DGJ v Ocean Tankers (Pte.) Ltd (In Liquidation)

DGJ v Ocean Tankers (Pte.) Ltd (In Liquidation)

All assignments were held void and unenforceable against Ocean Tankers because they were executed and used to subvert the insolvency pari passu distribution regime (impermissible debt trafficking) and thereby offended public policy; consequentially insolvency set-off could not be asserted by the Debtor in respect of the Assigned Claims. The court also held that the NAC in the storage agreement would, on its proper construction, cover tortious claims and that non-compliant assignments need not be effective against the obligor for the purposes of provability and set-off; additionally a statutory trust of liquidation negates mutuality whereas such a trust does not arise on judicial...

Citation
[2024] SGCA 57
Parties
Appellant in Ca/ca 42/2023; Respondent in Ca/ca 43/2023: DGJ; Respondent in Ca/ca 42/2023; Appellant in Ca/ca 43/2023 (in Liquidation): Ocean Tankers (Pte) Ltd (in liquidation)
Court
Court of Appeal
Jurisdiction
Singapore
Judgment Date
2 December 2024
Case Number
CA/CA 42/2023 ( CA/SUM 6/2024 ) |CA/CA 42/2024
Procedural Posture
Court of Appeal — Civil Appeals Nos 42 and 43 of 2023 / Final Judgment on Appeal (court of Appeal)
Outcome
Debtor's appeal dismissed in CA 42; Liquidators' appeal allowed in CA 43; Assigned Claims declared void and unenforceable against Ocean Tankers; no insolvency set-off available to Debtor
Legal Topics
Assignment of Choses in Action, Non Assignment Clauses, Champerty and Maintenance, Insolvency Set Off, Pari Passu Distribution, Statutory Trust, Merger of Judgment
Source Language
English
Insolvency Law Company Law Contract Law Civil Procedure Tort Law Private International Law Assignment of Choses in Action Non Assignment Clauses +5 more

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Parties

DGJ

Appellant in Ca/ca 42/2023; Respondent in Ca/ca 43/2023

Ocean Tankers (Pte) Ltd (in liquidation)

Respondent in Ca/ca 42/2023; Appellant in Ca/ca 43/2023 (in Liquidation)

Procedural Posture

Court of Appeal — Civil Appeals Nos 42 and 43 of 2023 / Final Judgment on Appeal (court of Appeal)

Legal Issues

  1. 1 Whether assignments of claims to a debtor executed shortly before liquidation are effective against the company and its liquidators
  2. 2 Whether the non-assignment clause in the storage agreement barred the assignments and the effect of breach
  3. 3 Whether the assignments were champertous or contrary to public policy (trafficking in debts to subvert pari passu)

Ratio Decidendi

All assignments were held void and unenforceable against Ocean Tankers because they were executed and used to subvert the insolvency pari passu distribution regime (impermissible debt trafficking) and thereby offended public policy; consequentially insolvency set-off could not be asserted by the Debtor in respect of the Assigned Claims. The court also held that the NAC in the storage agreement would, on its proper construction, cover tortious claims and that non-compliant assignments need not be effective against the obligor for the purposes of provability and set-off; additionally a statutory trust of liquidation negates mutuality whereas such a trust does not arise on judicial...

Court Disposition

Debtor's appeal dismissed in CA 42; Liquidators' appeal allowed in CA 43; Assigned Claims declared void and unenforceable against Ocean Tankers; no insolvency set-off available to Debtor

Orders

  • All Assigned Claims void and unenforceable against Ocean Tankers (Pte) Ltd (in liquidation)
  • Debtor cannot assert insolvency set-off in respect of the Assigned Claims