Projector SA v Marubeni: Appeal Against Mandatory Injunction Over Vessel Arrest Under Letter of Indemnity

In Projector SA v Marubeni International Petroleum (S) Pte Ltd, the Court of Appeal of Singapore heard an appeal against the High Court's decision to refuse the unconditional lifting of an ex parte interim mandatory injunction (IMI) and to deny an inquiry into damages suffered by Projector SA due to the IMI. The IMI was granted to Marubeni following the arrest of a vessel in South Korea due to Projector SA's failure to prevent the arrest or secure the vessel's release under a letter of indemnity (LOI). The Court of Appeal dismissed the appeal, upholding the High Court's decision to defer these questions to the trial judge.

1. Case Overview

1.1 Court

Court of Appeal of the Republic of Singapore

1.2 Outcome

Appeal Dismissed

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Appeal regarding a mandatory injunction for vessel arrest under a letter of indemnity. The court dismissed the appeal, deferring key questions to the trial judge.

1.7 Decision Date

24 January 2005

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
Projector SA	Appellant	Corporation	Appeal Dismissed	Lost	Lawrence Teh, Sean La'Brooy
Marubeni International Petroleum (S) Pte Ltd	Respondent	Corporation	Appeal Dismissed	Won	Ian Koh, Werner Tsu

3. Judges

Judge Name	Title	Delivered Judgment
Chao Hick Tin	Justice of Appeal	Yes
Choo Han Teck	Judge	No

4. Counsels

Counsel Name	Organization
Lawrence Teh	Rodyk and Davidson
Sean La'Brooy	Rodyk and Davidson
Ian Koh	Drew and Napier LLC
Werner Tsu	Drew and Napier LLC

4. Facts

Appellant sub-chartered a vessel from the respondent for gas oil transport.
Appellant requested cargo delivery without original bills of lading (B/Ls).
Appellant issued letters of indemnity (LOI) to the respondent.
Vessel was arrested in South Korea by banks holding original B/Ls.
Respondent obtained an ex parte interim mandatory injunction (IMI) against the appellant.
Appellant furnished security, and the vessel was released.
Appellant applied to set aside the IMI and sought an inquiry into damages.

5. Formal Citations

Projector SA v Marubeni International Petroleum (S) Pte Ltd (No 3), CA 42/2004, [2005] SGCA 5

6. Timeline

Date	Event
2003-06-01	Respondent time-chartered the vessel, Dynamic Express, from Mitsui OSK Lines Ltd.
2003-07-03	Respondent sub-chartered the vessel to the appellant for the carriage of gas oil from Taiwan to South Korea.
2003-11-05	Shin Han Bank advised the respondent that it was the holder of bill of lading no KAKR-001 and demanded payment or the delivery of the goods.
2003-11-06	Respondent received a similar letter from Cho Hung Bank with regard to bill of lading no DMEXP-A.
2003-11-17	Shipowner, Mitsui, informed the respondent that the original B/Ls had not yet been surrendered and that Petaco had become insolvent.
2003-11-19	Appellant replied through brokers stating that it would soon revert with the information on the status of the B/Ls.
2003-11-20	Mitsui wrote to the respondent advising the latter that Mitsui had just been informed by its lawyers in Korea that some Korean banks were preparing for arrest of vessels relating to cargo released to the collapsed PETACO.
2003-11-21	Respondent’s solicitors, M/s Drew & Napier sent a fax to the appellant’s Singapore office demanding that the appellant make good all promises in the Letter of Indemnity.
2003-11-24	Kim & Chang informed D&N that the arrest of the vessel was underway.
2003-11-24	Vessel was arrested by the banks.
2003-11-28	Respondent obtained from Tay Yong Kwang J an ex parte IMI against the appellant.
2003-12-02	The IMI was served on the appellant.
2003-12-02	Appellant filed an urgent application to set aside the IMI.
2003-12-05	Choo Han Teck J ordered that the IMI be suspended except the part which required the appellant to pay the cash deposit into court.
2003-12-05	Necessary security in cash was furnished by the appellant through Mitsui to the South Korean court and the vessel was accordingly released.
2004-05-19	The discharge application came up for further hearing before Belinda Ang Saw Ean J.
2004-11-24	Court heard the appeal and dismissed it.
2004-10-27	Court gave leave to the appellant to amend the Notice of Appeal.
2005-01-25	Decision Date

7. Legal Issues

Mandatory Injunction
- Outcome: The court deferred the decision on whether the IMI was properly obtained to the trial judge.
- Category: Substantive
- Sub-Issues:
  - Propriety of granting interim mandatory injunction
  - Reasonableness of applying for interim mandatory injunction
Breach of Contract
- Outcome: The court deferred the decision on whether the appellant was in breach of its obligations under the LOI to the trial judge.
- Category: Substantive
- Sub-Issues:
  - Failure to prevent arrest of vessel
  - Failure to secure release of vessel
Letter of Indemnity
- Outcome: The court emphasized the object of the LOI, which is to take care of the situation of a “fast-arrived ship” and to facilitate commerce.
- Category: Substantive
- Sub-Issues:
  - Obligations under letter of indemnity
  - Interpretation of clauses in letter of indemnity

8. Remedies Sought

Discharge of Interim Mandatory Injunction
Inquiry as to Damages

9. Cause of Actions

Breach of Contract
Indemnity

10. Practice Areas

Commercial Litigation
Injunctions
Shipping
International Trade

11. Industries

Petroleum
Shipping
Finance

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
Chuan Hong Petrol Station Pte Ltd v Shell Singapore (Pte) Ltd	Court of Appeal	Yes	[1992] 2 SLR 729	Singapore	Cited for the principle that the court should take the course that carries the lower risk of injustice when granting interlocutory relief.
Singapore Press Holdings Ltd v Brown Noel Trading Pte Ltd	Court of Appeal	Yes	[1994] 3 SLR 151	Singapore	Cited to reaffirm the principle in Chuan Hong regarding the grant of interlocutory relief.
Shepherd Homes Ltd v Sandham	Chancery Division	Yes	[1971] Ch 340	England and Wales	Relied upon in Chuan Hong for the principle that the strength of a party’s case was neither a necessary, nor a sufficient, condition for the grant of a mandatory injunction.
Films Rover International Ltd v Cannon Film Sales Ltd	High Court of Justice	Yes	[1987] 1 WLR 670	England and Wales	Relied upon in Chuan Hong for the principle that the strength of a party’s case was neither a necessary, nor a sufficient, condition for the grant of a mandatory injunction.
Tomongo Shipping Co Ltd v Heng Holdings SEA (Pte) Ltd	High Court	Yes	[1997] 2 SLR 550	Singapore	Cited for the principle that the issue of an IMI is prima facie in order in cases involving obligations under a letter of indemnity.
Felton v Callis	Queen's Bench Division	Yes	[1969] 1 QB 200	England and Wales	Distinguished from the present case; cited for the principle that the court should be reluctant to make an order for the mere payment of a sum of money, but found inapplicable to the context of a letter of indemnity.
McIntosh v Dalwood (No 4)	Supreme Court of New South Wales	Yes	(1930) 30 SR (NSW) 415	Australia	Cited in support of the grant of an IMI.
Sze Hai Tong Bank Ltd v Rambler Cycle Co Ltd	Privy Council	Yes	[1959] MLJ 200	Malaysia	Cited to highlight that in law, the shipowner should only deliver the goods against the relevant B/Ls.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute Name	Jurisdiction
No applicable statutes

15. Key Terms and Keywords

15.1 Key Terms

Letter of Indemnity
Interim Mandatory Injunction
Bills of Lading
Vessel Arrest
Security
Charterparty
Ex Parte
Cash Deposit

15.2 Keywords

injunction
letter of indemnity
vessel arrest
shipping
contract
Singapore
Marubeni
Projector SA

16. Subjects

Injunctions
Shipping
Contract Law
Commercial Dispute

17. Areas of Law

Injunctions
Shipping Law
Contract Law
Commercial Law