Pacific Rim Palm Oil v PT Asiatic Persada: Breach of Loan Agreement & Quistclose Trust

In Pacific Rim Palm Oil Ltd v PT Asiatic Persada, the High Court of Singapore heard a claim by Pacific Rim Palm Oil Limited against PT Asiatic Persada and others for the repayment of US$5 million advanced under a Loan Agreement. The Plaintiffs claimed breach of contract and the existence of a Quistclose trust. The court, delivered by Belinda Ang Saw Ean J, found that a Quistclose trust was established and that the Loan Agreement was breached, ordering the Defendants to repay the US$5 million with interest.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Judgment for Plaintiff

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Pacific Rim Palm Oil sought repayment of US$5 million from PT Asiatic Persada for breach of loan agreement. The court found a Quistclose trust existed and ordered repayment.

1.7 Decision Date

16 October 2003

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
Pacific Rim Palm Oil Ltd	Plaintiff	Corporation	Judgment for Plaintiff	Won	Alvin Yeo of Wong Partnership Chou Sean Yu of Wong Partnership Linda Wee of Wong Partnership
PT Asiatic Persada	Defendant	Corporation	Claim Dismissed	Dismissed	Cavinder Bull of Drew & Napier LLC
Santoso Senangsyah	Defendant	Individual	Judgment against Defendant	Lost	Kalaiselvi Singaram of Infinitus Law Corporation Chan Kok Chye of Infinitus Law Corporation Sim Kang Ho of Infinitus Law Corporation
Rizal Senangsyah	Defendant	Individual	Judgment against Defendant	Lost	Kalaiselvi Singaram of Infinitus Law Corporation Chan Kok Chye of Infinitus Law Corporation Sim Kang Ho of Infinitus Law Corporation
Andi Senangsyah	Defendant	Individual	Judgment against Defendant	Lost	Kalaiselvi Singaram of Infinitus Law Corporation Chan Kok Chye of Infinitus Law Corporation Sim Kang Ho of Infinitus Law Corporation
Veronica Untu	Defendant	Individual	Judgment against Defendant	Lost	Kalaiselvi Singaram of Infinitus Law Corporation Chan Kok Chye of Infinitus Law Corporation Sim Kang Ho of Infinitus Law Corporation

3. Judges

Judge Name	Title	Delivered Judgment
Belinda Ang Saw Ean	Judge	Yes

4. Counsels

Counsel Name	Organization
Alvin Yeo	Wong Partnership
Chou Sean Yu	Wong Partnership
Linda Wee	Wong Partnership
Cavinder Bull	Drew & Napier LLC
Kalaiselvi Singaram	Infinitus Law Corporation
Chan Kok Chye	Infinitus Law Corporation
Sim Kang Ho	Infinitus Law Corporation

4. Facts

Pacific Rim Palm Oil Ltd advanced US$5 million to PT Asiatic Persada under a Loan Agreement.
The loan was for the express purpose of discharging debts owed by PT Asiatic Persada to IBRA.
The US$5 million was transferred to a Citibank account in the names of the 2nd and 3rd Defendants.
The 2nd to 5th Defendants did not settle the IBRA Debt with IBRA.
IBRA auctioned the IBRA Debt, which was successfully bid on by Batavia Financial Services Fund 1.
The Plaintiffs claimed the US$5 million should be returned due to failure of purpose and breach of contract.

5. Formal Citations

Pacific Rim Palm Oil Ltd v PT Asiatic Persada and Others, Suit 770/2002, [2003] SGHC 243

6. Timeline

Date	Event
2000-01-26	Loan Agreement dated
2000-01-26	Share Sale and Purchase Agreement dated
2000-02-02	Plaintiffs remitted US$28 million to the 1st Defendant's bank account
2000-02-04	US$23 million transferred to the Senangsyahs' Citibank account
2000-03-17	US$5 million transferred to the Senangsyahs' Citibank account
2002-05-01	IBRA took steps to auction the IBRA Debt
2002-07-03	Writ of Summons filed
2002-07-04	Injunction order obtained against the 2nd to 5th Defendants
2003-03-10	Batavia agreed to sell the debts of 1st Defendant to the 2nd Defendant
2003-10-17	Decision Date

7. Legal Issues

Breach of Contract
- Outcome: The court found that the Defendants breached the Loan Agreement by failing to settle the IBRA Debt within a reasonable time, entitling the Plaintiffs to rescind the contract.
- Category: Substantive
- Sub-Issues:
  - Repudiatory breach of loan agreement
  - Failure to perform obligation within a reasonable time
Quistclose Trust
- Outcome: The court held that a Quistclose trust was established, as the US$5 million was advanced for the specific purpose of settling the IBRA Debt, and the purpose failed when the debt was auctioned off by IBRA.
- Category: Substantive
- Related Cases:
  - [1970] AC 567

8. Remedies Sought

Repayment of US$5 million
Interest
Injunction

9. Cause of Actions

Breach of Contract
Quistclose trust

10. Practice Areas

Commercial Litigation

11. Industries

Palm Oil Production

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
Barclays Bank Ltd v Quistclose Investments Ltd	House of Lords	Yes	[1970] AC 567	England and Wales	Cited as authority for the proposition that where money is advanced for a specific purpose, a trust arises if the purpose fails.
Twinsectra Ltd v Yardley and Others	N/A	Yes	[2002] 2 AC 164	N/A	Cited for the principle that the beneficial interest in money remains with the lender until the purpose for which the money was paid is fulfilled.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute Name	Jurisdiction
No applicable statutes

15. Key Terms and Keywords

15.1 Key Terms

Loan Agreement
Quistclose trust
IBRA Debt
Repudiatory breach
Relevant Banks
One obligor policy

15.2 Keywords

Pacific Rim Palm Oil
PT Asiatic Persada
Loan Agreement
Breach of Contract
Quistclose Trust
Singapore High Court

17. Areas of Law

Area Name	Relevance Score
Quistclose trust	90
Trust Law	80
Contract Law	75
Repudiatory breach	65
Unjust Enrichment	30
Fraud and Deceit	25
Banking and Finance	20

16. Subjects

Contract Law
Trust Law
Financial Law