The “Jeil Crystal” [2024]

The “Jeil Crystal” [2024]
[2024] SGHC 74 [Singapore]

Type of Case: Issuer sued Vessel Owner for misdelivery; Vessel Owner alleged wrongful arrest.

• Plaintiff/Issuer – Banque Cantonale de Genève
• Defendant/Vessel Owner – Jeil International Co. Ltd.
• Charterer/Buyer/Applicant/On-Seller – GP Global APAC Pte Ltd.
• Seller/Beneficiary – IRPC Public Co. Ltd.
• Vessel Operator – Dae Myung International Pte Ltd.
• Broker – RG Chartering Sdn Bhd
• Second Buyer – Standard Asiatic Oil Co. Ltd.
• Presenting Bank – Bank of Ayudhya

Underlying Transaction: Purchase and re-sale of 2,000MT of oil.

LC: Documentary credit for unspecified value. Silent as to governing rules.

Decision: The High Court of Singapore, Mohan, J., dismissed all claims by Issuer and ruled in favour of Vessel Owner on its counterclaim for wrongful arrest.

Rationale: Misdelivery claim brought by financing bank rejected where bank endorsed and delivered without qualification original bills of lading to customer who resold goods under switched B/Ls; conduct by bank in arresting vessel constituted gross negligence implying malice justifying damages for vessel owner.

Summary & Analysis:

To support its purchase of 2,000MT of Lube Base Oil (the Cargo) from IRPC Public Co. Ltd. (Seller), GP Global APAC Pte Ltd. (Buyer/Applicant) applied for and caused Banque Cantonale de Genève (Issuer) to issue an irrevocable LC in favor of Seller/Beneficiary.[[1]] As Buyer/Applicant intended to on-sell the Cargo to Standard Asiatic Oil Co. Ltd. (Second Buyer),[[2]] Issuer contemplated a “self-liquidating” transaction.[[3]] The Cargo was laden onboard the “Jeil Crystal” (the Vessel) in Thailand to be shipped to Bangladesh; Buyer/Applicant chartered the Vessel from Jeil International Co. Ltd. (Vessel Owner) for a single voyage.

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