ATS Specialized Inc. v LAP Projects: Dispute over Tripartite Set-Off Agreement for Trucking Services

ATS Specialized Inc. (trading as ATA Wind Energy Services) sued LAP Projects (Asia) Pte Ltd in the High Court of Singapore before Belinda Ang Saw Ean J, judgment date 2012-08-17, for debts related to trucking services. The central legal issue was whether a tripartite set-off agreement existed between ATS, its associate company ATS International Service, Inc. (ATSI), and LAP, reducing the debt owed. The court found no such agreement and ruled in favor of ATS, ordering LAP to pay the full outstanding amount.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Judgment for Plaintiff

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

ATS Specialized Inc. sued LAP Projects for unpaid trucking services. The key legal issue was whether a tripartite set-off agreement existed. The court ruled in favor of ATS.

1.7 Decision Date

16 August 2012

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
ATS Specialized Inc. (trading as ATA Wind Energy Services)	Plaintiff	Corporation	Judgment for Plaintiff	Won	Walter Ferix Justine of Joseph Tan Jude Benny LLP Danny Chua Chok Wah of Joseph Tan Jude Benny LLP
LAP Projects (Asia) Pte Ltd	Defendant	Corporation	Judgment for Plaintiff	Lost	Tan Poh Ling Wendy of Stamford Law Corporation Fu Simin Charmaine of Stamford Law Corporation

3. Judges

Judge Name	Title	Delivered Judgment
Belinda Ang Saw Ean	Judge	Yes

4. Counsels

Counsel Name	Organization
Walter Ferix Justine	Joseph Tan Jude Benny LLP
Danny Chua Chok Wah	Joseph Tan Jude Benny LLP
Tan Poh Ling Wendy	Stamford Law Corporation
Fu Simin Charmaine	Stamford Law Corporation

4. Facts

ATS provided trucking services to LAP under a March 2011 contract.
LAP owed ATS US$325,781.40 for these services.
LAP proposed a set-off arrangement involving ATS, its associate ATSI, and LAP Global.
ATS initially rejected the set-off proposal.
Discussions and meetings were held to resolve outstanding issues and potential set-off.
No final agreement was reached on the figures for settlement or set-off.
LAP paid ATS US$95,348.44, which ATS rejected and returned.

5. Formal Citations

ATS Specialized Inc. (trading as ATA Wind Energy Services) v LAP Projects (Asia) Pte Ltd, Suit No 559 of 2011, [2012] SGHC 173

6. Timeline

Date	Event
2007-01-01	Agency Agreement between ATSI and LAP Global Services Pte Ltd commenced.
2009-01-01	LAP contended that the Agency Agreement ceased.
2010-09-28	ATSI set up a Singapore subsidiary, ATSI Projects Services (Asia) Pte Ltd.
2011-03-08	Agreement entered into for trucking services (March 2011 Contract).
2011-04-21	ATS conducted carriages pursuant to the March 2011 Contract.
2011-05-12	ATS conducted carriages pursuant to the March 2011 Contract.
2011-05-27	ATS demanded payment for outstanding sums.
2011-05-31	Business cooperation in Asia between ATSI, LAP and LAP Global ceased.
2011-06-02	LAP proposed to offset accounts between ATS and LAP Global.
2011-06-03	ATS rejected the proposal for set-off.
2011-06-04	ATS suggested LAP cut a check for the difference between what LAP owes ATS and ATS owes LAP.
2011-06-06	Meeting held to resolve outstanding ATSI's matters with LAP Global.
2011-06-14	ATSI proposed an offset of US$179,078.96.
2011-06-20	ATSI re-adjusted figures to reflect a lower offset figure of US$166,636.16.
2011-06-21	LAP affirmed their commitment to resolving the outstanding issues between ATS and LAP.
2011-07-08	LAP wanted to contra what ATSI owed to LAP Global with what LAP was required to pay ATS.
2011-07-12	ATSI sent a formal letter to LAP regarding compensation for unauthorized issuance of house bills of lading.
2011-07-13	ATSI proposed a final meeting on 18 July 2011 to resolve all issues.
2011-07-26	Final meeting took place at LAP’s office; parties unable to come to a final agreement.
2011-10-03	ATS filed this action claiming US$325,781.40.
2012-02-23	ATSI obtained an arbitration award against LAP Global.
2012-03-15	LAP paid ATS US$95,348.44 (with interest), which was returned.
2012-04-16	Trial began.
2012-04-17	Defendant dropped the Sany issue.
2012-08-17	Judgment delivered.

7. Legal Issues

Breach of Contract
- Outcome: The court found that there was a valid contract and that the defendant breached the contract by failing to pay the full amount due.
- Category: Substantive
Tripartite Set-Off Agreement
- Outcome: The court held that there was no tripartite agreement to set-off.
- Category: Substantive
Contract Formation
- Outcome: The court found that there was no offer and acceptance, certainty of terms, or consideration to form a valid set-off agreement.
- Category: Substantive
- Sub-Issues:
  - Offer
  - Acceptance
  - Consideration
  - Certainty of Terms

8. Remedies Sought

Monetary Damages
Interest
Costs

9. Cause of Actions

Breach of Contract
Debt Recovery

10. Practice Areas

Commercial Litigation
Arbitration

11. Industries

Transportation
Energy

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
Tribune Investment Trust Inc v Soosan Trading Co Ltd	Singapore Court of Appeal	Yes	[2000] 2 SLR(R) 407	Singapore	Cited for the approach to find a contract from correspondence based on the intentions of the parties objectively ascertained.
The Good Helmsman	English Court of Appeal	Yes	[1981] 1 Lloyd’s Rep 405	England and Wales	Cited for principles on construing the existence of a contract from correspondence, including manifested intention and the effect of subsequent negotiations.
Perry v Suffields Ltd	N/A	Yes	[1916] 2 Ch D. 187	N/A	Cited for the principle that once a complete contract is shown, further negotiations cannot get rid of the contract already arrived at without the consent of both parties.
Wickman Machine Tools Sale Ltd v Schuler AG	N/A	Yes	[1973] 2 Lloyd’s Rep 53	N/A	Cited for the principle that subsequent conduct cannot be used as an aid to construction of a document.
Readon Smith Line v Hansen-Tangen	N/A	Yes	[1976] 2 Lloyd’s Rep 621	N/A	Cited for the principle that parties cannot be heard to say with what intention they spoke, wrote, or acted.
Cooperatieve Centrale Raiffeisen-Boerenleenbank BA (trading as Rabobank International), Singapore Branch v Motorola Electronics Pte Ltd	Singapore Court of Appeal	No	[2011] 2 SLR 63	Singapore	Cited regarding the implication of a contract and the requirements for offer, acceptance, consideration, intention to create legal relations, and certainty of terms.
Hofflinghouse & Co Ltd v C-Trade S.A. (the “Intra Transporter’)	N/A	Yes	[1985] 2 QB (Com Ct) 158	N/A	Cited for the principle that what looks like a concluded agreement in the exchange of letters, was seen not to be so when it was recognised that there were other matters which had been discussed between the parties but which remained unresolved.
May & Butcher v R	N/A	Yes	[1934] 2 KB 17	N/A	Cited for the principle that terms of a contract could be agreed later, if they were not vital matters material to both parties.
Chwee Kin Keong & Ors v Digilandmall	N/A	Yes	[2004] 2 SLR 594	N/A	Cited for the proposition that consideration need only be nominal.
Gay Choon Ing v Loh Sze Ti Terrence Peter	Singapore Court of Appeal	Yes	[2009] 2 SLR(R) 332	Singapore	Cited to acknowledge that the doctrine of consideration is still a standard requirement to formation of a 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

Tripartite Set-Off Agreement
Accounts Receivable
Accounts Payable
March 2011 Contract
Agency Agreement
House Bills of Lading
Sany Issue
GE Issue
Offset
Consideration
Offer
Acceptance

15.2 Keywords

set-off
trucking services
contract
ATS
LAP
ATSI
agreement
debt
payment

17. Areas of Law

Area Name	Relevance Score
Contract Law	80
Breach of Contract	75
Formation of contract	60
Commercial Litigation	40
Estoppel	30
Summary Judgement	20
Business Law	20
Waiver	20
Mistake	10

16. Subjects

Contract Dispute
Set-Off Agreement
Commercial Law
Transportation Law