Business

USD $1.49 million bunker credit sleeving dispute between Goodwood and Southernpec reaches conclusion

Universal Alliance, BMS United, Digiland International, Goodwood Associates, Southernpec (Singapore), and Taigu Energy were involved in alleged circular fictitious trades of fuel oil during July 2015.

Published

4 years ago

November 24, 2020

Admin

A High Court of the Republic of Singapore Judge on 5 November issued a reserved judgement over a bunker credit sleeving dispute between Goodwood Associates Pte Ltd (Goodwood), Southernpec (Singapore) Pte Ltd (SPPL), Southernpec (Singapore) Shipping Pte Ltd (SPSPL) and other individuals, according to a court document seen by Singapore bunker publication Manifold Times.

Summary

Singapore-based petrochemical wholesale company Goodwood was involved in a credit sleeve operation with several parties in July 2015, where it received a margin of USD 3 per metric tonne (mt) for its intermediary role to facilitate the sales of fuel oil between BMS United Bunkers (Asia) Pte Ltd (BMS) and SPPL.

Source: High Court of the Republic of Singapore

The transactions for 2,000 metric tonnes (mt) and 1,200 mt of fuel oil were supported by intertank transfer (ITT) certificates and cargo release notices (CRNs).

The Scheme was intended to comprise a circular chain of “back-to-back sales” of non-existent “fuel oil” from one entity in the chain to another lower down the chain, wrote Justice Hoo Sheau Peng.

To start the chain, BMS would provide actual funds to Universal Alliance Limited (UA), another oil trading company, which would then use the funds to make payment to the next fictitious “sub-seller” above it in the chain for an ostensible purchase of fictitious fuel oil, until the funds found their way back to BMS.

According to the view of SPPL’s Fuel Oil Trading Manager Jason Wu Jian Cai (Mr Wu), another motive of the circular fictitious “paper” deals in fuel oil was purportedly to help improve Goodwood’s revenue figures.

“Mr Wu brought the matter up to Mr Xu, who agreed to do so. This was because Mr Xu and Mr Wu had enjoyed a good working relationship with Mr Lee, Mr Lim and Dr Goh Jin Han (Dr Goh), the director and chief executive officer of Digiland, when the latter three were involved with another oil trading company IAG-Pacific Petroleum Pte Ltd.,” stated the court document, reflecting Mr Wu’s account of the alleged operation.

“To that end, Mr Lim came up with a scheme involving a circular series of fictitious trades (the Scheme) with BMS on board. In particular, Mr Lim introduced Mr Mohammad Arif bin Abdol Rahman (Mr Arif), a BMS bunker oil trader, who, according to Mr Wu, would “handle day-to-day running of the Scheme for BMS” with the blessing of his superior, Mr George Markos Kounalakis (Mr Kounalakis), the managing director of BMS.”

Dispute

Issues arose for the July contracts when UA defaulted on its payment to Taigu, which in turn did not pay SPPL; leading to SPPL’s default on its payment obligations to Goodwood.

As such, Goodwood launched a claim against purchaser SPPL for the two July fuel oil sales contracts; it is also claiming against SPSPL which is the guarantor of SPPL for the similar sales contracts.

Goodwood’s case was it had duly performed its obligations under the July Contracts as it relied on the ITT certificates and CRNs as supporting evidence for the transaction.

In response, both SPPL and SPSPL denied liability and claimed the two fuel oil sales contracts were shams; they issued a counterclaim against Goodwood and its associates on the grounds they were making legal claims on the false premise that the July Contracts were genuine.

Southernpec asserts the July Contracts are not enforceable due to them being “sham transactions supported by sham documents” and thus not being subjected to any legal effects.

SPSPL on November 2017 further introduced counterclaims against Goodwood and its associates for lawful and unlawful means conspiracy.

Goodwood on October 2018 started a counterclaim against SPPL for the purchase price based on the July Contracts.

Conclusion

In summary, Justice Hoo concluded the July contracts were not shams and dismissed SPPL’s and SPSPL’s claims based on the tort of conspiracy to injure and decided both were liable to Goodwood under the July Contracts and the SPSPL Guarantee respectively.

“Judgment is granted to Goodwood against SPPL and SPSPL in the sum of US$1,491,669.26 for the invoiced amounts under the July Contracts,” she stated.

“Contractual interest is awarded at the rate of 5.1885% per annum on US$932,177.08 from 30 July 2015 to the date of payment, and at the rate of 5.19075% per annum on US$559,492.18 from 4 August 2015 to the date of payment.”

Note: Full details of the 73-page judgement, including names of all staff involved and further details of the alleged credit sleeving operations, can be found on the original document available from the High Court website here.

Photo credit: Manifold Times
Published: 24 November, 2020

FuelEU

FincoEnergies launches pooling service for FuelEU Maritime compliance

FuelEU Pooling service enables undercompliant vessels to meet their compliance targets by pooling with vessels running on GoodFuels sustainable bio bunker fuels.

Published

9 hours ago

April 21, 2025

Admin

GoodFuels biofuel supplier FincoEnergies on Wednesday (16 April) announced the launch of its FuelEU Pooling service, created to enable shipowners to meet FuelEU Maritime compliance in a cost-effective way.

FuelEU Maritime, effective from 1 January 2025, mandates the reduction of greenhouse gas intensity of energy used on board ships trading in the EU. For many operators, particularly those with limited access to low-carbon fuels, compliance can be both complex and costly.

Designed for shipowners, operators, charterers, and technical managers, FincoEnergies’ FuelEU Pooling service enables undercompliant vessels to meet their compliance targets by pooling with vessels running on GoodFuels sustainable biofuels, when these vessels are overcompliant and have ‘Surplus’ emission reduction available for allocation.

FincoEnergies also partnered with Lloyd’s Register (LR), who supported the development of the service. Their technical expertise has enabled shaping a solution that aligns with both regulatory requirements and FincoEnergies' established position as a biofuel supplier in the fuel supply chain.

“FuelEU Maritime represents one of the most important regulatory shifts for the shipping industry in decades,” said Alberto Perez, Global Head, Maritime Commercial Markets at LR. “By integrating technical expertise with strategic guidance, we ensure shipowners, operators, and suppliers not only comply with evolving emissions standards, but also proactively transform their operations, embracing new technologies and alternative fuels to ensure a sustainable and profitable future.”

“With a decade of experience in biofuel bunkers and carbon certificate trading in the voluntary market, we are excited to expand our creative and solution-oriented product portfolio with FuelEU Pooling,” said Johannes Schurmann, Commercial Director International Marine at FincoEnergies.

“Thanks to our physical presence in the supply chain, shipping companies looking for FuelEU surplus can confidently rely on us as a trusted partner in their decarbonisation journey.”

Through its role as Pool Organiser, FincoEnergies streamlines the entire pooling process – from performing biofuel bunkers and prefinancing Surplus, to Surplus allocation and pool verification. With cost-effective pricing, FuelEU Pooling provides shipping companies with a competitive alternative for changing their fuel mix themselves.

Photo credit: FincoEnergies
Published: 21 April, 2025

ECA

PO/Marine launches supply of MED ECA-compliant ULSFO bunker fuel

In preparation of the upcoming Mediterranean Emission Control Area regulation, PO/Marine successfully delivered its first supply of ULSFO with 0.10% sulphur content on 15 April.

Published

9 hours ago

April 21, 2025

Admin

Aydın Yıldız, Head of Marine Sales at Petrol Ofisi Group

Petrol Ofisi’s bunkering arm PO/Marine on Thursday (17 April) said it has completed the bunkering operation of ULSFO—a marine fuel with 0.10% sulphur content—in alignment with the upcoming Mediterranean Emission Control Area (MED ECA) regulation.

Under the new regulation, all vessels operating within the Mediterranean must use low-sulphur marine fuels.

Effective 1 May 2025, the Mediterranean will officially be designated as an Emission Control Area (MED ECA), prohibiting the use of marine fuels with sulphur content exceeding 0.10%.

In preparation for this regulatory transition, PO/Marine successfully delivered its first supply of ULSFO (Ultra Low Sulphur Fuel Oil) with 0.10% sulphur content on 15 April.

PO/Marine launches supply of MED ECA-compliant ULSFO bunker fuel

Aydın Yıldız, Senior Maritime Manager at Petrol Ofisi Group, said: “Our leadership in the maritime fuel sector is defined not only by our market share but also by the innovative steps we take to shape the industry.

“Successfully completing the supply of marine fuel with 0.10% sulphur content in alignment with the MED ECA transition in Türkiye is a concrete reflection of this. We previously led the way with the country’s first VLSFO bunkering operation, setting a precedent in our sector.

“With our ULSFO bunkering, we have once again demonstrated that we are setting the standard in Türkiye’s marine fuel landscape. The designation of the Mediterranean as an Emission Control Area is not only a regional development but a historic turning point for global maritime operations.”

Photo credit: PO/Marine
Published: 21 April, 2025

Bunker Fuel

Oilmar completes first ULSFO bunker fuel delivery in Türkiye

Company announced the successful completion of its first ULSFO 0.1% Sulphur delivery in Istanbul and is now offering the marine fuel in several key locations including Istanbul Anchorage and Marmara Sea.

Published

9 hours ago

April 21, 2025

Admin

UAE-based marine fuel and petroleum products trader Oilmar DMCC on Friday (18 April) announced the successful completion of its first ULSFO 0.1% Sulphur delivery in Istanbul, marking one of the very first trades of its kind in the country.

“With this milestone, Oilmar proudly steps forward as one of Türkiye’s pioneering trading companies in ULSFO 0.1% Sulphur fuel,” it said in a social media post.

Oilmar is now offering ULSFO 0.1% across key locations:

Istanbul Anchorage
Marmara Sea
Gulf of Derince
Bozcaada Anchorage
Southern Türkiye Ports

In addition, High Sulphur Fuel Oil (HSFO), Very Low Sulphur Fuel Oil (VLSFO), Ultra-Low Sulphur Fuel Oil (ULSFO), and Low Sulphur Marine Gasoil (LSMGO) are available at all ports across Türkiye.

Photo credit: Dima Rogachevskiy on Unsplash
Published: 21 April, 2025