OCBC v Owner of "Yue You 902": Bills of Lading, Delivery of Cargo, and Summary Judgment

Oversea-Chinese Banking Corporation Limited (OCBC) sued Jiang Xin Shipping Co Ltd, the owner of the vessel Yue You 902, in the High Court of Singapore, for failure to deliver a cargo of palm oil against 14 bills of lading. OCBC had provided a loan to Aavanti Industries Pte Ltd for the purchase, taking the bills as security. The Defendant discharged the cargo against a letter of indemnity from FGV Trading Sdn Bhd before OCBC became the holder of the bills. The court dismissed the Defendant's appeals and affirmed the summary judgment in favor of OCBC.

1. Case Overview

1.1 Court

High Court of Singapore

1.2 Outcome

Registrar's Appeals dismissed; summary judgment affirmed for the plaintiff.

1.3 Case Type

Admiralty

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

OCBC sues for failure to deliver palm oil cargo against bills of lading. The court addresses spent bills, contractual arrangements, and good faith under the Bills of Lading Act.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Oversea-Chinese Banking Corporation LimitedPlaintiff, RespondentCorporationAppeal dismissed; summary judgment affirmedWon
Owner and/or Demise Charterer of the vessel “Yue You 902”Defendant, AppellantOtherAppeal DismissedLost

3. Judges

Judge NameTitleDelivered Judgment
Pang Khang ChauJudicial CommissionerYes

4. Counsels

Counsel NameOrganization
Toh Kian SingRajah & Tann Singapore LLP
Chen ZhidaRajah & Tann Singapore LLP
Ang KailiOon & Bazul LLP
Bazul Ashhab bin Abdul KaderOon & Bazul LLP
Prakasash SilvamOon & Bazul LLP

4. Facts

  1. OCBC extended a loan to Aavanti for the purchase of palm oil and took the bills of lading as security.
  2. The Defendant discharged the cargo against a letter of indemnity from FGV before OCBC became the holder of the bills.
  3. OCBC sought delivery of the cargo from the Defendant after Aavanti defaulted on the loan.
  4. The bills of lading were signed on behalf of the master of Yue You 902 and made “To Order”.
  5. The bills were blank endorsed by FGV before delivery to OCBC.
  6. OCBC acquired a special property in the goods as pledgee when it granted a trust receipt loan to Aavanti for the purchase price.
  7. The cargo had been completely discharged from Yue You 902 before OCBC remitted the purchase price to Maybank.

5. Formal Citations

  1. The “Yue You 902” and another matter, , [2019] SGHC 106

6. Timeline

DateEvent
FGV entered into a voyage charterparty with the Defendant.
Aavanti contracted with Ruchi Soya Industries Ltd to sell palm oil.
Aavanti contracted with FGV to purchase palm oil.
Defendant received instructions to transport palm oil to Chittagong, Bangladesh.
Defendant received revised instructions to transport palm oil to New Mangalore, India.
Yue You 902 took on palm oil from Lubuk Gaung, Indonesia.
Bills of lading released to FGV following payment of freight to the Defendant.
Ruchi issued a back-to-back LOI to Aavanti.
FGV issued an LOI to the Defendant.
Aavanti issued a back-to-back LOI to FGV.
Yue You 902 arrived at New Mangalore.
OCBC received bills of lading from FGV through Maybank.
OCBC informed Aavanti of the arrival of documents and requested payment instructions.
Cargo discharging began at New Mangalore.
OCBC granted loan to Aavanti.
Cargo completely discharged at New Mangalore.
Payment of purchase price effected by OCBC to Maybank.
Aavanti obtained an extension of time from OCBC.
OCBC demanded delivery of cargo from the Defendant.
OCBC initiated proceedings against the Defendant.
OCBC obtained summary judgment against the Defendant.
RAs 259 & 261, RAs 258 & 260 and SUMs 334 & 336 were all heard before me.
Hearing date.
Judgment date.

7. Legal Issues

  1. Whether the plaintiff acquired a right of suit pursuant to section 2 of the Bills of Lading Act
    • Outcome: The Defendant failed to raise a triable issue on whether OCBC had acquired rights of suit in respect of the bills of lading pursuant to s 2(1) of the Bills of Lading Act.
    • Category: Substantive
  2. Whether the plaintiff was a holder of the bills of lading in good faith
    • Outcome: The Defendant has failed to raise a triable issue on whether OCBC was a lawful holder of the bills of lading.
    • Category: Substantive
  3. Whether the plaintiff consented to the carrier discharging the cargo without presentation of the bills of lading
    • Outcome: The Defendant was not able to point to anything said or done by OCBC which could have induced the Defendant to conclude that OCBC had consented to the delivery of the cargo without bill of lading.
    • Category: Substantive
  4. Whether the plaintiff is estopped from asserting a misdelivery claim
    • Outcome: Both the defences of estoppel by acquiescence and estoppel by convention did not raise triable issues.
    • Category: Substantive
  5. Quantum of damages
    • Outcome: The court assessed the quantum of damages as the invoice value of the cargo in the sale between FGV and Aavanti, which is USD 7,454,973.16.
    • Category: Substantive

8. Remedies Sought

  1. Delivery of cargo
  2. Monetary damages

9. Cause of Actions

  • Breach of contract of carriage
  • Breach of contract of bailment
  • Conversion
  • Detinue

10. Practice Areas

  • Admiralty
  • Shipping
  • Commercial Litigation

11. Industries

  • Shipping
  • Banking
  • Commodities Trading

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Wee Cheng Swee Henry v Jo Baby Kartika PolimSingapore High CourtYes[2015] 4 SLR 250SingaporeCited for the principle that the defendant must show a reasonable probability of a real or bona fide defence in relation to the issues.
JP Choon Pte Ltd v Lal Offshore Marine Pte LtdSingapore High CourtYes[2016] SGHC 115SingaporeCited for the principle that the defendant must show a reasonable probability of a real or bona fide defence in relation to the issues.
Sim Kim Seng (trading as Kim Seng Ship Building) v New West Coast Shipyard Pte LtdSingapore High CourtYes[2016] SGHCR 2SingaporeCited for the principle that the defendant must show a reasonable probability of a real or bona fide defence in relation to the issues.
Goh Chok Tong v Chee Soon JuanSingapore Court of AppealYes[2003] 3 SLR(R) 32SingaporeCited for the principle that the court must be convinced that there is a reasonable probability that the defendant has a real or bona fide defence in relation to the issues.
Banque de Paris et des Pays-Bas (Suisse) SA v Costa de Naray and Christopher John WaltersN/AYes[1984] 1 Lloyd’s Rep 21N/ACited for the principle that in an application for summary judgment, the defendant will not be given leave to defend based on mere assertions alone.
Microsoft Corporation v Electro-Wide LimitedN/AYes[1997] FSR 580N/ACited for the principle that the court must look at the complete account of events put forward by both the plaintiff and the defendants and look at the whole situation.
M2B World Asia Pacific Pte Ltd v Matsumura AkihikoSingapore High CourtYes[2015] 1 SLR 325SingaporeCited for the principle that the duty of a judge does not end as soon as a fact is asserted by one party, and denied or disputed by the other in an affidavit.
Calvin Klein, Inc and another v HS International Pte Ltd and othersSingapore High CourtYes[2016] 5 SLR 1183SingaporeCited for the principle that the duty of a judge does not end as soon as a fact is asserted by one party, and denied or disputed by the other in an affidavit.
Bank Negara Malaysia v Mohd Ismail & OrsSupreme Court of MalaysiaYes[1992] 1 MLJ 400MalaysiaCited for the principle that the duty of a judge does not end as soon as a fact is asserted by one party, and denied or disputed by the other in an affidavit.
Ritzland Investment Pte Ltd v Grace Management & Consultancy Services Pte LtdSingapore High CourtYes[2014] 2 SLR 1342SingaporeCited for the policy underlying summary judgment.
Lee Hsien Loong v Singapore Democratic Party and others and another suitSingapore High CourtYes[2007] 1 SLR(R) 675SingaporeCited for the principle that the fact that an action involves complex issues is not an answer to a claim for summary judgment if the claim is otherwise well-founded.
Bandung Shipping Pte Ltd v Keppel TatLee Bank LtdSingapore Court of AppealYes[2003] 1 SLR(R) 295SingaporeCited for the principle that bills blank endorsed are bearer bills.
BNP Paribas v Bandung Shipping Pte Ltd (Shweta International Pte Ltd and another, third parties)Singapore High CourtYes[2003] 3 SLR(R) 611SingaporeCited for the principle that delivery to persons not entitled does not cause a bill of lading to be spent.
The Future ExpressN/AYes[1992] 2 Lloyd’s Rep 79N/ACited for the principle that the contract of carriage generally continues and the bill of lading remains effective, until the goods are delivered to the person entitled under the bill of lading.
Barber v MeyersteinN/AYes(1870) LR 4 HL 317N/ACited for the principle that the bill was not yet spent at the time of pledge as the goods have not yet been delivered to a person entitled to possession of the same.
The DelfiniN/AYes[1990] 1 Lloyd’s Rep 252N/ACited for approving Barber v Meyerstein.
East West Corporation v DKBS 1912N/AYes[2002] 2 Lloyd’s Rep 182N/ACited for the principle that the reference to the right to possess is a reference to one of the primary rights emanating from the bill of lading’s function as a document of title.
East West Corporation v DKBS AF 1925 A/S and anotherN/AYes[2003] QB 1509N/ACited for the principle that section 2(2) refers to the possibility of a person becoming the holder of a bill at a time when possession of the bill no longer gives a right (as against the carrier) to possession of the goods to which the bill relates.
The Erin SchulteN/AYes[2015] 1 Lloyd’s Rep 97N/ACited for the principle that the rights under the contract of carriage, including the right to obtain delivery of the goods from the carrier, did not cease when the goods were discharged against the letter of indemnity.
The Pacific VigorousSingapore High CourtYes[2006] 3 SLR(R) 374SingaporeCited for the principle that even though the shipowner no longer has the goods, the bill of lading is not spent and as such it does not cease to be a transferable document of title.
Glyn Mills Currie & Co v The East and West India Dock CompanyN/AYes(1882) LR 7 App Cas 591N/ACited as an example of how the risk of trafficking in a spent bill can arise.
The Berge SisarN/AYes[2002] 2 AC 205N/ACited to show that the 1992 Act is concerned solely with contractual obligations created in a bill of lading in relation to the carriage and delivery up of the goods.
The YthanN/AYes[2006] 1 Lloyd’s Rep 457N/ACited to show that the question to ask in connection with the wording in section 5(2)(c) under consideration is: does possession of the bill of lading any longer give a contractual right (as against the carrier) to possession of the goods to which the bill relates?
The “Aegean Sea”N/AYes[1998] 2 Lloyd’s Rep 39N/ACited for the meaning of the term “good faith” in s 5(2) of COGSA 1992.
UCO Bank v Golden Shore Transportation Pte LtdSingapore Court of AppealYes[2006] 1 SLR(R) 1SingaporeCited for the principle that “good faith” in s 5 of the Bills of Lading Act connotes “honest conduct”.
The David AgmashenebeliN/AYes[2003] 1 Lloyd’s Rep 92N/ACited for the principle that, for a transfer to be regarded as having been “effected in pursuance of any contractual or other arrangements”, it has to be a transfer “provided for by the antecedent contractual or other arrangements” or “called for” by the contractual or other arrangements.
The PaceN/AYes[2010] 1 Lloyd’s Rep 183N/ACited for the principle that the objective or aim of section 2(2)(a) to avoid trafficking in bills of lading will be achieved if the reason or cause of the transfer is the contractual or other arrangements in existence before the bills were spent.
The Erin SchulteN/AYes[2013] 2 Lloyd’s Rep 338N/ACited for the principle that the test should be whether the contractual or other arrangement is the “real and effective cause” of the transfer.
The Stone GeminiN/AYes[1999] 2 Lloyd’s Rep 255N/ACited for the principle that the letter of indemnity is designed to provide a remedy for a shipowner, where the master releases cargo at the request of a party, in respect of claims which may be brought as a consequence of such release.
Travista Development Pte Ltd v Tan Kim Swee Augustine and othersSingapore High CourtYes[2008] 2 SLR(R) 474SingaporeCited for the requirements for estoppel by convention.
Nasaka Industries (S) Pte Ltd v Aspac Aircargo Services Pte LtdSingapore High CourtYes[1999] 2 SLR(R) 817SingaporeCited for the requirements for estoppel by acquiescence.
Concentrate Engineering Pte Ltd v United Malayan Banking Corp BhdSingapore High CourtYes[1990] 1 SLR(R) 465SingaporeCited for the principle that O 14 is for the plain and obvious and not for the devious and crafty.
He-Ro Chemicals Ltd v Jeuro Container Transport (HK) LtdN/AYes[1993] 2 HKC 368Hong KongCited for the principle that the invoice value of the goods is, in my judgment, as good an indication of the value of the goods at the time of misdelivery as a court could reasonably expect.
Star Line Traders Limited v Transpac Container System LimitedN/AYes[2009] HKCU 1355Hong KongCited as an example where the defence of consent was disposed of at the summary judgment stage.
Kai Min Fashion (HK) Ltd v Fond Express Logistics LtdN/AYes[2012] HKCU 1982Hong KongCited as an example where the defence of consent was disposed of at the summary judgment stage.
Synehon (Xiamen) Trading Co Ltd v American Logistics LtdN/AYes[2009] HKCU 1000Hong KongCited as an example where the defence of consent was disposed of at the summary judgment stage.
Nederlandsche Handel-Maatschappij v Strathlorne Steamship CompanyN/AYes(1931) 39 Lloyd’s Rep 171ScotlandCited for the principle that the defence of consent implied that something was said or done by the pursuers which affected the mind of the master of the ship, induced him to conclude that they were consenters, and thus encouraged him to make delivery without production of the bills of lading.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
Bills of Lading Act (Cap 384, 1994 Rev Ed)Singapore
Application of English Law Act (Cap 7A, 1994 Rev Ed)Singapore
Rules of Court (Cap 332, R 5, 2014 Rev Ed)Singapore
Sale of Goods Act (Cap 393, 1999 Rev Ed)Singapore
Companies Act (Cap 50, 2006 Rev Ed)Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Bills of lading
  • Letter of indemnity
  • Trust receipt loan
  • Spent bills
  • Good faith
  • Contract of carriage
  • Misdelivery
  • Estoppel
  • Voyage charterparty

15.2 Keywords

  • Bills of Lading Act
  • Spent Bills
  • Letter of Indemnity
  • Summary Judgment
  • OCBC
  • Yue You 902
  • Palm Oil

17. Areas of Law

Area NameRelevance Score
Bills of Lading Act95
Admiralty and Maritime Law90
Delivery of cargo against presentation of bills of lading80
Contract Law70
Summary Judgement60
Civil Procedure50
Breach of Contract40

16. Subjects

  • Admiralty
  • Shipping
  • Bills of Lading
  • Commercial Law
  • Civil Procedure