Otech Pakistan v Clough Engineering: Inducement of Breach of Contract & Striking Out Claim
Otech Pakistan Pvt Ltd sued Clough Engineering Ltd for breach of contract and William Harold Clough for inducing that breach, relating to a fee agreement for services rendered in connection with contracts between Clough Engineering and Oil and Gas Development Co Ltd. The High Court of Singapore, presided over by Justice Kan Ting Chiu, dismissed the defendants' application to strike out the plaintiff's claim against the second defendant, William Harold Clough, for inducing the first defendant to breach the contract.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Application to strike out the plaintiff's claim dismissed.
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Otech Pakistan sued Clough Engineering for breach of contract and William Clough for inducing the breach. The court dismissed the application to strike out the claim.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Otech Pakistan Pvt Ltd | Plaintiff | Corporation | Claim not struck out | Neutral | Wendy Tan Poh Ling, Anand Su Yin |
| Clough Engineering Ltd | Defendant | Corporation | Application to strike out claim dismissed | Lost | Surenthiraraj s/o Saunthararajah |
| William Harold Clough | Defendant | Individual | Application to strike out claim dismissed | Lost | Surenthiraraj s/o Saunthararajah |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Kan Ting Chiu | Judge | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Wendy Tan Poh Ling | Haq and Selvam |
| Anand Su Yin | Haq and Selvam |
| Surenthiraraj s/o Saunthararajah | Harry Elias Partnership |
4. Facts
- Otech Pakistan was engaged by Clough Engineering to assist with claims against Oil and Gas Development Co Ltd.
- Clough Engineering agreed to pay Otech Pakistan 40% of any amount recovered from OGDCL in excess of US$8m.
- The agreement was renegotiated to 20% of the net amount recovered with no minimum.
- Clough Engineering settled its claims against OGDCL for US$7,515,000.
- Clough Engineering did not pay Otech Pakistan its agreed fees of US$1,503,000.
- William Harold Clough allegedly instructed representatives of Clough Engineering not to pay Otech Pakistan.
- William Harold Clough was a major shareholder of Clough Engineering.
5. Formal Citations
- Otech Pakistan Pvt Ltd v Clough Engineering Ltd and Another, Suit 815/2004, RA 14/2005, [2005] SGHC 98
6. Timeline
| Date | Event |
|---|---|
| First defendant agreed to pay the plaintiff for its services 40% of any amount recovered from OGDCL in excess of US$8m. | |
| Agreement renegotiated to pay the plaintiff 20% of the net amount recovered from OGDCL with no minimum. | |
| First defendant representatives met with the plaintiff's director and breached the agreement to pay 20% of the settlement amount. | |
| Suit 815/2004 filed. | |
| Decision date. |
7. Legal Issues
- Inducement of Breach of Contract
- Outcome: The court considered the principle that a servant acting bona fide within the scope of his authority does not become liable for inducing breach of contract.
- Category: Substantive
- Related Cases:
- [1919] 3 KB 497
- (1853) 2 E. & B. 216
- Striking Out
- Outcome: The court dismissed the application to strike out the plaintiff's claim.
- Category: Procedural
- Related Cases:
- [2004] 4 SLR 801
8. Remedies Sought
- Damages of US$1,503,000
9. Cause of Actions
- Breach of Contract
- Inducement of Breach of Contract
10. Practice Areas
- Commercial Litigation
11. Industries
- Oil and Gas
- Construction
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Chong Hon Kuan Ivan v Levy Maurice (No 2) | High Court | Yes | [2004] 4 SLR 801 | Singapore | Cited regarding the principle that a company can only act by its officers, servants or agents and if the individual defendant was acting within the scope of his employment, as the company’s alter ego, the claim of conspiracy must fail. |
| Said v Butt | N/A | Yes | [1919] 3 KB 497 | England and Wales | Cited for the principle that a servant acting bona fide within the scope of his authority does not become liable for inducing breach of contract between his employer and a third person. |
| Lumley v. Gye | N/A | Yes | (1853) 2 E. & B. 216 | N/A | Cited as the basis for the tort of inducement of breach of contract. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| No applicable statutes | |
15. Key Terms and Keywords
15.1 Key Terms
- Inducement of breach of contract
- Striking out
- Bona fide
- Scope of authority
- Alter ego
- Controlling shareholder
15.2 Keywords
- breach of contract
- inducement
- striking out
- shareholder
- director
- good faith
- scope of authority
16. Subjects
- Contract Law
- Tort Law
- Civil Procedure
17. Areas of Law
- Civil Procedure
- Tort
- Contract Law