United Petroleum Trading v Trafigura: Striking Out & Limitation of Actions in Futures Contract Dispute
In United Petroleum Trading Limited v Trafigura Pte Ltd, the Appellate Division of the High Court of Singapore dismissed United Petroleum Trading's appeal regarding the striking out of claims for US$4.4m and US$1.38m due to limitation. The claims arose from an alleged agreement where Trafigura was to trade gasoline futures for United Petroleum, and United Petroleum sought recovery of these sums based on the agreement being void or a total failure of consideration. The court found that while a claim for total failure of consideration accrues when the basis fails, United Petroleum's pleadings did not sufficiently demonstrate that this failure occurred within the limitation period.
1. Case Overview
1.1 Court
Appellate Division of the High Court of the Republic of Singapore1.2 Outcome
Appeal Dismissed
1.3 Case Type
Civil
1.4 Judgment Type
Ex Tempore Judgment
1.5 Jurisdiction
Singapore
1.6 Description
United Petroleum Trading's claim against Trafigura for recovery of funds was partially struck out due to limitation, concerning a futures contract agreement.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| United Petroleum Trading Limited | Appellant | Corporation | Appeal Dismissed | Lost | Alain Abraham Johns |
| Trafigura Pte Ltd | Respondent | Corporation | Appeal Dismissed | Won | Tan Wee Kheng Kenneth Michael, Loh Wai Yue, Mohammad Haireez bin Mohameed Jufferie, Chan Ji Kin Thaddaeus |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Belinda Ang Saw Ean | Judge of the Appellate Division | No |
| Chua Lee Ming | Judge of the High Court | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Alain Abraham Johns | Alain A Johns Partnership |
| Tan Wee Kheng Kenneth Michael | Kenneth Tan Partnership |
| Loh Wai Yue | Incisive Law LLC |
| Mohammad Haireez bin Mohameed Jufferie | Incisive Law LLC |
| Chan Ji Kin Thaddaeus | Incisive Law LLC |
4. Facts
- United Petroleum Trading paid US$4.4m and US$1.38m to Trafigura in September 2013.
- The payments were allegedly initial margin for a futures contract agreement.
- Trafigura denied the alleged agreement, claiming the sums were owed under a different agreement.
- United Petroleum Trading commenced legal action in October 2019.
- The claim was based on the alleged agreement being void or a total failure of consideration.
- The pleadings did not specify when Trafigura was to commence trading.
- Two invoices dated 17 October 2013 were issued by Trafigura to United Petroleum Trading.
5. Formal Citations
- United Petroleum Trading Ltd v Trafigura Pte Ltd, Civil Appeal No 48 of 2021, [2021] SGHC(A) 13
6. Timeline
| Date | Event |
|---|---|
| United Petroleum Trading paid US$4.4m to Trafigura. | |
| United Petroleum Trading paid US$1.38m to Trafigura. | |
| Trafigura issued two invoices to United Petroleum Trading. | |
| United Petroleum Trading commenced S1055. | |
| Judgment delivered. |
7. Legal Issues
- Limitation of Actions
- Outcome: The court held that the cause of action for total failure of consideration accrues when the basis fails, not necessarily when the money is paid. However, the appellant's pleadings were insufficient to prove that the failure occurred within the limitation period.
- Category: Procedural
- Sub-Issues:
- Accrual of cause of action
- Total failure of consideration
- Related Cases:
- [2012] 4 SLR 546
- [2001] 1 SLR(R) 856
- [2020] 2 SLR 272
- Striking Out
- Outcome: The court upheld the decision to strike out the claims for the first two sums because they were time-barred.
- Category: Procedural
8. Remedies Sought
- Recovery of funds
9. Cause of Actions
- Breach of Contract
- Unjust Enrichment
- Money had and received
10. Practice Areas
- Commercial Litigation
11. Industries
- Commodities Trading
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| The “Bunga Melati 5” | Singapore Court of Appeal | Yes | [2012] 4 SLR 546 | Singapore | Cited for the principle that a defence of limitation would defeat the claims even if all the facts alleged by the appellant are proved. |
| Ching Mun Fong (executrix of the estate of Tan Geok Tee, deceased) v Liu Cho Chit | Singapore Court of Appeal | No | [2001] 1 SLR(R) 856 | Singapore | Cited regarding the limitation period for claims founded on contract and claims for money had and received for a total failure of consideration. Distinguished because the failure of consideration occurred at the time the money was paid. |
| Benzline Auto Pte Ltd v Supercars Lorinser Pte Ltd and another | Singapore High Court | Yes | [2018] 1 SLR 239 | Singapore | Cited for the three requirements of a claim in unjust enrichment. |
| IPP Financial Advisers Pte Ltd v Saimee bin Jumaat and another appeal | Singapore Court of Appeal | Yes | [2020] 2 SLR 272 | Singapore | Cited for the principle that it is incumbent on the claimant to plead the relevant facts which show that its claims fall within the limitation period. |
| Sami v Hamit | English High Court | Yes | [2018] EWHC 1400 (Ch) | England and Wales | Cited for the principle that if the relevant basis failed after the date of receipt of the benefit, the cause of action only accrues when the basis failed. |
| Guardian Ocean Cargoes Ltd and others v Banco do Brasil | English Court of Appeal | Yes | [1994] 2 Lloyd’s Rep 152 | England and Wales | Cited for the principle that the plaintiffs’ cause of action for their money arose when the negotiations finally failed. |
13. Applicable Rules
| Rule Name |
|---|
| Rules of Court (2014 Rev Ed), O 18 r 19 |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Limitation Act (Cap 163, 1996 Rev Ed), s 6(1)(a) | Singapore |
| Limitation Act, s 26(2) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Futures contracts
- Initial margin
- Total failure of consideration
- Limitation period
- Unjust enrichment
- Accrual of cause of action
- Pleadings
- Striking out
15.2 Keywords
- limitation of actions
- striking out
- futures contracts
- failure of consideration
- unjust enrichment
16. Subjects
- Civil Procedure
- Contract Law
- Limitation of Actions
- Unjust Enrichment
17. Areas of Law
- Civil Procedure
- Limitation of Actions
- Contract Law
- Unjust Enrichment