Milaha Explorer Pte Ltd v Pengrui Leasing: Appeal Over Mareva Injunction in Ship Sale Dispute

Milaha Explorer Pte Ltd appealed against the decision of the High Court of Singapore to grant Pengrui Leasing (Tianjin) Co Ltd a Mareva injunction over Milaha's assets in aid of London arbitration proceedings concerning an alleged breach of a memorandum of agreement for the sale of a vessel. The Court of Appeal allowed Milaha's appeal on 7 September 2022, setting aside the Mareva injunction, finding that there was no real risk of dissipation of assets by Milaha.

1. Case Overview

1.1 Court

Court of Appeal of the Republic of Singapore

1.2 Outcome

Appeal Allowed

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Appeal regarding a Mareva injunction in a dispute over a ship sale agreement. The court allowed the appeal, finding no real risk of asset dissipation.

1.7 Decision Date

19 February 2023

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
Milaha Explorer Pte Ltd	Appellant	Corporation	Appeal Allowed	Won	Teo Jim Yang of Ascendant Legal LLC Jordan Tan of Audent Chambers LLC Victor Leong of Audent Chambers LLC Edgar Chin Ren Howe of Ascendant Legal LLC Ch’ng Cheng Yi Samantha of Ascendant Legal LLC Harpreet Singh Nehal SC of Audent Chambers LLC
Pengrui Leasing (Tianjin) Co Ltd	Respondent	Corporation	Appeal Dismissed	Lost	Goh Kok Leong of Ang & Partners
OHT Osprey AS	Other	Corporation	Neutral	Neutral	Shawn Lim Zi Xuan of Oon & Bazul LLP

3. Judges

Judge Name	Title	Delivered Judgment
Judith Prakash	Justice of the Court of Appeal	Yes
Tay Yong Kwang	Justice of the Court of Appeal	No

4. Counsels

Counsel Name	Organization
Teo Jim Yang	Ascendant Legal LLC
Jordan Tan	Audent Chambers LLC
Victor Leong	Audent Chambers LLC
Edgar Chin Ren Howe	Ascendant Legal LLC
Ch’ng Cheng Yi Samantha	Ascendant Legal LLC
Harpreet Singh Nehal SC	Audent Chambers LLC
Goh Kok Leong	Ang & Partners
Shawn Lim Zi Xuan	Oon & Bazul LLP

4. Facts

Milaha is a Singapore-incorporated company and a special purpose vehicle owning a vessel.
Pengrui is a Chinese company engaged in ship-owning and leasing.
The dispute arose from an alleged breach of a memorandum of agreement for the sale of the vessel.
Pengrui alleged Milaha breached the agreement because the vessel did not meet requirements.
Milaha cancelled the agreement, citing Pengrui's failure to effect agreed amendments.
Pengrui commenced arbitration proceedings in London.
Pengrui sought a Mareva injunction against Milaha's assets in Singapore.

5. Formal Citations

Milaha Explorer Pte Ltd v Pengrui Leasing (Tianjin) Co Ltd, Civil Appeal No 2 of 2022, [2023] SGCA 6

6. Timeline

Date	Event
2021-05-31	Memorandum of agreement signed
2021-08-02	Meeting regarding variations to the memorandum of agreement
2021-08-12	Milaha sent a letter cancelling the memorandum of agreement
2021-08-16	Pengrui replied stating that Milaha’s exercise of the buyer’s default clause was wrongful
2021-08-20	Pengrui filed OS 849 ex parte seeking a Mareva injunction against Milaha
2021-08-23	Ex parte Mareva Injunction in OS 849 was granted
2021-09-09	Milaha filed SUM 4226 to set aside the ex parte Mareva Injunction
2021-10-18	SUM 4226 was dismissed
2022-01-25	Transfer of the appeal to this court was allowed
2022-02-15	SUM 35 was dismissed
2022-09-07	Appeal heard and allowed
2023-02-20	Grounds of decision delivered

7. Legal Issues

Risk of Dissipation of Assets
- Outcome: The Court of Appeal held that there was no real risk of dissipation of assets by Milaha.
- Category: Substantive
- Sub-Issues:
  - Unjustified dealings with assets
  - Corporate structure as evidence of dissipation risk
- Related Cases:
  - [2015] 5 SLR 558
  - [2018] 2 SLR 159
  - [2018] Ch 297
  - [2010] 4 SLR 801
  - [1997] 3 SLR(R) 813
  - [2007] 1 AC 181
  - [2003] 1 SLR(R) 157

8. Remedies Sought

Mareva Injunction

9. Cause of Actions

Breach of Contract

10. Practice Areas

Commercial Litigation
Arbitration
Injunctions

11. Industries

Shipping
Finance

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
Pengrui Leasing (Tianjin) Co Ltd v Milaha Explorer Pte Ltd	High Court	Yes	[2022] SGHC 80	Singapore	Cited as the judgment under appeal, where the judge granted a Mareva injunction over the assets of the appellant.
Bouvier, Yves Charles Edgar and another v Accent Delight International Ltd and another and another appeal	Court of Appeal	Yes	[2015] 5 SLR 558	Singapore	Cited for the requirements for the grant of a Mareva injunction.
Milaha Explorer Pte Ltd v Pengrui Leasing (Tianjin) Co Ltd	High Court	Yes	[2022] 1 SLR 1147	Singapore	Cited for the procedural history of the case, specifically the transfer of the appeal to the Court of Appeal.
JTrust Asia Pte Ltd v Group Lease Holdings Pte Ltd and others	Court of Appeal	Yes	[2018] 2 SLR 159	Singapore	Cited for the essential test for determining whether there is a real risk that a judgment may not be satisfied because of a risk of unjustified dealings with assets.
Holyoake and another v Candy and others	Chancery Division	Yes	[2018] Ch 297	England and Wales	Cited for the principle that the mere fact that a defendant holds their assets through offshore structures or by way of special purpose vehicles is not in itself evidence of a risk of dissipation.
Lee Shieh-Peen Clement and another v Ho Chin Nguang and others	High Court	Yes	[2010] 4 SLR 801	Singapore	Cited for the principle that the purpose of a Mareva injunction is not to provide security to a litigant or to guard against potential insolvency of the counterparty.
Tribune Investment Trust Inc v Dalzavod Joint Stock Co	High Court	Yes	[1997] 3 SLR(R) 813	Singapore	Cited for the principle that the purpose of a Mareva injunction is to prevent the course of justice from being frustrated by a defendant’s deliberate actions which would have the effect of defeating wholly or in part any judgment or order which the claimant may thereafter obtain against the defendant.
Customs and Excise Commissioners v Barclays Bank plc	House of Lords	Yes	[2007] 1 AC 181	United Kingdom	Cited for the principle that the purpose of a Mareva injunction is to prevent the course of justice from being frustrated by a defendant’s deliberate actions which would have the effect of defeating wholly or in part any judgment or order which the claimant may thereafter obtain against the defendant.
Guan Chong Cocoa Manufacturer Sdn Bhd v Pratiwi Shipping SA	High Court	Yes	[2003] 1 SLR(R) 157	Singapore	Distinguished from the present case, where the court noted that there was no explanation offered by the respondent for the sale of its only vessel and its cessation of business, which supported the conclusion that there was a real risk of dissipation of assets.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute Name	Jurisdiction
No applicable statutes

15. Key Terms and Keywords

15.1 Key Terms

Mareva Injunction
Dissipation of Assets
Memorandum of Agreement
Special Purpose Vehicle
Buyer's Default Clause
Arbitration Clause
Vessel
Corporate Structure

15.2 Keywords

Mareva Injunction
Shipping
Contract
Arbitration
Singapore
Vessel
Dissipation of Assets

17. Areas of Law

Area Name	Relevance Score
Mareva Injunctions	95
Civil Procedure	70
Arbitration	50
Breach of Contract	40
Contract Law	40

16. Subjects

Civil Procedure
Shipping Dispute
Contract Law
Injunctions