(delivering the judgment of the court): The appellants ('the bank') are a company incorporated in the United States of America with a place of business in the Republic of Singapore and is resident outside the Scheduled Territories as defined by the Exchange Control Act 1953. At all material times, Votier Investment Pte Ltd ('Votier'), a company registered in Singapore, was a customer of the bank and had an account with them.

The respondents are directors and shareholders of Votier. Votier had asked the bank for a loan. In its offer letter dated 9 January 1985 the bank wrote as follows:

American Express International Banking Corporation Shing Kwan House, 4 Shenton Way, Singapore 0106.

9 January 1985

Votier Investment Pte Ltd

36 Robinson Road

#18-01 City House

Singapore 0106

Attention: Mr YH Chong

Dear Sirs

Credit Facilities

We are pleased to advise that American Express International Banking Corporation has approved a demand loan with maximum validity of one year to you to be available as follows: AmountUS$6m Interest2¼% over three or six months SIBOR payable quarterly.

Collateral:

(1) Pledge of Sri Hartamas Corporation Berhad shares (plus bonus shares an