Petrosin Corp v Clough Engineering: Breach of Contract & Oral Agreement Dispute
Petrosin Corp Pte Ltd, a Singaporean company, sued Clough Engineering Ltd, an Australian company, in the High Court of Singapore, alleging breach of an oral agreement made on 18 October 2001, regarding the Sawan Field Project. Petrosin claimed that Clough agreed to award all local works to Petrosin exclusively, without pre-qualification or OMV approval. Tay Yong Kwang J dismissed Petrosin's claim, finding no concluded oral agreement.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Plaintiff's claim dismissed with costs at 75%.
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Petrosin Corp sued Clough Engineering for breach of an oral agreement regarding a construction project. The court dismissed Petrosin's claim.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Petrosin Corp Pte Ltd | Plaintiff | Corporation | Claim Dismissed | Lost | Kenneth Tan, Oommen Matthew |
| Clough Engineering Ltd | Defendant | Corporation | Judgment for Defendant | Won | Steven Chong, Sim Kwan Kiat, Kelvin Poon |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Tay Yong Kwang | Judge | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Kenneth Tan | Kenneth Tan Partnership |
| Oommen Matthew | Haq and Selvam |
| Steven Chong | Rajah and Tann |
| Sim Kwan Kiat | Rajah and Tann |
| Kelvin Poon | Rajah and Tann |
4. Facts
- Petrosin assisted Clough in securing the Sawan Field Project.
- Latif and Roberton negotiated three proposed agreements.
- Latif claimed an oral agreement was reached on 18 October 2001.
- Roberton took the unsigned MOU back to Perth for review.
- Clough sent a revised MOU on 28 October 2001.
- Petrosin rejected the revised MOU.
- Clough awarded the local works to other parties.
5. Formal Citations
- Petrosin Corp Pte Ltd v Clough Engineering Ltd, Suit 229/2004, [2005] SGHC 170
6. Timeline
| Date | Event |
|---|---|
| Petrosin Corp Pte Ltd incorporated. | |
| Negotiations began between Latif and Roberton on three proposed agreements. | |
| Latif met Roberton in Singapore. | |
| Latif sent an e-mail to Roberton regarding in-country work. | |
| Latif sent a draft MOU to Roberton by e-mail. | |
| Latif met the defendant’s officers in Perth. | |
| Latif raised the question of signing the MOU. | |
| Roberton replied to Latif's email. | |
| Latif and Roberton met in Singapore. | |
| Roberton e-mailed to say that he expected to send the signed agreements to Latif the next day. | |
| Roberton telephoned Latif to say that he had problems with his subordinates and further discussions on the MOU were necessary. | |
| Latif sent an e-mail asserting that “we both reached an agreement”. | |
| Roberton replied to say that he had faxed the signed copies of the three agreements to Latif. | |
| Latif met Harold Clough at the Conrad Hotel. | |
| The plaintiff’s Pakistani office received a request for pre-qualification in respect of “camp building” from the defendant. | |
| The plaintiff accepted the defendant’s repudiation. | |
| Further and Better Particulars dated. | |
| Decision Date |
7. Legal Issues
- Breach of Contract
- Outcome: The court found that there was no concluded oral agreement and therefore no breach of contract.
- Category: Substantive
- Sub-Issues:
- Failure to award subcontract work
- Introduction of new contract terms
- Formation of Contract
- Outcome: The court found that there was no concluded oral agreement on 18 October 2001.
- Category: Substantive
- Sub-Issues:
- Oral agreement
- Memorandum of Understanding
- Consideration
- Outcome: The court found that there was valuable consideration moving from the plaintiff to the defendant.
- Category: Substantive
- Sub-Issues:
- Past consideration
- Sufficiency of consideration
- Related Cases:
- [1980] AC 614
- Enforceability of Agreement
- Outcome: The court found that s 6(e) of the Civil Law Act did not apply because performance of the agreement was to begin within one year.
- Category: Procedural
- Sub-Issues:
- Agreement not to be performed within one year
- Requirement of written agreement
8. Remedies Sought
- Loss and damages
9. Cause of Actions
- Breach of Contract
10. Practice Areas
- Commercial Litigation
- Construction Disputes
11. Industries
- Construction
- Oil and Gas
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Projection Pte Ltd v The Tai Ping Insurance Co Ltd | High Court | Yes | [2001] 2 SLR 399 | Singapore | Cited for the objective test to determine whether agreement had been reached between parties. |
| Pao On v Lau Yiu Long | Privy Council | Yes | [1980] AC 614 | United Kingdom | Cited regarding past consideration and the burden of proving valuable consideration. |
| SM Integrated Transware Pte Ltd v Schenker Singapore (Pte) Ltd | High Court | Yes | [2005] 2 SLR 651 | Singapore | Cited regarding whether e-mail correspondence are included in the words “in writing” for the purpose of s 6(d) of the Civil Law Act. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Civil Law Act (Cap 43, 1999 Rev Ed) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Memorandum of Understanding
- Local works agreement
- Sawan Field Project
- Pre-qualification
- OMV approval
- In-country work
- Agency agreement
- Subcontract
- Right of first refusal
15.2 Keywords
- contract
- agreement
- construction
- Sawan Field Project
- MOU
- breach of contract
- oral agreement
16. Subjects
- Contract Law
- Construction Law
- Breach of Contract
- Oral Agreement
17. Areas of Law
- Contract Law
- Construction Law