Singapore: The Singapore High Court has dismissed an appeal by a Bahrain bank, Arab Banking Corporation (now known as Bank ABC), against engineering firm Boustead Singapore, Boustead said in a Singapore Exchange filing yesterday.
It added that the Court of Appeal’s decision on Thursday to dismiss the case “finally and conclusively discharges the company’s liability to Arab Bank under the facility agreements,” The Business Times of Singapore reported yesterday.
Bank ABC’s appeal was regarding a $18.8 million dispute between it and Boustead that lasted four years.
The dispute had started from a 300m Singapore dollars contract Boustead entered into in 2007 through a joint venture to build a township in Libya.
Boustead had at that time provided two separate counter-guarantees, via Bank ABC, for advance payment and performance to Libya’s Bank of Commerce and Development.
The Bank of Commerce and Development was then supposed to pay these amounts – $3.7m for the advance payment guarantee and $15m for the performance guarantee – to a government entity, Organisation for Development of Administrative Centres (ODAC), which had awarded the contract to the joint venture.
But when civil war broke out in Libya in February 2011, Boustead pulled out of the country, halted the project and invoked a “force majeure” clause on its contract with ODAC. Boustead also got a temporary injunction from the courts to stop Bank ABC from carrying out the guarantee payments.
Faced with pressure from Libya’s Bank of Commerce and Development, Bank ABC demanded that Boustead cough up the sums and sued Boustead.
However, the Singapore High Court ruled in March 2015 that the Arab bank was not to receive payment from Boustead, and was not to make payment to Bank of Commerce and Development.
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