Tractors Singapore Ltd v Pacific Ocean Engineering: Implied Contractual Terms & Repudiatory Breach

In Tractors Singapore Ltd v Pacific Ocean Engineering & Trading Pte Ltd, the Singapore High Court addressed a breach of contract claim and a counterclaim arising from shipbuilding equipment contracts. Tractors Singapore Limited (Plaintiff) sued Pacific Ocean Engineering & Trading Pte Ltd (Defendant) for repudiatory breach of implied terms, including failing to nominate a port of destination and advise on a delivery date within a reasonable time. The Defendant counterclaimed that the Plaintiff had wrongly terminated the contracts. The High Court found in favor of the Plaintiff, ruling that the Defendant's breaches entitled the Plaintiff to terminate the contracts and dismissed the Defendant's counterclaim.

1. Case Overview

1.1 Court

High Court of the Republic of Singapore

1.2 Outcome

Judgment for Plaintiff; Defendant's counterclaim dismissed.

1.3 Case Type

Civil

1.4 Judgment Type

Judgment

1.5 Jurisdiction

Singapore

1.6 Description

Singapore High Court case regarding implied contractual terms for delivery date and port nomination, and whether the defendant's breach entitled the plaintiff to terminate the contracts.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Pacific Ocean Engineering & Trading Pte LtdDefendantCorporationClaim DismissedLost
Tractors Singapore LimitedPlaintiffCorporationJudgment for PlaintiffWon

3. Judges

Judge NameTitleDelivered Judgment
Vincent HoongJudgeYes

4. Counsels

Counsel NameOrganization
Koh Kok KwangCTLC Law Corporation
Ong Sie Hou RaymondCTLC Law Corporation
Karin LeeCTLC Law Corporation
Kirpalani Rakesh GopalDrew & Napier LLC
Oen Weng Yew TimothyDrew & Napier LLC
Teo Wei LingDrew & Napier LLC

4. Facts

  1. The plaintiff and defendant entered into ten contracts for shipbuilding equipment.
  2. The contracts required the defendant to nominate a port of destination and/or advise on a delivery date.
  3. The defendant paid a 10% down-payment for each contract.
  4. The equipment was never delivered to the defendant.
  5. The plaintiff alleged that the defendant's failure to nominate a port and advise on a delivery date constituted a repudiatory breach.
  6. The defendant counterclaimed that the plaintiff had wrongly terminated the contracts.
  7. The plaintiff sold some of the equipment to mitigate losses.

5. Formal Citations

  1. Tractors Singapore Ltd v Pacific Ocean Engineering & Trading Pte Ltd, Suit No 283 of 2018, [2020] SGHC 60

6. Timeline

DateEvent
Purchase Orders 8874 and 8875 issued
Purchase Orders 9968 and 9969 issued
Purchase Orders 9992, 10600 and 10601 issued
Purchase Orders 11289 and 11290 issued
Meeting between parties regarding delivery dates for POs 9968 and 9969
Purchase Order 11651 issued
Plaintiff alleged defendant was in repudiatory breach of contracts evidenced by POs 8874 and 8875 and unilaterally terminated them
Plaintiff terminated contracts evidenced by POs 9968, 9969, 9992, 10600, 10601, 11289, 11290 and 11651
Plaintiff issued the writ in this action
Judgment reserved

7. Legal Issues

  1. Breach of Contract
    • Outcome: The court found that the defendant breached the contracts by failing to nominate a port of destination and advise on a delivery date within a reasonable time.
    • Category: Substantive
    • Sub-Issues:
      • Failure to nominate port of destination
      • Failure to advise on delivery date
  2. Implied Terms
    • Outcome: The court held that the contracts were subject to implied terms requiring the defendant to nominate a port of destination and advise on a delivery date within a reasonable time.
    • Category: Substantive
    • Sub-Issues:
      • Reasonable time for nomination
      • Business efficacy
  3. Repudiatory Breach
    • Outcome: The court found that the defendant's breaches were repudiatory, entitling the plaintiff to terminate the contracts.
    • Category: Substantive
    • Sub-Issues:
      • Renunciation
      • Breach of condition
  4. Waiver
    • Outcome: The court held that the plaintiff had not waived its right to terminate the contracts.
    • Category: Procedural
    • Sub-Issues:
      • Waiver by election
      • Communication of choice
  5. Mitigation of Losses
    • Outcome: The court found that the plaintiff had reasonably mitigated its losses.
    • Category: Substantive
    • Sub-Issues:
      • Reasonable steps to mitigate
      • Burden of proof

8. Remedies Sought

  1. Monetary Damages

9. Cause of Actions

  • Breach of Contract

10. Practice Areas

  • Commercial Litigation
  • Contract Disputes

11. Industries

  • Shipping
  • Manufacturing

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Sembcorp Marine Ltd v PPL Holdings Pte LtdCourt of AppealYes[2013] 4 SLR 193SingaporeCited for the three-stage test for implying terms in fact.
CAA Technologies Pte Ltd v Newcon Builders Pte LtdCourt of AppealYes[2017] 2 SLR 940SingaporeCited for reaffirming the three-stage test for implying terms in fact.
Tsakiroglou & Co Ltd v Transgrains, SAEnglish CourtYes[1958] 1 Lloyd’s Rep 562EnglandCited for the principle that a buyer must nominate a port of destination within a reasonable time.
Mansel Oil Ltd and another v Troon Storage Tankers SA (The “Ailsa Craig”)English High CourtYes[2008] EWHC 1269 (Comm)EnglandCited for the principle that a charterer must declare the delivery port within a reasonable time.
Mansel Oil Limited, Vitol S.A. v Troon Storage Tankers SAEnglish Court of AppealYes[2009] EWCA Civ 425EnglandCited for upholding the propositions in Mansel Oil (HC).
Aero-Gate Pte Ltd v Engen Marine Engineering Pte LtdHigh CourtYes[2013] 4 SLR 409SingaporeCited for the interpretation of 'final date to be advised' and waiver by election.
RDC Concrete Pte Ltd v Sato Kogyo (S) Pte Ltd and anotherCourt of AppealYes[2007] 4 SLR(R) 413SingaporeCited for the four situations in which an innocent party is entitled to terminate a contract.
V Nithia (co-administratrix of the estate of Ponnusamy Sivapakiam, deceased) v Buthmanaban s/o Vaithilingam and anotherCourt of AppealYes[2015] 5 SLR 1422SingaporeCited for the principle that parties are bound by their pleadings.
OMG Holdings Pte Ltd v Pos Ad Sdn BhdCourt of AppealYes[2012] 4 SLR 231SingaporeCited for the principle that the court may permit an unpleaded point to be raised if no injustice will be caused to the other party.
Y.E.S. F&B Group Pte Ltd v Soup Restaurant Singapore Pte Ltd (formerly known as Soup Restaurant (Causeway Point) Pte Ltd)Court of AppealYes[2015] 5 SLR 1187SingaporeCited for the principle that the objective of interpreting a contract is to discern the parties’ intentions at the time of entering into the contract.
San International Pte Ltd (formerly known as San Ho Huat Construction Pte Ltd) v Keppel Engineering Pte LtdHigh CourtYes[1998] 3 SLR(R) 447SingaporeCited for the definition of repudiatory breach.
Econ Piling Pte Ltd v GTE Construction Pte LtdHigh CourtYes[2009] SGHC 213SingaporeCited for the definition of repudiatory breach.
Chai Cher Watt (trading as Chuang Aik Engineering Works) v SDL Technologies Pte Ltd and anotherHigh CourtYes[2012] 1 SLR 152SingaporeCited for the concept of waiver by election.
The “Pacific Vigorous”High CourtYes[2006] 3 SLR(R) 374SingaporeCited for the requirements for waiver by election.
Strait Colonies Pte Ltd v SMRT Alpha Pte LtdHigh CourtYes[2018] 2 SLR 441SingaporeCited for the requirements for waiver by election.
Audi Construction Pte Ltd v Kian Hiap Construction Pte LtdCourt of AppealYes[2018] 1 SLR 317SingaporeCited for the principle that mere silence or inaction will not normally amount to an unequivocal representation.
Fook Gee Finance Co Ltd v Liu Cho ChitHigh CourtYes[1998] 1 SLR(R) 385SingaporeCited for the principle that mere silence or inaction will not normally amount to an unequivocal representation.
Charles Rickards v OppenhaimEnglish Court of AppealYes[1950] 1 K.B. 616EnglandCited for the principle that a buyer can give notice to the supplier fixing a reasonable time for delivery, thus making time of the essence once again.
Agseed Pty Ltd v BroadSupreme Court of South AustraliaYes(1990) BC9100416AustraliaCited for the principle that an implication of a reasonable time when none is expressly limited is, in general, to be made unless there are indications to the contrary.
Perri v Coolangatta Investments Pty LtdHigh Court of AustraliaYes(1982) 149 CLR 537AustraliaCited for the principle that an implication of a reasonable time when none is expressly limited is, in general, to be made unless there are indications to the contrary.
Fu Yuan Foodstuff Manufacturer Pte Ltd v Methodist Welfare ServicesCourt of AppealYes[2009] 3 SLR(R) 925SingaporeCited for the principle that if a termination clause is clearly drafted, its literal language ought to accurately reflect the intentions of the parties.
Rice v Great Yarmouth Borough CouncilEnglish Court of AppealYes[2003] TCLR 1EnglandCited for the principle that a termination clause should be read down in order to control its legal effect.
Shawton Engineering Ltd v DGP International LtdEnglish CourtYes[2006] BLR 1EnglandCited for the principle that where a party is in breach by delay, and time is not of the essence, timely performance cannot be regarded as a condition of the contract.
Dansway International Transport Ltd v Lesway and Sons Inc.Ontario Superior Court of JusticeYes[2001] O.T.C 880CanadaCited for the principle that where the seller believes that the buyer is not taking delivery of goods within a reasonable time, the seller must give notice requiring the buyer to take delivery before he may terminate the contract.
The “Asia Star”Court of AppealYes[2010] 2 SLR 1154SingaporeCited for the principle that the aggrieved party must take all reasonable steps to mitigate the loss consequent on the defaulting party’s breach.
Bulsing Ltd v Joon Seng & CoN/AYes[1972] 2 MLJ 43N/AMentioned in passing regarding the existence of a 'ready market'.
Kason Kek-Gardner Ltd v Process Components LtdEnglish Court of AppealYes[2017] EWCA Civ 2132EnglandCited for the principle that contractual terms which expressly provide for a right of termination are effective even if the events on which those rights are exercisable do not amount to repudiatory breaches.
Firodi Shipping Ltd v Griffon Shipping LLCEnglish Court of AppealYes[2013] EWCA Civ 1567EnglandCited for the principle that contractual terms which expressly provide for a right of termination are effective even if the events on which those rights are exercisable do not amount to repudiatory breaches.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
Civil Law Act (Cap 43, 1999 Rev Ed)Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Implied term
  • Repudiatory breach
  • Nominate port of destination
  • Advise delivery date
  • Waiver
  • Mitigation of losses
  • Condition of contract
  • TBA by POET
  • Course of dealing
  • Business efficacy

15.2 Keywords

  • Contract
  • Breach
  • Implied Terms
  • Singapore
  • Shipping
  • Equipment
  • Termination
  • Damages

17. Areas of Law

Area NameRelevance Score
Contract Law95
Breach of Contract90
Contractual terms85
Implied Terms80
Repudiatory breach75
Damages60
Waiver50
Requirements for waiver by election40
Communication of choice to affirm contract in clear and unequivocal terms40
Frustration40
Renunciation30
Breach of condition30

16. Subjects

  • Contract Law
  • Commercial Law
  • Shipping Law