Avra Commodities v China Coal Solution: Contract Formation & Intention

In Avra Commodities Pte Ltd v China Coal Solution (Singapore) Pte Ltd, the Singapore High Court addressed a breach of contract claim concerning the sale of Indonesian steam coal. Avra Commodities sued China Coal Solution, alleging a contract was formed through an exchange of emails. The court, presided over by Justice Vinodh Coomaraswamy, ruled in favor of Avra Commodities, finding that the email exchange constituted a binding contract. The court awarded damages of US$1,465,850 to Avra Commodities for China Coal Solution's breach.

1. Case Overview

1.1 Court

High Court of the Republic of Singapore

1.2 Outcome

Judgment for Plaintiff

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Singapore High Court case regarding contract formation via email exchange. Court found intention to create legal relations, awarding damages.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
China Coal Solution (Singapore) Pte LtdDefendantCorporationJudgment against DefendantLost
Avra Commodities Pte LtdPlaintiffCorporationJudgment for PlaintiffWon

3. Judges

Judge NameTitleDelivered Judgment
Vinodh CoomaraswamyJudgeYes

4. Counsels

Counsel NameOrganization
Joseph TanLegal Solutions LLC
Joanna PohLegal Solutions LLC
Tan Xue TingHaridass Ho & Partners
Thomas TanHaridass Ho & Partners

4. Facts

  1. The plaintiff and defendant exchanged four emails on March 29, 2017.
  2. The emails concerned the sale of Indonesian steam coal.
  3. The plaintiff claimed the emails constituted a binding contract.
  4. The defendant argued there was no intention to create legal relations.
  5. The defendant argued the terms were insufficiently certain.
  6. The parties had previous dealings on three occasions.
  7. The defendant failed to execute the final draft of the contract.

5. Formal Citations

  1. Avra Commodities Pte Ltd v China Coal Solution (Singapore) Pte Ltd, Suit No 725 of 2017, [2019] SGHC 287

6. Timeline

DateEvent
Plaintiff agreed to sell defendant a cargo of 45,000 MT of coal pursuant to an exchange of emails.
Plaintiff sold defendant a cargo of 55,000 MT of coal under a formal contract.
Plaintiff sold defendant a cargo of 55,000 MT of coal under a formal contract.
Parties exchanged business confirmation emails.
Mr. Zhou emailed Mr. Wei a draft contract titled “FOB Coal Sale Agreement”.
Mr. Wei emailed Mr. Zhou the draft contract marked up with the defendant’s proposed amendments.
Plaintiff replied to Mr. Wei’s email.
Mr. Wei replied to the plaintiff’s email with another marked-up version of the draft contract.
Plaintiff replied with further comments.
Parties attempted to reach agreement on the remaining disputed clauses of the draft contract.
Parties reached agreement on the terms of the draft contract.
Mr Zhou emailed to Mr Wei a clean copy of the final draft of the contract.
Mr. Wei replied to say: “confirm the draft good in order”.
Plaintiff executed the final draft of the contract and sent it to the defendant.
Mr. Zhou reminded Mr. Wei to execute and return the final draft of the contract.
Plaintiff sent an email to Mr. Wei taking the position that the parties were contractually bound by the business confirmation emails.
Mr. Wei replied to the plaintiff.
Plaintiff wrote to the defendant taking the position that the defendant was contractually obliged to purchase all three cargoes of coal.
Mr Burgess met representatives of the defendant to “make a last ditch attempt” to get the defendant to perform.
Plaintiff’s solicitors wrote to the defendant formally terminating the parties’ contract.
Plaintiff issued the writ in this action.
Trial began.
Trial continued.
Trial continued.
Trial continued.
Judgment issued.
Reasons set out.

7. Legal Issues

  1. Breach of Contract
    • Outcome: The court found the defendant liable for breach of contract and awarded damages to the plaintiff.
    • Category: Substantive
    • Sub-Issues:
      • Failure to perform
      • Damages calculation
  2. Contract Formation
    • Outcome: The court held that a contract was formed through the exchange of emails between the parties.
    • Category: Substantive
    • Sub-Issues:
      • Offer
      • Acceptance
      • Intention to create legal relations
      • Certainty of terms
  3. Intention to Create Legal Relations
    • Outcome: The court found that the parties intended to create legal relations through their email exchange.
    • Category: Substantive
  4. Certainty of Terms
    • Outcome: The court found that the terms of the contract were sufficiently certain to be enforceable.
    • Category: Substantive

8. Remedies Sought

  1. Monetary Damages

9. Cause of Actions

  • Breach of Contract

10. Practice Areas

  • Commercial Litigation

11. Industries

  • Commodities
  • Shipping

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
R1 International Pte Ltd v Lonstroff AGCourt of AppealYes[2015] 1 SLR 521SingaporeCited for the objective approach to questions of contractual formation.
Midlink Development Pte Ltd v The Stansfield Group Pte LtdN/AYes[2004] 4 SLR(R) 258SingaporeCited for the principle that negative conduct can amount to acceptance.
Statoil ASA v Louis Dreyfus Energy Services LPN/AYes[2009] 1 All ER (Comm) 1035N/ACited for the principle that strict requirements of offer and acceptance are not necessarily appropriate when sorting out details against the background of a concluded contract.
Pagnan SpA v Feed Products LtdN/AYes[1987] 2 Lloyd’s Rep 601N/ACited for the principle that parties may intend to be bound forthwith even though there are further terms still to be agreed or some further formality to be fulfilled.
Rudhra Minerals Pte Ltd v MRI Trading Pte LtdN/AYes[2013] 4 SLR 1023SingaporeCited for the principle that it is for the parties to decide whether and when they wish to be bound and, if so, by what terms.
Benourad v Compass Group PLCN/AYes[2010] EWHC 1882N/ACited by the defendant to argue that the parties did not intend to create legal relations until they signed a formal contract.
Johnson and Another v AgnewN/AYes[1980] AC 367N/ACited for the general rule that damages should be assessed as at the date of the breach.
Golden Strait Corporation v Nippon Yusen Kubishika Kaisha (The “Golden Victory”)N/AYes[2007] 2 AC 353N/ACited for the proposition that where there has been a breach of contract for the sale of goods, some period must usually be allowed to enable the necessary arrangements for the substitute sale or purchase to be made.
Kaines (UK) Ltd v Österreichische WarrenhandelsgesellschaftEnglish Court of AppealYes[1993] 2 Lloyd’s Rep 1EnglandCited for the principle that some period must usually be allowed to enable the necessary arrangements for the substitute sale or purchase to be made.
Marco Polo Shipping Co Pte Ltd v Fairmacs Shipping & Transport Services Pte LtdCourt of AppealYes[2015] 5 SLR 541SingaporeCited for the definition of an “available market”.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
Sale of Goods Act (Cap 393, 1999 Rev Ed)Singapore
Civil Law Act (Cap 43, Rev Ed 1999)Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Business confirmation emails
  • Indonesian steam coal
  • FOB
  • Laycan
  • Gearless vessel
  • Geared and grabbed vessel
  • Letter of credit
  • Load port surveyor
  • Available market
  • Market price

15.2 Keywords

  • Contract formation
  • Intention to create legal relations
  • Breach of contract
  • Coal
  • Singapore
  • Email
  • Damages

17. Areas of Law

Area NameRelevance Score
Formation of contract98
Contract Law95
Breach of Contract90
Intention to create legal relations85
Certainty of terms75
Performance of Contract60
Damages50
Sale of Goods40

16. Subjects

  • Contract Law
  • Commercial Law
  • Sale of Goods