Bank of China v Huang Ziqiang: Guarantee Enforcement & Fraudulent Misrepresentation in Loan Facility Revision

In Bank of China Limited (Singapore Branch) v Huang Ziqiang and another, the High Court of Singapore ruled in favor of the plaintiff, Bank of China, against the first defendant, Mr. Huang Ziqiang, for US$66,838,374.08 plus interest, based on a personal guarantee. Mr. Huang's defense centered on allegations of fraudulent misrepresentations by the Bank, claiming he was induced to execute the guarantee under false pretenses. The court found that the guarantee was validly executed and that Mr. Huang's claims of misrepresentation and promissory estoppel were unsubstantiated. The second defendant, Huali Shipping Holding (H.K.) Co Limited, had a default judgment entered against them earlier in the proceedings. The case involved a claim for breach of guarantee.

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

The High Court addresses Bank of China's claim against Huang Ziqiang for loan guarantee, focusing on allegations of fraudulent misrepresentation and enforceability of guarantee.

1.7 Decision Date

19 November 2014

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
Bank of China Limited (Singapore Branch)	Plaintiff	Corporation	Judgment for Plaintiff	Won	Tham Feei Sy of Drew & Napier LLC Hri Kumar Nair of Drew & Napier LLC Zhao Liwen Constance of Drew & Napier LLC
Huang Ziqiang	Defendant	Individual	Claim Dismissed	Lost	Chan Ming Onn David of Shook Lin & Bok LLP Seah Yong Quan Terence of Shook Lin & Bok LLP Christine Ong of Shook Lin & Bok LLP Justin Chan of Shook Lin & Bok LLP
Huali Shipping Holding (H.K.) Co Limited	Defendant	Corporation	Default Judgment	Default

3. Judges

Judge Name	Title	Delivered Judgment
Belinda Ang Saw Ean	Judge	Yes

4. Counsels

Counsel Name	Organization
Tham Feei Sy	Drew & Napier LLC
Hri Kumar Nair	Drew & Napier LLC
Zhao Liwen Constance	Drew & Napier LLC
Chan Ming Onn David	Shook Lin & Bok LLP
Seah Yong Quan Terence	Shook Lin & Bok LLP
Christine Ong	Shook Lin & Bok LLP
Justin Chan	Shook Lin & Bok LLP

4. Facts

Bank of China lent US$90.65m to Yuan Sheng Shipping in July 2008 to finance a bulk carrier purchase.
Huang Ziqiang, the first defendant, was the guarantor of the loans granted by the Bank to Yuan Sheng Shipping.
The 2008 Loan Facility was secured by a first statutory mortgage on Pacific Yuansheng.
The charterer of Pacific Yuansheng defaulted about four months after the loan was drawn down.
Pacific King, on behalf of the Borrower, commenced negotiations with the Bank to revise the 2008 Loan Facility.
The Bank revised the 2008 Loan Facility limit downwards to US$78.15m in January 2009.
Mr Huang gave his personal guarantee to the Bank on 13 January 2009.
The Borrower eventually defaulted on the loan repayments.

5. Formal Citations

Bank of China Limited (Singapore Branch) v Huang Ziqiang and another, Suit No 138 of 2013, [2014] SGHC 245

6. Timeline

Date	Event
2008-07-01	Bank lent US$90.65m to the Borrower on a term loan facility
2008-11-01	Charterer of Pacific Yuansheng defaulted on the charter
2008-11-01	Negotiations took place between the parties to revise the instalment payment schedule
2009-01-06	Bank revised the 2008 Loan Facility limit downwards to US$78.15m
2009-01-13	First Supplemental Facility Agreement signed
2009-01-13	Mr Huang gave his personal guarantee to the Bank
2011-03-01	Bank revised the facility limit to US$74.67m
2011-04-01	Second Supplemental Facility Agreement signed
2011-04-01	Mr Huang signed the Undertaking confirming that the Guarantee would apply to the 2SFA
2013-01-25	Bank made a demand for repayment of the loan and interest
2013-02-18	Bank commenced action to seek repayment of the outstanding principal sum along with substantial interest
2013-07-10	Judgment in default of defence was entered against the second defendant
2014-11-20	Judgment reserved

7. Legal Issues

Enforceability of Guarantee
- Outcome: The court held that the guarantee was enforceable against Mr. Huang.
- Category: Substantive
Fraudulent Misrepresentation
- Outcome: The court found that Mr. Huang failed to prove that the Bank made fraudulent misrepresentations to induce him to execute the guarantee.
- Category: Substantive
- Related Cases:
  - [2001] 2 SLR(R) 435
Promissory Estoppel
- Outcome: The court held that the doctrine of promissory estoppel did not apply as there was no inequitable conduct by the Bank.
- Category: Substantive
Backdating of Guarantee
- Outcome: The court found that the Guarantee was executed on 13 January 2009, the date stated on its face, and was not backdated.
- Category: Procedural

8. Remedies Sought

Monetary Damages
Contractual Interest

9. Cause of Actions

Breach of Guarantee
Debt Recovery

10. Practice Areas

Commercial Litigation
Banking Litigation

11. Industries

Banking
Shipping

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
Panatron Pte Ltd and another v Lee Cheow Lee and another	Court of Appeal	Yes	[2001] 2 SLR(R) 435	Singapore	Cited for the elements of fraudulent misrepresentation.
Wu Yang Construction Group Ltd v Zhejiang Jinyi Group Co Ltd and others	High Court	Yes	[2006] 4 SLR(R) 451	Singapore	Cited regarding the burden of proof in fraudulent misrepresentation cases.
Joseph Constantine Steamship Line Limited v Imperial Smelling Corporation Limited	House of Lords	Yes	[1942] AC 154	England	Cited for the principle that the burden of proof is generally on the party who affirms rather than denies a particular thing.
Grunther Industrial Development Ltd v Federated Employers Insurance Association Ltd	English Court of Appeal	Yes	[1973] 1 Lloyd’s Rep 394	England	Cited to highlight the distinction between the burden of proof and affirmations and denials in pleadings.
Universal Permanent Building Society v Cooke	Chancery Division	Yes	[1952] 1 Ch 95	England	Cited for the general rule that a deed takes effect from the date upon which execution is completed by delivery.
Browne v Burton	Queen's Bench	Yes	(1847) 17 LJQB 49	England	Cited for the principle that a deed speaks from the time of execution, not the date on its face.
Bestland Development Pte Ltd v Thasin Development Pte Ltd	High Court	Yes	[1991] SGHC 27	Singapore	Cited for the principle that to constitute a representation, a statement must relate to a matter of fact.
Derry v Peek	House of Lords	Yes	(1889) 14 App. Cas. 337	England	Cited for the principle that if fraud is proved, the motive of the person guilty of it is immaterial.
Hongkong & Shanghai Banking Corp Ltd v Jurong Engineering Ltd and others	High Court	Yes	[2000] 1 SLR(R) 204	Singapore	Cited for the principle that in cases involving commercial transactions, the parties are presumed to have intended to create legal relations.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute Name	Jurisdiction
Misrepresentation Act (Cap 390, 1994 Rev Ed) s 2	Singapore
Rules of Court (Cap 322, R 5, 2014 Rev Ed) Order 35 r 4(1)	Singapore
Rules of Court (Cap 322, R 5, 2014 Rev Ed) Order 35 r 4(6)	Singapore
Evidence Act (Cap 98, 2008 Rev Ed) Section 105	Singapore
Civil Law Act (Cap 43, 1999 Rev Ed) Section 6(b)	Singapore

15. Key Terms and Keywords

15.1 Key Terms

Guarantee
Loan Facility
Fraudulent Misrepresentation
Promissory Estoppel
Backdating
Supplemental Facility Agreement
Undertaking
Personal Guarantee
Corporate Guarantee
Revised Repayment Schedule

15.2 Keywords

Guarantee
Loan
Misrepresentation
Bank of China
Shipping
Singapore
Contract
Enforcement

17. Areas of Law

Area Name	Relevance Score
Guarantee	90
Misrepresentation	85
Banking Law	80
Banking and Finance	75
Fraud and Deceit	70
Contract Law	60
Estoppel	50
Commercial Law	40
Agency and Distributorships	30
Corporate Law	20

16. Subjects

Banking
Finance
Contract Law
Civil Procedure