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16 April 2025

In Valency International Pte Ltd v JSW International Tradecorp Pte Ltd & Ors [2025] SGHC 50, the General Division of the High Court of Singapore dismissed various claims, including claims in conversion, brought by Valency International Pte Ltd (“Valency”) against JSW International Tradecorp Pte Ltd (“JSW”) and Oldendorff Carriers GmbH & Co KG (“Oldendorff”) but entered judgment against Unicorn Maritimes (India) Pvt Ltd (“Unicorn”).

In a judgment released on 28 March 2025, Chua Lee Ming J found that Valency had no right to sue JSW and Oldendorff in conversion as it had pledged the bills of lading to its bank and therefore did not have the immediate right to possession of goods at the material time.?The court also found that even if there had been a right to sue in conversion, JSW’s instructions to Unicorn, the discharge port agent for the vessel, to release delivery orders for the cargo did not amount to conversion.

Allen & Gledhill Partner Kenny Yap represented the successful defendant, JSW.

Background

The dispute arose from the sale of 55,000MT of steam coal (“Cargo”) by JSW to K.I. (International) Limited (“Kamachi”) which was financed by Valency. The Cargo was shipped from South Africa to India on board a vessel which was voyage chartered by JSW from Oldendorff, who in turn time chartered the vessel from the shipowner.

Pursuant to letters of indemnity furnished by JSW to Oldendorff and by Oldendorff to the shipowner, the Cargo was discharged from the vessel without production of original bills of lading at Krishnapatnam Port. Unicorn was the discharge port agent for the vessel.

After the discharge, whilst the Cargo was still at Krishnapatnam Port, JSW and Oldendorff both gave instructions to Unicorn for the release of delivery orders. Valency, however, did not give any such instructions to Unicorn. Pursuant to a letter of undertaking issued by Unicorn to Valency, Unicorn undertook not to release delivery orders for the Cargo without Valency’s instructions.

Despite the absence of instructions from Valency, Unicorn proceeded to issue and release delivery orders for the Cargo progressively over a three-month period after the Cargo was discharged from the vessel. The delivery orders issued by Unicorn enabled Kamachi to obtain delivery of the Cargo from Krishnapatnam Port without having to pay Valency for the same.

All this time, Valency was kept in the dark by Unicorn who issued periodic reports to Valency showing that the Cargo was still held at Krishnapatnam Port. Valency eventually found out, more than a year later, that the Cargo had been removed from Krishnapatnam Port.

Valency commenced Singapore proceedings against JSW, Oldendorff, and Unicorn, seeking to hold each party liable for the loss of the Cargo. Valency initially claimed against the shipowner as well, but this claim was struck out at a previous hearing.

Claims in conversion

Valency’s primary claim was in conversion. Valency alleged that (i) it had a right to sue for conversion; and (ii) the release instructions issued by JSW, the release instructions issued by Oldendorff, and the delivery orders issued by Unicorn, constituted acts of conversion by each of these parties.

Right to sue in conversion

On the issue of Valency’s right to sue in conversion, the court found that it was well established that a person has the right to sue for conversion if and only if he had, at the time of the conversion, either actual possession of, or the immediate right to possess, the goods converted.

On the evidence, however, the judge found that Valency did not have the immediate right to possession of the Cargo at the time the relevant release instructions were issued by JSW and Oldendorff, because at such time, the original bills of lading had been pledged by Valency to its bank as security for an import trust receipt loan obtained by Valency from its bank. The fact that the original bills of lading had been released by Valency’s bank to Valency under a trust receipt did not put an end to the pledge.

JSW’s release instructions

Although the judge’s finding on right to sue would have been sufficient to dispose of the matter, he went on to find, in the case of JSW, that even if Valency had the right to sue in conversion, the release instructions given by JSW to Unicorn did not constitute an act of conversion. This was because JSW’s release instructions did not release Unicorn from its undertaking to Valency. Unicorn remained bound by its own undertaking to Valency and JSW was aware of this. JSW therefore could not have intended by its release instructions to interfere with Valency’s interest in the Cargo. The judge further supported his decision by reference to two previous transactions where JSW also issued release instructions to Unicorn, but Unicorn understood that it could still not release the cargo financed by Valency without Valency’s instructions.

Oldendorff’s release instructions

In the case of Oldendorff, however, the judge took a different view with respect to its release instructions. Oldendorff’s explanation was that the delivery orders and its release instructions were issued only in connection with the berthing of the vessel and the discharge of the Cargo at Krishnapatnam Port. The judge did not accept Oldendorff’s explanation and, instead, took the view that Oldendorff’s release instructions, which were given almost two weeks after berthing and discharge, were instructions to Unicorn to issue delivery orders for the delivery of the Cargo to Kamachi.

Unicorn’s delivery orders

Unicorn was not represented and did not participate in the trial. The judge found that the delivery orders issued by Unicorn constituted acts of conversion and entered judgment against Unicorn. However, Valency only obtained judgment against Unicorn for delivery orders that were issued after the pledge of documents granted by Valency to its bank came to an end (when Valency repaid the import trust receipt loan it obtained from its bank).

Other claims

Valency also pursued various other claims against JSW and Unicorn including claims for breach of implied agreement, conspiracy to injure Valency by unlawful means, and inducing breach of contract, but did not succeed in establishing any of these claims. The judge also did not have to decide on JSW’s claim for contribution against Unicorn given his finding that Valency’s claims against JSW failed.

Practical implications

The late Justice GP Selvam once said that the common law concept of conversion is “too elusive to be expressed in words” and is “like a hydra with many heads”. This case serves to illustrates the versatility of a claim in conversion where instructions could potentially be construed as acts of conversion.

It is also a timely reminder to traders and charterers alike to be careful when issuing instructions and to ensure that the instructions given are clear. Where such instructions wrongfully interfere with a claimant’s chattel in a manner inconsistent with the claimant’s superior possessory title in the chattel, the claimant could potentially have a cause of action in conversion.

Reference materials

The is available on the Singapore Courts website .