Cytec Industries v Asia Pulp & Paper: Corporate Guarantee, Consideration & Limitation Act
In Cytec Industries Pte Ltd v Asia Pulp & Paper Co Ltd, the High Court of Singapore addressed a dispute concerning a corporate guarantee. Cytec Industries, the plaintiff, sued Asia Pulp & Paper, the defendant, over a guarantee related to a purchase agreement with APP Chemicals. The court, presided over by Justice Choo Han Teck, ruled in favor of the plaintiff, finding that the guarantee was validly executed, consideration was furnished, and the defendant was estopped from raising limitation defenses. The case involved a breach of contract claim.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Judgment for Plaintiff
1.3 Case Type
Civil
1.4 Judgment Type
Judgment
1.5 Jurisdiction
Singapore
1.6 Description
The High Court ruled on a dispute over a corporate guarantee, addressing consideration, the affixation of a company seal, and limitation provisions.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Cytec Industries Pte Ltd | Plaintiff | Corporation | Claim Allowed | Won | Yap Yin Soon, Edmund Tham Weiheng |
| Asia Pulp & Paper Co Ltd | Defendant | Corporation | Claim Dismissed | Lost | Adrian Tan, Ho Kheng Lian |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Choo Han Teck | J | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Yap Yin Soon | Allen & Gledhill LLP |
| Edmund Tham Weiheng | Allen & Gledhill LLP |
| Adrian Tan | Drew & Napier LLC |
| Ho Kheng Lian | Drew & Napier LLC |
4. Facts
- Cytec Industries and APP Chemicals entered into a Letter of Intent for the purchase of chemicals.
- Asia Pulp & Paper issued a guarantee for APP Chemicals' payment obligations.
- The guarantee was backdated to October 25, 1999.
- The guarantee contained preliminary statements regarding consideration.
- No formal purchase agreement was signed between Cytec and APP Chemicals.
- Cytec transacted with APP Chemicals after the guarantee was issued.
- The guarantee included a clause (Article 2(e)) waiving any statute of limitation defense.
5. Formal Citations
- Cytec Industries Pte Ltd v Asia Pulp & Paper Co Ltd, Suit 161/2007, [2009] SGHC 32
6. Timeline
| Date | Event |
|---|---|
| Letter of Intent concluded between Cytec Industries Pte Ltd and APP Chemicals International (Mau) Ltd | |
| Guarantee backdated | |
| Asia Pulp & Paper Company Ltd entered into a guarantee with Cytec Industries Pte Ltd | |
| Suit filed (Suit 161/2007) | |
| Defendant's written submission filed | |
| Judgment Reserved | |
| Decision Date |
7. Legal Issues
- Consideration
- Outcome: The court held that the guarantee was supported by consideration, even without a formal purchase agreement.
- Category: Substantive
- Sub-Issues:
- Whether a purchase agreement is required for consideration
- Whether consideration was furnished by the plaintiff
- Limitation of Actions
- Outcome: The court held that parties can contract out of the Limitation Act, and the defendant was estopped from raising limitation defenses due to Article 2(e) of the Guarantee.
- Category: Procedural
- Sub-Issues:
- Contracting out of limitation provisions
- Execution of Deed
- Outcome: The court held that the guarantee had been executed as a deed.
- Category: Substantive
8. Remedies Sought
- Monetary Damages
9. Cause of Actions
- Breach of Contract
- Breach of Guarantee
10. Practice Areas
- Commercial Litigation
11. Industries
- Chemicals
- Pulp and Paper
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| First National Securities Ltd v Jones | Chancery Division | Yes | [1978] Ch 109 | England and Wales | Cited regarding the non-affixation of a seal on a deed |
| Board of Trade v Cayzer, Irvine & Co | House of Lords | Yes | [1927] AC 610 | United Kingdom | Cited for the rationale underpinning limitation provisions |
| Lubovsky v Snelling | King's Bench | Yes | [1944] 1 KB 44 | England and Wales | Cited for the view that a party may contract out of limitation provisions |
| A’Court v Cross | Court of Common Pleas | Yes | (1825) 3 Bing. 329 | England and Wales | Cited for the rationale behind the Statute of Limitations 1623 |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Limitation Act (Cap 163, 1996 Rev Ed) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Corporate Guarantee
- Letter of Intent
- Purchase Agreement
- Transaction Documents
- Limitation Act
- Consideration
- Deed
- Preliminary Statements
15.2 Keywords
- corporate guarantee
- consideration
- limitation act
- contract law
- singapore
- high court
16. Subjects
- Contract Law
- Guarantees
- Civil Procedure
- Limitation of Actions
17. Areas of Law
- Contract Law
- Limitation of Actions
- Corporate Law
- Guarantees