Bintai Kindenko v Samsung C&T: Performance Bond Call & Unconscionability Exception
In Bintai Kindenko Pte Ltd v Samsung C&T Corporation and DBS Bank Ltd, the Singapore Court of Appeal heard an appeal against the High Court's decision to discharge an ex parte interim injunction restraining a call on a banker’s guarantee. The court dismissed the appeal, holding that Bintai Kindenko was contractually precluded from relying on the unconscionability exception and had failed to establish a strong prima facie case of fraud. The court also found that Bintai Kindenko had failed to make full and frank disclosure of all material facts during the ex parte hearing.
1. Case Overview
1.1 Court
Court of Appeal of the Republic of Singapore1.2 Outcome
Appeal dismissed.
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Singapore Court of Appeal case regarding an interim injunction restraining a call on a performance bond, focusing on fraud and unconscionability.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| DBS Bank Ltd | Respondent | Corporation | Neutral | Neutral | |
| Samsung C&T Corporation | Respondent | Corporation | Appeal Dismissed | Won | |
| Bintai Kindenko Pte Ltd | Appellant | Corporation | Appeal Dismissed | Lost |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Tay Yong Kwang | Judge of Appeal | Yes |
| Woo Bih Li | Judge | No |
4. Counsels
4. Facts
- Samsung was appointed as the main contractor for a project to upgrade the Suntec City Convention Centre.
- Samsung appointed Bintai as the Project’s mechanical and engineering sub-contractor.
- Bintai furnished Samsung with a banker’s guarantee for a sum of about $4.3 million.
- Various phases of the Sub-Contract works were not completed on time, leading to disputes.
- Samsung rejected Bintai's requests for extensions of time and claimed liquidated damages.
- Bintai lodged Payment Claim No 56, claiming $13,479,366.43 for the value of work done.
- Samsung called on the banker's guarantee for the guaranteed sum.
5. Formal Citations
- Bintai Kindenko Pte Ltd v Samsung C&T Corp and another, , [2019] SGCA 39
- Bintai Kindenko Pte Ltd v Samsung C&T Corp and another, Civil Appeal No 95 of 2018, Civil Appeal No 95 of 2018
6. Timeline
| Date | Event |
|---|---|
| First Letter of Acceptance sent by Samsung to Bintai. | |
| Second Letter of Acceptance issued by Samsung to Bintai. | |
| Bintai sought extensions of time to contractual deadlines. | |
| Bintai sought extensions of time to contractual deadlines. | |
| Samsung rejected Bintai's requests for extensions of time. | |
| Samsung substantiated reasons for rejecting Bintai's requests for extensions of time. | |
| Bintai lodged Payment Claim No 56. | |
| Samsung rejected Bintai’s claims in Payment Response No 56. | |
| Bintai lodged Payment Claim No 60. | |
| Bintai commenced Adjudication Application No 190 of 2017. | |
| Samsung issued a delay certificate to Bintai. | |
| Samsung lodged Payment Response No 60. | |
| Bintai's claim in AA 190/2017 was allowed by the adjudicator. | |
| Bintai filed Originating Summons No 975 of 2017; Samsung demanded payment on the BG. | |
| Samsung's solicitors demanded immediate payment of the guaranteed sum; Bintai commenced Suit No 800 of 2017 and took out Summons No 3934 of 2017; Judge granted an ex parte interim injunction. | |
| Bintai highlighted errors in Samsung's computation of periods of delay. | |
| Judge granted Samsung's application and discharged the Interim Injunction. | |
| Samsung successfully applied to set aside the Adjudication Determination. | |
| Court dismissed the appeal after hearing the appellant and the first respondent. | |
| Grounds of decision released. |
7. Legal Issues
- Unconscionability Exception
- Outcome: The court held that the Appellant was contractually precluded from relying on the unconscionability exception.
- Category: Substantive
- Fraud Exception
- Outcome: The court held that the Appellant had failed to establish a strong prima facie case of fraud.
- Category: Substantive
- Full and Frank Disclosure
- Outcome: The court held that the Interim Injunction should also have been discharged on the basis that the Appellant failed to make full and frank disclosure of material facts during the ex parte hearing.
- Category: Procedural
- Incorporation of Contractual Terms
- Outcome: The court found that Clause 3 of the Second LOA incorporated the SC Particular Conditions into the Sub-Contract by reference.
- Category: Substantive
- Burden of Proof
- Outcome: The court held that the burden of proof fell on the First Respondent since the party that asserts the affirmative must prove its case.
- Category: Procedural
8. Remedies Sought
- Interim Injunction to restrain call on performance bond
9. Cause of Actions
- Breach of Contract
10. Practice Areas
- Commercial Litigation
- Construction Law
- Injunctions
- Performance Bonds
11. Industries
- Construction
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| BS Mount Sophia Pte Ltd v Join-Aim Pte Ltd | High Court | Yes | [2012] 3 SLR 352 | Singapore | Cited for the principle that the court will only intervene to prevent a beneficiary from calling on a performance guarantee if the call was either fraudulent or unconscionable. |
| CKR Contract Services Pte Ltd v Asplenium Land Pte Ltd | Court of Appeal | Yes | [2015] 3 SLR 1041 | Singapore | Cited for the principle that parties can agree to exclude the right of the provider of the performance guarantee to rely on the unconscionability exception. |
| Bintai Kindenko Pte Ltd v Samsung C&T Corp and another | High Court | Yes | [2018] SGHC 191 | Singapore | Cited as the grounds of decision of the High Court Judge which is being appealed. |
| Bocotra Construction Pte Ltd and others v Attorney-General | Court of Appeal | Yes | [1995] 2 SLR(R) 262 | Singapore | Cited for the principle that an applicant seeking an injunction to restrain a call on a performance guarantee only needs to show that the fraud or unconscionability exceptions were made out. |
| Cooperatieve Centrale Raiffeisen-Boerenleenbank BA (trading as Rabobank International), Singapore Branch v Motorola Electronics Pte Ltd | Court of Appeal | Yes | [2011] 2 SLR 63 | Singapore | Cited regarding the burden of proof. |
| L’Estrange v F. Graucob Ltd | King's Bench | Yes | [1934] 2 KR 394 | England and Wales | Cited for the principle that a party is bound by all the terms of a contract that it signs, even if that party did not read or understand those terms. |
| Amiri Flight Authority v BAE Systems plc | High Court | Yes | [2004] 1 All ER (Comm) 385 | England and Wales | Cited for the principle that a party is bound by all the terms of a contract that it signs, even if that party did not read or understand those terms. |
| Northrop Grumman Mission Systems Europe Ltd v BAE Systems (AL Diriyah C4I) Ltd | Technology and Construction Court | Yes | (2015) 161 ConLR 1 | England and Wales | Cited for the principle that the court is permitted to interpret the clause with the appropriate modifications such that it applied mutatis mutandis to the Appellant and First Respondent. |
| Skips A/S Nordheim and others v Syrian Petroleum Co Ltd and another | Court of Appeal | Yes | [1984] 1 QB 599 | England and Wales | Cited for the principle that the court is permitted to interpret the clause with the appropriate modifications such that it applied mutatis mutandis to the Appellant and First Respondent. |
| Press Automation Technology Pte Ltd v Trans-Link Exhibition Forwarding Pte Ltd | High Court | Yes | [2003] 1 SLR(R) 712 | Singapore | Cited for the principle that the requirement of reasonable notice did not apply in a case where terms contained in a separate document were specifically incorporated into a contract that was signed by the party that was sought to be bound. |
| Wartsila Singapore Pte Ltd v Lau Yew Choong and another suit | High Court | Yes | [2017] 5 SLR 268 | Singapore | Cited with approval for the decision in Press Automation Technology Pte Ltd v Trans-Link Exhibition Forwarding Pte Ltd. |
| Huationg (Asia) Pte Ltd v Lonpac Insurance Bhd | High Court | Yes | [2016] 1 SLR 1431 | Singapore | Cited with approval for the decision in Press Automation Technology Pte Ltd v Trans-Link Exhibition Forwarding Pte Ltd. |
| Abani Trading Pte Ltd v BNP Paribas and another appeal | High Court | Yes | [2014] 3 SLR 909 | Singapore | Cited with approval for the decision in Press Automation Technology Pte Ltd v Trans-Link Exhibition Forwarding Pte Ltd. |
| AEG (UK) Ltd v Logic Resource Limited | Court of Appeal | Yes | [1996] CLC 265 | England and Wales | Cited for the opinion that the reasonableness of clauses is the subject matter of the Unfair Contract Terms Act. |
| International Research Corp PLC v Lufthansa Systems Asia Pacific Pte Ltd and another | Court of Appeal | Yes | [2014] 1 SLR 130 | Singapore | Cited for the principle that whether the incorporating clause in question had the effect of incorporating the terms which were in a separate document is a matter of contractual interpretation. |
| Grace Electrical Engineering Pte Ltd v Te Deum Engineering Pte Ltd | Court of Appeal | Yes | [2018] 1 SLR 76 | Singapore | Cited for the factors to consider when determining whether a party ought to be granted leave to introduce a new point on appeal. |
| Koh Lin Yee v Terrestrial Pte Ltd and another appeal | Court of Appeal | Yes | [2015] 2 SLR 497 | Singapore | Cited for the principle that whether or not a clause is reasonable under the UCTA would depend on the precise facts of the case itself. |
| Arab Banking Corp (B.S.C.) v Boustead Singapore Ltd | Court of Appeal | Yes | [2016] 3 SLR 557 | Singapore | Cited for the elements to establish a strong prima facie case that the First Respondent called on the bond. |
| JBE Properties Pte Ltd v Gammon Pte Ltd | High Court | Yes | [2011] 2 SLR 47 | Singapore | Cited regarding the applicable standard of proof to be applied in assessing 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 | Cited for the principle that a party seeking an ex parte interlocutory injunction has a duty to make full and frank disclosure of all material facts. |
| The “Vasiliy Golovnin” | High Court | Yes | [2008] 4 SLR(R) 994 | Singapore | Cited for the principle that an applicant is required to draw the judge’s attention to the relevant documents, as well as to identify the crucial points for and against the application. |
| Bintai Kindenko Pte Ltd v Samsung C&T Corp | High Court | Yes | [2018] 2 SLR 532 | Singapore | Cited to show that the First Respondent applied successfully to set aside the Adjudication Determination. |
13. Applicable Rules
| Rule Name |
|---|
| O 57 r 9A(4) of the Rules of Court (Cap 322, R5, 2014 Rev Ed) |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Unfair Contract Terms Act (Cap 396, 1994 Rev Ed) | Singapore |
| Evidence Act Act (Cap 97, 1997 Rev Ed) | Singapore |
| Building and Construction Industry Security of Payment Act (Cap 30B, 2006 Rev Ed) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Performance Bond
- Banker's Guarantee
- Unconscionability Exception
- Fraud Exception
- Letter of Acceptance
- Sub-Contract
- Main Contract
- Exclusion Clause
- Payment Claim
- Payment Response
- Liquidated Damages
- Interim Injunction
- Full and Frank Disclosure
15.2 Keywords
- Performance bond
- injunction
- unconscionability
- fraud
- construction
- contract
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Performance Bond | 90 |
| Credit and Security | 85 |
| Injunctions | 80 |
| Contract Law | 75 |
| Construction Law | 70 |
| Civil Procedure | 70 |
| Incorporation by reference | 65 |
| Banking and Finance | 60 |
16. Subjects
- Contract Law
- Construction Law
- Civil Procedure
- Performance Bonds
- Injunctions