SINGAPORE: The Appellate Division of the High Court has overturned a landmark ruling that had held former Inter-Pacific Petroleum (IPP) director Goh Jin Hian liable for US$146 million (S$187 million) in damages.
This decision, delivered on 5 June 2025, sets aside an earlier verdict that found Goh responsible for the financial losses sustained by the now-insolvent marine fuel supplier.
The appeal was heard by Justice of the Court of Appeal Tay Yong Kwang and Judges of the Appellate Division Woo Bih Li and Kannan Ramesh.
While the panel agreed that Goh breached his duty of care as a director, they concluded that the breach was not the cause of IPP’s losses.
In the earlier trial, IPP had successfully argued that Goh, as a director, failed to act on multiple warning signs, or “red flags”, that should have prompted him to investigate suspicious activities within the company.
Justice Aidan Xu @ Aedit Abdullah ruled in February 2024 that Goh was negligent in not acting upon these signs, awarding damages totalling US$146,047,099.60 in favour of IPP.
Scale of alleged fraud involved multimillion-dollar cargo and bunker trades
The alleged fraud involved drawdowns of over US$146 million for cargo trades and an additional US$10.5 million for bunker trades between 21 June and 2 August 2019.
At trial, IPP claimed that Goh had not responded adequately to three specific indicators: an audit confirmation request he signed, the Maritime and Port Authority’s temporary suspension of IPP’s bunker licence, and three debt confirmation letters also signed by him and submitted to Maybank.
According to IPP, a proper inquiry by Goh in response to these events would have exposed fraudulent trades that severely impacted the company.
Goh, however, maintained that he neither breached his duties nor caused the loss, and argued that the cited red flags were insufficient grounds to trigger a formal investigation.
Justice Abdullah found Goh had played an active managerial role and assumed responsibilities, stating that the director’s lack of knowledge regarding the cargo trading segment—a core area of IPP’s business—was unacceptable.
He concluded that the failure to act on the red flags amounted to a breach of director’s duties and justified the award of damages.
Goh appealed against the ruling, leading to the current judgment by the Appellate Division.
Court finds breach of duty but no causal link to financial losses
Delivering the court’s judgment, Justice Ramesh agreed that Goh had breached his duty by remaining unaware that IPP had a cargo trading division.
However, he emphasised that IPP had failed to demonstrate that this ignorance directly caused the financial losses.
“In our view, IPP has failed to discharge its burden of proving that Dr Goh’s ignorance of the cargo trading business was the proximate cause of the loss in question, namely the cargo drawdowns,” Justice Ramesh stated.
To succeed in its claim, IPP needed to specify what preventive steps Goh could or would have taken had he been aware of the cargo trading operations.
However, the court found that IPP did not outline such steps or present supporting evidence, instead relying on speculative assertions.
The Appellate Division further disagreed with Justice Abdullah’s characterisation of the red flags.
It held that the documents and events cited by IPP did not rise to the level of warning signs that would compel a director to investigate potential fraud.
“It cannot be part of a director’s duty of supervision and oversight to pick up fraud unless there are tell-tale or warning signs,” Justice Ramesh explained.
“A director may be a sentinel, but he is not a forensics investigator or a sleuth, unless there are signs that would put him on inquiry. There is no suggestion by IPP there were any, apart from the ‘red flags’, which we have concluded were not in fact red flags,” he added.
The court also ruled that Goh did not breach any duty owed to IPP’s creditors, as he did not authorise the cargo drawdowns.
As a result, the Appellate Division set aside the damages award and allowed Goh’s appeal in part.
Goh was represented by Thio Shen Yi, a senior counsel from TSMP Law Corporation, and Nanthini Vijayakumar.
Speaking on the outcome, Thio said, “Dr Goh has always maintained that his conduct caused no avoidable loss to IPP, and we believe he has been vindicated.”
He added that the judgment was a significant one for corporate governance.
“Directors owe fiduciary obligations and duties of care to a company but the Appeals Court has crucially recognised the practical and commercial limits to their ability to scrutinise for and detect fraud, especially deep-seated fraud,” Thio noted.
“This acknowledges the complex commercial realities that directors often operate in.”
Separate criminal proceedings against Goh still ongoing
Despite the successful appeal, Goh continues to face legal issues.
He was charged in September 2023 with false trading in connection with his previous role as CEO of New Silkroutes Group.
That case involves 39 charges under the Securities and Futures Act and remains pending before the court.
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