Airtrust v PH Hydraulics: Defective Reel Drive Unit & Breach of Contract

In a civil suit before the High Court of Singapore on 30 November 2015, Airtrust (Hong Kong) Ltd sued PH Hydraulics & Engineering Pte Ltd for breach of contract, alleging that a 300-ton reel drive unit (RDU) purchased from PH Hydraulics was defective. The court, presided over by Chan Seng Onn J, found in favor of Airtrust, determining that the RDU was not of merchantable quality, fit for its intended purpose, or free from defects in design, manufacture, or workmanship, thus constituting a breach of contract by PH Hydraulics.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Judgment for Plaintiff

1.3 Case Type

Civil

1.4 Judgment Type

Judgment reserved

1.5 Jurisdiction

Singapore

1.6 Description

Singapore High Court found PH Hydraulics breached contract by delivering a defective reel drive unit to Airtrust, unfit for its purpose.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
AIRTRUST (HONG KONG) LTDPlaintiffCorporationJudgment for PlaintiffWonTan Chuan Thye, Avinash Pradhan, Alyssa Leong, Arthi Anbalagan
PPH HYDRAULICS & EENGINEERING PTE LTDDefendantCorporationJudgment against DefendantLostDaniel John, Kevin Cheng

3. Judges

Judge NameTitleDelivered Judgment
Chan Seng OnnJudgeYes

4. Counsels

Counsel NameOrganization
Tan Chuan ThyeRajah & Tann Singapore LLP
Avinash PradhanRajah & Tann Singapore LLP
Alyssa LeongRajah & Tann Singapore LLP
Arthi AnbalaganRajah & Tann Singapore LLP
Daniel JohnGoodwins Law Corporation
Kevin ChengGoodwins Law Corporation

4. Facts

  1. Plaintiff purchased a 300-ton reel drive unit (RDU) from the Defendant in 2007.
  2. The RDU was intended for lease to Trident Offshore Services for undersea umbilical laying.
  3. The Sale and Purchase Agreement stipulated ABS full certification for the RDU.
  4. The RDU suffered a major gearbox failure during umbilical laying operations.
  5. Plaintiff claimed the RDU had manufacturing and design defects at delivery.
  6. Defendant was responsible for the RDU design but kept design details confidential.
  7. The RDU was delivered to the Plaintiff on 10 April 2008.

5. Formal Citations

  1. Airtrust (Hong Kong) Ltd v PH Hydraulics & Engineering Pte Ltd, Suit No 219 of 2013, [2015] SGHC 307

6. Timeline

DateEvent
Sale and Purchase Agreement for RDU entered into
Factory acceptance test carried out
RDU delivered to Plaintiff
Major failure of gearbox assembly occurred
Suit filed
Judgment reserved

7. Legal Issues

  1. Breach of Contract
    • Outcome: The court found that the Defendant had breached its contract by not delivering an RDU that was of merchantable quality and fit for its purpose to the Plaintiff.
    • Category: Substantive
    • Sub-Issues:
      • Failure to supply goods of merchantable quality
      • Failure to supply goods fit for purpose
      • Defects in design
      • Defects in manufacture
      • Defects in workmanship
  2. Fraudulent Misrepresentation
    • Outcome: The court found that the Defendant had fraudulently modelled some of the critical structural connections of the RDU and further fraudulently stipulated the absence of wind load on the RDU in the submission of its STAAD.Pro programme to ABSG for its design review, and thus had deliberately and dishonestly misled ABSG into giving ABSG certification for the Defendant’s structural design of the RDU, which certification the Defendant would not have otherwise obtained had it modelled the RDU correctly.
    • Category: Substantive
    • Sub-Issues:
      • Inaccurate STAAD.Pro Modelling
      • Misrepresentation of ABSG Certification
      • Misrepresentation of Wind Load Considerations

8. Remedies Sought

  1. Monetary Damages
  2. Punitive Damages

9. Cause of Actions

  • Breach of Contract
  • Fraudulent Misrepresentation

10. Practice Areas

  • Commercial Litigation
  • Construction Law

11. Industries

  • Construction
  • Oil and Gas
  • Marine

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
National Foods Ltd v Pars Ram Brothers (Pte) LtdHigh CourtYes[2007] 2 SLR(R) 1048SingaporeCited to support the proposition that the defendant is under a statutory obligation to ensure that the RDU is fit for the particular purposes made known to it.
MFM Restaurants Pte Ltd v Fish & Co Restaurants Pte LtdCourt of AppealYes[2011] 1 SLR 150SingaporeCited for the proposition that there is an arguable case, in principle, for the award of punitive damages in contract law.

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

  • Reel Drive Unit
  • RDU
  • ABSG Certification
  • STAAD.Pro Analysis
  • Umbilical Laying
  • Merchantable Quality
  • Fitness for Purpose
  • Design Defects
  • Manufacturing Defects
  • Bolted Joints
  • Gearbox Failure
  • Finite Element Analysis
  • Fatigue Analysis

15.2 Keywords

  • Reel Drive Unit
  • RDU
  • Breach of Contract
  • Defective Goods
  • Engineering
  • Construction
  • Singapore
  • High Court

16. Subjects

  • Contract Dispute
  • Construction Dispute
  • Engineering Dispute
  • Product Liability

17. Areas of Law

  • Contract Law
  • Construction Law
  • Engineering Law