Parakou Shipping v Liu Cheng Chan: Freezing Order for Asset Dissipation

In Parakou Shipping Pte Ltd (in liquidation) v Liu Cheng Chan and others, the Singapore High Court granted the plaintiff's application for a freezing order against the defendants. The plaintiff, a shipping company in liquidation, sought the order to prevent the defendants from dissipating assets to avoid paying an arbitration award to Galsworthy Singapore Pte Ltd. The court, presided over by Justice Choo Han Teck, found that the defendants' actions indicated an intention to prevent Galsworthy from receiving payment and allowed the application, with costs in the cause.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Plaintiff's application allowed.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

The High Court granted a freezing order against the defendants, finding a risk of asset dissipation to prevent payment of an arbitration award.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
OthersDefendantCorporationApplication grantedLost
PARAKOU SHIPPING PTE LTD (IN LIQUIDATION)PlaintiffCorporationApplication allowedWon
LIU CHENG CHANDefendantIndividualApplication grantedLost

3. Judges

Judge NameTitleDelivered Judgment
Choo Han TeckJudgeYes

4. Counsels

Counsel NameOrganization
Wong Tjen WeeEldan Law LLP
Sim ChongJLC Advisors LLP
Siraj OmarPremier Law LLC
Lawrence TanEldan Law LLP
Kate LooJLC Advisors LLP
Foo JuyuanEldan Law LLP
Prema LathaPremier Law LLC
Kenneth LimAllen & Gledhill LLP
Fay Fong Shi-TingAllen & Gledhill LLP
Chua Xin YingAllen & Gledhill LLP

4. Facts

  1. Parakou Shipping Pte Ltd went into liquidation.
  2. Galsworthy Singapore Pte Ltd is a major creditor of Parakou Shipping.
  3. Galsworthy obtained an arbitration award of US$45m against Parakou Shipping.
  4. The plaintiff applied for a freezing order against the defendants.
  5. A sum of $635,000 from the sale of the plaintiff’s vessels is held by JLC Advisors LLP.
  6. The first and second defendants own a house valued between $30 to $40 million.
  7. Income earning contracts for vessel management were cancelled.

5. Formal Citations

  1. Parakou Shipping Pte Ltd (in liquidation) v Liu Cheng Chan and others, Suit No 434 of 2014 (Summons No 2012 of 2014), [2014] SGHC 244

6. Timeline

DateEvent
Third and fourth defendants took over the plaintiff from the first and second defendants.
Galsworthy received the arbitration award in its favour.
Arbitrators delivered the second award on quantum awarding a sum of US$45m to Galsworthy.
Plaintiff commenced proceedings in this suit against the defendant and applied for a freezing order.
Summons was served on the plaintiff.
Interim injunction granted pending the inter partes hearing of the summons.
Parties returned for the inter parte arguments.
Judgment reserved.

7. Legal Issues

  1. Risk of Asset Dissipation
    • Outcome: The court found a real risk of asset dissipation.
    • Category: Substantive

8. Remedies Sought

  1. Freezing order

9. Cause of Actions

  • No cause of actions

10. Practice Areas

  • Commercial Litigation
  • Arbitration

11. Industries

  • Shipping

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
No cited cases

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
No applicable statutes

15. Key Terms and Keywords

15.1 Key Terms

  • Liquidation
  • Freezing order
  • Asset dissipation
  • Arbitration award
  • Interim injunction

15.2 Keywords

  • Shipping
  • Liquidation
  • Freezing order
  • Asset dissipation
  • Arbitration

17. Areas of Law

Area NameRelevance Score
Winding Up90
Dissipation of Assets80
Injunctions75
Company Law60
Corporate Restructuring55
Bankruptcy50
Commercial Disputes40
Business Litigation30
Arbitration30

16. Subjects

  • Shipping
  • Insolvency
  • Arbitration