Bintai Kindenko v Samsung C&T: Interlocutory Injunction on Banker's Guarantee & Exclusion Clauses

In Bintai Kindenko Private Limited v Samsung C&T Corporation and DBS Bank Ltd, the Singapore High Court addressed an application by Samsung C&T Corporation to lift an interim injunction obtained by Bintai Kindenko Private Limited, restraining DBS Bank Ltd from paying out on a banker’s guarantee. The guarantee was issued in favor of Samsung C&T Corporation pursuant to a subcontract with Bintai Kindenko Private Limited. Samsung C&T Corporation called on the guarantee due to alleged breaches of the subcontract. The High Court lifted the injunction, finding that an exclusion clause in the subcontract precluded Bintai Kindenko Private Limited from raising unconscionability as a ground for resisting the call on the guarantee, and that fraud was not established. Bintai Kindenko Private Limited appealed the decision, and leave to appeal was granted by the Court of Appeal.

1. Case Overview

1.1 Court

High Court of Singapore

1.2 Outcome

Injunction discharged; appeal granted by the Court of Appeal.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Singapore High Court case regarding an interim injunction to restrain payment on a banker's guarantee due to alleged breaches of contract.

1.7 Decision Date

2 September 2018

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
DBS Bank Ltd	Defendant	Corporation	Neutral	Neutral
Samsung C&T Corporation	Defendant	Corporation	Injunction lifted	Won	Kelvin Aw Wei Keng of Morgan Lewis Stamford LLC Leonard Chew Wei Chong of Morgan Lewis Stamford LLC Lee Kok Wee of Morgan Lewis Stamford LLC Eugene of Morgan Lewis Stamford LLC
Bintai Kindenko Private Limited	Plaintiff	Corporation	Injunction discharged	Lost	Lee Hui Min of WongPartnership LLP Josephine Choo Poh Hua of WongPartnership LLP Dynyse Loh Jia Wen of WongPartnership LLP

3. Judges

Judge Name	Title	Delivered Judgment
Aedit Abdullah	Judge	Yes

4. Counsels

Counsel Name	Organization
Kelvin Aw Wei Keng	Morgan Lewis Stamford LLC
Leonard Chew Wei Chong	Morgan Lewis Stamford LLC
Lee Kok Wee	Morgan Lewis Stamford LLC
Eugene	Morgan Lewis Stamford LLC
Lee Hui Min	WongPartnership LLP
Josephine Choo Poh Hua	WongPartnership LLP
Dynyse Loh Jia Wen	WongPartnership LLP

4. Facts

Plaintiff and 1st Defendant entered into a subcontract in December 2012 for mechanical, electrical, and plumbing works.
A banker’s guarantee of about $4.3m was issued by the 2nd defendant in favour of the 1st defendant.
The 1st defendant imposed liquidated damages and sought to call on the guarantee due to alleged contractual breaches.
The plaintiff sought and obtained an interim injunction against the demand and payment on an ex parte basis.
The 1st defendant applied to lift the injunction.
The subcontract incorporates a clause which expressly stipulates that except in the case of fraud, the plaintiff shall not for any reason whatsoever be entitled to enjoin or restrain the 1st defendant on making any call or demand on the guarantee.
The 1st defendant eventually filed an application to set aside the adjudication determination.

5. Formal Citations

Bintai Kindenko Pte Ltd v Samsung C&T Corp and another, Suit No 800 of 2017, [2018] SGHC 191

6. Timeline

Date	Event
2012-12-01	Subcontract entered into by the 1st defendant and the plaintiff for the supply and installation of mechanical, electrical and plumbing works.
2013-03-01	Completion dates for the various phases of the works to be done spanned March 2013 to April 2014.
2014-04-01	Completion dates for the various phases of the works to be done spanned March 2013 to April 2014.
2015-02-01	Plaintiff achieved actual completion of the last phase.
2015-05-01	Letters exchanged from the period of May 2015 to January 2016, where the 1st defendant sought to pin responsibility for the delay on the plaintiff and notified the plaintiff of potential liquidated damages to be paid.
2016-01-01	Letters exchanged from the period of May 2015 to January 2016, where the 1st defendant sought to pin responsibility for the delay on the plaintiff and notified the plaintiff of potential liquidated damages to be paid.
2017-02-01	Payment claims filed by the plaintiff, and responses from the 1st defendant detailing reasons for withholding payments and indicating liquidated damages payable by the plaintiff were then exchanged between February 2017 and July 2017.
2017-07-01	Payment claims filed by the plaintiff, and responses from the 1st defendant detailing reasons for withholding payments and indicating liquidated damages payable by the plaintiff were then exchanged between February 2017 and July 2017.
2017-07-07	Plaintiff lodged an adjudication application against the 1st defendant in relation to the first half of the retention monies.
2017-07-11	An adjudicator was appointed.
2017-08-15	The adjudication determination was granted in favour of the plaintiff; no determination was made on the variation order claims and back charges.
2017-08-24	The 1st defendant replied with a payment response explaining why payments were withheld.
2017-08-28	The 1st defendant made a demand on the banker’s guarantee.
2017-08-29	Plaintiff obtained an interim injunction against the demand and payment on an ex parte basis.
2017-11-20	Hearing date.
2017-12-01	Hearing date.
2017-11-14	The matter was heard on 14 November 2017 by Foo Chee Hock JC.
2018-01-19	Hearing date.
2018-09-03	Date of judgment.

7. Legal Issues

Interlocutory Injunction
- Outcome: The court discharged the interim injunction.
- Category: Procedural
- Sub-Issues:
  - Ex parte application
  - Full and frank disclosure
Unconscionability
- Outcome: The court found that unconscionability was precluded by the subcontract between the parties due to the exclusion clause.
- Category: Substantive
- Related Cases:
  - [2015] 3 SLR 1041
Fraud
- Outcome: The court found that fraud was not established on the facts.
- Category: Substantive
- Sub-Issues:
  - Dishonest conduct
  - Reckless indifference to the truth
Incorporation of Exclusion Clause
- Outcome: The court found that the Exclusion Clause was incorporated into the subcontract between the plaintiff and the 1st defendant.
- Category: Substantive

8. Remedies Sought

Interim Injunction
Restraining Order

9. Cause of Actions

Breach of Contract
Injunction

10. Practice Areas

Commercial Litigation
Construction Disputes
Arbitration

11. Industries

Construction
Banking

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
CKR Contract Services Pte Ltd v Asplenium Land Pte Ltd and another and another appeal and another matter	Court of Appeal	Yes	[2015] 3 SLR 1041	Singapore	Upheld that parties are entitled to contract out of the ground of unconscionability.
BS Mount Sophia Pte Ltd v Join-Aim Pte Ltd	High Court	Yes	[2012] 3 SLR 352	Singapore	Discusses the circumstances where a call on a guarantee is made despite a complete absence of allegations of delay.
Bocotra Construction Pte Ltd and others v Attorney-General	Court of Appeal	Yes	[1995] 2 SLR(R) 262	Singapore	Excluded the use of the test espoused in American Cyanamid Co Ltd v Ethicon Ltd in determining whether a call was unconscionable or fraudulent.
American Cyanamid Co Ltd v Ethicon Ltd	House of Lords	Yes	[1975] AC 396	England and Wales	Test espoused in American Cyanamid Co Ltd v Ethicon Ltd excluded in determining whether a call was unconscionable or fraudulent.
JBE Properties Pte Ltd v Gammon Pte Ltd	Court of Appeal	Yes	[2011] 2 SLR 47	Singapore	Recognized both fraud and unconscionability as separate bases for restraining a call on a performance bond.
GKN Contractors v Lloyds Bank plc	Not Available	Yes	GKN Contractors v Lloyds Bank plc (1985) 30 BLR 48	England and Wales	Fraud can be established by conduct that shows that the call was invalid, and the party knowing the call to be such represented the call to the paying bank as being valid.
Raymond Construction Pte Ltd v Low Yang Tong and another	High Court	Yes	[1996] SGHC 136	Singapore	Unconscionability takes into account unfair or reprehensible conduct, or that which lacks good faith.
Arab Banking Corp (B.S.C.) v Boustead Singapore Ltd	Court of Appeal	Yes	[2016] 3 SLR 557	Singapore	The presentation of obviously non-conforming documents to support a claim, without any explanation being proffered, may be sufficient to give rise to a finding of fraud.
Tay Long Kee Impex Pte Ltd v Tan Beng Huwah (trading as Sin Kwang Wah)	High Court	Yes	[2000] 1 SLR(R) 786	Singapore	Innocent omissions are generally not fatal to the grant of an injunction.
Bintai Kindenko Pte Ltd v Samsung C&T Corp	Court of Appeal	Yes	[2018] SGCA 39	Singapore	Appeal dismissed.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute Name	Jurisdiction
Supreme Court of Judicature Act (Cap 322, 2007 Rev Ed)	Singapore

15. Key Terms and Keywords

15.1 Key Terms

Banker's Guarantee
Interim Injunction
Exclusion Clause
Unconscionability
Fraud
Liquidated Damages
Subcontract
Adjudication Determination

15.2 Keywords

injunction
banker's guarantee
construction
contract
fraud
unconscionability

17. Areas of Law

Area Name	Relevance Score
Injunctions	95
Contract Law	70
Banker's Guarantee	60
Construction Contracts	50
Arbitration	30
Evidence	25

16. Subjects

Contract Law
Construction Law
Banking Law
Civil Procedure
Injunctions