1 The applicant, Sentek Marine & Trading Pte Ltd (“Sentek”) is in the business of supplying bunkers to vessels calling at the Port of Singapore. ¹ In this judgment, “bunkers” refer to fuel supplied to vessels for propulsion or operations and includes marine gas oil. ² The respondent, the Maritime and Port Authority of Singapore (the “MPA”), is the statutory body charged under the Maritime and Port Authority of Singapore Act 1996 (2020 Rev Ed) (“MPA Act”) with the duty to issue licences to regulate the sale and supply of fuel to vessels. On or around 8 September 2013, the MPA issued to Sentek two licences: (a) the Bunkering (Bunker Supplier) Licence No 93167 (the “Bunker Supplier Licence”) and (b) the Bunker Craft Operator Licence No C95020 (the “Craft Operator Licence”. These licences will be referred to collectively as the “Licences”). ³ From 8 September 2013 until 31 August 2022, the Licences were renewed eight consecutive times, up to the period ending 28 February 2023. ⁴ MPA’s decision not to renew the Licences thereafter is the focus of this judgment.

2 The events that culminated in MPA’s decision arose sometime earlier. After a representative from Shell Eastern Petroleum Pte Ltd (“Shell”) filed a police report on 1 August 2017, the police started investigations into a series of offences linked to the misappropriation of gas oil from Shell’s Pulau Bukom facility. ⁵ I refer to the series of offences in this judgment as “the Bukom Events”. In January 2018, 14 men were charged in relation to the Bukom Events., ⁶ Two, Mr Ng Hock Teck and Mr Alan Tan Cheng Chuan, were employees of Sentek. Sentek terminated their employment that same month. ⁷

3 Subsequently, two vessels operated by Sentek, “Sentek 22” and “Sentek 26”, were identified as vessels involved in the Bukom Events (see Public Prosecutor v Juandi bin Pungot [2022] 5 SLR 470 (“Juandi”) at Annex A). ⁸ From 2020 to 2022, Sentek’s then-Managing Director, Mr Pai Keng Pheng (“Mr Pai”), was also charged for multiple offences relating to the Bukom Events. ⁹ Thereafter, on 29 September 2022, 42 charges were filed against Sentek under the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act 1992 (2020 Rev Ed). The charges against Sentek alleged that, between August 2014 and January 2018, Sentek had received on board its vessels Sentek 22 and Sentek 26 a total of about 118,131 mt of marine gas oil (valued at over $US56 million) which had been dishonestly misappropriated from Shell, knowing that the marine gas oil was another person’s benefits from criminal conduct. ¹⁰

4 The MPA, concerned with the potential reputational damage to Singapore as a trusted bunkering hub, started its own investigation as to whether Sentek had complied with the terms and conditions of the Licences. They investigated, in particular, Sentek’s compliance with the licence requirements for correct and accurate records. ¹¹ On 30 November 2022 and 3 January 2023, the MPA issued to Sentek Notices to Furnish Documents and Information pursuant to s 10(1) of the MPA Act. ¹² Sentek’s response to both of these notices was that the documents had either been seized by the Singapore Police Force (“SPF”) or had been discarded after the expiry of their regulatory retention period. ¹³ In response, the MPA required Sentek to write to the SPF to request that the SPF provide, directly to the MPA, copies of the documents which the SPF had seized. Sentek obliged, and the MPA followed up with its investigations. ¹⁴

5 In the meantime, the Licences were due to expire on 28 February 2023. ¹⁵ Sentek applied to the MPA (the “Applications”) on 16 January 2023 for the Licences to be renewed. ¹⁶ On 27 February 2023, the MPA issued Sentek a Notice to Show Cause Against Proposed Rejection of the Renewal Applications (the “Show Cause Notice”). ¹⁷ This notice referred to multiple breaches of the terms and conditions of the Licences (“the Breaches”). Sentek replied on 13 March 2023, and a series of letters between the MPA and Sentek followed. ¹⁸ Finally, on 1 April 2024, the MPA informed Sentek that the Licences would not be renewed and would expire on 31 May 2024 (the “Decision”). ¹⁹

6 In HC/OA 442/2024 (“OA 442”), Sentek applied for permission to commence an application for judicial review and, at the same time, for the following prerogative orders and declaratory relief: ²⁰

7 In HC/OA 447/2024 (“OA 447”), Sentek applied for a declaration that the MPA’s decision to reject the Applications is null and void and/or otherwise of no effect. ²¹ It also applied for an injunction in HC/SUM 1256/2024 (“SUM 1256”) to restrain the MPA from acting upon, enforcing, and/or otherwise giving effect to the Decision, such that the Licences continue to subsist, pending the final disposal of OA 447. ²² SUM 1256 was eventually withdrawn by consent, as parties were able to agree to the extension of the Licences pending resolution of OA 442.

8 The permission application and the substantive merits of the judicial review application were heard together on a “rolled up” basis on 11 July 2024. In relation to the application for permission, it was not disputed at the hearing that Sentek possessed sufficient legal standing to make the application and that the matters raised were susceptible to the orders sought. The MPA submitted that there was no arguable case of reasonable suspicion.

9 In respect of OA 442, I was of the view that there was an arguable case of reasonable suspicion, and therefore gave permission to proceed with judicial review. I reserved judgment on the prayers relating to the substantive review, and I deal with these below. For OA 447, no orders were made as none were necessary.

10 The two Licences, ²³ issued under Regulation 64 of the Maritime and Port Authority of Singapore (Port) Regulations, give the MPA wide discretion in considering whether to accept, either on terms or unconditionally, or to reject applications, both in relation to applications for fresh licences and for renewal of existing licences. The only contractual limitation on the MPA’s discretion, with which the MPA complied, is that it must ask the licensee to show cause against a proposed rejection if it intends to reject an application to renew a licence (see cl 4.4 of the Bunkering Licence and cl 4.4 of the Craft Operator Licence). ²⁴

11 The parties therefore do not dispute that the scope of review is limited to the following:

(a) Legality: the MPA must exercise its discretion in good faith according to the statutory purpose for which that power was granted, including, inter alia, that it must not take into account irrelevant considerations or fail to take into account relevant considerations (Tan Seet Eng v Attorney-General and another matter [2016] 1 SLR 779 (“Tan Seet Eng”) at [80]).

(b) Rationality: the MPA must not make a decision that, despite falling within the range of legally possible answers (ie, satisfying (a)), is so absurd that no reasonable decision-maker could have come to it (Tan Seet Eng at [80]).

(c) Procedural fairness: the MPA must observe the basic rules of natural justice in its conduct of the show cause process, and in coming to its decision (see Per Ah Seng Robin and another v Housing Development Board and another [2015] 2 SLR 19 at [82]).

12 While Sentek initially raised the argument that it had substantive legal expectations which the MPA ignored, ²⁵ it no longer pursued this point at the hearing. ²⁶ Sentek’s remaining contentions are that:

(a) The Decision was premised on irrelevant matters, of which there were two. The first was the Bukom Events. ²⁷ The second was a false basis that Sentek terms the “Foundational Allegation”. ²⁸ This relates to the MPA’s statement, in its Show Cause Notice, that 45 out of the 73 Breaches involved the intentional falsification of records. ²⁹

(b) The Decision was unreasonable in the sense set out in Associated Provincial Picture Houses, Limited v Wednesbury Corporation [1948] 1 KB 223 (“Wednesbury”), in that no reasonable authority would have made the Decision. In this regard, Sentek points out that MPA was not limited to a binary decision of whether to renew the Licences or not. It had the power to impose appropriate terms and conditions on a renewal. ³⁰

(c) The Decision was procedurally improper. The MPA had breached fundamental tenets of natural justice. It did not inform Sentek specifically of the allegations that were being made against Sentek, and it did not afford Sentek a real opportunity to meet the case that was put against Sentek. ³¹

13 These contentions require examination of the background and process that led to the Decision.

14 Sentek contends that the Bukom Events were an irrelevant factor in the Decision. It is not disputed that the Bukom Events formed part of the background to the MPA’s exercise of its discretion. After Sentek and Mr Pai were charged, the MPA issued to Sentek, on 30 November 2022 and 3 January 2023, Notices to Furnish Documents and Information pursuant to s 10(1) of the MPA Act ³² (see [4]). The first letter, on 30 November 2022, required Sentek to provide the following: ³³

15 The second letter, on 3 January 2023, required Sentek to provide: ³⁴

16 Sentek granted permission for the MPA to access the documents from the SPF (see [4]). On 25 January 2023 and 7 February 2023, Mr Ranabir Chakravarty, a Deputy Director in the Standards and Investigation (Marine Fuels) Department of the MPA, ³⁵ went with two colleagues to the SPF’s office to inspect the documents. ³⁶ They identified documents relating to Sentek 22 and Sentek 26 for the months of February and March 2017 as it appeared that these were the months for which the most documents were available for both the delivering and receiving vessels. They made copies of those documents and brought them back to the MPA’s office for further review. Upon discovering various breaches within those two months, they also conducted further random checks of the documents relating to Sentek 22 and Sentek 26 for other time periods in 2016 and 2017, to ascertain whether the breaches were isolated to February and March 2017. These random checks revealed further breaches. ³⁷ It is therefore also not disputed that the MPA used only the documents which were in SPF’s custody and only documents that were contemporaneous to the Bukom Events.

17 On 27 February 2023, the MPA sent Sentek the Show Cause Notice (see [5]). Sentek’s allegations on the Foundational Allegation relate to this notice. The Show Cause Notice referenced various terms of the Licenses which obliged Sentek to ensure that accurate records were maintained and that no records be falsified. The Breaches, from February 2016 to November 2017, consisted of three categories:

18 In its response on 13 March 2023 (“Response to Show Cause”), Sentek made the following points: ⁴¹

In its Response to Show Cause, Sentek did not explain precisely how the discrepancies between the carbon copies had come about.

19 The MPA responded to Sentek’s solicitors, Lee & Lee, on 29 May 2023. The MPA offered to do the following to address Sentek’s concerns at [18(d)]. First, it offered to make arrangements for Sentek to “expeditiously view” the relevant documents. Second, it asked for the names and NRIC/FIN numbers of the ex-employees that Sentek wished to interview, their roles at the relevant time, the questions that Sentek intended to pose to each of them, and the basis for Sentek’s claim that they were “prevented from communicating with or interviewing the ex-employees.” ⁴²

20 Sentek responded to the MPA’s letter on 23 June 2023. It rejected the MPA’s offers on the ground that the MPA “[did] not truly address the gravamen of the issues raised in [Sentek’s] 13 March letter”, ⁴³ for the following reasons. Regarding the relevant documents, even if copies of all the relevant documents were made available to Sentek, it would still be challenging for Sentek to conduct any of its own investigations given that it lacked the powers of investigation vested in the police. It took the view that the MPA should allow the criminal proceedings to take their due and proper course before altering the status quo. ⁴⁴ As for the request for the ex-employees’ information, Sentek did not know what the MPA’s purpose in asking for the information was, and without knowing that purpose, it was difficult for Sentek to provide any meaningful response. ⁴⁵

21 The MPA’s response came on 7 August 2023. It explained that its investigations were independent of the SPF’s criminal investigations. In relation to Sentek’s query on the ex-employees, the MPA explained its intention was to interview the ex-employees to ascertain their explanation for the discrepancies, and to “then inform [Sentek] of the gist of the ex-employees’ answers and to provide [Sentek] with an opportunity to respond to the answers.” ⁴⁶

22 Sentek responded on 25 August 2023, rejecting the MPA’s overtures. It took the position that the MPA should refrain from attempting to conduct its own parallel investigations and adjudicating on the questions of: (a) whether Sentek’s employees had indeed falsified and/or doctored the documents giving rise to the suspected discrepancies; and (b) whether their primary purpose in doing so was to conceal the true facts from Sentek to avoid detection of their wrongdoings. ⁴⁷ As for the MPA’s offer to assist Sentek in communicating with its employees, Sentek observed that this could still give rise to witness tampering, and that in any event, the MPA should hold off regulatory proceedings until there was finality in the related criminal proceedings. ⁴⁸ It asked for a “without prejudice” meeting with the MPA. ⁴⁹ The MPA did not respond to this letter.

23 On 1 April 2024, the MPA informed Sentek that it would not renew the Licences through the Decision, stating the following:

24 Returning to the three main contentions made by Sentek (see [12]), the Decision would be tainted by illegality if irrelevant considerations had been taken into account (see Tan Seet Eng at [80]). The two irrelevant considerations advanced by Sentek relate to the genesis of the investigations and the early concerns of the MPA. I therefore deal with these contentions first.

25 It is not disputed that the MPA decided to conduct its own investigations after Mr Pai and Sentek were charged in the context of the Bukom Events. It is also not disputed that the documents the MPA used were those pertinent to the Bukom Events. What is disputed, however, is whether the MPA took into account matters relating to the Bukom Events in coming to the Decision itself. Sentek argues that the scope of, and the manner in which, the MPA’s inquiry was conducted leads to an “irresistible inference” that the Bukom Events influenced the Decision. ⁵² It cites the fact that the MPA limited itself to seeking documents which the SPF seized from Sentek regarding the vessels Sentek 22 and Sentek 26, pertaining to a particular historical date range, being 1 August 2014 to 31 January 2018. This date range was the very period in which the Bukom Events occurred, a period some six to seven years before the issuance of the Show Cause Notice. ⁵³ The very documents seized by the SPF for its investigations in the Bukom Events then became the basis for the matters stated by the MPA in its Show Cause Notice. ⁵⁴

26 To bolster its argument, Sentek relies on various parts of Mr Chakravarty’s affidavit (the “MPA Affidavit”) where Mr Chakravarty defended the Decision by pointing to the risk of reputational harm to Singapore as a bunkering hub. ⁵⁵ Counsel for the applicant, Mr Jordan Tan (“Mr Tan”) referred to various illustrative excerpts, as follows:

(a) “While the [MPA] was aware that the Charges had not been dealt with in Court, the [MPA] was concerned with the overall situation given the potential reputational damage to Singapore as a reliable and trusted bunkering hub, especially given the possible length of time required for the resolution of the criminal proceedings” (para 11).

(b) Having concentrated on the records for Sentek 22 and Sentek 26 (para 14), then concluding at para 44, “[h]owever, the [MPA] decided not to renew the Licences on terms because… the [MPA] was of the view that, given the severity of the breaches that [Sentek] had committed, allowing [Sentek] to continue to operate with the Licences risked serious reputational harm to Singapore’s position as a reliable and trusted bunkering hub”.

(c) Having initially considered waiting until the conclusion of the criminal proceedings to take action (para 54), at para 55, “…[g]iven the severity of the breaches, the [MPA] considered that allowing [Sentek] to continue to operate with the Licences risked serious reputational harm to Singapore’s position as a reliable and trusted bunkering hub” (para 55).

27 Sentek’s argument was that these excerpts allude to the MPA’s concern for serious reputational harm to Singapore, in turn proving that the Bukom Events had been considered by the MPA in coming to the Decision. I do not agree with Sentek’s interpretation of these excerpts. The first, at (a), explained the context for the independent MPA investigation. The latter two excerpts, (b) and (c), stated that the severity of Sentek’s breaches of its Licences were the cause of the non-renewal. Further, Paragraph 44 went on to specify that the MPA assessed Sentek to be unfit to continue to hold the Licences for various specific reasons, and paragraph 55 made clear that “[MPA’s] own investigations had independently established that [Sentek] had breached the T&Cs of the Licences”.

28 In my view, there is no doubt that the MPA was entitled to start its own investigations into whether the terms and conditions of its Licences had been breached. That its overarching concern was to maintain Singapore’s standing as a trusted bunkering hub is not surprising in the light of its role under the MPA Act. The Bukom Events being the impetus for the independent investigations does not lead to the conclusion that the Bukom Events were given undue weight in the Decision. It is not disputed that the MPA found breaches of the Licences, which were put to Sentek to explain. Being dissatisfied with Sentek’s answers, the MPA then proceeded to reject the application for the renewal of the Licences.

29 Sentek’s second contention of another irrelevant consideration is what it defines as a Foundational Allegation, “that out of the 73 transfers, 45 records were intentionally falsified”. ⁵⁶ Sentek’s case was that because this allegation was made by merely comparing vessel records, it was made without sufficient basis. ⁵⁷ This false premise therefore rendered the Decision irrational.

30 It is relevant, at this juncture, to explain these 45 falsified records. The first 42 involve breaches of cll 11 and 14 of the Bunker Supplier Licence and cl 11 of the Craft Operator Licence, both in effect from 1 January 2013 and prior to 1 April 2017. These clauses state, respectively:

(a) “The bunker supplier shall record and ensure that bunker craft operators and cargo officers record all deliveries and transfers of bunkers correctly and accurately in the documents as specified in the latest edition of SS 600 and that no false records or entries are made in the same” (cl 11 of the Bunker Supplier Licence). (SS 600 is an abbreviation of SS 600:2014, which refers to an industry standard on the practice of bunkering that was promulgated by SPRING Singapore.) ⁵⁸

(b) “The bunker supplier shall not falsify and shall ensure that cargo officers shall not falsify any records in any documents used in connection with the supply of bunkers, including any deliveries and transfers thereof, whether directly or indirectly undertaken by the bunker supplier” (cl 14 of the Bunker Supplier Licence). ⁵⁹

(c) “The bunker craft operator shall not falsify and shall ensure that the crew and cargo officer shall not falsify any records in any documentation used in connection with the supply of bunkers… (cl 11 Craft Operator Licence). ⁶⁰

31 The MPA’s findings at para 10 of the Show Cause Notice were as follows: ⁶¹

[emphasis in original]

32 Three additional instances of falsification entail breaches of cl 8.10 of the Bunker Supplier Licence and cl 8.11 of the Craft Operator Licence (in effect from 1 April 2017):

(a) “The Licensee must not falsify, and must ensure that its management, employees, directors, officers, and the cargo officers do not falsify any records or any documents used in connection with any supply of bunkers made by it” (cl 8.10 of the Bunker Supplier Licence). ⁶²

(b) The Licensee must not falsify, and must ensure that its management, employees, directors, officers and the cargo officers do not falsify, any records or any documents used in connection with the delivery of bunkers made using any of its bunker craft” (cl 8.11 of the Craft Operator Licence). ⁶³

The reason the numbering of the clauses changed in the Licences is that a different version of the Licences was in force from 1 April 2017 onwards; however, the substance of the clauses breached is essentially the same.

33 MPA’s findings at para 19 of the Show Cause Notice were the following: ⁶⁴

34 In each transaction where fuel was transferred from vessel to vessel, there was a single process of measurement, which was then recorded on the BDN, during which two more carbon copies of the BDN were produced, for a total of three identical copies. Specifically, the BDN serial number and the quantity of fuel supplied, ⁶⁵ along with the signatures of the relevant officers, would be written on the original copy of the BDN, while being reproduced onto the two carbon copies below. This is necessary so that, following a given transfer of fuel, one copy of the BDN can be retained by the bunker supplier, another can be given to the receiving vessel, and the third can be given to the charterers of the receiving vessel or any other interested party having interest in the bunkering operation. ⁶⁶ The object was to ensure that the fuel was properly accounted for amongst the three parties. However, as summed up in the MPA Affidavit: ⁶⁷

35 The MPA’s assumption that carbon copies of the BDN would be identical unless at least one of them had been deliberately falsified, is entirely logical. When carbon paper is used, any writing on the original BDN would be automatically and simultaneously transferred to the carbon paper below. It follows therefrom that carbon copies should, in the ordinary course of events, be identical, and conversely, that if no sensible explanation is given, any differences between the various copies would have involved intentional falsification.

36 Premised on this sensible starting point, the MPA asked Sentek to show cause. The purpose of the show cause was to highlight MPA’s cause for concern, and to ask Sentek to offer an explanation as to how that situation had arisen. Therefore, it was not the Foundational Allegation that led to the Decision. Rather, it was Sentek’s inability to explain the circumstances outlined by the MPA that led to the Decision. Sentek’s response of 13 March did not explain the reason for the differences in the carbon copies, but made the assertions highlighted at [18], and which I deal with in later sections.

37 The lack of explanation persisted into the oral hearing, where Sentek attempted to argue that with the passage of time and the use of manual measurement at the time, human error could not be ruled out. ⁶⁸ Nevertheless, any error would have been made on the original top sheet and, because of the process, reflected within the carbon copies below. Instead, while the carbon copies stored on different vessels did not match, the stock movement logbooks and BDNs within each specific vessel did. ⁶⁹

38 A final point of procedure on this issue was raised by Mr Vincent Leow (“Mr Leow”), counsel for the MPA, who argued that the Foundational Allegation was not pleaded in Sentek’s Statement under Order 24 of the Rules of Court 2021 (the “Statement”). Mr Tan argued that it was, as the Breaches were identified at para 9(b) of the Statement, in the section on irrelevant considerations. I note the Breaches were also identified as an irrational basis for reasonable action, at para 12(f) of the Statement. In my view, the Statement was broadly consistent with Sentek’s written submissions, which listed the Foundational Allegation as an irrelevant consideration and also, in its Introduction, introduced the allegation as foundational to the Decision. The frame of the Foundational Allegation in Sentek’s written submission was a device used to contend that the particular allegation of falsification could not be proved merely by comparing vessel records. This may have caused confusion. As I have mentioned at [36], the Breaches functioned as a starting premise, and it was the absence of a cogent answer by Sentek that resulted in the Decision. Para 9(b) and para 12(f), read together, were sufficient.

39 In this context, I turn to Sentek’s contention that the MPA’s decision was not one that any reasonable regulator would make.

40 Parties do not dispute that in assessing whether a given act by a public authority was reasonable, the court is not entitled to substitute the public authority’s decision with its view of how the public authority should have exercised its discretion (Lines International Holding (S) Pte Ltd v Singapore Tourist Promotion Board [1997] 1 SLR(R) 52 at [78(b)]). Decision-makers may in good faith arrive at different decisions based on the same facts (Chee Siok Chin and others v Minister for Home Affairs and another [2006] 1 SLR(R) 582 (“Chee Siok Chin”) at [95]). The relevant standard of Wednesbury unreasonableness (also referred to as irrationality), therefore, refers to a decision that is so outrageous and in defiance of logic or accepted moral standards that no sensible decision-maker, who had applied his mind to the question to be decided and considered the correct factors, could have arrived at that decision (Tan Seet Eng at [73] and [80]). The assessment of reasonableness entails an inherent measure of latitude (Chee Siok Chin at [95]).

41 Sentek’s various arguments on reasonableness may be organised into four categories:

I address each in turn.

42 The breaches relating to falsification have been detailed above. Aside from these, there was another group of breaches that involved discrepancies in vessel records (the “additional breaches”). These amounted to breaches of the following clauses:

43 At the hearing, Sentek did not dispute that the discrepancies (both the deliberate falsifications and the additional breaches) had occurred, or that they amounted to breaches of the relevant terms of the Licences. Instead, it argued that the Breaches were not severe. In its written submissions, Sentek further suggests that the Licences do not impose strict liability: any breaches must be sufficiently severe to be considered a factor in the non-renewal of the Licences. ⁷⁰ The MPA, in contrast, maintains that the Breaches are severe and recurrent, reflecting the absence of a system to ensure the prevention of future similar breaches. ⁷¹

44 Sentek’s argument on the lack of severity of the breaches comprised both a qualitative and quantitative aspect. ⁷² Regarding the qualitative aspect, Sentek’s main argument is that the Foundational Allegation of the Breaches being fraudulent could not be premised on a simple comparison of the records of two Sentek vessels. ⁷³ As I have detailed at [34]−[36], this argument is untenable.

45 A second qualitative argument relates to how the falsification only affected internal transfers rather than transfers from a Sentek vessel to a third party customer. ⁷⁴ MPA has explained that accurate documents are necessary to prevent malpractices such as short delivery, which could affect Singapore’s position as a trusted bunkering hub. Sentek’s position was that no customers were shortchanged of bunkers. ⁷⁵ This position is not a conclusion that follows from the evidence, however. The evidence that falsification had taken place in internal transfers does not, as a matter of logic, lead to any inference that no similar falsification had not taken place during transfers between Sentek-owned vessels and third party-owned vessels. It was simply that evidence regarding such transfers was not available, and MPA used the available evidence from Sentek 22, Sentek 26, Sentek 30, Sentek 31, Sentek 32 and Sentek 35. ⁷⁶ Sentek did not adduce any evidence that no customers were shortchanged. It could be that Sentek’s argument was that the Breaches did not concern third party customers. Nevertheless, that the Breaches concerned transfers internal to Sentek did not lead to a conclusion that no third party customers were affected. The discrepancies totalled more than 10,000 mt of fuel valued at approximately $US 6m on 2017 prices. ⁷⁷ The amount of bunkers, at the original point of receipt before the internal transfer, and at the onward delivery point following the internal transfer, could have been recorded in differing amounts, allowing bunkers to go unaccounted for. Proper documentation concerning all transfers increases the likelihood of detecting fraud; conversely, improper documentation enables fraudulent behaviour to go undetected, which would eventually cause loss to third parties. ⁷⁸

46 Turning to the quantitative aspect, Sentek argued that even if I were to find that some of the Breaches had been fraudulent, the Breaches were not severe as they formed a very small proportion of the total number of bunker transfers that Sentek conducted over the time period under investigation. By Sentek’s calculations, 73 discrepancies out of 1,000 transfers per month, from 2016 to 2017 (ie, 24 months), amounted to an error rate of 0.3%. ⁷⁹ As for volume, since the Breaches entailed a total of 10,000 metric tonnes of discrepancies in bunker transfers, and Sentek transferred 8−10m metric tonnes of bunkers in total over the same two-year period, the volume of bunkers implicated in the Breaches was only 0.1−0.125% of the total bunker volume transferred by Sentek. ⁸⁰ Drawing on this, Mr Tan submitted that the minute rate of error rendered the non-renewal of Sentek’s Licences irrational.

47 In my view, Sentek has mischaracterised the MPA’s investigations. It is not correct to contend that only 73 discrepancies were found amidst voluminous records, or that there were no discrepancies outside of the window highlighted by the MPA. The MPA had not in fact conducted an exhaustive review of all the documents in Sentek’s vessels over the entire two-year period. ⁸¹ First, the MPA completed a “deep dive” into only two months – February and March 2016 - of documents from Sentek’s vessels, within which period they found numerous breaches. Thereafter, they conducted random sampling checks, still within the broader two-year period but outside of February and March 2016, to ensure that the Breaches were not isolated occurrences (see [16]). ⁸² The issue is rather, whether the Breaches were sufficiently severe to require an answer from Sentek, the licensee. In that context, it was reasonable for the MPA to ask Sentek to explain. Sentek, as the licensee, had the responsibility under the Licences to maintain a system to ensure accurate records were kept. The purpose of the Show Cause Notice was to obtain Sentek’s explanation. It is the Decision, issued following the Show Cause Notice and show cause process, to which the question of reasonableness is directed. This brings us to Sentek’s position, then and now, that its measures in place were and are sufficient.

48 The MPA concluded, after considering Sentek’s responses, that “the consistent and recurring nature of the Breaches demonstrates systemic flaws in [Sentek’s] processes”. ⁸³ Sentek’s contention was that it met industry norms; furthermore, industry standards did not mandate cross-vessel comparisons. MPA’s case was that the industry standards relied upon, SS 600 and SS 524:2014 (“SS 524”), ⁸⁴ did not supply the means of fulfilling the terms and conditions of the Licences regarding the accuracy of records. These were industry standards and it was left to the licensee to put in place the correct systems to ensure compliance with the terms and conditions of its licence. Sentek did not dispute this at the hearing. ⁸⁵ Furthermore, it was not the MPA’s position that Sentek was required to do cross-vessel comparisons. For the MPA, this was merely an effective way to investigate whether Sentek had met its contractual obligation to keep accurate records.

49 Relatedly, Sentek was of the view that it had taken all reasonable measures. Its best efforts had been deliberately subverted by criminal ex-employees who had been on a frolic of their own. ⁸⁶ Sentek argued that declining to renew its Licences on account of these employees would be a disproportionate and irrational response. The MPA, on the other hand, argued that Sentek’s response showed that it refused, or was unable, to recognise the flaws in its processes, rendering it unfit to continue holding the Licences. ⁸⁷ In my view, the Licences required Sentek to set up a system to ensure that records were accurate and to prevent their falsification. In other words, the onus was on Sentek to show that a system was in place that would ordinarily detect employees who had embarked on a frolic of their own. The fact that there was no such system is the issue of concern.

50 Sentek tried to address this difficulty in three ways. First, Sentek listed some measures that it had taken (at para 20 of its Response to Show Cause). Pertinently, however, these measures did not check the accuracy of the vessel records – rather, they focused only on ensuring the consistency of vessel records (ie, that the records within a given vessel tallied with other records therein): ⁸⁸

51 Secondly, Mr Tan also asserted that the measures outlined above merely constituted a non-exhaustive “snapshot” of the measures that Sentek put in place. ⁸⁹ Notwithstanding, the argument that the measures outlined in the Response to Show Cause were merely part of a broader well-functioning internal system, did not answer the central query, which was whether a sound and well-functioning internal system existed to verify the accuracy of the relevant records. I also note that Mr Tan rightly retreated from the position that, for the MPA’s view to be rational, it bore the burden of identifying the precise operational measure that Sentek had failed to implement. ⁹⁰

52 Thirdly, and finally, Sentek’s answer was that its system was regularly audited. ⁹¹ Mr Tan argued that audits were significant in proving that Sentek’s systems were not flawed. ⁹² He pointed to various findings in the SS 524 audit report done by Lloyd’s Register Quality Assurance Ltd (“Lloyd’s Report”) for the year 2017 in which various measures undertaken by Sentek were “found acceptable”. ⁹³ However, having perused the Lloyd’s Report, I do not find the cited extracts to be helpful in proving that Sentek had put in place a sound system to ensure the accuracy of its records. I deal with each of the extracts in turn.

(a) First, the Lloyd’s Report evaluated bunkering activities on board the Sentek 26 for one day, involving the delivery of 17.357 mt of bunkers to another vessel. ⁹⁴ Sentek cites the part which states that “[d]aily entries of stock movement (loading/transfer/delivery) were made in the ‘Stock Movement LogBook’. Records from month of July, August and September 2017 were sampled. No discrepancy was noted.” However, it is unclear whether, in stating that “no discrepancy was noted”, the auditor was referring to the consistency of records (ie, that there was no discrepancy between the various entries in the logbook), or whether it was referring to the accuracy of the records (ie, whether the entries in the logbook corresponded to the actual volume of the bunkers in the vessel). Even supposing that this part of the Lloyd’s Report was referring to the accuracy of the records, I agree with the MPA that the accuracy of a single sample on one vessel in respect of one transaction does not lead to a conclusion that Sentek had put a system in place to ensure the accuracy of vessel records. ⁹⁵

(b) Second, Sentek cites the part of the Lloyd’s Report which stated that Sentek’s risk control measures were “found acceptable”. ⁹⁶ However, this part of the audit was concerned with “Management System Elements”, which evaluated Sentek’s “Organisation and Its Context & Planning”, “Management of Change”, and “Continual Improvement”, among other things. This part of the audit appears to have focused on Sentek’s strategic-level planning, with limited relevance to the question of whether Sentek had in place an operational-level process for checking the accuracy of the vessel records.

(c) Third, Sentek references internal audits that were carried out aboard three bunker tankers Sentek 8, Sentek 20, and Sentek (referring to the name of a vessel). The internal audit records of these vessels were sampled and “found acceptable”. ⁹⁷ This was an “office audit”. It is not clear if this part of the audit was concerned with the accuracy, rather than consistency, of the records.

(d) Finally, Sentek references the Lloyd’s Report’s finding that the bunker forms sampled for certain deliveries were “found duly updated in accordance with SS 600:2014 and TR48:2015” (the latter being another industry standard). ⁹⁸ However, these standards set out what documents must be kept and the details that must be set out in the documents, but do not refer to the accuracy of the documents.

53 Therefore, the parts of the Lloyd’s Report which Sentek cited in the Response to Show Cause, and continued to cite before me, did not show that there was a system in place. Sentek was unable to articulate its system, and the audits could not, in and of themselves, be the system. Mr Tan argued that the purpose of an audit was to check if there was a system in place. Nevertheless, an audit functions as a randomised check. The clearance of an audit did not show that a system was in place. Sentek’s obligation under the Licences was to put a system in place.

54 Sentek further argues that the MPA had not given sufficient consideration to its enhanced control measures in deciding not to renew the Licences. The enhanced measures were listed at para 36 of the Response to Show Cause as follows: ⁹⁹

55 Mr Tan clarified, at the hearing, that the enhanced control measures were relevant in two ways. First, they demonstrate that Sentek was committed to “true change” after 2019. ¹⁰⁰ Second, the opportunity for errors in vessel records was reduced following the requirement, introduced in 2019, that bunker transfers between vessels be measured electronically using mass flow meters (“MFMs”). ¹⁰¹

56 For its part, the MPA explained that it came to the Decision, despite Sentek’s implementation of enhanced control measures, for two reasons. First, these enhanced measures were not sufficient cause for the MPA to deviate from its policy position against falsification and/or malpractice, especially where such breaches were recurring. ¹⁰² Secondly, Sentek’s attitude showed that it was unfit to continue holding the Licences. ¹⁰³

57 Relatedly, Mr Tan argued that it was not fair for a regulator to rely on matters six or seven years prior to its decision. It is clear from the arguments here that while the MPA’s concerns arose from a past time period, its concern was whether there was a robust system in place at the time of the licence renewal. I turn, therefore, to consider its two reasons.

58 Sentek has not explained how the enhanced measures would prevent falsification or manipulation of records in the future.

59 Regarding MFMs (see [55]), this is not relevant to the concern of falsification. The work stream involves a single point of measurement (see [30]−[35]), and the MFMs ensure the accuracy of that measurement. Both prior to and following the introduction of the MFMs, the carbon copies would be expected to align. In other words, the MFMs do not provide a system against falsification of the records taken following the single point of measurement. The MPA further highlights that, as MFM data is generally only retained for three months, contemporaneous documents such as the stock movement logbook and BDNs continue to be important as they are retained for three years and assist future investigations in shedding light on discrepant documents and records. ¹⁰⁴

60 Coming to the measures themselves as outlined in the Response to Show Cause, and going through each in turn: ¹⁰⁵

(a) The engagement of independent inspectors and randomised boardings of vessels suffer from all the limitations explained regarding audits at [52(a)] and [53]. What is needed is the implementation of a system, and no such system was articulated.

(b) Regarding the CCTV surveillance, these would not be able to detect the tampering of records while these breaches are occurring.

(c) As for the paperless inventory systems and enhanced training, these do not address the problem of detecting fraud and ensuring the accuracy of vessel records by preventing them from being tampered with.

(d) Sentek’s anti-corruption and anti-bribery policy is rather vague and contains little by way of detail, ¹⁰⁶ casting doubt on whether it would be effective in preventing future instances of the Breaches. For instance, the policy sets out a “zero-tolerance” stance towards corruption and bribery, without operationalising what this means in practice. Likewise, it requires that employees not participate in any “corrupt or improper practices with other stakeholders”, but does not really explain what this means apart from stating that gifts and favours are forbidden (which is, with respect, obvious). It then asserts that Sentek “has an internal reporting structure, procedures and channels that are secure and accessible for our employees to raise concerns and report violations or suspicious activity”, but gives no details as to what this internal reporting structure is, or how it works.

(e) There is even less detail on the “whistleblowing policy” mentioned. A management review noted that “[Sentek’s] ‘whistle-blowing’ policy has been adopted”; ¹⁰⁷ however, the terms of the whistleblowing policy are not set out in Sentek’s affidavit. As such, I have no information with which I can assess its effectiveness.

Therefore, Sentek has not explained how its enhanced measures would prevent future similar breaches.

61 Sentek’s attitude during the show cause process was also pertinent to the Decision. The gist of Sentek’s Response to Show Cause was to insist that Sentek could not have detected the Breaches, and that even if the ex-employees had perpetrated the Breaches (which Sentek did not admit at the time), they would have been on a frolic of their own. ¹⁰⁸ As Mr Leow explained, this is not the attitude of an organisation that is genuinely committed to preventing breaches of the terms of its Licences; if Sentek were indeed regretful about the Breaches, it could have taken a very different course in its Response to Show Cause and its subsequent correspondence with the MPA. ¹⁰⁹ For instance, Sentek, in its Response to Show Cause, acknowledged what it termed “Suspected Discrepancies”, but did not discuss how these would no longer arise because of control systems it had put in place or would put in place in the future. Instead, Sentek’s response was that:

62 Central to the MPA’s consideration whether to renew the licence would be the licensee’s ability to fulfil its contractual obligations in the period of renewal. In the present case, there had been breaches in a specific past period. There was neither any cogent explanation of what system was in place at the time of the Breaches or in the future, nor any assurance that any system would be in place during the period of renewal. In the circumstances, the Decision could not be said to be unreasonable.

63 Finally, Sentek argues that the Decision was irrational as the MPA failed to consider the possibility of imposing appropriate terms and conditions on a renewal of the Licences, ¹¹⁴ instead adopting an all-or-nothing approach to reject the Applications. ¹¹⁵

64 I disagree. Mr Chakravarty made clear that the MPA had considered the possibility of renewing the Licences on terms, but rejected the option due to the severity of the Breaches and Sentek’s attitude during the show cause process. ¹¹⁶ He also explained why the MPA has a strict policy in respect of accurate records, and how in 2017, pursuant to that policy, the MPA revoked the bunker supplier and craft operator licences of Transocean Oil Pte Ltd because of falsifications of and discrepancies in records. ¹¹⁷ I have concluded in the section above (see [62]) that the rejection of the renewal application was not unreasonable. In this context, the MPA’s manner of regulation was to prescribe the expectation and standards, through the use of industry standards such as SS 600 and the broad terms and conditions in the Licences. The matter of fulfilling the requisite standards and terms was understood by both licensor and licensee to be an operational matter, and thus within the remit of the licensee. Any specific system of ensuring the prevention of falsification or the accuracy of the various records would fall to be designed by the licensee. It follows, therefore, that any condition directed at the operational requirements of a system to be used to ensure accurate records, would necessarily arise out of enhancements promised by the licensee. Because Sentek’s responses repeatedly failed to articulate a robust system for the future, there remained a gap in the systemic structure. It was not unreasonable on the part of the MPA to reject the renewal application rather than to mandate specific operational solutions to fill the lacuna in the systemic structure.

65 I deal, finally, with Sentek’s allegations regarding procedural unfairness. Sentek argues that two fundamental tenets of natural justice were not adhered to in the present case: ¹¹⁸

66  In my view, Sentek was sufficiently informed of the allegations against it. In the Show Cause Notice, the MPA set out, in detail and in a tabular format, each transfer that was being queried, with a comment explaining the relevant discrepancy. ¹²⁰ To take an example, the first transfer in the first table (entitled “Failure to record deliveries and transfers of bunkers in the stock movement logbook”) was alleged to have taken place on 1 Feb 2017, from Sentek 22 to Sentek 26. Under “remarks”, the MPA explained that this transfer had been recorded in the stock movement logbook of the latter vessel but not the former. ¹²¹

67 In respect of the records classified as falsified, which is the category of breaches that Sentek takes issue with, the MPA set out all of them under the same heading “Discrepancies in records and falsification of records”, ¹²² and classified these breaches into different tables depending on whether or not the transfers were recorded under the same serial number on the delivering and receiving vessels. For each entry, the MPA set out the quantity that had been recorded in the relevant records of the delivering and receiving vessels, and then under the “Remarks” column, calculated the difference between the quantities noted in the delivering vessel and the receiving vessels, and also set out the serial number of the BDN(s) that had been issued for the transfer. Having set out the breaches in detail, including the date, vessels involved, the serial number of the transfer, and the exact discrepancies between the records of each vessel concerning the quantity of bunkers transferred, it can hardly be said that Sentek was not informed of the case against it.

68 In this context, it was unnecessary for the MPA to specify, as Sentek contends, whether it was the sending or the receiving vessel’s record that was falsified. This is because, in creating the BDNs, the volume of bunkers transferred is measured once, ¹²³ with that single measurement being recorded once, and subsequently being automatically copied onto the carbon copies of the original BDN (see [35]). It is the discrepancy between the copies of the BDNs, which were supposed to be carbon copies, that raised the query as to whether there was a system in place to ensure the accuracy of these carbon copies.

69 There is no dispute that sufficient time was given for Sentek to respond. Sentek premises its lack of opportunity to present its case on the fact that it could not interview its ex-employees, as they are co-accused persons in the charges relating to the Bukom Events, and that the MPA knew this. ¹²⁴ It argues that the MPA’s approach, to only give Sentek, a party accused of fraud, an opportunity to interview witnesses through itself, the investigating authority, is unprecedented. ¹²⁵ It is also unprecedented for only a “gist” of the witnesses’ responses to be provided to a party responding to accusations of fraud. ¹²⁶

70 The MPA’s response is that natural justice does not require that Sentek be given an opportunity to “fully” investigate, but rather, that it be given a reasonable opportunity to show cause. ¹²⁷ In the circumstances, Sentek was given a reasonable opportunity to present its case. First, Sentek was sufficiently informed of the case it had to answer, ¹²⁸ and was given sufficient time and opportunity to respond to the Show Cause Notice in the form of an extension of time, and the fact that its further letters to the MPA were entertained. ¹²⁹ Second, in suggesting that Sentek could pose queries to its ex-employees through MPA, the MPA was not insisting that Sentek collect evidence second-hand through it; rather, the MPA was trying to address the concerns that Sentek had articulated in its Response to Show Cause, thereby facilitating Sentek’s ability to present its case. ¹³⁰

71 In my view, Sentek was given sufficient opportunity to meet the case against it. Sentek’s argument is essentially that it is unable to investigate the Breaches without speaking to its ex-employees. This is a useful argument for Sentek to employ: if the MPA agreed, it would necessarily defer all regulatory action until the conclusion of criminal proceedings. It was and is a red herring. The gravamen of the MPA’s complaint was that Sentek had no effective system in place to ensure the accuracy of the records pertinent to its Licences. That complaint ought to have been answered by reference to the relevant systems which, even if not in place at the time of the breaches, ought to have been in place by the time of the Applications, or in the future period of the Licences in which they were to be renewed. No such answer was forthcoming.

72 I therefore dismiss the prayers for substantive relief.

73 If parties are unable to agree on costs, submissions are to be filed and exchanged within 14 days. In this event, if either party requires an oral hearing on costs, that party must make the relevant request in its submissions.