Salim Anthony v Sumitomo: Assignment of Creditors' Rights & Guarantee Discharge
In Salim Anthony v Sumitomo Corp Capital Asia Pte Ltd, the High Court of Singapore heard two originating summonses concerning a facility agreement and a guarantee. Salim Anthony, the plaintiff, sought declarations that the assignment of the lenders' rights to Sumitomo Corp Capital Asia Pte Ltd was invalid and that he had discharged his obligations under a guarantee. Sulfindo filed a similar originating summons. The court ruled in favor of the plaintiff, declaring the assignment invalid and affirming the plaintiff's discharge of obligations under the guarantee, entitling him to subrogation rights.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Judgment for Plaintiff
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Salim Anthony sought declarations regarding the validity of an assignment of rights and discharge of obligations under a guarantee. The court ruled in favor of Salim Anthony.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Salim Anthony | Plaintiff | Individual | Judgment for Plaintiff | Won | Davinder Singh, Hri Kumar, Kabir Singh |
| Sumitomo Corp Capital Asia Pte Ltd | Defendant | Corporation | Orders in favor of Plaintiff | Lost | Philip Jeyaretnam, Ajinderpal Singh |
| Sakura Merchant Bank (Singapore) Ltd | Defendant | Corporation | Orders in favor of Plaintiff | Lost | Tan Chuan Thye, Andy Yeo |
| Mizuho Corporate Bank Ltd | Defendant | Corporation | Orders in favor of Plaintiff | Lost | Tan Chuan Thye, Andy Yeo |
| The Norinchukin Bank | Defendant | Corporation | Orders in favor of Plaintiff | Lost | Tan Chuan Thye, Andy Yeo |
| The Sumitomo Trust and Banking Co Ltd | Defendant | Corporation | Orders in favor of Plaintiff | Lost | Tan Chuan Thye, Andy Yeo |
| Sumitomo Mitsui Banking Corporation Singapore Branch | Defendant | Corporation | Orders in favor of Plaintiff | Lost | Tan Chuan Thye, Andy Yeo |
| Dresdner Bank Aktiengesellschaft | Defendant | Corporation | Orders in favor of Plaintiff | Lost | Tan Chuan Thye, Andy Yeo |
| PT Satomo Indovyl Monomer | Other | Corporation | |||
| Sulfindo | Other | Corporation | |||
| Brenswick Limited | Other | Corporation |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Lai Siu Chiu | Judge | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Davinder Singh | Drew and Napier LLC |
| Hri Kumar | Drew and Napier LLC |
| Kabir Singh | Drew and Napier LLC |
| Philip Jeyaretnam | Rodyk and Davidson |
| Ajinderpal Singh | Rodyk and Davidson |
| Tan Chuan Thye | Allen and Gledhill |
| Andy Yeo | Allen and Gledhill |
4. Facts
- PT Satomo Indovyl Monomer obtained a loan of US$94,500,000 from several lenders.
- Anthony Salim executed a guarantee in favor of the lenders, guaranteeing the obligations of Sulfindo and Brenswick.
- The Borrower defaulted on the principal installment due on 30 October 2002.
- The Lenders declared an event of default and demanded payment.
- The Lenders assigned their rights under the Facility Agreement to Sumitomo Corp Capital Asia Pte Ltd.
- Salim Anthony paid US$38,915,000 to the Facility Agent.
- The Lenders claimed that the assignment was effective before Salim Anthony's payment.
5. Formal Citations
- Salim Anthony v Sumitomo Corp Capital Asia Pte Ltd and Others and Another Application, OS 1368/2003, 1566/2003, [2004] SGHC 117
6. Timeline
| Date | Event |
|---|---|
| Joint venture agreement signed between Sumitomo Corporation, PT Sulfindo Adiusaha, and Brenswick Limited. | |
| Facility Agreement signed between the Borrower and the Lenders. | |
| Anthony Salim executed the Guarantee in favor of the Lenders. | |
| Security Documents executed by the Borrower in favor of the Security Agent. | |
| Shareholders’ support agreement signed. | |
| First semi-annual installment due under the Facility Agreement. | |
| Borrower obtained two deferrals under the Facility Agreement. | |
| Borrower defaulted on the principal installment. | |
| Facility Agent declared an event of default. | |
| Facility Agent gave notice under the SSA and demanded payment. | |
| Facility Agent demanded payment from Sulfindo as guarantor. | |
| Security Agent demanded payment from the plaintiff as guarantor. | |
| Lenders commenced proceedings against the plaintiff in Suit No 370 of 2003. | |
| Facility Agent gave Default Notice to the Borrower. | |
| Assignment agreement signed. | |
| Facility Agent informed the Borrower of the transfer of outstandings. | |
| Plaintiff paid US$38,915,000 to the Facility Agent. | |
| Lenders informed the plaintiff of the assignment to the first defendant. | |
| Plaintiff filed Originating Summons No 1368 of 2003. | |
| Sulfindo filed Originating Summons No 1566 of 2003. | |
| Judgment reserved. |
7. Legal Issues
- Validity of Assignment
- Outcome: The court held that the assignment of the lenders' rights to the first defendant was invalid due to non-compliance with contractual terms and legal requirements.
- Category: Substantive
- Sub-Issues:
- Compliance with legal requirements
- Compliance with contractual terms
- Prior notice
- Discharge of Guarantee Obligations
- Outcome: The court held that the plaintiff had discharged all his obligations under the guarantee upon payment of the outstanding debts and costs.
- Category: Substantive
- Sub-Issues:
- Full payment of outstanding debts
- Payment of costs and expenses
- Subrogation Rights
- Outcome: The court held that the plaintiff was entitled to be subrogated to the rights of the lenders under the facility agreement, rejecting the argument that he had waived his rights of subrogation.
- Category: Substantive
- Sub-Issues:
- Waiver of subrogation rights
- Unjust enrichment
8. Remedies Sought
- Declaration that the assignment is void
- Declaration that the plaintiff has discharged all obligations under the guarantee
- Order for the lenders to state the amount due from the plaintiff
- Declaration that the plaintiff is subrogated to the rights of the lenders
9. Cause of Actions
- Declaration regarding validity of assignment
- Declaration regarding discharge of guarantee obligations
- Declaration regarding subrogation rights
10. Practice Areas
- Commercial Litigation
- Banking Law
11. Industries
- Banking
- Finance
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Loy Hean Heong v NM Rothschild & Sons | High Court | Yes | [1993] 1 SLR 332 | Singapore | Cited regarding the interpretation of a guarantee clause related to indemnity rights of the guarantor. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Civil Law Act (Cap 43, 1999 Rev Ed) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Facility Agreement
- Guarantee
- Assignment
- Lenders
- Borrower
- Subrogation
- Default
- Outstandings
- Prior notice
- Transfer Notice
15.2 Keywords
- Assignment
- Guarantee
- Subrogation
- Contract
- Banking
- Singapore
- Facility Agreement
16. Subjects
- Contract Law
- Banking
- Finance
- Guarantees
- Assignment
17. Areas of Law
- Contract Law
- Assignment
- Credit and Security
- Guarantees and Indemnities