JTJB Legal Update January 2018
Piraeus Bank, one of the largest banks in Greece, commenced two mortgagee actions in Singapore and effected a double arrest on the vessels “Posidon” and “Pegasus”, flowing from the ship-owners’ default of a loan agreement. The vessels were subsequently sold pursuant to a judicial sale.
Subsequently, World Fuel Services, who had (via various companies) supplied bunkers to the vessels on credit, intervened in both actions.
World Fuel Services claimed that the usual order of priorities, in terms of entitlement to the vessels’ sale proceeds, should be altered so as to elevate their claim for unpaid bunkers above the Bank’s claim as mortgagees (the Bank would ordinarily enjoy a higher priority). A number of different grounds were asserted by World Fuel Services in support of their claim.
In a landmark Singapore High Court decision, Justice Belinda Ang in a written Judgment (The “Posidon”  SGHC 138), held that the Court did have the power to alter priorities between maritime claimants provided that exceptional circumstances were shown.
This is the first local decision on the point as prior local cases had only ruled that the Court had the power to allow certain claims to be treated as Sheriff’s expenses and thereby enjoy a higher priority.
Nonetheless, applying the above principle, Justice Belinda Ang declined to alter priorities as World Fuel Services were unable to show exceptional circumstances. Justice Belinda Ang found that World Fuel Services had not even raised a prima facie case to support their claim for an alteration of priorities and further, that the extension of credit by World Fuel Services to the ship-owners was a business risk assumed in the course of business.
World Fuel Services appealed against this decision to the Singapore Court of Appeal. The appeal was heard in January 2018. The Court of Appeal upheld Justice Belinda Ang’s decision and dismissed the appeal.
Piraeus Bank was represented by K Murali Pany and Ng Lip Kai of Joseph Tan Jude Benny LLP.
|K Murali Pany
|Ng Lip Kai
About Joseph Tan Jude Benny LLP (JTJB)
We are a Singapore law firm offering a wide spectrum of legal services ranging from Commercial Dispute Resolution, Corporate Law, Insurance and Personal Injury, Real Estate and Conveyancing and are particularly known for our Maritime & Shipping expertise.
The Firm is a prominent part of the legal landscape in Singapore with an international clientele and reputation. JTJB’s Practice Groups are led by skilled and experienced Practitioners able to take on matters of any size, urgency and complexity. From assistance, advice and representation, we aim to provide our clients with fast, practical and creative legal solutions in the most efficient and cost-effective manner possible.
JTJB also has worldwide reach through branch offices, associate firms and legal networks, and is the only Singapore member of the ADVOC group – a network of international law offices spanning more than 60 countries.
The Firm will be celebrating 30 years of practice on 1 February 2018.