Equatorial Marine Wins MISC Unpaid Bunkers Appeal

Chief Justice Chan Sek Keong was one of 3 Judges who deliberated over the appeal.

The Singapore Court of Appeal on Tuesday overturned a ruling that had prevented Singaporean bunker supplier Equatorial Marine Fuel Management Services Pte Ltd. (Equatorial Marine) from recovering what is claimed to be over $21 million in unpaid bunker bills from Malaysian international shipping line MISC Berhad (MISC), court documents have shown.

Equatorial Marine's claim that they had established contracts for the bunkers with MISC through bunker trader Market Asia Link Sdn Bhd (MAL) was originally stuck out on the grounds that the action was "plainly unsustainable."

But Chief Justice Chan Sek Keong, Judge of Appeal Andrew Phang Boon Leong, and Judge of Appeal VK Rajah ruled that the matter should be allowed to proceed to trial as there was enough anecdotal and sworn evidence to suggest MAL had the authority to conclude bunker contracts on MISC's behalf.

The ruling noted that MISC had paid other bunker suppliers who were in a similar position to Equatorial Marine, and although MISC's explanation that it did so to avoid its vessels being arrested was a reasonable one, it was equally reasonable to say MISC did so because it knew that it was in a contractual relationship with those bunker suppliers.

The appeal Judges also said they were unable to share the original Judge's certainty that it had been "demonstrated beyond doubt" that MAL was not MISC's agent.

Bunker Contracts

The case dates back to 2008 when Equatorial Marine says it entered into three bunker contracts to supply MISC owned or operated vessels, two of them fixed price bunker contracts of $744 and $750 per metric tonne (pmt) and one spot price bunker contract.

MISC's position is that it only ever had a contractual relationship with MAL for 138,000 tonnes of bunkers at a fixed price of US$475 pmt, the only invoices it received were from MAL, and MISC did not have control over where MAL sourced it bunkers.

The shipping line said it paid MAL for the bunkers in full at a cost of $17,336,660 while Equatorial Marine maintain it is owed $21,703,059.

The dispute was originally raised in California with Equatorial Marine taking action against MISC's Bunga Kasturi Lima.

At the time MISC offered to provide a corporate guarantee to secure the bunker supplier's claim against MAL if Equatorial Marine withdrew all actions against it.

Equatorial Marine rejected the offer prompting MISC to seek legal action of its own to have the claim dismissed, but Equatorial Marine withdrew the suit before that could be heard.