Societe Generale v Statoil: Construction of Contract Terms & Right of Recourse

Societe Generale appealed the High Court's dismissal of their claim for US$4,408,599.73 against Statoil Asia Pacific Pte Ltd. The claim arose from a payment confirmation and invoice discounting facility provided by Societe Generale to Statoil for sales to Siam United Services Public Co Ltd (SUSCO). Societe Generale sought to reclaim payments made to Statoil after SUSCO defaulted. The Court of Appeal dismissed the appeal, finding that the contract terms did not provide Societe Generale with a right of recourse against Statoil in the circumstances.

1. Case Overview

1.1 Court

Court of Appeal

1.2 Outcome

Appeal dismissed

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Societe Generale's claim against Statoil for US$4,408,599.73 was dismissed. The court found no right of recourse existed based on the contract terms.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Societe GeneraleAppellantCorporationAppeal dismissedLostSarjit Singh Gill, Suhaimi Lazim, Ng Yeow Khoon
Statoil Asia Pacific Pte LtdRespondentCorporationAppeal dismissedWonLawrence Quahe, S Suresh

3. Judges

Judge NameTitleDelivered Judgment
Chao Hick TinJustice of the Court of AppealYes
L P TheanJustice of the Court of AppealNo
Yong Pung HowChief JusticeNo

4. Counsels

Counsel NameOrganization
Sarjit Singh GillShook Lin & Bok
Suhaimi LazimShook Lin & Bok
Ng Yeow KhoonShook Lin & Bok
Lawrence QuaheHarry Elias Partnership
S SureshHarry Elias Partnership

4. Facts

  1. Societe Generale (Soc Gen) provided a payment confirmation with invoice discounting facility to Statoil for sales to SUSCO.
  2. The facility involved SUSCO issuing Payment Undertakings to Soc Gen.
  3. Soc Gen and Statoil signed Payment Confirmation and Invoice Discounting Agreements for each shipment.
  4. In May 1997, Soc Gen amended the agreement by adding a proviso limiting their liability.
  5. SUSCO defaulted on payments under 12 Payment Undertakings.
  6. Soc Gen sought to reclaim US$4,408,599.73 from Statoil based on the proviso and an alleged oral agreement.
  7. The trial judge found that Soc Gen did not specifically draw Statoil's attention to the modifications effected to the form in May 1997.

5. Formal Citations

  1. Societe Generale v Statoil Asia Pacific Pte Ltd, CA 62/2000, [2000] SGCA 61

6. Timeline

DateEvent
Soc Gen offered banking facility to Statoil
Soc Gen informed Statoil facility available for sales to SUSCO
First contract between Statoil and SUSCO signed
Second contract between Statoil and SUSCO signed
Second contract period commenced
Soc Gen amended Payment Confirmation and Invoice Discounting Agreement
Third contract between Statoil and SUSCO signed
Last shipment under second contract
Third contract period commenced
Soc Gen received Payment Undertaking from SUSCO under third contract but decided not to sign Payment Confirmation
SUSCO defaulted on payments
SUSCO defaulted on payments
Appeal dismissed

7. Legal Issues

  1. Construction of Contract Terms
    • Outcome: The court found that the proviso in the Payment Confirmation and Invoice Discounting Agreement only qualified the payment obligation and did not apply to the invoice discounting arrangement.
    • Category: Substantive
    • Sub-Issues:
      • Application of proviso
      • Interpretation of payment obligations
      • Recourse rights under invoice discounting agreement
  2. Right of Recourse
    • Outcome: The court found no basis for Societe Generale's claim that there was an express oral agreement granting them a right of recourse against Statoil.
    • Category: Substantive
    • Sub-Issues:
      • Existence of oral agreement
      • Interpretation of express terms
      • Effect of proviso on recourse

8. Remedies Sought

  1. Monetary Damages
  2. Interest

9. Cause of Actions

  • Breach of Contract
  • Recovery of Debt

10. Practice Areas

  • Commercial Litigation
  • Banking
  • Invoice Discounting

11. Industries

  • Banking
  • Petroleum

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
No cited cases

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
No applicable statutes

15. Key Terms and Keywords

15.1 Key Terms

  • Payment Confirmation and Invoice Discounting Agreement
  • Payment Undertaking
  • Proviso
  • Invoice Discounting
  • Right of Recourse
  • Silent Confirmation
  • Non-refundable risk commission

15.2 Keywords

  • contract
  • invoice discounting
  • recourse
  • payment confirmation
  • Statoil
  • Societe Generale
  • SUSCO

16. Subjects

  • Contract Law
  • Banking
  • Finance
  • Invoice Discounting

17. Areas of Law

  • Contract Law
  • Banking Law