Raiffeisen Zentralbank v Archer Daniels Midland: Fraudulent Misrepresentation & Conspiracy Claim
Raiffeisen Zentralbank Osterreich AG sued Archer Daniels Midland Co and others in the High Court of Singapore, alleging fraudulent misrepresentation and conspiracy by unlawful means. The bank claimed it relied on misrepresentations made by the defendants to its detriment when entering into structured trade finance transactions. Andrew Ang J dismissed the plaintiff's claims, finding no evidence of fraud or dishonesty on the part of the defendants. The court held that the plaintiff was not induced by the misrepresentations and that the losses suffered were due to Parmalat's bankruptcy, not the defendants' actions. The claim was for damages for fraudulent misrepresentation and a claim in respect of a conspiracy by unlawful means.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Judgment for Defendants
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Raiffeisen Zentralbank sued Archer Daniels Midland for fraudulent misrepresentation and conspiracy. The court dismissed the claims, finding no evidence of fraud.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Raiffeisen Zentralbank Osterreich AG | Plaintiff | Corporation | Claim Dismissed | Lost | |
| Archer Daniels Midland Co | Defendant | Corporation | Judgment for Defendant | Won | |
| Adm-Acti Trade Resources, Inc | Defendant | Corporation | Judgment for Defendant | Won | |
| Toepfer International-Asia Pte Ltd | Defendant | Corporation | Judgment for Defendant | Won | |
| Trade Resources LLC | Defendant | Corporation | Judgment for Defendant | Won | |
| Rush River Trading Cayman Ltd | Defendant | Corporation | Judgment for Defendant | Won |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Andrew Ang | Judge | Yes |
4. Counsels
4. Facts
- Raiffeisen Zentralbank entered into four structured trade finance transactions with ADM and its affiliates.
- The transactions involved discounting promissory notes issued by Wishaw Trading SA and guaranteed by Parmalat.
- Wishaw and Parmalat defaulted on the third and fourth transactions due to Parmalat's bankruptcy.
- The plaintiff claimed the defendants made fraudulent misrepresentations regarding the structure of the transactions.
- The plaintiff alleged the defendants conspired by unlawful means to defraud the plaintiff.
- The court found that the plaintiff was not induced by the misrepresentations to enter into the transactions.
- The court found that the losses suffered by the plaintiff were due to Parmalat's bankruptcy, not the defendants' actions.
5. Formal Citations
- Raiffeisen Zentralbank Osterreich AG v Archer Daniels Midland Co and Others, Suit 592/2005, [2006] SGHC 182
6. Timeline
| Date | Event |
|---|---|
| Katherine Mak of ADM Singapore proposed structured trade finance transactions to Catherine Low and Sharon Tan of Raiffeisen Zentralbank. | |
| Katherine Mak made a presentation to Low and Tan at the plaintiff’s office. | |
| Plaintiff entered into four structured trade finance transactions with Agrograin SA, the first defendant and the third defendant. | |
| Representations made by Katherine Mak on behalf of the Defendants to Sharon Tan regarding the structure of the third transaction. | |
| Written confirmations of the third transaction were sent to the plaintiff. | |
| Written confirmations of the third transaction were sent to the plaintiff. | |
| The 3rd Defendant issued an invoice to Wishaw for the sale of the goods. | |
| Plaintiff agreed to discount the promissory note for the third transaction. | |
| Representations made by Katherine Mak on behalf of the Defendants to Sharon Tan regarding the structure of the fourth transaction. | |
| The third defendant issued an invoice dated against Wishaw in respect of the purported sale of goods for the fourth transaction. | |
| Documents were presented to the plaintiff for discounting for the fourth transaction. | |
| Plaintiff agreed to discount the promissory note for the fourth transaction. | |
| Wishaw and Parmalat defaulted in payment in respect of the third and fourth transactions on account of Parmalat’s bankruptcy. | |
| Judgment reserved. |
7. Legal Issues
- Fraudulent Misrepresentation
- Outcome: The court found no evidence of fraud or dishonesty on the part of the defendants and held that the plaintiff was not induced by the misrepresentations.
- Category: Substantive
- Sub-Issues:
- False representation
- Inducement
- Loss as a consequence of misrepresentation
- Conspiracy by Unlawful Means
- Outcome: The court found that the plaintiff failed to make good its claim in respect of conspiracy because there was no evidence of fraud or dishonesty on the part of any of the defendants.
- Category: Substantive
- Sub-Issues:
- Agreement to commit unlawful act
- Intention to injure the plaintiff
- Achievement of intention
8. Remedies Sought
- Monetary Damages
9. Cause of Actions
- Fraudulent Misrepresentation
- Conspiracy by Unlawful Means
10. Practice Areas
- Commercial Litigation
- Banking Law
- Trade Finance Litigation
11. Industries
- Finance
- Agriculture
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Panatron Pte Ltd v Lee Cheow Lee | Court of Appeal | Yes | [2001] 3 SLR 405 | Singapore | Cited as authority for the elements required to prove fraud in an action for deceit. |
| Derry v Peek | House of Lords | Yes | (1889) 14 AC 337 | England and Wales | Cited as the leading case on the requirements for proving fraud, specifically the need to show knowledge of falsity or reckless disregard for the truth. |
| Niru Battery Manufacturing Co v Milestone Trading Ltd | English High Court | No | [2004] QB 985 | England and Wales | Cited to illustrate that negligence, however gross, is not fraud, and that dishonesty is the touchstone for fraudulent misrepresentation. |
| Avon Insurance plc v Swire Fraser Limited | High Court | No | [2000] Lloyd’s Rep IR 535 | England and Wales | Cited for the distinction between a factor that is observed or considered and a factor that is a real and substantial part of what induced a party to enter into a transaction. |
| JEB Fasteners Ltd v Marks Bloom & Co | English Court of Appeal | Yes | [1983] 1 All ER 583 | England and Wales | Cited to support the principle that a misrepresentation need not be the sole cause of a party's actions, as long as it plays a real and substantial part in inducing the party to act. |
| William Smith v David Chadwick | House of Lords | Yes | (1884) 9 App Cas 187 | England and Wales | Cited for the principle that actual inducement may be found with little or no other evidence where materiality is patent and the probability of inducement is great. |
| Vita Health Laboratories Pte Ltd v Pang Seng Meng | High Court | Yes | [2004] 4 SLR 162 | Singapore | Cited for the principle that the plaintiff must prove that the loss it claims to have suffered flowed directly from the alleged fraudulent misrepresentations. |
| CEMP Properties (UK) Limited v Dentsply Research and Development Corporation | Court of Appeal | No | [1991] 2 EGLR 202 | England and Wales | Cited for the principle that if the court is left in real doubt as to whether the plaintiff has suffered any loss at all, the court may be obliged to make no award. |
| Holmes v Jones | High Court of Australia | No | (1907) 4 CLR 1692 | Australia | Cited to illustrate that damage is an essential factor in the cause of action for fraudulent misrepresentation. |
| Twycross v Grant | Court of Common Pleas | No | (1877) 2 CPD 469 | England and Wales | Cited to illustrate the principle that the measure of damages in deceit is the difference between the contract price and the true open market value of the asset purchased at the date of the contract. |
| Waddell v Blockey | Court of Appeal | No | (1879) 4 QBD 678 | England and Wales | Cited to illustrate that there must be a natural or proximate connection between the wrong done and the damage suffered in a fraudulent misrepresentation claim. |
| Smith New Court Securities Ltd v Citibank NA | House of Lords | Yes | [1997] AC 254 | England and Wales | Cited to acknowledge that the Date of Transaction Rule is only a general rule for measuring damages in deceit cases. |
| Quah Kay Tee v Ong & Company Pte Ltd | High Court | Yes | [1997] 1 SLR 390 | Singapore | Cited for the definition of conspiracy by unlawful means, requiring a combination to commit an unlawful act with the intention of injuring the plaintiff. |
| Kuwait Oil Tanker Co SAK v Al Bader | Court of Appeal | No | [2000] 2 All ER (Comm) 271 | England and Wales | Cited to support the principle that an intention to injure the claimant in an unlawful means conspiracy can be inferred from the facts. |
| Peek v Derry | Court of Appeal | No | (1887) 37 Ch D 541 | England and Wales | Cited for the Date of Transaction Rule. |
| McConnel v Wright | Court of Appeal | No | [1903] 1 Ch 546 | England and Wales | Cited for the Date of Transaction Rule. |
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
- Structured Trade Finance
- Promissory Note
- Discounting
- Fraudulent Misrepresentation
- Conspiracy
- Parmalat
- Wishaw Trading SA
- Title
- Trade Confirmation
- Bills of Lading
15.2 Keywords
- fraudulent misrepresentation
- conspiracy
- structured trade finance
- promissory notes
- banking
- Singapore
- High Court
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Fraud and Deceit | 90 |
| Conspiracy by Unlawful Means | 85 |
| Contract Law | 50 |
| Commercial Litigation | 40 |
16. Subjects
- Tort Law
- Banking Law
- Commercial Law
- Fraud
- Conspiracy
- Trade Finance