The Shipping Law Updates is a publication by our Regional Shipping Group which marshals legal expertise, industry insight, and commercial acumen in the fields of maritime and trade from the diverse talent pool of specialist lawyers at the Rajah & Tann Asia offices. The publication provides a snapshot of the key legal, regulatory, case law and industry developments in the region that have an impact on the shipping industry and your operations.


In this issue, we consider the occurrence of supply disruptions in commodities trading and the contractual remedies available to affected parties along the supply chain - specifically, we take a look at the example of the Indonesia oil export ban earlier this year and the options available under the Palm Oil Refiners Association of Malaysia contracts. On the topic of international trade, we also examine the relationship between the sale contract, the carriage contract and the financing arrangements in the context of a recent judgment of Malaysia's apex court in Malayan Banking Berhad v Punjab National Bank [2022] 4 MLJ 758 (Federal Court).

Moving on to topics involving vessels and crew, we discuss the statutory regimes for the payment of compensation to employees for workplace injury and how it interacts with private settlements, against the backdrop of the recent Singapore High Court decision involving a crewmember aboard a vessel in M.T.M. Ship Management Pte Ltd v Devaswarupa & 3 Ors [2022] SGHC 178. We also take a look at the Bombay High Court's decision The Swedish Club v V8 Pool Inc. and Other. (Commercial Appeal Nos. 108 and 111 of 2021), which considered whether crew wages incurred post-arrest could be ranked as Sheriff's (or marshal's) expenses, and whether recoupment of such wages and Maritime Labour Convention expenditure by a P & I club are also to be treated as Sheriff's expenses.

Malaysia: Supply Disruptions in Commodities Trading - How Do PORAM Contracts Address Export Bans?


The world of commodities trading has seen several major events of supply disruption over the years, ranging from export bans to oil strikes to pandemics. 2022 saw the addition of another such event - Indonesia's palm oil export ban.

Indonesia banned the export of all palm oil derivatives from 28 April 2022 to 23 May 2022. As the world's biggest edible oils shipper, Indonesia's ban meant that monthly supplies of 300,000 to 325,000 tonnes of palm oil (about 60% of global supply) were taken off global markets. The action shocked global markets with the swiftness of its implementation and the breadth of its coverage.

The ban also raised the question of the contractual remedies and avenues available to affected parties along the supply chain. In this regard, standard-form Palm Oil Refiners Association of Malaysia ("PORAM") contracts often govern the relevant commercial relationships. This article thus looks at the effect of supply disruptions on parties who have contracted on PORAM contracts and the options available to them following the Indonesian palm oil ban.

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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.