CRÉDIT AGRICOLE CORPORATE AND INVESTMENT BANK, SINGAPORE BRANCH V PPT ENERGY TRADING CO LTD

[2022] SGHC(I) 1, Singapore International Commercial Court, Jeremy Lionel Cooke IJ, 13 January 2022

Contracts — Guarantees and indemnities — Letter of credit – Sale transaction allegedly fraudulent – Contracts of indemnity – Uniform Customs and Practice for Documentary Credits 600 (UCP 600)

The claimant (CACIB), a bank, had issued a letter of credit to the defendant (PPT) for the purchase by Z of a quantity of crude oil from PPT. The oil was subject to a long trade chain directed by Z and involving Z more than once (“round-tripping”) and was next to be sold by Z to T. The sale contract between PPT and Z, and therefore the letter of credit, reflected a sale price of Platt’s plus a premium of US$3.24 per barrel. Z had assigned the proceeds of the transaction with T to CACIB as security. Prior to issuing the letter of credit, CACIB had received from Z a fabricated contract for the sale to T showing a premium of US$3.60. This was false, and the transaction was in reality conducted at a loss, creating exposure for CACIB under the letter of credit in the absence of the expected assigned proceeds.