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Commodities in Focus Weekly - Issue 89
Banque de Commerce et de Placements SA, DIFC Branch & Anor v China Aviation Oil (Singapore) Corporation Ltd [2024] SGHC 145
This case is one instalment of various legal disputes that arose out of the collapse of the Singapore commodities trader, ZenRock Commodities Trading Pte Ltd ("ZenRock"), and is yet another example of how financing banks are seeking recovery of or resisting payment under letters of credit on the basis that the underlying contracts are fraudulent.
The key allegation asserted by the plaintiffs, collectively Banque De Commerce Et De Placements SA ("BCP"), was that the defendant, China Aviation Oil (Singapore) Corporation Ltd ("CAO"), was involved in a sham or fraudulent contract with ZenRock. On that basis, BCP sought to recover the monies paid out to CAO under the letter of credit.
In June 2024, the Singapore Court ruled that the sale contract between CAO and ZenRock was a legitimate one, despite no physical cargo passing from CAO to ZenRock and the other parties in the chain transaction as BCP failed to prove its allegations of fraud, negligent misrepresentation, unjust enrichment and conspiracy.
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