On 3 December 2020, the High Court in two separate claims, ruled in favour of a French bank, Union De Banques Arabes et Françaises - UBAF by granting summary judgments on bills of exchange payable to the bank pursuant to a series of export bills discounting with recourse transactions. Claudia Cheah and Aufa Radzi acted for UBAF in both claims.
 
Both claims involved bills of exchange drawn by Singapore-based Agritrade International Pte Ltd who was accused of issuing duplicate bills of lading in order to obtain financing from multiple banks for the same shipment. The defendant buyers subsequently had refused to pay the bills of exchange after having accepted the presentation of documents on the ground that the bills of lading issued by Agritrade were purportedly fraudulent.
 
The buyers submitted inter alia that the acceptance of the bills of exchange was qualified as to condition and time, and that the maturity date stated in the said bills was to give time for the parties to ascertain and ensure that all the documents submitted were original and valid. This argument was rejected by the High Court which held that a maturity date in the context of an endorsement on a bill of exchange signifies when the bill of exchange becomes due for payment.
 
Notwithstanding the buyers’ allegation that there was fraud involved in the issuance of bills of lading by Agritrade, the High Court found that the buyers had accepted the bills of exchange without qualification when they signed and placed their company stamps on the documents. Hence, there was general acceptance under the Bill of Exchange Act 1949. Any grievance which the buyers had pertaining to the validity of the bills of lading is a separate matter between the buyers and Agritrade, and does not affect the validity of the bills of exchange.
 
The High Court’s decision is welcomed as the court took cognizance of the application of the International Chambers of Commerce Uniform Rules for Collections 522 (URC 522) Revision 1995  which  is a set of rules governing the documentary collection procedure in international trade, in particular Article 13 which states that : “Banks assume no liability or responsibility for the form, sufficiency, accuracy, genuineness, falsification or legal effect of any documents(s)… nor do they assume any liability or responsibility for the description, quantity, weight, quality, condition, packing, delivery, value or existence of the goods represented by any document(s)..”