Reed Smith Client Alerts

The case in question was CIMB Bank Bhd v. World Fuel Services (Singapore) Pte Ltd [2020] SGHC 117. The decision was delivered on 9 June 2020 by the Singapore High Court.

The judgment addresses questions some of which have been the subject of keen interest and recurring enquiries in the first half of 2020. They relate to claims by a bank under assignments and other security documents over rights in commodities supply contracts and receivables under such contracts.

Authors: Dan Perera Omar Al-Ali Kyri Evagora Kohe Hasan Justine Barthe-Dejean Philip Orme Johnny Lim (Resource Law LLC)

Background and facts

In late June 2016, CIMB Bank Berhad (CIMB) provided loan facilities to Panoil Petroleum Pte Ltd (Panoil). Funds advanced to Panoil by CIMB were purportedly secured by an all monies limited debenture over all of the goods and/or receivables relating to the goods, as well as documents representing the goods financed by CIMB (the Debenture). 

Between July and August 2017, Panoil issued 11 sales confirmations (the Sales Confirmations) and 11 related invoices (together the Contracts) to its counterparty, World Fuel Services (Singapore) Pte Ltd (WFS). The Sales Confirmations related to the sale of 11 sales and deliveries of marine fuel oil by Panoil to WFS. The Sales Confirmations were said by CIMB to incorporate Panoil’s Terms and Conditions for Sales of Marine Fuel (the T&Cs). The T&Cs contained an express ‘no set-off’ provision.

Panoil’s rights under the Contracts were among the rights purportedly assigned to CIMB under the Debenture. 

In August 2017, CIMB found that Panoil was experiencing financial difficulties. CIMB proceeded to issue and serve on WFS a notice of assignment of Panoil’s rights under the Contracts and the related receivables. In February 2018, CIMB sought to exercise its rights as the legal assignee of those rights by enforcing the Debenture. CIMB brought claims against WFS for sums due and owing from WFS to Panoil under the Contracts.