Pengrui Leasing v Milaha Explorer: Mareva Injunction & Arbitration Dispute

Pengrui Leasing (Tianjin) Co Ltd applied for a Mareva injunction against Milaha Explorer Pte Ltd to prevent the dissipation of assets related to a vessel sale agreement. The High Court of Singapore dismissed Milaha's application to set aside the injunction. The court found that Pengrui had a good arguable case and that there was a real risk of asset dissipation by Milaha, justifying the continuation of the injunction pending arbitration in London.

1. Case Overview

1.1 Court

General Division of the High Court

1.2 Outcome

Application dismissed.

1.3 Case Type

Arbitration

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Mareva injunction sought by Pengrui against Milaha over a vessel sale dispute. The court upheld the injunction, citing risk of asset dissipation.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Milaha Explorer Pte LtdRespondentCorporationApplication dismissedLost
Pengrui Leasing (Tianjin) Co LtdApplicantCorporationApplication dismissedNeutral

3. Judges

Judge NameTitleDelivered Judgment
Lai Siu ChiuSenior JudgeYes

4. Counsels

Counsel NameOrganization
Edgar Chin Ren HoweAscendant Legal LLC
Samantha Ch’ng Cheng YiAscendant Legal LLC
Henry Li-Zheng SetionoAng & Partners

4. Facts

  1. Pengrui and Milaha entered into a MOA for the sale of a vessel for US$26 million.
  2. Pengrui paid a deposit of US$5.2 million late, which Milaha accepted.
  3. Milaha tendered a Notice of Readiness, which Pengrui rejected due to concerns about the vessel's class certificate.
  4. Pengrui alleged the vessel did not have a clean class certificate due to a spud leg issue.
  5. Milaha claimed Pengrui was informed of the spud leg issue and offered a price reduction.
  6. Pengrui served a Notice of Cancellation, requesting a refund of the deposit.
  7. Milaha claimed the parties agreed to vary the terms of the MOA, which Pengrui denied.

5. Formal Citations

  1. Pengrui Leasing (Tianjin) Co Ltd v Milaha Explorer Pte Ltd, Originating Summons No 849 of 2021(Summons No 4226 of 2021), [2022] SGHC 80

6. Timeline

DateEvent
Milaha and Pengrui entered into a memorandum of agreement.
Deposit payment due date.
Pengrui paid the deposit.
Addendum No 1 was created.
Milaha tendered the Notice of Readiness, which Pengrui rejected.
Addendum No 2 was created.
Alleged meeting between Chambers and Zhang.
Chambers sent Addendum No 2 to Zhang.
Pengrui gave Notice of Cancellation.
Milaha sent a letter stating the parties had agreed to vary the terms of the MOA.
Pengrui responded to Milaha's letter, denying any agreement to vary the MOA.
Milaha responded to Pengrui's letter, raising further allegations.
Pengrui responded to Milaha's letter, denying the allegations.
Court granted the Mareva Injunction.
Pengrui commenced arbitration proceedings in London against Milaha.
Chambers filed an affidavit in support of the Application.
Pengrui filed an affidavit from its broker Wang.
Court heard the Application.
Court dismissed the Application.

7. Legal Issues

  1. Full and Frank Disclosure
    • Outcome: The court found that there was no failure to make full and frank disclosure of material facts.
    • Category: Procedural
    • Sub-Issues:
      • Non-disclosure of background and context of discussions
      • Non-disclosure of discussions regarding vessel's condition
      • Misleading the court about attendance at meetings
  2. Risk of Dissipation of Assets
    • Outcome: The court found that there was a real risk of dissipation of assets by Milaha.
    • Category: Substantive
  3. Validity of Notice of Readiness
    • Outcome: The court determined that the disputed Notice of Readiness is a matter to be determined at the arbitration proceedings.
    • Category: Substantive

8. Remedies Sought

  1. Mareva Injunction
  2. Return of Deposit

9. Cause of Actions

  • Breach of Contract

10. Practice Areas

  • Commercial Litigation
  • Arbitration

11. Industries

  • Shipping
  • Finance

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Bouvier, Yves Charles Edgar and another v Accent Delight International Ltd and another and another appealCourt of AppealYes[2015] 5 SLR 558SingaporeCited for the tests to determine whether to grant a Mareva injunction.
American Cyanamid Co v Ethicon LtdN/AYes[1975] AC 396England and WalesCited for the principle of a 'good arguable case' in injunction applications.
JTrust Asia Pte Ltd v Group Lease Holdings Pte and OthersCourt of AppealYes[2018] 2 SLR 159SingaporeCited for the principle that an applicant for an ex parte Mareva injunction is required to give full and frank disclosure of material facts.
Multi-Code Electronics Industries (M) Bhd and another v Toh Chun Toh Gordon and othersN/AYes[2009] 1 SLR 1000N/ACited for the principle that non-disclosure per se is not fatal in an application for an ex parte Mareva injunction.
UCO Bank v Golden View Maritime Pte LtdHigh CourtYes[2003] SGHC 271SingaporeCited for the principle that the fact that a company is a special purpose vehicle and a one-ship company in itself is no evidence of risk of dissipation.
Quek Jin Oon v Goh Chin SoonHigh CourtYes[2020] SGHC 246SingaporeCited for the principle that the fact that a company is a special purpose vehicle and a one-ship company in itself is no evidence of risk of dissipation.
Guan Chong Cocoa Manufacturer Sdn Bhd v Pratiwi Shipping SAN/AYes[2003] 1 SLR(R) 157N/ACited for the requirement of 'solid evidence' to demonstrate that there is a real risk of dissipation of assets.

13. Applicable Rules

Rule Name
Order 69A, Rule 3 of the Rules of Court (Cap 322, Rule 5)

14. Applicable Statutes

Statute NameJurisdiction
International Arbitration Act 1994Singapore
Arbitration Act 1996United Kingdom
Supreme Court of Judicature Act (Cap 322, 2007 Rev Ed)Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Mareva Injunction
  • Memorandum of Agreement
  • Notice of Readiness
  • Class Certificate
  • Spud Leg
  • Addendum
  • Deposit
  • Dissipation of Assets
  • Arbitration

15.2 Keywords

  • Arbitration
  • Injunction
  • Shipping
  • Contract
  • Vessel
  • Sale
  • Singapore

17. Areas of Law

Area NameRelevance Score
Mareva Injunction90
Injunctions85
Arbitration75
International Arbitration75
Full and Frank Disclosure70
Contract Law60
Breach of Contract60
Commercial Law50
Civil Procedure40

16. Subjects

  • Arbitration
  • Contract Law
  • Shipping Law
  • Injunctions