HSBC vs DNKH: Indemnity Clause Interpretation in Warehouse Fire Loss
HSBC Institutional Trust Services (Singapore) Ltd, as trustee of AIMS AMP Capital Industrial REIT (the Landlord), appealed against the decision in favor of DNKH Logistics Pte Ltd (the Tenant). The appeal concerned the interpretation of an indemnity clause in a lease agreement following a fire at the leased premises. The Appellate Division of the High Court of Singapore, comprising Kannan Ramesh JAD, Valerie Thean J, and Andre Maniam J, dismissed the appeal, finding that the lease allocated the risk of fire damage to the Landlord and that the indemnity clause did not apply in the absence of fault by the Tenant.
1. Case Overview
1.1 Court
Appellate Division of the High Court of the Republic of Singapore1.2 Outcome
Appeal dismissed with costs.
1.3 Case Type
Civil
1.4 Judgment Type
Ex Tempore Judgment
1.5 Jurisdiction
Singapore
1.6 Description
Appeal on indemnity clause after a fire at DNKH Logistics' warehouse. The court examined the lease agreement to determine liability for losses.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| HSBC Institutional Trust Services (Singapore) Ltd (as trustee of AIMS AMP Capital Industrial REIT) | Appellant | Corporation | Appeal Dismissed | Lost | S Selvam Satanam, Julia Emma DCruz |
| DNKH Logistics Pte Ltd | Respondent | Corporation | Appeal Dismissed | Won | Aqbal Singh s/o Kuldip Singh, Tan Yee Pin Jeff |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Kannan Ramesh | Judge of the Appellate Division | No |
| Valerie Thean | Judge of the High Court | Yes |
| Andre Maniam | Judge of the High Court | No |
4. Counsels
| Counsel Name | Organization |
|---|---|
| S Selvam Satanam | Ramdas & Wong |
| Julia Emma DCruz | Ramdas & Wong |
| Aqbal Singh s/o Kuldip Singh | Pinnacle Law LLC |
| Tan Yee Pin Jeff | Pinnacle Law LLC |
4. Facts
- A fire occurred at the Premises leased by DNKH Logistics Pte Ltd.
- The fire was believed to have been caused by the spontaneous combustion of black peppercorns.
- The Landlord's insurer paid for the losses and exercised its right of subrogation.
- The Landlord sought an indemnity from the Tenant under cl 3.18.1 of the Lease.
- The parties agreed that the fire arose without any negligence on the part of either party.
- The Landlord suffered losses of $3,441,541.24 as a result of the fire.
5. Formal Citations
- HSBC Institutional Trust Services (Singapore) Ltd (as trustee of AIMS AMP Capital Industrial REIT)vDNKH Logistics Pte Ltd, Civil Appeal No 94 of 2022, [2023] SGHC(A) 13
- HSBC Institutional Trust Services (Singapore) Ltd (as trustee of AIMS AMP Capital Industrial REIT) v DNKH Logistics Pte Ltd, , [2022] SGHC 248
6. Timeline
| Date | Event |
|---|---|
| Lease commenced between HSBC Institutional Trust Services (Singapore) Ltd and DNKH Logistics Pte Ltd. | |
| Lease agreement signed. | |
| Fire broke out on the Premises. | |
| Restoration work completed. | |
| Lease ended. | |
| Judgment issued by the Judge below. | |
| Judgment delivered in the Appellate Division of the High Court. |
7. Legal Issues
- Interpretation of Indemnity Clause
- Outcome: The court held that the indemnity clause did not apply in the absence of fault by the Tenant, as the lease allocated the risk of fire damage to the Landlord.
- Category: Substantive
- Related Cases:
- [2023] SGHC(A) 13
- [2022] SGHC 248
8. Remedies Sought
- Indemnity for losses suffered as a result of the fire
9. Cause of Actions
- Contractual Indemnity
10. Practice Areas
- Commercial Litigation
11. Industries
- Logistics
- Real Estate
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Sunny Metal & Engineering Pte Ltd v Ng Khim Ming Eric | Court of Appeal | Yes | [2007] 3 SLR(R) 782 | Singapore | Cited as a case where the Court of Appeal held that the indemnity clauses in question applied to third party claims only. |
| Marina Centre Holdings Pte Ltd v Pars Carpet Gallery Pte Ltd | Court of Appeal | Yes | [1997] 2 SLR(R) 897 | Singapore | Cited as a case where the Court of Appeal held that the indemnity clauses in question applied to third party claims only. |
| CIFG Special Assets Capital I Ltd (formerly known as Diamond Kendall Ltd) v Ong Puay Koon and others and another appeal | Court of Appeal | Yes | [2018] 1 SLR 170 | Singapore | Cited for the approach to the construction of contracts. |
| PT Bayan Resources TBK and another v BCBC Singapore Pte Ltd and another | Court of Appeal | Yes | [2019] 1 SLR 30 | Singapore | Cited to affirm the approach to the construction of contracts as stated in CIFG Special Assets Capital I Ltd v Ong Puay Koon. |
| Lucky Realty Co Pte Ltd v HSBC Trustee (Singapore) Ltd | N/A | Yes | [2016] 1 SLR 1069 | Singapore | Cited for the principle that one looks to the text that the parties have used when construing a contract. |
| Zurich Insurance (Singapore) Pte Ltd v B Gold Interior Design & Construction Pte Ltd | N/A | Yes | [2008] 3 SLR (R) 1029 | Singapore | Cited for the principle that it is permissible to have regard to the relevant context as long as the relevant contextual points are clear, obvious and known to both parties. |
| Sembcorp Marine Ltd v PPL Holdings Pte Ltd | N/A | Yes | [2013] 4 SLR 193 | Singapore | Cited for the reason the court has regard to the relevant context is that it places the court in “the best possible position to ascertain the parties’ objective intentions by interpreting the expressions used by [them] in their proper context”. |
| Yap Son On v Ding Pei Zhen | N/A | Yes | [2017] 1 SLR 219 | Singapore | Cited for the principle that the meaning ascribed to the terms of the contract must be one which the expressions used by the parties can reasonably bear. |
| Kay Lim Construction & Trading Pte Ltd v Soon Douglas (Pte) Ltd and another | N/A | Yes | [2013] 1 SLR 1 | Singapore | Cited for the principle that the principles of construction relevant to exemption clauses are equally relevant to the construction of indemnity clauses. |
| Singapore Telecommunications Ltd v Starhub Cable Vision Ltd | N/A | Yes | [2006] 2 SLR(R) 195 | Singapore | Cited for the principle that if a party seeks to exclude or limit its liability (or seeks to have its liability indemnified), it must do so in clear words. |
| Lambert v Keymood | N/A | Yes | [1999] Lloyd’s Rep IR 80 | N/A | Cited for the principle that a landlord’s bare covenant to insure for fire risk within a lease does not raise a conclusive presumption that the insurance was to inure for the benefit of the tenant as well as the landlord. |
| Wisma Development Pte Ltd v Sing – The Disc Shop Pte Ltd | N/A | Yes | [1994] 1 SLR(R) 749 | Singapore | Cited for the principle that a landlord’s bare covenant to insure for fire risk within a lease does not raise a conclusive presumption that the insurance was to inure for the benefit of the tenant as well as the landlord. |
| Gillespie Brothers & Co Ltd v Roy Bowles Transport Ltd | N/A | Yes | [1973] 1 All ER 193 | N/A | Cited in Marina Centre Holdings for the principle that an indemnity clause and an exemption clause are correlative of each other. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| No applicable statutes | |
15. Key Terms and Keywords
15.1 Key Terms
- Indemnity Clause
- Subrogation
- Lease Agreement
- Spontaneous Combustion
- Insurance
- Allocation of Risk
- Fire Damage
- Third Party Claims
- Wilful Negligence
- Structural Elements
15.2 Keywords
- indemnity
- lease
- fire
- warehouse
- subrogation
- contract
- insurance
16. Subjects
- Contract Law
- Lease Agreements
- Indemnity
- Insurance
- Fire Damage
17. Areas of Law
- Contract Law
- Construction Law
- Insurance Law