Navigating the course of trade finance is not without its hazards and challenges. Varying trade arrangements and multiplicity of parties often give rise to legal issues and uncertainties. In CIMB Bank Bhd v World Fuel Services (Singapore) Pte Ltd [2021] SGCA 19, the Singapore Court of Appeal had the opportunity to consider such issues of trade finance, including claims under assignment, the resolution of competing contracts, and the right of set-off.
In this case, the plaintiff bank claimed against the defendant as the alleged assignee of purported debts owing from the defendant to the plaintiff bank’s borrower. The Court had to grapple with a clause precluding the right of set-off contained in the borrower’s standard terms and conditions on one hand and a subsisting offset agreement providing for the right of set-off between the defendant and the borrower on the other hand.
This Update looks at the key points of the Court’s judgment and the issues that should be considered by banks and borrowers alike when entering into trade finance agreements.
For more information, click here to read the full Legal Update.
