Standard Chartered Bank v Maersk Tankers: Misdelivery, Bills of Lading & Trade Finance

In Standard Chartered Bank (Singapore) Ltd v Maersk Tankers Singapore Pte Ltd, the High Court of Singapore addressed an appeal concerning the misdelivery of gasoil. Standard Chartered Bank, the plaintiff, financed Hin Leong Trading's purchase of gasoil, which Maersk Tankers, the defendant, delivered without the presentation of the Bills of Lading. The intervener was Winson Oil Trading Pte Ltd. The court allowed the appeal, finding triable issues regarding causation, specifically whether the misdelivery caused the plaintiff's loss, considering the financing arrangements and knowledge of the gasoil's whereabouts.

1. Case Overview

1.1 Court

GENERAL DIVISION OF THE high court of the republic of singapore

1.2 Outcome

Appeal Allowed

1.3 Case Type

Admiralty

1.4 Judgment Type

Judgment

1.5 Jurisdiction

Singapore

1.6 Description

Singapore court addresses misdelivery claim where Standard Chartered Bank financed Hin Leong Trading's gasoil purchase. The court allowed the appeal.

1.7 Decision Date

26 September 2022

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
Winson Oil Trading Pte Ltd	Intervener	Corporation	Neutral	Neutral	Bazul Ashhab bin Abdul Kader of Oon & Bazul LLP Prakaash s/o Paniar Silvam of Oon & Bazul LLP Levin Lin Lok Yan of Oon & Bazul LLP Tan Yu Hang of Oon & Bazul LLP
Standard Chartered Bank (Singapore) Limited	Plaintiff, Respondent	Corporation	Appeal Allowed	Lost	Daryll Richard Ng of Virtus Law LLP Lauren Tang Hui Jing of Virtus Law LLP Ooi Chit Yee of Virtus Law LLP
Maersk Tankers Singapore Pte Ltd	Defendant, Appellant	Corporation	Appeal Allowed	Won	Tan Wee Kheng Kenneth Michael of Kenneth Tan Partnership Khoo Ching Shin Shem of Focus Law Asia LLC Teo Jia Hui Veronica of Focus Law Asia LLC Siew Jowen of Focus Law Asia LLC

3. Judges

Judge Name	Title	Delivered Judgment
Ang Cheng Hock	Judge of the High Court	Yes

4. Counsels

Counsel Name	Organization
Bazul Ashhab bin Abdul Kader	Oon & Bazul LLP
Prakaash s/o Paniar Silvam	Oon & Bazul LLP
Levin Lin Lok Yan	Oon & Bazul LLP
Tan Yu Hang	Oon & Bazul LLP
Daryll Richard Ng	Virtus Law LLP
Lauren Tang Hui Jing	Virtus Law LLP
Ooi Chit Yee	Virtus Law LLP
Tan Wee Kheng Kenneth Michael	Kenneth Tan Partnership
Khoo Ching Shin Shem	Focus Law Asia LLC
Teo Jia Hui Veronica	Focus Law Asia LLC
Siew Jowen	Focus Law Asia LLC

4. Facts

Standard Chartered Bank provided trade financing for Hin Leong Trading (HLT).
HLT entered into a contract with Winson Oil Trading (WOT) for the purchase of 750,000 bbls of Gasoil.
Maersk Tankers Singapore was the owner of the vessel “MAERSK PRINCESS”.
WOT chartered the Vessel from the defendant to carry the 750,000 bbls of gasoil.
The gasoil was shipped on board the Vessel, and bills of lading were issued.
The Vessel arrived at Universal Terminal, Singapore, and the gasoil was discharged.
Delivery to HLT was done without the production of the original Bills of Lading.
HLT applied to the plaintiff for an issuance of a letter of credit in favour of WOT.
The plaintiff issued the letter of credit in favour of WOT.
WOT presented documents to the plaintiff, including a letter of indemnity to HLT.
The plaintiff paid WOT the sum of US$6,129,977.22.
WOT delivered the full set of the original Bills of Lading to the plaintiff.
The plaintiff demanded delivery of the Gasoil Cargo from the defendant.
The plaintiff commenced proceedings against the defendant for breach of contract of carriage.

5. Formal Citations

Standard Chartered Bank (Singapore) Ltd v Maersk Tankers Singapore Pte Ltd, Admiralty in Personam No 115 of 2021 (Registrar’s Appeal No 108 of 2022), [2022] SGHC 242

6. Timeline

Date	Event
2020-02-12	HLT entered into a contract with WOT for the purchase of 750,000 bbls of Gasoil.
2020-02-17	Addendum to the contract between HLT and WOT.
2020-02-21	750,000 bbls of gasoil were shipped on board the Vessel.
2020-02-27	The Vessel arrived at Universal Terminal, Singapore.
2020-02-28	Discharge of the 750,000 bbls of gasoil took place.
2020-02-29	Discharge of the 750,000 bbls of gasoil was completed.
2020-03-03	HLT applied to the plaintiff for an issuance of a letter of credit.
2020-03-04	The letter of credit was issued by the plaintiff in favour of WOT.
2020-03-05	WOT's commercial invoice and letter of indemnity to HLT.
2020-03-12	WOT presented documents to the plaintiff.
2020-03-27	The plaintiff paid WOT the sum of US$6,129,977.22.
2020-08-07	WOT delivered the full set of the original Bills of Lading to the plaintiff.
2020-11-19	The plaintiff wrote to the defendant to demand delivery of the Gasoil Cargo.
2021-02-26	The plaintiff and WOT entered into an escrow agreement.
2021-10-26	The plaintiff commenced proceedings against the defendant.
2022-07-22	Judgment reserved.
2022-09-27	Judgment issued.

7. Legal Issues

Misdelivery
- Outcome: The court found that there were triable issues regarding whether the misdelivery caused the plaintiff's loss.
- Category: Substantive
- Sub-Issues:
  - Breach of contract of carriage
  - Causation of loss
Lawful Holder of Bills of Lading
- Outcome: The court did not make a determination on whether the plaintiff was a lawful holder of the Bills of Lading.
- Category: Substantive
Causation
- Outcome: The court found that there were triable issues regarding whether the defendant's misdelivery caused the plaintiff's loss.
- Category: Substantive
- Sub-Issues:
  - Proximate cause
  - Effective cause

8. Remedies Sought

Damages

9. Cause of Actions

Breach of Contract of Carriage
Conversion

10. Practice Areas

Commercial Litigation
Admiralty Litigation
Trade Finance
Shipping
Bills of Lading

11. Industries

Shipping
Finance
Oil and Gas

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
Standard Chartered Bank v Dorchester LNG (2) Ltd (The “Erin Schulte”)	N/A	Yes	[2015] 1 Lloyd’s Rep 97	N/A	Cited for the principle that there must be a voluntary and unconditional transfer of possession by the holder of the Bills of Lading to the indorsee and an unconditional acceptance by the indorsee.
UCO Bank v Golden Shore Transportation Pte Ltd	N/A	Yes	[2006] 1 SLR(R) 1	Singapore	Cited for the principle that there was no evidence that the plaintiff was acting dishonestly.
The “Yue You 902” and another matter	N/A	Yes	[2020] 3 SLR 573	Singapore	Cited for the established law that bills of lading would only become spent upon delivery of the cargo to the lawful holder of the bills of lading.
Lim Oon Kuin and others v Ocean Tankers (Pte) Ltd (interim judicial managers appointed)	N/A	Yes	[2022] 1 SLR 434	Singapore	Cited for the principle that summary judgment will only be granted if the court is satisfied that all the defences raised by the defendant to resist the claim are “wholly unsustainable”, as a matter of fact and law.
M2B World Asia Pacific Pte Ltd v Matsumura Akihiko	N/A	Yes	[2015] 1 SLR 325	Singapore	Cited for the principle that the defendant must establish that there is a fair or reasonable probability that he has a real or bona fide defence.
Abdul Salam Asanaru Pillai (trading as South Kerala Cashew Exporters) v Nomanbhoy & Sons Pte Ltd	N/A	No	[2007] 2 SLR(R) 856	Singapore	Cited regarding conditional leave to defend.
Ling Yew Kong v Teo Vin Li Richard	N/A	No	[2014] 2 SLR 123	Singapore	Cited regarding conditional leave to defend.
Fimbank Plc v Discover Investment Corporation (The “Nika”)	N/A	No	[2021] 1 Lloyd’s Rep 109	N/A	Cited for the principle that the claimant bank did not have a good arguable case that the defendant was liable to it for substantial damages because the claimant bank had no claim for misdelivery.
UniCredit Bank AG v Euronav NV (The Sienna)	N/A	No	[2022] EWHC 957 (Comm)	N/A	Cited for the principle that any breach by the defendant shipowner of the bill of lading contract by discharging the financed cargo, without production of the bill of lading, did not cause the loss suffered by the claimant.
The “STI Orchard” (Winson Oil Trading Pte Ltd, intervener)	N/A	No	[2022] SGHCR 6	Singapore	Cited for the triable issue of whether the financing and security arrangements between OCBC and HLT were such that OCBC actually regarded the bills of lading as its security for financing the purchase of the gasoil.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute Name	Jurisdiction
Carriage of Goods by Sea Act 1992 (c 50) (UK)	United Kingdom
Bills of Lading Act 1992 (2020 Rev Ed)	Singapore

15. Key Terms and Keywords

15.1 Key Terms

Bills of Lading
Letter of Credit
Misdelivery
Trade Finance
Gasoil Cargo
Letter of Indemnity
Contract of Carriage
Security
Causation
Hin Leong Trading
Winson Oil Trading
Maersk Tankers
Universal Terminal

15.2 Keywords

Admiralty
Shipping
Trade Finance
Bills of Lading
Misdelivery
Singapore
Contract Law

17. Areas of Law

Area Name	Relevance Score
Bills of Lading Act	90
Summary Judgement	80
Admiralty and Maritime Law	75
Shipping Law	70
Contract Law	65
Civil Litigation	60

16. Subjects

Admiralty
Shipping
Trade Finance
Contract Law
Civil Procedure