Ocean Tankers v Rajah & Tann: Striking Out Injunction Actions Due to Lack of Standing
In Originating Summons Nos. 666 and 704 of 2020, Ocean Tankers (Pte) Ltd and Hin Leong Trading (Pte) Ltd sought injunctions against Rajah & Tann Singapore LLP. The High Court, General Division, struck out the injunction actions, finding that the directors of Ocean Tankers and Hin Leong Trading lacked the legal standing to bring the actions after the appointment of interim judicial managers and judicial managers. The court also disallowed the joinder applications by Mr. Lim Oon Kuin and the Lims. The decision was made by Justice Kannan Ramesh on 25 February 2021.
1. Case Overview
1.1 Court
General Division of the High Court1.2 Outcome
Injunction actions struck out.
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
The High Court struck out injunction actions by Ocean Tankers and Hin Leong Trading against Rajah & Tann, finding the directors lacked standing after judicial management orders.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Ocean Tankers (Pte) Ltd (under judicial management) | Applicant | Corporation | Application Dismissed | Lost | Ong Ziying Clement, Khoo Shufen Joni |
| Rajah & Tann Singapore LLP | Respondent | Limited Liability Partnership | Application Granted | Won | Toby Landau QC, Liew Wey-Ren Colin |
| Hin Leong Trading (Pte) Ltd (under judicial management) | Applicant | Corporation | Application Dismissed | Lost | Christopher Anand s/o Daniel, Eileen Yeo |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Kannan Ramesh | Judge of the High Court | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Ong Ziying Clement | Damodara Ong LLC |
| Khoo Shufen Joni | Damodara Ong LLC |
| Christopher Anand s/o Daniel | Advocatus Law LLP |
| Eileen Yeo | Advocatus Law LLP |
| Toby Landau QC | Essex Court Chambers Duxton |
| Liew Wey-Ren Colin | Colin Liew LLC |
4. Facts
- Ocean Tankers and Hin Leong Trading sought injunctions against Rajah & Tann.
- The injunctions aimed to restrain Rajah & Tann from advising and acting for the judicial managers of the companies.
- Interim judicial managers were appointed before the injunction actions were filed.
- The directors of Ocean Tankers and Hin Leong Trading procured the companies to file the injunction actions.
- The directors did not seek consent from the interim judicial managers or judicial managers to bring the injunction actions.
- Rajah & Tann applied to strike out the injunction actions.
- The court allowed the striking-out applications, finding the directors lacked standing.
5. Formal Citations
- Ocean Tankers (Pte) Ltd (under judicial management) v Rajah & Tann Singapore LLP and another matter, , [2021] SGHC 47
6. Timeline
| Date | Event |
|---|---|
| Hin Leong Trading engaged Rajah & Tann Singapore LLP to advise on insolvency issues. | |
| Mr. Lim Oon Kuin stepped down as director of Ocean Tankers and Hin Leong Trading. | |
| Hin Leong Trading placed under interim judicial management. | |
| Hin Leong Trading's application under s 211B of the Companies Act withdrawn. | |
| Ocean Tankers placed under interim judicial management. | |
| Ocean Tankers' application under s 211B of the Companies Act withdrawn. | |
| Ocean Tankers filed Injunction action (OS 666). | |
| Hin Leong Trading filed Injunction action (OS 704). | |
| Judicial management applications granted for Ocean Tankers and Hin Leong Trading. | |
| Striking-Out applications and Joinder applications heard. | |
| Striking-Out applications allowed and Injunction actions struck out. | |
| Joinder applications disallowed. | |
| Leave applications to appeal decision on Joinder applications declined. | |
| Grounds of Decision issued. |
7. Legal Issues
- Standing of Directors after Appointment of Interim Judicial Managers and Judicial Managers
- Outcome: The court held that the directors did not have the legal standing to bring the injunction actions after the appointment of interim judicial managers and judicial managers.
- Category: Procedural
- Sub-Issues:
- Residuary powers of directors
- Displacement of directors' powers
- Related Cases:
- [1972] 1 WLR 640
- [2016] 2 SLR 1022
- Striking Out
- Outcome: The court allowed the striking-out applications.
- Category: Procedural
- Sub-Issues:
- Absence of legal standing
- Abuse of process
8. Remedies Sought
- Injunctive Relief
9. Cause of Actions
- Injunction
10. Practice Areas
- Commercial Litigation
- Insolvency
- Corporate Law
11. Industries
- Shipping
- Oil Trading
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Petroships Investment Pte Ltd v Wealthplus Pte Ltd | High Court | Yes | [2016] 2 SLR 1022 | Singapore | Cited with approval regarding the board of directors being 'effectively functus officio' upon the appointment of liquidators or judicial managers. |
| Re Union Accident Insurance Co. Ltd. | Not specified | Yes | [1972] 1 WLR 640 | England and Wales | Cited for the principle that directors retain residuary powers even after the appointment of a provisional liquidator, specifically the power to challenge the appointment. |
| Stephen, Petitioner | Not specified | Yes | [2012] BCC 537 | United Kingdom | Followed the approach in Union Accident, holding that directors retain the power to challenge the appointment of administrators. |
| Closegate Hotel Development (Durham) Ltd v McLean | English High Court | Yes | [2014] Bus LR 405 | England and Wales | Followed the approach in Stephen and Union Accident, confirming the directors' standing to challenge the appointment of administrators. |
| Sri Hartamas Development Sdn Bhd v MBF Finance Bhd | Supreme Court of Kuala Lumpur | Yes | [1991] 3 MLJ 325 | Malaysia | Cited Union Accident regarding the company's right to be heard and appeal against a winding-up order. |
| Taman Sungai Dua Development Sdn Bhd v Goh Boon Kim | Kuala Lumpur Court of Appeal | Yes | [1997] 2 MLJ 526 | Malaysia | Cited Sri Hartamas and Union Accident, granting a stay of powers of provisional liquidators pending appeal. |
| Shanks v Central Regional Council | Outer House of the Scottish Court of Session | Yes | [1987] SLT 410 | Scotland | Discussed the possibility of a conflict of interests arising, making it necessary for directors to institute proceedings even under receivership. |
| Re Lehman Brothers Europe Ltd (In Administration) | Not specified | Yes | [2018] Bus LR 439 | England and Wales | Discussed the powers of directors and shareholders to do things not inconsistent with administration, subject to administrator's consent. |
13. Applicable Rules
| Rule Name |
|---|
| Rules of Court (Cap 322, R 5, 2014 Rev Ed) O 18 r 19 |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Companies Act (Cap 50, 2006 Rev Ed) | Singapore |
| Companies Act (Cap 50, 2006 Rev Ed) s 227B(10)(b) | Singapore |
| Companies Act (Cap 50, 2006 Rev Ed) s 227G(2) | Singapore |
| Companies Act (Cap 50, 2006 Rev Ed) s 227G(3) | Singapore |
| Companies Act (Cap 50, 2006 Rev Ed) s 227G(4) | Singapore |
| Companies Act (Cap 50, 2006 Rev Ed) Eleventh Schedule | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Judicial management
- Interim judicial manager
- Striking out
- Legal standing
- Residuary powers
- Directors' powers
- Injunction
- Functus officio
15.2 Keywords
- Judicial management
- Injunction
- Striking out
- Directors' powers
- Standing
16. Subjects
- Insolvency
- Company Law
- Civil Procedure
17. Areas of Law
- Civil Procedure
- Companies Law
- Insolvency Law
- Judicial Management