Renault SAS v Liberty Engineering: Guarantee, Contractual Terms & Pleading
Renault SAS, the claimant, sued Liberty Engineering Group Pte Ltd, the defendant, in the Singapore International Commercial Court, under a Deed of Guarantee. The case involved two originating applications, OA 3/2023 and OA 9/2023, both claiming €5,250,025.61. The central legal issue was whether the principal debtor, Alvance Aluminium Wheels, had any liability to Renault. The court ruled in favor of Renault in OA 9/2023, finding Liberty Engineering liable under the guarantee due to Alvance's failure to make a payment. OA 3/2023 was dismissed.
1. Case Overview
1.1 Court
Singapore International Commercial Court1.2 Outcome
Claim in Originating Application No 9 of 2023 succeeds, while Originating Application No 3 of 2023 is dismissed.
1.3 Case Type
Civil
1.4 Judgment Type
Judgment
1.5 Jurisdiction
Singapore
1.6 Description
Renault SAS sues Liberty Engineering under a guarantee. The court addressed contractual terms and pleading issues, ruling in favor of Renault.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Liberty Engineering Group Pte Ltd | Defendant | Corporation | Claim Dismissed | Lost | |
| Renault SAS | Claimant | Corporation | Judgment for Claimant | Won |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Roger Giles | International Judge | Yes |
4. Counsels
4. Facts
- Renault provided financial support to Liberty Wheels, a subsidiary of LEG, to acquire AR Industries.
- A Financial Services Agreement (FSA) was signed between Renault and LEG.
- LEG provided a Guarantee to Renault for the financial support.
- Liberty Wheels was placed under redressment judiciare and later liquidation judiciare.
- Liberty Wheels failed to make a payment due on 1 June 2023.
- Renault claimed the outstanding amount from LEG under the Guarantee.
- LEG argued that Liberty Wheels was not a party to the FSA and therefore had no liability.
5. Formal Citations
- Renault SAS v Liberty Engineering Group Pte Ltd, Originating Application No 3 of 2023, [2024] SGHC(I) 6
- Renault SAS v Liberty Engineering Group Pte Ltd, Originating Application No 9 of 2023, [2024] SGHC(I) 6
6. Timeline
| Date | Event |
|---|---|
| Deed of Guarantee signed | |
| AR Industries placed under redressment judiciare | |
| Financial Services Agreement signed between Renault and LEG | |
| Court adopted the sale plan and made orders to give effect to it | |
| Liberty Wheels France created | |
| Guarantee dated | |
| Renault paid €1.5m to Liberty Wheels | |
| Renault paid €1.5m to Liberty Wheels | |
| Renault paid €2.5 million to Liberty Wheels | |
| Renault paid €1.5 million to Liberty Wheels | |
| Alvance placed under redressment judiciare by the Paris Commercial Court | |
| Renault issued a letter of demand for payment by LEG of the sum of €7 million | |
| Renault commenced Suit 1 in the High Court | |
| Renault filed a proof of claim with Alvance’s court-appointed creditors’ representatives | |
| Paris Commercial Court approved a plan to sell the operations and assets of Alvance to a third party | |
| Redressment judiciare converted into liquidation judiciare | |
| Notification of Admitted Claims | |
| Renault commenced OA 3 in the SICC | |
| Suit 1 was heard | |
| Judgment was given in Suit 1 | |
| Payment of €1,750,000 due | |
| Renault commenced OA 9 in the SICC | |
| Proceedings were heard | |
| Judgment reserved |
7. Legal Issues
- Liability under Guarantee
- Outcome: The court found the defendant liable under the guarantee for the outstanding amount due to the failure of the principal debtor to make a payment.
- Category: Substantive
- Sub-Issues:
- Enforceability of guarantee
- Interpretation of guarantee terms
- Acceleration of debt
- Contractual Interpretation
- Outcome: The court interpreted the Financial Services Agreement to determine the obligations of the parties and whether a separate contract existed.
- Category: Substantive
- Sub-Issues:
- Interpretation of Financial Services Agreement
- Definition of 'Purchaser'
- Substitution clause
- Pleading Requirements
- Outcome: The court found that the claimant had adequately pleaded a separate contract, even though it was not a model pleading.
- Category: Procedural
- Sub-Issues:
- Sufficiency of pleading a separate contract
- Material facts
- Legal conclusions
8. Remedies Sought
- Monetary Damages
9. Cause of Actions
- Breach of Guarantee
10. Practice Areas
- Commercial Litigation
11. Industries
- Automobile
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Renault SAS v Liberty Engineering Group Pte Ltd | Singapore International Commercial Court | Yes | [2023] 4 SLR 152 | Singapore | Cited as the Suit 1 Judgment, where the claimant's claim was dismissed. The current judgment distinguishes itself from the Suit 1 Judgment. |
| Grains and Industrial Products Trading Pte Limited v the Bank of India and another | High Court | Yes | [2016] 3 SLR 1308 | Singapore | Cited for the principle that interest is discretionary. |
| MK (Project Management) Ltd v Baker Marine Energy Pte Ltd | Court of Appeal | Yes | [1994] 3 SLR(R) 823 | Singapore | Cited for the principle that it is sufficient for the pleader to state the material facts, and the legal conclusion to be drawn from them need not be stated. |
| Acute Result Holdings Ltd v CGS-CIMB Securities (Singapore) Pte Ltd (formerly known as CIMB Securities (Singapore) Pte Ltd) | High Court | Yes | [2023] 5 SLR 406 | Singapore | Cited for the principle that a pleader’s duty is to plead facts not law. |
| Gay Choon Ing v Loh Sze Ti Terence Peter and another appeal | Court of Appeal | Yes | [2009] 2 SLR(R) 332 | Singapore | Cited regarding the requirements for an identifiable agreement that is complete and certain. |
| Travista Development Pte Ltd v Tan Kim Swee Augustine and others | High Court | Yes | [2008] 2 SLR(R) 474 | Singapore | Cited for the principle that in construing a contract, all parts of it must be given effect where possible, and no part of it should be treated as inoperative or surplus. |
| Court of Cassation dated 15 November 1994, First Civil Chamber | Court of Cassation | Yes | No 92-18.981 | France | Cited regarding adherence to a contract, but distinguished by the court. |
| Court of Cassation dated 21 June 2018, Third Civil Chamber | Court of Cassation | Yes | No 17-18.738 | France | Cited regarding the enforcement of a substitution provision, but the court found that the FSA did not provide for substitution. |
| Court of Cassation dated 19 March 1997, Third Civil Chamber | Court of Cassation | Yes | No 95-12.47 | France | Cited regarding the distinction between substitution and assignment, but the court found that the FSA did not provide for substitution. |
| Court of Cassation dated 13 May 2003, Commercial Chamber | Court of Cassation | Yes | No 00-15.642 | France | Cited regarding the waiver of the unenforceability of the forfeiture of the term, but the court found that the reliance on the decision was misplaced. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Article L.642-9 of the French Commercial Code | France |
| Article L.643-1 of the French Commercial Code | France |
| Article 1172 of the French Civil Code | France |
| Article 1113 of the French Civil Code | France |
| Article 1114 of the French Civil Code | France |
| Article 1118 of the French Civil Code | France |
| Article 1216 of the French Civil Code | France |
| Article 1205 of the French Civil Code | France |
| Article 1206 of the French Civil Code | France |
| Article 1208 of the French Civil Code | France |
| Article 1103 of the French Civil Code | France |
15. Key Terms and Keywords
15.1 Key Terms
- Guarantee
- Financial Support Agreement
- Purchaser
- Redressment Judiciare
- Liquidation Judiciare
- Bankruptcy Event
- First Demand Guarantee
- Obligations
- Consensualisme
- Substitution
- Assignment
15.2 Keywords
- Guarantee
- Contractual Terms
- Pleading
- Financial Support
- Liberty Engineering
- Renault
- Alvance
- French Law
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Guarantee | 90 |
| Credit and Security | 85 |
| Contract Law | 80 |
| Civil Procedure | 75 |
16. Subjects
- Contract Law
- Guarantees
- Civil Procedure