Manuchar Steel v Star Pacific: Pre-Action Discovery & Single Economic Entity
Manuchar Steel Hong Kong Limited applied to the High Court of Singapore for pre-action discovery from Star Pacific Line Pte Ltd to determine if Star Pacific was part of a single economic entity with SPL Shipping Limited, against whom Manuchar held two arbitral awards. Manuchar sought to enforce the awards against Star Pacific. Lee Kim Shin JC dismissed the application, finding that Manuchar had sufficient facts to formulate a claim and that the intended cause of action was not viable under the International Arbitration Act or general company law.
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
Application for pre-action discovery to enforce arbitral awards against Star Pacific as a single economic entity. Application dismissed.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Manuchar Steel Hong Kong Limited | Applicant | Corporation | Application dismissed | Lost | Leong Lu Yuan |
| Star Pacific Line Pte Ltd | Respondent | Corporation | Application dismissed | Won | Jeyabalen, Arthur Edwin Lim |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Lee Kim Shin | Judicial Commissioner | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Leong Lu Yuan | Ang & Partners |
| Jeyabalen | Jeyabalen & Partners |
| Arthur Edwin Lim | Jeyabalen & Partners |
4. Facts
- Manuchar sought pre-action discovery from Star Pacific to enforce arbitral awards obtained against SPL Shipping.
- Manuchar claimed SPL Shipping and Star Pacific were a single economic entity.
- Manuchar chartered the vessel Fusion 1 from SPL Shipping under a charterparty dated 9 July 2008.
- SPL Shipping did not participate in the arbitration proceedings in London.
- Manuchar obtained orders from Singapore, England, and BVI High Courts to enforce the awards against SPL Shipping.
- Manuchar argued SPL Shipping and Star Pacific shared the same Singapore office.
- Instructions and correspondence concerning Fusion 1 appeared to have come from Star Pacific’s employees.
5. Formal Citations
- Manuchar Steel Hong Kong Limited v Star Pacific Line Pte Ltd, Originating Summons No 927 of 2013, [2014] SGHC 181
6. Timeline
| Date | Event |
|---|---|
| Charterparty dated between Manuchar and SPL Shipping | |
| Disputes arose under the charterparty | |
| Final Award issued in favor of Manuchar | |
| Manuchar made a demand against SPL Shipping for sums under the Awards | |
| Deadline for SPL Shipping to comply with Manuchar's demand | |
| Manuchar contacted SPL Shipping regarding correction of Final Award heading | |
| Manuchar notified SPL Shipping of arbitrator's correction to Final Award heading | |
| Supplementary award issued | |
| Singapore High Court granted Manuchar liberty to enforce the Awards against SPL Shipping | |
| Enforcement order obtained from the English High Court | |
| Enforcement order obtained from the High Court of Justice in the BVI | |
| Manuchar served a statutory demand on SPL Shipping in the BVI | |
| Originating Summons No 927 of 2013 filed | |
| Decision Date |
7. Legal Issues
- Pre-Action Discovery
- Outcome: The court held that pre-action discovery was not necessary because Manuchar had sufficient facts to formulate a claim.
- Category: Procedural
- Sub-Issues:
- Relevance
- Necessity
- Fishing expedition
- Single Economic Entity
- Outcome: The court held that the single economic entity concept was not a viable cause of action under the International Arbitration Act or general company law.
- Category: Substantive
- Enforcement of Arbitral Awards
- Outcome: The court held that an arbitral award cannot impose enforceable obligations on strangers to an arbitration agreement.
- Category: Substantive
8. Remedies Sought
- Pre-Action Discovery
- Enforcement of Arbitral Award
9. Cause of Actions
- Enforcement of Arbitral Award
- Breach of Contract
10. Practice Areas
- Commercial Litigation
- Arbitration
- Discovery
11. Industries
- Shipping
- Logistics
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Ching Mun Fong v Standard Chartered Bank | Court of Appeal | Yes | [2012] 4 SLR 185 | Singapore | Cited for the twin requirements of relevance and necessity in pre-action discovery applications. |
| Dorsey James Michael v World Sport Group Pte Ltd | Court of Appeal | Yes | [2014] 2 SLR 208 | Singapore | Cited for the principle that pre-action disclosure is not necessary if the plaintiff can immediately commence proceedings. |
| Kuah Kok Kim and others v Ernst & Young | High Court | Yes | [1996] 3 SLR(R) 485 | Singapore | Cited for the principle that pre-action discovery will not be ordered to enable a plaintiff to go on a fishing expedition. |
| Asta Rickmers Schiffahrtsgesellschaft mbH & Cie KG v Hub Marine Pte Ltd | High Court | Yes | [2006] 1 SLR(R) 283 | Singapore | Distinguished on the facts; pre-action discovery was granted in that case, but the court chose not to follow it in this case. |
| Whang Tar Liang v Standard Chartered Bank | High Court | Yes | [2011] SGHC 154 | Singapore | Cited for the principle that pre-action discovery is unnecessary if the plaintiff is already in a position to determine its cause of action. |
| PT First Media TBK (formerly known as PT Broadband Multimedia TBK) v Astro Nusantara International BV and others and another appeal | Court of Appeal | Yes | [2014] 1 SLR 372 | Singapore | Cited for the principle that enforcing an award against a party not party to the arbitration agreement would be anathema to the consensual basis of arbitration. |
| Peterson Farms Inc v C&M Farming Ltd | English High Court | Yes | [2004] 1 Lloyd’s Rep 603 | England | Cited for the principle that an arbitral award cannot impose enforceable obligations on strangers to an arbitration agreement. |
| Leads Engineering (S) Pte Ltd v Chin Choon Co (Pte) Ltd (personal representatives of the estate of Choo Kok Hoe, deceased, garnishee) | High Court | Yes | [2009] SGHC 53 | Singapore | Distinguished on the facts; the case was not directly on point. |
| Aron Salomon (Pauper) v A Salomon and Company, Limited | House of Lords | Yes | [1897] 1 AC 22 | England | Cited for the basic tenet of company law that a company and its shareholders are separate legal persons. |
| Adams and others v Cape Industries plc and another | English Court of Appeal | Yes | [1990] 1 Ch 433 | England | Cited for the principle that the court cannot disregard the principle in Salomon merely because it considers that justice so required. |
| Prest v Petrodel Resources Ltd and others | Supreme Court | Yes | [2013] 2 AC 415 | England | Cited for the principle that the recognition of a limited power to pierce the corporate veil is necessary if the law is not to be disarmed in the face of abuse. |
| Public Prosecutor v Lew Syn Pau and another | High Court | Yes | [2006] 4 SLR(R) 210 | Singapore | Cited for the principle that there are exceptional situations in which the law ignores the separate legal personalities of the company and its shareholders. |
| Briggs v James Hardie & Co Pty Ltd | Supreme Court | Yes | (1989) 16 NSWLR 549 | New South Wales | Cited for the principle that there is no common, unifying principle for piercing the corporate veil. |
| Kosmopoulos v Constitution Insurance Co of Canada | Supreme Court | Yes | [1987] 1 SCR 2 | Canada | Cited for the principle that there is no common, unifying principle for piercing the corporate veil. |
| Attorney-General v Equiticorp Industries Group Ltd (In Statutory Management) | High Court | Yes | [1996] 1 NZLR 528 | New Zealand | Cited for the principle that there is no common, unifying principle for piercing the corporate veil. |
| Cape Pacific Ltd v Lubner Controlling Investments (Pty) Ltd | Appellate Division | Yes | (1995) 4 SA 790 (A) | South Africa | Cited for the principle that there is no common, unifying principle for piercing the corporate veil. |
| Albacruz (Cargo Owners) v Albazero (Owners) | House of Lords | Yes | [1977] 1 AC 774 | England | Cited for the principle that each company in a group of companies is a separate legal entity. |
| Bank of Tokyo Ltd v Karoon and Another | House of Lords | Yes | [1987] 1 AC 45 | England | Cited for the principle that the distinction between separate legal personalities of each member of the group is fundamental and cannot be bridged. |
| DHN Food Distributors Ltd v Tower Hamlets London Borough Council | English Court of Appeal | Yes | [1976] 1 WLR 852 | England | Discussed as a controversial case regarding the single economic entity concept. |
| Harold Holdsworth & Co (Wakefield) Ltd v Caddies | House of Lords | Yes | [1955] 1 WLR 352 | England | Cited as an instance where a group of companies are treated as one concern. |
| Woolfson v Strathclyde Regional Council | House of Lords | Yes | (1978) 38 P&CR 521 | Scotland | Cited for expressing reservations over the application of the piercing of the corporate veil principle in DHN Food. |
| Win Line (UK) Ltd v Masterpart (Singapore) Pte Ltd and another | High Court | Yes | [1999] 2 SLR(R) 24 | Singapore | Cited for rejecting the submission that liability ought to be found against a party on the basis that two companies were part of a single economic entity. |
| The “Skaw Prince” | High Court | Yes | [1994] 3 SLR(R) 146 | Singapore | Cited for the principle that one-ship companies are a legitimate practice for businesses engaged in the shipping business to limit their liability. |
| Cavenagh Investment Pte Ltd v Kaushik Rajiv | High Court | Yes | [2013] 2 SLR 543 | Singapore | Cited for the principle that one-ship companies are a legitimate practice for businesses engaged in the shipping business to limit their liability. |
| Antonio Gramsci Shipping Corporation and others v Stepanovs | High Court | Yes | [2011] EWHC 333 | England and Wales | Cited for the principle that exceptional circumstances may warrant the lifting of the corporate veil against a one-ship company. |
| Chimbusco Pan Nation Petro-Chemical Co Ltd v The Owners and/or Demise Charterers of the Ship or Vessel “Decurio” | Not specified | Yes | [2013] 2 Lloyd’s Rep 407 | Not specified | Cited for the principle that courts do not as a general course lift the corporate veil notwithstanding the widespread use of one-ship shipowning companies. |
13. Applicable Rules
| Rule Name |
|---|
| Order 24 Rule 6(1) of the Rules of Court |
| Order 24 Rule 6(3)(b) of the Rules of Court |
| Order 24 Rule 7 of the Rules of Court |
| Order 18 Rule 19(a) of the Rules of Court |
| Order 18 Rule 19(b) of the Rules of Court |
| Order 18 Rule 7 of the Rules of Court |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| International Arbitration Act (Cap 143A, 2002 Rev Ed) | Singapore |
| Rules of Court (Cap 322, R 5, 2014 Rev Ed) | Singapore |
| Supreme Court of Judicature Act (Cap 322, 2007 Rev Ed) | Singapore |
| Insolvency Act, 2003 (No 5 of 2003) | British Virgin Islands |
15. Key Terms and Keywords
15.1 Key Terms
- Pre-action discovery
- Single economic entity
- Arbitral award
- Charterparty
- Enforcement
- Corporate veil
- Piercing the corporate veil
15.2 Keywords
- pre-action discovery
- single economic entity
- arbitration
- company law
- Singapore
- enforcement
- corporate veil
16. Subjects
- Civil Procedure
- Arbitration
- Company Law
- Pre-Action Discovery
- Enforcement of Judgments
17. Areas of Law
- Civil Procedure
- Arbitration Law
- Company Law