Singapore court upholds injunction blocking US$2m guarantee call

High Court finds demand made fraudulently.

The Singapore High Court upheld an interim injunction restraining Anlima Meghnaghat Power Plant Limited from calling on a US$2m bank guarantee issued by Standard Chartered Bank, after finding the demand was made fraudulently.

The ruling arose from an application by GE Vernova Parts & Products GmbH to block payment pending arbitration.

The dispute centred on a December 2021 reservation agreement under which Anlima paid a non-refundable US$2m fee for GE to reserve a gas turbine, later amended to cover a different turbine model, with the reservation period extended to 31 Dec. 2025.

The court found that the agreement was not a supply contract and did not obligate Anlima to purchase the turbine, nor GE to refund the fee absent a breach.

Justice Chan Seng Onn held that GE had continued to comply with its contractual obligation to reserve the turbine price and that the agreement was not frustrated by the cancellation of Anlima’s power project letter of intent in Bangladesh.

As a result, the court rejected Anlima’s argument that it was entitled to recover the reservation fee and ruled that there was no total failure of consideration.

The court concluded that Anlima knew or could not have honestly believed that its demand on the bank guarantee was valid, noting that Anlima had already benefited from most of the reservation period when it made the call.

The injunction was therefore maintained, with costs reserved to the ongoing arbitration between the parties.