Liberty Engineering v Renault: Guarantee, Contractual Terms & French Law
In Liberty Engineering Group Pte Ltd v Renault SAS, the Court of Appeal of Singapore dismissed Liberty Engineering Group's appeal against the High Court's decision. The case concerned a guarantee provided by Liberty Engineering Group (LEG) for a loan Renault made to Alvance Aluminium Wheels. The court found that Alvance had adhered to the Financial Support Agreement (FSA) under French law, making LEG liable under the guarantee for Alvance's unpaid debt to Renault. The court dismissed the appeal, albeit on different grounds relative to the decision of the Judge.
1. Case Overview
1.1 Court
Court of Appeal of the republic of singapore1.2 Outcome
Appeal Dismissed
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Singapore court dismisses appeal, finding Alvance adhered to FSA, making LEG liable under guarantee for Alvance's debt to Renault.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Liberty Engineering Group Pte Ltd | Appellant | Corporation | Appeal Dismissed | Lost | |
| Renault SAS | Respondent | Corporation | Appeal Dismissed | Won | |
| Alvance Aluminium Wheels | Other | Corporation | Neutral |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Steven Chong | Justice of the Court of Appeal | Yes |
| Belinda Ang Saw Ean | Justice of the Court of Appeal | Yes |
| Bernard Rix | International Judge | Yes |
4. Counsels
4. Facts
- Renault provided a €7m loan to Alvance, a subsidiary of LEG, for the purchase of AR Industries.
- LEG provided a guarantee to Renault for Alvance's obligations under the Financial Support Agreement (FSA).
- Alvance was later placed under judicial restructuring in France.
- Alvance failed to make the second repayment installment due on 1 June 2023.
- Renault commenced proceedings against LEG to recover the outstanding debt under the guarantee.
- The Commercial Court of Orléans authorized the full replacement of LEG by Alvance in the takeover of AR Industries.
5. Formal Citations
- Liberty Engineering Group Pte Ltd v Renault SAS, Civil Appeal No 2 of 2024, [2024] SGCA(I) 7
6. Timeline
| Date | Event |
|---|---|
| Financial Support Agreement signed | |
| Commercial Court of Orléans approved the Sale Plan | |
| Alvance (formerly Liberty Wheels France) incorporated | |
| Guarantee executed by LEG | |
| Renault advanced sums to Alvance | |
| Renault advanced sums to Alvance | |
| Renault advanced sums to Alvance | |
| Renault advanced sums to Alvance | |
| Alvance placed under redressement judiciaire | |
| Redressement judiciaire of Alvance converted into liquidation judiciaire | |
| Renault commenced OA 9 | |
| Judge dismissed OA 3 | |
| Judgment published | |
| Judgment reserved | |
| Judgment delivered |
7. Legal Issues
- Breach of Guarantee
- Outcome: The court found that the guarantee was engaged because Alvance was a party to the FSA.
- Category: Substantive
- Contractual Interpretation
- Outcome: The court interpreted the FSA and the Guarantee to determine the scope of LEG's obligations.
- Category: Substantive
- Adherence under French Law
- Outcome: The court held that Alvance adhered to the FSA under French law, making it a party to the agreement.
- Category: Substantive
8. Remedies Sought
- Monetary Damages
9. Cause of Actions
- Breach of Guarantee
10. Practice Areas
- Commercial Litigation
11. Industries
- Manufacturing
- Finance
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Development Bank of Singapore Ltd v Bok Chee Seng Construction Pte Ltd | Court of Appeal | Yes | [2002] 2 SLR(R) 693 | Singapore | Cited for the principle that a pleader is not shut out from arguing points of law which arise on the facts pleaded, even if the legal consequences were stated inaccurately. |
| Karsales (Harrow) v Wallis | N/A | Yes | [1956] 1 WLR 936 | N/A | Cited for the principle that it is sufficient for a pleader to plead the material facts, and even if the legal consequences are stated inaccurately, that does not shut them out from arguing points of law which arise on the facts pleaded. |
| N/A | French Court of Cassation | Yes | Appeal no.: 92-18.981 | France | Cited to support the doctrine of adherence, where new partners in a partnership were bound by a pre-existing joint professional practice agreement. |
| Renault SAS v Liberty Engineering Group Pte Ltd | Singapore International Commercial Court | Yes | [2024] SGHC(I) 6 | Singapore | The judgment under appeal. The Court of Appeal disagreed with the Judge's finding of a separate contract but upheld the outcome based on different reasoning. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Article 1172 of the French Civil Code | France |
| Article 1113 of the French Civil Code | France |
| Article 1216 of the French Civil Code | France |
15. Key Terms and Keywords
15.1 Key Terms
- Guarantee
- Financial Support Agreement
- Purchaser
- Adherence
- Consensualisme
- Redressement Judiciaire
- Liquidation Judiciaire
15.2 Keywords
- guarantee
- contractual terms
- french law
- financial support agreement
- adherence
- liberty engineering
- renault
- alvance
17. Areas of Law
16. Subjects
- Contract Law
- Guarantees
- French Law
- Civil Procedure