CIMB Bank Bhd v Italmatic Tyre: Assignment, Set-Off & Recovery of US$2.43M Debt
In CIMB Bank Bhd v Italmatic Tyre & Retreading Equipment (Asia) Pte Ltd, the High Court of Singapore heard a claim by CIMB Bank to recover US$2.43 million plus interest from Italmatic Tyre as the assignee of Panoil Petroleum Pte Ltd's contractual rights. Italmatic Tyre raised a set-off defense and a cancellation defense, both of which were rejected by the court. Justice Vinodh Coomaraswamy allowed CIMB Bank's claim, finding that Italmatic Tyre was bound by a no set-off clause in its contract with Panoil and that the alleged set-off and cancellation were not proven.
1. Case Overview
1.1 Court
High Court of the Republic of Singapore1.2 Outcome
Judgment for Plaintiff
1.3 Case Type
Civil
1.4 Judgment Type
Judgment
1.5 Jurisdiction
Singapore
1.6 Description
CIMB Bank sought to recover US$2.43m from Italmatic Tyre as assignee of Panoil's rights. The court allowed CIMB's claim, rejecting Italmatic's defenses.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| CIMB BANK BHD | Plaintiff | Corporation | Judgment for Plaintiff | Won | Chan Kia Pheng, Tan Jia Hui, Samuel Lee |
| ITALMATIC TYRE & RETREADING EQUIPMENT (ASIA) PTE LTD | Defendant | Corporation | Claim Dismissed | Lost | Lim Chee San |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Vinodh Coomaraswamy | Judge | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Chan Kia Pheng | LVM Law Chambers LLC |
| Tan Jia Hui | LVM Law Chambers LLC |
| Samuel Lee | LVM Law Chambers LLC |
| Lim Chee San | TanLim Partnership |
4. Facts
- CIMB Bank granted trade financing facilities to Panoil Petroleum.
- Panoil executed an all-monies debenture in favor of CIMB Bank as security.
- Panoil entered into contracts to sell marine fuel to Italmatic Tyre.
- Italmatic Tyre owed Panoil US$2.43 million under the contracts.
- Panoil's licenses were revoked by the Maritime and Port Authority of Singapore.
- CIMB Bank sent a notice of assignment to Italmatic Tyre, claiming the debt.
- Italmatic Tyre claimed a set-off agreement and cancellation of the debt.
5. Formal Citations
- CIMB Bank Bhd v Italmatic Tyre & Retreading Equipment (Asia) Pte Ltd, Suit No 186 of 2018, [2020] SGHC 160
6. Timeline
| Date | Event |
|---|---|
| Plaintiff granted trade financing facilities to Panoil. | |
| Panoil executed an all-monies debenture in favor of the plaintiff. | |
| Panoil entered into contracts to sell marine fuel to the defendant. | |
| Plaintiff sent a notice of assignment to the defendant. | |
| Panoil applied to be placed in judicial management. | |
| Panoil's application for judicial management was granted. | |
| Panoil went into insolvent liquidation. | |
| Trial began. | |
| Judgment reserved. | |
| Judgment delivered. |
7. Legal Issues
- Assignment of Contractual Rights
- Outcome: The court held that Panoil's assignment of the debt to the plaintiff was effective.
- Category: Substantive
- Right of Set-Off
- Outcome: The court held that the defendant was contractually precluded from exercising a right of set-off due to a no set-off clause in the contract.
- Category: Substantive
- Insolvency Set-Off
- Outcome: The court held that insolvency set-off prevails over contractual clauses excluding set-off in liquidation.
- Category: Substantive
- Incorporation of Contractual Terms
- Outcome: The court held that Panoil's standard terms and conditions, including the no set-off clause, were incorporated into the contracts.
- Category: Substantive
- Authenticity of Documents
- Outcome: The court found that the documents supporting the defendant's set-off and cancellation defenses were fabrications.
- Category: Procedural
8. Remedies Sought
- Monetary Damages
- Contractual Interest
9. Cause of Actions
- Breach of Contract
- Debt Recovery
10. Practice Areas
- Commercial Litigation
- Banking Litigation
- Debt Recovery
- Insolvency Litigation
11. Industries
- Banking
- Shipping
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| R1 International Pte Ltd v Lonstroff AG | High Court | Yes | [2015] 1 SLR 521 | Singapore | Cited for the objective approach to contractual formation and incorporation of terms. |
| Midlink Development Pte Ltd v The Stansfield Group Pte Ltd | High Court | Yes | [2004] 4 SLR(R) 258 | Singapore | Cited for the principle that a party's conduct can evince acceptance of contractual terms. |
| Circle Freight International Ltd (trading as Mogul Air) v Medeast Gulf Exports Ltd (trading as Gulf Export) | English Court of Appeal | Yes | [1988] 2 Lloyd’s Law Reports 427 | England and Wales | Cited for the principle that standard terms and conditions of an industry body can be incorporated into a contract by reference and course of dealing. |
| Wartsila Singapore Pte Ltd v Lau Yew Choong and another suit | High Court | Yes | [2017] 5 SLR 268 | Singapore | Cited for the principle that an onerous or unusual term requires an enhanced standard for reasonable notice. |
| PP v BAU | High Court | Yes | [2016] 5 SLR 146 | Singapore | Cited for the common law rule that a party may not attack the credibility of its own witness. |
| Alexander v Gibson | N/A | Yes | Alexander v Gibson (1811) 2 Camp. 555 | England and Wales | Cited for the principle that a party who calls a witness vouches for their honesty. |
| Bintai Kindenko Pte Ltd v Samsung C&T Corp and another | High Court | Yes | [2019] 2 SLR 295 | Singapore | Cited for the principle that a party is bound by the terms of a contract they sign, even if they did not read or understand them. |
| CMA-CGM Marseille v Petro Bunker International (formerly known as Petroval Bunker International) | English Court of Appeal | Yes | [2011] EWCA Civ 461 | England and Wales | Cited for the observation that a no set-off clause is commonplace in the oil supply industry. |
| Totsa Total Oil Trading SA v Bharat Petroleum Corp Ltd | High Court of Justice | Yes | [2005] EWHC 1641 (Comm) | England and Wales | Cited in CMA-CGM Marseille v Petro Bunker International for the observation that a no set-off clause is commonplace in the oil supply industry. |
| Chan Lie Sian v Public Prosecutor | High Court | Yes | [2019] 2 SLR 439 | Singapore | Cited for the principle that a point not challenged should be taken as accepted. |
| Super Group Ltd v Mysore Nagaraja Kartik | High Court | Yes | [2018] SGHC 192 | Singapore | Cited for the principle that authenticity is a necessary condition of admissibility of evidence. |
| Singapore Tourism Board v Children’s Media Ltd and others | High Court | Yes | [2008] 3 SLR(R) 981 | Singapore | Cited for the principle that a document cannot be admitted in evidence until its authenticity has been established. |
| Chong Khee Sang v Pang Ah Chee | N/A | Yes | [1984] 1 MLJ 377 | Malaysia | Cited in Singapore Tourism Board v Children’s Media Ltd and others for the principle that a document cannot be admitted in evidence until its authenticity has been established. |
| Jet Holding Ltd and others v Cooper Cameron (Singapore) Pte Ltd and another and other appeals | Court of Appeal | Yes | [2006] 3 SLR(R) 769 | Singapore | Cited for the principle that even after authenticity has been established, it is still necessary to prove the truth of the contents of the document by admissible evidence. |
| Jurong Data Centre Development Pte Ltd (provisional liquidator appointed) (receivers and managers appointed) v M+W Singapore Pte Ltd and others | High Court | Yes | [2011] 3 SLR 337 | Singapore | Cited for the definition of a book debt as a debt which arises in the ordinary course of a company’s business. |
| Duncan, Cameron Lindsay and another v Diablo Fortune Inc and another matter | High Court | Yes | [2018] 4 SLR 240 | Singapore | Cited for the definition of a book debt as a debt which should be entered in such books as should be kept in the business. |
| Motor Credits Ltd v WF Wollaston Ltd | Supreme Court of New South Wales | Yes | Motor Credits Ltd v WF Wollaston Ltd (1929) 29 SR (NSW) 227 | Australia | Cited in Duncan, Cameron Lindsay and another v Diablo Fortune Inc and another matter for the definition of a book debt as a debt which should be entered in such books as should be kept in the business. |
| Paul & Frank Ltd v Discount Bank (Overseas) Ltd | High Court of Justice | Yes | [1967] Ch 348 | England and Wales | Cited for the principle that a debt which is omitted from the books does not by that fact alone cease to be a book debt. |
| Dawson v Isle | High Court of Justice | Yes | [1906] 1 Ch 633 | England and Wales | Cited for the common understanding that each account receivable is a book debt. |
| In re Stevens | N/A | Yes | [1888] W.N 110 | England and Wales | Cited for the common understanding that each account receivable is a book debt. |
| Liquidators of Progen Engineering Pte Ltd v Progen Holdings Ltd | High Court | Yes | [2010] 4 SLR 1089 | Singapore | Cited for the principle that directors owe a fiduciary duty to take into account the interests of the company’s creditors when making decisions for the company. |
| National Westminster Bank v Halesowen Presswork & Assemblies Ltd | House of Lords | Yes | [1972] AC 785 | England and Wales | Cited for the principle that insolvency set-off is mandatory and parties are not permitted contractually to exclude its effect. |
| Good Property Land Development Pte Ltd v Societe-Generale | High Court | Yes | [1996] 1 SLR(R) 884 | Singapore | Cited for the principle that insolvency set-off is mandatory and parties are not permitted contractually to exclude its effect. |
| Re Washington Diamond Mining Company | High Court of Justice | Yes | [1893] 3 Ch 95 | England and Wales | Cited for the principle that you cannot prefer a man by merely putting him in the very position in which he would be if a bankruptcy followed. |
| Stein v Blake | N/A | Yes | [1995] 2 All ER 961 | England and Wales | Cited for the principle that insolvency set-off is automatic and takes effect without the need for further intervention. |
| Coca-Cola Financial Corpn v Finsat International Ltd | N/A | Yes | [1996] 3 WLR 849 | England and Wales | Cited for the principle that the statutory obligation to set off mutual debts is an exception to the general principle that someone may renounce the benefit or other right introduced entirely in his favour. |
| Citibank NA v Lee Hooi Lian and another | High Court | Yes | [1999] 2 SLR(R) 1 | Singapore | Cited Coca-Cola Financial Corpn v Finsat International Ltd with approval for the principle that the statutory obligation to set off mutual debts is an exception to the general principle that someone may renounce the benefit or other right introduced entirely in his favour. |
| Tribune Investment Trust Inc v Soosan Trading Co Ltd | Court of Appeal | Yes | [2000] 2 SLR(R) 407 | Singapore | Cited for the principle that an adverse inference can be drawn from failure to call a witness. |
| Raffles Town Club Pte Ltd v Lim Eng Hock Peter and others (Tung Yu-Lien Margaret and others, third parties) | Court of Appeal | Yes | [2011] 1 SLR 582 | Singapore | Cited for the principle that costs on an indemnity basis should only be ordered in a special case or where there are exceptional circumstances. |
| Tan Chin Yew Joseph v Saxo Capital Markets Pte Ltd | High Court | Yes | [2013] SGHC 274 | Singapore | Cited for the principle that the burden on a party who seeks an order for indemnity costs as a matter of discretion is a high one. |
| Wong Meng Cheong and another v Ling Ai Wah and another | High Court | Yes | [2012] 1 SLR 549 | Singapore | Cited for the principle that the list of factors in O 59 r 5 of the Rules of Court is not exhaustive and the court should have regard to all the circumstances of the case. |
| Three Rivers District Council v The Governor and Co of the Bank of England (No 6) | High Court of Justice | Yes | [2006] EWHC 816 (Comm) | England and Wales | Cited for the principle that the test for indemnity costs is not conduct attracting moral condemnation, but rather unreasonableness. |
| Airtrust (Hong Kong) Ltd v PH Hydraulics & Engineering Pte Ltd | High Court | Yes | [2016] 5 SLR 103 | Singapore | Cited for the principle that some relevant factors for indemnity costs include the extent of a party’s dishonest and unscrupulous intentions and actions. |
| Fairview Developments Pte Ltd v Ong & Ong Pte Ltd and another appeal | Court of Appeal | Yes | [2014] 2 SLR 318 | Singapore | Cited for the principle that in a novation, both the benefits and the burdens of the original contract are transferred to the new contracting parties. |
| Koh Chong Chiah and others v Treasure Resort Pte Ltd and another | High Court | Yes | [2013] 1 SLR 1069 | Singapore | Cited for the principle that for a novation, the consideration is usually the discharge of the old contract. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Evidence Act (Cap 97, 1997 Rev Ed) | Singapore |
| Rules of Court (Cap 322, R5, 2014 Rev Ed) | Singapore |
| Bankruptcy Act (Cap 20, 2009 Rev Ed) | Singapore |
| Companies Act (Cap 50, 2006 Rev Ed) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Assignment
- Debenture
- Set-Off
- No Set-Off Clause
- Marine Fuel
- Liquidation
- Judicial Management
- Book Debt
- Fabrication
- Insolvency Set-Off
15.2 Keywords
- Assignment
- Set-Off
- Debt Recovery
- Marine Fuel
- Singapore
- Contract Law
- Banking
- Insolvency
16. Subjects
- Banking
- Contract Law
- Debt Recovery
- Evidence
- Insolvency
17. Areas of Law
- Banking Law
- Contract Law
- Debt and Recovery
- Evidence Law
- Insolvency Law