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Singapore court rejects interpleader application under OW Bunker case

Singapore court rejects interpleader application under OW Bunker case
A Singapore Court has has ruled that application for interpleader relief from 13 shipowners and charters who purchased bunker stems directly or indirectly from OW Bunker’s subsidiary Dynamic Oil Trading.

Justice Steven Chong from the Singapore Court last Tuesday found that the physical suppliers had not established a prima facie claim to the funds and that, accordingly, there were no competing claims for payment of the bunkers.

The bunker purchasers argued that if they paid their contractual supplier they were at risk of also having to pay to the physical supplier, some of whom had written to them and demanded payment for the bunkers.

“The purchasers therefore sought leave of the Singapore Court to pay the price of the bunkers into Court and leave the physical and contractual suppliers to fight out who was entitled to the funds,” law firm Clyde & Co wrote.

“From the Singapore High Court's decision, it would seem that the purchasers are left in the same position they were before. However, purchasers will likely take comfort from the Singapore High Court's finding that the physical suppliers could not establish a prima facie claim which could reduce the risk of any action being taken by them,” it continued.

Late last year, OW Bunker declared that it discovered a SGD125m fraud at its Singapore-based subsidiary Dynamic Oil Trading.

While interpleader actions can be helpful in resolving certain disputes, they may not be always available, according to John Kissane, partner in dispute resolution team at Watson Farley and Williams.

“The court must have jurisdiction over all claimants in order to issue the injunction and dispose of the matter. Whether or not the court has jurisdiction over a party depends on the extent of the party’s contacts with the forum,” Kissane said.

Chong from the Singapore Court explained that the statutorily imposed pre-requisites for interpleader relief had not been fulfilled and therefore there were no grounds to grant the relief sought.