Equatorial Marine v "Bunga Melati 5": Agency by Estoppel & Bunker Supply Dispute

The Singapore Court of Appeal heard an appeal by Equatorial Marine Fuel Management Services Pte Ltd against MISC Berhad concerning a dispute over bunker supplies. Equatorial Marine claimed a contractual relationship existed through the agency of Market Asia Link Sdn Bhd (MAL), seeking over US$21 million. The High Court struck out Equatorial Marine's action, but the Court of Appeal allowed the appeal, finding that the claim was not plainly unsustainable. The court addressed issues of agency by estoppel, issue estoppel, and the invocation of admiralty jurisdiction.

1. Case Overview

1.1 Court

Court of Appeal

1.2 Outcome

Appeal Allowed

1.3 Case Type

Admiralty

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Singapore Court of Appeal addresses agency by estoppel in a bunker supply dispute, reversing the lower court's decision to strike out the claim.

1.7 Decision Date

20 August 2012

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
EQUATORIAL MARINE FUEL MANAGEMENT SERVICES PTE LTD	Appellant	Corporation	Appeal Allowed	Won	Teo Ke-Wei Ian of Rajah & Tann LLP Leong Kah Wah of Rajah & Tann LLP Koh See Bin of Rajah & Tann LLP
MISC Berhad	Respondent	Corporation	Appeal Dismissed	Lost	Prem Gurbani of Gurbani & Co. Tan Hui Tsing of Gurbani & Co.

3. Judges

Judge Name	Title	Delivered Judgment
Chan Sek Keong	Chief Justice	No
Andrew Phang Boon Leong	Justice of the Court of Appeal	No
V K Rajah	Justice of the Court of Appeal	Yes

4. Counsels

Counsel Name	Organization
Teo Ke-Wei Ian	Rajah & Tann LLP
Leong Kah Wah	Rajah & Tann LLP
Koh See Bin	Rajah & Tann LLP
Prem Gurbani	Gurbani & Co.
Tan Hui Tsing	Gurbani & Co.

4. Facts

Appellant claimed a contractual relationship with the respondent for bunker supplies via MAL.
Appellant alleged two fixed price contracts and one spot contract with the respondent.
Respondent claimed a contractual relationship only with MAL under a Bunker Fixed Price Agreement.
Appellant initially commenced proceedings against the respondent in the United States.
Appellant commenced in rem proceedings in the Singapore High Court.
Appellant hinged its contractual claim on the doctrine of agency by estoppel.
Appellant relied on representations made by the respondent that MAL had ostensible authority.

5. Formal Citations

The “Bunga Melati 5”, Civil Appeal No 193 of 2010, [2012] SGCA 46
The "Bunga Melati 5", , [2011] 4 SLR 1017
The “Bunga Melati 5”, , [2011] SGHC 195
Equatorial Marine Fuel Management Services Pte Ltd v The “Bunga Melati 5, , [2010] SGHC 193

6. Timeline

Date	Event
2006-05-22	Respondent's employee directed Compass Marine to contact MAL regarding bunker requirements.
2008-03-01	Bunker Fixed Price Agreement concluded between respondent and MAL.
2008-03-14	MAL awarded the Bunker Fixed Price Agreement.
2008-03-24	Start date of Bunker Fixed Price Agreement.
2008-07-03	Appellant allegedly entered into two fixed price contracts with the respondent.
2008-09-18	Appellant allegedly entered into a contract with the respondent for the supply of bunkers to The MT Navig8 Faith.
2008-09-01	Appellant allegedly supplied 35,000 metric tonnes of bunkers to vessels owned or operated by the respondent.
2008-09-01	End date of Bunker Fixed Price Agreement.
2008-11-05	Appellant demanded payment from the respondent.
2008-11-01	Appellant commenced proceedings against the respondent in the United States District Court for the Central District of California.
2008-12-01	Rule B attachment order executed against one of the respondent’s vessel, the Bunga Kasturi Lima, at Long Beach, California.
2008-12-15	Respondent filed a motion to vacate the Rule B attachment order and to dismiss the Verified Complaint.
2008-12-18	California District Court vacated the Rule B attachment order.
2010-02-05	Appellant commenced in rem proceedings in the Singapore High Court.
2010-03-02	Respondent applied to set aside and/or strike out the appellant’s writ.
2010-06-17	Respondent successfully obtained orders from the AR to strike out the appellant’s writ and statement of claim.
2011-01-01	Decision from which this appeal arose is reported at [2011] 4 SLR 1017.
2012-08-21	Court of Appeal allowed the appeal and restored the appellant’s action.

7. Legal Issues

Agency by Estoppel
- Outcome: The court found that the appellant's claim of agency by estoppel was not so factually or legally unsustainable that it should be barred from proceeding to trial.
- Category: Substantive
- Sub-Issues:
  - Representation
  - Authority
  - Inducement
- Related Cases:
  - [1964] 2 QB 480
  - [2009] 4 SLR(R) 788
  - [2011] 3 SLR 540
Issue Estoppel
- Outcome: The court upheld the Judge’s refusal to strike out the appellant’s action on the basis of issue estoppel.
- Category: Procedural
- Related Cases:
  - [2007] 4 SLR(R) 277
  - [1985] 1 WLR 490
Invocation of Admiralty Jurisdiction
- Outcome: The court clarified the steps and standards of proof involved in invoking admiralty jurisdiction under the High Court (Admiralty Jurisdiction) Act.
- Category: Jurisdictional
- Related Cases:
  - [2008] 4 SLR(R) 994

8. Remedies Sought

Monetary Damages

9. Cause of Actions

Breach of Contract
Unjust Enrichment

10. Practice Areas

Admiralty
Commercial Litigation
Shipping
Bunker Supply

11. Industries

Shipping
Maritime

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
The “Bunga Melati 5”	High Court	Yes	[2011] SGHC 195	Singapore	The High Court decision that was appealed against in the current judgment.
The “Bunga Melati 5”	Court of Appeal	Yes	[2012] SGCA 46	Singapore	Formal citation for the current judgment.
Schwarz & Co (Grain) Ltd v St Elefterio ex Arion (Owners) (The St Elefterio)	N/A	Yes	[1957] 1 P 179	N/A	Cited for the principle that the court has inherent jurisdiction to stay proceedings that are frivolous or vexatious.
Sunly Petroleum Co Ltd v The Owners of the Ship or Vessel Lok Maheshwari	High Court	Yes	[1996] SGHC 212	Singapore	Cited for the principle that the court has inherent jurisdiction to stay proceedings that are frivolous or vexatious.
The Osprey	N/A	Yes	[1999] 3 SLR(R) 1099	N/A	Cited for the phrases “plainly unsustainable” or “obviously unsustainable”.
Recordtv Pte Ltd v MediaCorp TV Singapore Pte Ltd and others	N/A	Yes	[2009] 4 SLR(R) 43	N/A	Cited for the phrases “plainly unsustainable” or “obviously unsustainable”.
Three Rivers District Council v Governor and Company of the Bank of England	House of Lords	Yes	[2001] UKHL 16	United Kingdom	Cited for the analytical formulation of the test for striking out a claim.
Swain v Hillman	N/A	Yes	[2001] 1 All ER 91	N/A	Cited for the object of the rule.
Freeman & Lockyer (A Firm) v Buckhurst Park Properties (Mangal) Ltd and Another	N/A	Yes	[1964] 2 QB 480	N/A	Cited for the elements of estoppel by representation.
Skandinaviska Enskilda Banken AB (Publ), Singapore Branch v Asia Pacific Breweries (Singapore) Pte Ltd and another and another suit	N/A	Yes	[2009] 4 SLR(R) 788	N/A	Cited for the elements of estoppel by representation.
Skandinaviska Enskilda Banken AB (Publ), Singapore Branch v Asia Pacific Breweries (Singapore) Pte Ltd and another and another appeal	Court of Appeal	Yes	[2011] 3 SLR 540	Singapore	Cited for the elements of estoppel by representation.
Boris Abramovich Berezovsky v Roman Arkadievich Abramovich	N/A	Yes	[2010] EWHC 647 (Comm)	England and Wales	Cited for the principle that a judge should not prefer the account of one side rather than the other.
The “AA V”	High Court	Yes	[1999] 3 SLR(R) 664	Singapore	Compared to the present case to show why the appellant’s action was not legally unsustainable.
Armagas Ltd v Mundogas S.A. (The Ocean Frost)	House of Lords	Yes	[1986] AC 717	United Kingdom	Cited for the principle that an agent cannot make a representation as to his own authority.
The Yuta Bondarovskaya	N/A	Yes	[1998] 2 Lloyd’s Rep 357	N/A	Cited as an instance where a plaintiff’s agency claim in the bunker trading context was set aside or struck out.
The J Faster	N/A	Yes	[2000] 1 HKC 652	Hong Kong	Cited as an instance where a plaintiff’s agency claim in the bunker trading context was set aside or struck out.
The Tolla	N/A	Yes	1921 PD 22	N/A	Cited for the exception that a plaintiff who had dealt directly with the master of the vessel with no knowledge whatsoever that the vessel was chartered could have an arguable case binding the ship-owner to the contract.
The MV	N/A	Yes	[1996] 4 MLJ 109	N/A	Cited for the exception that a plaintiff who had dealt directly with the master of the vessel with no knowledge whatsoever that the vessel was chartered could have an arguable case binding the ship-owner to the contract.
The “Vasiliy Golovnin”	High Court	Yes	[2007] 4 SLR(R) 277	Singapore	Cited regarding issue estoppel.
D.S.V. Silo-Und Verwaltungsgesellschaft mbH v Owners of The Sennar and 13 Other Ships	N/A	Yes	[1985] 1 WLR 490	N/A	Cited regarding issue estoppel.
The “Vasiliy Golovnin”	High Court	Yes	[2006] SGHC 247	Singapore	Cited regarding issue estoppel.
The “Vasiliy Golovnin”	Court of Appeal	Yes	[2008] 4 SLR(R) 994	Singapore	Cited regarding issue estoppel.
The “Irini A” (No 2)	N/A	Yes	[1999] 1 Lloyd's Rep 189	N/A	Cited regarding issue estoppel.
Carl Zeiss (No 2) Stiftung v Rayner & Keeler Ltd (No 2)	House of Lords	Yes	[1967] 1 AC 853	United Kingdom	Cited regarding issue estoppel.
Alliance Entertainment Singapore Pte Ltd v Sim Kay Teck and another	N/A	Yes	[2006] 3 SLR(R) 712	N/A	Cited regarding issue estoppel.
Goh Nellie v Goh Lian Teck and others	N/A	Yes	[2007] 1 SLR(R) 453	N/A	Cited regarding issue estoppel.
The Jarguh Sawit	N/A	Yes	[1997] 3 SLR(R) 829	N/A	Cited regarding invoking admiralty jurisdiction.
The “Opal 3” ex “Kuchino”	N/A	Yes	[1992] 2 SLR(R) 231	N/A	Cited regarding invoking admiralty jurisdiction.
The “Thorlina”	N/A	Yes	[1985–1986] SLR(R) 258	N/A	Cited regarding invoking admiralty jurisdiction.
The “Rainbow Spring”	N/A	Yes	[2003] 3 SLR(R) 362	N/A	Cited regarding invoking admiralty jurisdiction.
The “Golden Petroleum”	N/A	Yes	[1993] 3 SLR(R) 209	N/A	Cited regarding invoking admiralty jurisdiction.
Vostok Shipping Co Ltd v Confederation Ltd	New Zealand Court of Appeal	Yes	[2000] 1 NZLR 37	New Zealand	Cited regarding invoking admiralty jurisdiction.
The “Aventicum”	N/A	Yes	[1978] 1 Lloyd’s Rep 184	N/A	Cited regarding invoking admiralty jurisdiction.
The “Nazym Khikmet”	N/A	Yes	[1996] 2 Lloyd's Rep 362	N/A	Cited regarding invoking admiralty jurisdiction.
The Andres Bonifacio	N/A	Yes	[1993] 3 SLR 521	N/A	Cited regarding invoking admiralty jurisdiction.
The Owners of the Ship “Shin Kobe Maru” v Empire Shipping Co Inc	High Court of Australia	Yes	(1994) 181 CLR 404	Australia	Cited regarding invoking admiralty jurisdiction.

13. Applicable Rules

Rule Name
Rule B of the Supplemental Rules for Admiralty or Maritime Claims and Asset Forfeiture Actions of the Federal Rules of Civil Procedure
Order 12 Rule 7 of the Rules of Court
Order 18 Rule 19 of the Rules of Court
Civil Procedure Rules 1998 (SI 1998 No 3132) (UK)

14. Applicable Statutes

Statute Name	Jurisdiction
Rules of Court (Cap 322, R 5, 2006 Rev Ed)	Singapore
High Court (Admiralty Jurisdiction) Act (Cap 123, 2001 Rev Ed)	Singapore

15. Key Terms and Keywords

15.1 Key Terms

Bunker Supplies
Agency by Estoppel
Bunker Fixed Price Agreement
In Rem Proceedings
Ostensible Authority
Rule B Attachment Order
Admiralty Jurisdiction
Good Arguable Case
Plainly Unsustainable
Factual Challenge
Legal Challenge

15.2 Keywords

Bunker
Agency
Estoppel
Admiralty
Shipping
Contract
Jurisdiction

17. Areas of Law

Area Name	Relevance Score
Bunker Supply	90
Agency Law	80
Admiralty and Maritime Law	75
Shipping Law	70
Contract Law	60
Breach of Contract	60
Estoppel	50
Unjust Enrichment	40
Litigation	30

16. Subjects

Admiralty
Agency
Contract
Civil Procedure
Shipping