IMSML Website Article 27/2025: The ‘Sea Coral’; Societe Generale, Singapore Branch v The Owners and/or the Demise Charterers of the Ship or Vessel Sea Coral of the Port of Coo Islands (An Zhong Shipping Pte Ltd, Intervener) [2023] MLJU 3303 - Extent of the Right to Intervene in an Admiralty Action In Rem, Setting Aside a Judgment in Default and Allegations of Fraudulent Bills of Lading

What was the subject-matter of this case?

Hin Leong Trading Pre Ltd (HLT)(the Defendant) was the demise charterer of the ‘Sea Coral’. The Defendant was also the shipper of a cargo of 163,207.630 mt of Low Sulphur Fuel Oil (LSFO) cargo, valued at USD37,33,8641.59, see Paragraph [2]. Note that the ‘Sea Coral’ was a Moored Oil Storage Tanker lying at Tanjung Pelepas, Malaysia, carrying gas oil and fuel oil cargo (of varying

grades), see Paragraph [10].

What was the basis of the Plaintiff’s case?

Societe Generale (SG)(the Plaintiff) was the holder of the bill of lading that was issued ‘to the order of SG’. This bill of lading was pledged as security for an import loan financing for a sum of USD 60,000,000.00 under an inventory financing facility, see Paragraph [3]. As result of the financing arrangement, SG held a full set of original bills of lading relating to the cargo of oil, see Paragraph [12]. These bills of lading were delivered to SG on or about 3 March 2020. Under the terms of the financing agreement, the cargo was not to be moved without SG’s consent, see Paragraph [15].

The Plaintiff alleged that the cargo represented by the bill of lading had been discharged and/or sold, and thus could no longer be delivered to SG, see Paragraph [3]. HLT did not enter appearance to SG’s action for misdelivery of goods. SG then applied for judgment in default of appearance under Order 70, rule 20(1). Judgment in favor of SG was entered on 14 July 2021 for the sum of USD37,338,641.59, see Paragraph [4].

Was there a previous case against HLT by HSBC?

It is interesting to note that the ‘Sea Coral’ was actually arrested as a means to satisfy an earlier claim by Hong Kong and Shanghai Banking Corporation (HSBC) for misdelivery of cargo in respect of another bill of lading dated 16 March 2020 for a sum of USD 34,815,000.00. An order for sale for the Vessel was made on 22 January 2021. This case involving HSBC was eerily similar to the facts of the present case where HLT had applied for Trade Financing from HSBC for the purchase of oil and/or oil related products. Security was then given by HLT to HSBC in the form several pledged bills of lading, representing cargo carried on board different vessels, see Paragraph [23]-[24].

What was the basis of the intervention?

An Zhong Shipping Pte Ltd (AZS), the shipowner who demised chartered the ‘Sea Coral’ to the Defendant HLT, applied to intervene (see Order 70, Rule 16(1) Rules of Court 2012), for leave to serve a defense and set aside the judgment in default, see Paragraph [1]. AZS asserted that SG’s case was based on an invalid bill of lading. SG alleged that preliminary investigations and reports by HLT’s judicial managers (ie note that HLT was previously under judicial management, but now in liquidation) that SG’s bill of lading was unauthorized or fabricated. Thus, as a carrier of the goods, HLT was not obliged to deliver the goods against production of the bill of lading, see Paragraph [6].

How are AZS (the Intervener Shipowner) and HLT (the Defendant) connected?

The ‘Sea Coral’ was managed by Ocean Tankers Pte Ltd (OPTL), see Paragraph [10]. At this stage, it is important to note that AZS (the shipowner) and HLT (the demise charterer) share common registered address at 1 Playfair Road, Singapore 367981. AZS, HLT and OTPL are part of the Hin Leong group of companies founded by Lim Oon Kuin (“OK Lim”) and have common shareholders and directors, see Paragraph [11].

Why did the matter go to trial?

AZS as Intervener is permitted to set up defense that the Defendant could have raised had it defended the action. In particular, AZS should be given the opportunity to raise the issue of fraud relating to the issued bills of lading, see Paragraph [31]. Further, HSBC was required to prove a well founded claim before it could enter judgment in default, see Paragraph [32].

What is the Legal Basis of AZS’ Right to Intervene?

An Intervener is entitled to protect its interest in the res, ie the ship, by filing a defence to liability or quantum. This is based on Order 70, Rule 16 and could be invoked with the leave of the Court, see Paragraph [56]. The classic English case of The Byzanthion [1922] 12 Lloyd’s Rep.9, identifies two purposes where an Intervention may be made: To defend an action (not against himself), but against the res, for either liability or quantum. Therefore, this is a defence of an action against the shipowner. There can be no liability against the ship unless there can also be personal liability against the shipowner, see see Paragraph [57]. Similar views have been expressed nationally by the Malaysia’s Court of Appeal in Pemunya Kampala MV Brihope and Others v Emmanuel E Okwusa and Others [1997] 1 MLJ 453, and across the Causeway in the Singapore cases of The Soraya Emas [1991] SGHC 125 and The Miracle Hope [2020] SGHCR.

What Reasons Were Given by SG’s When It Challenged AZS’ Right to Intervene in the Case Involving the ‘Sea Coral’?

SG put forward several grounds in Paragraph [58].

[1] The provisions of Order 70, Rule 16(1) were only applicable in the suit involving HSBC, not in the current case. There was neither an arrest of the ship, nor proceeds of sale in this subsequent action;

[2] The intervention under Order 70, Rule 16(1) can only be made before the final judgment is entered. In the earlier case involving HSBC, judgment had been entered. Further in this case, judgment had also been entered and there was nothing for AZS to defend;

[3] Alternatively, even if Order 70, Rule 16(1) was applicable, there has been unreasonable and inordinate delay since the judgment in default, which was more than one year and nine months ago.

What was Mr Justice Ong Chee Kwan’s Ruling on the First Matter Raised by SG?

His Lordship rejected the first submission by SG on the basis that it was based on an overly narrow interpretation of Order 70, Rule 16(1). As long as an action in rem where the ship is arrested, or the proceeds of that property is lodged in Court, a person who has an interest in either, but is not a Defendant, may apply to intervene. The bar is much lower for for an intervener in an admiralty action because as long as there is ‘a person who has an interest in that property’, he can defend an action against either the res, or its proceeds of sale, see Paragraph [62]-[65].

Did Mr Justice Ong Chee Kwan Accept SG’s Second Submission?

His Lordship also rejected the second submission made by SG, because in a case where there is a judgment in default, defences which the shipowner could have raised to defend the action in rem, were never heard by the Court, see Paragraph [74]. Not allowing an intervention would be to prejudice the an interested party’s right to protect their interest in the property or proceeds of sale, ie in effect not having an opportunity to raise defense that the Defendant could have set up against the claims. After all, as Mr Justice Ong Chee Kwan explained, under Order 70, Rule 20(9) of the Rules of Court 2012, the ‘Court may, on such terms as it thinks just, set aside or vary any judgment entered to pursuant to this rule’, see Paragraph [74]. His Lordship’s view that an interested party may intervene even after judgment is supported by the English case of Brave Bulk Transport v Spot on Shipping [2009] EWHC 612 (QB), see Paragraph [76], and the long established authority of Ladefoged Niels v Joseph H (The) [1970] Ex. C.R.101 at para [9] (Exchequer Court of Canada, see Paragraph [77].

Did Mr Justice Ong Chee Kwan have to answer the question whether an intervention is possible where a final judgment has been obtained after a full argument on the merits in an Order 14 application or after trial?

Thankfully, his Lordship acknowledged that there was no need to do so. As his Lordship pointed out, this would have been an easy issue to resolve as the ‘decisions in the MV Brihope and the Soeraya Emas see to be in conflict’, see Paragraph [79]. His Lordship, however did opine that, since the Defendant had already defended the action, it must necessarily follow that it will no longer be possible for any interested parties to seek to intervene, see Paragraph [80]. His Lordship also noted that since intervention was subject to the Court’s leave, ie a discretion of the Court, the circumstances where a Court will grant leave to intervene after judgment has been entered on the merits will be ‘rare and exceptional’, eg where judgment was obtained through collusion, fraud or questionable circumstances tantamount to the shipowner not taken to have defended the claim, see Paragraph [82].

Was the Third Ground Submitted by SG, Based on Delay, Accepted by Mr Justice Ong Chee Kwan?

The third and final submission made by SG was regarding the issue of delay. Mr Justice Ong Chee Kwan exercised his discretion to allow AZS to intervene. This was founded on the principle that the application to set aside the judgment must be filed, to use the words of Gopal Sri Ram JCA in Khor Cheng Wah v Sungai Way Leasing Sdn Bhd [1996] 1 MLJ 223, timeously, ie without delay, see Paragraph [85]. Although there is no time limit placed on an application, according to the Malaysian High Court Practice, Volume 1, Issue 23 (September 2012) at para [15.6.2], it should be made ‘as soon as possible to avoid inconvenience’, see Paragraph [86].

On the facts of the The Sea Coral, AZS’ application for intervention was filed one year and nine months after judgment in default was obtained on 14 July 2021, and one year and four months after AZS had become aware of the said judgment on 5 December 2021. SG submitted several reasons why AZS’ application should be rejected:

[1] AZS waiting until its appeal against the earlier case involving HSBC were determined was not a good reason, see Paragraph [88], even though there were the same allegation of potential fraud, see Paragraph [89]. The HSBC case concerned different parties. This Court was not bound to follow the HSBC case. It was trite law that the doctrine of binding precedent was only applicable if the two cases had the same material facts and common points of law were argued, see Paragraph [90].

[2] AZS was deliberately delaying to obtain an advantage in litigation, ie having the Court of Appeal decision to support its application against SG. In Mercurine Pte Ltd v Canberra Development Pte [2008] 4 SLR 907 at para [32], the Court held that any desire to gain litigation advantage via delay will be viewed uncharitably, see Paragraph [92].

[3] AZS’ attempt at convenience, time and cost saving would be at the expense of SG, see Paragraph [93]. By contrast, SG had time and expense instructing its Malaysian solicitors, participated in the assessment of the Sheriff’s Bills of Costs (during case management), actively participated in the application to determine priorities and payment out of the Fund in the earlier HSBC suit, took part in AZS’ application for stay of execution against HSBC, as well as liaised with various parties to facilitate payment of Fund see Paragraph [93]. Therefore, whilst SG continued to expand time and expense to enforce its judgment and ensure that its interest in the proceeds of the Vessel sale were not prejudiced, AZS had knowledge of this and took not steps to intervene, see Paragraph [94].

[4] Even AZS has a right to file this application to Intervene, it is trite law in cases such as Edwin Chen Chee Kit v Sabah State Government and Another [2022] 1 LNS 1359, and Khor Cheng Wah v Sungai Way Leasing Sdn Bhd [199] 1 MLJ 223 (CA), that the Courts will not assist a party that has slept on its rights, because ‘justice is not only for a defaulting defendant: It is for the plaintiff as well’, see Paragraph [95].

There are several reasons why Mr Justice Ong Chee Kwan rejected the submission above that were put forward by SG as under the circumstances of the case, was no ‘inordinate and inexcusable delay’ on the part of AZS, see Paragraph [97].

First, the default judgment in the suit was never served on AZS, ie this was ad admission made by SG, see Paragraph [98]. The 30 days time limit to set aside a judgment in default under Order 42, Rule 13 only started running from the date when the sealed Judgment is received by AZS, ie not from the date of judgment on 14 July 2021, see Paragraph [97]. Hence the 30 days time limit was never triggered. Time did not start to run until sometime on 15 December 2021, when it was informed by its solicitors. By that time, AZS had already filed its appeals against HSBC’s judgment in default, and an order setting it aside was granted enabling it to plead its defense. The HSBC Appeals were fixed for hearing later on 26 May 2022, see Paragraph [98]. His Lordship would not make any comment on the litigation strategy adopted by AZS, and stressed that what was relevant was that AZS could not be described as an ‘indolent party’ and ’sleeping on its rights’ throughout the period from 15 December 2021 to 21 April 2023, see Paragraph [101].

The second reason why Mr Justice Ong Chee Kwan rejected SG’s submission was because ‘SG suffered no real prejudice or injustice because of the delay’, see Paragraph [102]. His Lordship pointed out several facts, see Paragraph [102]:

[1] Even though default judgment was entered on 14 July 2021, SG could not have been any sooner, as the order for priorities was only made on 10 November 2022;

[2] SG could not be until the HSBC claim was decided at trial which was fixed in February 2024. Any payment earlier would prejudice HSBC’s claim as SG would be paid in full as SG (as a statutory lien) and HSBC had claims which were ranked the same (ie pari passu).

[3] Portions of the proceeds of sale to meet enforcement claims for the default judgment were safe and secure in Court.

Third, Mr Justice Ong Chee Kwan held that, if there was any delay at all, it was in the hearing and determination of the application to intervene. This had not affected the enjoyment of SG’s ‘fruits of litigation’, see Paragraph [103].

Was there a Defense on the the Merits of the Case which Justified Setting Aside the Judgment in Default?

It is trite law as laid down by the Supreme Court in Hasil Bumi Perumahan Sdn Bhd v United Malayan Banking Corporation Bhd [1994] 1 MLJ 328 that a setting is only possible if the applicant in a setting aside ‘must show that his defense is not a sham defense but one that is primarily facie, raising serious issues as bona fide reasonable defense that ought to be tried, see Paragraph [109]. AZS had argued that since SG had characterized its claim as a mis-delivery of cargo, SG was there under a legal obligation to prove, on the facts and evidence that, see Paragraph [111]:

[1] SG had made a valid demand for delivery;

[2] HLT, despite being presented with the bill of lading, refused to deliver the goods to SG;

[3] SG were the lawful holders of the original bill of lading;

[4] Alternatively, SG had delivered to some other third party not holding the original bill of lading.

Note, that [1]-[4] above are crucial as HLT, as carrier, is not obliged to deliver cargo on presentation of a potentially fraudulent bill of lading, see Paragraph [111]. It is trite law from cases such as Sze Hai Tong Bank Ltd v Rambler Cycle Co Ltd [1959] 1 MLJ 200 that the carrier is not obliged to deliver the cargo to anyone else other than the holder of the original bill of lading. On the other side of the coin, only a holder of the original bill of lading is entitle to demand delivery of the cargo, ie to it and no one else, see Paragraph [112].

More importantly, AZS argued that this was not a typical mis-delivery cargo claim, as there were two differentiating facts:

[1] The bill of lading is primarily facie not valid, ie unauthorized and fabricated, see Paragraph [114a]. The long line of authorities establishing mis-delivery of cargo did not involve a fraudulent bill of lading, see for example Mewah-Oils Sdn Bhd v Lushing Traders Pte [2017] 2 MLJ 592, The Salina [1998] 3 SLR 76, The Houda [1994] 2 Lloyd’s Rep.541 and Minmetals South-East Asia Corp Pte Ltd v Nakhoda Logistics Sdn Bhd [2018] 6 MLJ 152, see Paragraph [113];

[2] The bill of lading did not contain a contract of carriage, but was rather for storage of cargo on board a ship, the ’Sea Coral’. The document was therefore never intended by both SG and HLT to operate as a contract of carriage. Therefore SG never intended for it to be an instrument to be used in the process of presentation in return for delivery of cargo and cannot now seek to rely on it for this purpose. Hence SG is estopped from asserting that the cargo could only be livered upon presentation of the bill of lading, see Paragraph [114].

Note, in making submissions [1] and [2] above, AZS relied on The Luna and Another Appeal [2022] 1 Lloyd’s Rep,216 at para [3] and [61], (Court of Appeal, Singapore). The case concerned a delivery of bunkers. Neither the sellers nor the shipowners could have intended for the delivery of the bunkers to be made only upon presentation of an original bill of lading. This intention was absent as:

[a] No port of discharge was specified;

[b] Deliver was to multiple ocean-going vessels;

[c] Credit was extended to the buyer that deliberately omitted stipulating for the use of traditional bills of lading under the sale contracts;

[d] The sellers accepted the risk of non-payment of the buyers.

[e] Bunker barges operate essentially as ‘mobile petrol kiosks, ie supplying oceangoing vessels with fuel for consumption. There was no intention for carriage from one port to another in the traditional sense. The intention was to pump the fuel into the tanks and then be subsequently burnt as fuel. The absence of a port of destination was significant to show that the bills of lading were not intended to function as traditional bills of lading which were evidence of a contract of carriage or to function as a document of title.

AZS also argued that the bill of lading was never intended to be used by SG as security for payment, satisfaction or discharge of HLT’s liabilities under the various financing agreements. It was contended that these were issues that could only be answered at a trial between SG and HLT, see Paragraph [117]. This was a triable issue (ie could not be decided summarily) according to three prominent Singapore cases on the precise financing and security arrangements where the issue was whether the bill of lading was intended to be used as security:

[1] The STI Orchard [2022] SGHC 6;

[2] The Miracle Hope [2022] SGHC 242;

[3] The Maersk Princess [2022] SGHC 242

AZS additionally contended that SG’s loss was not due to HLT mis-delivery of the cargo, but rather HLT’s breach of the financing agreements. This was similar to Unicredit Bank AG v Euronav NV [2023] (CA, England) where the bank would have permitted the discharge to take place without production of the original bill of lading in keeping with well-established commercial practice in commodity finance world of discharging against an LOI. The shipowner could have therefore consulted the bank on what to do rather than initially refusing to discharge without production of the bill of lading, see Paragraph [122].

Is HLT Estopped from Asserting that the Bill of Lading is Fraudulent?

AZS’ claim that the bills of lading issued by HLT to the lending banks were invalid or void were ‘interesting’ and ‘puzzling’. Mr Justice Ong Chee Kwan pointed out that these bills of lading were forwarded by OK Lim to secure the financing for HLT. His Lordship also drew attention to the Lim Family’s ownership of the entire shareholdings in its entirety for both AZS and HLT. Mr Justice Ong Chee Kwan applied the Duomatic principle (ie there was informed consent that was unanimous which were legally binding on shareholders like a formal resolution, see Ciban Management Corporation v Citco (BVI) [2020] UKPC 21), and found that holding out the bills of lading as genuine to the banks, mean that the bills of lading were issued under the authorization of HLT, see Paragraph [133].

There were express admissions from both OK  Lim and CH Lim that in order to secure financing from the banks, the bills of lading were issued by HLT and delivered to the banks. As the financing institutions relied on the HLT bills of lading being genuine in return for financing, HLT is now estopped  from asserting that these bills of lading may be potentially fraudulent or fabricated, see Paragraph [136]. In effect, HLT could not claim that the goods represented by the bill of lading were not on board the ship, or were of lesser quantities than stated, see Paragraph [139].

Under the doctrine of judicial estoppel, HLT is estopped from asserting an inconsistent position in a subsequent proceeding, see Paragraph [139]. Mr Justice Ong Chee Kwan relied on Leisure Farm Corp Sdn Bhd v Kabushiki Kaisha Ngu (formerly known as Dan-Ichi Shokai) [2017] 5 MLJ 63 at para [16] where the Court of Appeal explained that ‘the object of judicial estoppel is to prevent a party who assumes a particular position in litigation to take an inconsistent position in later litigation’, see Paragraph [141]. The Court of Appeal relied heavily on a case from outside Malaysia, for example, OJSC Oil Co Yugraneft (in liquidation) v Abramovich and Others [2008] EWHC 2613 (Comm). In the OJSC case, Mr Justice Christopher Clarke quoted a US case with approval. In particular, the Court of Appeals for the Sixth Circuit in Edwards v Aetna Life and Casualty 690 F 2s 595 held that ‘unlike equitable estoppel, judicial estoppel may be applied even if detrimental reliance or privity does not exist … If the second tribunal adopted the party’s inconsistent position, then at least one court has probably been misled’, see Paragraph [141].

Mr Justice Ong Chee Kwan held that the Court should not lend a hand to assist a party who is in pari delicto (ie in equal fault) with HLT in perpetrating a fraud on the bank lenders, see Paragraph [145]. In particular, it is the Lim family that were responsible in HLT to ‘fabricate’ or ‘authorise’ the bill of lading because at all material times, the Lim Family were shareholders as well as directors in both HLT and AZS. The Lim Facility was now trying through AZS to rely on their very own illegal actions to justify setting aside the judgment as HLT did not appear to defend the action, see Paragraph [145]. Further, his Lordship pointed out that in an on-going action by liquidators of HLT, the Lim Family were held personally liable for HLT’s losses by pledging to the bank cargo that HLT did not own, or over stating the quantity of cargo it did now that had already been encumbered through the issuance of fraudulent bills of lading. In this action, it was not HLT’s position that the bills of lading were not authorized and not binding on HLT, see Paragraph [147].

The bills of lading were signed ‘as agent, and for and on behalf of master Liu Chun Yu’. However AZS’ allegation was that the bill of lading was not forged, but rather that it was signed by a person who signs it in the usual course of business, see Paragraph [152]-[153]. Mr Justice Ong Chee Kwan rejected this submission and agreed with SG instead, that the rule in Royal British Bank v Turquand [1843-60] All ER Rep.435 (ie accepted in Malaysia by the Federal Court in Pekan Nenas Industries Sdn Bhd v Chang Ching Chuen and Others [1998] 1 MLJ 465) was applicable, see Paragraph [154]. Hence a person dealing with HLT in good faith is entitled to presume that HLT had fully complied with its internal procedures when HLT pledged the bill of lading for financing provided by SG, see Paragraph [155].

The fact that the bill of lading was in fact issued with the authority of HLT cannot be denied, see Paragraph [160]. Hence, HLT  cannot raise a defence to SG’s claim based on the Cargo not being on board, or that the quantity was not what was in fact stated in the bill of lading. As a carrier, HLT was bound by what was stated in the bill of lading, see Paragraph [161]. Based on the documents accompanying the bills of lading, SG did look at the bill of lading as security for the payment, satisfaction or discharge of HLT liabilities under the Inventory Financing Facility. It was clearly stated in an Uncommitted Trade Finance Facility Letter dated 27 June 2019 that ‘for each shipment of goods financed by SG, the bills of lading shall be issued / endorsed to the order of SG’. This letter goes on to further say that the ‘Borrower shall ensure and undertake that for so long as any monies are owing under the Facility, it will not charge, pledge, mortgage or encumber any assets financed by SG without SG’s prior written consent, see Paragraph [167]. OK Lim, who was at the material time a director of both HLT and AZS, affirmed that the bill of lading to SG was intended to act as security and document of title, see Paragraph [168].

Should the default judgment be set aside?

The mere fact that summary judgment application by various banks were unsuccessful alone in earlier litigation, cannot amount to establishing that HLT or AZS had a good defence on the merits to warrant the setting aside the default judgment in this case, see Paragraph [169]. In reaching this conclusion, Mr Justice Ong Chee Kwan relied on The Hong Kong and Shanghai Banking Corporation v Ismail bin Daud and Another [1978] 2 MLJ 160 (OCJ). His Lordship held noted that AZS could have adduced primary evidence that SG never looked at the bill of lading as a document of title, or that SG was aware and consented to the delivery of the Cargo without production of the bill of lading. But AZS chose not to do so. AZS had done nothing mote than produce incomplete preliminary reports that were merely interim reports, see Paragraph [170].

Was there a presentation of the bill of lading?

No. Prior to the commencement of the action in rem in this case, HLT had wrongfully sold the cargo on the Vessel. Therefore, delivery could not be made to SG, see Paragraph [173]. The lack of presentation of the bill of lading is not fatal to SG’s case as SG claim was founded on mis-delivery where the Cargo was sold to a third party without SG’s consent or knowledge, see Paragraph [174].

Was SG’s loss a result of the mis-delivery of Cargo?

No. It was contended by SG that the outstanding sums due and payable under the Inventory Financing Facility is the result of HLT’s breach of the terms and conditions. It was not a failure to deliver the cargo upon presentation of the bill of lading, see Paragraph [175]. This contention was rejected by Mr Justice Ong Chee Kwan as not having any merit at all. Looking at the entirety of the case, and the particulars of the loss, SG’s claim is indeed premised from the mis-delivery of the Cargo without production of the bill of lading. The breach of the loan facility entitled to have SG to have recourse to the security in the form of the bill of lading, which SG lost because HLT mis-delivered the Cargo, see Paragraph [176]-[177].

Are the HSBC Appeals Binding on the Court in this Case?

No. Mr Justice Ong Chee Kwan, see Paragraph [180], held that the doctrine of precedent is based on the ratio decided and not the mere similarity in the facts or in the law, or in the arguments of counsel, nor the obiter dicta of the case (see Tetuan Wan Shahrizal, Hari and Co v Public Prosecutor [2023] 4 MLJ 1, FC). His Lordship agreed with the reasons put forward by counsel for SG, Miss Ira Biswas, see Paragraph [181], in particular because there were similarities but the facts were not the same:

[1] In the earlier HSBC case, the Court of Appeal allowed HSBC’s judgment in default against HLT. It also concerned an appeal against the High Court’s decision to set aside leave to AZS to file and serve its defense, as well as to plead all defenses available to HLT;

[2] The Court of Appeal concerned with the sole issue of whether AZS as an intervener can plead or set up defences available to HLT, especially whether there was fraud relating to the bill of lading;

[3] In the earlier HSBC appeal, AZS’ right to intervene was not disputed as in this case. In that earlier case, the issue was whether an intervener could have set up the same defences as HLT, had HLT defended the case;

[4] Unlike the present case, the Court of Appeal in the HSBC appeals held that AZS could plead and set up the defence that there was fraud relating to the bills of lading in order to resist HSBC’s application for judgment.

Mr Justice Ong Chee Kwan held that the issues in this case were different, in particular relating to whether AZS, see Paragraph [182]:

[1] Had met the procedural conditions to intervene;

[2] Can intervene after judgment was entered;

[3] Delay in filing bars obtaining an order to intervene in the action to set aside SG’s default judgment;

[4] Had a good defense on the merits to set aside the suit brought by SG which had resulted in a default judgment.

As a result of the facts above, Mr Justice Ong Chee Kwan held that the issues in the HSBC appeals ‘are not the same, and the parties are also not the same’. Therefore ‘there is no question off any estoppel operating against SG’, see Paragraph [185].

Could AZS Introduce New Facts and Contentions?

AZS attempted to introduce new contentions never previously raised, for the first time after the parties have filed their written submission and presented oral arguments before the Court. These contentions were clearly an afterthought, with the benefit of hindsight. It was an attempt to bolster its chances of the Court finding some triable issues to merit the setting aside of the Default Judgment, see Paragraph [188]. His Lordship held that ‘it would not be right for the Court to permit AZS to introduce new facts and contentions at this late stage, especially after the parties have all filed their respective written submission and real arguments fully canvassed before this Court’, see Paragraph [189].

Thank you for reading IMSML Website Article 27/2025

Stay tuned for the next IMSML Website Article 28/2025: China Star Chemical Shipping Limited v Linyang Shipping Navigation Ltd [2024] MLJU 359 - Challenges in Seeking Damages for Wrongful Arrest

Signing-off for today,

Dr Irwin Ooi Ui Joo, LL.B(Hons.)(Glamorgan); LL.M (Cardiff); Ph.D (Cardiff); CMILT

Professor of Maritime and Transport Law

Faculty of Law

Universiti Teknologi MARA Shah Alam

Selangor, Malaysia

Tuesday,  8 July 2025

Note that I am the corresponding author for the IMSML Website Articles. My official email address is: uijoo310@uitm.edu.my