Teras Offshore Pte Ltd v Teras Cargo Transport: Breach of Contract & Non-payment Dispute

In the Singapore International Commercial Court, Teras Offshore Pte Ltd (TO) sued Teras Cargo Transport (America) LLC (TCT) for breach of contract and non-payment related to marine logistics services for LNG projects in Australia. TO claimed US$3.5 million in advanced payments and approximately US$25 million in back-charges. TCT denied the claims and counterclaimed for US$14 million. The court found in favor of TO, awarding the US$3.5 million advanced payments, the back-charges, and dismissing TCT's counterclaim.

1. Case Overview

1.1 Court

Singapore International Commercial Court

1.2 Outcome

Judgment for Plaintiff

1.3 Case Type

Civil

1.4 Judgment Type

Judgment

1.5 Jurisdiction

Singapore

1.6 Description

Singapore court judgment in a breach of contract case between Teras Offshore and Teras Cargo Transport concerning non-payment for marine logistics services.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Teras Offshore Pte LtdPlaintiffCorporationJudgment for PlaintiffWon
Teras Cargo Transport (America) LLCDefendantCorporationCounterclaim DismissedLost

3. Judges

Judge NameTitleDelivered Judgment
Sir Henry Bernard EderInternational JudgeYes

4. Counsels

Counsel NameOrganization
Andrew LeePeter Doraisamy LLC
Peter DoraisamyPeter Doraisamy LLC
Timothy Ross LordPeter Low LLC
Rajkumar MannarPeter Low LLC

4. Facts

  1. Teras Offshore (TO) provided marine logistics to Teras Cargo Transport (TCT) for LNG projects in Australia.
  2. TCT subcontracted work to TO on back-to-back terms from main contracts with Bechtel.
  3. TO transported modules to Curtis Island for the Queensland Curtis, Australia Pacific, and Gladstone LNG Projects.
  4. TO claimed reimbursement of US$3.5 million in advanced payments and approximately US$25 million in back-charges.
  5. TCT denied TO's claims and advanced a counterclaim for approximately US$14 million.
  6. TCT elected not to call any of its scheduled witnesses at trial.
  7. The court found TO's witnesses to be honest and accepted their evidence.

5. Formal Citations

  1. Teras Offshore Pte Ltd v Teras Cargo Transport (America) LLC, Suit No 1 of 2016, [2017] SGHC(I) 04

6. Timeline

DateEvent
QUEENSLAND CURTIS LNG PROJECT OCEAN BARGE TRANSPORT AGREEMENT signed
GLNG PLANT PROJECT TECHNICAL SERVICES AGREEMENT signed
Sub-Contracts signed
AUSTRALIA PACIFIC LNG PROJECT GENERAL SERVICES AGREEMENT signed
Writ filed
Statement of Claim amended to include back-charges claims
Trial began
Judgment reserved
Judgment issued

7. Legal Issues

  1. Breach of Contract
    • Outcome: The court found that the defendant breached the contract by failing to make payments for services rendered.
    • Category: Substantive
    • Sub-Issues:
      • Non-payment
      • Scope of work
      • Contractual interpretation
  2. Scope of Contractual Obligations
    • Outcome: The court determined the scope of work under the contracts, including what was excluded.
    • Category: Substantive
    • Sub-Issues:
      • Interpretation of contract terms
      • Definition of 'Work'
      • Exclusions from scope of work
  3. Pay When Paid Clauses
    • Outcome: The court considered the effect of 'pay when paid' clauses and whether the defendant could rely on them.
    • Category: Substantive
    • Sub-Issues:
      • Interpretation of payment terms
      • Conditions precedent to payment
      • Implied undertakings

8. Remedies Sought

  1. Monetary Damages
  2. Interest
  3. Costs

9. Cause of Actions

  • Breach of Contract
  • Debt
  • Quantum Meruit

10. Practice Areas

  • Commercial Litigation
  • International Trade
  • Contract Disputes

11. Industries

  • Oil and Gas
  • Construction
  • Shipping

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Browne v DunnHouse of LordsYes(1893) 6 R 67 (HL)United KingdomCited regarding the rule in Browne v Dunn, concerning cross-examination of witnesses.
Hong Leong Singapore Finance Ltd v United Overseas Bank LtdSingapore Court of AppealYes[2007] 1 SLR(R) 292SingaporeCited as explaining the rule in Browne v Dunn.
Rira Bina Sdn Bhd v GBC Construction Sdn BhdHigh CourtYes[2011] 2 MLJ 378MalaysiaCited regarding the nature of a 'pay when paid' clause.
Brightside Mechanical & Electrical Services Group Ltd and another v Hyundai Engineering & Construction Co LtdSingapore High CourtYes[1988] 1 SLR(R) 1SingaporeCited regarding the nature of a 'pay when paid' clause.
Interpro Engineering Pte Ltd v Sin Heng Construction Co Pte LtdSingapore High CourtYes[1997] 3 SLR(R) 668SingaporeCited regarding the nature of a 'pay when paid' clause.
Durabella Ltd v J. Jarvis & Sons LtdEnglish High CourtYes[2001] EWHC 454 (TCC)United KingdomCited regarding a party's inability to rely on a 'pay when paid' clause if non-payment is due to their own breach.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
Evidence Act (Cap 97, 1997 Rev Ed)Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Back-charges
  • Marine spread
  • LNG Projects
  • Sub-Contracts
  • Main Contracts
  • Curtis Island
  • Barges
  • Tugs
  • Grillage removal
  • Pay when paid clause

15.2 Keywords

  • breach of contract
  • non-payment
  • marine logistics
  • LNG
  • Singapore
  • back-charges
  • subcontract
  • Teras Offshore
  • Teras Cargo Transport

17. Areas of Law

Area NameRelevance Score
Breach of Contract95
Contract Law90
Shipping Law60
Commercial Litigation50
Marine Logistics40

16. Subjects

  • Contract Dispute
  • Shipping
  • Marine Logistics
  • Subcontracting