Marinteknik Shipbuilders v SNC Passion: Injunction Against Banker's Guarantee Demand

In Marinteknik Shipbuilders (S) Pte Ltd v SNC Passion, the Singapore High Court heard an application by Marinteknik Shipbuilders for an injunction to restrain SNC Passion from making a demand on a banker's guarantee related to a shipbuilding contract. The court discharged the injunction, finding no fraud or unconscionability on the part of SNC Passion and material non-disclosure by Marinteknik Shipbuilders. The court ordered Marinteknik Shipbuilders to pay damages and costs to SNC Passion.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Injunction discharged; Plaintiffs to pay damages and costs.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Singapore High Court case regarding an injunction against a demand on a banker's guarantee in a shipbuilding contract dispute. The court discharged the injunction.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Marinteknik Shipbuilders (S) Pte LtdPlaintiffCorporationInjunction DischargedLost
SNC PassionDefendantCorporationInjunction DischargedWon

3. Judges

Judge NameTitleDelivered Judgment
Lee Seiu KinJudicial CommissionerYes

4. Counsels

Counsel NameOrganization
John WangRobert W H Wang & Woo
R GovintharasahGurbani & Co.

4. Facts

  1. Marinteknik Shipbuilders (S) Pte Ltd, a Singapore company, entered into an agreement with SNC Passion, a French company, to build a catamaran.
  2. The agreement was for the design, construction, and delivery of the catamaran 'Passion' for EUR 6,666,600.
  3. Marinteknik furnished SNC Passion with a Banker's Guarantee (BG) for EUR 666,660 as security for their obligations under the agreement.
  4. SNC Passion threatened to make a demand on the BG, alleging breaches of the agreement by Marinteknik.
  5. Marinteknik sought an injunction to restrain SNC Passion from making a demand on the BG.
  6. SNC Passion claimed liquidated damages for late delivery and failure of the vessel to attain the specified speed.
  7. SNC Passion also claimed damages for miscellaneous defects and failure to deliver a fifth engine.

5. Formal Citations

  1. Marinteknik Shipbuilders (S) Pte Ltd v SNC Passion, OS 1203/2000, SIC 600673/2001, [2001] SGHC 140

6. Timeline

DateEvent
Agreement entered into to design, build, and deliver the Passion.
Banker's Guarantee effective date.
Sea trials conducted.
Sea trials conducted.
Original agreed delivery date.
Passion arrived at Point-a-Pitre (Plaintiff's claim).
Passion arrived at Guadeloupe (Defendant's claim).
Passion unloaded (Defendant's claim).
New deadline for delivery.
Plaintiffs requested Defendants to sign Protocol of Completion (Defendant's claim).
Defendants took over the Passion (Defendant's claim).
Sea trials conducted at Guadeloupe.
Sea trials conducted at Guadeloupe.
Defendants threatened to make a demand on the Banker's Guarantee.
Plaintiffs took out Originating Summons.
Interim injunction granted.
Defendants took out Summons-in-Chambers to discharge the ex parte injunction.
Injunction discharged.
Banker's Guarantee due to expire.
Decision Date
Expiry date of the Guarantee.

7. Legal Issues

  1. Breach of Contract
    • Outcome: The court found that there were genuine disputes regarding the alleged breaches, which should be determined by arbitration.
    • Category: Substantive
    • Sub-Issues:
      • Late delivery
      • Failure to attain specified speed
      • Miscellaneous defects
      • Failure to deliver a fifth engine
  2. Unconscionability
    • Outcome: The court found no unconscionability on the part of the Defendants in making a demand on the Banker's Guarantee.
    • Category: Substantive
    • Related Cases:
      • [2000] 4 SLR 290
  3. Material Non-Disclosure
    • Outcome: The court found that the Plaintiffs had failed to make full and frank disclosure of all material facts in their application for the ex parte injunction, justifying the discharge of the injunction.
    • Category: Procedural
    • Related Cases:
      • [2000] 1 SLR 657

8. Remedies Sought

  1. Injunction
  2. Declaration
  3. Return of Sums Paid
  4. Costs
  5. Interest

9. Cause of Actions

  • Breach of Contract

10. Practice Areas

  • Commercial Litigation
  • Construction Law
  • Shipbuilding Disputes

11. Industries

  • Maritime
  • Construction

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Eltraco International Pte Ltd v CGH Development Pte LtdCourt of AppealYes[2000] 4 SLR 290SingaporeCited for the principle that it is not unconscionable to make a call on a demand bond where there is a genuine dispute between the parties on liability.
New Civilbuild Pte Ltd v Guobena Snd BhdHigh CourtYes[1999] 1 SLR 374SingaporeCited for the proposition that there was no concept of unconscionability in English law in relation to on-demand bonds.
Bocotra Construction Pte Ltd v A-G (No 2)Court of AppealYes[1995] 2 SLR 733SingaporeCited for the proposition that fraud or unconscionability was a ground on which the court would interfere and restrain the enforcement of a performance bond.
GHL Pte Ltd v Unitrack Building Construction Pte LtdCourt of AppealYes[1999] 4 SLR 604SingaporeCited for disagreeing with New Civilbuild and holding that the court in Bocotra had made a conscious departure from English law in that unconscionability was another exception under Singapore law.
Dauphin Offshore Engineering & Trading Pte Ltd v The Private Office of HRH Sheikh Sultan bin Khalifa bin Zayed Al NahyanHigh CourtYes[2000] 1 SLR 657SingaporeCited for the principle that even if there has been material non-disclosure, the court nevertheless has the discretion to continue an injunction if the justice of the case requires it.
Cargill International SA & Anor v Bangladesh Sugar & Food Industries CorpCourt of AppealYes[1996] 4 All ER 563England and WalesCited to highlight the difference between Singapore and English law regarding unconscionability as a ground for restraining a call on a performance bond.

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

  • Banker's Guarantee
  • Shipbuilding Contract
  • Injunction
  • Liquidated Damages
  • Delivery
  • Speed
  • Unconscionability
  • Material Non-Disclosure
  • Protocol of Completion
  • Vessel
  • Components

15.2 Keywords

  • Banker's Guarantee
  • Shipbuilding Contract
  • Injunction
  • Breach of Contract
  • Singapore High Court

17. Areas of Law

Area NameRelevance Score
Guarantee80
Guarantees and indemnities75
Contract Law75
Breach of Contract70
Commercial Law65
Banking and Finance60
Commercial Litigation55
Arbitration50
Injunctions45
Shipping Law40
Best Efforts Clause30

16. Subjects

  • Contract Dispute
  • Shipbuilding
  • Injunctions
  • Commercial Litigation