Gunn Chit Tuan SCJ:

[1] 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).

[2] 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 al