THE "YUE YOU 902" AND ANOTHER MATTER

[2019] SGHC 106, High Court of Singapore, Pang Khang Chau JC, 24 April 2019

Bills of lading - Bank as holder of bills of lading - Spent bills of lading - Transfer of rights of suit - Contractual right to possession - Constructive possession - Summary judgment - Bills of Lading Act (Cap 384, 1994 Rev Ed), sections 2 and 5

Oversea-Chinese Banking Corporation Ltd (OCBC), a bank, claimed against the defendant owner of the vessel Yue You 902 for its failure to deliver to OCBC a cargo of palm oil subject to 14 bills of lading in OCBC's possession. OCBC had extended a loan to the buyer of the cargo, Aavanti Industries Pte Ltd ("Aavanti"), for the purchase price of the cargo and had taken the bills of lading as security for the loan. The cargo had been discharged to a party nominated by the seller before the loan was granted, at which point OCBC became the holder of the bills of lading, raising the question whether the bills of lading were spent before OCBC became their holder. Also at issue was what constituted relevant prior "contractual or other arrangements" for the purpose of section 2(2)(a) of the Bills of Lading Act (equivalent to UK COGSA 1992) and what constituted "good faith" for the purpose of section 5(2) of the Bills of Lading Act. OCBC had obtained summary judgment from the assistant registrar on 11 September 2017. The judge had confirmed that decision after a hearing on 29 January 2018. This was the shipowner's appeal against that decision.