Exxonmobil Asia Pacific Pte Ltd v Bombay Dyeing & Manufacturing Co Ltd

• Jurisdiction: Singapore
• Judge: Tan Lee Meng J
• Judgment Date: 28 August 2007
• Neutral Citation: [2007] SGHC 137
• Court: High Court (Singapore)
• Year: 2007
• Published date: 13 December 2007
• Plaintiff Counsel: Lai Swee Fung (Unilegal LLC)
• Defendant Counsel: Paul Sandosham and Sung Jingyin (Wong Partnership)
• Subject Matter: Civil Procedure,Stay of proceedings,Whether proceedings should be stayed on ground of forum non conveniens,Conflict of Laws,Whether India more appropriate forum than Singapore for resolution of dispute
• Citation: [2007] SGHC 137

28 August 2007

Tan Lee Meng J:

1 This case involves an unmeritorious appeal by the defendant against the dismissal of its application for a stay of proceedings by the assistant registrar, Ms Charlene Tay (“AR Tay”). I dismissed the appeal and now give the reasons for my decision.

2 The plaintiff, Exxonmobil Asia Pacific Pte Ltd (“Exxonmobil”) a Singapore company, is in the business of refining, manufacturing and trading of petrochemical and petroleum products. The defendant, Bombay Dyeing & Manufacturing Co Ltd (“Bombay Dyeing”), is in the business of manufacturing and selling textiles.

3 In late September 2006, Exxonmobil and Bombay Dyeing concluded a contract (the “contract”), under which the former sold the latter 5,000 metric tonnes (+/- 5% at the seller’s option) of paraxylene in bulk at USD1,365.00 per metric tonne. Paraxylene is a raw material used in the manufacture of dimethyl terephthalate (“DMT”), which is required for the production of polyester. Bombay Dyeing has been manufacturing DMT for its textiles since 1986.

4 The paraxylene was to be carried from Singapore to Mumbai and delivery was to be made in end October or early November 2006.

5 On 9 October 2006, Bombay Dyeing informed Exxonmobil that they were having serious problems with the process air compressor in its DMT plant and that it could not take delivery of the paraxylene that it had purchased. Bombay Dyeing claimed that it was entitled to rely on the force majeure provisions in the contract to refuse to take delivery of the paraxylene.

6 On the following day, Bombay Dyeing alleged that it had entered into the contract on the basis of Exxonmobil’s representation that the contract price for the paraxylene was within the international price range for the product. Obviously unhappy about the price it had agreed to pay for the paraxylene, Bombay Dyeing sought, in its letter of 10 October 2006, to repudiate the contract on the ground of fraud and misrepresentation. What was rather interesting was that in the same breath, Bombay Dyeing offered to buy the same cargo at a reduced price. It stated that “in the interest of .. continued good relationship”, it was “ready and willing” to take delivery of the paraxylene if Exxonmobil would reduce the price to USD1,260.00 per metric tonne.

7 On 12 October 2006, Exxonmobil wrote to Bombay Dyeing to reject the allegations of fraud and misrepresentation. The relevant parts of the letter included the following:

We … refute any and all allegations of fraud or misrepresentation on our part. …

We hereby reject your repudiation of our contract dated September 28, 2006 for the sale of 5,000 MT of paraxylene. We further reject your request for a reduction in the price to 1,260$/T ….

We further reject your declaration of Force Majeure …. The unserviceability of your process air compressor does not constitute an event of Force Majeure within the terms of the contract and does not entitle you to delay performance of, or not perform, your contractual obligations. In any case the fact that you have offered to take the parcel at the reduced price is not consistent with any Force Majeure situation.

We therefore expect to receive your letter of credit by 22 October 2006.

8 As Bombay Dyeing refused to take delivery of the paraxylene at the contract price, Exxonmobil sold the said cargo to another party at a loss. On 11 January 2007, Exxonmobil informed Bombay Dyeing that it had suffered a loss of USD1,045,000.00 as a result of its attempt to mitigate the loss occasioned by the latter’s breach of contract. Apart from claiming this sum, Exxonmobil also claimed dead freight charges amounting to USD116,899.87 from Bombay Dyeing.

9 In February 2007, Exxonmobil instituted the present suit to recover damages for wrongful breach of contract by Bombay Dyeing. Exxonmobil claimed the sum of USD1,161,899.87 from Bombay Dyeing and interest on this sum.

10 Bombay Dyeing applied for the proceedings to be stayed on the ground of forum non conveniens. It alleged that India was a more appropriate forum than Singapore for the resolution of the dispute.

11 On 19 June 2007, the defendant’s application to stay the proceedings was heard by AR Tay, who dismissed it with costs. Bombay Dyeing appealed against her decision.

Whether the action should be stayed

12 As far as the approach with respect to a stay of proceedings on the ground of forum non conveniens is concerned, the Court of Appeal has endorsed on many occasions the view of Lord Goff in Spiliada Maritime Corporation v Cansulex Ltd [1987] AC 460. In Brinkerhoff Maritime Drilling Corp and Another v PT Airfast Services Indonesia and Another Appeal [1992] 2 SLR 776, Chao Hick Tin J, as he then was,...