Milaha Explorer Pte Ltd v Pengrui Leasing (Tianjin) Co Ltd
Jurisdiction | Singapore |
Judge | Judith Prakash JCA |
Judgment Date | 20 February 2023 |
Neutral Citation | [2023] SGCA 6 |
Court | Court of Appeal (Singapore) |
Docket Number | Civil Appeal No 2 of 2022 |
Hearing Date | 07 September 2022 |
Citation | [2023] SGCA 6 |
Year | 2023 |
Plaintiff Counsel | Harpreet Singh Nehal SC, Jordan Tan, Victor Leong (Audent Chambers LLC) (instructed), Edgar Chin Ren Howe, Ch'ng Cheng Yi Samantha, and Teo Jim Yang (Ascendant Legal LLC) |
Defendant Counsel | Goh Kok Leong (Ang & Partners),Shawn Lim Zi Xuan (Oon & Bazul LLP) |
Published date | 24 February 2023 |
The present appeal arises from the decision of the judge below (the “Judge”) in
On 7 September 2022, we heard and allowed the appeal and set aside the Mareva injunction granted by the Judge. These are the detailed grounds of our decision.
Factual backgroundOn appeal, the parties only disputed a single issue, that is, whether there was a real risk of dissipation of assets by the appellant (see below at [22]). We therefore set out only the facts that are relevant to this issue. The complete facts are set out in the Judgment.
The partiesThe appellant, Milaha Explorer Pte Ltd (“Milaha”), is a Singapore-incorporated company. It is a special purpose vehicle incorporated for the purpose of owning its sole asset, a vessel called the “Milaha Explorer” (the “Vessel”). Milaha has a paid-up capital of $50,000 and is fully owned by a company called Milaha Offshore Holding Company Pte Ltd (“Milaha Offshore”), which is in turn fully owned by Milaha Offshore Support Services Co W.L.L. (“Milaha Support”). Milaha’s ultimate beneficial owner is Qatari Navigation QPSC (“Qatari Navigation”), which owns 99.5% of the shares in Milaha Support. Qatari Navigation is a public company listed on the Qatar stock exchange.
The respondent, Pengrui Leasing (Tianjin) Co Ltd (“Pengrui”), is a Chinese company engaged in the business of ship-owning and leasing.
The memorandum of agreementThe dispute between the parties relates to the alleged breach of a memorandum of agreement (“MOA”) signed by the parties on 31 May 2021. Under the MOA, Milaha agreed to sell the Vessel to Pengrui for US$26m.
We highlight two relevant clauses in the MOA:
A dispute over the MOA arose shortly after it was signed. In late July 2021, Pengrui alleged that Milaha had breached the MOA because the Vessel did not meet certain requirements stipulated in the MOA. There was then a meeting on 2 August 2021 (the “2 August 2021 meeting”). Certain variations to the MOA were allegedly discussed at this meeting. In these proceedings, Pengrui denied that its representative attended the 2 August 2021 meeting. It therefore denied that there were any discussions between the parties regarding the variation of the MOA on 2 August 2021.
Milaha, on the other hand, alleged that Pengrui was in breach of the MOA for failing to effect the amendments discussed and agreed to during the 2 August 2021 meeting. Milaha took the position that Pengrui had wrongly repudiated the contract by its failure. Milaha therefore sent Pengrui a letter on 12 August 2021 (the “12 August 2021 letter”) cancelling the MOA. Milaha also highlighted in the 12 August 2021 letter its contractual right under the buyer’s default clause to sell the Vessel to someone else upon Pengrui’s breach of contract. Pengrui replied on 16 August 2021 stating that Milaha’s exercise of the buyer’s default clause was wrongful.
Pengrui then commenced arbitration proceedings in London (the “London arbitration”) pursuant to the arbitration clause. Thus, the factual disputes are to be resolved in the London arbitration. We emphasise that in setting out the factual background to this appeal, we are
The procedural history leading to this appeal was somewhat involved. On 20 August 2021, Pengrui filed HC/OS 849/2021 (“OS 849”)
Milaha then appealed against the Judge’s decision. However, the appeal was initially filed to the Appellate Division of the High Court. Thereafter, Milaha filed CA/OS 31/2021 to transfer the appeal to this court. Pengrui objected to the transfer and filed AD/SUM 35/2021 (“SUM 35”) to strike out the Notice of Appeal. The transfer of the appeal to this court was allowed on 25 January 2022: see
The dispute below centred around whether the requirements for the grant of a Mareva injunction set out in
In response to Pengrui’s argument that all the above requirements were satisfied, Milaha argued that Pengrui had failed to give full and frank disclosure of material facts and therefore, the Mareva injunction should be set aside.
The Judge held that all the requirements in
In support of its argument that there was a real risk of dissipation of assets, Pengrui pointed to the corporate structure of Milaha. Specifically, Pengrui highlighted that Milaha had a paid-up capital of only $50,000 and its sole shareholder is Milaha Offshore. It, however, recognised that Milaha’s ultimate owner is Qatari Navigation. Pengrui also pointed out that Milaha had suffered accumulated losses totalling over US$12m as of 31 December 2019. Milaha was only able to stay afloat due to financial support from Qatari Navigation.
In response, Milaha submitted that the mere fact that it was a special purpose vehicle and a one-ship company did not evince a real risk of dissipation. Further, Pengrui knew that Milaha’s ultimate owner is Qatari Navigation, which is a listed company in Qatar.
The Judge held that there was a real risk that Milaha would dissipate its assets for the following reasons:
The Judge also dealt with Pengrui’s argument that there was dishonesty on Milaha’s part in concealing material facts relating to the Vessel. Pengrui submitted that such dishonesty further supported the conclusion that there was a real risk of dissipation of assets. The Judge disregarded Pengrui’s (hotly contested) allegations of dishonesty on the part of Milaha, citing [66] of
The Judge also noted that when...
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Milaha Explorer Pte Ltd v Pengrui Leasing (Tianjin) Company Ltd
...Explorer Pte Ltd and Pengrui Leasing (Tianjin) Co Ltd [2023] SGCA 6 Judith Prakash JCA and Tay Yong Kwang JCA Civil Appeal No 2 of 2022 Court of Appeal Civil Procedure — Mareva injunctions — Allegations of dishonesty — Appellant alleging respondent acted dishonestly in concealing material f......