A Jeil International-owned chemical/product tanker has been arrested in Singapore over a $1m cargo claim.

The South Korean shipowner’s 11,600-dwt chemical/product tanker Jeil Crystal (built 1999) was shackled on Sunday after a party described as the “owner of cargo lately laden onboard” filed a claim against it.

The identity of that entity was not disclosed, although the High Court of Singapore’s cause book indicated that Sumitomo Mitsui Banking Corp had recently engaged in legal proceedings against the “owner and/or demise charterer” of the vessel that have now been declared as concluded.

A growing number of tankers have been arrested in recent months over cargo claims involving vessels that discharged their cargoes against letters of indemnity provided by oil traders that had issued them as an alternative to the bills of lading that are usually held by the financiers of the cargo until payment is made.

The practice, which commodities lawyers have described as commonplace, has led to serious legal implications for vessel owners after many traders that issued them ran into financial difficulties following the collapse of oil prices towards the beginning of the year.

The letters of indemnity became worthless after the traders went bust.

Preliminary court documents did not indicate whether this scenario applied in the case of the Jeil Crystal’s arrest. TradeWinds has reached out to Jeil International for comment.

More prominent shipowners have secured the release of their ships caught in such disputes by putting up security or through other legal means. One high-profile case this year involving Cido Shipping's 319,000-dwt tanker Miracle Hope (built 2019) saw court battles in Singapore and London involving Trafigura, Gunvor’s Clearlake Shipping and Petrobras before it was resolved.

However, smaller owners with more limited access to security or legal clout have not been so lucky.

Indonesian owner Scorpa Pranedya’s 19,000-dwt chemical/product tanker Spas Tiga (built 2014) continues to languish under arrest in Singapore more than three months after the Hong Kong & Shanghai Banking Corp filed a $6m cargo claim against it.

TradeWinds was unable to reach the Jakarta-based company for comment.