South Korean owner Pan Ocean has failed in a bid to halt legal proceedings in Singapore in a protracted wrangle over alleged oil smuggling.
Christopher Hancock QC, sitting as a UK high court judge, ruled there was no exclusive jurisdiction clause (ECJ) in favour of the English courts in the tanker case.
And he rejected an anti-suit injunction (ASI) application by Pan Ocean to prevent the multi-million-dollar Singapore proceedings continuing.
Hancock said the facts of the case are that in 2016 a sale contract was entered into between trader Gunvor and China-Base Group for 38,000 tonnes of light cycle oil.
China-Base entered into that contract as agent of Beihai Xinan Petrochemical.
Gunvor's Clearlake Shipping already had a charter in place with Pan Ocean, demise charterer of the 46,000-dwt Grand Ace12 (built 2008).
The vessel loaded about 36,360 tonnes of light cycle oil and gas oil at Zhoushan, China and Taichung, Taiwan.
Pan Ocean issued bills of lading which accurately reflected the load ports and nature of the cargo.
The tanker then proceeded to Subic Bay in the Philippines, where it took on a further 50 tonnes of gasoil, for which no separate bill of lading was issued.
"In accordance with Clearlake's instructions, it is said that an agent of Pan Ocean issued switch bills of lading dated 7 May 2016 falsely naming the load port for the entire cargo as Subic Bay, Philippines, and mis-describing the entire cargo as light cycle oil," the judgement said.
Cargo impounded
The cargo was discharged at Nansha in China.
China-Base/Beihai sought to obtain customs clearance for the cargo using documents which mis-described the load port and nature of the cargo in the same manner as the switch bills.
It is China-Base/Beihai's case that the cargo was impounded by the Chinese anti-smuggling bureau on the grounds that the origin of the cargo was China and Taiwan rather than the Philippines as shown in the documentation presented for customs clearance.
Cargo from the Philippines was subject to a lower rate of import duty than cargo from China and Taiwan. China-Base/Beihai say that they were only able to obtain the release of the cargo after paying taxes, fines and other expenses.
A writ was issued in Singapore in April 2017.
On 28 February 2018 the vessel was arrested in Singapore, and on 3 March 2018 was released from arrest against a club letter of undertaking.
Too late for English application
Hancock ruled that consent to the EJC had not been clearly and precisely demonstrated, and so he did not need to consider the ASI application.
But he went on to say he would have rejected this too.
"Substantial time and costs have been expended in the Singapore proceedings," he said.
"The Singapore courts have also given up substantial time and resources to this matter. ...in my judgment the claimant has simply left it far too late to make its application here."
Gunvor, which had previously denied the allegations, told TradeWinds last May that neither it nor subsidiary Clearlake had been charged, and a spokesman argued that the company was not "facing allegations" in the Singapore case because the trader is not a party to the case.
“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.”
In June 2018, Pan Ocean sued Clearlake for $7.25m in California.
