BNP Paribas SA v Jacob Agam: Enforcement of Personal Guarantees for Corporate Loans

In the Singapore International Commercial Court, BNP Paribas SA, as successor to BNP Paribas Wealth Management, sued Jacob Agam and Ruth Agam for approximately €32 million under personal guarantees for loans made to their companies. The court, composed of Steven Chong JA, Roger Giles IJ, and Dominique Hascher IJ, ruled in favor of BNP Paribas, finding Jacob and Ruth jointly and severally liable for the outstanding amounts. The court dismissed Jacob's counterclaim.

1. Case Overview

1.1 Court

Singapore International Commercial Court

1.2 Outcome

Judgment for Plaintiff

1.3 Case Type

Civil

1.4 Judgment Type

Judgment

1.5 Jurisdiction

Singapore

1.6 Description

BNP Paribas SA sues Jacob and Ruth Agam for €32 million under personal guarantees for loans to their companies. The court ruled in favor of BNP Paribas, dismissing Jacob's counterclaim.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
BNP Paribas SAPlaintiffCorporationJudgment for PlaintiffWonK Muralidharan Pillai, Luo Qinghui, Foo Ming-En Mark, Andrea Tan
Jacob AgamDefendantIndividualClaim DismissedLost
Ruth AgamDefendantIndividualClaim DismissedLost

3. Judges

Judge NameTitleDelivered Judgment
Steven ChongJudge of AppealNo
Roger GilesInternational JudgeYes
Dominique HascherInternational JudgeNo

4. Counsels

Counsel NameOrganization
K Muralidharan PillaiRajah & Tann Singapore LLP
Luo QinghuiRajah & Tann Singapore LLP
Foo Ming-En MarkRajah & Tann Singapore LLP
Andrea TanRajah & Tann Singapore LLP

4. Facts

  1. BNP Paribas SA sued Jacob and Ruth Agam for approximately €32 million under personal guarantees.
  2. The guarantees were for loans made to the Agams' companies, which owned properties in France and Monaco.
  3. The Agam properties were previously mortgaged to ING Bank (Monaco) SAM, later merged with Bank Julius Baer (Monaco) SAM.
  4. In 2010, Jacob Agam contacted BNP Paribas Wealth Management to refinance the Agam properties.
  5. The loans were secured by mortgages, pledges of shares, and personal guarantees.
  6. A total of €61.7 million was drawn down under the facilities.
  7. A dispute arose when a French court ordered the seizure of the Paris property in 2014.
  8. BNP Paribas Wealth Management considered that the seizure brought default in the margin requirements.
  9. The SCI Agam loan was repaid using funds from a pledged account.
  10. The SCI Ruth Agam and Det Internationale loans remained unsatisfied.
  11. BNP Paribas Wealth Management commenced proceedings against the Agams in 2015.

5. Formal Citations

  1. BNP Paribas SA v Jacob Agam and another, Suit No 2 of 2016, [2017] SGHC(I) 10

6. Timeline

DateEvent
Charles Merimee sent Jacob Agam a presentation on services offered by BNPWM's Singapore branch.
BNPWM provided a facility letter for a five year non-revolving term loan.
BNP Paribas Wealth Management provided documents to Jacob Agam and Mr Van Hagen for review.
Arrangements were made for the French notaries necessary for the mortgage documents.
A French court ordered the seizure of the Paris property.
BNP Paribas Wealth Management wrote to SCI Agam to inform it of a breach of borrower and margin requirements.
BNP Paribas Wealth Management sold securities in the pledged account and used the proceeds to repay the SCI Agam loan in full.
BNP Paribas Wealth Management sent letters agreeing to hold its hand.
The Granada property was sold and the Bronton loan was repaid.
BNP Paribas Wealth Management wrote to SCI Ruth Agam and Det Internationale requesting additional collateral.
Date for repayment came.
BNP Paribas Wealth Management issued formal letters of demand to SCI Ruth Agam and Det Internationale for repayment of their loans.
BNP Paribas Wealth Management wrote to Jacob and Ruth Agam requiring payment as guarantors.
Payment was not received.
BNP Paribas Wealth Management used funds in Jacob’s account and in the pledged account in part repayment of the loans.
BNP Paribas Wealth Management gave notice to Jacob and Ruth Agam of the set-offs and outstanding amounts.
BNP Paribas Wealth Management commenced proceedings.
BNP and BNP Paribas Wealth Management executed a merger agreement.
It was ordered that the proceedings be transferred to the Singapore International Commercial Court.
The Agams filed an application to stay the proceedings.
The application to stay the proceedings was heard.
The merger was completed.
BNP applied to be substituted as plaintiff in place of BNP Paribas Wealth Management.
The application was heard.
The application was heard.
The application was granted and substitution was ordered.
The appeal was heard.
The Court’s reasons were delivered.
The Israeli proceedings had been commenced.
A further Case Management Conference was fixed.
Hin Tat filed an application to be discharged as solicitors for the Agams.
The stay application was listed before Steven Chong JA.
The proceedings came on for hearing.

7. Legal Issues

  1. Enforcement of Personal Guarantees
    • Outcome: The court held that the personal guarantees were enforceable against both Jacob and Ruth Agam.
    • Category: Substantive
  2. Defence of Non Est Factum
    • Outcome: The court rejected Ruth Agam's defence of non est factum.
    • Category: Substantive
  3. Breach of Contract
    • Outcome: The court found that the Agam companies had breached the facility agreements.
    • Category: Substantive

8. Remedies Sought

  1. Monetary Damages
  2. Interest
  3. Indemnity Costs

9. Cause of Actions

  • Breach of Contract
  • Enforcement of Guarantee
  • Indemnity

10. Practice Areas

  • Commercial Litigation
  • Banking Litigation

11. Industries

  • Banking
  • Financial Services

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
BNP Paribas Wealth Management v Jacob Agam and anotherSingapore High CourtYes[2017] 3 SLR 27SingaporeCited for the dismissal of the Agams' application to stay the proceedings.
BNP Paribas Wealth Management v Jacob Agam and anotherSingapore High CourtYes[2017] 4 SLR 14SingaporeCited for the granting of BNP's application to be substituted as plaintiff.
Jacob Agam and another v BNP Paribas SACourt of AppealYes[2017] 2 SLR 1SingaporeCited for the dismissal of the Agams' appeal from the decision to allow BNP to be substituted as plaintiff.
PT Jaya Sumpiles Indonesia and another v Kristle Trading Ltd and another appealSingapore Court of AppealYes[2009] 3 SLR(R) 689SingaporeCited for the principle that a principal debtor clause is generally insufficient to convert a contract of guarantee into a contract of indemnity.
Mahidon Nichiar bte Mohd Ali and others v Dawood Sultan KamaldinSingapore Court of AppealYes[2015] 5 SLR 62SingaporeCited for the requirements of the defence of non est factum.
Koh Lin Yee v Terrestrial Pte Ltd and another appealSingapore Court of AppealYes[2015] 2 SLR 497SingaporeCited for the principle that a 'no set-off' provision will be given effect.
Abani Trading Pte Ltd v BNP Paribas and another appealSingapore Court of AppealYes[2014] 3 SLR 909SingaporeCited for the principle that a contractual agreement on costs will ordinarily be upheld.

13. Applicable Rules

Rule Name
Rules of Court

14. Applicable Statutes

Statute NameJurisdiction
Evidence ActSingapore

15. Key Terms and Keywords

15.1 Key Terms

  • Personal Guarantee
  • Facility Agreement
  • Margin Call
  • Event of Default
  • Refinancing
  • Pledged Account
  • Mortgage
  • Indemnity
  • Non Est Factum

15.2 Keywords

  • Personal Guarantee
  • Loan
  • Mortgage
  • Singapore International Commercial Court
  • BNP Paribas
  • Jacob Agam
  • Ruth Agam

16. Subjects

  • Banking
  • Finance
  • Contract Law
  • Guarantees
  • Indemnities

17. Areas of Law

  • Credit and Security
  • Guarantees and Indemnities
  • Banking Law
  • Contract Law