SingTel v Starhub: Breach of Contract & Interpretation of Exclusion Clause in Network Lease Agreement

Singapore Telecommunications Ltd (SingTel) sued Starhub Cable Vision Ltd (Starhub) in the Court of Appeal of Singapore, alleging breach of a Network Lease Agreement (NLA) dated 16 June 1995. SingTel claimed Starhub was improperly tapping into SingTel's facilities to transmit cable television signals to properties not covered by the NLA. The trial judge found Starhub liable for breach but held that SingTel could not recover damages due to an exemption clause in the NLA. SingTel appealed. The Court of Appeal allowed the appeal, finding Starhub in breach of contract and ordering damages to be assessed.

1. Case Overview

1.1 Court

Court of Appeal

1.2 Outcome

Appeal Allowed

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

SingTel sues Starhub for breach of contract for tapping into leased facilities. The court found Starhub liable, holding that an exclusion clause did not preclude SingTel's claim.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Singapore Telecommunications LtdAppellantCorporationAppeal AllowedWon
Starhub Cable Vision LtdRespondentCorporationAppeal DismissedLost

3. Judges

Judge NameTitleDelivered Judgment
Belinda Ang Saw EanJudgeYes
Chao Hick TinJustice of the Court of AppealNo
Yong Pung HowChief JusticeNo

4. Counsels

Counsel NameOrganization
Kannan RameshTan Kok Quan Partnership
Sean Tan Kim KangTan Kok Quan Partnership
Tan Kok QuanTan Kok Quan Partnership
Lam Sin YeeTan Kok Quan Partnership
Low Chai ChongRodyk and Davidson
Ajinderpal SinghRodyk and Davidson
Philip JeyaretnamRodyk and Davidson

4. Facts

  1. SingTel leased its network facilities to Starhub for cable television roll-out to high-rise residential properties.
  2. The Network Lease Agreement (NLA) defined the types of properties covered under the contract.
  3. Starhub tapped into the leased facilities to transmit cable television signals to properties not covered by the NLA.
  4. SingTel claimed that Starhub's breach resulted in a loss of revenue.
  5. Negotiations for a lease of facilities for excluded properties continued after the NLA was concluded but no agreement was reached.
  6. SingTel discovered Starhub had been using the facilities leased under the NLA to provide cable television services to excluded properties.

5. Formal Citations

  1. Singapore Telecommunications Ltd v Starhub Cable Vision Ltd, CA 58/2005, [2006] SGCA 5

6. Timeline

DateEvent
SCV designated as vehicle for cable television roll-out in Singapore.
Meeting held between SingTel and SCV regarding lease of facilities.
Network Lease Agreement (NLA) signed between SingTel and SCV.
SCV sought SingTel’s confirmation that the lease charges in respect of Excluded Properties would be calculated on an “incremental costs” basis.
SingTel confirmed that the pricing for the commercial and landed properties would be based on the additional fibres and ducting, and not include the Common Portion of the network already implemented for the high-rise residential properties.
SingTel provided details of revised lease charges for landed properties.
SCV referred the matter to the Telecommunication Authority of Singapore for moderation.
TAS suggested that SCV “seriously consider” SingTel’s offer at least where commercial properties were concerned.
SCV informed SingTel that it had decided not to lease the Facilities for cable television roll-out to landed properties.
SingTel stated that it respected SCV’s decision in building its own infrastructure to serve the landed property residents, and therefore withdrew all previous offers on the lease of ducting and fibre for the same said purpose.
SingTel discovered that SCV had been using the Facilities leased under the NLA to provide cable television services to Excluded Properties.
Judgment reserved.
Court of Appeal allowed the appeal.

7. Legal Issues

  1. Breach of Contract
    • Outcome: The court held that Starhub breached the Network Lease Agreement by tapping into the leased facilities to provide cable television services to excluded properties.
    • Category: Substantive
    • Sub-Issues:
      • Unauthorised use of leased facilities
      • Violation of contractual terms
  2. Interpretation of Exclusion Clause
    • Outcome: The court held that the exclusion clause in the Network Lease Agreement did not preclude SingTel's claim for damages resulting from Starhub's breach of contract.
    • Category: Substantive
    • Sub-Issues:
      • Scope of exclusion for indirect, incidental, consequential, or special damages
      • Exclusion of liability for lost revenues or lost profits
  3. Estoppel by Convention
    • Outcome: The court rejected Starhub's argument that SingTel was estopped by convention from challenging Starhub's tapping.
    • Category: Procedural
    • Sub-Issues:
      • Common assumption regarding incremental costs
      • Common assumption regarding self-provision

8. Remedies Sought

  1. Monetary Damages

9. Cause of Actions

  • Breach of Contract

10. Practice Areas

  • Commercial Litigation
  • Telecommunications
  • Contract Disputes

11. Industries

  • Telecommunications

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
L Schuler AG v Wickman Machine Tool Sales LtdHouse of LordsYes[1974] AC 235England and WalesCited for the principle that the parties’ intentions must be determined from the words they have used in the contract.
Reardon Smith Line Ltd v Yngvar Hansen-TangenHouse of LordsYes[1976] 1 WLR 989England and WalesCited for the principle that contracts are not made in a vacuum and the court should know the commercial purpose of the contract.
Mt Elizabeth Hospital Ltd v Allan Ng Clinic for WomenCourt of AppealYes[1994] 3 SLR 639SingaporeCited for approving the principle in Reardon Smith Line Ltd v Yngvar Hansen-Tangen that the court should know the commercial purpose of the contract.
Investors Compensation Scheme Ltd v West Bromwich Building SocietyHouse of LordsYes[1998] 1 WLR 896England and WalesCited for the principles underlying the contextual approach to the interpretation of contracts.
Pacific Century Regional Development Ltd v Canadian Imperial Investment Pte LtdCourt of AppealYes[2001] 2 SLR 443SingaporeCited for endorsing the principles in Investors Compensation Scheme Ltd v West Bromwich Building Society.
Bank of Credit and Commerce International SA v AliHouse of LordsYes[2002] 1 AC 251England and WalesCited for clarifying that the words “absolutely anything” in ICS v West Bromwich referred to “anything which a reasonable man would have regarded as relevant”.
James Miller & Partners Ltd v Whitworth Street Estates (Manchester) LtdHouse of LordsYes[1970] AC 583England and WalesCited for the principle that subsequent conduct cannot be taken into account as an aid to construction.
Re Lin Securities (Pte)High CourtYes[1988] SLR 340SingaporeCited for following the principle in James Miller & Partners Ltd v Whitworth Street Estates (Manchester) Ltd that subsequent conduct cannot be taken into account as an aid to construction.
Amalgamated Investment & Property Co Ltd v Texas Commerce International Bank LtdCourt of AppealYes[1982] QB 84England and WalesCited for the principle that evidence of subsequent conduct is available to see how the parties acted on the contract, and under the guise of estoppel, either party can be prevented from going back on the interpretation they themselves gave to it.
Philip Collins Ltd v DavisHigh CourtYes[2000] 3 All ER 808England and WalesCited for the principle that the doctrine of estoppel by convention should not be used as a means to admit evidence of the parties’ alleged subjective intentions or negotiations to ascertain the meaning of contractual documents where such evidence would otherwise be inadmissible.
Republic of India v India Steamship Co Ltd (No 2)House of LordsYes[1998] AC 878England and WalesCited for the minimum requirements for the doctrine of estoppel by convention to apply.
Homburg Houtimport BV v Agrosin Private LtdHouse of LordsYes[2004] 1 AC 715England and WalesCited for the principle that if a party otherwise liable is to exclude or limit his liability or to rely on an exemption, he must do so in clear words; any ambiguity or lack of clarity must be resolved against that party.
Hong Realty (Pte) Ltd v Chua Keng MongCourt of AppealYes[1994] 3 SLR 819SingaporeCited for the principle that exemption clauses must be construed strictly and their application must be restricted to the particular circumstances the parties had in mind at the time they entered into the contract.
Hadley v BaxendaleCourt of ExchequerYes(1854) 9 Exch 341England and WalesCited for the rule on remoteness of damages in contract law.
Saint Line Limited v Richardsons, Westgarth & Co, LimitedKing's Bench DivisionYes[1940] 2 KB 99England and WalesCited for the definition of direct damage as that which flows naturally from the breach without other intervening cause and independently of special circumstances.
Croudace Construction Ltd v Cawoods Concrete Products LtdCourt of AppealYes[1978] 2 Lloyd’s Rep 55England and WalesCited for affirming that the word “consequential” does not cover any loss which directly and naturally results, in the ordinary course of events, from a breach of contract.
Hotel Services Limited v Hilton International Hotels (UK) LimitedCourt of AppealYes[2000] BLR 235England and WalesCited for rejecting the criticism that a construction of the term “consequential” loss was too narrow.
Deepak Fertilisers and Petrochemicals Corporation v ICI Chemicals & Polymers LtdQueen's Bench DivisionYes[1999] 1 Lloyd’s Rep 387England and WalesCited for comparison of exclusion clauses.
Pegler Limited v Wang (UK) LimitedTechnology and Construction CourtYes[2000] BLR 218England and WalesCited for supporting the interpretation that it is only where lost revenue is indirect or consequential that it is excluded under Art 8.5(a).
Victoria Laundry (Windsor) Ltd v Newman Industries LtdCourt of AppealYes[1949] 2 KB 528England and WalesCited for explaining that claims for loss of profits may fall into either the first or the second rule in Hadley v Baxendale, depending on the circumstances.
Leicester Circuits Limited v Coates Brothers PlcCourt of AppealYes[2003] EWCA Civ 290England and WalesCited for the view that the word “incidental” in Art 8.5(a) is superfluous.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
No applicable statutes

15. Key Terms and Keywords

15.1 Key Terms

  • Network Lease Agreement
  • Facilities
  • Permitted Properties
  • Excluded Properties
  • Tapping
  • Incremental Costs
  • Self-Provide
  • Common Portion
  • Last-Mile Network

15.2 Keywords

  • breach of contract
  • network lease agreement
  • exclusion clause
  • tapping
  • telecommunications
  • singtel
  • starhub

17. Areas of Law

Area NameRelevance Score
Breach of Contract95
Contract Law90
Damages80
Interpretation of contractual terms75
Estoppel60
Tapping40

16. Subjects

  • Contract Law
  • Telecommunications
  • Lease Agreements
  • Damages
  • Exclusion Clauses