Singapore court blocks ‘fraudulent’ US$2 million bank guarantee call in cross-border power dispute

[SINGAPORE] The High Court has upheld an injunction preventing a Bangladeshi power company from claiming US$2 million under a bank guarantee issued by Standard Chartered Bank (Singapore), in a ruling that found the demand “fraudulent”.

In his judgment issued on Monday (Jan 26), Senior Judge Chan Seng Onn dismissed an application by Bangladeshi power company Anlima Meghnaghat Power Plant to set aside an interim injunction restraining it from receiving payment under the guarantee.

Justice Chan found that the company had acted fraudulently when it called on the guarantee issued by Standard Chartered.

In 2021, United States-listed power equipment company GE Vernova made a reservation agreement with Anlima, under which the Bangladeshi firm paid a US$2 million non-refundable reservation fee to secure a gas turbine at a fixed price for a power plant project.

The agreement explicitly stated that the fee was non-refundable unless GE Vernova breached its contractual obligations.

When the Bangadesh Power Development Board cancelled Anlima’s letter of intent for the project in November 2024, the firm sought to recover the reservation fee by making a demand on the bank guarantee that GE Vernova had procured from Standard Chartered.

GE Vernova successfully obtained an ex parte interim injunction on Aug 14, 2025, restraining both Anlima from receiving payment and Standard Chartered from paying out under the guarantee, pending arbitration between the parties.

Clear contractual agreements

Justice Chan found that the reservation agreement was “clearly not a supply contract” and that Anlima had no contractual obligation to purchase the turbine.

GE Vernova’s sole obligation was to reserve the turbine at a fixed price until Dec 31, 2025, which it had done throughout the dispute.

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“GE had repeatedly affirmed in its letters that it had complied and continued to comply with its obligations under the reservation agreement,” said Justice Chan.

Anlima had argued that the contract could no longer be performed when the power purchase agreement fell through, and that it was entitled to recover the fee since it could no longer use the reserved turbine for its intended purpose.

Justice Chan rejected this, noting that the reservation fee was “expressly agreed by GE and Anlima to be non-refundable and it was not provisional in nature”.

Further, the court noted that it was around month 44, out of the 48-month reservation period when Anlima made the demand in August 2025, with only months remaining until the agreement’s expiry.

Anlima’s call on the guarantee was “opportunistic and unfair”, said the judge. “The only realistic inference for the court to draw was that Anlima knew that the call on the bank guarantee was invalid and/or that Anlima could not have honestly believed that the call on the bank guarantee was a valid call.”

Christopher Chong, Chen Zhihui and Isaac Lee of Drew & Napier represented GE Vernova, while Lim Shack Keong and Ang Minghao of Legis Point acted for Anlima.