UniCredit Bank v Glencore: Tort of Deceit & Fraud Exception in Letter of Credit Transaction

In UniCredit Bank AG v Glencore Singapore Pte Ltd, the Court of Appeal of Singapore dismissed UniCredit's appeal against the High Court's decision to dismiss its claim against Glencore in the tort of deceit. The case arose from a letter of credit transaction where UniCredit financed Hin Leong's purchase of goods from Glencore. UniCredit alleged that Glencore made false representations. The court found no misrepresentation by Glencore and dismissed the appeal.

1. Case Overview

1.1 Court

Court of Appeal of the Republic of Singapore

1.2 Outcome

Appeal dismissed with costs to the respondent, Glencore Singapore Pte Ltd.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

UniCredit Bank's deceit claim against Glencore dismissed. The court found no misrepresentation by Glencore in a letter of credit transaction.

1.7 Decision Date

27 November 2023

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
UniCredit Bank AG	Appellant, Plaintiff	Corporation	Appeal Dismissed	Lost	Kenneth Tan of Kenneth Tan Partnership Hannah Chua of Dentons Rodyk & Davidson Stuart Ralph Lim Xiu Wu of Dentons Rodyk & Davidson Koh Kia Jeng of Dentons Rodyk & Davidson Herman Jeremiah of Dentons Rodyk & Davidson Toh Cher Han of Dentons Rodyk & Davidson Joie Tan Yi Xi of Dentons Rodyk & Davidson Ooi Shu Min of Dentons Rodyk & Davidson
Glencore Singapore Pte Ltd	Respondent, Defendant	Corporation	Appeal Dismissed	Won	Colin Liew of Colin Liew LLC Chan Leng Sun of Chan Leng Sun LLC Hannah Chua of CLASIS LLC Jeffrey Koh of CLASIS LLC

3. Judges

Judge Name	Title	Delivered Judgment
Sundaresh Menon	Chief Justice	No
Judith Prakash	Justice of the Court of Appeal	No
Belinda Ang Saw Ean	Justice of the Court of Appeal	Yes

4. Counsels

Counsel Name	Organization
Kenneth Tan	Kenneth Tan Partnership
Hannah Chua	Dentons Rodyk & Davidson
Stuart Ralph Lim Xiu Wu	Dentons Rodyk & Davidson
Koh Kia Jeng	Dentons Rodyk & Davidson
Herman Jeremiah	Dentons Rodyk & Davidson
Toh Cher Han	Dentons Rodyk & Davidson
Joie Tan Yi Xi	Dentons Rodyk & Davidson
Ooi Shu Min	Dentons Rodyk & Davidson
Colin Liew	Colin Liew LLC
Chan Leng Sun	Chan Leng Sun LLC
Jeffrey Koh	CLASIS LLC

4. Facts

UniCredit granted Hin Leong banking facilities amounting to US$85m.
Hin Leong applied to UniCredit for an irrevocable letter of credit to finance its purchase of goods from Glencore.
Hin Leong purchased goods from Glencore via a Sale Contract and simultaneously agreed to sell the goods back via a Buyback Contract.
Hin Leong misrepresented to UniCredit that the application for a letter of credit was for unsold cargo.
UniCredit issued an irrevocable letter of credit in favour of Glencore.
Glencore presented documents, including a letter of indemnity, to UniCredit for payment.
UniCredit paid Glencore US$36,997,691.57.
Hin Leong became insolvent and was unable to repay UniCredit.

5. Formal Citations

UniCredit Bank AG v Glencore Singapore Pte Ltd, Civil Appeal No 9 of 2023, [2023] SGCA 41

6. Timeline

Date	Event
2019-11-22	UniCredit granted Hin Leong banking facilities amounting to US$85m.
2019-11-27	Hin Leong applied to UniCredit for an irrevocable letter of credit in the sum of US$37,209,550.35.
2019-11-27	Hin Leong purchased goods from Glencore via Sale Contract.
2019-11-27	Glencore agreed to buy back the goods from Hin Leong via Buyback Contract.
2019-11-28	UniCredit requested documents from Hin Leong.
2019-11-28	Hin Leong clarified that its application for a letter of credit was for unsold cargo.
2019-11-28	Hin Leong submitted a revised application for an irrevocable letter of credit.
2019-11-29	UniCredit issued an irrevocable letter of credit in favour of Glencore.
2019-12-02	Glencore presented documents to UniCredit for payment under the November LC.
2019-12-02	Title to the goods passed from Glencore to Hin Leong and back to Glencore.
2019-12-03	UniCredit informed Hin Leong that the documents under the November LC were presented.
2019-12-03	UniCredit paid Glencore US$36,997,691.57.
2020-02-28	The November LC matured.
2020-04-13	UniCredit issued a notice of demand to Hin Leong.
2020-04-14	UniCredit asked Glencore if it had the original BLs.
2020-04-27	Hin Leong was placed under interim judicial management.
2020-08-07	Hin Leong was placed under judicial management.
2020-10-20	UniCredit sued Glencore.
2021-03-08	Hin Leong went into liquidation.
2022-01-01	Judge’s reasons for dismissing the various causes of action are found in UniCredit Bank AG v Glencore Singapore Pte Ltd [2022] SGHC 263.
2023-08-30	Appeal heard.
2023-11-28	Grounds of decision delivered.

7. Legal Issues

Tort of Deceit
- Outcome: The court found that Glencore did not make any false representations to UniCredit and dismissed the claim.
- Category: Substantive
- Sub-Issues:
  - False Representation
  - Intention to Induce Reliance
  - Actual Reliance
  - Damages Suffered
- Related Cases:
  - [2001] 2 SLR(R) 435
Fraud Exception to the Principle of Autonomy of Letters of Credit
- Outcome: The court found that the fraud exception did not apply as there was no fraud on the documents and the Sale Contract was not a sham.
- Category: Substantive
- Sub-Issues:
  - Fraudulent Presentation of Documents
  - Knowledge of Untruth
  - Material Representation of Fact
- Related Cases:
  - [1983] 1 AC 168

8. Remedies Sought

Monetary Damages

9. Cause of Actions

Tort of Deceit

10. Practice Areas

Commercial Litigation
Banking Litigation
International Trade Finance

11. Industries

Banking
Commodities Trading

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
Ong Bee Chew v Ong Shu Lin	Court of Appeal	No	[2019] 3 SLR 132	Singapore	Cited for the principle that the tort of deceit is premised on parties’ private interests.
ANC Holdings Pte Ltd v Bina Puri Holdings Bhd	Court of Appeal	No	[2013] 3 SLR 666	Singapore	Cited for the principle that the tort of deceit is premised on parties’ private interests.
United City Merchants (Investments) Ltd v Royal Bank of Canada	House of Lords	Yes	[1983] 1 AC 168	England and Wales	Cited for the principle that the fraud exception is founded on public policy and the maxim ex turpi causa non oritur actio.
Arab Banking Corp (B.S.C.) v Boustead Singapore Ltd	Court of Appeal	Yes	[2016] 3 SLR 557	Singapore	Cited for the principle that the fraud exception is founded on public policy and the maxim ex turpi causa non oritur actio.
National Infrastructure Development Co Ltd v Banco Santander SA	High Court	Yes	[2018] 1 All ER (Comm) 156	England and Wales	Cited for the principle that the fraud exception is founded on public policy and the maxim ex turpi causa non oritur actio.
UniCredit Bank AG v Glencore Singapore Pte Ltd	High Court	Yes	[2022] SGHC 263	Singapore	The High Court judgment under appeal in this case.
DBS Bank Ltd v Carrier Singapore (Pte) Ltd	High Court	No	[2008] 3 SLR(R) 261	Singapore	Cited as an example of a deceit claim in the context of a letter of credit transaction.
Hill Samuel Merchant Bank Asia Ltd v Resources Development Corp Ltd	High Court	No	[1992] 3 SLR(R) 107	Singapore	Cited as an illustration of the fraud exception.
Edward Owen Engineering Ltd v Barclays Bank International Ltd	Court of Appeal	No	[1978] QB 159	England and Wales	Cited as an illustration of the fraud exception.
Korea Industry Co Ltd v Andoll Ltd	High Court	No	[1989] 2 SLR(R) 300	Singapore	Cited as an illustration of the fraud exception.
Panatron Pte Ltd and another v Lee Cheow Lee and another	Court of Appeal	Yes	[2001] 2 SLR(R) 435	Singapore	Cited for the elements of the tort of deceit.
Chu Said Thong and another v Vision Law LLC	Court of Appeal	Yes	[2014] 4 SLR 375	Singapore	Cited for the principle that the essence of the tort of deceit is fraud.
Kuvera Resources Pte Ltd v JPMorgan Chase Bank, NA	Court of Appeal	Yes	[2023] SGCA 28	Singapore	Cited for the principle that LCs are best characterised as unilateral contracts that bear the sui generis quality of irrevocability.
Crédit Agricole Corporate & Investment Bank, Singapore Branch v PPT Energy Trading Co Ltd and another appeal	Singapore International Commercial Court	No	[2023] SGCA(I) 7	Singapore	Cited for the definition of the fraud exception.
B High House International Pte Ltd v MCDP Phoenix Services Pte Ltd and another	High Court	No	[2023] SGHC 12	Singapore	Cited for the principle that only parties to a contract have the standing to enforce the obligations contained in that contract.
The “Dolphina”	High Court	No	[2012] 1 SLR 992	Singapore	Cited for the principle that only parties to a contract have the standing to enforce the obligations contained in that contract.
Uday Mehra v L Capital Asia Advisors and others	Court of Appeal	No	[2022] 5 SLR 113	Singapore	Cited for the observation that an implicit representation accompanies every promise: which is that the promisor genuinely intends to honour his promise.
Kuvera Resources Pte Ltd v JPMorgan Chase Bank, NA	High Court	No	[2022] SGHC 213	Singapore	Cited for the principle that once UniCredit had issued the November LC, that November LC was irrevocable – UniCredit owed Glencore a contractual obligation to not revoke the November LC, which also included by implication, an obligation not to alter the terms of the November LC.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute Name	Jurisdiction
Contract (Rights of Third Parties) Act (Cap 53B)	Singapore

15. Key Terms and Keywords

15.1 Key Terms

Letter of Credit
Fraud Exception
Tort of Deceit
Sale Contract
Buyback Contract
Bill of Lading
Letter of Indemnity
Misrepresentation
Autonomy of Letters of Credit

15.2 Keywords

Letter of Credit
Fraud
Deceit
UniCredit
Glencore
Hin Leong
Singapore
Banking
Trade Finance

17. Areas of Law

Area Name	Relevance Score
Letter of Credit Law	90
Fraud and Deceit	80
Banking Law	75
Misrepresentation	70
Contract Law	65
Bills of Lading Act	50

16. Subjects

Banking
International Trade
Contract Law
Tort Law