MGA International v. Wajilam Exports: Trade Finance Commission Dispute

In MGA International Pte Ltd v Wajilam Exports (Singapore) Pte Ltd, the Singapore High Court addressed a dispute over the commission owed to Wajilam Exports for providing trade finance to MGA International for the purchase of PNG logs. MGA claimed the commission should be US$5 per cubic meter based on prior dealings, while Wajilam argued it had discretion to determine the commission. The court rejected both arguments, finding no agreed rate and instead determined that a reasonable commission was owed. Ultimately, the court ruled in favor of MGA, ordering Wajilam to refund the over-deducted commission 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

Singapore High Court case regarding a dispute over the commission owed to Wajilam Exports for providing trade finance to MGA International. The court determined a reasonable commission.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
MGA International Pte LtdPlaintiffCorporationJudgment for PlaintiffWonJohn Seow, Vellayappan Balasubramaniyam
Wajilam Exports (Singapore) Pte LtdDefendantCorporationPartial LossPartialWendy Tan, Charmaine Fu

3. Judges

Judge NameTitleDelivered Judgment
Belinda Ang Saw EanJudgeYes

4. Counsels

Counsel NameOrganization
John SeowRajah & Tann LLP
Vellayappan BalasubramaniyamRajah & Tann LLP
Wendy TanStamford Law Corporation
Charmaine FuStamford Law Corporation

4. Facts

  1. MGA, a log trading company, engaged Wajilam, a wholesale trading company, for trade finance services.
  2. Wajilam provided trade finance to MGA for the purchase of PNG round logs shipped onboard the Marina I.
  3. A dispute arose regarding the amount of commission Wajilam was entitled to for providing trade finance services.
  4. MGA claimed the commission should be calculated at US$5 per cubic meter based on prior dealings.
  5. Wajilam argued it had absolute discretion to determine its own remuneration.
  6. There was no specific discussion between the parties regarding the commission rate for the Marina I shipment.
  7. Wajilam charged 50% of the net profit as its commission, amounting to US$376,477.67.

5. Formal Citations

  1. MGA International Pte Ltd v Wajilam Exports (Singapore) Pte Ltd, Suit No 545 of 2008, [2010] SGHC 319

6. Timeline

DateEvent
MGA approached Wajilam for trade finance for Guyana logs (First Transaction).
MGA and Wajilam entered into a second trade finance transaction for Sarawak logs.
Wajilam opened letters of credit for MGA's purchases of Sarawak logs.
Wajilam opened the import letter of credit for the Royal Crystal shipment.
Wajilam opened the import letter of credit for the Dana Muheiddine transaction.
Wajilam opened import letters of credit for MGA’s purchases of Sarawak logs.
Wajilam opened import letters of credit for MGA’s purchases of Sarawak logs.
Wajilam opened import letters of credit for MGA’s purchases of Sarawak logs.
Mukesh spoke to Tarun about MGA’s purchase of PNG logs.
Wajilam opened the first import letter of credit for PNG logs.
Wajilam opened the second import letter of credit for PNG logs.
Wajilam opened import letter of credit for Guyana sawn timber.
Wajilam sent MGA a letter summarizing their agreement.
Discounting of usance bills took place.
Discounting of usance bills took place.
Wajilam prepared and sent the sixth consolidated statement to MGA.
Agarwal Soham Ghanshyam sent Wajilam an e-mail with the seventh consolidated statement attached.
Mukesh began e-mailing Tarun for "the old account".
Mukesh emailed Tarun requesting the old account.
Mukesh sent an e-mail chaser for the old account.
Tarun notified Mukesh that the accounts would be finalised soon.
Soham wrote to Tarun, asking him to “finalise [MGA’s] account”.
Mukesh wrote to Tarun asking for payment.
Soham again wrote to Tarun with the same request.
MGA’s solicitors issued Wajilam a letter of demand.
Decision Date

7. Legal Issues

  1. Breach of Contract
    • Outcome: The court found that there was no agreed rate of commission, but implied a term that a reasonable sum was to be paid as commission.
    • Category: Substantive
  2. Quantum Meruit
    • Outcome: The court determined a reasonable commission for the trade finance services provided.
    • Category: Substantive
  3. Incorporation of Terms by Prior Course of Dealing
    • Outcome: The court found that the discretionary commission term was not incorporated by a prior course of dealing into the Marina I finance transaction.
    • Category: Substantive

8. Remedies Sought

  1. Repayment of over-deducted commission
  2. Interest

9. Cause of Actions

  • Breach of Contract

10. Practice Areas

  • Commercial Litigation
  • Banking Law

11. Industries

  • Commodities Trading
  • Finance

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Circle Freight International Limited v Medeast Gulf Exports LimitedCourt of AppealYes[1988] 2 Lloyd’s Rep 427England and WalesCited regarding incorporation of terms by prior course of dealing.
Capes (Hatherden) Ltd v Western Arable Services LtdHigh CourtYes[2010] 1 Lloyd’s Rep 477England and WalesCited regarding incorporation of terms by prior course of dealing.
Hollier v Rambler Motors (AMC) LtdCourt of AppealYes[1972] 2 QB 71England and WalesCited regarding incorporation of terms by prior course of dealing.
Horkulak v Cantor Fitzgerald InternationalUnknownYes[2005] ICR 402UnknownCited regarding the court’s approach to contractual discretion.
Socimer Bank Ltd v Standard Bank LtdUnknownYes[2008] 1 Lloyd’s Rep 558UnknownCited regarding the exercise of contractual discretion.
JML Direct v Freesat UK LtdHigh CourtYes[2009] EWHC 616England and WalesCited regarding contractual discretion.
Ludgate Insurance Co Ltd v CitibankUnknownYes[1998] Lloyd’s Rep IP 221UnknownCited regarding contractual discretion.
Weinberger v InglisHouse of LordsYes[1919] AC 606United KingdomCited regarding contractual discretion.
Dundee General Hospitals Board of Management v WalkerUnknownYes[1952] 1 All ER 896UnknownCited regarding contractual discretion.
Docker v HymansUnknownYes[1969] 1 Ll R 487UnknownCited regarding contractual discretion.
Abu Dhabi National Tanker Company v Product Star Shipping Company LimitedUnknownYes[1993] 1 Lloyd’s Rep 397UnknownCited regarding contractual discretion.
Rabiah Bee bte Mohamed Ibrahim v Salem IbrahimHigh CourtYes[2007] 2 SLR(R) 655SingaporeCited regarding quantum meruit claims.
Gold Coin Ltd v Tay Kim WeeCourt of AppealYes[1985-1986] SLR(R) 575SingaporeCited regarding quantum meruit claims.
British Steel Corporation v Cleveland Bridge and Engineering Co LtdUnknownYes[1984] 1 All ER 504UnknownCited regarding implying a term that a reasonable sum is to be paid.
May & Butcher Ltd v RUnknownYes[1934] 2 KB 17UnknownCited regarding implying a term that a reasonable sum is to be paid.
W N Hillas & Co Ltd v Arcos LtdUnknownYes(1932) 147 LT 503UnknownCited regarding implying a term that a reasonable sum is to be paid.
Foley v Classique Coaches LtdUnknownYes[1934] 2 KB 1UnknownCited regarding implying a term that a reasonable sum is to be paid.
Way v LatillaUnknownYes[1937] 2 All ER 759UnknownCited regarding the approach the court could take in determining reasonable remuneration.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
No applicable statutes

15. Key Terms and Keywords

15.1 Key Terms

  • Trade finance
  • Commission
  • Letter of credit
  • Cubic meter
  • Prior dealings
  • Discretionary commission
  • Quantum meruit
  • Incorporation of terms
  • Running account
  • Consolidated statement

15.2 Keywords

  • Trade finance
  • Commission
  • Logs
  • Singapore
  • Contract
  • MGA International
  • Wajilam Exports

16. Subjects

  • Contract Dispute
  • Trade Finance
  • Commission Dispute
  • Agency

17. Areas of Law

  • Contract Law
  • Trade Finance