Burgundy Global v Transocean: Damages for Breach of Contract & EJD Order Jurisdiction
The Singapore Court of Appeal heard two appeals, CA 48/2013 and CA 55/2013, in the case of Burgundy Global Exploration Corp v Transocean Offshore International Ventures Ltd. CA 48/2013 concerned a breach of contract claim related to an Escrow Agreement and Drilling Contract. The court held that Transocean could not claim damages for loss of profits from the termination of the Drilling Contract under a claim based on breach of the Escrow Agreement. CA 55/2013 involved an appeal by the directors of Burgundy against the High Court's refusal to set aside an order for substituted service of examination of judgment debtor orders. The court allowed both appeals, reducing Transocean's award of damages and setting aside the order for substituted service.
1. Case Overview
1.1 Court
Court of Appeal1.2 Outcome
Appeal Allowed
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Singapore Court of Appeal allows appeals, holding Transocean cannot claim lost profits from Drilling Contract breach in Escrow Agreement claim. EJD order against foreign directors set aside.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Burgundy Global Exploration Corp | Appellant | Corporation | Appeal Allowed | Won | |
| Transocean Offshore International Ventures Ltd | Respondent | Corporation | Partial Judgment | Partial | |
| Serafica Rogelio T | Appellant | Individual | Appeal Allowed | Won | |
| Directors of Burgundy | Appellant | Other | Appeal Allowed | Won |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Sundaresh Menon | Chief Justice | Yes |
| V K Rajah | Justice of the Court of Appeal | No |
| Judith Prakash | Judge | No |
4. Counsels
4. Facts
- Burgundy and Transocean entered into a Drilling Contract for offshore drilling services.
- The Drilling Contract included an arbitration agreement.
- Burgundy and Transocean also entered into an Escrow Agreement requiring Burgundy to deposit funds into an escrow account.
- Burgundy failed to make the initial deposit into the escrow account by the specified date.
- Transocean terminated the Drilling Contract due to Burgundy's failure to deposit the escrow amount.
- Transocean commenced a suit against Burgundy for breach of the Escrow Agreement, claiming damages for loss of profits under the Drilling Contract.
- Transocean obtained EJD orders against the directors of Burgundy, who were residents of the Philippines.
5. Formal Citations
- Burgundy Global Exploration Corp v Transocean Offshore International Ventures Ltd and another appeal, Civil Appeals Nos 48 and 55 of 2013, [2014] SGCA 24
6. Timeline
| Date | Event |
|---|---|
| Offshore Drilling Contract signed | |
| Novation agreement signed | |
| Escrow Agreement signed | |
| Burgundy failed to deposit Escrow Amount | |
| Transocean terminated Drilling Contract | |
| Transocean commenced Suit No 87 of 2009 | |
| Leave to serve writ of summons out of jurisdiction obtained | |
| Burgundy applied for stay of proceedings | |
| Summary judgment application granted | |
| Assessment of damages commenced | |
| Final judgment entered against Burgundy | |
| Transocean applied for EJD orders | |
| Transocean filed summons seeking liberty to effect substituted service of the EJD Orders | |
| AR Ruth Yeo granted orders in terms of Prayers 1(i), 2 and 3 | |
| Transocean served the EJD Orders on Gomez & Vasu LLC | |
| The Directors applied to set aside AR Yeo’s order allowing substituted service | |
| Application dismissed by an assistant registrar | |
| Judgment reserved |
7. Legal Issues
- Breach of Contract
- Outcome: The court held that Transocean could not claim damages for loss of profits from the termination of the Drilling Contract under a claim based on breach of the Escrow Agreement.
- Category: Substantive
- Sub-Issues:
- Failure to deposit escrow amount
- Repudiatory breach
- Jurisdiction over Foreign Officers
- Outcome: The court held that leave is required to serve an EJD order out of jurisdiction on a foreign officer and set aside the order for substituted service.
- Category: Jurisdictional
- Sub-Issues:
- Extraterritorial jurisdiction
- Service out of jurisdiction
- Substituted service
- Res Judicata
- Outcome: The court held that the issue of whether Transocean could recover damages for losses due to the termination of the Drilling Contract under a claim based on breach of the Escrow Agreement was not res judicata.
- Category: Procedural
8. Remedies Sought
- Monetary Damages
- Declaration that Burgundy was in repudiatory breach of the Escrow Agreement
- Declaration that the Drilling Contract had been validly terminated
9. Cause of Actions
- Breach of Contract
10. Practice Areas
- Commercial Litigation
- Arbitration
- Civil Litigation
11. Industries
- Oil and Gas
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Transocean Offshore International Ventures Ltd v Burgundy Global Exploration Corp | High Court | Yes | [2010] 2 SLR 821 | Singapore | Cited for the decision that Art 25.1 of the Drilling Contract did not apply to claims arising from Burgundy’s failure to pay the Escrow Amount. |
| Goh Nellie v Goh Lian Teck and others | Court of Appeal | Yes | [2007] 1 SLR(R) 453 | Singapore | Cited for the aspects of the umbrella doctrine of res judicata. |
| Lee Tat Development Pte Ltd v Management Corporation of Strata Title Plan No 301 | Court of Appeal | Yes | [2005] 3 SLR(R) 157 | Singapore | Cited for the requirements that must be satisfied for an issue estoppel to arise. |
| Panwah Steel Pte Ltd v Koh Brothers Building & Civil Engineering Contractor (Pte) Ltd | Court of Appeal | Yes | [2006] 4 SLR(R) 571 | Singapore | Cited for the principle that leave may be granted on appeal if the issues are purely legal and do not require fresh evidence. |
| Satef-Huttenes Albertus SpA v Paloma Tercera Shipping Co SA (The Pegase) | English High Court | Yes | [1981] 1 Lloyd’s Rep 175 | England and Wales | Cited regarding the issue of remoteness of damages and whether losses flowing from the breach of one contract can be based on another contract. |
| Hadley v Baxendale | Court of Exchequer | Yes | (1854) 9 Exch 341 | England and Wales | Cited for the principle of remoteness of damages. |
| JIO Minerals FZC and others v Mineral Enterprises Ltd | High Court | Yes | [2011] 1 SLR 391 | Singapore | Cited for the presumption against extraterritoriality in statutory interpretation. |
| Masri v Consolidated Contractors International (UK) Ltd (No 4) | House of Lords | Yes | [2010] 1 AC 90 | England and Wales | Cited for the holding that the English counterpart of O 48 r 1 does not permit an English court to issue an EJD order against a foreign officer. |
| Mackinnon v Donaldson, Lufkin and Jenrette Securities Corporation and others | High Court | Yes | [1986] Ch 482 | England and Wales | Cited for the principle that a state should refrain from demanding obedience to its sovereign authority by foreign non-parties in respect of their conduct outside of the jurisdiction. |
| In re Tucker (RC) (A Bankrupt), Ex p Tucker (KR) | Court of Appeal | Yes | [1990] Ch 148 | England and Wales | Cited regarding whether s 25(1) of the Bankruptcy Act 1914 allowed the bankruptcy court to summon the brother of a bankrupt, who was a British citizen resident in Belgium. |
| In re Seagull Manufacturing Co Ltd | Court of Appeal | Yes | [1993] Ch 345 | England and Wales | Cited regarding whether s 133 of the Insolvency Act 1986 had extraterritorial effect. |
| Vitol SA v Capri Marine Limited | High Court | Yes | [2008] EWHC 378 (Comm) | England and Wales | Cited for the decision that EJD orders could not be served out of jurisdiction on a foreign officer. |
| Serious Organised Crime Agency v Perry and others (Nos 1 and 2) | UK Supreme Court | Yes | [2013] 1 AC 182 | England and Wales | Cited regarding whether s 357 of the Proceeds of Crime Act 2002 could be invoked against persons out of jurisdiction. |
| Dar Al Arkan Real Estate Development Co and another v Majid Al-Sayed Bader Hashim Al Refai and others | High Court | Yes | [2013] EWHC 4112 (QB) | England and Wales | Cited regarding whether r 81.4(3) of the CPR allowed the court to issue committal orders against non-resident directors or officers of a company in contempt of court. |
| Amin Rasheed Corporation v Kuwait Insurance Co | House of Lords | Yes | [1984] 1 AC 50 | England and Wales | Cited for the principle that the jurisdiction exercised by an English court over a foreign corporation is an exorbitant jurisdiction. |
| HRH Maharanee Seethaderi Gaekwar of Baroda v Wildenstein | Queen's Bench Division | Yes | [1972] 2 QB 283 | England and Wales | Cited for the principle that an originating process may be validly served when the officer comes to Singapore for a temporary visit. |
| National Justice Compania Naviera SA v Prudential Assurance Co Ltd (No 2) (The Ikarian Reefer) | Court of Appeal | Yes | [2000] 1 WLR 603 | England and Wales | Cited regarding whether leave may be granted to serve an EJD order out of jurisdiction under r 6.30(2) of the CPR. |
| PT Bakrie Investindo v Global Distressed Alpha Fund 1 Ltd Partnership | Court of Appeal | Yes | [2013] 4 SLR 1116 | Singapore | Cited for the principle that the predominant purpose of an EJD order is to obtain information to assist the judgment creditor in executing his judgment. |
| Transocean Offshore International Ventures Ltd v Burgundy Global Exploration Corp | High Court | Yes | [2013] 3 SLR 1017 | Singapore | The High Court's decision regarding Burgundy's appeal against AR Tan’s award of damages. |
| Serafica Rogelio T and others v Transocean Offshore Ventures Ltd | High Court | Yes | [2013] 3 SLR 1040 | Singapore | The High Court's decision regarding the Directors’ appeal against AR Liew’s dismissal of the setting-aside application. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Rules of Court (Cap 322, R 5, 2006 Rev Ed) O 48 r 1 | Singapore |
| Rules of Court (Cap 322, R 5, 2006 Rev Ed) O 11 r 8(1) | Singapore |
| Interpretation Act (Cap 1, 2002 Rev Ed) s 9A | Singapore |
| Supreme Court of Judicature Act (Cap 322, 2007 Rev Ed) s 16(1) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Drilling Contract
- Escrow Agreement
- Escrow Amount
- Examination of Judgment Debtor Order
- Extraterritorial Jurisdiction
- Substituted Service
- Loss of Profits
- Res Judicata
15.2 Keywords
- contract
- arbitration
- jurisdiction
- EJD order
- foreign officer
- Singapore
- breach of contract
- damages
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Contract Law | 75 |
| Arbitration | 60 |
| Damages | 60 |
| Jurisdiction | 50 |
| Civil Procedure | 40 |
| Examination of judgment debtor | 40 |
| Estoppel | 30 |
| Substituted Service | 30 |
| Asset Recovery | 30 |
16. Subjects
- Contract Law
- Civil Procedure
- Arbitration
- Jurisdiction
- Insolvency