Gimpex Ltd v Unity Holdings: Breach of Contract, Coal Quality Dispute

In Gimpex Ltd v Unity Holdings Business Ltd, the Singapore Court of Appeal heard appeals arising from a dispute over a contract for the sale of coal. Gimpex claimed breach of contract and unlawful means conspiracy against Unity Holdings and others, alleging the delivered coal did not meet contractual specifications. The High Court allowed the breach of contract claim but dismissed the conspiracy claim. The Court of Appeal dismissed Unity's appeal against the breach of contract finding and allowed Gimpex's appeal in part, assessing damages at US$705,670.

1. Case Overview

1.1 Court

Court of Appeal

1.2 Outcome

Appeal allowed in part; damages assessed by the court.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Singapore Court of Appeal case involving Gimpex Ltd and Unity Holdings Business Ltd concerning a coal sale contract dispute over coal quality and breach of contract.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Gimpex LtdAppellant, RespondentCorporationAppeal allowed in partPartialPhilip Tay, Yip Li Ming
Unity Holdings Business LtdRespondent, AppellantCorporationAppeal dismissedLostBazul Ashhab, Mabel Tan
Param Energy Pte LtdRespondentCorporationClaims dismissedDismissedBazul Ashhab, Mabel Tan
Vinay Parmanad HarianiRespondentIndividualClaims dismissedDismissedBazul Ashhab, Mabel Tan

3. Judges

Judge NameTitleDelivered Judgment
Sundaresh MenonChief JusticeNo
Chao Hick TinJustice of the Court of AppealYes
Quentin LohJudgeNo

4. Counsels

Counsel NameOrganization
Philip TayRajah & Tann LLP
Yip Li MingRajah & Tann LLP
Bazul AshhabOon & Bazul LLP
Mabel TanOon & Bazul LLP

4. Facts

  1. Gimpex contracted with Unity to purchase 41,510MT of coal to be shipped from Kalimantan, Indonesia, to Karachi, Pakistan.
  2. The contract specified a Gross Calorific Value (GCV) of not less than 6,300Kcal/kg and a total moisture (TM) of 16%.
  3. Gimpex intended to resell the coal to Awan Trading Co Pvt Ltd under a subcontract.
  4. Unity sourced the coal from PT Planet Resources, which in turn purchased it from CV Berkah Mulya Abadi.
  5. Sucofindo was appointed to conduct tests and produce survey reports on the coal's quality and quantity during loading.
  6. Gimpex's surveyors, SCCI, were initially prevented from sampling the coal during loading.
  7. Upon arrival in Karachi, Intertek and Inspectorate reports indicated the coal did not meet contractual specifications.

5. Formal Citations

  1. Gimpex Ltd v Unity Holdings Business Ltd and others and another appeal, Civil Appeal Nos 160 of 2013 and 161 of 2013, [2015] SGCA 8
  2. Gimpex Limited v Unity Holding Business Limited and others, Suit No 390 of 2010, [2013] SGHC 224

6. Timeline

DateEvent
Draft contract sent by Lalit to Gimpex.
Contract entered into between Gimpex and Unity.
Loading of coal to be done between this date and 2010-04-03.
Sampling of coal stockpiled at Sungai Putting.
Loading of coal at Batulicin began.
Loading of coal at Batulicin ended.
Pre-shipment Analysis Report produced.
Loading of coal at Sungai Putting began.
Awan informed Kulkarni that SCCI had been prevented from sampling the coal.
Prem informed Lalit that Unity would prepare samples and deliver them to SCCI.
Loading of coal at Sungai Putting ended.
Loading of coal from barges onto the Vessel completed.
Sucofindo Report issued.
Coal arrived at Karachi.
Unity presented documents under the L/C for negotiation.
BOI paid Unity under the L/C and submitted the documents to ING for payment.
Intertek issued Inspection Certification of Quality and Quantity.
Injunction obtained by Gimpex in India to prevent ING from paying out under the L/C.
Gimpex applied for an interim injunction to restrain Unity from receiving payment under the L/C.
Unity entered into a contract with Rafeh Enterprises to sell the coal.
Rajah & Tann LLP wrote to Oon & Bazul LLP informing them that Awan had rejected the coal.
Oon & Bazul LLP informed Rajah & Tann LLP that Gimpex had unlawfully rejected the coal.
Kishore arrived at Pakistan.
Kishore engaged SGS Pakistan to conduct a survey of the coal.
SGS was stopped by Awan from taking samples.
O&B wrote to R&T regarding threats made to Kishore and the pilferage of the coal.
R&T replied to O&B seeking more information regarding the threats made against Kishore.
O&B stated that the proposed joint inspection would be pointless.
Kishore left Karachi.
Inspectorate issued a Certificate of Sampling and Analysis.
Unity sold the coal to M/s International Energy Resources (FZC).
Lalit sent an email to PT Planet to ask for the Berkah contract.
Judgment of Gimpex Limited v Unity Holding Business Limited and others [2013] SGHC 224.
Decision Date

7. Legal Issues

  1. Breach of Contract
    • Outcome: The court found that Unity Holdings breached the contract by delivering coal that did not meet the specified quality.
    • Category: Substantive
    • Sub-Issues:
      • Failure to deliver goods of specified quality
      • Wrongful rejection of goods
  2. Admissibility of Hearsay Evidence
    • Outcome: The court ruled on the admissibility of the Sucofindo Report, Intertek Report, and Inspectorate Report under Section 32 of the Evidence Act.
    • Category: Procedural
    • Sub-Issues:
      • Business records exception
      • Statements made by persons outside jurisdiction
  3. Unlawful Means Conspiracy
    • Outcome: The court dismissed the claim of unlawful means conspiracy, finding insufficient evidence of fraud.
    • Category: Substantive
    • Sub-Issues:
      • Fraudulent misrepresentation
      • Use of shell company
  4. Lifting the Corporate Veil
    • Outcome: The court declined to lift the corporate veil of Unity Holdings and Param Energy, finding that Vinay did not have sufficient control over Unity.
    • Category: Substantive
    • Sub-Issues:
      • Alter ego
      • Control over company

8. Remedies Sought

  1. Monetary Damages
  2. Indemnity against claims by Awan

9. Cause of Actions

  • Breach of Contract
  • Unlawful Means Conspiracy

10. Practice Areas

  • Commercial Litigation
  • International Trade
  • Contract Disputes

11. Industries

  • Commodities
  • Trading

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Zim Integrated Shipping Service Ltd and others v Dafni Igal and othersCourt of AppealYes[2011] 1 SLR 862SingaporeCited to distinguish the legal burden and the evidential burden.
Vaynar Suppiah & Sons v Abdul Rahim K M A and AnotherCourt of AppealYes[1974–1976] SLR(R) 112SingaporeCited for the principle that s 32(1)(b) only applied to reports made first-hand by a person with knowledge of the truth of the contents of the report.
Press Automation Technology Pte Ltd v Translink Exhibition Forwarding Pte LtdHigh CourtYes[2003] 1 SLR(R) 712SingaporeCited regarding the admissibility of a survey report which incorporated a verbal inspection report.
Jet Holdings Ltd and others v Cooper Cameron (Singapore) Pte Ltd and another and other appealsSingapore High CourtYes[2006] 3 SLR(R) 769SingaporeCited regarding the unavailability of a witness as one of the conditions which had to be fulfilled before any of the exceptions contained within the old s 32 could even be engaged.
Asia Hotel Investments Ltd v Starwood Asia Pacific Management Pte Ltd and AnotherHigh CourtYes[2007] SGHC 50SingaporeCited regarding the unavailability of a witness as one of the conditions which had to be fulfilled before any of the exceptions contained within the old s 32 could even be engaged.
Public Prosecutor v Abdul Rahim Bin Abdul SatarKuala Lumpur High CourtYes[1990] 3 MLJ 188MalaysiaCited regarding who is the maker of a document for the purposes of the hearsay rule.
Nagase Singapore Pte Ltd v Ching Kai Huat and othersSingapore Court of AppealYes[2008] 1 SLR(R) 80SingaporeCited for the elements to constitute unlawful and lawful means conspiracy.
Asian Corporate Services (SEA) Pte Ltd v Eastwest Management Ltd (Singapore Branch)Singapore Court of AppealYes[2006] 1 SLR(R) 901SingaporeCited for the principle that proof of conspiracy will normally be inferred from objective facts.
Visionhealthone Corp Pte Ltd v HD Holdings Pte LtdSingapore Court of AppealYes[2013] SGCA 47SingaporeCited for the principle that proof of conspiracy will normally be inferred from objective facts.
Tang Yoke Kheng trading as (Niklex Supply Co) v Lek Benedict and othersSingapore Court of AppealYes[2005] 3 SLR(R) 263SingaporeCited for the standard of proof in finding fraud.
Alwie Handoyo v Tjong Very Sumito and another and another appealSingapore Court of AppealYes[2013] 4 SLR 308SingaporeCited for the standard of proof in finding fraud.
Chua Kwee Chen v Koh Choon ChinHigh CourtYes[2006] 3 SLR(R) 469SingaporeCited for the standard of proof in finding fraud.
Wah Tat Bank Ltd and others v ChanPrivy CouncilYes[1974–1976] SLR(R) 284SingaporeCited to establish that Vinay should be liable as a joint tortfeasor.
Van Den Hurk v R Martens & Co, Limited (in liquidation)Kings Bench DivisionYes[1920] 1 KB 850England and WalesCited regarding the relevant time at which the price should be ascertained for damages.
Naugthon v O’CallaghanEnglish Court of AppealYes[1990] 3 All ER 191England and WalesCited regarding the relevant time at which the price should be ascertained for damages.
Robertson Quay Investment Pte Ltd v Steen Consultants Pte LtdSingapore High CourtYes[2008] 2 SLR(R) 623SingaporeCited regarding the measure of damages should be the loss of profit suffered by Gimpex instead.
China Resources Purchasing Co Ltd v Yue Xiu Enterprises (S) Pte Ltd and anotherSingapore Court of AppealYes[1996] 1 SLR(R) 397SingaporeCited regarding the court reserving a specific claim for assessment until a claim is brought by Awan.
Hadley v BaxendaleCourt of ExchequerYes(1854) 9 Exch 341England and WalesCited regarding the principles established in Hadley v Baxendale.
Williams Brothers v ED T Agius, LimitedHouse of LordsYes[1914] 1 AC 510United KingdomCited regarding the measure of damages in respect of non-delivery of the coal.
Rodocanachi, Sons & Co v Milburn BrothersEnglish Court of AppealYes(1886) 18 QBD 67England and WalesCited regarding the existence of a sub-sale by the buyer should have no effect on the damages payable by the seller to the buyer under the agreement entered into between them.
Hall (R and H) Ltd v W H Pim (Junior) & Co's ArbitrationHouse of LordsYes(1928) 33 Com Cas 324United KingdomCited regarding the understanding of the parties at the time of contracting.
Fazlur Rahman v Bombay Trading Co ((Pte) LtdSingapore High CourtYes[1992] 2 SLR(R) 529SingaporeCited regarding the understanding of the parties at the time of contracting.
Quay Kay Tee v Ong and Co Pte LtdSingapore High CourtYes[1996] 3 SLR(R) 637SingaporeCited for the need to show that the predominant purpose of the conspirators was to cause damage or injury to the plaintiff in order to establish a claim in lawful means conspiracy.
Wu Yang Construction Group Ltd v Zhejiang Jinyi Group Co LtdSingapore High CourtYes[2006] 4 SLR(R) 451SingaporeCited for the need to show that the predominant purpose of the conspirators was to cause damage or injury to the plaintiff in order to establish a claim in lawful means conspiracy.
Toepfer v Continental Grain CoNot AvailableYes[1974] 1 Lloyd’s Rep 11Not AvailableCited for the proposition that the contents of the Sucofindo Report could not be challenged because it was final and binding on the parties under the Contract.
Elafonissos Fishing and Shipping Company v Aigaion Insurance Company SAEnglish High CourtYes[2012] EWHC 1512 (Comm)England and WalesCited for the fact that the witness in question has left the employ of the party seeking to admit the evidence, is a factor that points to it being impracticable for the witness to be produced.
R v CastilloNot AvailableYes[1996] 1 Cr App Rep 438United KingdomCited for the various considerations alluded to by Prof Tapper.

13. Applicable Rules

Rule Name
Rules of Court (Cap 322, R 5, 2006 Rev Ed)

14. Applicable Statutes

Statute NameJurisdiction
Evidence Act (Cap 97, 1997 Rev Ed)Singapore
Sale of Goods Act (Cap 393, Rev Ed 1999)Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Gross Calorific Value
  • Total Moisture
  • Letter of Credit
  • Sucofindo Report
  • Intertek Report
  • Inspectorate Report
  • Performance Bond
  • Barge Reports
  • Pre-shipment Analysis Report
  • Unlawful Means Conspiracy Claim
  • Lifting of Corporate Veil Claims

15.2 Keywords

  • coal
  • contract
  • breach
  • quality
  • survey
  • evidence
  • hearsay
  • conspiracy
  • damages
  • Singapore
  • Gimpex
  • Unity Holdings

16. Subjects

  • Contract Law
  • Commercial Dispute
  • International Trade
  • Commodities Trading
  • Evidence

17. Areas of Law

  • Contract Law
  • Sale of Goods
  • Evidence Law
  • Civil Procedure
  • Commercial Law