GE Vernova Parts & Products GmbH v Anlima Meghnaghat Power Plant Limited and another

GE Vernova Parts & Products GmbH, a Swiss power equipment company, entered into a reservation agreement dated 4 December 2021 with Anlima Meghnaghat Power Plant Limited, the Bangladeshi developer of a power plant project. Anlima paid a reservation fee of US$2,000,000 for GE to reserve a gas turbine. Clause 3 stated that the fee was paid subject to GE not being in breach of the agreement and that it was not refundable. GE procured a standby letter of credit from Standard Chartered Bank (Singapore) Limited for US$2,000,000 in Anlima's favour, payable on a statement that GE was in breach. In 2023 the parties switched the reservation to a different turbine model and extended the stop date to 31 December 2025.

In 2025 Anlima asserted that the agreement had been frustrated because the Bangladesh Power Development Board had cancelled its letter of intent for the project, and demanded the fee back. GE replied that there was no frustration, that it continued to perform, and that the fee was non-refundable. Anlima then called on the guarantee on or around 4 August 2025. On 14 August 2025 the court granted GE an ex parte interim injunction restraining payment pending arbitration in Originating Application No 872 of 2025. Anlima applied to set it aside by Summons No 2496 of 2025, arguing that it honestly believed in its demand and that GE had not made full and frank disclosure.

1. Whether GE showed a sufficient case that Anlima's call on the bank guarantee was fraudulent.
2. Whether the reservation agreement was frustrated by the cancellation of the letter of intent.
3. Whether a term could be implied entitling Anlima to recover the fee on a total failure of consideration.

It was not disputed that, under English law governing the guarantee, fraud was the only ground for restraining a call, and Singapore law was the same. Applying Shanghai Electric Group Co Ltd v PT Merak Energi Indonesia and another [2010] 2 SLR 329, the applicant must show that the beneficiary knew its claim was invalid or had no honest belief in it, and clear evidence is required; it suffices if fraud is the only realistic inference.

The judge found that the reservation agreement was not a supply contract. Anlima had no obligation to buy the turbine, and the agreement contemplated a separate supply contract. It had chosen a reservation precisely because the project might not proceed, so the cancellation of the letter of intent was a risk already in contemplation. The common purpose was the reservation itself, which GE could and did continue to perform, so the agreement was not frustrated and the Law Reform (Frustrated Contracts) Act 1943 did not apply.

Clause 3 made the fee refundable only on GE's breach. Anlima did not allege that GE had failed to reserve the turbine. The proposed implied term contradicted the express wording, and the fee was neither provisional nor an advance payment.

GE had repeatedly told Anlima it was complying, and Anlima knew this. It called on the guarantee after enjoying most of the reservation period, with only a few months left. On the material before the court, the only realistic inference was that Anlima knew its call was invalid or could not honestly have believed it valid, so the call was fraudulent and the injunction stood.

Chan Seng Onn SJ dismissed Anlima's application and upheld the ex parte interim injunction. Because the parties were in arbitration over the dispute, costs were reserved to the arbitration. Anlima has filed an appeal.