POSH Semco Pte Ltd v Makamin Petroleum: Guarantee Enforcement & Good Faith in Saudi Law
In a case before the Singapore International Commercial Court, POSH Semco Pte Ltd sued Makamin Petroleum Services Co and Offshoreworks Global (L) Ltd (“OWG”) for breach of a guarantee. The court found in favor of POSH Semco, holding OWG liable for the outstanding debt of US$771,779.98 plus interest. The court considered the principles of good faith under Saudi law, which governed the underlying agreement between POSH Semco and Makamin Petroleum, but ultimately concluded that OWG was liable under the guarantee.
1. Case Overview
1.1 Court
SINGAPORE INTERNATIONAL COMMERCIAL COURT1.2 Outcome
Judgment for Plaintiff
1.3 Case Type
Civil
1.4 Judgment Type
Judgment
1.5 Jurisdiction
Singapore
1.6 Description
Judgment on guarantee enforcement. Court found OWG liable for the outstanding debt, emphasizing good faith obligations under Saudi law.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| POSH Semco Pte Ltd | Plaintiff | Corporation | Judgment for Plaintiff | Won | |
| Makamin Petroleum Services Co | Defendant | Corporation | Claim Dismissed | Lost | |
| Offshoreworks Global (L) Ltd | Defendant | Corporation | Judgment for Plaintiff | Lost |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Jeremy Lionel Cooke | International Judge | Yes |
4. Counsels
4. Facts
- POSH Semco had claims against MOS under a time charter.
- MOS requested POSH Semco to alleviate its financial situation.
- POSH Semco agreed to a Settlement Agreement with MOS.
- The Settlement Agreement stipulated payment of US$2,119,461.56 by MOS in installments.
- The Settlement Agreement stated that failure to make payments would render the entire Outstanding Debt immediately payable.
- MOS failed to make timely payments of the third and fourth installments.
- OWG provided a guarantee for MOS's obligations.
5. Formal Citations
- POSH Semco Pte Ltd v Makamin Petroleum Services Co and another, Suit No 1 of 2019, [2020] SGHC(I) 26
6. Timeline
| Date | Event |
|---|---|
| OWG Guarantee given | |
| Settlement Agreement between plaintiff and charterer (MOS) signed | |
| Third installment received | |
| Plaintiff asserted that the balance of the Outstanding Debt was payable | |
| Plaintiff withdrew the vessel and terminated the Charter | |
| Summary judgment given for part of the plaintiff’s claim against the Second Defendant | |
| OWG filed an appeal | |
| Solicitors instructed by OWG gave notice that they were ceasing to act in the Action and in the appeal | |
| Solicitors instructed by OWG gave notice that they were ceasing to act in the Action and in the appeal | |
| Hearing in the Court of Appeal | |
| Hearing in the Court of Appeal | |
| Court of Appeal judgment issued | |
| Plaintiff sought information from OWG as to whether it would be appointing solicitors | |
| Plaintiff explained the position to the Singapore International Commercial Court Registry and said it would seek judgment in default | |
| Case management conference fixed for the Action | |
| Further case management conference | |
| Trial listed | |
| Judgment reserved |
7. Legal Issues
- Enforcement of Guarantee
- Outcome: The court ruled in favor of the plaintiff, enforcing the guarantee against OWG.
- Category: Substantive
- Good Faith Obligations under Saudi Law
- Outcome: The court considered the principles of good faith under Saudi law but concluded that the plaintiff had not breached those obligations.
- Category: Substantive
- Interest on Debt
- Outcome: The court awarded interest on the debt, despite the prohibition of riba under Saudi law, based on the contractual agreement between the parties.
- Category: Substantive
8. Remedies Sought
- Monetary Damages
- Interest
9. Cause of Actions
- Breach of Guarantee
10. Practice Areas
- Commercial Litigation
11. Industries
- Petroleum
- Shipping
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Offshoreworks Global (L) Ltd v POSH Semco Pte Ltd | Court of Appeal | Yes | [2020] SGCA(I) 4 | Singapore | The Court of Appeal judgment provides the background and context for the current action, and the current judgment relies on the Court of Appeal's findings. |
13. Applicable Rules
| Rule Name |
|---|
| Order 35, r 1(2) of the Rules of Court |
| Order 110, r 3(1) of the Rules of Court |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Rules of Court (Cap 322, R 5, 2014 Rev Ed) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Outstanding Debt
- Settlement Sum
- OWG Guarantee
- Good Faith
- Saudi Law
- Time Charter
- Riba
- Indemnity Costs
15.2 Keywords
- guarantee
- settlement agreement
- saudi law
- good faith
- interest
- singapore international commercial court
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Guarantees and indemnities | 90 |
| Civil Procedure | 70 |
| Banking and Finance | 60 |
| Commercial Law | 60 |
| Contract Law | 50 |
| Judgments and Orders | 40 |
16. Subjects
- Contract Law
- Commercial Law
- Guarantees
- International Trade
- Civil Procedure