Singapore: Sembcorp Marine reports that the Court of Appeal has dismissed BNP Paribas' appeal against the decision of the High Court which prevented the French bank from filing a winding up application against its subsidiary Jurong Shipyard. BNP Paribas was also ordered to pay costs to Jurong Shipyard.
The Court of Appeal decided that in a case where a solvent company disputes a debt and is prepared to offer security to defend the claim, the Court should not allow a party in the position of BNP Paribas to file a winding up application to force Jurong Shipyard to pay, according to Sembcorp.
To recap, last November it was revealed that Jurong Shipyard had racked up massive losses, believed to total more than $300m, when alleged unauthorised currency trades made by its former finance director went bad. Agreement on settlement terms was reached with nearly all the 11 banks concerned but BNP filed a winding-up petition against Jurong in a bid to recover the $50.7 million it said it had lost. That petition was turned down in June, a decision BNP subsequently appealed.
Jurong Shipyard welcomes the decision of the Court of Appeal on the grounds that "facts relating to the unauthorised (currency) transactions will now see the light of day in a full trial". It says it will, as it had offered to do a year ago, put up security for BNP Paribas' original claim of US$50.7 million. BNP Paribas has 12 weeks to commence an action against Jurong Shipyard, failing which the Court of Appeal has ordered that the security would be cancelled and returned to Jurong Shipyard. [14/11/09]
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