Max Media v Nimbus Media: Breach of Contract & Bank Guarantee Dispute

In Max Media FZ LLC v Nimbus Media Pte Ltd, the High Court of Singapore heard a claim by Max Media for the return of money paid under a bank guarantee to Nimbus Media. Nimbus Media resisted the claim and counterclaimed for damages arising from Max Media's breach of contract. The court dismissed Max Media's claim and allowed Nimbus Media's counterclaim, finding Max Media in repudiatory breach of the agreement and entitling Nimbus Media to post-termination damages, with the amount drawn under the bank guarantee to be applied to the damages assessed.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Plaintiff's claim dismissed and defendant's counterclaim allowed with costs. Damages to be assessed by the registrar.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Max Media sues Nimbus Media for return of money paid under a bank guarantee. Nimbus counterclaims for breach of contract, leading to a dispute over termination and damages.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Max Media FZ LLCPlaintiffCorporationClaim DismissedLost
Nimbus Media Pte LtdDefendantCorporationCounterclaim AllowedWon

3. Judges

Judge NameTitleDelivered Judgment
Andrew AngJudgeYes

4. Counsels

Counsel NameOrganization
Sunil NairHarry Elias Partnership
Yang ZiliangHarry Elias Partnership
Fong Yeng Fatt PhilipHarry Elias Partnership
Chong Li LianRajah & Tann LLP
Chandra Mohan s/o RethnamRajah & Tann LLP
Mabelle Tay JiahuiRajah & Tann LLP

4. Facts

  1. The plaintiff was appointed the exclusive sales agent for advertising inventory with respect to cricket matches broadcast by Neo Sports in the Middle East.
  2. The agreement promised the defendant a Minimum Guaranteed amount of US$6,675,000.
  3. The plaintiff was required to provide irrevocable and unconditional bank guarantees to secure its payment obligations.
  4. The plaintiff was late or had not made payment for several invoices.
  5. The defendant terminated the agreement due to the plaintiff's failure to provide the second bank guarantee and persistent late payments.
  6. The defendant drew down US$2.5m from the first bank guarantee after terminating the agreement.

5. Formal Citations

  1. Max Media FZ LLC v Nimbus Media Pte Ltd, Suit No 804 of 2008, [2010] SGHC 30

6. Timeline

DateEvent
Advertising Sales Agency agreement signed
Plaintiff to deliver Bank Guarantee for first contract year
First bank guarantee issued
Invoice NMPL/2007/DIS/018 due
Plaintiff informs defendant of incomplete Telecast Certificates
Stamped Telecast Certificates provided to plaintiff
Invoice NMPL/2007/DIS/048 due
Defendant informs plaintiff of addition of BCB Bangladesh v South Africa event
Plaintiff states concerns about selling advertising inventory for BCB Bangladesh v South Africa event
Neo Sports broadcast of BCB Bangladesh v South Africa event begins
Invoices NMPL/2007/DIS/056 and NMPL/2007/DIS/057 due
Meeting held between parties regarding BCB Bangladesh v South Africa event
Plaintiff to deliver Bank Guarantee for second contract year
Invoice No 74 due
HSBC issues letter to defendant regarding issuance of new Bank Guarantee
Defendant rejects HSBC's 2 April 2008 letter
Defendant informs plaintiff of default of contractual obligations
Plaintiff promises to pay outstanding sum for Invoice No 74 in three tranches
Defendant acknowledges receipt of first tranche of US$200,000
Plaintiff asks if board of directors had ratified the proposal
Invoice NMPL/2007/DIS/083 due
Plaintiff states payment will be transferred very soon
Defendant initiates process of drawing down the 1st BG
Defendant sends another default notice to the plaintiff
Plaintiff asks defendant to withdraw its claim on the 1st BG
Defendant receives US$2.5m from HSBC
Defendant sends notice informing the plaintiff that it was terminating the Agreement
BCB Kitply Triseries event broadcast begins
Defendant enters into another advertising contract with Integrated Advertising Services FZ LLC
Decision Date

7. Legal Issues

  1. Breach of Contract
    • Outcome: The court found that the plaintiff had committed a repudiatory breach of the agreement.
    • Category: Substantive
    • Sub-Issues:
      • Failure to make payment
      • Failure to provide bank guarantee
    • Related Cases:
      • [2007] 4 SLR(R) 413
  2. Penalty Clause
    • Outcome: The court held that clause 6.1.3 was not a penalty clause.
    • Category: Substantive
    • Related Cases:
      • [1915] AC 79
  3. Damages for Loss of Bargain
    • Outcome: The court found that the defendant was entitled to claim post-termination damages.
    • Category: Substantive
    • Related Cases:
      • [1987] QB 527
      • [1963] 2 QB 104
  4. Failure of Consideration
    • Outcome: The court found that there was no total failure of consideration with respect to the uninvoiced events.
    • Category: Substantive
    • Related Cases:
      • [1943] AC 32

8. Remedies Sought

  1. Return of money paid under a bank guarantee
  2. Damages for breach of contract

9. Cause of Actions

  • Breach of Contract

10. Practice Areas

  • Commercial Litigation

11. Industries

  • Media
  • Advertising

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Lancore Services Ltd v Barclays Bank PlcHigh CourtYes[2008] EWHC 1264England and WalesCited to support the principle that restitutionary principles are supplemental to the law of contract where the parties are in a contractual relationship.
Firstlink Energy Pte Ltd v Creanovate Pte Ltd and another actionHigh CourtYes[2007] 1 SLR(R) 1050SingaporeCited to support the principle that restitutionary principles are supplemental to the law of contract where the parties are in a contractual relationship.
Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour LtdHouse of LordsYes[1943] AC 32England and WalesCited for the principle that where money has been paid out under a contract that is or becomes ineffective, the payer may recover the money if the consideration for the payment has totally failed.
Biggerstaff v Rowatt’s Wharf LtdCourt of AppealYes[1896] 2 Ch 93England and WalesCited for the principle that consideration is normally viewed as “whole and indivisible” and the court will not divide or apportion unless it is clear that the parties intended it to be so.
Dunlop Pneumatic Tyre Co Ltd v New Garage & Motor Co LtdHouse of LordsYes[1915] AC 79England and WalesCited for the principles to be applied when construing whether a clause is a penalty clause or a liquidated damages clause.
Beihai Zingong Property Development Co and another v Ng Choon MengCourt of AppealYes[1999] 1 SLR(R) 527SingaporeCited for endorsing the principles laid out in Dunlop Pneumatic Tyre Co Ltd v New Garage & Motor Co Ltd regarding penalty clauses.
Lombard North Central Plc v ButterworthCourt of AppealYes[1987] QB 527England and WalesCited for the principle that where time is of the essence, any failure to perform within the stipulated time would entitle the other party to terminate the contract and claim post-termination damages.
Financings Ltd v BaldockCourt of AppealYes[1963] 2 QB 104England and WalesCited and distinguished from Lombard North Central Plc v Butterworth, regarding the recovery of damages for loss of bargain.
RDC Concrete Pte Ltd v Sato Kogyo (S) Pte Ltd and another appealCourt of AppealYes[2007] 4 SLR(R) 413SingaporeCited for the four situations where a breach of contract will entitle the innocent party to terminate the contract.
Bunge Corporation, New York v Tradax Export SA, PanamaHouse of LordsYes[1981] 1 WLR 711England and WalesCited for the principle that the foremost consideration must be to give effect to the contracting parties’ intention.
Sports Connection Pte Ltd v Deuter Sports GmbHCourt of AppealYes[2009] 3 SLR(R) 883SingaporeCited for explaining that Situations 1 and 3(a) of RDC Concrete are substantially the same.
Tan Wee Fong v Denieru Tatsu F&B Holdings (S) Pte LtdHigh CourtYes[2009] SGHC 290SingaporeCited for the principle that where a contract is terminated pursuant to an express provision alone, damages for loss of bargain may be recoverable only if there is a concurrent repudiatory breach under common law.
Man Financial (S) Pte Ltd (formerly known as E D & F Man International (S) Pte Ltd) v Wong Bark Chuan DavidCourt of AppealYes[2008] 1 SLR(R) 663SingaporeCited for the principle that there is no magic formula enabling a court to determine if a contractual term is a condition.
L Schuler AG v Wickman Machine Tool Sales LtdHouse of LordsYes[1974] AC 235England and WalesCited for the proposition that the express language of a contractual term may not be determinative of its nature.
Steedman v DrinkleJudicial Committee of the Privy CouncilYes[1916] 1 AC 275CanadaCited for the principle that stipulations that “time is of the essence” mean that parties have agreed that a failure by one party to perform within the stipulated time would entitle the other party to terminate the contract.
Alliance Concrete Singapore Pte Ltd v Comfort Resources Pte LtdCourt of AppealYes[2009] 4 SLR(R) 602SingaporeCited for the principle that punctual payment will ordinarily not be regarded as a condition of the contract.

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

  • Bank guarantee
  • Minimum Guaranteed amount
  • Advertising inventory
  • Telecast Certificates
  • Repudiatory breach
  • Post-termination damages
  • Time is of the essence
  • Failure of consideration

15.2 Keywords

  • breach of contract
  • bank guarantee
  • advertising sales
  • termination
  • damages
  • Singapore High Court

17. Areas of Law

Area NameRelevance Score
Breach of Contract95
Contract Law90
Guarantee70
Damages60
Banking and Finance40
Advertising Law30

16. Subjects

  • Contract Dispute
  • Commercial Dispute
  • Banking Law