Highness Electrical v Sigma Cable: Repudiatory Breach & Mitigation in Fixed-Price Supply Contract
In 2006, Highness Electrical Engineering Pte Ltd sued Sigma Cable Company (Pte) Ltd in the High Court of Singapore, alleging breach of contract. Highness Electrical claimed Sigma repudiated a fixed-price contract to supply electrical cables by withholding deliveries to force price increases. Tan Lee Meng J. found Sigma in repudiatory breach and ruled in favor of Highness Electrical, entitling them to damages, to be assessed by the Registrar. The court held that Highness Electrical was not obligated to accept Sigma's subsequent offer to supply goods at the original prices.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Judgment for Plaintiff
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Highness Electrical sued Sigma Cable for breach of contract due to withheld deliveries. The court found Sigma in repudiatory breach, entitling Highness to damages.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Highness Electrical Engineering Pte Ltd | Plaintiff | Corporation | Judgment for Plaintiff | Won | |
| Sigma Cable Co (Pte) Ltd | Defendant | Corporation | Judgment against Defendant | Lost |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Tan Lee Meng | Judge | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Alvin Chang | M & A Law Corporation |
| Gan Kam Yuin | Bih Li & Lee |
4. Facts
- Highness Electrical contracted with Sigma for the supply of electric cables at fixed prices.
- Sigma withheld delivery of goods to compel Highness Electrical to agree to price increases.
- Highness Electrical acceded to price increases on two occasions.
- Sigma warned Highness Electrical on 23 December 2004 that the contract would be terminated unless it received a forecast of the electric cables required for the remaining period under the contract.
- Sigma unilaterally attempted to terminate the contract at an earlier date by informing Highness Electrical that the latest delivery date for electric cables under the contract was the end of April 2005 and not 31 December 2005.
- Highness Electrical accepted Sigma's repudiation of the contract on 3 February 2005.
- Sigma offered to supply electric cables at the prices originally agreed upon on 30 March 2005.
5. Formal Citations
- Highness Electrical Engineering Pte Ltd v Sigma Cable Co (Pte) Ltd, Suit 403/2005, [2006] SGHC 114
6. Timeline
| Date | Event |
|---|---|
| Contract signed | |
| Contract commenced | |
| Delivery instruction No HE/DI/04/0037 issued | |
| Partial delivery of electric cables ordered under delivery instruction No HE/DI/04/0037 | |
| Sigma informed Highness Electrical of price increases for outstanding cables ordered under delivery instruction No HE/DI/04/0037 | |
| Remaining electric cables ordered under delivery instruction No HE/DI/04/0037 delivered | |
| Remaining electric cables ordered under delivery instruction No HE/DI/04/0037 delivered | |
| Delivery instruction No HE/DI/04/0128 issued | |
| Delivery date for cables ordered under delivery instruction No HE/DI/04/0128 | |
| Delivery instruction No HE/DI/04/0154 issued | |
| Delivery instruction No HE/DI/04/0156 issued | |
| Delivery date for delivery instruction No HE/DI/04/0154 | |
| Delivery date for delivery instruction No HE/DI/04/0156 | |
| Highness Electrical resolved payment issues | |
| Sigma sent Highness Electrical a fax confirming price increases for goods ordered under delivery instruction No HE/DI/04/0128 | |
| Partial delivery of cables ordered under delivery instruction No HE/DI/04/0128 | |
| Delivery instruction No HE/DI/04/0217 issued | |
| Delivery date for delivery instruction No HE/DI/04/0217 | |
| Sigma warned Highness Electrical that the contract would be terminated unless it received a forecast of the electric cables required for the remaining period under the contract | |
| Partial delivery of cables ordered under delivery instruction No HE/DI/04/0128 | |
| Sigma informed Highness Electrical that it was not going to fulfill its contractual obligation to supply electric cables at the prices agreed under their contract of 17 December 2003 and quoted new increased prices to Highness Electrical | |
| Highness Electrical rejected the new prices | |
| Delivery instruction No HE/DI/05/0008 issued | |
| Delivery instruction No HE/DI/05/0015 issued | |
| Delivery date for delivery instruction No HE/DI/05/0008 | |
| Sigma unilaterally attempted to terminate the contract at an earlier date | |
| Highness Electrical's solicitors alleged that the contract had been repudiated by Sigma and that the repudiation was accepted by Highness Electrical | |
| Delivery date for delivery instruction No HE/DI/05/0015 | |
| Sigma agreed to supply electric cables at the prices originally agreed upon in December 2003 | |
| Highness Electrical reiterated its position that it had accepted Sigma's repudiation of the contract | |
| Highness Electrical instituted action to recover damages | |
| Highness Electrical entered into a contract with Keystone Cable (S) Pte Ltd for the supply of electric cables | |
| Judgment reserved |
7. Legal Issues
- Repudiatory Breach
- Outcome: The court held that Sigma's conduct amounted to a repudiatory breach of contract.
- Category: Substantive
- Sub-Issues:
- Withholding delivery of goods
- Demand for price increases
- Related Cases:
- [1971] 1 WLR 361
- [1979] AC 757
- [2002] 2 SLR 243
- Mitigation of Damage
- Outcome: The court held that Highness Electrical was not obliged to mitigate its loss by accepting Sigma's offer to continue to supply goods at original contractual prices.
- Category: Substantive
- Related Cases:
- [1996] 1 SLR 734
- [1895] 2 QB 253
- (1878) 9 Ch D 20
8. Remedies Sought
- Monetary Damages
9. Cause of Actions
- Breach of Contract
10. Practice Areas
- Commercial Litigation
11. Industries
- Construction
- Electrical Engineering
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Decro-Wall International SA v Practitioners in Marketing Ltd | N/A | Yes | [1971] 1 WLR 361 | N/A | Cited for the principle that a breach must deprive the injured party of a substantial part of the benefit to which he is entitled under the contract to constitute repudiation. |
| Federal Commerce & Navigation Co Ltd v Molena Alpha Inc | N/A | Yes | [1979] AC 757 | N/A | Endorsed the approach in Decro-Wall International regarding repudiation of contract. |
| Kool Team Marketing v Pacific Sunwear Pte Ltd | N/A | Yes | [2002] 2 SLR 243 | Singapore | Adopted the approach in Decro-Wall International regarding repudiation of contract. |
| China Resources Purchasing Co Ltd v Yue Xiu Enterprises (S) Pte Ltd | N/A | Yes | [1996] 1 SLR 734 | Singapore | Cited regarding the standard of reasonableness to be applied to the decision of the innocent buyer in mitigation of loss. |
| Brace v Calder | N/A | Yes | [1895] 2 QB 253 | N/A | Cited for the principle that steps taken by the innocent party in mitigation of loss may include acceptance of a reasonable offer by the party in breach. |
| Dunkirk Colliery Company v Lever | N/A | No | (1878) 9 Ch D 20 | N/A | Cited for the principle that the innocent party is not required to accept any performance other than in the ordinary course of business. |
| Banco de Portugal v Waterlow & Sons Ltd | N/A | Yes | [1932] AC 452 | N/A | Cited regarding the standard of reasonableness to be applied to the decision of the innocent buyer in mitigation of loss. |
| Payzu Ltd v Saunders | N/A | Yes | [1919] 2 KB 581 | N/A | Cited regarding the standard of reasonableness to be applied to the decision of the innocent buyer in mitigation of loss. |
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
- Repudiatory breach
- Mitigation of damage
- Fixed-price contract
- Delivery instruction
- Manufacturing lead time
15.2 Keywords
- breach of contract
- repudiation
- mitigation
- electrical cables
- fixed price
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Repudiatory breach | 95 |
| Breach of Contract | 90 |
| Contract Law | 85 |
| Damages | 70 |
| Performance of Contract | 65 |
| Mitigation of damage | 60 |
16. Subjects
- Contract Law
- Breach of Contract
- Commercial Law