TA Private Capital v UD Trading: Striking Out Defenses in Guarantee Claim
TA Private Capital Security Agent Limited and TransAsia Private Capital Limited sued UD Trading Group Holding Pte Ltd and Rutmet Inc in the General Division of the High Court of Singapore, seeking USD 63.3 million under a guarantee. The plaintiffs applied to strike out the defendants' defenses. The court, presided over by AR Desmond Chong, struck out the defenses of both defendants and granted judgment in favor of the plaintiffs against UD Trading Group Holding Pte Ltd, finding their defenses wholly contrary to the plain text of the relevant contracts.
1. Case Overview
1.1 Court
General Division of the High Court1.2 Outcome
Defendants' Defenses Struck Out; Judgment for Plaintiffs
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Plaintiffs seek USD 63.3M from D1 under a guarantee. Court strikes out D1 & D2's defenses, finding them contrary to contract terms.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| TA Private Capital Security Agent Limited | Plaintiff | Corporation | Judgment for Plaintiff | Won | |
| TransAsia Private Capital Limited | Plaintiff | Corporation | Judgment for Plaintiff | Won | |
| UD Trading Group Holding Pte Ltd | Defendant | Corporation | Defenses Struck Out | Lost | |
| Rutmet Inc | Defendant | Corporation | Defenses Struck Out | Lost |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Desmond Chong | Assistant Registrar | Yes |
4. Counsels
4. Facts
- D1 guaranteed payment of monies by its subsidiaries to D2 for metal and metal products supply.
- D2 assigned its rights under the Guarantee to the plaintiffs.
- Plaintiffs demanded USD 63.3m from D1 under the Guarantee.
- D1's defense hinged on securities pledged under a separate loan agreement.
- D1 claimed improper enforcement of securities resulted in no outstanding sums owed under the Guarantee.
- D1 alternatively sought to set off the securities against the USD 63.3m sum.
- D1 challenged the assignment of D2’s rights under the Guarantee to the plaintiffs.
5. Formal Citations
- TA Private Capital Security Agent Ltd and another v UD Trading Group Holding Pte Ltd and another, Suit No 624 of 2020 (Summons No 2377 of 2022), [2023] SGHCR 1
- UD Trading Group Holding Pte Ltd v TA Private Capital Security Agent Limited and another, , [2022] SGHC(A) 3
6. Timeline
| Date | Event |
|---|---|
| ATFF1 Loan agreement entered into between D2 and Cantrust (Far East) Limited | |
| D1 provided the Guarantee to D2 | |
| ATFF2 Loan agreement entered into between P2 and D2 | |
| UIL HK wound up by the High Court of Hong Kong | |
| D2 defaulted on its payments to P2 under the ATFF2 Loan | |
| Plaintiffs issued letters of demand to D1 under the Guarantee | |
| Security Deed, General Security Agreement, and Forbearance Agreement entered into between D2 and the plaintiffs | |
| Total amount owed by D2 to P2 was USD 54,209,809.43 | |
| Plaintiffs sent a Letter of Demand to D1 demanding USD 63.3m | |
| Suit 624 commenced | |
| D1 commenced proceedings against the plaintiffs in Ontario | |
| D2 commenced proceedings against the plaintiffs in Ontario | |
| D1's defence was filed | |
| D2's defence was filed | |
| Plaintiffs' replies were filed | |
| Further and better particulars were filed by all parties | |
| Further and better particulars were filed by D1 | |
| Present application was brought | |
| Judgment delivered |
7. Legal Issues
- Striking Out Defenses
- Outcome: The court struck out the defendants' defenses, finding them to be without merit and contrary to the plain text of the relevant contracts.
- Category: Procedural
- Interpretation of Guarantee
- Outcome: The court found that the Guarantee contained both a simple guarantee and a separate enforceable obligation of an on-demand performance guarantee.
- Category: Substantive
- On-Demand Performance Guarantee vs Simple Guarantee
- Outcome: The court determined that Clause 3.2 of the Guarantee, read together with Clauses 9.1 and 7.3, constituted an on-demand performance guarantee, creating a primary obligation on D1 to pay upon demand.
- Category: Substantive
- Validity of Assignment
- Outcome: The court upheld the validity of the assignment of D2's rights under the Guarantee to the plaintiffs, rejecting the defendants' challenges based on lack of notice and attempts to rescind related agreements.
- Category: Substantive
8. Remedies Sought
- Monetary Damages
9. Cause of Actions
- Breach of Guarantee
10. Practice Areas
- Commercial Litigation
11. Industries
- Finance
- Commodities Trading
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Gabriel Peter & Partners (suing as a firm) v Wee Chong Jin and others | Court of Appeal | Yes | [1997] 3 SLR(R) 649 | Singapore | Cited for the principle that pleadings should not be struck out except in plain and obvious cases. |
| TMT Asia Ltd v BHP Billiton Marketing AG (Singapore Branch) | High Court | Yes | [2015] 2 SLR 540 | Singapore | Cited for the principle that a complex question of law is not a bar to summary determination. |
| Master Marine AS v Labroy Offshore Ltd and others | Singapore Court of Appeal | Yes | [2012] 3 SLR 125 | Singapore | Cited for interpreting whether the contract in question was on demand performance guarantee in deciding whether to grant an interim injunction. |
| IIG Capital LLC v Van Der Merwe and another | English Court of Appeal | Yes | [2008] 2 All ER (Comm) 1173 | England and Wales | Cited as an example where the court considered that the contracts in question were on demand performance guarantees and granted summary judgment. |
| Wuhan Guoyu Logistics Group Co Ltd v Emporiki Bank of Greece SA | English Court of Appeal | Yes | [2013] 1 All ER (Comm) 1191 | England and Wales | Cited as an example where the court considered that the contracts in question were on demand performance guarantees and granted summary judgment. |
| Bitumen Invest AS v Richmond Mercantile Ltd FZC | English High Court | Yes | [2016] EWHC 2957 (Comm) | England and Wales | Cited as an example where the court considered that the contracts in question were on demand performance guarantees and granted summary judgment. |
| Leiman, Ricardo and another v Noble Resources Ltd and another | Court of Appeal | Yes | [2020] 2 SLR 386 | Singapore | Cited for the principles on contractual interpretation in Singapore. |
| Zurich Insurance (Singapore) Pte Ltd v B-Gold Interior Design & Construction Pte Ltd | Court of Appeal | Yes | [2008] 3 SLR(R) 1029 | Singapore | Cited for the principle that the emphasis is on the document as a whole when interpreting a contract. |
| Marubeni Hong Kong and South China Ltd v Mongolian Government | English Court of Appeal | Yes | [2005] 1 WLR 2497 | England and Wales | Cited for the principle that, in a transaction outside the banking context, the absence of language expressly indicating the creation of an on demand performance guarantee created a strong presumption against the existence of such an obligation. |
| Edward Owen Engineering Ltd v Barclays Bank International Ltd | England and Wales Court of Appeal (Civil Division) | Yes | [1978] QB 159 | England and Wales | Cited for the principle that an on demand performance guarantee is akin to letters of credit. |
| Vossloh Aktiengesellschaft v Alpha Trains (UK) Ltd | English High Court | No | [2011] 2 All ER (Comm) 307 | England and Wales | Cited for the definition of an on demand performance guarantee and the differences between a guarantee and an indemnity. |
| Gold Coast Ltd v Caja de Ahorros del Mediterraneo | England and Wales Court of Appeal (Civil Division) | Yes | [2002] 1 Lloyd’s Rep 617 | England and Wales | Cited for the principle that the existence of four factors listed in the textbook, Paget’s Law of Banking, gave rise to a presumption that the document in question will be construed as an on demand performance guarantee. |
| Likpin International Ltd v Swiber Holdings Ltd and another | Court of Appeal | Yes | [2016] 4 SLR 1079 | Singapore | Cited for the principle that claims can be legally and factually unsustainable. |
| Likpin International Ltd v Swiber Holdings Ltd and another | High Court | Yes | [2015] 5 SLR 962 | Singapore | Cited for the principle that it is frivolous, vexatious and an abuse of process to expect a defendant to defend a contractual claim when the plaintiff itself admits in its pleading that it is unsure of the most salient terms of the contract. |
| Kuvera Resources Pte Ltd v JPMorgan Chase Bank, NA | High Court | Yes | [2022] SGHC 213 | Singapore | Cited for the principle that under a confirmed letter of credit, an issuing bank and a confirming bank are obliged to pay the beneficiary against a complying presentation of documents. |
| The “Bunga Melati 5” | Court of Appeal | Yes | [2012] 4 SLR 546 | Singapore | Cited for the principle that a claim can be “frivolous or vexatious” if it is “plainly or obviously unsustainable”. |
| Chee Siok Chin and others v Minister for Home Affairs and another | High Court | Yes | [2006] 1 SLR(R) 582 | Singapore | Cited for the principle that pleadings may be struck out if they are an abuse of the court process. |
| M2B World Asia Pacific Pte Ltd v Matsumura Akihiko | High Court | Yes | [2015] 1 SLR 325 | Singapore | Cited for the principle that the duty of a judge does not end as soon as a fact is asserted by one party, and denied or disputed by the other in an affidavit. |
| Rickshaw Investments Ltd v Nicolai Baron von Uexkull | High Court | Yes | [2007] 1 SLR(R) 377 | Singapore | Cited for the principle that, where foreign law was not proven or not pleaded, the law of the forum applied by default. |
| D’Oz International Pte Ltd v PSB Corp Pte Ltd | High Court | Yes | [2010] 3 SLR 267 | Singapore | Cited for the principle that the rule of convenience which the courts may utilise unless it is unjust and inconvenient to do so. |
| Balmoral Group Ltd v Borealis (UK) Ltd and others | English High Court | Yes | [2006] All ER (D) 378 | England and Wales | Cited for the principle that there may be situations where the court may refuse to presume that the content of the foreign law is the same as that of the law of the forum in the absence of proof of foreign law. |
| Bank Negara Malaysia v Mohd Ismail | Supreme Court | Yes | 1992 1 MLJ 400 | Malaysia | Cited for the principle that the duty of a judge does not end as soon as a fact is asserted by one party, and denied or disputed by the other in an affidavit. |
| UD Trading Group Holding Pte Ltd v TA Private Capital Security Agent Limited and another | Appellate Division of the High Court | Yes | [2022] SGHC(A) 3 | Singapore | Cited for noting that D2 was prosecuting its claim in the D2 Ontario Proceedings at a “glacial” pace. |
| Clement v Clement | England and Wales Court of Appeal (Civil Division) | Yes | 1995 Lexis Citation 4562 | England and Wales | Cited as an example of an indemnity. |
| Carey Value Added, S.L. v Grupo Urvasco, S.A. | English High Court | No | [2010] EWHC 1905 (Comm) | England and Wales | Cited as an example where the court held that the contracts in question were not on demand performance guarantees. |
| Standard Trust v Mortgage Insurance Co | Ontario Court of Justice | Yes | 1992 CarswellOnt 139 | Canada | Cited for the principle that an on demand performance guarantee was akin to letters of credit and that the obligor’s liability was not contingent on the principal debtor’s default of its obligations under the underlying contract. |
| Simic v New South Wales Land and Housing Corp | High Court of Australia | Yes | [2016] 339 ALR 200 | Australia | Cited for the principle that under an on demand performance guarantee, liability is triggered upon a simple “demand” by the obligee to pay. |
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
- Guarantee
- On Demand Performance Guarantee
- Security Deed
- General Security Agreement
- Forbearance Agreement
- Assignment
- Set-off
- Letter of Demand
- Operating Companies
- ATFF2 Loan
- Hangji Security
- GEM Security
15.2 Keywords
- guarantee
- striking out
- defenses
- contract law
- civil procedure
- on demand performance guarantee
- assignment
- security
- UD Trading
- TA Private Capital
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Guarantee | 85 |
| Civil Procedure | 75 |
| Contract Law | 60 |
| Banking and Finance | 40 |
| Commercial Law | 30 |
16. Subjects
- Contract Law
- Civil Procedure
- Guarantees
- Indemnities
- Banking
- Finance