TA Private Capital v UD Trading: Guarantee, Performance Bond & Striking Out Defences

In TA Private Capital Security Agent Ltd and TransAsia Private Capital Limited v UD Trading Group Holding Pte Ltd and Rutmet Inc, the High Court of Singapore dismissed the defendants' appeals against the Assistant Registrar's decision to strike out their defences and enter judgment for the plaintiffs. The case concerns a guarantee executed by UD Trading Group Holding Pte Ltd in favor of Rutmet Inc for US$63.3m, which was later assigned to TA Private Capital Security Agent Ltd. The court found the defences to be without merit and upheld the judgment in favor of the plaintiffs.

1. Case Overview

1.1 Court

General Division of the High Court of the Republic of Singapore

1.2 Outcome

Defendants' appeals dismissed; judgment entered against the first defendant stands; second defendant's defence struck out.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Singapore court strikes out defences in a guarantee dispute, finding them meritless. The case involves a US$63.3m debt and assignment issues.

1.7 Decision Date

30 January 2024

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
TA Private Capital Security Agent Limited	Plaintiff	Corporation	Judgment for Plaintiff	Won	Chan Leng Sun SC of Duxton Hill Chambers Bazul Ashhab of Oon & Bazul LLP Lionel Chan of Oon & Bazul LLP Nicholas Chang of Oon & Bazul LLP Esther Yong of Oon & Bazul LLP
TransAsia Private Capital Limited	Plaintiff	Corporation	Judgment for Plaintiff	Won	Chan Leng Sun SC of Duxton Hill Chambers Bazul Ashhab of Oon & Bazul LLP Lionel Chan of Oon & Bazul LLP Nicholas Chang of Oon & Bazul LLP Esther Yong of Oon & Bazul LLP
UD Trading Group Holding Pte Ltd	Defendant, Appellant	Corporation	Appeal Dismissed	Lost	Chooi Jing Yen of Eugene Thuraisingam LLP Ng Yuan Siang of Eugene Thuraisingam LLP Kenneth Tan SC of Kenneth Tan Partnership Eugene Thuraisingam of Eugene Thuraisingam LLP Hamza Malik of Eugene Thuraisingam LLP
Rutmet Inc	Defendant, Appellant	Corporation	Appeal Dismissed; Defence Struck Out	Lost	Daniel Koh of Eldan Law LLP Imran Rahim of Eldan Law LLP Zerlina Yee of Eldan Law LLP

3. Judges

Judge Name	Title	Delivered Judgment
Vinodh Coomaraswamy	Judge of the High Court	Yes

4. Counsels

Counsel Name	Organization
Chan Leng Sun SC	Duxton Hill Chambers
Bazul Ashhab	Oon & Bazul LLP
Lionel Chan	Oon & Bazul LLP
Nicholas Chang	Oon & Bazul LLP
Esther Yong	Oon & Bazul LLP
Chooi Jing Yen	Eugene Thuraisingam LLP
Ng Yuan Siang	Eugene Thuraisingam LLP
Kenneth Tan SC	Kenneth Tan Partnership
Eugene Thuraisingam	Eugene Thuraisingam LLP
Hamza Malik	Eugene Thuraisingam LLP
Daniel Koh	Eldan Law LLP
Imran Rahim	Eldan Law LLP
Zerlina Yee	Eldan Law LLP

4. Facts

The first plaintiff is the security agent of the second plaintiff.
The second plaintiff is a fund manager that manages the Asian Trade Finance Fund 2.
The first defendant is the parent company of the UD Group.
The Operating Companies purchased metal and metal products from the second defendant.
The second defendant drew down funds under the ATFF2 Loan to purchase metal and metal products from its suppliers.
The first defendant executed the Guarantee in favour of the second defendant on 15 April 2019.
The plaintiffs claim that the second defendant validly assigned its rights under the Guarantee to the first plaintiff on 22 November 2019.
The first plaintiff issued a letter to the first defendant demanding payment of US$63.3m on 24 January 2020.
The first defendant does not dispute that the Operating Companies owed $63.3m to the second defendant as at 31 January 2020.

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 (Registrar’s Appeal Nos 18 and 19 of 2023), [2024] SGHC 11

6. Timeline

Date	Event
2017-01-01	ATFF1 Loan entered into between Cantrust and the second defendant.
2019-01-01	ATFF2 Loan entered into between the second plaintiff and the second defendant.
2019-04-15	First defendant executed the Guarantee in favour of the second defendant.
2019-11-22	Second defendant assigned its rights under the Guarantee to the first plaintiff.
2020-01-24	First plaintiff issued a letter to the first defendant demanding payment of US$63.3m.
2020-01-31	First defendant had not made payment to the first plaintiff.
2020-07-01	Plaintiffs commenced action to recover US$63.3m from the first defendant.
2020-08-12	First defendant commenced UD's Ontario Action against the plaintiffs.
2020-12-14	Second defendant commenced the second defendant's Ontario Action against the plaintiffs.
2023-02-09	Hearing date.
2023-03-13	Hearing date.
2024-01-31	Judgment date.

7. Legal Issues

Whether the Guarantee is an on-demand performance guarantee
- Outcome: The court found it unnecessary to determine whether the Guarantee is an on-demand performance guarantee.
- Category: Substantive
Whether the defendants' defences should be struck out
- Outcome: The court held that the defendants' defences should be struck out.
- Category: Procedural
Whether the GEM and Hangji securities can be used to satisfy the sum owed under the Guarantee
- Outcome: The court held that the GEM and Hangji securities cannot be used to satisfy the sum owed under the Guarantee.
- Category: Substantive
Whether the GEM and Hangji securities can be set off against the sum owed under the Guarantee
- Outcome: The court held that the GEM and Hangji securities cannot be set off against the sum owed under the Guarantee.
- Category: Substantive
Whether notices were validly given of the second defendant's assignment to the first plaintiff of the debts due to it from the Operating Companies
- Outcome: The court held that the notices of assignment were validly given.
- Category: Substantive
Whether the defendants are estopped from taking positions contrary to the findings of the Ontario court
- Outcome: The court held that the defendants are not estopped from taking positions contrary to the findings of the Ontario court.
- Category: Procedural

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
TA Private Capital Security Agent Ltd and another v UD Trading Group Holding Pte Ltd and another	High Court	Yes	[2023] SGHCR 1	Singapore	Decision of Assistant Registrar Desmond Chong which was appealed against.
Vossloh Aktiengesellschaft v Alpha Trains (UK) Ltd	Not specified	Yes	[2011] 2 All ER (Comm) 307	England and Wales	Cited for the definition of an on-demand performance guarantee.
Master Marine AS v Labroy Offshore Ltd and others	Court of Appeal	Yes	[2012] 3 SLR 125	Singapore	Cited for the purpose and advantages of an on-demand performance guarantee and its analogy to letters of credit.
Dauphin Offshore Engineering & Trading Pte Ltd v The Private Office of HRH Sheikh Sultan bin Khalifa bin Zayed Al Nahyan	High Court	Yes	[2000] 1 SLR(R) 117	Singapore	Cited for the narrow grounds of fraud or unconscionability to resist payment under a guarantee.
Meritz Fire and Marine Insurance Co Ltd v Jan De Nul NV and another	Not specified	Yes	[2011] 1 All ER (Comm) 1049	England and Wales	Cited for the importance of the guarantor's identity in an on-demand performance guarantee.
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 Marubeni presumption against creating an on-demand performance guarantee outside the banking context.
China Taiping Insurance (Singapore) Pte Ltd (formerly known as China Insurance Co (Singapore) Pte Ltd) v Teoh Cheng Leong	High Court	Yes	[2012] 2 SLR 1	Singapore	Cited for recognizing the importance of the Marubeni presumption.
Wuhan Guoyu Logistics Group Co Ltd v Emporiki Bank of Greece SA (No. 1)	Not specified	Yes	[2013] 1 All ER (Comm) 1191	England and Wales	Cited for the Paget factors in construing an instrument as an on-demand performance guarantee.
Wood Hall Ltd v Pipeline Authority	High Court of Australia	Yes	(1979) 141 CLR 443	Australia	Cited as an example of words construed as creating an on-demand performance guarantee in the banking context.
Bitumen Invest AS v Richmond Mercantile Ltd FZC	Not specified	Yes	[2016] EWHC 2957 (Comm)	England and Wales	Cited as an example of words construed as creating an on-demand performance guarantee outside the banking context.
British Linen Asset Finance Ltd v Ridgeway	Not specified	Yes	British Linen Asset Finance Ltd v Ridgeway (1999) GWD 2–78	Scotland	Cited for the principle that conclusive evidence clauses will not be readily construed as being conclusive of the legal existence of the indebtedness.
Van Der Merwe v IIG Capital LLC	Not specified	Yes	[2008] 1 All ER (Comm) 435	England and Wales	Cited for the factor in favour of construing the instrument as an on-demand performance guarantee where a clause is found on its proper construction to cover both liability and quantum.
Projection Pte Ltd v The Tai Ping Insurance Co Ltd	High Court	Yes	[2001] 1 SLR(R) 798	Singapore	Cited for the analysis of offer and acceptance where continuing negotiations are concerned.
Likpin International Ltd v Swiber Holdings Ltd and another	High Court	Yes	[2015] 5 SLR 962	Singapore	Cited for the requirement to plead a specific date when the contract was concluded.
Gay Choon Ing v Loh Sze Ti Terence Peter and another appeal	Court of Appeal	Yes	[2009] 2 SLR(R) 332	Singapore	Cited for the flexible approach in cases of continuing negotiations.
Independent State of Papua New Guinea v PNG Sustainable Development Program Ltd	High Court	Yes	[2019] SGHC 68	Singapore	Cited for the requirement of reasonable certainty for the formation of an oral agreement.
Day, Ashley Francis v Yeo Chin Huat Anthony and others	High Court	Yes	[2020] 5 SLR 514	Singapore	Cited for the requirement of a clear acceptance at some point in time for continuing negotiations to be a binding contract.
Connaught Restaurants Ltd v Indoor Leisure Ltd	Not specified	Yes	[1994] 1 WLR 501	England and Wales	Cited for the principle that clauses providing that amounts are to be paid 'without any deduction' may, in some contexts, be insufficient to exclude equitable set-off.
Holt v Heatherfield Trust Limited and another	Not specified	Yes	[1942] 2 KB 1	England and Wales	Cited for the principle that a failure to give notice of an assignment does not affect the contractual effectiveness of an assignment as between the assignor and the assignee.
Merck Sharp & Dohme Corp (formerly known as Merck & Co, Inc) v Merck KGaA (formerly known as E Merck)	Court of Appeal	Yes	[2021] 1 SLR 1102	Singapore	Cited for the requirement of transnational issue estoppel that the foreign judgment must be a final and conclusive decision on the merits.
Lakshmi Anil Salgaocar v Jhaveri Darsan Jitendra	Court of Appeal	Yes	[2019] 2 SLR 372	Singapore	Cited for the principle that issue estoppel can in principle arise in respect of foreign decisions on interlocutory matters.
William Jacks & Co (Singapore) Pte Ltd v Nelson Honey & Marketing (NZ) Ltd	High Court	Yes	[2015] SGHCR 21	Singapore	Cited for the principle that a decision of a foreign court as to whether that foreign court is the appropriate forum can never give rise to issue estoppel.
The “Bunga Melati 5”	Court of Appeal	Yes	[2011] 4 SLR 1017	Singapore	Cited for the principle that it is relevant for the Singapore court to consider what foreign law itself says about the nature of the judgment.

13. Applicable Rules

Rule Name
Order 14 Rule 12 of the Rules of Court
Order 18 Rule 19 of the Rules of Court

14. Applicable Statutes

Statute Name	Jurisdiction
Rules of Court	Singapore

15. Key Terms and Keywords

15.1 Key Terms

Guarantee
On-demand performance guarantee
Operating Companies
ATFF2 Loan
GEM Security
Hangji Security
Assignment
Set-off
Cross-collaterisation

15.2 Keywords

guarantee
performance bond
striking out
civil procedure
contract law
singapore
high court

17. Areas of Law

Area Name	Relevance Score
Guarantee	85
Performance Bond	75
Civil Procedure	70
Assignment Law	65
Contract Law	60
Commercial Disputes	50
Jurisdiction	40
Summary Judgement	35
Estoppel	30
Costs	20

16. Subjects

Contract Law
Guarantee
Civil Procedure