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HK court rules against Hoe Leong unit in marine fuel sale case
HEAVY equipment supplier Hoe Leong Corp has suffered a defeat in an overseas court case, it disclosed in a bourse announcement on Friday evening.
Wholly owned subsidiary Arkstar Ship Management had been entangled with Chimbusco Pan Nation Petro-Chemical Co since a writ of summons was received in September 2015, over its failure to pay for a marine fuel oil sale contract.
Arkstar Ship Management has now been ordered to pay the claimed amount of close to US$336,000, as well as interest and costs, in a Jan 11 judgment from the Hong Kong High Court.
The Hoe Leong Corp unit argued at the time that the fuel supplied had led to fuel tank contamination, leaving the vessel out of action for several months when it came to chartering services.
Arkstar Ship Management also submitted a counter-claim against Chimbusco for breach of contract, citing the alleged supply of contaminated bunkers and subsequent damage to the vessel's engines.
But the Hong Kong court ruled against Arkstar Ship Management, saying both the defence and counter-claim were excluded under the interpretation of the contract.
The court also pointed to a factual finding that the bunkers were not actually contaminated.
Hoe Leong Corp said on Friday that its subsidiary is now "seeking legal advice and exploring all of its options" with regard to the court order.
The group is a 28.66 per cent-owned associate of United Overseas Bank, which was allotted 1.61 billion shares in 2018 in a debt-for-equity swop through a scheme of arrangement.
Controlling shareholder Hoe Leong Co's interest then stood at 28.29 per cent.