Proving Actual Loss for Calls on Indemnity Bonds

In Chiu Teng Construction Co Pte Ltd v. AXA Insurance Pte Ltd [2020] SGHC 234, the High Court revisited the propositions relating to indemnity bonds set forth in JBE Properties Pte Ltd v. Gammon Pte Ltd [2011] 2 SLR 47  and York International Pte Ltd v. Voltas Ltd [2013] 3 SLR 1142. The High Court held that a beneficiary under an indemnity bond must prove that it has suffered actual loss as a matter of fact. This can only be definitively done after an independent determination, or arbitral award or by way of an admission; the provision of documents, regardless of volume and specificity would be insufficient to conclusively prove the matter.  The High Court went on to hold that the court is in a position to determine whether the beneficiary, who is before the court, has adduced sufficient evidence to definitively prove its case.  It allowed the call on the bond.

Note:  The case is currently on appeal, with the hearing fixed for May 2021.

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