Gunn Chit Tuan SCJ:

The American Express International Banking Corporation (hereinafter referred to as "the plaintiff") is a Singapore-based bank. In 1985, it granted facilities to a Singapore-registered company known as Cornwall Investments Pte. Ltd. The facilities were secured by a guarantee given by two persons including one Tan Loon Swan (hereinafter referred to as "the defendant"). The said guarantee was executed by the defendant on 8 July 1985, and contained a maximum liability clause of S$10.5 million together with interest at 12% per annum from the date of demand to the date of payment (pp. 57 and 63 of the appeal records).

The banking facilities enjoyed by Cornwall Investments Pte. Ltd., were also secured by a pledge of shares made by the company in favour of the plaintiff pursuant to the terms and conditions of a general loan and collateral agreement (pp. 54, 55 of the appeal records). On 23 December 1985, Cornwall Investments Pte. Ltd. and the defendant were notified by the plaintiff of a default by the former in complying with its repayment obligations and the need to meet a shortfall in the collateral value of the pledged shares. On the same day, the plaintiff