AMZ v AXX: Breach of Contract, Repudiatory Breach, and Damages in Oil Supply Agreement Arbitration

In AMZ v AXX, the Singapore High Court addressed an application by AMZ to set aside an arbitration award. AMZ, the claimant, sought damages for AXX's alleged repudiatory breach of a contract to supply Dar Blend crude oil. The tribunal found one breach related to the letter of credit, but dismissed the claim, as it did not amount to a repudiatory breach and AMZ did not pursue an alternative claim for damages. Coomaraswamy J. dismissed AMZ's application, finding no procedural defects or prejudice, and AMZ's appeal to the Court of Appeal was dismissed.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Claimant's application to set aside the tribunal's award was dismissed with costs.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Singapore High Court case concerning a breach of contract claim in an oil supply agreement, focusing on repudiatory breach and damages.

1.7 Decision Date

29 October 2015

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
AMZ	Plaintiff, Applicant	Corporation	Application dismissed	Lost	Koh Swee Yen of WongPartnership LLP Goh Wei Wei of WongPartnership LLP
AXX	Defendant, Respondent	Corporation	Application dismissed	Won	Lek Siang Pheng of Rodyk & Davidson LLP Mark Seah of Rodyk & Davidson LLP Patrick Wong of Rodyk & Davidson LLP

3. Judges

Judge Name	Title	Delivered Judgment
Vinodh Coomaraswamy	Judge	Yes

4. Counsels

Counsel Name	Organization
Koh Swee Yen	WongPartnership LLP
Goh Wei Wei	WongPartnership LLP
Lek Siang Pheng	Rodyk & Davidson LLP
Mark Seah	Rodyk & Davidson LLP
Patrick Wong	Rodyk & Davidson LLP

4. Facts

AMZ and AXX entered into a Supply Contract for the sale of Dar Blend crude oil.
The Supply Contract stipulated a delivery window between 10 January 2011 and 20 January 2011.
AXX was obligated to open an irrevocable letter of credit by 16 December 2010.
AXX failed to secure a crude oil import licence before the delivery window.
AMZ chartered the Tantive IV to transport the Dar Blend but held it in Alderaan.
AMZ claimed AXX's breaches amounted to a repudiatory breach of contract.
The Tribunal found AXX breached the contract by failing to issue a letter of credit.

5. Formal Citations

AMZ v AXX, , [2015] SGHC 283

6. Timeline

Date	Event
2010-12-01	Supply Contract signed
2010-12-13	Owen sent a chaser to the defendant’s representative inquiring about the status of the Supply Contract
2010-12-14	Defendant returned the signed execution pages of the Supply Contract to the plaintiff
2010-12-16	Deadline for defendant to open a letter of credit
2010-12-17	Dar Blend loaded onto the Tantive IV at Port Sudan
2010-12-18	Dar Blend loaded onto the Tantive IV at Port Sudan
2011-01-01	Tantive IV arrived in Alderaan
2011-01-04	Defendant confirmed failure to secure crude oil import licence
2011-01-10	Start of delivery window
2011-01-20	Plaintiff put the defendant on notice that the plaintiff considered the defendant to be in repudiatory breach of the Supply Contract
2011-01-20	End of delivery window
2011-02-25	Plaintiff notified defendant it had not found another buyer
2011-03-01	Plaintiff sold the Dar Blend to a company
2011-03-01	Plaintiff demanded that the defendant pay within one week the sum of US$10.17m as compensation for the defendant’s breach of the Supply Contract
2011-04-07	Plaintiff commenced arbitration against the defendant
2011-07-01	Tribunal was duly constituted
2011-12-05	Jurisdictional hearing took place
2011-12-06	Jurisdictional hearing took place
2012-04-30	Tribunal notified the parties that it was disinclined at that stage to accept the defendant’s jurisdictional objection
2013-02-18	Hearing on the merits took place
2013-02-19	Hearing on the merits took place
2013-02-20	Hearing on the merits took place
2014-01-21	Tribunal issued its award
2015-10-30	Decision Date

7. Legal Issues

Breach of Contract
- Outcome: The Tribunal found one breach of contract to have been established but found that the other two alleged breaches are not breaches at all.
- Category: Substantive
- Sub-Issues:
  - Failure to provide letter of credit
  - Failure to obtain crude import licence
  - Failure to take delivery of consignment
Repudiatory Breach
- Outcome: The tribunal held that the claimant was unable to rely on the lone breach of contract as being a repudiatory breach of contract.
- Category: Substantive
Setting Aside Arbitration Award
- Outcome: The court dismissed the claimant's application to set aside the tribunal's award.
- Category: Procedural
- Sub-Issues:
  - Breach of natural justice
  - Dealing with matters outside the scope of submission to arbitration
  - Procedure not in accordance with parties’ agreement
- Related Cases:
  - John Holland Pty Ltd (formerly known as John Holland Construction & Engineering Pty Ltd) v Toyo Engineering Corp (Japan) [2001] 1 SLR(R) 443
  - Soh Beng Tee & Co v Fairmont Development Pte Ltd [2007] 3 SLR(R) 86
  - L W Infrastructure Pte Ltd v Lim Chin San Contractors Pte Ltd and another appeal [2013] 1 SLR 125
  - Jeyaretnam Joshua Benjamin v Lee Kuan Yew [1992] 1 SLR(R) 791
  - Re Shankar Alan s/o Anant Kulkarni [2007] 1 SLR(R) 85
  - Zermalt Holdings SA v Nu-Life Upholstery Repairs Ltd [1985] 2 EGLR 14
  - Interbulk Ltd v Aiden Shipping Co Ltd (The Vimeira) [1984] 2 Lloyd’s Rep 66
  - Koh Brothers Building and Civil Engineering Contractor Pte Ltd v Scotts Development (Saraca) Pte Ltd [2002] 2 SLR(R) 1063
  - Front Row Investment Holdings (Singapore) Pte Ltd v Daimler South East Asia Pte Ltd [2010] SGHC 80
  - Laing O’Rourke Australia Construction Pty Ltd v H&M Engineering & Construction Pty Ltd [2010] NSWSC 818
  - CRW Joint Operation v PT Perusahaan Gas Negara (Persero) TBK [2011] 4 SLR 305
  - PT Asuransi Jasa Indonesia (Persero) v Dexia Bank SA [2007] 1 SLR(R) 597

8. Remedies Sought

Monetary Damages
Setting Aside of Arbitral Award

9. Cause of Actions

Breach of Contract

10. Practice Areas

Commercial Arbitration
Commercial Litigation

11. Industries

Oil and Gas

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
Hadley v Baxendale	N/A	Yes	Hadley v Baxendale (1854) 9 Exch 341; 156 ER 145	N/A	Cited for the principle of recoverability of hedging losses as damages.
John Holland Pty Ltd (formerly known as John Holland Construction & Engineering Pty Ltd) v Toyo Engineering Corp (Japan)	N/A	Yes	John Holland Pty Ltd (formerly known as John Holland Construction & Engineering Pty Ltd) v Toyo Engineering Corp (Japan) [2001] 1 SLR(R) 443	Singapore	Cited for the requirements to set aside an arbitral tribunal award under s 24(b) of the International Arbitration Act.
Soh Beng Tee & Co v Fairmont Development Pte Ltd	N/A	Yes	Soh Beng Tee & Co v Fairmont Development Pte Ltd [2007] 3 SLR(R) 86	Singapore	Cited for the requirements to set aside an arbitral tribunal award under s 24(b) of the Act and the test of actual prejudice.
L W Infrastructure Pte Ltd v Lim Chin San Contractors Pte Ltd and another appeal	N/A	Yes	L W Infrastructure Pte Ltd v Lim Chin San Contractors Pte Ltd and another appeal [2013] 1 SLR 125	Singapore	Cited for the requirements to set aside an arbitral tribunal award under s 24(b) of the Act and the test of actual prejudice.
Jeyaretnam Joshua Benjamin v Lee Kuan Yew	N/A	Yes	Jeyaretnam Joshua Benjamin v Lee Kuan Yew [1992] 1 SLR(R) 791	Singapore	Cited for the rule against bias and apparent bias.
Re Shankar Alan s/o Anant Kulkarni	N/A	Yes	Re Shankar Alan s/o Anant Kulkarni [2007] 1 SLR(R) 85	Singapore	Cited for the rule against bias and apparent bias.
Zermalt Holdings SA v Nu-Life Upholstery Repairs Ltd	N/A	Yes	Zermalt Holdings SA v Nu-Life Upholstery Repairs Ltd [1985] 2 EGLR 14	N/A	Cited for the principle that a tribunal should not base its decision on a point not submitted to it or a matter not argued before it.
Interbulk Ltd v Aiden Shipping Co Ltd (The Vimeira)	N/A	Yes	Interbulk Ltd v Aiden Shipping Co Ltd (The Vimeira) [1984] 2 Lloyd’s Rep 66	N/A	Cited for the principle that a tribunal should not base its decision on a point not submitted to it or a matter not argued before it.
Koh Brothers Building and Civil Engineering Contractor Pte Ltd v Scotts Development (Saraca) Pte Ltd	N/A	Yes	Koh Brothers Building and Civil Engineering Contractor Pte Ltd v Scotts Development (Saraca) Pte Ltd [2002] 2 SLR(R) 1063	Singapore	Cited for the principle that a tribunal should not base its decision on a point not submitted to it or a matter not argued before it.
Front Row Investment Holdings (Singapore) Pte Ltd v Daimler South East Asia Pte Ltd	High Court of Singapore	Yes	Front Row Investment Holdings (Singapore) Pte Ltd v Daimler South East Asia Pte Ltd [2010] SGHC 80	Singapore	Cited for the principle that a tribunal cannot disregard an argument or a submission made by a party without directing its judicial mind to the merits of that argument or submission through an active process of intellectual reasoning.
Laing O’Rourke Australia Construction Pty Ltd v H&M Engineering & Construction Pty Ltd	Supreme Court of New South Wales	Yes	Laing O’Rourke Australia Construction Pty Ltd v H&M Engineering & Construction Pty Ltd [2010] NSWSC 818	Australia	Cited for the principle that a tribunal cannot disregard an argument or a submission made by a party without directing its judicial mind to the merits of that argument or submission through an active process of intellectual reasoning.
CRW Joint Operation v PT Perusahaan Gas Negara (Persero) TBK	N/A	Yes	CRW Joint Operation v PT Perusahaan Gas Negara (Persero) TBK [2011] 4 SLR 305	Singapore	Cited for the principle that a tribunal is not required to refer every issue which falls for decision to the parties for submissions.
PT Asuransi Jasa Indonesia (Persero) v Dexia Bank SA	N/A	Yes	PT Asuransi Jasa Indonesia (Persero) v Dexia Bank SA [2007] 1 SLR(R) 597	Singapore	Cited for the two questions the Court must consider when considering whether to set aside an award under Article 34(2)(a)(iii) of the Model Law.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute Name	Jurisdiction
International Arbitration Act (Cap 143A, 2002 Rev Ed)	Singapore

15. Key Terms and Keywords

15.1 Key Terms

Dar Blend
Supply Contract
Buy-back Contract
Letter of Credit
Repudiatory Breach
Crude Oil Import Licence
Tantive IV
Hedging Losses
Ex Ship
Payment Undertaking

15.2 Keywords

arbitration
breach of contract
oil supply
repudiatory breach
damages
Singapore High Court

17. Areas of Law

Area Name	Relevance Score
Breach of Contract	95
Contract Law	90
Damages	80
Arbitration	75
Commercial Disputes	60
International Arbitration Act	50
International Commercial Arbitration	40
Contractual discretions	30

16. Subjects

Arbitration
Contract Law
International Trade
Oil and Gas