In recent years, Singapore Courts have had a number of opportunities to consider the scope and applicability of the fraud exception, which has been invoked by banks to resist payment under letters of credit. However, is it possible to resist payment in circumstances where the fraud exception has not been established, but where the beneficiary has breached warranties provided to the issuing bank?
In the recent decision of Crédit Agricole Corporate & Investment Bank v PPT Energy Trading Co Ltd [2023] SGCA(I) 7 (“CACIB v PPT”), the Singapore Court of Appeal (“SGCA”) answered this question in the affirmative. The SGCA allowed the appeal by Crédit Agricole Corporate & Investment Bank (“CACIB”) on the narrow ground that PPT Energy Trading Co Ltd (“PPT”) had breached its warranty under the letter of indemnity that it had marketable title at the time title passed.
This article follows from our earlier article on the Singapore International Commercial Court’s decision in Crédit Agricole Corporate & Investment Bank v PPT Energy Trading Co Ltd [2022] SGHC(I) 1, which can be accessed here: Defences to Payment in Letter of Credit Transactions
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For further information, please contact:
Probin Dass, Partner, Shook Lin & Bok
probin.dass@shooklin.com
