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: Summons No 4313 of 2017
- Tribunal/Proceeding: Interlocutory stage; application to lift an interlocutory injunction
- Legal Area: Injunctions – Interlocutory Injunction
- Plaintiff/Applicant: Bintai Kindenko Pte Ltd
- Defendant/Respondent: Samsung C&T Corp (1st defendant) and DBS Bank Ltd (2nd defendant)
- Parties (as described): Bintai Kindenko Private Limited — Samsung C&T Corporation — DBS Bank Ltd
- Representation: Josephine Choo Poh Hua, Lee Hui Min and Dynyse Loh Jia Wen (WongPartnership LLP) for the plaintiff; Kelvin Aw Wei Keng, Lee Kok Wee, Eugene and Leonard Chew Wei Chong (Morgan Lewis Stamford LLC) for the first defendant; second defendant not represented, not present.
- Procedural History (noted in LawNet editorial 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.
- Related Adjudication Proceedings: Adjudication determination set aside by Foo Chee Hock JC on 14 November 2017; appeal dismissed in Bintai Kindenko Pte Ltd v Samsung C&T Corp [2018] SGCA 39.
Summary
Bintai Kindenko Pte Ltd v Samsung C&T Corp and another [2018] SGHC 191 concerned an application to lift an interlocutory injunction that had previously restrained the beneficiary (Samsung C&T) and the bank (DBS) from calling and paying out under a banker’s guarantee. The guarantee, issued in favour of Samsung C&T, was procured by Bintai Kindenko pursuant to a subcontract for mechanical, electrical and plumbing works. Samsung C&T called on the guarantee after alleging that Bintai had breached the subcontract and was liable for liquidated damages.
At the ex parte stage, Bintai obtained an interim injunction restraining the call and payment. On an inter partes hearing, Aedit Abdullah J lifted the injunction. The judge’s decision turned on the limited grounds available to restrain payment under a banker’s guarantee, the contractual exclusion of unconscionability, and serious deficiencies in Bintai’s ex parte disclosure. While Bintai initially relied on unconscionability, the court found that the evidence did not establish fraud, and that Bintai’s attempt to shift its case from unconscionability to fraud did not overcome the threshold required to restrain a bank’s obligation.
What Were the Facts of This Case?
The dispute arose from a subcontract entered into in December 2012 between Samsung C&T (the main contractor, as 1st defendant) and Bintai Kindenko (the subcontractor, as plaintiff). The subcontract covered the supply and installation of mechanical, electrical and plumbing works. As part of the contractual arrangements, Samsung C&T required a banker’s guarantee of approximately S$4.3 million. The guarantee was issued by DBS Bank Ltd (the 2nd defendant) in favour of Samsung C&T, and it was intended to secure Samsung C&T against losses arising from alleged breaches by Bintai.
Under the subcontract, the completion dates for different phases of the works were scheduled across March 2013 to April 2014. In practice, Bintai did not achieve completion of the final phase until February 2015. Samsung C&T responded through a series of letters exchanged from May 2015 to January 2016, seeking to attribute the delay to Bintai and notifying Bintai of potential liquidated damages. The parties then exchanged payment claims and responses between February 2017 and July 2017, including discussions about retention monies, variation orders, and back charges.
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 a determination was issued on 15 August 2017 in Bintai’s favour. However, the adjudicator did not determine certain variation order claims and back charges. Shortly thereafter, Bintai requested payment of the adjudicated amount. Samsung C&T responded on 24 August 2017, explaining why it withheld payment and maintaining its position on liquidated damages and other sums.
On 28 August 2017, Samsung C&T made a demand on the banker’s guarantee, asserting that Bintai owed liquidated damages. Because of the urgency, Bintai applied for an interim injunction on an ex parte basis and obtained it on 29 August 2017, restraining Samsung C&T from calling on the guarantee and restraining DBS from paying out. Samsung C&T then applied to lift the injunction. Separately, Samsung C&T applied to set aside the adjudication determination. Foo Chee Hock JC set aside the determination on 14 November 2017 for breach of natural justice, and the Court of Appeal later dismissed Bintai’s appeal in Bintai Kindenko Pte Ltd v Samsung C&T Corp [2018] SGCA 39. This background formed part of the context for the injunction dispute.
What Were the Key Legal Issues?
The first legal issue was the scope of the court’s power to restrain a call on a banker’s guarantee. Singapore law generally treats banker’s guarantees as independent undertakings, and the court will not lightly interfere with the beneficiary’s right to call. The question was what grounds were available to Bintai to obtain an injunction restraining payment, and whether those grounds were properly established on the evidence.
The second issue concerned the effect of an express contractual exclusion clause. The subcontract contained a 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 argued that this clause excluded unconscionability as a basis for injunctive relief, relying on the Court of Appeal’s approach in CKR Contract Services Pte Ltd v Asplenium Land Pte Ltd and another and another appeal and another matter [2015] 3 SLR 1041 (“CKR”). The court therefore had to consider whether unconscionability was contractually excluded and, if so, whether Bintai could still rely on it.
The third issue involved the ex parte procedure and disclosure. Because Bintai obtained the interim injunction without notice, it was under a duty of full and frank disclosure of all material facts. Samsung C&T contended that Bintai failed to disclose the existence of the exclusion clause and an arbitration clause, failed to disclose material aspects of the adjudication and its later set-aside, and made active misrepresentations. The court had to decide whether these deficiencies warranted lifting the injunction.
How Did the Court Analyse the Issues?
Aedit Abdullah J began by framing the case as an interim injunction dispute in the context of banker’s guarantees. The judge emphasised that banker’s guarantees are designed to provide prompt payment assurance to the beneficiary. Accordingly, the court’s intervention is exceptional. The court’s analysis therefore focused on whether Bintai had met the threshold required to restrain the call and payment, particularly where the contractual framework and the evidential record were contested.
On the contractual exclusion point, the judge accepted Samsung C&T’s position that the subcontract contained an express exclusion clause that barred injunctive relief on grounds other than fraud. The clause was significant because it directly addressed the very ground Bintai initially relied upon—unconscionability. The judge referred to the Court of Appeal’s reasoning in CKR, where the court recognised that parties may contract out of unconscionability as a basis to bar a call on a guarantee. In this case, the exclusion clause was not merely implied; it was expressly drafted. The judge therefore treated unconscionability as unavailable unless Bintai could establish a clear basis to avoid the clause’s incorporation.
In addition, the judge considered the arbitration clause. Samsung C&T argued that disputes relating to demands on the guarantee were contractually agreed to be referred to arbitration. While the judgment excerpt does not fully develop the arbitration analysis, it was clearly part of Samsung C&T’s argument that Bintai’s attempt to obtain court relief was procedurally and substantively flawed. The court’s reasoning on this point reinforced the broader theme that the contractual allocation of risk and dispute resolution mechanisms mattered when assessing whether injunctive relief should be granted.
Turning to the ex parte disclosure issue, the judge was critical of Bintai’s conduct. The duty of full and frank disclosure is a cornerstone of ex parte applications because the court grants relief without hearing the other side. Samsung C&T argued that Bintai did not disclose the exclusion clause and arbitration clause, and also failed to disclose material facts about the adjudication determination and the adjudicator’s approach. The judge accepted that these omissions were material. The judge also noted 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. The judge found that, given Samsung C&T’s solicitors were already on record for the adjudication, it would have been evident that notice should have been given or at least that the other side’s solicitors should have been informed.
Most importantly, the judge addressed the grounds for restraining payment. Samsung C&T’s case was that if any challenge was to be made, fraud was the only available ground because unconscionability was excluded by contract. The judge agreed that there was no meaningful allegation of fraud in the supporting affidavits at the time of the ex parte application. The judge further found that fraud was not made out on the evidence. In particular, the judge accepted that Samsung C&T’s call was not a contrived retaliation against the adjudication application; rather, it arose from the alleged delay and the existence of damages and back charges at the time of the call.
The judge also analysed the nature of the claims included in the call. Samsung C&T’s position was that the banker’s guarantee call included sums not dealt with in the adjudication determination, which was consistent with Samsung C&T’s broader stance that the adjudication determination had been made in breach of natural justice and was later set aside. The judge treated this as undermining any suggestion that the call was fabricated. The judge further noted that the categories of claims invoked by Samsung C&T existed at the time of the call and were not fabricated, even if there were discrepancies in some figures. The judge accepted that discrepancies were corrected and that reductions were made upon revision, and that even on Bintai’s best case, the reductions would not eliminate the justification for calling the guarantee.
On Bintai’s side, the plaintiff attempted to shift the basis of its case. It began by asserting unconscionability, but later emphasised fraud. The judge considered this shift and found it unpersuasive. The judge’s reasoning suggests that the court was concerned not only with whether fraud could be proven, but also with whether Bintai had properly pleaded and evidenced fraud from the outset. The court’s approach reflects a practical evidential requirement: where fraud is alleged to restrain a bank’s payment obligation, the allegation must be clear, pleaded, and supported by evidence sufficient to show a prima facie case. The absence of any “shred” of fraud allegation in the supporting material was decisive.
What Was the Outcome?
Having considered the contractual exclusion of unconscionability, the inadequacy of Bintai’s fraud case, and the serious failures in disclosure and procedure at the ex parte stage, Aedit Abdullah J lifted the interim injunction. The practical effect was that Samsung C&T and DBS were no longer restrained from calling on and paying out under the banker’s guarantee.
Bintai appealed, and leave to appeal was granted by the Court of Appeal. However, the LawNet editorial note indicates that the appeal was dismissed by the Court of Appeal on 1 April 2019 in Civil Appeal No 95 of 2018: see [2019] SGCA 39. Thus, the lifting of the injunction stood.
Why Does This Case Matter?
This decision is important for practitioners because it illustrates the high threshold for injunctive relief against calls on banker’s guarantees in Singapore. The court reaffirmed that banker’s guarantees are meant to be honoured promptly, and that the court will not interfere unless the applicant can bring itself within the narrow grounds recognised by law and, critically, within the contractual framework governing the guarantee.
From a drafting and risk allocation perspective, the case underscores the potency of contractual exclusion clauses. Where parties expressly exclude unconscionability as a basis to restrain a call (subject to fraud), the court will treat that bargain as binding. This has direct implications for construction and engineering contracting, where guarantees are commonly used to secure performance and where parties often seek to preserve the beneficiary’s ability to call without delay.
From a litigation practice standpoint, the judgment also serves as a cautionary tale about ex parte applications. Full and frank disclosure is not a formality; material omissions and procedural failures can justify lifting an injunction even if the applicant might otherwise argue that the underlying dispute is serious. Lawyers should therefore ensure that all relevant contractual provisions (including exclusion clauses and dispute resolution clauses) and all material developments in related proceedings are disclosed promptly and accurately.
Legislation Referenced
- Supreme Court of Judicature Act (as referenced in the judgment context)
- Unfair Contract Terms Act (as referenced in the judgment context, including discussion of applicability noted in the Court of Appeal’s approach in CKR)
Cases Cited
- CKR Contract Services Pte Ltd v Asplenium Land Pte Ltd and another and another appeal and another matter [2015] 3 SLR 1041 (“CKR”)
- BS Mount Sophia Pte Ltd v Join-Aim Pte Ltd [2012] 3 SLR 352 (“BS Mount Sophia”)
- Bintai Kindenko Pte Ltd v Samsung C&T Corp [2018] SGCA 39
- Bintai Kindenko Pte Ltd v Samsung C&T Corp and another [2018] SGHC 191
- Civil Appeal No 95 of 2018 (dismissed on 1 April 2019): see [2019] SGCA 39
- [1996] SGHC 136 (as cited in the judgment)
- [2018] SGCA 39 (as cited in the judgment)
- [2019] SGCA 39 (as cited in the judgment)
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.