‘Unconscionability’ as an exception to the Principle of Autonomy of Letters of Credit: How well is it entrenched in Singaporean jurisdiction.

Chhina, Ramandeep Kaur

Abstract

This paper examines the development and application of the "unconscionability" exception to the principle of autonomy of abstract payment undertakings in the jurisdiction of Singapore. It establishes that the development of this exception in Singapore has been due to the failure of the Singapore courts to mark clearly the parameters of the ‘fraud in the transaction’ defence in earlier cases, which arguably justified the application of the ‘fraud as no bona fide belief’ defence. However, this was later re-interpreted as establishing an overly broad ‘unconscionability’ exception in relation to granting an injunction, due to the fact that the courts examined the underlying contract in order to reach their decision. Nonetheless, although the ‘unconscionability’ exception could be said to be quite well entrenched in Singaporean jurisprudence now, as it has been expressly recognised as a separate defence in relation to granting an injunction under performance bonds in Singapore case law, in the majority of these cases similar conclusions could have been reached by applying the wider ‘fraud as no bona fide belief’ exception. Thus, what is termed ‘unconscionability’ in Singapore is not very different from the wider ‘fraud in the transaction’ exception.

Citation

Chhina, R. K. (2016). ‘Unconscionability’ as an exception to the Principle of Autonomy of Letters of Credit: How well is it entrenched in Singaporean jurisdiction. Lloyd’s Maritime and Commercial Law Quarterly, 412-435

• Journal Article Type: Article
• Acceptance Date: Nov 24, 2015
• Publication Date: Aug 9, 2016
• Deposit Date: Feb 13, 2018
• Journal: Lloyd's Maritime and Commercial Law Quarterly
• Print ISSN: 0306-2945
• Publisher: Taylor & Francis
• Peer Reviewed: Peer Reviewed
• Pages: 412-435
• Keywords: Letters of credit, performance bonds, unconscionability, fraud exception,
• Public URL: http://researchrepository.napier.ac.uk/Output/1038370
• Publisher URL: https://www.i-law.com/ilaw/doc/view.htm?id=368111