UCO Bank v. Golden View Maritime
This Case Note was contributed by Ang &
Website’s International Contributors for Singapore
In one of the actions, UCO Bank, as bill of lading holders, sued Golden View Maritime Pte Ltd ("Golden View"), the registered Owners of the vessel "Asean Unity", on 21 February 2002 for breach of contract and conversion by releasing two shipments of Sarawak round logs to receivers in India without the production of the original bills of lading. Golden View’s defence was that they had, with the knowledge and consent of UCO Bank, delivered the cargo of Sarawak round logs at Kandla to receivers against the presentation of switched bills of lading.
On 25 June 2003, 16 months after the suit was commenced, UCO Bank sought and obtained a ‘Mareva’ injunction to restrain Golden View from dealing with or disposing of "Asean Unity". Golden View applied to set aside the injunction obtained on grounds that UCO Bank had not established any risk of dissipation of assets and that there was delay in applying for the injunction.
UCO Bank relied on the sale of the vessel "Asean Ranger" by her Owners, Golden Star Maritime Pte Ltd ("Golden Star") in July 2002 to infer that there was a risk of dissipation of Golden View’s assets. UCO Bank had sued Golden Star in a separate action on 16 January 2002 and Golden Star sold "Asean Ranger" as scrap in July 2002.
Golden View and Golden Star were one-ship companies and they had some common shareholders and directors. Three of the four directors of Golden View were also directors of Golden Star. Two of the three shareholders of Golden View were also shareholders of Golden Star. The two vessels were operated by Glory Shipmanagement, which was controlled or managed by the same people.
UCO Bank argued that the sale of "Asean Ranger" was an attempt to avoid any attachment or enforcement of any judgment which might be obtained against Golden Star and believed that there was therefore a real risk of dissipation of Golden View’s assets in these proceedings.
2. The Judge found that although Golden Star and Golden View had some common
shareholders and directors, the sale of "Asean Ranger" was
insufficient to show a real risk of dissipation of assets by Golden View. Golden
Star explained that "Asean Ranger" was sold as she was at the end of
her trading life. She was a 25 year-old vessel and her condition would entail
expensive repairs if she were to continue trading. Golden Star had operated
"Asean Ranger" till the last possible moment before she was sold as
scrap. The Judge was of the view that "Asean Ranger" was sold in the
usual course of business and it was not intend ed to deprive the claimants of
the fruits of their judgment.
4. Further, the audited accounts for financial year ending 30 June 2002
showed that Golden View had net current assets of S$929,114.00 and the book
value of the vessel was S$1.88 million. The claim quantum was relatively small
in comparison and the company had adequate resources to satisfy the claim.
Besides, Golden View was a Singapore company and the "Asean Unity" was
a Singapore registered vessel. Only companies properly capitalized as required
under the Merchant Shipping (Registration of Ships) Regulations would be allowed
to register their ships in Singapore.
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