China Merchants Bank v Sinfeng Marine: Pre-Action Discovery & Validity of Bunkers Contract

China Merchants Bank Co Ltd (CMB) applied for pre-action discovery from Sinfeng Marine Services Pte Ltd (Sinfeng) regarding a bunkers contract. The Assistant Registrar allowed the application, and Sinfeng appealed. The High Court of Singapore, on 2 September 2019, dismissed Sinfeng's appeal, finding that CMB required the documents to frame an appropriate cause of action regarding the validity of the contract and potential fraud. Sinfeng appealed the High Court's decision.

1. Case Overview

1.1 Court

High Court of the Republic of Singapore

1.2 Outcome

Appeal dismissed.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Appeal regarding pre-action discovery. The court considered the validity of a bunkers contract and allegations of fraud to determine if discovery was warranted.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Sinfeng Marine Services Pte LtdDefendant, AppellantCorporationAppeal DismissedLost
China Merchants Bank Co LtdPlaintiff, RespondentCorporationAppeal AllowedWon

3. Judges

Judge NameTitleDelivered Judgment
Tan Siong ThyeJudgeYes

4. Counsels

Counsel NameOrganization
Tan Poh Ling WendyMorgan Lewis Stamford LLC
Carl Lim Kok WeeMorgan Lewis Stamford LLC
Ong Boon Hwee WilliamAllen & Gledhill LLP
Erik WidjajaAllen & Gledhill LLP
Lim Jun RuiAllen & Gledhill LLP
IvanAllen & Gledhill LLP

4. Facts

  1. CMB entered into a financing arrangement with Coastal Oil Pte Ltd.
  2. Coastal Oil Pte Ltd assigned receivables from Sinfeng to CMB under a bunkers contract.
  3. CMB allowed Coastal Oil Pte Ltd to draw down US$9,971,752.84 under the loan facility.
  4. Coastal Oil Pte Ltd went into voluntary liquidation.
  5. Sinfeng denied the existence of the 90-day contract and alleged forgery.
  6. Sinfeng claimed to have entered into a cash-in-advance contract with Coastal Oil Pte Ltd.
  7. CMB sought pre-action discovery of documents related to the contract.

5. Formal Citations

  1. China Merchants Bank Co Ltd v Sinfeng Marine Services Pte Ltd, Originating Summons No 635 of 2019 (Registrar’s Appeal No 240 of 2019), [2019] SGHC 238

6. Timeline

DateEvent
CMB entered into a financing arrangement with Coastal Oil Pte Ltd.
Coastal Oil Pte Ltd entered into a bunkers contract with Sinfeng Marine Services Pte Ltd.
Coastal Oil Pte Ltd informed CMB of the bunkers contract and sent a copy of the contract.
CMB had a meeting with Liang of Sinfeng and Mrs Huang Peishi of Coastal Oil Pte Ltd.
Coastal Oil Pte Ltd went into voluntary liquidation.
CMB cancelled the loan facility.
CMB demanded payment from Sinfeng on the bunkers contract.
CMB's representatives sought confirmation from Sinfeng regarding payment of assigned proceeds.
Sinfeng emailed CMB's lawyers regarding the contract.
CMB sought further documents from Sinfeng.
Payment on the seven invoices from Sinfeng to CO became due.
Sinfeng allegedly made payment of US$12,486,600.00 to CO’s bank account with CMB.
CMB took out OS 635/2019 to seek pre-action discovery of documents from Sinfeng.
High Court dismissed Sinfeng's appeal.
Reasons for decision given.

7. Legal Issues

  1. Pre-Action Discovery
    • Outcome: The court held that pre-action discovery was necessary for CMB to frame an appropriate cause of action.
    • Category: Procedural
    • Sub-Issues:
      • Necessity of discovery
      • Relevance of documents
  2. Validity of Contract
    • Outcome: The court found that the genuineness of the contract was a serious issue that formed CMB’s pivotal consideration in deciding whether to proceed against Sinfeng.
    • Category: Substantive
    • Sub-Issues:
      • Genuineness of contract
      • Fraudulent misrepresentation
      • Conspiracy to injure

8. Remedies Sought

  1. Discovery of Documents
  2. Monetary Damages

9. Cause of Actions

  • Fraudulent Misrepresentation
  • Conspiracy to Injure
  • Breach of Contract

10. Practice Areas

  • Commercial Litigation
  • Banking Litigation

11. Industries

  • Banking
  • Shipping

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Ching Mun Fong v Standard Chartered BankHigh CourtYes[2012] 4 SLR 185SingaporeCited for the principle that pre-action discovery is unnecessary if the potential plaintiff has sufficient facts to commence proceedings.
Dorsey James Michael v World Sport Group Pte LtdHigh CourtYes[2014] 2 SLR 208SingaporeCited for the principle that pre-action disclosure is not usual and a court should not make an order without sufficient information to assess the necessity of disclosure.
Fairview Developments Pte Ltd v Ong & Ong & Ong Pte Ltd and another appealCourt of AppealYes[2014] 2 SLR 318SingaporeCited for the principle that in an assignment, the assignor remains bound to perform its obligations under the contract.
Bayerische Hypo- und Vereinsbank AG v Asia Pacific Breweries (Singapore) Pte LtdHigh CourtYes[2004] 4 SLR(R) 39SingaporeCited to distinguish the present case, noting that disbelief of a party's position is not sufficient reason for seeking pre-action discovery when the party seeking discovery has enough information to plead their cause of action.

13. Applicable Rules

Rule Name
Order 24, Rule 6(1)
Order 24, Rule 6(5)
Order 24, Rule 7
Order 18 r 12(1)(b)

14. Applicable Statutes

Statute NameJurisdiction
Rules of Court (Cap. 322, R5, 2014 Rev Ed)Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Pre-action discovery
  • Bunkers contract
  • Assignment of receivables
  • Voluntary liquidation
  • Fraudulent misrepresentation
  • CIA contract
  • 90-day contract

15.2 Keywords

  • pre-action discovery
  • bunkers contract
  • fraud
  • assignment
  • Singapore
  • High Court

17. Areas of Law

Area NameRelevance Score
Discovery90
Civil Practice75
Assignment Law60
Contract Law50
Misrepresentation40
Fraud and Deceit40
Conspiracy by Unlawful Means30
Commercial Law30
Commercial Litigation30
Summary Judgement20

16. Subjects

  • Civil Procedure
  • Contract Law
  • Banking Law
  • Discovery