Materials Industry v. Vopak Terminals: Dispute over PME Cargo Disposal and Contractual Lien

In a dispute before the High Court of Singapore, Materials Industry and Trade (Singapore) Pte Ltd sued Vopak Terminals Singapore Pte Ltd over the disposal of a Palm Methyl Ester (PME) cargo stored at Vopak's terminal due to outstanding liabilities of IBRIS Bio-fuels Pte Ltd, Vopak's customer. Materials Industry claimed ownership of the PME, alleging Vopak's disposal breached their right to possession. Vopak asserted its contractual lien rights under its agreement with IBRIS. The court dismissed both Materials Industry's claim and Vopak's counterclaim for storage fees, finding that Vopak was entitled to exercise its lien over the entirety of the PME cargo.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Both the plaintiff's claim and the defendant's counterclaim are dismissed.

1.3 Case Type

Civil

1.4 Judgment Type

Judgment

1.5 Jurisdiction

Singapore

1.6 Description

Singapore High Court case involving Materials Industry and Trade (Singapore) Pte Ltd and Vopak Terminals Singapore Pte Ltd concerning the disposal of Palm Methyl Ester (PME) cargo.

1.7 Decision Date

27 November 2019

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
Materials Industry and Trade (Singapore) Pte Ltd	Plaintiff, Defendant in Counterclaim	Corporation	Claim Dismissed	Lost	Chuah Hui Fen Christine of Fullerton Law Chambers LLC Brinden Anandakumar of Fullerton Law Chambers LLC Eng Zixuan Edmund of Fullerton Law Chambers LLC
Vopak Terminals Singapore Pte Ltd	Defendant, Plaintiff in Counterclaim	Corporation	Counterclaim Dismissed	Lost	Chew Kei-Jin of Ascendant Legal LLC Tan Silin Stephanie of Ascendant Legal LLC Tay Shi-En, Hannah of Ascendant Legal LLC
IBRIS Bio-fuels Pte Ltd	Other	Corporation

3. Judges

Judge Name	Title	Delivered Judgment
Ang Cheng Hock	Judge	Yes

4. Counsels

Counsel Name	Organization
Chuah Hui Fen Christine	Fullerton Law Chambers LLC
Brinden Anandakumar	Fullerton Law Chambers LLC
Eng Zixuan Edmund	Fullerton Law Chambers LLC
Chew Kei-Jin	Ascendant Legal LLC
Tan Silin Stephanie	Ascendant Legal LLC
Tay Shi-En, Hannah	Ascendant Legal LLC

4. Facts

Materials Industry and Trade (Singapore) Pte Ltd (MIT) agreed to sell 2,000 metric tonnes of PME to IBRIS Bio-fuels Pte Ltd.
IBRIS had a service agreement with Vopak Terminals Singapore Pte Ltd for storage tanks at Vopak's Banyan Terminal.
IBRIS failed to provide a bank guarantee (BG2) to Vopak as required by their service agreement.
MIT and IBRIS entered into a Storage Agreement stating title to the PME would not pass to IBRIS until payment.
Vopak exercised its lien over the PME cargo due to IBRIS's outstanding liabilities and disposed of the cargo.
MIT claimed Vopak wrongfully converted the PME cargo, asserting MIT retained title.
Vopak counterclaimed for outstanding storage fees and expenses.

5. Formal Citations

Materials Industry and Trade (Singapore) Pte Ltd v Vopak Terminals Singapore Pte Ltd, Suit No 1153 of 2017, [2019] SGHC 276

6. Timeline

Date	Event
2006-08-25	Vopak Terminals Singapore Pte Ltd entered into an agreement with Natural Fuel Pte Ltd to design, construct, operate, and maintain storage tanks.
2008-01-01	Construction of the seven storage tanks was completed.
2009-04-01	Natural Fuel Pte Ltd went into receivership, and its agreement with Vopak Terminals Singapore Pte Ltd was terminated.
2010-04-01	IBRIS Bio-fuels Pte Ltd approached Vopak Terminals Singapore Pte Ltd to lease storage tanks.
2011-07-19	IBRIS Bio-fuels Pte Ltd entered into a service agreement with Vopak Terminals Singapore Pte Ltd.
2011-08-01	Initial lease term began between IBRIS Bio-fuels Pte Ltd and Vopak Terminals Singapore Pte Ltd.
2012-08-01	Yearly adjustments to fixed monthly fees began between IBRIS Bio-fuels Pte Ltd and Vopak Terminals Singapore Pte Ltd.
2012-11-29	Vopak Terminals Singapore Pte Ltd sent a letter to IBRIS Bio-fuels Pte Ltd varying clause 39.1 of the Service Agreement.
2014-05-29	IBRIS Bio-fuels Pte Ltd failed to provide BG2 to Vopak Terminals Singapore Pte Ltd.
2014-07-21	Vopak Terminals Singapore Pte Ltd sent a letter to IBRIS Bio-fuels Pte Ltd reminding them that BG2 was due.
2014-07-25	Vopak Terminals Singapore Pte Ltd sent a letter to IBRIS Bio-fuels Pte Ltd giving notice of its intention to exercise its contractual right of lien.
2014-07-30	Vopak Terminals Singapore Pte Ltd agreed to extend the deadline for IBRIS Bio-fuels Pte Ltd to provide BG2 until 31 August 2014.
2014-08-01	Materials Industry and Trade (Singapore) Pte Ltd entered into an agreement to sell 2,000 metric tonnes of PME to IBRIS Bio-fuels Pte Ltd.
2014-08-29	IBRIS Bio-fuels Pte Ltd executed a sale and purchase agreement with Materials Industry and Trade (Singapore) Pte Ltd.
2014-08-31	IBRIS Bio-fuels Pte Ltd failed to provide BG2 to Vopak Terminals Singapore Pte Ltd.
2014-09-02	Delivery of the PME by Antara Commodities (M) Sdn Bhd began.
2014-09-12	Vopak Terminals Singapore Pte Ltd sent an email to IBRIS Bio-fuels Pte Ltd indicating possible legal actions if BG2 was not provided.
2014-09-15	IBRIS Bio-fuels Pte Ltd began transferring the PME cargo to Tank 1102 at the Banyan Terminal.
2014-09-16	Vopak Terminals Singapore Pte Ltd made a demand to Standard Chartered Bank to draw on BG1.
2014-09-26	Materials Industry and Trade (Singapore) Pte Ltd issued an invoice for 1,176.69 metric tonnes of PME.
2014-09-29	The sale and purchase agreement was executed between Materials Industry and Trade (Singapore) Pte Ltd and Antara Commodities (M) Sdn Bhd.
2014-09-29	The sale and purchase agreement was executed between Materials Industry and Trade (Singapore) Pte Ltd and IBRIS Bio-fuels Pte Ltd.
2014-09-29	The sale and purchase agreement was executed between Materials Industry and Trade (Singapore) Pte Ltd and Future Prelude Sdn Bhd.
2014-09-29	The sale and purchase agreement was executed between IBRIS Bio-fuels Pte Ltd and British Petroleum Singapore Pte Ltd.
2014-09-29	The sale and purchase agreement was executed between IBRIS Bio-fuels Pte Ltd and Antara Commodities (M) Sdn Bhd.
2014-09-29	The sale and purchase agreement was executed between IBRIS Bio-fuels Pte Ltd and Future Prelude Sdn Bhd.
2014-09-29	The sale and purchase agreement was executed between British Petroleum Singapore Pte Ltd and Antara Commodities (M) Sdn Bhd.
2014-09-29	The sale and purchase agreement was executed between British Petroleum Singapore Pte Ltd and Future Prelude Sdn Bhd.
2014-09-29	The sale and purchase agreement was executed between Antara Commodities (M) Sdn Bhd and Future Prelude Sdn Bhd.
2014-09-29	The sale and purchase agreement was executed between Antara Commodities (M) Sdn Bhd and British Petroleum Singapore Pte Ltd.
2014-09-29	The sale and purchase agreement was executed between Future Prelude Sdn Bhd and British Petroleum Singapore Pte Ltd.
2014-09-29	The sale and purchase agreement was executed between Future Prelude Sdn Bhd and Antara Commodities (M) Sdn Bhd.
2014-09-29	The sale and purchase agreement was executed between British Petroleum Singapore Pte Ltd and IBRIS Bio-fuels Pte Ltd.
2014-09-29	The sale and purchase agreement was executed between Antara Commodities (M) Sdn Bhd and IBRIS Bio-fuels Pte Ltd.
2014-09-29	The sale and purchase agreement was executed between Future Prelude Sdn Bhd and IBRIS Bio-fuels Pte Ltd.
2014-09-29	The sale and purchase agreement was executed between Materials Industry and Trade (Singapore) Pte Ltd and British Petroleum Singapore Pte Ltd.
2014-09-29	The sale and purchase agreement was executed between Materials Industry and Trade (Singapore) Pte Ltd and Antara Commodities (M) Sdn Bhd.
2014-09-29	The sale and purchase agreement was executed between Materials Industry and Trade (Singapore) Pte Ltd and Future Prelude Sdn Bhd.
2014-09-29	The sale and purchase agreement was executed between Materials Industry and Trade (Singapore) Pte Ltd and IBRIS Bio-fuels Pte Ltd.
2014-09-25	Standard Chartered Bank made payment to Vopak Terminals Singapore Pte Ltd.
2014-10-08	Vopak Terminals Singapore Pte Ltd gave IBRIS Bio-fuels Pte Ltd notice of its intention to terminate the Service Agreement if IBRIS failed to furnish BG2 by 16 October 2014.
2014-10-15	The Storage Agreement was executed between Materials Industry and Trade (Singapore) Pte Ltd and IBRIS Bio-fuels Pte Ltd.
2014-10-17	Delivery of all 2,000 metric tonnes of PME was completed.
2014-10-17	Vopak Terminals Singapore Pte Ltd informed IBRIS Bio-fuels Pte Ltd that the Service Agreement would be terminated with effect from 29 November 2014.
2014-10-18	Vopak Terminals Singapore Pte Ltd wrote to Standard Chartered Bank again, calling for payment of S$733,264.34 under BG1.
2014-10-20	Antara Commodities (M) Sdn Bhd made payment of US$150,000 to Materials Industry and Trade (Singapore) Pte Ltd.
2014-10-20	Vopak Terminals Singapore Pte Ltd informed IBRIS Bio-fuels Pte Ltd of the estimated amount due to Vopak and demanded payment.
2014-10-24	Standard Chartered Bank paid Vopak Terminals Singapore Pte Ltd the claimed sum of S$733,264.34.
2014-10-29	Materials Industry and Trade (Singapore) Pte Ltd executed a repayment agreement with IBRIS Bio-fuels Pte Ltd.
2014-11-29	The Service Agreement between IBRIS Bio-fuels Pte Ltd and Vopak Terminals Singapore Pte Ltd was terminated.
2014-12-19	Materials Industry and Trade (Singapore) Pte Ltd issued a letter of demand through its solicitors.
2014-12-31	Materials Industry and Trade (Singapore) Pte Ltd wrote to Vopak Terminals Singapore Pte Ltd for the first time to assert title to the PME cargo.
2015-02-09	Materials Industry and Trade (Singapore) Pte Ltd wrote to IBRIS Bio-fuels Pte Ltd to give it notice that Materials Industry and Trade (Singapore) Pte Ltd had accepted IBRIS Bio-fuels Pte Ltd's repudiatory breach of the Repayment Agreement and that agreement was terminated.
2015-02-11	IBRIS Bio-fuels Pte Ltd communicated in a letter to Materials Industry and Trade (Singapore) Pte Ltd that Vopak Terminals Singapore Pte Ltd had asserted its right of lien and retention over the PME cargo.
2015-02-16	Materials Industry and Trade (Singapore) Pte Ltd's solicitors wrote to Vopak Terminals Singapore Pte Ltd to give notice that it held title to the PME cargo and was exercising its immediate right of possession.
2015-03-11	Vopak Terminals Singapore Pte Ltd's solicitors wrote to inform Materials Industry and Trade (Singapore) Pte Ltd's solicitors that Vopak Terminals Singapore Pte Ltd had exercised its rights of lien and disposal over the PME cargo.
2015-03-01	Vopak Terminals Singapore Pte Ltd made arrangements to sell the PME cargo to a third party.
2015-06-01	The PME cargo was eventually sold for US$893,494.53.
2015-08-14	IBRIS Bio-fuels Pte Ltd was wound up following a creditors’ voluntary liquidation.
2019-11-28	Judgment reserved.

7. Legal Issues

Passing of Title
- Outcome: The court found that title to the PME cargo passed from the plaintiff to IBRIS upon each batch of delivery up until 15 October 2014, the date of the Storage Agreement.
- Category: Substantive
- Related Cases:
  - [1957] 1 Lloyd’s Rep 240
  - [1964] MLJ 276
Interpretation of Contractual Terms
- Outcome: The court interpreted clause 8 of the Storage Agreement as a retention of title clause, not a re-conveyance of title.
- Category: Substantive
- Related Cases:
  - [2017] 1 SLR 219
  - [2015] 5 SLR 1187
  - [2008] 3 SLR(R) 1029
Exercise of Contractual Lien
- Outcome: The court found that the defendant could exercise its right of lien upon the termination of the Service Agreement on 29 November 2014.
- Category: Substantive
- Related Cases:
  - [2018] 2 SLR 129
  - [1909] AC 109
Agency by Estoppel
- Outcome: The court found that the plaintiff must have impliedly granted authority to IBRIS to grant possession of the PME to the defendant on terms that would include a right of lien.
- Category: Substantive
- Related Cases:
  - [1965] 2 QB 480
  - [2001] 3 SLR(R) 726
  - [2010] 1 SLR 241
  - [1913] 3 KB 1
  - [2011] 3 SLR 540
  - [2016] 2 SLR 1114

8. Remedies Sought

Damages

9. Cause of Actions

Conversion

10. Practice Areas

Commercial Litigation
Contract Disputes
Agency Law

11. Industries

Oil and Gas
Commodities Trading
Storage Terminal Services

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
Carlos Federspiel & Co S.A. v Charles Twigg & Co Ltd	N/A	Yes	[1957] 1 Lloyd’s Rep 240	N/A	Cited for the conditions that have to be satisfied for property to pass in a contract for the sale of goods.
Yap Chin Hock & Anor v Cheng Wang Loong	N/A	Yes	[1964] MLJ 276	N/A	Cited for endorsing and applying the principles in Carlos Federspiel.
Diablo Fortune Inc v Duncan, Cameron Lindsay	Court of Appeal	No	[2018] 2 SLR 129	Singapore	Cited to distinguish the nature of a contractual lien over sub-freights from the right of lien and retention over products stored by IBRIS with the defendant.
Great Eastern Railway Company v Lord’s Trustee	N/A	Yes	[1909] AC 109	N/A	Cited to show that the nature of the defendant’s interest is more akin to the lien in Great Eastern Railway Company v Lord’s Trustee.
Yap Son On v Ding Pei Zhen	Court of Appeal	Yes	[2017] 1 SLR 219	Singapore	Cited for the principles of contractual interpretation.
Y.E.S F&B Group Pte Ltd v Soup Restaurant Singapore Pte Ltd (formerly known as Soup Restaurant (Causeway Point) Pte Ltd)	N/A	Yes	[2015] 5 SLR 1187	N/A	Cited for the principles of contractual interpretation.
Zurich Insurance (Singapore) Pte Ltd v B-Gold Interior Design & Construction Pte Ltd	N/A	Yes	[2008] 3 SLR(R) 1029	Singapore	Cited for the principles of contractual interpretation and admissibility of extrinsic evidence.
Sports Connection Pte Ltd v Deuter Sports GmbH	N/A	Yes	[2009] 3 SLR(R) 883	Singapore	Cited for the admissibility of post-contractual conduct.
Sembcorp Marine Ltd v PPL Holdings Pte Ltd and another and another appeal	Court of Appeal	Yes	[2013] 4 SLR 193	Singapore	Cited for the process of implying terms in a contract.
Simpson Marine (SEA) Pte Ltd v Jaicipto Jiaravanon	Court of Appeal	Yes	[2019] 1 SLR 696	Singapore	Cited for the relevance of post-contractual conduct.
Ngee Ann Development Pte Ltd v Takashimaya Singapore Ltd	N/A	Yes	[2017] 2 SLR 627	Singapore	Cited for an example of where conduct was relevant.
Freeman & Lockyer (a firm) v Buckhurt Park Properties (Mangal) Ltd and another	N/A	Yes	[1965] 2 QB 480	N/A	Cited for the definition of actual and apparent authority in agency law.
Banque Nationale de Paris v Tan Nancy and another	N/A	Yes	[2001] 3 SLR(R) 726	Singapore	Cited for the definition of apparent authority in agency law.
Eng Gee Seng v Quek Choon Teck and others	N/A	Yes	[2010] 1 SLR 241	Singapore	Cited for the principle that a principal may ratify his agent’s conduct either expressly or impliedly.
Jowitt & Sons v Union Cold Storage Company	N/A	Yes	[1913] 3 KB 1	N/A	Cited for the principle that a party is subject to a lien if they are aware that goods are being stored and that a storage agreement exists.
Skandinaviska Enskilda Banker AB (Publ), Singapore Branch v Asia Pacific Breweries (Singapore) Pte Ltd and another and another appeal	N/A	Yes	[2011] 3 SLR 540	Singapore	Cited for the principle that an agent cannot make a representation as to his own authority.
The “Bunga Melati 5”	N/A	Yes	[2016] 2 SLR 1114	Singapore	Cited for the principle that silence or inaction may be taken as a valid representation for the purposes of establishing a basis for estoppel.
In re Yorkshire Woolcombers Association Ltd	N/A	Yes	[1903] 2 Ch 284	N/A	Cited for the definition of a floating charge.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute Name	Jurisdiction
Sale of Goods Act (Cap 393, 1999 Rev Ed)	Singapore

15. Key Terms and Keywords

15.1 Key Terms

Palm Methyl Ester
PME
Lien
Storage Agreement
Service Agreement
Bank Guarantee
BG1
BG2
Title
Possession
Conversion
In-Tank Transfer
ITT
Free on Board
FOB

15.2 Keywords

PME
lien
storage
contract
IBRIS
Vopak
Materials Industry
title
conversion
agency
estoppel

17. Areas of Law

Area Name	Relevance Score
Sale of Goods	85
Commercial Law	80
Contract Law	75
Credit and Security	60
Property Law	30
Agency Law	25

16. Subjects

Contract Law
Commercial Law
Agency Law
Sale of Goods
Liens