HSBC v DNKH Logistics: Indemnity Clause Interpretation in Lease Agreement

In HSBC Institutional Trust Services (Singapore) Ltd (as trustee of AIMS AMP Capital Industrial REIT) v DNKH Logistics Pte Ltd, the High Court of Singapore dismissed the plaintiff's claim against the defendant, DNKH Logistics Pte Ltd, concerning the interpretation of an indemnity clause in a lease agreement. The plaintiff, HSBC Institutional Trust Services (Singapore) Ltd, sued as trustee of AIMS AMP Capital Industrial REIT, sought indemnity from the defendant for losses arising from a fire at the leased premises. The court ruled that the indemnity clause only applied to third-party claims and not to direct claims between the landlord and tenant. The court dismissed the plaintiff's claim.

1. Case Overview

1.1 Court

General Division of the High Court of the Republic of Singapore

1.2 Outcome

Plaintiff's claim dismissed.

1.3 Case Type

Civil

1.4 Judgment Type

Judgment

1.5 Jurisdiction

Singapore

1.6 Description

The court interpreted an indemnity clause in a lease agreement, ruling it applied only to third-party claims, not direct claims between landlord and tenant.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
HSBC Institutional Trust Services (Singapore) Ltd (as trustee of AIMS AMP Capital Industrial REIT)PlaintiffCorporationClaim DismissedDismissed
DNKH Logistics Pte LtdDefendantCorporationJudgment for DefendantWon

3. Judges

Judge NameTitleDelivered Judgment
Tan Siong ThyeJudge of the High CourtYes

4. Counsels

Counsel NameOrganization
Julia Emma DcruzRamdas & Wong
S Selvam SatanamRamdas & Wong
Aqbal Singh s/o Kuldip SinghPinnacle Law LLC
Tan Yee Pin JeffPinnacle Law LLC

4. Facts

  1. HSBC Institutional Trust Services (Singapore) Ltd was the landlord of the premises.
  2. DNKH Logistics Pte Ltd was the tenant of the premises from 16 July 2012 to 15 July 2016.
  3. A fire occurred at the premises on 9 August 2015.
  4. The fire originated from an area where peppercorns belonging to McCormick Ingredients Southeast Asia Pte Ltd were stored.
  5. The cause of the fire could not be ascertained but was likely of electrical origin.
  6. The plaintiff's insurer, Great Eastern General Insurance Limited, paid out losses to the plaintiff as a result of the fire.
  7. The plaintiff claimed against the defendant based on a contractual indemnity clause in the lease.

5. Formal Citations

  1. HSBC Institutional Trust Services (Singapore) Ltd (as trustee of AIMS AMP Capital Industrial REIT) v DNKH Logistics Pte Ltd, Suit No 90 of 2021, [2022] SGHC 248

6. Timeline

DateEvent
Lease commenced
Lease agreement signed
Fire occurred at the premises
Lease ended
Suit filed
Trial began
Agreed Statement of Facts dated
Plaintiff’s Closing Submissions dated
Defendant’s Written Submissions dated
Judgment reserved
Judgment issued

7. Legal Issues

  1. Interpretation of Contractual Indemnity Clause
    • Outcome: The court held that the indemnity clause applied only to third-party claims and not to direct claims between the landlord and tenant.
    • Category: Substantive
    • Sub-Issues:
      • Scope of indemnity
      • Third-party claims vs. direct claims
      • Application of contra proferentem rule
    • Related Cases:
      • [2017] SGHC 22
      • [2018] 1 SLR 170
      • [2007] 3 SLR(R) 782
      • [1997] 2 SLR(R) 897
      • [1952] AC 192

8. Remedies Sought

  1. Indemnification for losses and damages

9. Cause of Actions

  • Breach of Contract (Indemnity Clause)

10. Practice Areas

  • Commercial Litigation

11. Industries

  • Logistics
  • Warehousing
  • Real Estate

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
CIFG Special Assets Capital I Ltd v Polimet Pte LtdHigh CourtYes[2017] SGHC 22SingaporeDiscussed the interpretation of indemnity clauses, noting that it depends on the parties' intent.
CIFG Special Assets Capital I Ltd (formerly known as Diamond Kendall Ltd) v Ong Puay Koon and others and another appealCourt of AppealYes[2018] 1 SLR 170SingaporeAffirmed the principles of contractual interpretation apply in construing an indemnity clause.
Kay Lim Construction & Trading Pte Ltd v Soon Douglas (Pte) Ltd and anotherHigh CourtYes[2013] 1 SLR 1SingaporeHeld that principles of construction relevant to exemption clauses are equally relevant to indemnity clauses.
Saatchi & Saatchi Pte Ltd and others v Tan Hun Ling (Clarke Quay Pte Ltd, third party)High CourtYes[2006] 1 SLR(R) 670SingaporeObserved that there is a presumption in law that an indemnity would not be readily granted to a party against a loss caused by its own negligence.
Ailsa Craig Fishing Co Ltd v Malvern Fishing Co Ltd and Securicor (Scotland) LtdHouse of LordsYes[1983] 1 All ER 101United KingdomObserved the inherent improbability that a party intended to release the other from a liability that would otherwise fall on him.
Canada Steamship Lines Ltd v The KingPrivy CouncilYes[1952] AC 192CanadaDiscussed the rule that an indemnity clause must clearly state the extent to which one contracting party is to indemnify the other.
Zurich Insurance (Singapore) Pte Ltd v B-Gold Interior Design & Construction Pte LtdCourt of AppealYes[2008] 3 SLR(R) 1029SingaporeEstablished principles to be applied in the interpretation of contracts.
Sembcorp Marine Ltd v PPL Holdings Pte Ltd and another and another appealCourt of AppealYes[2013] 4 SLR 193SingaporeEstablished principles to be applied in the interpretation of contracts.
Y.E.S. F&B Group Pte Ltd v Soup Restaurant Singapore Pte Ltd (formerly known as Soup Restaurant (Causeway Point) Pte Ltd)Court of AppealYes[2015] 5 SLR 1187SingaporeEstablished principles to be applied in the interpretation of contracts.
Lucky Realty Co Pte Ltd v HSBC Trustee (Singapore) LtdCourt of AppealYes[2016] 1 SLR 1069SingaporeEstablished principles to be applied in the interpretation of contracts.
Yap Son On v Ding Pei ZhenCourt of AppealYes[2017] 1 SLR 219SingaporeEstablished principles to be applied in the interpretation of contracts.
Sunny Metal & Engineering Pte Ltd v Ng Khim Ming EricCourt of AppealYes[2007] 3 SLR(R) 782SingaporeInterpreted an indemnity clause as applying only to third-party claims.
Marina Centre Holdings Pte Ltd v Pars Carpet Gallery Pte LtdCourt of AppealYes[1997] 2 SLR(R) 897SingaporeInterpreted an indemnity clause as applying only to third-party claims.
The LindenhallEnglish Court of AppealYes[1945] P 8EnglandHeld that an indemnity clause must be construed as being limited to claims made against the port authority by third parties.
Singapore Telecommunications Ltd v Starhub Cable Vision LtdCourt of AppealYes[2006] 2 SLR(R) 195SingaporeStates that if a party seeks to exclude or limit his liability (or seeks to have his liability indemnified), he must do so in clear words
Compania Naviera Aeolus, SA v Union of IndiaHouse of LordsYes[1964] AC 868United KingdomDiscussed the noscitur a sociis canon of interpretation.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
No applicable statutes

15. Key Terms and Keywords

15.1 Key Terms

  • Indemnity clause
  • Lease agreement
  • Third-party claims
  • Direct claims
  • Landlord
  • Tenant
  • Premises
  • Subrogation
  • Contra proferentem
  • Occurrences

15.2 Keywords

  • indemnity
  • lease
  • contract
  • fire
  • third party
  • DNKH Logistics
  • HSBC
  • Singapore
  • High Court
  • interpretation

17. Areas of Law

Area NameRelevance Score
Contractual terms95
Indemnity costs90
Contract Law90
Commercial Leasing80
Contracts70
Breach of Contract60
Remedies60
Damages50
Estoppel30
Statutory Demand20
Agency Law10
Warranty of Authority10
Torts10
Property Law10
Personal Injury10
Insurance10
Guarantee10

16. Subjects

  • Contract Law
  • Lease Agreements
  • Indemnification
  • Commercial Property