Holcim v Kwan Yong: Force Majeure & Economic Duress in Concrete Supply Contract

In Holcim (Singapore) Pte Ltd v Kwan Yong Construction Pte Ltd, the High Court of Singapore ruled in favor of Holcim, dismissing Kwan Yong's counterclaim. Holcim sued Kwan Yong for $305,153.40 for unpaid ready-mixed concrete supplied under a contract. Kwan Yong counterclaimed $418,149.87, alleging economic duress in subsequent agreements to vary the price due to an Indonesian sand export ban. The court, presided over by Justice Lai Siu Chiu, found no economic duress, holding Kwan Yong liable for the outstanding amount and dismissing the counterclaim.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Judgment for Plaintiff; Defendant's counterclaim dismissed.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Holcim sued Kwan Yong for unpaid concrete. Kwan Yong counterclaimed economic duress. Court ruled for Holcim, finding no duress or breach.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Holcim (Singapore) Pte LtdPlaintiffCorporationJudgment for PlaintiffWon
Kwan Yong Construction Pte LtdDefendantCorporationCounterclaim DismissedLost

3. Judges

Judge NameTitleDelivered Judgment
Lai Siu ChiuJudgeYes

4. Counsels

Counsel NameOrganization
Chandra MohanRajah & Tann LLP
V JesudevanRajah & Tann LLP
Jasmin YekKelvin Chia Partnership
Chung Khoon Leong JohnKelvin Chia Partnership

4. Facts

  1. Plaintiff and defendant entered into a contract for the supply of ready-mixed concrete.
  2. The defendant was contracted by the Ministry of Education to rebuild Pei Tong Primary School.
  3. An Indonesian sand export ban caused a shortage of sand in Singapore.
  4. The parties entered into subsequent agreements to vary the price of concrete due to the sand ban.
  5. The defendant claimed the subsequent agreements were made under economic duress.
  6. The defendant received a government subsidy for the price increase in sand and granite.
  7. The defendant continued to order concrete from the plaintiff even after alleging breach of contract.

5. Formal Citations

  1. Holcim (Singapore) Pte Ltd v Kwan Yong Construction Pte Ltd, Suit 291/2007, [2008] SGHC 231

6. Timeline

DateEvent
Defendant awarded contract by Ministry of Education to rebuild Pei Tong Primary School.
Commencement date for rebuilding Pei Tong Primary School.
Plaintiff and defendant entered into agreement for supply of concrete.
Plaintiff's quotation date.
Plaintiff delivered concrete to the defendant.
Plaintiff delivered concrete to the defendant.
Indonesian authorities announced the ban of sand exports to Singapore.
Sand ban took effect.
Plaintiff notified the defendant of the possible stoppage of supply of sand.
Parties agreed to vary the price of the concrete supplied under the Quotation by increasing it by $35 for all grades.
Defendant continued to order concrete from the plaintiff.
Plaintiff continued to supply concrete to the defendant.
BCA announced that it would release sand from the government stockpile at $25 per tonne.
Plaintiff wrote to the defendant to advise that it was unable to supply concrete based on the Quotation and it would be revising its prices with immediate effect.
BCA announced a cost-sharing initiative for public projects.
BCA increased the price of sand from $25 to $60 per tonne.
Parties agreed to vary the terms of the January agreement by a second quotation no. HSPL/Q/387/07.
Plaintiff forwarded a letter to the defendant explaining the circumstances for the price increase.
Defendant responded with a purchase order to the plaintiff for 440 m³ of G40 pump mix concrete at the plaintiff’s quoted price of $191 per m³.
Plaintiff wrote to the defendant to say that the prices of concrete would be those as reflected in the March agreement.
Plaintiff delivered concrete to the defendant.
Defendant wrote to the plaintiff protesting that the plaintiff’s price increase was in breach of the contract.
Plaintiff sent a letter of demand to the defendant for sums totalling $330,935.36 for concrete supplied.
Defendant placed orders with the plaintiff for grade 40 concrete to be delivered.
Defendant placed orders with the plaintiff for grade 40 concrete to be delivered.
Defendant replied to the plaintiff’s letter of demand to say that due to the plaintiff’s wrongful repudiation of the Quotation, the defendant intended to set off its claim for damages for breach of contract against the plaintiff’s claim.
Plaintiff’s solicitors sent a letter of demand to the defendant for the sum of $305.153.40.
Defendant’s solicitors replied to deny the plaintiff’s claim and alleged that it was the plaintiff who was in breach of contract.
Plaintiff commenced proceedings claiming the sum of $305,153.40.
Judgment reserved.

7. Legal Issues

  1. Economic Duress
    • Outcome: The court found that the defendant failed to prove that the January and March agreements were executed under economic duress.
    • Category: Substantive
    • Related Cases:
      • [2001] 3 SLR 368
      • [1979] 3 WLR 435
      • [1984] ICR 419
      • [1990] SLR 20
  2. Frustration of Contract
    • Outcome: The court found that the contract was frustrated due to the sand ban.
    • Category: Substantive
    • Related Cases:
      • [1956] AC 696
      • [1999] 2 SLR 620
  3. Consideration for Contract Variation
    • Outcome: The court found that there was valuable consideration provided by the plaintiff for the increase in concrete prices set out in the two documents.
    • Category: Substantive
    • Related Cases:
      • [1991] 1 QB 1
  4. Breach of Contract
    • Outcome: The court found that the defendant failed to pay timeously, the price of concrete delivered by the plaintiff.
    • Category: Substantive

8. Remedies Sought

  1. Monetary Damages

9. Cause of Actions

  • Breach of Contract

10. Practice Areas

  • Commercial Litigation
  • Construction Disputes

11. Industries

  • Construction

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Sharon Global Solutions Pte Ltd v LG International (Singapore) Pte LtdHigh CourtYes[2001] 3 SLR 368SingaporeCited as a local case with similar facts regarding economic duress in contract law.
Pao On v Lau Liu LongPrivy CouncilYes[1979] 3 WLR 435EnglandCited as a locus classicus on economic duress, emphasizing coercion of will that vitiates consent.
B&S Contracts and Design Ltd v Victor Green Publications LtdEnglish Court of AppealYes[1984] ICR 419EnglandCited as a case where Pao On was followed regarding economic duress.
Third World Development Ltd v Atang LatiefAppellate CourtYes[1990] SLR 20SingaporeCited as a local case that applied Pao On, setting out tests for coercion of will.
Davis Contractors Ltd v Fareham UDCHouse of LordsYes[1956] AC 696EnglandCited for the test of radical change in obligations for frustration to apply.
Glahe International Expo AG v ACS Computer Pte LtdCourt of AppealYes[1999] 2 SLR 620SingaporeCited to support the argument that the sand ban did not cause the contract to be frustrated.
Occidental Worldwide Investment Corporation v Skibs A/S AvantiN/AYes[1976] 1 Lloyd’s Rep 293N/ACited in Pao On as recognizing that commercial pressure may constitute duress.
North Ocean Shipping Co. Ltd v Hyundai Construction Co LtdN/AYes[1979] 3 WLR 419N/ACited in Pao On as recognizing that commercial pressure may constitute duress.
Williams v Roffey Bros & Nicholls (Contractors) LtdEnglish Court of AppealYes[1991] 1 QB 1EnglandCited regarding consideration and practical benefit in contract variations.

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

  • Ready-mixed concrete
  • Sand ban
  • Force majeure
  • Economic duress
  • Contract variation
  • Government subsidy
  • Mitigation of loss

15.2 Keywords

  • Concrete
  • Construction
  • Singapore
  • Contract
  • Force Majeure
  • Economic Duress

17. Areas of Law

Area NameRelevance Score
Contract Law95
Force Majeure80
Economic Duress75
Frustration60
Breach of Contract50
Mitigation of Damages50
Damages40
Mistake30
Waiver20

16. Subjects

  • Contract
  • Construction
  • Supply Chain