CIMB Bank Bhd v World Fuel Services (Singapore) Pte Ltd

CourtHigh Court (Singapore)
JudgeDedar Singh Gill JC
Judgment Date09 June 2020
Neutral Citation[2020] SGHC 117
Citation[2020] SGHC 117
Hearing Date31 October 2019,29 October 2019,27 December 2019,01 November 2019,30 October 2019,05 November 2019
Docket NumberSuit No 184 of 2018
Published date13 June 2020
Plaintiff CounselChan Kia Pheng, Samuel Lee Jia Wei and Tan Jia Hui (LVM Law Chambers LLC)
Defendant CounselNair Suresh Sukumaran, Bryan Tan Tse Hsien and Bhatt Chantik Jayesh (PK Wong & Nair LLC)
Subject MatterBanking,Lending and security
Dedar Singh Gill JC: Introduction

In this action, CIMB Bank Berhad (“CIMB”) claims against World Fuel Services (Singapore) Pte Ltd (“WFS”) for sums under a deed of debenture dated 15 July 2016 (“the Debenture”). The Debenture assigned to CIMB rights under 11 invoices issued by Panoil Petroleum Pte Ltd (“Panoil”) (“the 11 Panoil Invoices”) and 11 sales confirmations issued by Panoil (“the 11 Panoil Sales Confirmations”). The 11 Panoil Sales Confirmations incorporated terms from a document titled “Panoil’s Terms and Conditions For Sales of Marine Fuel” (“Panoil’s Terms and Conditions”). The aforesaid invoices, sales confirmations and terms and conditions are collectively referred to as “the Sales Documents”. The Sales Documents related to 11 separate sales of marine fuel oil by Panoil to WFS (“the Subject Transactions”).

Facts Background

CIMB is the Singapore branch of a bank incorporated in Malaysia and is licensed to provide banking services in Singapore.1 CIMB provided such services to Panoil. On 2 October 2017, Panoil was placed under judicial management.2 It has since been wound up. Panoil occupied a different position in the supply chain for marine fuel oil from WFS.3 Panoil was a physical supplier of marine fuel oil to vessels.4 WFS is a bunker trader with access to the supply of marine fuel oil from “oil majors” and cargo traders.

CIMB’s banking services to Panoil were governed by a facility letter dated 29 June 2016 (“the Facility Letter”). The loan facility contained therein was secured, inter alia, by an all monies limited debenture over all the goods and/or the receivables and documents representing the goods financed by CIMB. Under the Facility Letter, Panoil was obliged to execute such a debenture.5 On 15 July 2016, Panoil purportedly executed the Debenture in favour of CIMB.6 In substance, the Debenture assigned certain rights to CIMB. CIMB relies on those rights in this action against WFS.

In or around mid-August 2017, CIMB discovered that Panoil was in financial trouble.7 Based on news that Panoil’s bunker crafter operator’s license had been revoked, CIMB realised that Panoil’s operations could suffer.8 CIMB then issued WFS a notice of assignment on 29 August 2017 (“the Notice of Assignment”) of its rights under the Debenture.9

On 22 February 2018, CIMB sought to exercise its rights as the legal assignee under the Debenture against WFS.10

The witnesses

The following witnesses appeared for CIMB: Bay Gek Qwee (“Ms Bay”), an associate director for trade sales in CIMB.11 Ms Bay testified that she had personally sent the Notice of Assignment to WFS. Lai Shing Joo (“Ms Lai”), a relationship manager in CIMB handling Panoil’s affairs.12 Ms Lai described CIMB’s commercial relationship with Panoil and explained why CIMB had not called Panoil’s former employees as witnesses in the present proceedings. Khoo May May Evelyn Vanessa (“Ms Khoo”), a director of commercial banking in CIMB.13 Ms Khoo was the main witness for CIMB. She testified extensively on the Subject Transactions and, more generally, on the commercial relationship between CIMB and Panoil. Neo Tiau Gee (“Mr Neo”), the executive director of SDE International Pte Ltd. He has more than 26 years of experience in the bunker industry.14 Mr Neo was an expert witness on various matters relating to the bunkering industry.15 He tendered an expert report (“Mr Neo’s Expert Report”).

The following witnesses appeared for WFS: Tan Chee Boon (“Mr Tan”), WFS’ supply manager. Mr Tan was personally involved in WFS’ dealings with Panoil.16 He testified that WFS had entered into a number of separate contracts with Panoil that gave it certain rights of set-off against Panoil. He explained that the sums due to Panoil under the Subject Transactions had been validly set-off pursuant to various set-off notices. Adrienne Beth Bolan (“Ms Bolan”), the former senior Vice President and Treasurer of WFS.17 Ms Bolan testified to the authenticity of a key document which WFS relies on in this action. Ultimately, her evidence was not material to the proceedings for the reasons explained at [82]. Loh Chee Choon (“Mr Loh”), the Vice President (Asia Supply) of WFS.18 Like Mr Tan, Mr Loh testified to the business dealings with Panoil and how the sums owed to Panoil had been validly set off. Tay Liang Seng (“Mr Tay”), the financial controller of WFS.19 Mr Tay gave evidence on the contracts that WFS had entered into with Panoil, which granted it rights of set-off. Lee Boon Meng Francis (“Mr Lee”), the managing director of WFS.20 Mr Lee’s evidence was that he had personally signed three of the key documents which WFS relies on to defend CIMB’s claims. Like Ms Bolan, his evidence was ultimately not relevant to the proceedings.

The parties’ cases CIMB’s case

CIMB claims that Panoil assigned to it certain rights under the Sales Documents pursuant to the Debenture.21 These Sales Documents incorporated cl 8.2 of Panoil’s Terms and Conditions, which provide that WFS was obliged to pay Panoil for each sales invoice “free … of set-off”.22

The details of the 11 Panoil Invoices are as follows:23

Sales Confirmation Ref. No. Invoice Date Invoice No. Invoice Amount (USD) Late Payment Interest as at 19 Feb 2018 at 2% per month (USD)
SO-1706-0986 6 July 2017 PS-B17/07-0016 381,602.89 50,625.98
SO-1706-0964 9 July 2017 PS-B17/07-0025 395,953.61 51,737.94
SO-1707-0996 10 July 2017 PS-B17/07-0028 396,532.50 51,813.58
SO-1707-1027 (Amended Sales Confirmation) 20 July 2017 PS-B17/07-0047 526,258.98 64,905.27
SO-1707-1062 31 July 2017 PS-B17/07-0083 189,568.67 21,989.97
SO-1707-1065 31 July 2017 PS-B17/07-0087 204,165.00 23,683.14
SO-1707-1073 6 August 2017 PS-B17/08-0004 304,351.57 34,087.38
SO-1707-1080 7 August 2017 PS-B17/08-0008 1,890,456.80 210,470.86
SO-1708-1091 10 August 2017 PS-B17/08-0017 410,579.72 44,890.05
SO-1708-1102 10 August 2017 PS-B17/08-0023 90,013.13 9,841.44
SO-1707-1111 12 August 2017 PS-B17-08-0030 304,160.95 32,849.38

In total, CIMB claims US$5,093,643.82 and late payment interest of US$596,894.9924 under the rights contained in the Sales Documents pursuant to the Debenture.

WFS’ case

WFS denies the authenticity of the Debenture. WFS also maintains that, as a matter of contractual interpretation, the Debenture did not assign Panoil’s rights under the Sales Documents to CIMB.

In addition, WFS does not admit that the Sales Documents governed the Sales Transactions. Instead, WFS claims that each of the Subject Transactions was covered by at least one of the following documents:25 a contract of affreightment between WFS and Panoil dated 30 December 2016 (“the 2016 COA”); a contract of affreightment between WFS and Panoil dated 11 July 2017 (“the 2017 COA”); a Transportation Agreement M/T “OPHELIA” dated 1 January 2017 (“the 2017 TA”); and an agreement between WFS and Panoil on or around 20 August 2014, providing for the mutual setting off of certain payable sums (“the 2014 Offset Agreement”).

I refer to the first three documents collectively as the “Umbrella Contracts”.

Essentially, WFS contends that the Subject Transactions were part of a composite “buy-sell” relationship in which Panoil sold fuel oil to WFS before Panoil bought the same quantity of oil from WFS.26 Thereafter, the oil would be delivered by Panoil to WFS’ vessels.27 This arrangement was governed by the Umbrella Contracts and/or the 2014 Offset Agreement. Under these contracts, WFS had rights of set-off exercisable against Panoil. Having exercised these rights against Panoil, WFS claims that it no longer owes CIMB.

WFS also denies that cl 8.2 of Panoil’s Terms and Conditions had been successfully incorporated into any of the Sales Documents and, in particular, into the Sales Confirmations. Accordingly, WFS retained its rights of set-off. WFS successfully exercised these rights of set-off against Panoil and is therefore no longer liable to CIMB in respect of the Subject Transactions. Finally, WFS submits that CIMB must prove “loss” in order to succeed in its claims.

Issues to be determined

The following issues arise in this action: whether CIMB has proven the authenticity of the Debenture; have Panoil’s rights under the Sales Documents been assigned under the Debenture; which documents governed the Subject Transactions; in any event, whether WFS was entitled to set-off the sums due under the Subject Transactions before the Notice of Assignment; and whether CIMB is required to prove loss.

Is the Debenture authentic?

The Debenture contains two signatures purportedly belonging to Alvin Yong Chee Ming (“Yong”), Panoil’s former managing director, and Lim Shi Zheng (“Lim”), a director of Panoil. WFS insists that CIMB proves these signatures belong to Yong and Lim.

CIMB’s treatment of the original Debenture in this suit is relevant in two aspects.

First, the late disclosure of the original Debenture. CIMB disclosed a copy of the Debenture to WFS by way of a letter from its solicitors on 14 February 2018. Similarly, it disclosed a copy of the Debenture in its list of documents dated 28 September 2018. However, the original Debenture was only disclosed to WFS on 24 October 2019, when CIMB’s solicitors wrote to WFS’ solicitors informing them that the “original deed [was] available for [their] inspection…” WFS inspected the original Debenture on 25 October 2019. Having inspected the original Debenture, WFS filed a Notice of Non-Admission (“the Notice”) as required by O 27 r 4(2) of the Rules of Court (Cap 322, R 5, 2014 Rev Ed) (“ROC”). The trial commenced on 29 October 2019. No reason...

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1 cases
  • CIMB Bank Bhd v World Fuel Services (Singapore) Pte Ltd and another appeal
    • Singapore
    • Court of Three Judges (Singapore)
    • 5 March 2021
    ...Berhad (“CIMB”) against the decision of the High Court judge (the “Judge”) in CIMB Bank Berhad v World Fuel Services (Singapore) Pte Ltd [2020] SGHC 117 (the “Judgment”). The Judge dismissed CIMB’s claims in Suit No 184 of 2018 (“HC/S 184/2018”) on the ground that the authenticity of a deed......

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