12.8 million (SGD 17.2 million).

The third individual who was charged, Boo Pu Wen, reportedly passed away in July 2023 and had his charges abated following his death, meaning Boo’s court proceedings over his 19 charges at the time came to an end.

Former Shell employees, who were key members of a group who dishonestly misappropriated fuel from Shell Pulau Bukom, were sentenced to jail in court earlier.

Earlier coverage of developments by Manifold Times regarding the Shell MGO bunker heist can be found below:

Photo credit: Katrin Bolovtsova
Published: 2 December, 2024

Biofuel

Singapore: GCMD introduces new technique for FAME bio bunker fuel fingerprinting

Fingerprinting identifies feedstock origins of FAME-based biofuels used in shipping industry; can be used as a potential tool to detect fraud in marine fuel supply chains and ensure biofuel authenticity.

Published

8 hours ago

December 2, 2024

Admin

Singapore: GCMD introduces new technique for FAME bio bunker fuel fingerprinting

The Global Centre for Maritime Decarbonisation (GCMD) on Monday (2 December) released its latest report, presenting a new technique that creates a fingerprint for Fatty Acid Methyl Esters(FAME) bio bunker fuels.

This fingerprint identifies the feedstock origins of the FAME-based biofuels used in the shipping industry.

GCMD said FAME fingerprinting is needed as the shipping sector is increasingly using biofuels, such as FAME, to reduce its GHG emissions. With that, concerns have arisen regarding the legitimacy of biofuels and whether they are truly sustainable.

Industry bodies are seeing a rising number of cases mislabelling biofuels purported to be made from recycled oils and fats, while suspicions persist that they might be produced from cheaper and less sustainable virgin oils.

“To address these concerns, FAME fingerprinting can be used as a potential tool to detect fraud in marine fuel supply chains and ensure biofuel authenticity. By providing a physical validation method that complements existing certification schemes, FAME fingerprinting can help justify the green premium with genuine environmental benefits and safeguard the integrity of marine fuels supply chain,” GCMD said.

FAME fingerprinting is based on the principle that the fatty acid profile of FAME is unique to its feedstock and can be preserved during feedstock transesterification to produce FAME. The "fingerprint" can then be compared against a database of known fatty acid profiles to identify the feedstock origin.

GCMD worked with VPS who modified existing fuel testing methods to carry out sample analyses using a gas chromatograph with flame-ionisation detection, an instrument commonly found in fuel test laboratories.

The analysis takes about an hour, comparable to the turnaround time for current marine fuel quality testing in the supply chain.

“We have tested this method on a variety of FAME samples from different suppliers, including virgin oils, used cooking oils, palm oil mill effluent, beef tallow and food waste and were able to identify the feedstock origins for each sample,” GCMD added.

Manifold Times previously reported Captain Rahul Choudhuri, President, Strategic Partnerships at marine fuels testing company VPS, forecasting the use of finger printing technology today will likely establish a blueprint of how future alternative bunker fuels’ feedstocks are authenticated.

Captain Choudhuri said this when he gave an update of VPS’ biofuels finger printing trials with GCMD.

Note: The full report, titled ‘Rapid forensic analysis of FAME-based biofuels: Potential use of its fingerprint as a fraud detection tool’, can be downloaded here.

Photo credit: Global Centre for Maritime Decarbonisation
Published: 2 December, 2024

Methanol

PLAGEN to produce and supply green methanol bunker fuel with Latvia plant

Korean firm’s MoU with AE Risinājumi will see construction of Latvia’s first commercial-scale green methanol production plant, which will supply green methanol to ships in EU’s maritime fleet.

Published

8 hours ago

December 2, 2024

Admin

PLAGEN to produce and supply green methanol bunker fuel with Latvia plant

South Korean clean energy firm PLAGEN on Friday (29 November) signed an MOU with Latvian company, AE Risinājumi, for the production of green methanol in Latvia at the “2024 Latvia-Korea Business Forum” hosted by the President of Latvia.

The agreement will result in the construction of Latvia's first commercial-scale green methanol production plant, which will supply green methanol to ships in the EU's maritime fleet, contributing to the reduction of greenhouse gas emissions from maritime transportation.

PLAGEN's MoU aims to produce 20,000 metric tonnes (mt) of green methanol per year and will begin feasibility studies in the first half of 2025, and full-scale production will begin in 2028.

With 53% of Latvia's land area covered by forests, timber production and wood processing make a significant contribution to Latvia’s economic production, which generates a large amount of forest residues and wood wastes. In addition, Latvia also has an abundance and low price of renewable electricity from wind power.

Latvia is one of the most competitive countries in the European Union, as it can produce clean methanol at a competitive price by using abundant wood waste as a raw material and renewable electricity from cheap wind power.

The use of abundant forest residues and wood wastes as a feedstock and cheap renewable electricity from wind power makes it possible to produce green methanol with a competitive price, making Latvia is one of the most competitive countries in the EU.

In the European Union, the European Emissions Trading Scheme (EU-ETS) will come into effect in 2025, requiring shipping companies to purchase carbon credits for their greenhouse gas emissions.

In addition, the EU is implementing FuelEU Maritime, which aims to reduce greenhouse gas emissions by 2% below the 2020 average by 2025 and 80% by 2050. This is expected to result in an energy transition to green methanol.

In July 2023, the International Maritime Organization (IMO) adopted a revised strategy that calls for reducing greenhouse gas (GHG) emissions from ships to net-zero by or around 2050, and plans to introduce full-scale regulations from 2027, and shipping companies have begun ordering methanol-powered ships fueled by green methanol, a carbon-neutral fuel.

“We expect to start producing green methanol in Latvia in 2028, which will reduce greenhouse gas emissions from EU maritime transport vessels and contribute significantly to the revitalization of the Latvian economy and national energy security,” said John Kyung, CEO of PLAGEN.

In November 2024, PLAGEN completed the purchase of an industrial complex and received a government permit for the construction of the country's first green methanol plant in Dongjeom Industrial Complex in Taebaek City, Gangwon-do.

The project, which will produce 10,000 mt per year, is scheduled to begin construction in the first half of 2025 and begin production in the second half of 2027.

Photo credit: PLAGEN
Published: 2 December, 2024