In 2024, our Joseph Lee, Pak Waltan, and Thong Ying Xuan successfully represented Golden Base Energy Pte Ltd (GBE) in a complex commodities dispute which originated from a Letter of Credit issued by Banque de Commerce et de Placements SA (BC) to Zenrock Commodities Trading Pte Ltd for a cargo purchase from China Aviation Oil (CAO).
The judgment is interesting for the following two reasons.
First, the transaction faced scrutiny as BC alleged the transaction was part of a circular trade involving multiple parties designed to benefit CAO financially rather than delivering actual cargo. Various claims were raised against CAO, including sham transaction allegations, deceit, and unjust enrichment.
We successfully defended the legitimacy of the transactions after a thorough examination of the facts. The Court eventually dismissed BC’s claims, emphasizing the legitimacy of circular trades and the commercial reasons behind them. The Court also explored the fraud exception relied on by CA, emphasizing the elements required to invoke it. It also clarified the distinction between the fraud exception and the tort of deceit, providing insights into its application in cases involving letters of credit and fraud allegations.
Second, and interestingly, the Court also addressed the threshold issue of standing to sue as CAO contested BC’s standing to sue since its branch had converted to a representative office. On the facts, the Court found that BC failed to establish its standing, raising questions about compensable loss.
This case serves as a reminder of the meticulous examination international trade disputes undergo, emphasizing the need for robust evidence in fraud allegations. It showcases the legal complexities surrounding commercial transactions and the importance of thorough analysis in resolving trade-related conflicts.
The link to the Court’s full judgment is here.
Lawyers
Joseph Lee
Joint Managing Director
Pak Waltan
Director
Thong Ying Xuan
Senior Associate