AL Shams Global Ltd v BNP Paribas: Breach of Contract, Duty of Care, and Promissory Estoppel
AL Shams Global Ltd (ASGL) sued BNP Paribas in the High Court of Singapore, seeking declarations that BNP Paribas breached contract, duty of care, and fiduciary duty by refusing a payment into ASGL's account. The court, presided over by Kannan Ramesh J, dismissed the application, finding that BNP Paribas had the contractual right to refuse the payment and that no duty of care or fiduciary duty was breached. The court also rejected claims of promissory estoppel and failure to provide a complete reply.
1. Case Overview
1.1 Court
High Court of Singapore1.2 Outcome
Application dismissed
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
ASGL sued BNP Paribas for refusing a payment. The court dismissed the claim, finding no breach of contract, duty of care, or promissory estoppel.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| AL Shams Global Ltd | Plaintiff | Corporation | Application dismissed | Lost | Muthukrishnan Nedumaran |
| BNP Paribas | Defendant | Corporation | Application dismissed | Won | Vincent Leow, Mak Sushan Melissa |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Kannan Ramesh | Judge | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Muthukrishnan Nedumaran | M Nedumaran & Co. |
| Vincent Leow | Allen & Gledhill LLP |
| Mak Sushan Melissa | Allen & Gledhill LLP |
4. Facts
- ASGL sought declarations that BNP Paribas breached contract, duty of care, and fiduciary duty.
- BNP Paribas refused to accept a payment into ASGL's account due to internal policy reasons.
- ASGL argued the bank's refusal was a breach of contract and duty of care.
- The bank cited a clause in the terms and conditions allowing it sole discretion to refuse payments.
- ASGL claimed the bank was estopped from refusing the payment after requesting documents.
- The court found the bank's discretion was not exercised arbitrarily or in bad faith.
- The court found no fiduciary duty requiring the bank to accept the payment.
5. Formal Citations
- AL Shams Global Ltd v BNP Paribas, Originating Summons No 873 of 2017, [2018] SGHC 143
6. Timeline
| Date | Event |
|---|---|
| AL Shams Global Ltd incorporated in the British Virgin Islands | |
| AL Shams Building Materials Trading LLC incorporated in Dubai | |
| BNP Paribas approached Shah about opening an account | |
| Account formally opened | |
| AL Shams Building agreed to sell shares in Ariston to Afrifresh | |
| First installment under the Sale of Shares Agreement credited into the Account | |
| Second installment under the Sale of Shares Agreement credited into the Account | |
| BNP Paribas gave ASGL notice of its decision to close the Account | |
| Shah confirmed receipt of the Bank’s letter | |
| Shah and Parakatil met to discuss the closure of the Account | |
| Shah and Parakatil met again | |
| Shah sent an email to Parakatil enclosing a copy of the remittance instruction for the Payment | |
| The Payment was returned by the Bank | |
| Shah raised matters in relation to the closure of the Account with Parakatil | |
| The Bank replied by a letter reiterating its decision to close the Account | |
| Originating Summons No 873 of 2017 filed | |
| Parties heard | |
| Full reasons given |
7. Legal Issues
- Breach of Contract
- Outcome: The court held that the bank was within its contractual rights to refuse the payment.
- Category: Substantive
- Duty of Care
- Outcome: The court found no basis for a duty of care requiring the bank to accept the payment.
- Category: Substantive
- Fiduciary Duty
- Outcome: The court found no fiduciary relationship existed between the bank and its customer regarding accepting payments.
- Category: Substantive
- Promissory Estoppel
- Outcome: The court found that the bank did not make a clear promise to accept the payment upon receipt of documents.
- Category: Substantive
- Locus Standi
- Outcome: The court held that ASGL had no locus standi to question the bank's compliance with statutory duties to report suspicious transactions.
- Category: Procedural
8. Remedies Sought
- Declaratory Relief
9. Cause of Actions
- Breach of Contract
- Negligence
- Breach of Fiduciary Duty
10. Practice Areas
- Commercial Litigation
- Banking Law
11. Industries
- Finance
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| MGA International Pte Ltd v Wajilam Exports (Singapore) Pte Ltd | High Court | Yes | [2010] SGHC 319 | Singapore | Cited for the principle that a party with 'sole discretion' must exercise it honestly and in good faith, and not arbitrarily or capriciously. |
| Edwards Jason Glenn v Australia and New Zealand Banking Group Ltd | High Court | Yes | [2012] SGHC 61 | Singapore | Cited for the principle that a bank does not have untrammelled discretion and must exercise it properly. |
| Ng Giap Hon v Westcomb Securities Pte Ltd and others | Court of Appeal | No | [2009] 3 SLR(R) 518 | Singapore | Cited to reject the notion of a term relating to the general doctrine of good faith being implied in law. |
| The One Suites Pte Ltd v Pacific Motor Credit (Pte) Ltd | Court of Appeal | No | [2015] 3 SLR 695 | Singapore | Cited to reiterate that the law in the sphere of good faith continues to be in a state of flux. |
| AREIF (Singapore I) Pte Ltd v NTUC Fairprice Co-operative Ltd and another matter | High Court | Yes | [2015] 2 SLR 630 | Singapore | Cited for the principle that parties to a contract retain the freedom to perform their obligations in their own self-interest. |
| Tay Eng Chuan v Ace Insurance Ltd | High Court | Yes | [2008] 4 SLR(R) 95 | Singapore | Cited as an example of contracts of utmost good faith, specifically contracts of insurance. |
| First Asia Capital Investments Ltd v Société Générale Bank & Trust and another | High Court | Yes | [2017] SGHC 78 | Singapore | Cited for the principle that a bank does not ordinarily owe fiduciary duties to its customer. |
| Deutsche Bank AG v Chang Tse Wen | High Court | Yes | [2013] 1 SLR 1310 | Singapore | Cited for the principle that a bank does not ordinarily owe fiduciary duties to its customer. |
| Governor and Company of the Bank of Scotland v A Ltd | Court of Appeal | Yes | [2001] 1 WLR 751 | England and Wales | Cited for the rationale behind why courts do not ordinarily consider banks as fiduciaries. |
| Aero-Gate Pte Ltd v Engen Marine Engineering Pte Ltd | High Court | Yes | [2013] 4 SLR 409 | Singapore | Cited for the elements of representation followed by subsequent reliance in promissory estoppel. |
| United Overseas Bank Ltd v Bank of China | High Court | Yes | [2006] 1 SLR(R) 57 | Singapore | Cited for the elements of representation followed by subsequent reliance in estoppel by representation. |
| Karaha Bodas Co LLC v Pertamina Energy Trading Ltd and another appeal | Court of Appeal | Yes | [2006] 1 SLR(R) 112 | Singapore | Cited for the principle that a plaintiff who asks for declaratory relief must have the locus standi to bring the action and there must be a real controversy for the court to resolve. |
| Gouriet v Union of Post Office Workers | House of Lords | Yes | [1978] AC 435 | United Kingdom | Cited for the principle that the court to have jurisdiction to declare any legal right it must be one which is claimed by one of the parties as enforceable against an adverse party to the litigation. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act | Singapore |
| Terrorism (Suppression of Financing) Act | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Breach of Contract
- Duty of Care
- Fiduciary Duty
- Promissory Estoppel
- Internal Policy
- Sole Discretion
- Locus Standi
- Terms and Conditions
- Suspicious Transaction Reporting
15.2 Keywords
- breach of contract
- duty of care
- fiduciary duty
- promissory estoppel
- banking
- singapore
- civil litigation
16. Subjects
- Banking Law
- Contract Law
- Civil Litigation
17. Areas of Law
- Contract Law
- Breach of Contract
- Consideration
- Promissory Estoppel
- Equity
- Fiduciary Relationships
- Tort Law
- Negligence
- Duty of Care
- Civil Procedure
- Courts and Jurisdiction
- Declaratory Judgment