Marina Towage Pte Ltd v Chin Kwek Chong: Fraudulent Trading & Company Director Liability

The Appellate Division of the High Court dismissed Marina Towage Pte Ltd's appeal against Chin Kwek Chong. The appeal concerned the dismissal of Marina Towage's claim that Chin Kwek Chong was personally liable for Island Logistic Pte Ltd's debt under s 340(1) of the Companies Act, alleging fraudulent trading. The court found no evidence of fraudulent intent when Island Logistic entered into charter agreements with Marina Towage. The court ordered the appellant to pay the respondent costs of the appeal fixed at $40,000 inclusive of disbursements.

1. Case Overview

1.1 Court

Appellate Division of the High Court

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 dismissed; the court found no fraudulent intent by the respondent in a case concerning fraudulent trading under the Companies Act.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Marina Towage Pte LtdAppellant, PlaintiffCorporationAppeal DismissedLost
Chin Kwek ChongRespondent, DefendantIndividualAppeal DismissedWon
Chin Chee ChienDefendantIndividual
Island Logistic Pte LtdOtherCorporation
Blue Metal Investments Pte LtdOtherCorporation

3. Judges

Judge NameTitleDelivered Judgment
Belinda Ang Saw EanJudge of the Appellate DivisionNo
Woo Bih LiJudge of the Appellate DivisionNo
Chua Lee MingJudge of the High CourtYes

4. Counsels

Counsel NameOrganization
Clarence Lun YaodongFervent Chambers LLC
Simone Bamapriya ChettiarFervent Chambers LLC
Chua Qin EnFervent Chambers LLC
Andrew Chan Chee YinAllen & Gledhill LLP
Anil Murkoth ChangarothChangAroth Chambers LLC
Lim Muhammad SyafiqChangAroth Chambers LLC

4. Facts

  1. Appellant bareboat chartered two vessels to Island Logistic Pte Ltd in July 2015.
  2. Island Logistic Pte Ltd subchartered the vessels to Blue Metal Investments Pte Ltd.
  3. Island Logistic Pte Ltd depended on Blue Metal Investments Pte Ltd's payments to pay the appellant.
  4. Disputes arose between Blue Metal Investments Pte Ltd and Island Logistic Pte Ltd regarding the condition of the vessels.
  5. Blue Metal Investments Pte Ltd stopped paying hire to Island Logistic Pte Ltd in February 2016.
  6. Island Logistic Pte Ltd stopped paying hire to the appellant.
  7. The appellant secured two awards against Island Logistic Pte Ltd in November 2017.

5. Formal Citations

  1. Marina Towage Pte Ltd v Chin Kwek Chong, Civil Appeal No 103 of 2021, [2021] SGHC(A) 24

6. Timeline

DateEvent
Appellant bareboat chartered two vessels to Island Logistic Pte Ltd.
Hire period commenced for the two vessels under both the main charterparties and the subcharterparties.
BMI stopped paying the hire due to IL under the subcharterparties.
Disputes between BMI and IL escalated; BMI sued the appellant in the Maldives.
Appellant commenced an arbitration against IL under each charterparty.
Appellant secured two awards against IL.
Appellant commenced action against the respondent and his nephew.
The Judge found that IL had no intent to defraud the appellant when it entered into the main charterparties with the appellant in July 2015.
Appeal heard.
Appeal dismissed.

7. Legal Issues

  1. Fraudulent Trading
    • Outcome: The court found no evidence of fraudulent intent on the part of the respondent.
    • Category: Substantive
    • Sub-Issues:
      • Intent to defraud
      • Dishonest intent
      • Reckless indifference
    • Related Cases:
      • [2005] 3 SLR(R) 263
      • [1984] QB 675

8. Remedies Sought

  1. Declaration of personal liability for judgment debt

9. Cause of Actions

  • Breach of Contract
  • Fraudulent Trading

10. Practice Areas

  • Commercial Litigation

11. Industries

  • Shipping

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Marina Towage Pte Ltd v Chin Kwek Chong and anotherHigh CourtYes[2021] SGHC 81SingaporeCited for the Judge's finding that IL had no intent to defraud the appellant when it entered into the main charterparties.
Tang Yoke Kheng (trading as Niklex Supply Co) v Lek Benedict and othersCourt of AppealYes[2005] 3 SLR(R) 263SingaporeCited to explain that an intention not to pay as well as knowledge that there was no reasonable prospect of one’s ability to pay are both just instances in which fraud might manifest itself.
R v GranthamQueen's BenchYes[1984] QB 675England and WalesCited as an instance in which fraud might manifest itself.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
Companies Act (Cap 50, 2006 Rev Ed)Singapore
Arbitration Act (Cap 10, 2002 Rev Ed)Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Fraudulent trading
  • Intent to defraud
  • Companies Act
  • Bareboat charter
  • Subcharter
  • Insolvency
  • Reckless indifference

15.2 Keywords

  • Fraudulent trading
  • Companies Act
  • Director liability
  • Charterparty
  • Singapore
  • Appeal

17. Areas of Law

Area NameRelevance Score
Fraudulent Trading80
Company Law75
Insolvency Law60
Breach of Contract50
Fraud and Deceit40
Charterparties35
Contract Law30
Arbitration20

16. Subjects

  • Company Law
  • Contract Law
  • Civil Litigation