The UK high court has reaffirmed anti-suit injunctions granted to Swiss trader Gunvor and its subsidiary Clearlake Shipping against any claims that may arise in Singapore from a Chinese oil smuggling row.
Andrew Burrows QC, sitting as a judge, turned down Singapore shipowner Xiang Da Marine's bid to overturn the injunctions awarded to the companies in the same court in April.
The injunctions are restraining proceedings brought in Singapore by Xiang Da against Clearlake and Gunvor Singapore.
The legal action arose in turn from a claim against Xiang Da brought in Singapore by cargo buyer China-Base Ningbo Group, which has now been discontinued.
But Xiang Da's proceedings remain extant, Burrows said.
The dispute involved a voyage from Subic Bay in the Philippines to Nansha in China in 2016.
Disputed cargo
Xiang Da's 46,000-dwt tanker Chang Hang Guang Rong (built 2007) discharged 40,000 tonnes of oil for China Base, but a portion of this was later impounded by customs authorities on the grounds that, contrary to what was stated in the shipping documents, the cargo did not originate from the port of Subic Bay.
The charter contracts specified exclusive jurisdiction in England if any dispute arose.
Xiang Da had wanted to amend its statement of claim, dropping all legal action in Singapore except a claim for an indemnity pursuant to a letter of indemnity it claimed was issued by Clearlake and enforceable by Xiang Da; and a claim in tort for fraudulent and/or negligent misrepresentation against Gunvor.
But there has been no finding by the court or any other court that Clearlake had issued any letters of indemnity enforceable by Xiang Da, and Clearlake has not admitted to any liability.
Burrows ruled that all disputes must be settled in England. No findings of oil smuggling were made by the judge.
Kennedys Law, acting for Clearlake, said on its website: "The case serves as a useful reminder of the principles applicable to the granting of anti-suit injunctions and of the full scope of the court’s jurisdiction, extending as it does to granting injunctive relief to non-parties to jurisdiction agreements in appropriate circumstances.
"It also serves to illustrate that the courts are likely to be unsympathetic to the manipulation of claims in an attempt to circumvent jurisdiction agreements."
Wider allegations
The case is part of wider legal action involving alleged oil smuggling.
The judgement said there had been proceedings in China against Yin Dikun, former managing director of Gunvor in Singapore, in relation to shipments of light cycle oil by Gunvor on 36 voyages between August 2014 and May 2016.
Yin was found guilty of smuggling by making false declarations about the place of origin of the oil being shipped.
He was imprisoned for 12 years and there has been a financial confiscation order against Gunvor requiring it to pay over $54.9m of evaded tax.
"But Gunvor was not a party in those criminal proceedings and submits that the Guangzhou judgement imposes no obligation upon it," Burrows said.
Pan Ocean also involved
South Korean shipowner Pan Ocean Shipping and Gunvor were also facing fraud allegations in the Singapore High Court from former clients in China, which sought to arrest a Pan Ocean tanker involved in an alleged cargo smuggling and tax evasion scheme.
But China Base has also discontinued proceedings against Pan Ocean, and no allegations of oil smuggling, fraud or other wrongdoing are being maintained by China Base.
Gunvor, which has previously denied the allegations, told TradeWinds earlier this year that neither it nor Clearlake had been charged, and a spokesman argued that the company is not "facing allegations" in the Singapore case because the trader is not a party to the case.
Gunvor said it views the situation as “purely political”.
“Philippines customs authorities have confirmed relevant customs documentation was issued in full compliance with applicable customs rules and regulations,” a Gunvor spokesman said. “Furthermore, Gunvor is not the importer of record into China and is therefore never the party liable to pay duties.”
