Singapore court dismisses appeal by Hin Leong's Lim family in Ocean Tankers case

THE Lim family of failed oil-services empire Hin Leong suffered a setback on Thursday (Oct 28) after Singapore's Court of Appeal dismissed their appeal against a suit won by the judicial managers (JMs) of Ocean Tankers a few months back.

Court of Appeal Justices Andrew Phang and Tay Yong Kwang described the appeal by Hin Leong's founder Lim Oon Kuin, better known as OK Lim, and his two children against the High Court's decision as a "Sisyphean attempt to raise triable issues...one that was, by its very nature, ultimately bound to fail."

Justices Phang and Tay further referred to the family's appeal as an "ill-advised attempt" to seek a different outcome by repackaging the same arguments that were raised earlier before the High Court judge.

"This effort to pour old wine into new wineskins was coupled with them seeking, quite impermissibly, to resile from admissions that they themselves had unreservedly made previously. The entire conduct of this litigation has led to an immensely unsatisfactory state of affairs," they added.

In April, Ocean Tankers' JMs Angela Ee and Purandar Rao of Ernst & Young won their bid in court to claim US$19 million from the trio - OK Lim, his son Evan Lim and daughter Lim Huey Ching, who were the firm's sole directors while father and daughter were shareholders. The family filed an appeal against the judgment soon after.

The JMs had filed the claim a year ago when they were interim JMs, alleging that Ocean Tankers made two separate payments collectively worth US$19.02 million to the Lims as partial repayment of a shareholder's loan when the firm was in a "parlous financial position" and insolvent.

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The suit against the family was filed on the basis that the payments involved an "undue preference" and were a breach of fiduciary duties, as the trio were required to ensure the company's assets were not dissipated or exploited for their own benefit at the expense of creditors.

The Lims resisted the claims and argued that Ocean Tankers was neither insolvent nor close to insolvency at that time and that they were not privy to the firm's state of affairs at the material time.

However, in affidavits filed by OK Lim and Evan Lim last year as they sought a debt moratorium for Ocean Tankers and sister company Hin Leong Trading (HLT) - these were filed less than a month after the payments in question were made - indicated that they had clear insight into the financial health of Ocean Tankers.

These moratorium affidavits, which stated that both companies were facing substantial financial difficulties, were also an integral part of the High Court Judge's reasoning in his judgment.

The Justices remarked that the Lims raised the same arguments in their appeal.

"These were arguments that were raised, considered, and rejected by the Judge" and yet the Lims sought a "second bite of the cherry" through an "unfortunately long and rambling appellants' case", said Justices Phang and Tay, adding that they were in full agreement with the observations that were made by the judge.

"This approach was not helpful, least of all with regard to the Lims' own case," they added.

Ocean Tankers and HLT, once Asia's leading players in ship management and oil trading respectively, have been wound up since being crippled by massive debts after a pandemic-led oil crash last year.