Parakou Shipping v Liu Cheng Chan: Mareva Injunction & Fiduciary Duty

In Parakou Shipping Pte Ltd (in liquidation) v Liu Cheng Chan and others, the High Court of Singapore heard applications related to a Mareva injunction. Parakou Shipping, a shipping company in liquidation, sued its former directors (Liu Cheng Chan and others) for breach of fiduciary duties. The plaintiff sought to increase the limit of a Mareva injunction to include the defendants' shareholding in a company, alleging asset dissipation through corporate restructuring. The defendants applied to set aside or vary the original Mareva injunction, arguing that their assets were sufficient to meet the plaintiff's claim. The court dismissed the plaintiff's application and allowed the defendants' applications, finding the defendants' identified assets sufficient to cover the claim, while reserving costs to the trial judge.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Plaintiff's application to increase the Mareva injunction is dismissed, and the defendants' applications to vary the Mareva injunction are allowed.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Shipping company Parakou Shipping sought to increase a Mareva injunction against former directors for alleged breach of fiduciary duties. The court dismissed the application.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
OthersDefendantCorporationApplication AllowedWon
PARAKOU SHIPPING PTE LTD (IN LIQUIDATION)PlaintiffCorporationApplication DismissedLost
LIU CHENG CHANDefendantIndividualApplication AllowedWon

3. Judges

Judge NameTitleDelivered Judgment
Choo Han TeckJYes

4. Counsels

Counsel NameOrganization
Wong Tjen WeeEldan Law LLP
Sim ChongJLC Advisors LLP
Siraj OmarPremier Law LLC
Senthil DayalanEldan Law LLP
Loo Chieh Ling KateJLC Advisors LLP
Premalatha SilwarajuPremier Law LLC
Kenneth LimAllen & Gledhill LLP
Edward KwokAllen & Gledhill LLP
Fay Fong Shi-TingAllen & Gledhill LLP
Chua Xin YingAllen & Gledhill LLP

4. Facts

  1. Parakou Shipping is a shipping company that went into liquidation.
  2. The first and second defendants used to be directors of Parakou Shipping.
  3. The third and fourth defendants took over Parakou Shipping from the first and second defendants on 22 December 2008.
  4. The fifth and sixth defendants are companies owned by the first, second, and third defendants.
  5. The plaintiff claims the defendants breached their fiduciary duties, causing loss and damage.
  6. The plaintiff claims the defendants are liable to account for loss of profits from the sale of vessels and transfer of ship management agreements.
  7. The defendants' shareholding in the sixth defendant was transferred to Parakou Tankers Inc for no consideration.

5. Formal Citations

  1. Parakou Shipping Pte Ltd (in liquidation) v Liu Cheng Chan and others, Suit No 434 of 2014 (Summons Nos 6150, 6151, 6152 of 2014 and 1482 of 2015), [2015] SGHC 96

6. Timeline

DateEvent
Third and fourth defendants took over the plaintiff from the first and second defendants.
Court granted the plaintiff’s application for a Mareva injunction order over the defendants’ assets.
Court granted a stay of the Order.
Defendants applied for a variation of the Order.
Plaintiff applied to increase the limit of the Mareva injunction.
Decision date.

7. Legal Issues

  1. Mareva Injunction
    • Outcome: The court found that the defendants had provided adequate security and dismissed the plaintiff's application to increase the limit of the Mareva injunction.
    • Category: Procedural
    • Sub-Issues:
      • Dissipation of assets
      • Adequacy of security
  2. Breach of Fiduciary Duty
    • Outcome: The court did not make a determination on the merits of the breach of fiduciary duty claim, as it was an interlocutory application.
    • Category: Substantive
    • Sub-Issues:
      • Loss and damage to the plaintiff
      • Account of profits

8. Remedies Sought

  1. Mareva Injunction
  2. Account of Profits

9. Cause of Actions

  • Breach of Fiduciary Duty

10. Practice Areas

  • Commercial Litigation
  • Insolvency Law

11. Industries

  • Shipping

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Parakou Shipping Pte Ltd v Liu Cheng Chan and othersHigh CourtYes[2014] SGHC 244SingaporeCited as the case in which the initial Mareva injunction was granted.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
No applicable statutes

15. Key Terms and Keywords

15.1 Key Terms

  • Mareva injunction
  • Fiduciary duty
  • Liquidation
  • Ship management agreements
  • Dissipation of assets
  • Corporate restructuring

15.2 Keywords

  • Mareva injunction
  • fiduciary duty
  • shipping
  • liquidation
  • Singapore

17. Areas of Law

Area NameRelevance Score
Liquidation80
Fiduciary Duties70
Injunctions60
Shipping Law60
Ship Management Agreements50
Commercial Litigation50
Corporate Law40
Bankruptcy40
Breach of Contract30
Contract Law30
Banking and Finance30

16. Subjects

  • Insolvency
  • Shipping
  • Fiduciary Duty
  • Civil Procedure