BCBC Singapore Pte Ltd and another v PT Bayan Resources TBK and another

JurisdictionSingapore
CourtInternational Commercial Court (Singapore)
JudgeQuentin Loh J
Judgment Date09 January 2019
Neutral Citation[2019] SGHC(I) 1
Citation[2019] SGHC(I) 1
Published date11 July 2019
Plaintiff CounselFrancis Xavier SC, Jeremy Gan, Alina Chia, Tng Sheng Rong, Ang Tze Phern and Tee Su Mien (Rajah & Tann LLP)
Defendant CounselDavinder Singh SC, Tony Yeo, Jaikanth Shankar, Chan Yong Wei, Lydia Ni, Harsharan Kaur and Jerrie Tan (Drew & Napier LLC)
Date09 January 2019
Hearing Date02 October 2018,15 November 2018,29 October 2018,05 November 2018
Docket NumberSuit No 1 of 2015
Subject MatterRemedies,Damages,Contract,Breach
Quentin Loh J, Vivian Ramsey IJ and Anselmo Reyes IJ: Introduction

The facts of this case have been set out in our First and Second Tranche Judgments, reported in BCBC Singapore Pte Ltd and another v PT Bayan Resources TBK and another [2016] 4 SLR 1 and BCBC Singapore Pte Ltd and another v PT Bayan Resources TBK and another [2017] 5 SLR 77 respectively. There was no appeal against our First Tranche Judgment. The Defendants appealed against our Second Tranche Judgment. Unless otherwise specified, we will use here the abbreviations defined in the Court of Appeal’s Judgment on the Defendants’ appeal (reported in PT Bayan Resources TBK and another v BCBC Singapore Pte Ltd and another [2018] SGCA(I) 6).

Save on one ground, the Court of Appeal dismissed the Defendants’ appeal. The one ground related to the issue of whether BCBCS could fund KSC on its own up to the point when commissioning and testing of the Tabang Plant was completed or until June 2012. The Court of Appeal held that we should have determined that issue on the evidence before us during the Second Tranche hearing. If there was insufficient evidence on the issue, the Court of Appeal held that we should have determined the same on the burden of proof. The Court of Appeal consequently remitted the matter back to us for a decision on that one issue.

This Judgment is consequently our determination on the remitted issue of whether BCBCS was able to fund KSC until the completion of commissioning and testing at the Tabang Plant or until June 2012. To assist in our decision, the parties provided two rounds of written submissions on the issue. In the first round they set out their respective cases on how we should determine the outstanding issue. In the second round, they responded to each other’s submissions. Thereafter, the Defendants sought (and were granted) leave to submit a brief written submission in further reply to the Plaintiffs. Upon considering the parties’ written submissions, we did not feel that it was necessary to hear oral submissions from the parties and informed them accordingly.

Background

There is a dispute between the parties as to what precisely the Court of Appeal remitted to us to determine. It is therefore convenient to set out here what the Court of Appeal said in the relevant paragraphs of its Judgment. Those were as follows: The Court declined to find, in any event, that only nominal damages could be awarded to BCBCS. Among other things, it found that it was not open to it, at that stage, to exclude the possibility of the Tabang Plant reaching commercial production within a reasonable time. Although the short-term contractors at the plant had been asked to suspend the modification works there on 22 November 2011, more than 300 regular employees of KSC continued to carry out the modification works. Further, while the plant had been put into care and maintenance on 15 December 2011, it could have been reactivated within a matter of days (Second Tranche Judgment at [210]–[212]). The above factors were not, however, conclusive because a critical element of BR’s case in this respect was that KSC would not have been funded to the point where the testing and commissioning of the Tabang Plant was completed, and this in fact rendered the question of damages theoretical. As to this, the Court found that on the evidence before it, it appeared likely that BCBCS would have been prepared to fund KSC unilaterally, and that BR would not have objected to such funding by BCBCS (Second Tranche Judgment at [223]). Indeed, BR had known since at least June 2010 that BCBCS was funding KSC on its own and had not objected to such unilateral funding by BCBCS (Second Tranche Judgment at [217]–[219]). The Court, however, concluded that there was insufficient evidence before it to determine whether BCBCS was indeed in a financial position to continue funding KSC on its own all the way until the completion of the testing and commissioning of the Tabang Plant. It therefore reserved its decision on this question to the next tranche of the trial, which it observed would be “specifically devoted to causation of damage and quantum” (Second Tranche Judgment at [223]–[224]).

Whether BCBCS was able to fund KSC unilaterally

This brings us to the question of whether BCBCS could have funded KSC by itself. As we noted earlier (at [65] above), the Court reserved its decision on this issue to the next tranche of the trial on the basis that there was insufficient evidence before it (Second Tranche Judgment at [223]). It also reserved to the next tranche its decision on whether BCBCS was in substance claiming KSC’s reflective loss (Second Tranche Judgment at [230]–[231]), and whether BCBCS could rely on what might have happened pursuant to the Expansion MOU in its claim for damages (Second Tranche Judgment at [232]; see also [66] above). The Appellants submit that the Court ought to have disposed of the three aforesaid issues instead of deferring them to the next tranche of the trial. They argue that the burden falls on the Respondents to establish causation and show that BCBCS would have suffered the loss that it is claiming. Thus, if the Court was of the view at the end of the second tranche of the trial that the evidence adduced was insufficient to establish causation, it ought to have found against the Respondents and held that either the loss claimed by BCBCS was not made out or the damages awarded for such loss should be limited to certain time periods. The Appellants submit that they have been prejudiced by the Court’s failure to determine the three above-mentioned issues based on the evidence before it because the Respondents have effectively been given another chance to establish causation at the next tranche of the trial.

Respectfully, however, we consider that the Court was not entitled to defer to the third tranche the issue of BCBCS’s ability to fund KSC unilaterally. Given that this issue was intricately tied to the question of whether KSC had sufficient funds to keep operating the Tabang Plant, it seems to us to have been squarely before the Court. Moreover, looking at the Respondents’ submissions for the second tranche of the trial, it is clear to us that they were happy to address this point based on the evidence that was adduced at that tranche. For example, the following argument was made in their written submissions:

... [I]t is untrue that ... BCBCS was not prepared to further fund KSC on its own. BCBCS was the sole shareholder cash funding the joint venture from October 2009 onwards, and had every intention to continue doing so had BR complied with its continuing obligation to supply coal to KSC. Far from not being prepared to further fund KSC on its own, from 19 August 2011, BCBCS had demonstrated that it was willing and able to further fund KSC of its own accord, beyond the US$49 million it had committed under the PLFA. Mr Flannery further testified that BCBCS was further willing and able to continue cash funding the project until the Tabang Plant reached commercial production.... [emphasis added]

Accordingly, while the Court was correct to defer the issues regarding the reflective loss principle and the Expansion MOU to the third tranche of the trial, it ought to have decided the question of whether BCBCS had the financial wherewithal to fund KSC by itself. To the extent that there was insufficient evidence to arrive at a finding on this issue, it should have been determined according to who bore the burden of proof.

Conclusion on the Causation Issue

For these reasons, we find that BCBC was willing to fund KSC by itself. But we consider that the Court ought to have decided the issue of whether BCBCS had the ability to do so, and we remit the issue to the Court for determination. Save as aforesaid, we dismiss the Appellant’s submissions on the remaining aspects of the Causation Issue.

Conclusion on the appeal

In conclusion, we dismiss the Appellants’ appeal in relation to all of the four main issues set out at [68] above, save only that in respect of the Causation Issue, we remit to the Court the question of whether BCBCS had the ability to fund KSC on its own.

In its judgment the Court of Appeal referred to what we had stated at paragraphs 223 and 224 of our Second Tranche Judgment. For completeness, we set out here what we said in those paragraphs, with the addition of paragraph 222 for context: By reason of the foregoing, we do not accept that key assumptions that underpin Mr Singh’s argument have been established. In particular, we find that it has not been established that BCBCS would not have funded KSC unilaterally or that BR would have objected to BCBCS funding KSC unilaterally. Whilst on the current evidence, it seems likely that BCBCS would have been prepared to fund KSC unilaterally and BR would not have objected, we...

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2 cases
  • BCBC Singapore Pte Ltd and another v PT Bayan Resources TBK and another
    • Singapore
    • International Commercial Court (Singapore)
    • 19 December 2022
    ...After considering the parties’ written submissions (see BCBC Singapore Pte Ltd and another v PT Bayan Resources TBK and another [2019] 3 SLR 1), we found that BCBCS could have so funded KSC. The defendants’ appeal against that decision was dismissed. In Tranche 3, we dealt with damages and ......
  • BCBC Singapore Pte Ltd and another v PT Bayan Resources TBK and another
    • Singapore
    • International Commercial Court (Singapore)
    • 7 February 2022
    ...completion of commissioning and testing or until June 2012 (see BCBC Singapore Pte Ltd and another v PT Bayan Resources TBK and another [2019] 3 SLR 1 (“Remittal Judgment”) at [13]‒[19]). The Defendants’ appeal against that decision was dismissed by the Court of Appeal with no written groun......

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