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Singapore: High Court dismisses UniCredit Bank USD 37 million claim against Glencore over Hin Leong transaction

Judge Maniam dismissed all of UniCredit’s claims against Glencore in regards to a letter of credit UniCredit issued in November 2019 to Hin Leong to finance a purchase of 150,000 mt of HSFO from Glencore.

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Editor: The following article is a summary of the full 69-page judgement from the High Court of the Republic of Singapore. The complete document published on 21 October 2022 is available here.

UniCredit Bank on Friday (21 October) lost a USD 37 million (exact: USD 37,209,550.35) claim against Glencore Singapore in a transaction related to liquidated oil trader Hin Leong at the High Court of Singapore. 

The Milan-based banking group was claiming against Glencore over fraud or deceit by Glencore, a conspiracy between Glencore and Hin Leong to injure UniCredit by unlawful means, and unjust enrichment, amongst others.

Judge Andre Maniam J concluded the judgement by dismissing all of UniCredit’s claims against Glencore in regards to a letter of credit (LC) UniCredit issued on 29 November 2019 to Hin Leong to finance the purchase of some 150,000 metric tonnes (mt) of high sulphur fuel oil (HSFO) from Glencore. 

“Glencore was entitled to the payment which it received from UniCredit under the LC (letter of credit). Glencore did not defraud or deceive UniCredit; it did not conspire with Hin Leong to injure UniCredit; it was not unjustly enriched. UniCredit is not entitled to rescind the LC, or to recover the payment it made to Glencore,” he said.

“I award Glencore, as the successful party, costs to be assessed. I will address the quantum of those costs separately.”

In its conspiracy claim, Judge Maniam stated though UniCredit emphasised about how Hin Leong defrauded it, the claim failed as the bank was unsuccessful on an earlier fraud / deceit related allegation.

“What is left is a general plea that Hin Leong and Glencore conspired to defraud UniCredit,  but there is no evidence of any such conspiracy. To the extent that the conspiracy is based on the allegation that the Sale Contract was a sham or fictitious transaction, I have found that the Sale Contract was not a sham, and it was not fictitious,” he said. 

 “There is no evidence that Glencore knew, or ought to have known, that Hin Leong was misrepresenting to UniCredit that the goods were ‘unsold’ when in fact Hin Leong had sold them back to Glencore by the Buyback Contract. The dealings between Hin Leong and UniCredit were not Glencore’s responsibility or concern.

“Accordingly, I dismiss UniCredit’s conspiracy claim as well.”

Background

On 22 November 2019, UniCredit granted Hin Leong banking facilities in the sum of USD 85 million, which Hin Leong could use to obtain LCs to finance the purchase of oil, petroleum products and other commodities. 

On 27 November 2019, Hin Leong applied to UniCredit for an irrevocable LC in the sum of USD 37,209,550.35 to finance the purchase of some 150,000 mt of high-sulphur fuel oil (the goods). 

Hin Leong contracted to purchase the goods from Glencore the same day (the Sale Contract). The Sale Contract stated that the goods would be shipped on board the vessel MT New Vision and delivered to Singapore in the period of 18 to 25 December 2019. 

Glencore, however, agreed to simultaneously buy back the goods from Hin Leong (the Buyback Contract).  Hin Leong and Glencore agreed that at 0001 hours on 2 December 2019, title to the goods would pass from Glencore to Hin Leong, and immediately back to Glencore.

On 28 November 2019, Hin Leong submitted to UniCredit a revised LC application. UniCredit asked Hin Leong for documents including the “Purchase and Sales contracts and/or a deal recap”.  Hin Leong replied the same day, saying that its LC application was for “Unsold cargo” and providing a copy of the Sale Contract.  However, the goods were not “unsold cargo” – Hin Leong had already contracted to sell the goods back to Glencore. 

On 13 April 2020, UniCredit issued a notice of demand to Hin Leong, demanding repayment of, among other things, the outstanding advances and accrued interest arising out of UniCredit’s financing of Hin Leong’s purchase of the goods from Glencore. By this time, Hin Leong had requested a meeting with its lenders.

On 14 April 2020, UniCredit asked Glencore if it had the original bills of lading (BLs) referred to in the LC; Glencore replied that it did not have the original BLs. 

Hin Leong was placed under interim judicial management on 27 April 2020, under judicial management on 7 August 2020, and into liquidation on 8 March 2021.

UniCredit thus found itself without repayment from Hin Leong, without the goods, without the BLs, and without security over the goods or the BLs.

Related: Singapore High Court concedes interim judicial management to Hin Leong Trading
Related: Singapore: Hin Leong Marine International liquidators issue notice of dividend
Related: Singapore: Notice of intended dividend announced for Hin Leong Marine International
Related: Lim family aims to wind up Hin Leong Trading subsidiary, Hin Leong Marine
Related: Lim family files application to wind up Hin Leong Trading subsidiary, Hin Leong Marine
Related: Judicial Managers of Hin Leong Trading Pte Ltd file for winding up order
Related: Hin Leong judicial managers to hold meeting of creditors to discuss fees incurred
Related: Hin Leong judicial managers and legal firms could rack up SGD 17.3 million in fees
Related: Bank of China takes legal action against BP Plc and Lim family to recover $312.9 million
Related: Hin Leong Trading founder denies allegations of forgery put forward by HSBC
Related: HSBC takes Lim family and Hin Leong employee to court to recover USD 85.3 million
Related: Report: Hin Leong Trading founder gave instructions to hide USD 800 million losses
Related: Argus Media: Singapore’s Hin Leong founder charged with forgery

 

Photo credit: Manifold Times
Published: 28 October, 2022

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Ammonia

Singapore: EMA, MPA shortlist two consortia for ammonia power generation and bunkering

Chosen consortia are Keppel’s Infrastructure Division and Sembcorp-SLNG, and the bunkering players in these consortia are Itochu Corporation, NYK Line and Sumitomo Corporation.

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The Energy Market Authority (EMA) and the Maritime and Port Authority of Singapore (MPA) on Thursday (25 July) said they have shortlisted two consortia that will proceed to the next round of evaluations of proposals to provide a low- or zero-carbon ammonia solution on Jurong Island for power generation and bunkering. 

The two consortia were selected from a total of six that were earlier shortlisted in 2023 to participate in a restricted Request for Proposal (RFP), following an Expression of Interest (EOI) called in 2022. The bids were assessed based on the technical, safety and commercial aspects of their proposals. 

The two consortium leads are Keppel’s Infrastructure Division and Sembcorp-SLNG, and the bunkering players in these consortia are Itochu Corporation, Nippon Yusen Kabushiki Kaisha (NYK Line) and Sumitomo Corporation. The two consortia will proceed to conduct engineering, safety and emergency response studies for the proposed Project.

At the next phase, we will select one of the two bidders as the lead developer of the project. The lead developer will develop the end-to-end ammonia solution comprising (i) generating 55 to 65 MW of electricity from imported low- or zero-carbon ammonia via direct combustion in a Combined Cycle Gas Turbine; and (ii) facilitating ammonia bunkering at a capacity of at least 0.1 million tons per annum (MTPA), starting with shore-to-ship bunkering followed by ship-to-ship bunkering. 

Given the nascency of the technology and global supply chains, the Government will work closely with the appointed lead developer to implement the Project. We aim to announce the lead developer by Q1 2025.

The project is part of Singapore’s National Hydrogen Strategy launched in 2022, which outlines Singapore’s approach to develop low-carbon hydrogen as a major decarbonisation pathway as part of the nation’s commitment to achieve net zero emissions by 2050.

A key thrust of this strategy is to experiment with the use of advanced hydrogen technologies that are on the cusp of commercial readiness. Ammonia is currently one of the most technologically-ready hydrogen carriers with an established international supply chain for industrial use.

“If successful, the project will position Singapore as one of the first countries in the world to deploy a direct ammonia combustion power plant and support the development of ammonia bunkering for international shipping, EMA and MPA said.

“This will help to unlock the potential of low-carbon ammonia as a low-carbon fuel.”

 

Photo credit: Manifold Times
Published: 25 July 2024

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LNG Bunkering

China: River-sea LNG bunkering vessel named and delivered in Shanghai

The 14,000 cubic metre ship, “Huaihe Nengyuan Qihang”, was independently developed, designed and built by Hudong-Zhonghua Shipbuilding (Group) for Huaihe Energy Holding Group.

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China: River-sea LNG bunkering vessel named and delivered in Shanghai

China’s river-to-sea LNG bunkering vessel, which was built locally, was named and delivered in Shanghai on Monday (19 July), according to the Shanghai Association of Shipbuilding Industry (SASIC). 

The 14,000 cubic metre (cbm) ship, Huaihe Nengyuan Qihang, was independently developed, designed and built by Hudong-Zhonghua Shipbuilding (Group) Co., Ltd for Huaihe Energy Holding Group as part of China’s "Gasification of the Yangtze River” project.

The ship is capable of travelling through the Nanjing Yangtze River Bridge all year round and has been dubbed a “Customised Yangtze River” LNG refuelling and transportation ship.

The ship is equipped with the B-type LNG containment system independently developed by Hudong-Zhonghua and authorised by a national patent.

According to SASIC, this was the first time such a system has been applied to a domestic LNG  refuelling and transportation ship, marking a major breakthrough in the B-type LNG containment system developed by China with independent intellectual property rights.

Related: China’s first river-sea LNG bunkering ship completes inaugural bunkering operation

Disclaimer: The above article published by Manifold Times was sourced from China’s domestic market through a local correspondent. While considerable efforts have been taken to verify its accuracy through a professional translator and processed from sources believed to be reliable, no warranty is made regarding the accuracy, completeness and reliability of any information.

 

Photo credit: Shanghai Shipbuilding Industry Association
Published: 25 July 2024

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Environment

Singapore-flagged tanker “Hafnia Nile” to be moved to safe location for cargo transfer

“Hafnia Nile” and the Sao Tome and Principe-flagged “Ceres I” collided and caught fire about 55km northeast of Pedra Branca on 19 July.

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Singapore-flagged tanker “Hafnia Nile” to be moved to safe location for cargo transfer

Shipowner Hafnia, the operator of Singapore-flagged tanker Hafnia Nile, is in discussion with The Maritime and Port Authority of Singapore (MPA) on a safe location to transfer the ship’s cargo, MPA said on Wednesday (24 July). 

They are also discussing towage plans for repairs to be approved by MPA.

Hafnia Nile and the Sao Tome and Principe-flagged Ceres I collided and caught fire about 55km northeast of Pedra Branca on 19 July.

“An additional tug with deep-sea towing capacity has arrived on site on 23 July 2024, joining four other tugs equipped with oil response and firefighting capabilities,” MPA said. 

In a meeting with MPA on 23 July, Hafnia informed MPA of light oil sheens near Hafnia Nile

“As part of the towage plan, Hafnia will arrange for repairs, containment and clean-up of the assessed localised seepage,” it added.

Reuters reported Hafnia stating that an initial assessment by a team of specialists conducting inspections of damaged areas of the tanker, showed Hafnia Nile's engine room had suffered damage from the fire.

Hafnia also reportedly said a salvage team has boarded the vessel and transferred equipment from one of the attending tugs on site to contain and stop any localised seepage.

Manifold Times previously reported Ceres 1 allegedly leaving the site of the collision as of 20 July and turned off its Automatic Identification System (AIS) but was believed to be in Malaysian waters.

The Malaysian Maritime Enforcement Agency (MMEA) was able to locate Ceres 1 some 28 nautical miles northeast of Pulau Tioman.

Related: “Ceres 1” goes dark after collision with Singapore-flagged tanker, located by MMEA
Related: MPA: Fire breaks out on two ships near Pedra Branca, search and rescue underway

 

Photo credit: Malaysian Maritime Enforcement Agency
Published: 25 July 2024

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