Crédit Agricole v PPT Energy: Breach of Warranty, Damages, and Interest in Letter of Indemnity Dispute

The Singapore Court of Appeal heard appeals from Crédit Agricole Corporate & Investment Bank, Singapore Branch ("CACIB") against PPT Energy Trading Co Ltd (“PPT”) regarding two cases, SIC/S 1/2021 and SIC/S 2/2021. The court previously found that PPT breached a warranty in a letter of indemnity, entitling CACIB to damages. This judgment addresses the interest payable on the awarded sums and the costs of the SICC proceedings and appeals. The court allowed the appeal in part, awarding interest to both parties and determining the costs to be awarded to CACIB as the successful party, subject to a discount.

1. Case Overview

1.1 Court

Court of Appeal of the Republic of Singapore

1.2 Outcome

Appeal allowed in part; judgment for Crédit Agricole for breach of warranty; orders made regarding interest and costs.

1.3 Case Type

Civil

1.4 Judgment Type

Judgment

1.5 Jurisdiction

Singapore

1.6 Description

Singapore Court of Appeal rules on interest and costs following a judgment finding PPT Energy breached a warranty, awarding damages to Crédit Agricole.

1.7 Decision Date

6 June 2024

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
Crédit Agricole Corporate & Investment Bank, Singapore Branch	Appellant, Plaintiff	Corporation	Appeal allowed in part	Partial	Nair Suresh Sukumaran of PK Wong & Nair LLC Alex Chia Yao Wei of PK Wong & Nair LLC Tan Tse Hsien Bryan of PK Wong & Nair LLC
PPT Energy Trading Co Ltd	Respondent, Defendant	Corporation	Judgment against	Lost	Giam Chin Toon of Wee Swee Teow LLP Lee Wei Yuen Arvin of Wee Swee Teow LLP Wan Hui Ting Monique of Wee Swee Teow LLP

3. Judges

Judge Name	Title	Delivered Judgment
Judith Prakash	Senior Judge	Yes
Jonathan Hugh Mance	International Judge	No
Bernard Rix	International Judge	No

4. Counsels

Counsel Name	Organization
Nair Suresh Sukumaran	PK Wong & Nair LLC
Alex Chia Yao Wei	PK Wong & Nair LLC
Tan Tse Hsien Bryan	PK Wong & Nair LLC
Giam Chin Toon	Wee Swee Teow LLP
Lee Wei Yuen Arvin	Wee Swee Teow LLP
Wan Hui Ting Monique	Wee Swee Teow LLP

4. Facts

CACIB issued a letter of credit in favor of PPT.
PPT issued a letter of indemnity (LOI) to CACIB.
A dispute arose regarding payment under the letter of credit due to fraud by Zenrock.
CACIB commenced legal action against PPT seeking an injunction.
PPT counterclaimed against CACIB for payment under the letter of credit.
The Receivables were transferred to Mayer Brown as escrow agent.
CACIB and ING entered into a Settlement Agreement.
The court found that PPT breached the warranty of marketable title given in the LOI.

5. Formal Citations

Crédit Agricole Corporate & Investment Bank,Singapore Branch vPPT Energy Trading Co Ltd and another appeal, Civil Appeal Nos 2 and 3 of 2022, [2024] SGCA(I) 3

6. Timeline

Date	Event
2020-04-03	CACIB issued letter of credit in favor of PPT.
2020-04-09	PPT issued letter of indemnity to CACIB.
2020-05-14	PPT took out a loan due to CACIB’s failure to pay the LC Sum.
2020-05-28	CACIB commenced Suit 451 against PPT.
2020-06-05	Due date for payment under the Credit.
2020-06-17	TOTSA transferred the Receivables to Mayer Brown as escrow agent.
2020-06-24	PPT commenced Suit 555 against CACIB.
2020-07-21	Suits 451 and 555 were ordered to be heard together.
2020-08-14	PPT filed Defence and Counterclaim in Suit 451.
2020-11-09	Parties agreed to discharge interim injunction and CACIB to pay LC Sum into PPT's bank account.
2020-11-18	CACIB paid US$23,662,732.50 into BOC bank account.
2020-11-19	CACIB filed Defence and Counterclaim (Amendment No. 1) to Suit 555.
2020-11-23	Settlement Agreement entered into between CACIB, ING and the escrow agent.
2021-02-09	Suits 451 and 555 were transferred to the SICC and renumbered as SIC 1 and SIC 2 respectively.
2021-12-01	Trial of SIC 1 and SIC 2 took place before the Judge over eight working days.
2022-01-13	Judge delivered decision in Crédit Agricole Corporate & Investment Bank, Singapore Branch v PPT Energy Trading Co Ltd [2022] SGHC(I) 1.
2022-03-30	Judge dealt with the reserved issues.
2022-04-14	CACIB paid the sum of US$1,983,971.30 to PPT as interest and costs.
2022-10-19	Appeals were heard.
2022-10-20	CACIB's amendment on sub-issue 3 of the LOI dispute.
2023-10-24	Liability Judgment issued.
2023-11-10	CACIB filed affidavit to address uncertainty in respect of recoveries in settlement.
2024-05-10	Interrogatories Judgment issued.
2024-06-07	Judgment reserved.

7. Legal Issues

Breach of Warranty
- Outcome: The court found that PPT breached the warranty of marketable title given in the LOI.
- Category: Substantive
Entitlement to Interest
- Outcome: The court determined the periods and amounts for which interest was payable to both parties.
- Category: Substantive
Allocation of Costs
- Outcome: The court determined that CACIB was the overall successful party and was entitled to costs, subject to a discount.
- Category: Procedural
Contractual Indemnity
- Outcome: The court considered the indemnity clause in the LOI in assessing costs, noting that it only extended to 'reasonable legal fees'.
- Category: Substantive

8. Remedies Sought

Monetary Damages
Interest
Costs

9. Cause of Actions

Breach of Warranty
Breach of Contract
Indemnity

10. Practice Areas

Commercial Litigation
Banking Litigation
International Trade Disputes

11. Industries

Finance
Energy Trading

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
Crédit Agricole Corporate & Investment Bank, Singapore Branch v PPT Energy Trading Co Ltd and another appeal	Court of Appeal	Yes	[2023] SGCA(I) 7	Singapore	The Liability Judgment determined the liability of the parties and is central to the current judgment regarding interest and costs.
Crédit Agricole Corporate & Investment Bank, Singapore Branch v PPT Energy Trading Co Ltd	Singapore International Commercial Court	Yes	[2022] SGHC(I) 1	Singapore	The Judge's decision in the SICC was appealed, and some of the orders were set aside by the Court of Appeal.
Comfort Management Pte Ltd v OGSP Engineering Pte Ltd and another	High Court	Yes	[2022] 5 SLR 525	Singapore	Cited for the principle that the successful party in litigation is entitled to recover its costs from the unsuccessful party.
BCBC Singapore Pte Ltd and another v PT Bayan Resources TBK and another	Singapore International Commercial Court	Yes	[2022] SGHC(I) 17	Singapore	Cited for the principle that the court must look at the outcome of the litigation overall to determine the successful party.
Telemedia Pacific Group Ltd v Credit Agricole (Suisse) SA (Yeh Mao-Yuan, third party)	High Court	Yes	[2015] 4 SLR 1019	Singapore	Cited regarding the court's discretion to award costs and the effect of costs agreements between parties.
Abani Trading Pte Ltd v BNP Paribas and another appeal	Court of Appeal	Yes	[2014] 3 SLR 909	Singapore	Cited regarding the court's discretion to uphold contractual bargains unless manifestly unjust.
United Overseas Bank Ltd v Sin Leong Ironbed & Furniture Manufacturing Co (Pte) Ltd and others	High Court	Yes	[1988] 1 SLR(R) 76	Singapore	Cited for the view that a contractual agreement on costs ousts the statutory discretion of a tribunal in awarding costs.
NSL Oilchem Waste Management Pte Ltd v Prosper Marine Pte Ltd and other suits	High Court	Yes	[2020] SGHC 204	Singapore	Cited for the view that contractual agreements on costs cannot oust the court’s discretion.

13. Applicable Rules

Rule Name
Order 59 of the Rules of Court (Cap 322, 2014 Rev Ed)
Order 110 rule 46 of the Rules of Court (Cap 322, 2014 Rev Ed)
Order 16 rule 3(5) of the Singapore International Commercial Court Rules 2021

14. Applicable Statutes

Statute Name	Jurisdiction
Rules of Court (Cap 322, 2014 Rev Ed)	Singapore

15. Key Terms and Keywords

15.1 Key Terms

Letter of Credit
Letter of Indemnity
Receivables
Warranty of Marketable Title
Settlement Agreement
Interpleader Proceedings
BOC Guarantee
LC Sum
Credit Dispute
LOI Dispute

15.2 Keywords

letter of credit
letter of indemnity
breach of warranty
damages
interest
costs
Singapore
commercial litigation
banking
international trade

17. Areas of Law

Area Name	Relevance Score
Costs	95
Damages Assessment	80
Commercial Disputes	70
Remedies	65
Breach of Contract	60
Contractual terms	50
Letter of Credit Law	40
Arbitration	30
Estoppel	20
Agency Law	15
Warranty of Authority	10

16. Subjects

Contract Law
Commercial Law
Civil Procedure
International Trade
Banking