Case Details
- Citation: [2018] SGHC 191
- Title: Bintai Kindenko Pte Ltd v Samsung C&T Corp and another
- Court: High Court of the Republic of Singapore
- Date of Decision: 03 September 2018
- Judge: Aedit Abdullah J
- Case Number: Suit No 800 of 2017 (Summons No 4313 of 2017)
- Procedural Context: Interlocutory injunction; application to lift an earlier ex parte interim injunction
- Plaintiff/Applicant: Bintai Kindenko Pte Ltd
- Defendant/Respondent: Samsung C&T Corp and another
- Second Defendant: DBS Bank Ltd (banker of the guarantee); not represented and not present
- Legal Area: Injunctions – Interlocutory Injunction
- Core Relief Sought: Interim injunction restraining (i) the second defendant from paying out on a banker’s guarantee issued in favour of the first defendant and (ii) the first defendant from receiving payment
- Banker’s Guarantee: Approximately S$4.3 million
- Triggering Event: First defendant called on the guarantee on 28 August 2017
- Ex Parte Injunction: Granted on 29 August 2017
- Inter Partes Hearing: Injunction discharged by Aedit Abdullah J (decision grounds set out in this judgment)
- Appeal Note: The appeal in Civil Appeal No 95 of 2018 was dismissed by the Court of Appeal on 1 April 2019 (see [2019] SGCA 39)
- Counsel for Plaintiff: Josephine Choo Poh Hua, Lee Hui Min and Dynyse Loh Jia Wen (WongPartnership LLP)
- Counsel for First Defendant: Kelvin Aw Wei Keng, Lee Kok Wee, Eugene and Leonard Chew Wei Chong (Morgan Lewis Stamford LLC)
- Statutes Referenced (as indicated in metadata/extract): Unfair Contract Terms Act; Supreme Court of Judicature Act (and references to Court of Appeal discussion in CKR)
- Length of Judgment: 11 pages, 6,294 words
Summary
Bintai Kindenko Pte Ltd v Samsung C&T Corp and another [2018] SGHC 191 concerns an application to lift an interim injunction that had restrained the beneficiary of a banker’s guarantee from calling on, and the bank from paying out, the guarantee. The plaintiff subcontractor (Bintai) had obtained an ex parte interim injunction after the main contractor (Samsung C&T) called on the guarantee following alleged breaches and delay-related liquidated damages claims. The High Court, however, discharged the injunction after an inter partes hearing.
The central theme of the decision is the narrow and exceptional nature of restraining calls on banker’s guarantees. The court emphasised that, absent fraud, the beneficiary’s right to payment under a guarantee is generally not to be interfered with. On the facts, the court found that the plaintiff’s case did not establish fraud at even a prima facie level, and that the plaintiff’s earlier ex parte application suffered from serious procedural and disclosure deficiencies. The court also considered contractual terms that purported to exclude unconscionability as a basis to restrain payment, and the existence of an arbitration clause directing disputes about demands on the guarantee to arbitration.
What Were the Facts of This Case?
The dispute arose from a subcontract entered into in December 2012 between Samsung C&T (the first defendant and project owner/main contractor in the relevant relationship) and Bintai Kindenko Pte Ltd (the plaintiff and subcontractor). The subcontract concerned the supply and installation of mechanical, electrical and plumbing works. Under the subcontract, Samsung C&T required Bintai to procure a banker’s guarantee in favour of Samsung C&T. The guarantee was issued by DBS Bank Ltd (the second defendant) in the sum of approximately S$4.3 million.
Work on the project proceeded in phases with completion dates spanning from March 2013 to April 2014. Bintai, however, achieved actual completion of the last phase only in February 2015. Following the delay, Samsung C&T and Bintai exchanged correspondence from May 2015 to January 2016 in which Samsung C&T sought to attribute responsibility for the delay to Bintai and notified Bintai of potential liquidated damages.
Thereafter, payment claims and responses were exchanged between February 2017 and July 2017. Samsung C&T’s responses indicated withholding of payments and asserted that liquidated damages were payable by Bintai. Importantly, the parties also engaged in an adjudication process under the relevant regime for construction disputes. On 7 July 2017, Bintai lodged an adjudication application against Samsung C&T relating to the first half of retention monies. An adjudicator was appointed on 11 July 2017 and issued a determination on 15 August 2017 in Bintai’s favour. The determination did not address variation order claims and back charges.
Shortly after the adjudication determination, Bintai requested payment of the amount due under that determination. Samsung C&T responded on 24 August 2017 explaining why payments were withheld. On 28 August 2017, Samsung C&T then made a demand on the banker’s guarantee, asserting that Bintai owed liquidated damages. In response, Bintai applied for an interim injunction on 29 August 2017 and obtained it ex parte, restraining Samsung C&T from calling on the guarantee and restraining DBS Bank from paying out.
What Were the Key Legal Issues?
The High Court had to determine whether the interim injunction should remain in place or be lifted. This required the court to assess the legal grounds on which Bintai sought to restrain the call on the banker’s guarantee. In the ex parte application, Bintai’s primary case was that it would be unconscionable for Samsung C&T to call on the guarantee in the circumstances. The court also had to consider whether fraud was made out, particularly because fraud is the classic exception that permits interference with a guarantee call.
Several interlocking issues were raised. First, the court considered whether the subcontract excluded unconscionability as a basis to restrain payment, and whether such an exclusion clause could be contractually upheld. Second, the court examined whether there was full and frank disclosure in the ex parte application, including whether Bintai failed to disclose material facts such as the existence and effect of the exclusion clause and the arbitration clause. Third, the court considered whether Bintai’s evidence established fraud sufficiently to justify an injunction, and whether the call on the guarantee was supported by genuine claims rather than contrived or fabricated ones.
How Did the Court Analyse the Issues?
The court began by framing the dispute as one concerning the exceptional nature of injunctive relief against calls on banker’s guarantees. Banker’s guarantees are designed to provide prompt and reliable payment to the beneficiary upon demand. Accordingly, the court’s approach is cautious: interference is generally limited to narrow circumstances, most notably fraud. The court’s analysis therefore focused on whether Bintai had established fraud, and whether the procedural posture and disclosure failures undermined the equitable basis for maintaining an injunction.
On the contractual landscape, Samsung C&T argued that the subcontract contained an “Exclusion Clause” stipulating that, except in the case of fraud, Bintai would not be entitled “for any reason whatsoever” to enjoin or restrain Samsung C&T from making any call or demand on the guarantee. Samsung C&T relied on prior authority (including CKR Contract Services Pte Ltd v Asplenium Land Pte Ltd and another and another appeal and another matter [2015] 3 SLR 1041) for the proposition that parties may contract out of unconscionability as a basis to restrain a guarantee call. The High Court accepted that the exclusion clause was relevant and that Bintai bore the burden of showing non-incorporation on a clear case.
In addition, Samsung C&T pointed to an arbitration clause in the subcontract. The court noted that the parties had expressly agreed to refer disputes relating to a demand on the guarantee to arbitration. While the judgment extract does not detail the full procedural consequences of this clause, the existence of arbitration was part of the court’s overall assessment of whether the court should grant and maintain injunctive relief in the first place, especially where the contractual framework directed disputes elsewhere.
The court’s reasoning also turned heavily on the conduct of the ex parte application. The judge emphasised that an applicant for an ex parte injunction must make full and frank disclosure of all material facts, even those prejudicial to the applicant. Samsung C&T alleged multiple non-disclosures and misrepresentations. In particular, Bintai did not disclose the existence of the Exclusion Clause and the arbitration clause. Further, Bintai did not disclose that an adjudicator had found that the Exclusion Clause was applicable, and that Bintai’s own submissions in the adjudication had referenced the Exclusion Clause. The court also considered that Bintai’s ex parte application was brought without notice to Samsung C&T’s solicitors, contrary to Supreme Court Practice Directions (para 41(2)), which require notice even in cases of extreme urgency.
These disclosure and procedural issues mattered because they went to the equitable foundation for an injunction. The court treated the omissions as material: they affected the legal basis on which the court was asked to restrain the guarantee call. The judge also found the plaintiff’s conduct to be “particularly egregious” in the sense that it involved active misrepresentations regarding the validity of the unconscionability ground. Even though the judgment extract truncates the plaintiff’s detailed arguments, the court’s approach indicates that it was not persuaded that Bintai had acted with the candour expected in ex parte proceedings.
Finally, the court analysed whether fraud was made out. Samsung C&T argued that fraud was the only available ground once the Exclusion Clause and contractual structure were considered, and that Bintai’s affidavits contained no allegation of fraud. The court accepted that there was no “shred” of an allegation of fraud in the supporting affidavits and that fraud was not raised in argument at the relevant stage. The court further held that, even if fraud were considered, the evidence did not satisfy the threshold for fraud.
In assessing fraud, the court examined the substantive context of the liquidated damages call. It noted that Samsung C&T had other outstanding claims beyond liquidated damages, including claims for re-evaluation, further back charges, omissions, and liability for water ingress. The court reasoned that the existence of these other claims supported the call on the guarantee and undermined any suggestion that the liquidated damages claim was contrived. The court also distinguished the case from situations where there is a complete absence of allegations of delay (as in BS Mount Sophia Pte Ltd v Join-Aim Pte Ltd [2012] 3 SLR 352). Here, the liquidated damages claim arose from Bintai’s actual delay, and the call was not framed as retaliation for the adjudication application.
The court also addressed the plaintiff’s attempt to shift from unconscionability to fraud. It considered that Bintai’s fraud arguments were surprising and not properly pleaded or supported. Additionally, the court noted that discrepancies in figures did not automatically equate to fraud. Even where some amounts were disputed or later revised, the court found that the call remained justified on the overall position and that the categories of claims relied upon by Samsung C&T existed at the time of the call rather than being fabricated.
What Was the Outcome?
The High Court lifted the interim injunction that had restrained Samsung C&T and DBS Bank from dealing with the banker’s guarantee. Practically, this meant Samsung C&T was no longer restrained from receiving payment under the guarantee, and DBS Bank was no longer restrained from paying out upon a valid call.
The decision also set the stage for appellate review. The extract notes that Bintai appealed, but the Court of Appeal later dismissed the appeal on 1 April 2019 (Civil Appeal No 95 of 2018), confirming the High Court’s approach to the narrow fraud exception and the significance of disclosure and contractual terms.
Why Does This Case Matter?
This case is significant for practitioners because it reinforces the strict and exceptional nature of injunctive relief against calls on banker’s guarantees in Singapore. The court’s reasoning illustrates that, where a guarantee is supported by a contractual exclusion clause and an arbitration framework, a party seeking to restrain payment must clear a high threshold and must do so with scrupulous disclosure, particularly when the relief is first sought ex parte.
From a litigation strategy perspective, Bintai’s experience demonstrates the practical consequences of failing to disclose material contractual terms and adjudication-related findings. The court treated non-disclosure and procedural non-compliance as serious defects that weigh against granting or maintaining an injunction. For lawyers, this underscores the need to ensure that all relevant clauses—especially those excluding unconscionability and directing disputes to arbitration—are brought to the court’s attention at the earliest stage.
Substantively, the case also clarifies how courts evaluate fraud allegations in the guarantee context. Disputes about quantum, revisions of figures, and the existence of other claims may be inconsistent with a finding of fraud. The decision therefore provides guidance on the evidential standard required to establish fraud sufficiently to justify interference with a guarantee call, and it aligns with the broader Singapore jurisprudence that protects the commercial function of guarantees.
Legislation Referenced
- Unfair Contract Terms Act
- Supreme Court of Judicature Act
Cases Cited
- [1996] SGHC 136
- [2012] 3 SLR 352 (BS Mount Sophia Pte Ltd v Join-Aim Pte Ltd)
- CKR Contract Services Pte Ltd v Asplenium Land Pte Ltd and another and another appeal and another matter [2015] 3 SLR 1041
- [2018] SGCA 39 (Bintai Kindenko Pte Ltd v Samsung C&T Corp)
- [2018] SGHC 191 (Bintai Kindenko Pte Ltd v Samsung C&T Corp and another)
- [2019] SGCA 39
Source Documents
This article analyses [2018] SGHC 191 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the full judgment for the Court's complete reasoning.