Uco Bank, Singapore Branch v Green Mint Pte Ltd and others

UCO Bank, Singapore Branch extended a credit facility to Green Mint Pte Ltd under a Facility Agreement dated 17 November 2020, which incorporated a facility letter dated 9 November 2020. The bank agreed to make available US$2,900,000 under various facilities. The facility was to be secured by personal guarantees, and the company's two directors, Mr Gupta Vaibhav (the second defendant) and Mr Arvind Sharma (the third defendant), signed guarantees under which they agreed to indemnify the bank up to US$2,900,000 and to be principal debtors jointly and severally with the company.

Green Mint did not pay on several bills and overdraft facilities. The bank recalled the facilities on 16 April 2021 and sent statutory demands to the guarantors on 27 April 2021, but nothing was paid. By the bank's determination, US$925,361.73 was due as of 19 January 2022, covering principal, interest and legal fees; cl 10.6 of the agreement made the bank's determination conclusive save for manifest error.

In Suit No 153 of 2022 the bank obtained default judgment against Green Mint on 31 May 2022, and the third defendant was made bankrupt on 4 August 2022. Against the second defendant, after repeated extensions he filed a memorandum of appearance late, on 17 January 2023, and then told the court at a pre-trial conference on 15 March 2023 that he would not file a defence. Although the bank could enter default judgment, it sought by Summons No 4463 of 2022 a judgment on the merits, because India, where it meant to enforce against his assets, does not treat a foreign judgment not given on the merits as conclusive.

1. Whether the court has power to decide a claim on its merits where the defendant is in default of defence.
2. Whether it was appropriate to exercise that power in this case.
3. Whether the bank had proved its claim against the second defendant so that judgment on the merits could be entered.

No local case had dealt with a merits judgment against a defendant in default of defence, but the court held that it had inherent power to give one. Drawing on Re Nalpon Zero Geraldo Mario [2013] 3 SLR 258, it said the correct label was the court's inherent powers rather than its inherent jurisdiction, since jurisdiction was not in doubt once the defendant had been validly served. It relied on Transasia, which dealt with default of appearance, and reasoned that the power rests not on the Rules of Court 2014, which distinguish the two kinds of default, but on inherent powers unaffected by that distinction. English cases, including Berliner Bank AG v Karageorgis and another [1996] 1 Lloyd’s Rep 426, supported the same view.

On appropriateness, the bank produced an Indian lawyer's opinion that under s 13(b) of India's Code of Civil Procedure 1908 a foreign judgment not on the merits is not conclusive. Following the test in Transasia, refusing a merits judgment would cause the bank serious injustice by blocking enforcement in India.

On proof, the affidavit evidence, read with the Facility Agreement and facility letter, established the claimed sums. The bank could rely on cl 10.6 for its determination of what was owed and, in the alternative, could substantiate the figures from the agreement and letter themselves.

The court allowed the bank's application and granted it judgment on the merits against the second defendant in terms of prayer 1 (as amended), covering US$925,361.73, contractual and penal interest from 20 January 2022 to payment, and costs from 19 January 2022 onwards on an indemnity basis under cl 20 of the Facility Agreement. It declined to send the matter to trial.