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Lawyers: Not end of the road for parties affected by thorny issues of commodity trading mishaps

Helmsman LLC lawyers discuss pausing of LC payment, what it means for parties buying ships from companies of a group affected by fraud allegations, and trafficking in spent bills of lading.

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A webinar discussing topical issues relating to Letter of Credit (LC) payments related to sale and purchase (S&P) of commodities, S&P of ships from financially troubled companies facing fraud allegations, and trafficking in spent bills of lading (BL), was organised by international shipping and commodity law firm Helmsman LLC on Wednesday (22 July).

The event started with Maureen Poh, Director at Helmsman, presenting a scenario of a buyer purchasing an oil cargo from a company affected by fraud allegations; with payment of the cargo on basis letter of credit (LC).

Pausing Letter of Credit bank payments

“The immediate concern for the buyer was try to stop payment under LC. It seems simple to tell the bank that there could be a suspected fraud involved with the transaction so ‘please stop’. But actually, this is not so straightforward,” said Poh, who, together with her colleagues, recently advised clients involved with the above scenario.

She explained the S&P chain and documentary chain, though related, are actually separate chains of contracts.

“You might have action against your counterparty in the S&P chain but that doesn’t mean you can stop payment under documentary chain. Documentary credit payment system is “the lifeblood of commerce”, and allowing others to affect documentary credit payment will spell the death knell of commerce,” noted Poh.

“But, some civil jurisdictions in Europe might have a more flexible position. In some jurisdictions there is a general duty of good faith where the court might be more sympathetic to the victim of an alleged wrongdoing.

“In one case, the client managed to get a temporary injunction to stop the issuing bank from proceeding with payment to the negotiating bank so they can gather more evidence of the alleged fraud.

“So, if you find yourself stuck in the LC chain it might be worth exploring another jurisdiction.”

S&P of ships from group under fraud investigations

A question related to considerations for players interested in the S&P of vessels owned by legally separate entities of a group under fraud investigations was posted by Singapore bunkering publication Manifold Times.

Chen Zhida, Associate Director at Helmsman, replied that it is “very common” for big commodity trading groups to have structures, such as a trading arm and shipping arm, to keep operations separate.

“Based on the question there is nothing to suggest the companies are set up to abuse the corporate structure. That being the case, their obligations would be kept separate,” he said.

“Another angle is if those shipowning entities are involved in the alleged fraud, then they might have an associated liability.”

Ian Teo, Managing Director at Helmsman, provided more details of liabilities and maritime liens.

“Maritime liens follow the vessel regardless of who are the owners. As the new owner you have to be responsible for these claims. In Singapore, the main maritime liens we recognise are claims for unpaid crew, and claims arising out of collision. Some countries recognise claims for unpaid bunkers,” said Teo.

“The danger of maritime liens is you do not know they exist until one day they appear. Technically, you can ask the ship manager for an account of who they owe money to but we will not know how accurate that is.

“In Singapore, you can check in the court system for certain vessel claims. There are many things you can do to make sure the vessel is free of liens but you need to bear in mind you are buying a vessel under such situations.  Do your due diligence.”

Trafficking of spent Bills of Lading

Tang Chong Jun, Executive Director at Helmsman and Managing Director of Tang & Co, shared there could be trafficking of spent BLs in Singapore.

“It is normal to present the Bill of Lading when taking delivery of cargo; but in shipping, many do not do this and there is a widespread practice of parties taking cargo under a Letter of Indemnity. The party which doesn’t surrender those Bills of Lading can take it into the bank and ask for finance,” said Tang.

“We have a recent case on hand where we are acting for the shipowner who did not collect the Bill of Lading. Obviously, when banks found out they sued the shipowner for failing to collect the original Bills of Lading and claimed the shipowner has misdelivered the cargo.

“The court has acknowledged that there could be trafficking in spent BLs.

“Now, the question is of what will be the implication for those banks who are in receipt of those spent BLs? In my view, this creates a lot of uncertainty where banks now need to do a lot more due diligence on whether BLs are spent.”

Teo added that the trafficking of spent BLs has been increasingly unraveling in recent years.

“This whole practice using the Letter of Indemnity has been going on many years and the practice is starting to show cracks and stress. We are seeing possibly the same cargo being resold and refinanced a few times,” he said.

“Most of time, there is no problem at end of day as the cargo is delivered. But if there is no cargo then something is definitely wrong.”

 

Published: 28 July, 2020

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Alternative Fuels

Yang Ming orders six LNG dual-fuel, ammonia-ready containerships from Hanwha Ocean

Each of the six new vessels will have a capacity of up to 13,650 TEU and feature LNG dual-fuel propulsion and Ammonia Fuel Ready specifications.

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Yang Ming orders six LNG dual-fuel, ammonia-ready containerships from Hanwha Ocean

Taiwanese shipping firm Yang Ming Marine Transport Corporation (Yang Ming) and South Korean shipbuilder Hanwha Ocean on Wednesday (2 September) signed a shipbuilding contract for six 13,000 TEU class LNG dual-fuel container vessels. 

The contract was signed by Dr. Chuck Tsai, Chairman of Yang Ming, and Mr. Charles Kim, CEO of Hanwha Ocean. The vessels are scheduled for delivery between 2028 and 2029. 

They will complement Yang Ming’s existing fleet of 10,000+ TEU vessels and serve as key vessels on East-West services, with deployment flexibility across trade lanes connecting Asia with the East and West Coasts of North America, South America, and the Mediterranean. 

Each of the six new vessels will have a capacity of up to 13,650 TEU and feature LNG dual-fuel propulsion and Ammonia Fuel Ready specifications.

“As Yang Ming transitions toward net-zero emissions, LNG provides a relatively mature and economically viable alternative fuel solution, capable of reducing greenhouse gas emissions by approximately 20%,” the company said. 

“At the same time, ammonia can serve as a carbon-free fuel by utilising converted LNG storage facilities, while offering relatively lower conversion costs and comparatively well-developed supply chains and infrastructure. The Ammonia Fuel Ready design will therefore provide Yang Ming with greater flexibility in responding to increasingly stringent international regulations on greenhouse gas emissions.”

In addition, the vessels will be equipped with Type B LNG fuel tanks with a design pressure of 1.0 bar to enhance the safety and efficiency of LNG operations, together with a range of energy-saving technologies, including Wind Shields, Rudder Bulbs, Pre-Swirl Stators, and Shore Power Systems. Smart ship technologies and cybersecurity protection features will also be incorporated to enhance operational efficiency, safety, and reliability while effectively reducing fuel consumption and greenhouse gas emissions.

Deliveries under Yang Ming’s next-generation fleet optimization plan commenced earlier this year. By 2030, a total of 24 new vessels are expected to enter service. 

This includes 18 LNG dual-fuel vessels—comprising five 15,500 TEU, seven 16,000 TEU, and the six 13,000 TEU vessels under this contract—alongside six 8,000 TEU methanol dual-fuel-ready ships. 

 

Photo credit: Yang Ming Marine Transport
Published: 4 September, 2026

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Alternative Fuels

LR, China’s MARIC unveil tanker concept ready for three future bunker fuels

Both secured AiP for a new 114,000 DWT product and crude oil tanker designed to accommodate future conversion to LNG, methanol or ammonia.

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LR, China’s MARIC unveil tanker concept ready for three future bunker fuels

Lloyd’s Register (LR) and the Marine Design and Research Institute of China (MARIC) on Thursday (3 September) have secured Approval in Principle (AiP) for a new 114,000 DWT product and crude oil tanker designed to accommodate future conversion to LNG, methanol or ammonia.

Announced at SMM 2026, the concept addresses one of the biggest investment challenges facing shipping today: the need to develop vessels and capabilities that can support a range of alternative fuel options and pathways as technologies, infrastructure and regulations evolve.

While LNG is already a mature fuel pathway, methanol and ammonia remain at an earlier stage of development, with questions around global fuel availability, infrastructure development, economics and long-term adoption.

The 114,000 DWT tanker concept has been designed as a product and crude oil carrier that can accommodate future conversion to LNG, methanol or ammonia as technologies, regulations and fuel supply chains mature. By incorporating conversion readiness at the design stage, the concept aims to reduce future retrofit complexity and provide owners with greater confidence when planning long-term fleet investments.

The design concept was reviewed against LR’s July 2026 class rules and regulations, including requirements relating to ships using gases and other low-flashpoint fuels, alongside relevant IACS Common Structural Rules for oil tankers. Final classification and statutory approval remain subject to full compliance with all applicable rules and regulations.

Theo Kourmpelis, Global Business Director for Tankers, Lloyd’s Register, said: “Shipowners are being asked to make major investment decisions today despite continued uncertainty around which fuels will dominate in the decades ahead. Alternative fuel solutions each offer potential pathways to compliance, but fuel infrastructure, regulation and economics continue to evolve at different speeds around the world.

“Designs that preserve flexibility will be critical in helping owners manage risk while preparing for multiple future scenarios.”

Si Nan, Marine & Offshore Marketing Department Vice Director, MARIC, said: “As the industry explores different decarbonisation pathways, shipowners need vessel designs that can adapt alongside technological and regulatory developments. This concept was developed specifically to provide greater fuel flexibility and long-term resilience, allowing owners to respond to changing market requirements without being locked into a single fuel strategy.

“Receiving Approval in Principle from Lloyd’s Register is an important milestone that validates the design concept and supports its future development.”

 

Photo credit: Lloyd’s Register
Published: 4 September, 2026

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Alternative Fuels

DNV: Alternative-fuelled vessel orders hit highest monthly level since October 2024

LNG-fuelled vessels accounted for the vast majority of August activity while the strong summer performance marked a significant acceleration in ordering activity after a relatively slow start to the year.

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DNV: Alternative-fuelled vessel orders hit highest monthly level since October 2024

Latest data from classification society DNV’s Alternative Fuels Insight (AFI) platform alternative-fuelled vessel ordering was strong in August, with 52 new vessels added to the platform.

This is the highest monthly total since October 2024 and follows another active month in July, when 47 vessels were added to the database.

LNG-fuelled vessels accounted for the vast majority of August activity, with 46 orders recorded. The container segment led the way with 30 orders, while the car carrier segment contributed a further 12 LNG-fuelled vessels. In addition, four ethanol-fuelled bulk carriers and two hydrogen-powered bulk carriers were added during the month, as well as one LNG bunker vessel.

The strong summer performance marked a significant acceleration in ordering activity after a relatively slow start to the year. In total, 242 alternative-fuelled vessel orders have been placed in the first eight months of 2026, representing a 27% increase compared with the same period in 2025.

LNG remains the dominant fuel choice, accounting for 63% of all alternative-fuelled vessel orders registered so far this year. Container vessels represent the largest share of these LNG orders (59%), followed by car carriers (30%).

Jason Stefanatos, Global Decarbonization Director at DNV Maritime, said: “The past two months have been particularly strong for alternative-fuelled vessel ordering, with August recording the highest monthly total we’ve seen since October 2024. This has helped lift year-to-date orders to a level well above the same period last year.

“LNG remains the leading fuel choice, driven largely by activity in the container and car carrier segments. These sectors have been among the earliest adopters of alternative fuels, supported by predictable liner operations and increasing demand from cargo owners to reduce emissions across supply chains. 

“For many owners, LNG offers a combination of emissions reductions, fuel availability and future flexibility while the longer-term fuel landscape continues to evolve. 

“At the same time, the latest figures include orders for ethanol- and hydrogen-fuelled vessels, highlighting that owners continue to explore a range of decarbonization pathways. Different segments are making different fuel choices, but the overall level of activity demonstrates continued investment in lower-emission shipping.”

Screenshot 2026 09 04 at 12.29.26 PM Screenshot 2026 09 04 at 12.29.36 PM

 

Photo credit: DNV
Published: 4 September, 2026

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