Jurong Shipyard off the hook – for now

Jurong Shipyard off the hook – for now 

Court rules that bank’s claims will have tobe heard in a full trial:

 

SEMBCORP Marine subsidiary, Jurong Shipyard, will not be wound up by BNP Paribas — at least not for now.

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This would have been for allegedly failing to pay some US$50.7 million($69.4 million) the French bank claims it is owed by the shipyard as a result of foreign exchange futures bets made with it by Jurong Shipyard’s former finance head,Mr Wee Sing Guan.

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In restraining BNP Paribas from winding up the world’s second largest rig builder, High Court Judge Lee Seiu Kin ruled that the bank would need to sue Jurong Shipyard at a trial where expert witnesses could be heard for the alleged debt.

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Justice Lee, however, made it clear that he was not deciding on the merits of the parties’ arguments, but on whether Jurong Shipyard had raised triable issues.

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The Singapore firm’s case was argued by lawyers from Drew and Napier, led by Mr Davinder Singh.

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Jurong Shipyard has been fighting BNP Paribas’ attempt to wind up the company for failure to pay up its alleged debts since November last year.

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Following fairly extensive hearings in February and March this year, Justice Lee found that Jurong Shipyard had indeed raised a number of triable issues.

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For instance, just the contents of an unsigned statement by Mr Wee in which he spoke of BNP Paribas introducing to him risky “toxic exotic” transactions “clearly raise a plethora of triable issues”, Justice Lee said.

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He also ruled that there was a triable issue as to whether the “unauthorised” transactions by Mr Wee amounted to transactions that were within the scope of a Jurong Shipyard resolution allowing speculative trades.

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BNP Paribas argued that the resolution allowed such trades, while Jurong Shipyard said the bank was fully aware that the shipyard’s intent was to hedge its forex exposure and nothing else.

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As to whether the bank should have known that Mr Wee lacked the authority to enter into the types of forex trades that Jurong Shipyard claims were unauthorised, Justice Lee also felt that there could be triable issues here.

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“I find that Jurong Shipyard has raised triable issues of fact in respect of whether BNP Paribas knew or had notice ofMr Wee’s lack of authority viz, by its arguments based on Mr Wee’s unsigned statement, the suspense account and the evidence that BNP was working withMr Wee to tailor the information to be provided to Jurong Shipyard’s external auditors,” Justice Lee observed.

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Justie Lee also felt that Jurong Shipyard’s allegation that BNP Paribas officers colluded with Mr Wee to carry out transactions beyond the scope of his authority is triable.

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SembCorp Marine said in a statement last night: “We are pleased that the High Court has agreed that there should be a full trial with cross examination.”

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A BNP Paribas spokesman, however, expressed disappointment with the outcome and said: “We are disappointed with the outcome of the court decision. We will be working with our lawyers with the intention of appealing the decision.”

 

Source: Today Newspaper

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