Lanxess v APP Chemicals: Assignment of Debt & Civil Law Act

Lanxess Pte Ltd sued APP Chemicals International (Mau) Ltd in the High Court of Singapore on 30 January 2009, claiming to be the assignee of a debt of US$10,199,553.12 arising from unpaid invoices issued by Bayer (Singapore) Pte Ltd to APP Chemicals. Lanxess argued that there were two valid assignments: first, from Bayer (Singapore) Pte Ltd to Bayer Polyurethanes Asia Pte Ltd (later renamed Bayer (South East Asia) Pte Ltd), and second, from Bayer (South East Asia) Pte Ltd to Lanxess. The court, presided over by Justice Andrew Ang, found that both assignments were valid and allowed Lanxess's claim.

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

Lanxess sues APP Chemicals for US$10,199,553.12, claiming assignment of debt. The court finds valid assignments and allows the claim.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
APP Chemicals International (Mau) LtdDefendantCorporationClaim AllowedLost
Lanxess Pte LtdPlaintiffCorporationJudgment for PlaintiffWon

3. Judges

Judge NameTitleDelivered Judgment
Andrew AngJudgeYes

4. Counsels

Counsel NameOrganization
Siraj OmarPremier Law LLC
See Chern YangPremier Law LLC
Yap Yin SoonAllen & Gledhill LLP
Edmund ThamAllen & Gledhill LLP

4. Facts

  1. The plaintiff claimed assignment of debt from Bayer (Singapore) Pte Ltd.
  2. The defendant admitted ordering chemical products from Bayer (Singapore) Pte Ltd.
  3. A significant portion of the amount set out in the invoices is unpaid.
  4. The plaintiff argued there was an assignment from BSEA(1) to BSEA(2).
  5. The plaintiff argued there was a second assignment from BSEA(2) to itself.
  6. The defendant denied there was any assignment in law or equity.
  7. The defendant admitted that an amount equal to the debt remains unpaid.

5. Formal Citations

  1. Lanxess Pte Ltd v APP Chemicals International (Mau) Ltd, Suit 730/2006, [2009] SGHC 25

6. Timeline

DateEvent
Bayer (Singapore) Pte Ltd started selling chemicals to the defendant.
APP issued a guarantee of the defendant’s obligations to Bayer (Singapore) Pte Ltd.
BSEA(1) sold and delivered chemical products to the defendant.
BSEA(1) sold and delivered chemical products to the defendant.
BSEA(1) and BSEA(2) entered into an Agreement for Sale and Purchase of Business (ASPB).
Bayer Polyurethanes Asia Pte Ltd changed its name to Bayer (South East Asia) Pte Ltd (BSEA(2)).
BSEA(1) changed its name to Bayer Trading Pte Ltd.
Notice in the Straits Times regarding the integration of Bayer (South East Asia) Pte Ltd.
Mr. Ian Clive Wood became general manager of the Bayer Chemicals Sub-group of BSEA(2).
Defendant first paid the 10% debt repayment upon goods being sold to APP.
BSEA(2) issued statements of account.
BSEA(2) issued statements of account.
Asset Purchase Agreement (APA) between BSEA(2) and Lanxess Pte Ltd.
Ms Lim Joo Joon joined the plaintiff as chief financial officer.
Bayer Trading Pte Ltd (formerly BSEA(1)) was dissolved.
Statements of account were issued on the plaintiff’s letterhead.
Deed of Assignment.
Last 10% repayment was made pursuant to a shipment made by the plaintiff.
Suit filed by Lanxess Pte Ltd against APP Chemicals International (Mau) Ltd.
Judgment reserved.

7. Legal Issues

  1. Validity of Assignment
    • Outcome: The court held that both the first and second assignments were valid in law and equity.
    • Category: Substantive
    • Sub-Issues:
      • Requirements for legal assignment
      • Requirements for equitable assignment
      • Sufficiency of notice of assignment
  2. Estoppel by Convention
    • Outcome: The court did not need to consider this argument as it found the assignments to be valid. However, the court noted that there would be a strong case for estoppel by convention if the assignments were not valid.
    • Category: Substantive

8. Remedies Sought

  1. Monetary Damages
  2. Interest

9. Cause of Actions

  • Breach of Contract
  • Assignment of Debt

10. Practice Areas

  • Commercial Litigation

11. Industries

  • Chemicals
  • Pulp and Paper

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Salim Anthony v Sumitomo Corp Capital Asia Pte LtdHigh CourtYes[2004] 3 SLR 331SingaporeCited for the principle that a notice of assignment must be clear, unambiguous, and unconditional to be valid under s 4(8) of the Civil Law Act.
Van Lynn Developments Ltd v Pelias Construction Co LtdEnglish Court of AppealYes[1969] 1 QB 607England and WalesCited for the principle that written notification of assignment must be given to the debtor so they know to whom to pay the debt.
Denney, Gasquet and Metcalfe v ConklinKing's Bench DivisionYes[1913] 3 KB 177England and WalesCited for the principle that a letter can serve as valid notice of assignment even if it does not explicitly mention the assignment.
Tsu Soo Sin v Oei Tjiong BinCourt of AppealYes[2008] SGCA 46SingaporeCited for the principle that equitable assignments do not require notice to the debtor or assignee, but must show a manifestation of the assignor’s intention to assign.
Travista Development Pte Ltd v Tan Kim Swee AugustineHigh CourtYes[2008] 2 SLR 474SingaporeCited for the elements of estoppel by convention.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
Civil Law Act (Cap 43, 1999 Rev Ed) s 4(8)Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Assignment
  • Debt
  • Chose in action
  • Legal assignment
  • Equitable assignment
  • Notice of assignment
  • Estoppel by convention
  • Agreement for Sale and Purchase of Business
  • Asset Purchase Agreement
  • Deed of Assignment

15.2 Keywords

  • Assignment of debt
  • Civil Law Act
  • Lanxess
  • APP Chemicals
  • Singapore High Court
  • Contract law
  • Chemical products

17. Areas of Law

Area NameRelevance Score
Assignment Law95
Contract Law80
Breach of Contract75
Commercial Law60
Guarantee50
Estoppel40

16. Subjects

  • Contract Law
  • Assignment
  • Civil Procedure