National Bank of Oman SAOG Dubai Branch v Bikash Dhamala and others

• Jurisdiction: Singapore
• Judge: Tan Siong Thye J
• Judgment Date: 18 September 2020
• Neutral Citation: [2020] SGHC 199
• Court: High Court (Singapore)
• Docket Number: Suit No 515 of 2017
• Published date: 24 September 2020
• Year: 2020
• Hearing Date: 18 September 2020,06 August 2020,04 August 2020,05 August 2020
• Plaintiff Counsel: Chan Cong Yen Lionel (Chen Congren), Nora Jessica Chan Kai Lin, Beatrice Mathilda Yeo Li Hui (Yang Lihui) and Chua Yi Ling Ilene (Oon & Bazul LLP)
• Defendant Counsel: Kanthosamy Rajendran (RLC Law Corporation),Prasanna d/o T V Prabhakaran (Raj Prasanna & Partners),The fifth, sixth, seventh, eighth, ninth, eleventh, twelfth and thirteenth defendants absent and unrepresented.
• Subject Matter: Tort,Misrepresentation,Fraud and deceit,Conspiracy,Unlawful means conspiracy,Trusts,Constructive trusts,Restitution,Knowing receipt,Unjust enrichment,Civil Procedure,No case to answer
• Citation: [2020] SGHC 199

Tan Siong Thye J (delivering the judgment of the court ex tempore): Introduction

The plaintiff, National Bank of Oman SAOG Dubai Branch (“NBO”), is the Dubai branch and wholly owned subsidiary of the National Bank of Oman, a bank headquartered in the Sultanate of Oman.¹

The NBO listed 15 defendants in Suit No 515 of 2017 (the “Suit”). However, only the NBO’s claims against five defendants are the subject matters of this trial. These defendants are the second, fourth, tenth, 14th and 15th defendants. The second defendant, Kismat International FZC (“Kismat FZC”), is a company incorporated in Sharjah, United Arab Emirates (“UAE”). The owners of Kismat FZC are the first and third defendants, Bikash Dhamala (“Bikash”) and Prakash Dhamala (“Prakash”). They were the masterminds of a conspiracy to defraud the NBO on oil transactions. Bikash and Prakash had earlier consented to judgments entered against them. The fourth defendant, Kismat Singapore Pte Ltd (“Kismat Singapore”) is a Singapore-incorporated company. The tenth defendant, Hla Myint Zu Lwin (“Zu Lwin”), is a Myanmar national and had been the director and 10% shareholder of Kismat Singapore since 19 May 2017. The 14th defendant, Joshi Trading Pte Ltd (“Joshi Trading”), is a Singapore-incorporated company whose director and sole shareholder is Bikash’s and Prakash’s nephew, Abishek Joshi. The 15th defendant, Madhu Dewan (“Madhu”), is Prakash’s wife and a Nepalese national.² I shall refer to the abovementioned five defendants collectively as “the Defendants”.

Brief facts The Credit Facilities

The NBO offered an invoice discounting credit facility to Kismat FZC by way of a General Facilities Agreement and a facility letter, both of which were dated 12 February 2015 (“the Credit Facilities”).³ The Credit Facilities were for discounting invoices drawn in favour of Shell International Trading Middle East (Shell) (“Shell”) and BP Singapore Pte Ltd (“BP Singapore”). The expiry date indicated for the Credit Facilities was 31 January 2016.

On 21 August 2016 the NBO issued a facility letter that renewed the Credit Facilities. This letter also stipulated that in addition to BP Singapore and Shell, the Credit Facilities could also be used for discounting invoices in favour of Abu Dhabi National Oil Company, Emirates National Oil Co Pte Ltd and Total Singapore Pte Ltd.⁴ On 30 September 2015, the NBO issued another facility letter to Kismat FZC to extend the Credit Facilities to include letters of credit and loans against trust receipts.⁵

On 20 November 2016, Zu Lwin, acting on the instructions of Prakash, incorporated British Petroleum Company Pte Ltd (“BPCPL”). It is undisputed that BPCPL was incorporated to impersonate BP Singapore, the real McCoy which is a multinational oil trader.⁶ On 8 March 2016, Total Singapore Pte Ltd (“TSPL”) was similarly incorporated by Zu Lwin to impersonate a Singapore company related to another real McCoy, Total SA (“Total-related company”).⁷ Zu Lwin was the director of TSPL at all material times and she was also the director of BPCPL from 20 November 2015 to 21 March 2017.⁸

Between 1 March 2017 and 20 March 2017, the NBO disbursed four loans to Kismat FZC pursuant to the Credit Facilities (“the Loans”), as follows:⁹

S/N	Description of facility	Outstanding loan (excluding interest and commission)
1	Invoice discounting of invoice number 5421 issued by Kismat FZC to BPCPL (“Invoice 5421”).	US$3,824,787.94
2	Invoice discounting of invoice number 5492 issued by Kismat FZC to BPCPL (“Invoice 5492”).	US$3,485,001.63
3	Invoice discounting of invoice number 5548 issued by Kismat FZC to BPCPL (“Invoice 5548”).	US$2,640,000
4	Letter of credit based on invoice issued by Universal Lubricants FZE to Kismat FZC, and loan against trust receipt for invoice number 5529 issued by Kismat FZC to TSPL (“Invoice 5529”).	US$4,716,183.29
Total	US$14,665,972.86

For Invoices 5421, 5492 and 5548, the NBO received e-mails from BPCPL sent from the following e-mail address: finance.BP@se2bp.com, confirming that payment would be made by BPCPL to the NBO pursuant to the respective Invoices. For Invoice 5529, the NBO was copied in an e-mail from Prakash to TSPL instructing TSPL to remit payment to Kismat FZC’s account with the NBO. The e-mail address used for TSPL was Dong.Dan@sngtotal.com.¹⁰ Thus, the NBO was deceived into believing that it was dealing with the real McCoys.

Between 26 March 2017 and 16 April 2017, Kismat FZC defaulted on the Loans. There were several other transactions, besides the Loans, in which the NBO had granted loans under the Credit Facilities and these other loans were fully redeemed by Kismat FZC. The NBO is not pursuing these other loans in the present action as it had been paid for those loans. Thus, the NBO was not alerted to Bikash’s, Prakash’s and the Defendants’ conspiracy to defraud the NBO until the Loans were defaulted on and the conspiracy exposed.

The bank transfers, Mareva injunctions and gold bars

Between 1 March 2017 and 11 June 2017, Kismat Singapore received moneys via bank transfer from Kismat Energy DMCC (“Kismat Energy”), TSPL, Impex Gulf FZC (“Impex”) and Kismat FZC. Kismat Singapore, around the same period, also remitted various sums to TSPL, Universal Lubricants FZE (“Universal”), Impex, Bikash and Prakash. These numerous transfers ranged from US$12,000 to more than US$3m. On 21 April 2017, Kismat Singapore also purchased over US$6m worth of gold bars in ten equal transactions.¹¹

On 9 June 2017, Kan Ting Chiu J granted a Mareva injunction restraining Bikash, Kismat FZC, Prakash and BPCPL from disposing of, dissipating, pledging, charging, assigning or otherwise dealing with any of their assets worldwide up to the value of US$14,831,141.53 (“the First Mareva Injunction”).¹²

However, between 12 June 2017 and 15 June 2017, Kismat Singapore transferred a total of US$7,130,000 to Joshi Trading via four transactions. Between 15 June 2017 and 8 August 2017, Joshi Trading purchased US$5,222,362.88 worth of gold bars in eight transactions and remitted a total of US$35,000 to a bank account held by Madhu. On 23 August 2017, Zu Lwin leased 16 safe deposit boxes (“the Safe Deposit Boxes”) from Certis Cisco Security Pte Ltd (“Certis Cisco”), with Madhu listed as a second additional licensee. On 24 August 2017, Joshi Trading issued an invoice for the sale of 128kg of gold bars to Zu Lwin and Madhu for US$7,250,517.76.¹³

On 30 August 2017, Lai Siu Chiu SJ granted an order of committal against Bikash and Prakash for breaching the First Mareva Injunction, and sentenced them to four months’ imprisonment each. On 13 September 2017, Andrew Ang J granted a Mareva injunction against Kismat Singapore, Zu Lwin, Joshi Trading and Madhu restraining each of them from disposing of, dissipating, pledging, charging, assigning or otherwise dealing with any of their assets worldwide up to the value of US$14,831,141.53 (“the Second Mareva Injunction”).¹⁴

The next day, on 14 September 2017, Zu Lwin was served with the Second Mareva Injunction. The same day, Zu Lwin attempted to access the Safe Deposit Boxes to remove the gold bars. When Zu Lwin was denied access to the Safe Deposit Boxes, she asked Certis Cisco whether Madhu could access the Safe Deposit Boxes instead. Presently, there is an outstanding committal proceeding (Summons No 4223 of 2018) against Bikash, Prakash, Zu Lwin and Madhu for breach of the Second Mareva Injunction.

On 21 June 2018, the Sheriff seized the 128kg of gold bars contained in the Safe Deposit Boxes. The proceeds of sale of the gold bars amounted to approximately US$5,809,718 (after setting off the expenses incurred in the sale).¹⁵

The present claims

In the three years since the Suit was commenced, save for the two defendants against whom the NBO discontinued the Suit, namely Meenachi d/o Velu Krishnasamy and Vijayalakshmi Jagadeesh, the other defendants (including BPCPL, TSPL and their sole directors/shareholders) have had final or default judgment entered against them.¹⁶ In particular, final judgment by consent was entered against Bikash and Prakash on 5 April 2018.¹⁷ Hence, only the NBO’s claims against the Defendants remain up till today.

My decision The issues

The issues that arise for my determination are as follows: Whether Kismat FZC is liable for fraudulent misrepresentation in so far as it fraudulently misrepresented to the NBO that it transacted with and was owed genuine trade receivables by the major oil companies, BP Singapore, the Total-related company and/or their related entities. Whether the Defendants conspired by unlawful means to induce the NBO to extend the Loans to Kismat FZC and to receive, dissipate, conceal and/or wrongfully retain the moneys so disbursed, with the intention of thereby causing loss to the NBO. Whether Kismat Singapore, Joshi Trading and Madhu are constructive trustees of the moneys they received from Kismat FZC, which had been acquired pursuant to the conspiracy to defraud the NBO. Whether Kismat Singapore, Joshi Trading and Madhu are liable for knowing receipt of the moneys they received from Kismat FZC, which had been acquired pursuant to the conspiracy to defraud the NBO. Whether Kismat Singapore, Joshi Trading and Madhu are liable for unjust enrichment, having received moneys from Kismat FZC which had been acquired pursuant to the conspiracy to defraud the NBO.

Submission of no case to answer

Long before the commencement of the trial, the Defendants applied for Bikash and Prakash to give evidence by way of video-link in this trial. Bikash and Prakash did not wish to give evidence in person as they feared that they would be arrested upon arrival in Singapore as they had been sentenced to four months’ imprisonment for contempt of court. The NBO opposed the application and I ruled in favour of the NBO. The Defendants...