Solvadis v Affert: Mareva Injunction & Risk of Asset Dissipation in Sulphur Export Contract Dispute
In Solvadis Commodity Chemicals GmbH v Affert Resources Pte Ltd, the Singapore High Court heard an application by Affert Resources Pte Ltd to set aside a worldwide Mareva injunction obtained by Solvadis Commodity Chemicals GmbH. The injunction was related to a dispute over a solid sulphur agreement where Affert failed to provide a letter of credit for a shipment of cargo. The court dismissed Affert's application, finding a real risk of dissipation of assets based on Affert's lack of probity and failure to fulfill its contractual obligations.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Application dismissed
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
The High Court dismissed Affert's application to set aside a worldwide Mareva injunction, finding a real risk of asset dissipation due to lack of probity.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Solvadis Commodity Chemicals Gmbh | Plaintiff | Corporation | Application granted | Won | |
| Affert Resources Pte Ltd | Defendant, Applicant | Corporation | Application dismissed | Lost |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Andrew Ang | Judge | Yes |
4. Counsels
4. Facts
- Plaintiff and Defendant entered into a solid sulphur agreement on 1 March 2012.
- Defendant failed to furnish a letter of credit for the purchase of the cargo.
- Defendant requested to pay with a bill of exchange due to exhausted credit lines.
- Plaintiff suggested "avalising" the bill of exchange, which the Defendant accepted.
- Plaintiff released the cargo based on the Defendant's agreement to "avalise" the bill.
- Defendant's bank was unable to "avalise" the bill of exchange.
- Defendant alleged the cargo was of inferior quality, causing damage and losses.
5. Formal Citations
- Solvadis Commodity Chemicals GmbH v Affert Resources Pte Ltd, Originating Summons No 681 of 2013 (Summons No 4122 of 2013), [2013] SGHC 217
6. Timeline
| Date | Event |
|---|---|
| Solid sulphur agreement signed | |
| Defendant placed order for 26.43 metric tonnes of solid sulphur | |
| Cargo arrived in Senegal | |
| Defendant sent draft of bill of exchange to Plaintiff | |
| Plaintiff required amendments to draft bill of exchange | |
| Defendant’s bank informed Plaintiff they were unable to “avalise” the bill of exchange | |
| Defendant alleged Cargo was of inferior quality | |
| Defendant demanded compensation of US$14.97m | |
| Defendant revised compensation demand to US$22.4m | |
| Plaintiff applied for Mareva injunction | |
| Worldwide Mareva injunction granted | |
| Defendant filed application to discharge Mareva injunction | |
| Defendant’s application dismissed | |
| Decision Date |
7. Legal Issues
- Risk of Dissipation of Assets
- Outcome: The court found a real risk of dissipation of assets based on the defendant's lack of probity.
- Category: Substantive
- Related Cases:
- [2003] 1 SLR(R) 157
- [2013] 2 SLR 449
- Duty of Full and Frank Disclosure
- Outcome: The court found no breach of the duty of full and frank disclosure that would warrant discharging the injunction.
- Category: Procedural
- Related Cases:
- [2000] 1 SLR(R) 786
8. Remedies Sought
- Monetary Damages
- Mareva Injunction
9. Cause of Actions
- Breach of Contract
10. Practice Areas
- Commercial Litigation
- Arbitration
- Mareva Injunctions
11. Industries
- Chemicals
- Fertilizers
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Maldives Airports Co Ltd v GMR Malé International Airport Pte Ltd | Court of Appeal | Yes | [2013] 2 SLR 449 | Singapore | Cited for the principle that the powers conferred under s 12A of the IAA include the power to grant a Mareva injunction. |
| Guan Chong Cocoa Manufacturer Sdn Bhd v Pratiwi Shipping SA | High Court | Yes | [2003] 1 SLR(R) 157 | Singapore | Cited for the requirements to obtain a Mareva injunction: a good arguable case and a real risk of dissipation of assets. |
| Tay Long Kee Impex Pte Ltd v Tan Beng Huwah (trading as Sin Kwang Wah) | Court of Appeal | Yes | [2000] 1 SLR(R) 786 | Singapore | Cited for the principles regarding the court’s role in an application for the discharge of an ex parte Mareva injunction, including the duty of full and frank disclosure. |
| Gulf Interstate Oil Corporation LLC v Ant Trade & Transport Ltd of Malta | N/A | No | [1999] 1 Lloyd’s Rep 867 | N/A | Cited regarding the disclosure of settlement negotiations and offers of security. |
| Brink’s-MAT Ltd v Elcombe | N/A | Yes | [1988] 3 All ER 188 | N/A | Cited regarding the materiality of facts and the consequences of non-disclosure in ex parte applications. |
| The “Vasiliy Golovnin” | Court of Appeal | Yes | [2008] 4 SLR(R) 994 | Singapore | Cited regarding the need to avoid meticulously dissecting the factual matrix to invent missing material facts in setting aside applications. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| International Arbitration Act (Cap 143A, 2002 Rev Ed) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Mareva Injunction
- Avalisation
- Bill of Exchange
- Letter of Credit
- Solid Sulphur
- Dissipation of Assets
- Full and Frank Disclosure
- Lack of Probity
15.2 Keywords
- Mareva Injunction
- Arbitration
- Contract
- Sulphur
- Singapore
- Commercial Dispute
17. Areas of Law
16. Subjects
- Arbitration
- Contract Law
- Civil Procedure
- International Trade