This month, DCW unpacks the legal and practical shifts reshaping trade finance interpretation. Why are ICC Opinions becoming increasingly scarce?
Writing as a trade finance professional with a long background in the business, Dave Meynell offers his personal views on factors contributing to the sharp reduction in ICC Official Opinions issued over the past several years.
With the causation defence being increasingly engaged in misdelivery cases, there is a great deal for banks and shipowners to learn from The “Maersk Katalin” case.
Applicant appealed Singapore trial court decision granting partial injunction on performance bond.
To support its excavation obligations for a train-line project, Ee Hup Construction Pte Ltd. (Subcontractor/Applicant) applied for and obtained an SGD 501,163 on-demand performance bond issued by India International Insurance Pte Ltd. (Issuer) in favour of China Jingye Engineering Corp. (Contractor/Beneficiary). Contractor/Beneficiary was engaged by the Land Transport Authority of Singapore (Principal) for construction of the Bedok South Mass Rapid Transit station and related tunnels. Performance bond value constituted 10% of the subcontract “lump sum” due to Subcontractor/Applicant upon completion. The bond expired 31 May 2024 and contained an auto-extension clause whereby it would extend for successive 180-day periods absent 90-day notice prior to expiration that Issuer would not extend. Judgment silent as to practice rules and choice of law.
Around March 2023, a dispute arose concerning alleged back-charges incurred by Contractor/Beneficiary regarding equipment, materials, manpower and “safety lapses”. While Subcontractor/Applicant issued a Payment Claim for SGD 1,909,794.65 for works allegedly completed, Contractor/Applicant issued its Payment Response acknowledging payment of only SGD 63,938.87, citing SGD 327,656.17 in back-charges.
Multiple instances of arbitration ensued whereby Subcontractor/Applicant forwarded Payment Claims alleging sums due and Contractor/Beneficiary raised Payment Responses alleging back-charges and other expenses due to fault by Subcontractor/Applicant. First instance adjudicator determined Contractor/Beneficiary owed Subcontractor/Applicant SGD 642,307.63; that decision did not consider back-charges as Contractor/Beneficiary withdrew those allegations therein. A request by Subcontractor/Applicant to review that determination was dismissed.
Writing as a trade finance professional with a long background in the business, Dave Meynell offers his personal views on factors contributing to the sharp reduction in ICC Official Opinions issued over the past several years.
With the causation defence being increasingly engaged in misdelivery cases, there is a great deal for banks and shipowners to learn from The “Maersk Katalin” case.
URDG 758 Article 15(c) makes clear that the requirement stated in Article 15(a) always applies unless expressly excluded in the guarantee, but does ISDGP help or harm in explaining this provision?
Four years after the Association of Banks in Singapore (ABS) roll out of a “Code of Best Practices – Commodity Financing”
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