Guan Chong Cocoa manufacturer Sdn Bhd v Pratiwi Shipping SA

CourtCourt of Three Judges (Singapore)
JudgeChao Hick Tin JA
Subject MatterMareva injunctions,Appeals,Requirements to be satisfied,Civil Procedure,Appellate court's review of trial judge's discretion,Factors indicating real risk of dissipation of assets
Plaintiff CounselLawrence Lee Mun Kong and Lisa Theng Siew Lian (Chui Sim Goh & Lim)
Date25 October 2002
Defendant CounselJoseph Tan Wee Kong (Kenneth Tan Partnership)
Docket NumberCivil Appeal No 80 of 2002
Published date19 September 2003

would involve a real risk that a judgment or award in favour of the plaintiffs would remain unsatisfied. Ninemia Maritime Corporation v Trave Schiffahrtsgesellschaft Gmb H [1983] 1 WLR 1412 (refd). (See [17])


The test is objective and the court is not concerned with motive or purpose as opposed to effect and there is no need to show an intention to dissipate assets. Felixstowe Dock & Rly Co v United States Lines Ltd [1989] QB 360 (refd) Ninemia Maritime Corporation v Trave Schiffahrtsgesellschaft Gmb H [1983] 1 WLR 1412 (refd) (See [17])


A mere assertion that there is a risk of dissipation is not good enough. There must be some solid evidence to substantiate the alleged risk. The evidence must reasonably have a bearing on the risk factor. The Niedersachsen [1984] 1 All ER 398 (refd). (See [18] – [19])


Where the defendant starts to put his property up for sale or where a company just ceases business, then unless an explanation is offered, it would prima facie be an act of dissipation. (See [19] – [20], [23] – [24], [26])


Another indicative factor is where the proceeds when paid to the defendants are in cash and can be easily disposed of or dissipated. (See [25])


The fact per se that the defendant is a foreign company cannot be a ground to allege that there would be a real risk of dissipation. This may however be different when taken into account along with other factors. (See [22])


The cross-undertaking in damages furnished by the appellants provided an adequate safeguard against the possibility that the injunction might be wrongly granted. (See [28])


This injunction granted is not of a world wide nature However, even if the injunction could be considered to be of a world wide nature, the injunction should still be granted as it did not appear that the respondents had other assets within the jurisdiction. Derby & Co Ltd v Weldon (Nos 3 & 4) [[1990] 1 Ch 65 (refd). (See [29])

Case(s) referred to

Hadmor Productions Ltd v Hamilton [1982] 2 WLR 322 (flld)

Ninemia Maritime Corporation v Trave Schiffahrtsgesellschaft Gmb H [1983] 1 WLR 1412 (refd)

Felixstowe Dock & Rly Co v United States Lines Ltd [1989] QB 360 (refd)

The Niedersachsen [1984] 1 All ER 398 (refd)

Derby & Co Ltd v Weldon (Nos 3 & 4) [1990] 1 Ch 65 (refd)

[Delivered by Chao Hick Tin JA]



1 This was an appeal against a decision of the High Court refusing the plaintiff-appellants’ application for a Mareva injunction. The action related to a claim for the loss suffered by the appellants on account of damage to cargo due to a fire on board a vessel of the respondents. We heard the appeal on 12 September 2002 and allowed it. We granted a Mareva injunction in respect of the proceeds from the sale of a specific asset. We now give our reasons.

The facts

2 The appellants were the lawful holders of two bills of lading, No. 01/PRT/PL/VII/01 and No. 02/PRT/PL/VII/01, dated 13 July 2001. The bills related to the carriage of a cargo of cocoa beans of a total weight of 609 m/t on board the vessel "PRATIWI" from Palu, Indonesia to Pasir Gudang, Johore. The appellants were the buyers of the cargo. The defendant-respondents were the owners of the vessel "PRATIWI".

3 Foong Sun Shipping (Pte) Ltd (Foong Sun) were the respondents’ agents and managers of the vessel. The bills of lading for this cargo were in Foong Sun’s standard form. The appellants had business dealings with Foong Sun from early 2001.

4 On 17 July 2001 a fire occurred on board the vessel. It started at the engine room. After the fire was put out, the vessel was towed to Banjarmasin, Indonesia. The fire so badly damaged the vessel that eventually it was declared a constructive total loss and had to be sold for scrap for only S$50,000. No insurance had been taken out in respect of its hull and machinery though there was a policy with China Insurance for third party liability for up to $500,000.

5 The cargo of cocoa beans was then transferred to another vessel "SUN RAY" which carried it to Pasir Gudang. Unfortunately, the cargo was found on arrival to have also been damaged by the fire. It was eventually disposed of in a salvage sale, causing the appellants a loss that was subsequently quantified at $904,164.22. In October 2001, the appellants had made a claim against the respondents for the loss, without stating a specific sum. On 31 October 2001, the respondents denied liability.

6 The appellants had insured the cargo with Malaysian Assurance Alliance Bhd (MAA). The appellants notified Foong Sun that they would be submitting their claim for the loss to MAA. But on 10 April 2002, MAA informed the appellants that MAA would be repudiating liability because there was a breach of the policy. The appellants informed Foong Sun of this development and thereafter, the appellants’ Finance and Trading Manager, Mr Hia Cheng, discussed the situation with the Manager of Foong Sun, Ms Elaine Quek. Both expressed a wish to resolve the matter amicably.

7 On 16 May 2002 the appellants’ solicitors made a claim of RM1,948,253 against China Insurance under their third party policy issued to the respondents. This communication was copied to Foong Sun.

8 On 18 June 2002, China Insurance denied liability through its solicitors, M/s Kenneth Tan Partnership (KTP), on the ground that the fire started without the fault of the owners. On the same day, the appellants’ solicitors directed the claim of the appellants to the respondents. The appellants also asked Foong Sun’s solicitors, KTP, for details of the owners of the PRATIWI, including its country of incorporation, registered address and assets. The details were not furnished.

9 The appellants instituted this action on 12 July 2002. Their claim was based on breach of contract and, in the alternative, on negligence. At the time, the searches carried out by the appellants indicated that the "PRATIWI" was owned by the respondents who had the...

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