Injunctions Restraining Calls on Performance Bonds - is Fraud the Only Ground in Singapore?

Lloyd's Maritime and Commercial Law Quarterly, Part 3, August 2000

Posted: 1 Feb 2001

See all articles by Hang Wu Tang

Hang Wu Tang

Singapore Management University - School of Law

Quentin Loh

Cooma, Lau & Loh

Abstract

This paper traces the divergence of Singapore law from English law with regard to the grounds upon which a call on a performance bond can be restrained, in particular the recent recognition of the Singapore Court of Appeal's ruling that "unconscionability" is a separate ground to restrain the call of a performance bond. This article examines the legal nature of an on demand performance bond and seeks to challenge the assumption that a performance bond is a mirror image of a letter of credit. This paper also discusses the recent case of Cargill International v. Bangladesh Sugar and Food Industries Corp. The paper will also seek to investigate the ambit of the notion of "unconscionability" and the general principles that can be drawn from a line of Singapore High Court decisions which presage this landmark ruling.

Keywords: Performance bond, guarantee, on demand, injunctions, international finance

JEL Classification: K20, K22, K29

Suggested Citation

Tang, Hang Wu and Loh, Quentin, Injunctions Restraining Calls on Performance Bonds - is Fraud the Only Ground in Singapore?. Lloyd's Maritime and Commercial Law Quarterly, Part 3, August 2000, Available at SSRN: https://ssrn.com/abstract=255493

Hang Wu Tang (Contact Author)

Singapore Management University - School of Law ( email )

55 Armenian Street
Singapore, 179943
Singapore

HOME PAGE: http://law.smu.edu.sg/directory/tang-hang-wu

Quentin Loh

Cooma, Lau & Loh ( email )

#43-08 OCBC Building
65 Chulia Street
049513 Singapore
Singapore
+65 5351822 (Phone)
+65 5357409 (Fax)

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