Olam Global Agri Pte Ltd v AAStar Trading Pte Ltd (WA-24NCC(ARB)-34-09/2024)

This judgment deals with the Defendant’s Discovery Application vide Enclosure 135 filed pursuant to Order 24 rules 3, 7 and 10 of the Rules of Court 2012 (“ROC 2012”) and or under the inherent jurisdiction of this Court.

The documents sought against Plaintiff (“Olam Global”) are: a) all pleadings in the arbitration proceedings between the Plaintiff against the Owners of the vessel MT YUANDONG commenced on 10.8.2022 at the Singapore Chamber of Maritime Arbitration (“SCMA”); b) all cause papers and submissions in the contested jurisdiction application decided by the SCMA tribunal; c) the written grounds of award by the arbitral tribunal pertaining to the contested jurisdiction application; d) all cause papers related and or connected with the Owner’s appeal against the SCMA arbitral tribunal’s decision on the contested jurisdiction filed in the Singapore High Court and written grounds of the decision of the Singapore High Court. (collectively referred as “the Discovery Documents”).

Enclosure 135 was filed in response to Olam Global’s Originating Summons herein to set aside the Final Appeal Award issued by the PORAM Appeal Board on the ground that the Final Appeal Award was induced and or affected by fraud and that the majority of the PORAM Appeal Board had failed to consider the material issue as regards the authenticity of the Cargo Readiness Declarations in the Final Appeal Award. Olam Global claimed that the Cargo Readiness Declarations were forged and or were backdated documents.

In fact, subsequent to the filing of the Originating Summons, Olam Global had filed Enclosure 104 which was the application for the discovery of the original copies of the Cargo Readiness Declarations and the correspondence, emails or other forms of communication (in original format and condition) enclosing the Cargo Readiness Declarations and or documents related to or in connection with the creation and or delivery of the same (“the Enclosure 104 Discovery Documents”).

Sometime on 26.3.2025, this Court dismissed Olam Global’s Enclosure 104 with costs on the ground that the Enclosure 104 Discovery Documents are neither relevant nor necessary for the determination of the Originating Summons.

On 7.5 2025, when Enclosure 135 came up for hearing, both counsel for the Defendant (“AAStar”) and Olam Global informed this Court that given the grounds of judgment issued in relation to the dismissal of Enclosure 104, this Court must for consistency similarly dismiss the application under Enclosure 135 since this Court has found that the issue of cargo readiness on 7.7.2022 was irrelevant to the Appeal Board’s determination in reaching the Final Appeal Award. The Discovery Documents sought under Enclosure 135 was to demonstrate that Olam Global is taking inconsistent positions on the issue of the cargo readiness for loading on 7.7.2022.

Based on the aforesaid, this Court dismissed Enclosure 135 with costs.

By way of two Sales Contracts, Olam Global agreed to purchase from AAStar 30,000MT of palm olein which was to be delivered at 2 load ports mutually agreed by the parties.

The initial agreement was for the cargo to be loaded onto the nominated vessel MT YUANDONG (“the Vessel”) by 30.6.2022. This time frame was extended to 10.7.2022 (“the Shipment Period”).

The Vessel arrived at the 1st load port, Kuala Tanjung, on 2.7.20225. It was not in dispute that AAStar did not provide notice of cargo readiness 2 days before the Vessel’s arrival as required by Clause 3(v) of PORAM Contract No. 2 but Olam Global had waived this requirement and was still willing to continue with the Sales Contract. However, the Vessel left without the cargo on 7.7.2022 claiming that the cargo was not ready for loading.

Olam Global attempted to get the Vessel to turn back for loading or alternatively nominate another vessel but failed in its efforts. Thereafter Olam Global arrested the Vessel on 10.7.2022 in Malaysia for breach of the charterparty agreement and informed AAStar on 11.7.2022 that they would make arrangement for the Vessel or a suitable alternative to return to load the cargo.

Notwithstanding the aforesaid, a fall in palm olein prices led to the termination of contract by Olam Global’s Iranian on-sale buyers. Due to this termination, on 4.8.2022, Olam Global informed AAStar that it was not in the position to perform the Sales Contracts.

The aforesaid caused AAStar to declare in an email of 5.8.2022 that Olam Global was in default of the Sales Contracts and to accept Olam Global’s express repudiation of the Sales Contracts.

On 10.8.2022, Olam Global commenced the SCMA Arbitration against the Owners of the Vessel for leaving Kuala Tanjung on 7.7.2022 without loading the cargo by issuing a Notice of Arbitration to them. This naturally presupposes that the cargo was ready for loading.

On or about 22.8.2022, AAStar commenced arbitration proceedings against Olam Global under the auspices of the Palm Oil Refiners’ Association of Malaysia (PORAM) pursuant to PORAM Rules of Arbitration and Appeal (PORAM Rules) against Olam Global claiming for, among others, the loss and damages arising from Olam Global’s breach of the Sales Contracts.

The First Tier Tribunal, consisting of a panel of 3 arbitrators including 1 nominated by Olam Global, unanimously found in favour of AAStar.

Unhappy with the result, Olam Global appealed to the PORAM Appeal Board which also ruled in favour of AAStar, albeit by a 2:1 majority.

The Appeal Board found that Olam Global was in default of the Sales Contracts when they were unable to present a vessel to lift the cargo on 4.8.2022. AAStar had put Olam Global in default of the Sales Contract on 5.8.2022. Hence, the majority of the Appeal Board agreed with the decision of the First Tier Tribunal.

Aggrieved with the Final Appeal Award, Olam Global filed the present Originating Summons to set aside the same. The crux of the application to set aside is that the cargo was in fact never ready for loading on 7.7.2022. Olam Global claims that the Cargo Readiness Declarations which were produced during the hearing before the Appeal Board were forged and or backdated and the majority of the Appeal Board had relied on them in deciding that Olam Global had defaulted on their obligation under the Sales Contracts.

By Enclosure 135, AAStar sought to have the Discovery Documents which according to AAStar would demonstrate that Olam Global had taken the position in the arbitration proceedings before the SCMA tribunal that the Owner of the Vessel had wrongfully departed from the 1st load port at Kuala Tanjung when the cargo was ready for loading.

It is AAStar’s case that Olam Global cannot on the one hand maintain in its claims against the Owner of the Vessel in the arbitration proceedings before the SCMA tribunal that the cargo was ready on 7.7.2022 but on the other hand at the same time take a diametrically opposite position in the present Originating Summons that the cargo was never ready for loading on 7.7.2022 based on the contention that the Cargo Readiness Declaration forms were forged and or back-dated.

Accordingly, AAStar contended that the Discovery Documents, if produced, would show the contradictory position by Olam Global in the arbitration proceedings before the SCMA tribunal and are therefore relevant and necessary for the resolution of the Originating Summons herein.

As I alluded to in my introduction to this judgment, I had already ruled in my grounds of judgment for Enclosure 104 that the Appeal Board in fact did not arrive at its decision premised on a finding that the Cargo Readiness Declarations were authentic and valid documents at all. The majority of the Appeal Board had proceeded on the basis that AAStar was unable to confirm cargo readiness on 7.7.2022. More specifically in paras [12.7] and [12.11] of the Final Appeal Award, the majority of the Appeal Board had found as follows: “12.7 Respondents were not able to confirm cargo readiness when the nominated Vessel arrived at the first load-port, Kuala Tanjung and tendered cargo readiness on 2nd July 2022. Respondents confirmed cargo readiness on 7th July 2022 with the Respondents presenting sufficient purchase contracts and export permits for the cargo while the Appellants disputed the accuracy of this confirmation as they believed that only off-specification 2,000 MT was available. …

12.11 PORAM Contract 2 terms clearly express the rights and obligations of the contracting parties. Respondents were obliged to but they were unable to confirm cargo readiness when the nominated vessel arrived at the first load-port. Appellants reserved their rights to hold Respondents responsible for losses and damages. Rather than exercising their rights to hold Respondents in default of the Sales Contracts, they continued their efforts to present suitable freight to lift the cargo from the Respondents. Appellant finally notified the Respondents that they were unable to present a vessel to lift the cargo on 4th August 2022. Respondents put Appellants in default of the Sales Contracts on the following day. We agree with the Tribunal’s decision to find the Appellants in default of the Sales Contracts.” [emphasis added] [24] AS can be seen above, the Appeal Board had not proceeded on the basis that Olam global had repudiated the Sales Contract on the ground that it had failed to load the cargo on 7.7.2022. Instead, the Appeal Board had found that Olam Global, notwithstanding AAStar’s breached its obligation to have the cargo ready for loading on 7.7.2022, had waived its right to terminate the Sales Contracts. Whilst reserving its rights to hold AAStar responsible for any losses and damages that Olam Global may suffer by reason of the aforesaid breach, Olam Global had affirmed the Sales Contracts by informing AAStar that it would arrange an alternative vessel to call at Kuala Tanjung port to load the cargo. [25] It was premised on the aforesaid that the Appeal Board had agreed with the decision of the Tribunal of the First Tier Arbitration that Olam Global had defaulted under the Sales Contract when it notified AAStar on 4.8.2022 that it would not be presenting a vessel to load the cargo. The relevant passages of the Tribunal’s Award of the First Tier Arbitration are reproduced below: “8.1.6 However, at every stage when the Claimant allegedly breached any of the terms of the Disputed Contracts until 7th July 2022 when the vessel sailed from Kuala Tanjung, the Respondent had options under the contract terms to take various steps to protect their interests. The option chosen by the Respondent was not to hold the Claimant in default and terminate the Disputed Contracts. Instead, the Respondent chose to put Claimant on notice for the loss and damage to which the Respondent had been exposed and calling on Claimant to confirm full cargo readiness. By doing so, the Respondent acknowledged their willingness to continue with the performance of the Disputed Contracts whilst holding Claimant accountable for its losses and damages.

8.1.7 Respondent, by its email on 11th July 2022, once again indicated to the Claimant that they were continuing with the performance of the Disputed Contracts and were seeking to have the vessel (or suitable alternate) return for loading the cargo soonest. Respondent also asked Claimant to confirm that the cargo was fully ready for loading, including having the export permits in place. At same time, Respondent continued to hold Claimant responsible for its losses and damages.

8.1.8 By their email dated 12th July 2022, Claimant reiterated that their cargo was fully ready to load as of 7th July 2022 and that, in view of the cargo size of 27,500 MT, it was not possible to keep the cargo ready indefinitely and that they would require 14 days from the date of notice of shipment to make the entire cargo available. Even at this stage the Respondent did not give any indication that they intended to exercise any option other than continuing with the performance of the Disputed Contracts.

8.1.9 We find it strange that after the above-mentioned communication of 12th July 2022 from the Claimant, there was no further communication from the Respondent in regard to their efforts to bring back a vessel for loading the cargo. Until 4th August 2022, when the Respondent communicated to the Claimant by an email (Exhibit C-14, pages 57-58 of the SOC) that they were not successful in bringing an alternate vessel to load the cargo as the On-Sale Contract had been terminated by their buyer. Crucially, Respondent went on to advise that they were not in a position to perform the contracts.

8.1.10 The Respondent had all along reserved their rights to hold the Claimant responsible for losses and damages sustained by the Respondent due to the various breaches of contract terms by the Claimant. We agree with the Respondent that even if its attempts to continue to perform the Disputed Contracts constituted a waiver, that waiver could only be a waiver of the right to terminate the Disputed Contracts and that there is no basis for Claimant's assertions as to an alleged waiver of Respondent's right to hold Claimant responsible for their breaches, especially as Respondent expressly and repeatedly reserved their rights to otherwise hold Claimant responsible.” [emphasis added] [26] Accordingly, since the question as to whether the cargo was ready or not on 7.7.2022 was immaterial to the decision of both the Tribunal of the First Tier Arbitration and the Appeal Board, the documents relating to the cargo readiness and for that matter, the position taken by Olam Global in the arbitration proceedings against the Owner of the Vessel before the SCMA tribunal in relation to the readiness of the cargo is of no relevance to the Originating Summons herein. This means that the Discovery Documents are both irrelevant and unnecessary for the determination of the Originating Summons herein and by reason of the same, Enclosure 135 ought to be dismissed. [27] There is no need for this Court to even consider the issue as to whether the Discovery Documents which are sought, being documents arising from the arbitration proceedings, are prevented from being discoverable by reason of the doctrine of confidentiality of the arbitration proceedings. Conclusion [28] In the premises, Enclosure 135 is dismissed with costs fixed at RM15,000.00 subject to payment of allocator. Dated the 20th day of May 2025 ONG CHEE KWAN Judge of the High Court of Malaya High Court of Kuala Lumpur, NCC2 & Admiralty Counsel:

Mr. Chong Yee Leong together with Mr. Abd Azim bin Abd Razak and Mr. Tan Chuan Yi for Plaintiff (Messrs. Rahmat Lim & Partners)

Mr. Siva Kumar A/L Kanagasabai together with Mr. Royce Bong Jun

Order 24 rules 3, 7 and 10 of the Rules of Court 2012

Palm Oil Refiners’ Association of Malaysia

PORAM Rules of Arbitration and Appeal