Holcim (Singapore) Pte Ltd v Precise Development Pte Ltd and another application
|Court of Three Judges (Singapore)
|Chan Sek Keong CJ
|19 January 2011
| SGCA 1
| SGCA 1
|Civil Appeal No 160 of 2009 and Summons No 697 of 2010
|Meaning of word "disrupted",commercial practicability,Event beyond the control of affected party,When requirement to take reasonable steps arises,Contract,Interpretation of force majeure clause
|24 January 2011
|Francis Xavier SC, Mohammed Reza and Low Yi Yang (Rajah & Tann LLP)
|06 April 2010,13 April 2010
|Tan Liam Beng, Tan Kon Yeng Eugene and Soh Chun York (Drew & Napier LLC)
This is yet another case in a series of cases arising from the Indonesian sand ban of 2007 (“the Sand Ban”). Not surprisingly, the crux of the present appeal turns on the interpretation of a
This is an appeal by the Appellant against the decision of the trial judge (“the Judge”) in
Briefly stated, the Appellant and the Respondent had entered into a contract (“the Contract”) for the supply of ready-mixed concrete (“RMC”) from the former to the latter. The Contract was entered into before the Sand Ban came into effect on or about 6 February 2007.
The Sand Ban created a shortage of sand and aggregates (which constituted materials required for the manufacture of RMC). The Appellant’s position was that, as a consequence of the Sand Ban, it could no longer supply RMC at pre-Sand Ban prices. Citing the Sand Ban, the Appellant informed the Respondent that it could supply RMC only if the Respondent was willing to pay a price higher than the contract price. The Respondent’s case was that the Appellant had breached the Contract by evincing an intention not to supply concrete at the prices stipulated in the contract. The Respondent sued the Appellant for breach of contract and asked for damages in the sum of $5,074,411.43. The Appellant raised three defences, one of which was based on the
The Purchaser must provide sufficient advance notice in confirming each order. The Supplier shall be under no obligation to supply the concrete if the said supply has been
disruptedby virtue of inclement weather, strikes, labour disputes, machinery breakdowns, riots, and shortage of material[, acts] of God or any other factors arising through circumstances beyond the control of the Supplier. [emphasis added]
The Judge rejected all three defences and held that the Appellant, in refusing to supply RMC to the Respondent at the contract price, was in breach of the Contract. Interlocutory judgment was awarded in favour of the Respondent, with damages for the Respondent to be assessed by the Registrar.
The Appellant has not pursued the defence relating to an alleged discharge of the Contract by mutual agreement in the present appeal (see also below at
It should, however, also be noted that the Appellant also sought, in the present appeal, to amend its defence to include an alternative defence that the Contract had been frustrated. If the application is allowed, this would constitute a second issue before this court. However, we are not persuaded that the Appellant ought to be permitted to amend its defence, not least because (as the Respondent argues) new evidence would be required (our detailed reasons on this issue are set out below at
Turning to the relevant factual background (which is crucial to the interpretation as well as application of cl 3), the Appellant entered into the Contract with the Respondent on 10 November 2006 for the supply of RMC for a warehouse project.
The Contract consists of a quotation dated 10 November 2006 and a page of Terms and Conditions. The Contract required the Appellant to supply 90,000 cubic metres (+/- 15%) of concrete to the Respondent for the project. Amongst the grades of concrete included in the Contract was Grade 30, for which the Appellant quoted a price of $65 per cubic metre. In the quotation dated 10 November 2006, paragraph 3 states as follows:
All prices fixed till 31
The salient clauses in the Terms and Conditions of the Contract included cl 3 (set out above at
Announcement of the Sand Ban
The supplier reserves the right to terminate the contract giving one month’s written notice to the Purchaser stating the reasons for the termination.
For concrete order that exceed 100[cu m], two day[s] advance booking is required.
All bookings are to be accepted by the Supplier. In no event shall the Supplier be liable for any liquidated damages arising from any cause whatsoever loss of profits consequential or otherwise.
The Indonesian government suddenly announced on or about 23 January 2007
Subsequently, in a Circular dated 1 February 2007,
The Appellant informed the Respondent by way of a letter dated 1 February 2007 that:
The letter also mentioned a meeting with the Minister of National Development on 30 January 2007, where the Minister had apparently stated that the Sand Ban was an abnormal situation that was beyond anyone’s control. The Appellant stated that it had been notified by the BCA that sand would be released from the BCA’s stockpile from 1 February 2007 and that there should be
the sudden announcement by Indonesia of the ban on sand, soil and topsoil exports to Singapore resulted in an immediate scarcity of materials and escalating prices that were totally beyond [the Appellant’s] control.
In light of all the factors mentioned above that is beyond our control, we have no alternative but to revise our concrete prices. Please find attached our quotation for the supply of concrete effective 1 February 2007 for your consideration.
The quotation referred to in this letter and attached (“the 1 February Quotation”)
On 5 February 2007, a day before the Sand Ban came into effect, one of the Appellant’s sand suppliers, Huat Shua Company Pte Ltd (“Huat Shua”), informed the Appellant that it was unable to supply sand to the Appellant, and that the supply agreement between Huat Shua and the Appellant had been terminated under its
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