IM Skaugen v MAN Diesel: Misrepresentation, Assignment, and Forum in Marine Engine Fuel Consumption Dispute

In IM Skaugen SE and IM Skaugen Marine Services Pte Ltd v MAN Diesel & Turbo SE and MAN Diesel & Turbo Norge AS, the High Court of Singapore, presided over by Vinodh Coomaraswamy J, addressed the issue of jurisdiction in a misrepresentation claim. The plaintiffs sought damages for alleged misrepresentations regarding the fuel consumption of marine engines. The court allowed the plaintiffs' appeal, finding that Singapore is the appropriate forum for the trial, considering the possibility of transfer to the Singapore International Commercial Court and the overstatement of the appropriateness of alternative forums like Germany and Norway. The defendants have appealed to the Court of Appeal against this decision.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Appeal Allowed

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Singapore court addresses jurisdiction in a misrepresentation claim regarding marine engine fuel consumption, focusing on assignment validity and forum appropriateness.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
IM SKAUGEN SEPlaintiffCorporationAppeal AllowedWonLawrence Teh, Loh Jen Wei, Ravin Periasamy
IM SKAUGEN MARINE SERVICES PTE LTDPlaintiffCorporationAppeal AllowedWonLawrence Teh, Loh Jen Wei, Ravin Periasamy
MAN DIESEL & TURBO SEDefendantCorporationAppeal DismissedLostDanny Ong, Yam Wern-Jhien, Eunice Wong
MAN DIESEL & TURBO NORGE ASDefendantCorporationAppeal DismissedLostDanny Ong, Yam Wern-Jhien, Eunice Wong

3. Judges

Judge NameTitleDelivered Judgment
Vinodh CoomaraswamyJudgeYes

4. Counsels

Counsel NameOrganization
Lawrence TehDentons Rodyk & Davidson LLP
Loh Jen WeiDentons Rodyk & Davidson LLP
Ravin PeriasamyDentons Rodyk & Davidson LLP
Danny OngRajah & Tann Singapore LLP
Yam Wern-JhienRajah & Tann Singapore LLP
Eunice WongRajah & Tann Singapore LLP

4. Facts

  1. The first plaintiff sourced six marine engines from the MAN group in 2000 and 2001.
  2. The defendants allegedly misrepresented the fuel consumption rate of the engines.
  3. The engines were sold to shipbuilders in China for installation in ships for the Skaugen group.
  4. The plaintiffs claim damages for the alleged misrepresentation.
  5. The defendants authored promotional material containing the representation in Germany.
  6. The promotional material was delivered to the Skaugen group at meetings in Denmark or Norway.
  7. The ships have been owned and operated by entities in the Cayman Islands, Hong Kong, and Singapore.

5. Formal Citations

  1. IM Skaugen SE and another v MAN Diesel & Turbo SE and another, Suit No 96 of 2015 (Registrar’s Appeals Nos 163, 167 and 168 of 2016), [2018] SGHC 123
  2. IM Skaugen SE and another v MAN Diesel & Turbo SE and another, , [2016] SGHCR 6

6. Timeline

DateEvent
First plaintiff sourced six marine engines from the MAN group.
First defendant delivered the Project Planning Manual to the first plaintiff.
First plaintiff entered into the first four shipbuilding contracts.
Shipbuilders entered into four contracts to purchase MAN Engines from the first defendant.
Defendants delivered the Kraftstoffsystem Fuel System to the shipbuilders.
Last two shipbuilding contracts entered into by Vintergas Limited.
Six MAN Engines became ready to be handed over to the shipbuilders.
Shipbuilders entered into two contracts to purchase MAN Engines from the first defendant.
First defendant conducted a field acceptance test on the engine at the first defendant’s factory in Germany.
First defendant conducted a field acceptance test on the engine at the first defendant’s factory in Germany.
Shipbuilders delivered to the Skaugen group all six ships.
Shipbuilders delivered to the Skaugen group all six ships.
Somargas II Pte Ltd owned all six ships.
All six ships registered under the Singapore flag.
First defendant issued a press release reporting the interim results of its investigation into possible irregularities in the field acceptance tests.
First defendant gave the first plaintiff an update on the results of its ongoing investigations.
First defendant admitted in writing to the Skaugen group that there were indications that the fuel consumption values for three of the six MAN Engines built for the Skaugen group were externally influenced in an improper manner during the field acceptance tests.
First defendant admitted in writing to the Skaugen group that there were indications that the fuel consumption values for three of the six MAN Engines built for the Skaugen group were externally influenced in an improper manner during the field acceptance tests.
Plaintiffs became aware that the representation as to fuel consumption was false.
First defendant admitted in writing to the Skaugen group that there were indications that the fuel consumption values for three of the six MAN Engines built for the Skaugen group were externally influenced in an improper manner during the field acceptance tests.
First defendant was found liable for the regulatory offence under German law.
GATX group became the sole owner of three of the ships through special-purpose, one-ship GATX subsidiaries.
Somargas SG sold a ship to a company known as SGPC1 Pte Ltd.
Claims Transfer Agreement entered into between GATX and the first plaintiff.
Somargas SG sold a ship to a company I shall call Gasmar.
Somargas SG sold the sole remaining ship to a company I shall call Zhonghua.
Assignment Agreement entered into between the second plaintiff as assignee and Somargas SG and Skaugen Marine as assignors.
Plaintiffs commenced this action.
Plaintiffs secured leave ex parte to serve the writ on the defendants outside Singapore.
Writ was served on the first defendant in Germany.
First defendant entered an appearance.
First defendant applied to challenge jurisdiction.
Writ was served on the second defendant in Norway.
Second defendant entered an appearance.
Second defendant made a virtually identical application in November 2015 on its own behalf.
Three GATX subsidiaries issued letters asserting that, as at the date of the Claims Transfer Agreement, they had transferred their claims to GATX.
Assistant registrar set aside service of the writ and the ex parte order granting the plaintiffs leave to serve the writ out of the jurisdiction.
Norwegian Court of Appeal dismissed the plaintiffs’ claims in the Norwegian proceedings.
Plaintiffs filed an appeal to the Norwegian Supreme Court.
Judgment was delivered.
Judgment date.

7. Legal Issues

  1. Misrepresentation
    • Outcome: The court found that the plaintiffs have established a good arguable case that the acts of the defendants which the plaintiffs allege to be tortious would have been actionable under Singapore law had they been committed in Singapore.
    • Category: Substantive
    • Sub-Issues:
      • Fraud and deceit
      • Negligent misrepresentation
      • Inducement
      • Alteration of position
  2. Jurisdiction
    • Outcome: The court held that Singapore is the appropriate forum for the trial of this action.
    • Category: Jurisdictional
    • Sub-Issues:
      • Discretionary
      • Natural Forum
  3. Conflict of Laws
    • Outcome: The court applied the double actionability rule to the plaintiffs’ causes of action.
    • Category: Substantive
    • Sub-Issues:
      • Choice of Law
      • Presumption of similarity
  4. Assignment
    • Outcome: The court accepted that both plaintiffs have established a good arguable case on the issue of standing.
    • Category: Substantive

8. Remedies Sought

  1. Monetary Damages

9. Cause of Actions

  • Misrepresentation
  • Negligence
  • Fraud

10. Practice Areas

  • Commercial Litigation

11. Industries

  • Maritime
  • Oil and Gas

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Zoom Communications Ltd v Broadcast Solutions Pte LtdCourt of AppealYes[2014] 4 SLR 500SingaporeCited for the three requirements for valid service of process out of the jurisdiction.
Bradley Lomas Electrolok Ltd and another v Colt Ventilation East Asia Pte Ltd and othersCourt of AppealYes[1999] 3 SLR(R) 1156SingaporeCited for the standard of a good arguable case.
Canada Trust Co v Stolzenberg (No 2)N/AYes[1998] 1 WLR 547N/ACited for the definition of a good arguable case.
Spiliada Maritime Corp v Cansulex Ltd (The Spiliada)N/AYes[1987] AC 460N/ACited for the test to show that Singapore is clearly the forum in which the case can be suitably tried.
ACES System Development Pte Ltd v Yenty Lily (trading as Access International Services)N/AYes[2013] 4 SLR 1317N/ACited for the principle that an appeal from the registrar to a judge in chambers is dealt with by way of rehearing.
Trendtex Trading Corporation v Credit SuisseHouse of LordsYes[1982] AC 679EnglandCited for the assignability of a cause of action in tort.
Macmillan Inc v Bishopsgate Investment Trust Plc (No 3)N/AYes[1996] 1 WLR 387N/ACited for the principle that the lex fori is applied to ascertain where the tort was committed.
Rickshaw Investments Ltd and another v Nicolai Baron von UexkullCourt of AppealYes[2007] 1 SLR(R) 377SingaporeCited for the double actionability rule.
JIO Minerals FZC and others v Mineral Enterprises LtdCourt of AppealYes[2011] 1 SLR 391SingaporeCited for the substance test.
Cordoba Shipping Co Ltd v National State Bank, Elizabeth, New Jersey (The “Albaforth”)N/AYes[1984] 2 Lloyd’s Rep 91N/ACited for the principle that if the misrepresentation is made to a specific person or to a specific class of persons, the loci delicti is the place where the representation is received and acted upon.
Diamond v Bank of London and Montreal LtdN/AYes[1979] QB 333N/ACited for the principle that if the misrepresentation is made to a specific person or to a specific class of persons, the loci delicti is the place where the representation is received and acted upon.
Cordova Land Co Ltd v Victor Brothers IncN/AYes[1966] 1 WLR 793N/ACited for the principle that if the misrepresentation is made to an unspecified class of persons, the loci delicti is the jurisdiction in which the misrepresentation is made.
Kuwait Airways Corporation v Iraqi Airways Company and others (Nos 4 and 5)House of LordsYes[2002] 2 AC 883EnglandCited for the approach in considering whether the tort would constitute a tort in Singapore law if the acts said to constitute the tort had been carried out entirely in Singapore.
Rappo, Tania v Accent Delight International Ltd and another and another appealCourt of AppealYes[2017] 2 SLR 265SingaporeCited for the principle that the inquiry is concerned with finding those incidents or connections that have the most relevant and substantial associations with the dispute.
Siemens AG v Holdrich Investments LtdCourt of AppealYes[2010] 3 SLR 1007SingaporeCited for the principle that the physical location of witnesses is no longer of vital or even material consideration in the Spiliada analysis because of the option of giving evidence by videolink.
Distillers Co (Biochemicals) Ltd v Laura Anne ThompsonPrivy CouncilYes[1971] AC 458N/ACited for the test to determine whether a claim is founded on a cause of action which arose in Singapore within the meaning of Order 11 r 1(p).
Metall und Rohstoff AG v Donaldson Lufkin & Jenrette Inc and anotherEnglish Court of AppealYes[1990] 1 QB 391EnglandInterpreted the analogous provision in Order 11 of the English Rules of the Supreme Court 1965 (SI 1965 No 776) (UK).
ISC Technologies Ltd and another v James Howard Guerin and othersN/AYes[1992] 2 Lloyds Rep 430N/ACited for the principle that the defendant’s application was to discharge the order granting leave to serve out, and the question was therefore whether that order was rightly made at the time it was made.
Credit Agricole Indosuez v Unicof Limited and othersN/AYes[2004] 1 Lloyd’s Rep 196N/AThe approach which the defendants before me now advocate was common ground between the parties.
William Jacks & Co (Singapore) Pte Ltd v Nelson Honey & Marketing (NZ) LtdN/AYes[2015] SGHCR 21SingaporeThe plaintiff was entitled to rely on the new head of jurisdiction under Order 11 r 1(r) and on the new cause of action arising from the distributorship agreement even though neither had been raised or relied upon at the ex parte stage.
NML Capital Ltd v Republic of ArgentinaN/AYes[2011] 2 AC 495N/AProcedural rules should be the servant not the master of the rule of law.
Virsagi Management (S) Pte Ltd v Welltech Construction Pte Ltd and another appealN/AYes[2013] 4 SLR 1097SingaporeThis factor arises where there has been, or is, litigation in a jurisdiction involving very complex facts that in turn necessitates highly specialised expert evidence, and evidence and expertise has been built up in a particular jurisdiction on those facts.
Beckkett Pte Ltd v Deutsche Bank AGN/AYes[2005] 3 SLR(R) 555SingaporeThe plaintiffs cannot do so unilaterally and must instead seek the court’s permission to relax their implied undertaking not to do so.

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

  • Marine Engines
  • Fuel Consumption
  • Misrepresentation
  • Field Acceptance Test
  • Project Planning Manual
  • Kraftstoffsystem Fuel System
  • Forum Non Conveniens
  • Double Actionability Rule
  • Singapore International Commercial Court
  • Assignment
  • Loci Delicti

15.2 Keywords

  • Misrepresentation
  • Jurisdiction
  • Forum Non Conveniens
  • Marine Engines
  • Fuel Consumption
  • Singapore
  • Assignment
  • Conflict of Laws

16. Subjects

  • Conflict of Laws
  • Tort Law
  • Civil Procedure
  • Commercial Dispute

17. Areas of Law

  • Conflict of Laws
  • Tort
  • Choses in Action
  • Evidence
  • Civil Procedure