BCBC Singapore v PT Bayan: Contract Dispute over Coal Briquetting Joint Venture - Damages Assessment
In a dispute before the Singapore International Commercial Court, BCBC Singapore Pte Ltd and Binderless Coal Briquetting Company Pty Limited (Plaintiffs) sued PT Bayan Resources TBK and Bayan International Pte Ltd (Defendants) concerning a joint venture to exploit coal upgrading technology. The court, presided over by Quentin Loh JAD, Vivian Ramsey IJ, and Anselmo Reyes IJ, addressed the issue of damages claimed by the plaintiffs following previous rulings that the Defendants had breached their contractual obligations. The Plaintiffs sought damages for wasted expenditure and loss of a chance to increase production capacity. The court dismissed both claims, finding that the Plaintiffs would not have recovered their wasted expenditure and that the loss of a chance claim was not valid.
1. Case Overview
1.1 Court
SINGAPORE INTERNATIONAL COMMERCIAL COURT1.2 Outcome
BCBCS's claim for damages for its wasted expenditure and its claim for damages for the loss of a chance to expand the Tabang Plant’s capacity to 3 MTPA and profit therefrom are dismissed.
1.3 Case Type
Civil
1.4 Judgment Type
Judgment
1.5 Jurisdiction
Singapore
1.6 Description
Singapore court assesses damages in a contract dispute between BCBC Singapore and PT Bayan over a failed coal briquetting joint venture.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| BCBC Singapore Pte Ltd | Plaintiff | Corporation | Claim Dismissed | Lost | |
| Binderless Coal Briquetting Company Pty Limited | Plaintiff | Corporation | Claim Dismissed | Lost | |
| PT Bayan Resources TBK | Defendant | Corporation | Judgment for Defendant | Won | |
| Bayan International Pte Ltd | Defendant | Corporation | Judgment for Defendant | Won |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Quentin Loh | Judge of the Appellate Division | Yes |
| Vivian Ramsey | International Judge | No |
| Anselmo Reyes | International Judge | No |
4. Counsels
4. Facts
- BCBCS and BR entered into a joint venture to exploit a new technology to upgrade coal for commercial sale.
- The joint venture company, KSC, was incorporated in Indonesia in January 2007.
- BR breached its Coal Supply Obligations by instructing FSP and Bara to cease their supply of coal to KSC on or around 9 November 2011.
- BR repudiated the JV Deed by wrongfully issuing the Termination Notice on 21 February 2012.
- BCBCS claims damages for wasted expenditure of US$91,591,206.68.
- BCBCS claims damages for the loss of a chance to increase the production capacity of the Tabang Plant to at least 3 MTPA and to profit therefrom.
- The Tabang Plant was shut down at the end of October 2011 and underwent extensive modifications in November 2011.
5. Formal Citations
- BCBC Singapore Pte Ltd and another v PT Bayan Resources TBK and another, Suit No 1 of 2015, [2022] SGHC(I) 2
6. Timeline
| Date | Event |
|---|---|
| JV Deed executed between BCBC and BI | |
| KSC incorporated in Indonesia | |
| BI sold its shares in KSC to BR | |
| Funding MOU and Expansion MOU dated | |
| Deed of Novation executed | |
| Priority Loan Funding Agreement signed by KSC, BR and BCBCS (backdated) | |
| 2010 CSAs backdated to this date | |
| Priority Loan Funding Agreement signed by KSC, BR and BCBCS | |
| Subordination Letter from KSC to BCBCS and BR | |
| 2010 CSAs entered into between KSC and BR’s coal mining subsidiaries | |
| April 2011 Side Letter signed by BCBC, BR, Bara and KSC | |
| 2010 CSAs entered into between KSC and BR’s coal mining subsidiaries | |
| Priority Facility exhausted | |
| BR instructed FSP and Bara to cease their supply of coal to KSC | |
| BR informed BCBCS of its wish to exit the joint venture at the November 2011 Board Meeting | |
| Parties agreed to put the Tabang Plant into care and maintenance at the 6 December 2011 EGM | |
| Tabang Plant put into care and maintenance | |
| BR wrongfully issued the Termination Notice | |
| BCBCS validly accepted BR’s repudiation of the JV Deed | |
| Hearing commenced | |
| Hearing commenced | |
| Judgment reserved |
7. Legal Issues
- Breach of Contract
- Outcome: The court found that BR had breached its Coal Supply Obligations and had wrongfully issued the Termination Notice, and that these acts constituted repudiatory breaches of the JV Deed.
- Category: Substantive
- Sub-Issues:
- Repudiatory Breach
- Failure to Supply Coal
- Remoteness of Damages
- Outcome: The court held that the losses claimed by BCBCS were not too remote.
- Category: Substantive
- Related Cases:
- Hadley v Baxendale (1854) 9 Exch 341
- Wasted Expenditure
- Outcome: The court found that BCBCS would not have recovered its wasted expenditure.
- Category: Substantive
- Loss of a Chance
- Outcome: The court dismissed BCBCS’s claim for damages in respect of the loss of a chance to profit from the operation of the Tabang Plant at an expanded capacity of 3 MTPA.
- Category: Substantive
- Reflective Loss
- Outcome: The court found that BCBCS’s claims are not precluded by the reflective loss principle.
- Category: Substantive
8. Remedies Sought
- Monetary Damages
9. Cause of Actions
- Breach of Contract
10. Practice Areas
- Commercial Litigation
- International Arbitration
11. Industries
- Mining
- Energy
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| BCBC Singapore Pte Ltd and another v PT Bayan Resources TBK and another | Singapore High Court | Yes | [2016] 4 SLR 1 | Singapore | Sets out the full facts of the case and the court's findings in Tranche 1 regarding the parties' contractual obligations. |
| BCBC Singapore Pte Ltd and another v PT Bayan Resources TBK and another | Singapore High Court | Yes | [2017] 5 SLR 77 | Singapore | Sets out the full facts of the case and the court's findings in Tranche 2 regarding BR’s coal supply obligations and the alleged breaches of the parties’ contractual obligations. |
| Hadley v Baxendale | Court of Exchequer | Yes | Hadley v Baxendale (1854) 9 Exch 341 | England and Wales | Cited for the two-pronged rule regarding remoteness of losses in contract law. |
| Out of the Box Pte Ltd v Wanin Industries Pte Ltd | Singapore Court of Appeal | Yes | [2013] 2 SLR 363 | Singapore | Cited for the framework for assessing remoteness of damage. |
| Freeman v Londish | New South Wales Supreme Court | Yes | [2018] NSWSC 1425 | Australia | Cited as an example where loans were recovered as wasted expenditure. |
| Assetco Plc v Grant Thornton UK LLP | England and Wales High Court | Yes | [2019] EWHC 150 (Comm) | England and Wales | Cited as an example where loans were recovered as wasted expenditure. |
| Townsing Henry George v Jenton Overseas Investment Pte Ltd (in liquidation) | Singapore Court of Appeal | Yes | [2007] 2 SLR(R) 597 | Singapore | Cited for the reflective loss principle, later departed from in Miao Weiguo v Tendcare Medical Group Holdings Pte Ltd. |
| Sevilleja v Marex Financial Ltd | United Kingdom Supreme Court | Yes | [2021] AC 39 | United Kingdom | Cited as a case that limits the scope of the rule against reflective loss to loss suffered by shareholders qua shareholders. |
| Miao Weiguo v Tendcare Medical Group Holdings Pte Ltd (formerly known as Tian Jian Hua Xia Medical Group Holdings Pte Ltd) (in judicial management) and another | Singapore Court of Appeal | Yes | [2021] SGCA 116 | Singapore | Cited for affirming the existence of the reflective loss principle and holding that it extends only to shareholders claiming qua shareholders. |
| Cullinane v British Rema Manufacturing Co Ltd | English Court of Appeal | Yes | [1954] 1 QB 292 | England and Wales | Illustrates the principle against double recovery, precluding a claimant from recovering both expectation loss and reliance loss. |
| Smile Inc Dental Surgeons Pte Ltd v OP3 International Pte Ltd | Singapore High Court | Yes | [2020] 3 SLR 1234 | Singapore | Cited for the principle that a claimant has to elect between expectation loss and reliance loss only applies where expectation loss is claimed on a gross, rather than net, basis. |
| Turf Club Auto Emporium Pte Ltd and others v Yeo Boong Hua and others and another appeal | Singapore Court of Appeal | Yes | [2018] 2 SLR 655 | Singapore | Cited for the principle that expectation and reliance losses are not founded on different juridical bases. |
| The Commonwealth of Australia v Amann Aviation Pty Ltd | High Court of Australia | Yes | (1991) 104 ALR 1 | Australia | Cited in support of the argument that the cashflows from the PRM should not be considered in the recoupment analysis. |
| PT Bayan Resources TBK and another v BCBC Singapore Pte Ltd and another | Singapore Court of Appeal | Yes | [2019] 1 SLR 30 | Singapore | Court of Appeal dismissed the appeal but held that the High Court ought to have determined, in Tranche 2, the issue of BCBCS’s ability to unilaterally fund KSC. |
| BCBC Singapore Pte Ltd and another v PT Bayan Resources TBK and another | Singapore High Court | Yes | [2019] 3 SLR 1 | Singapore | Based on the evidence adduced in Tranche 2, the High Court held that BCBCS was clearly in a position to fund KSC unilaterally until the completion of commissioning and testing or until June 2012. |
| Tembusu Growth Fund Ltd v ACTAtek, Inc and others | Singapore Court of Appeal | Yes | [2018] 4 SLR 1213 | Singapore | For the loss of a chance to constitute a compensable head of damage, it must be shown that the provision of the chance is the object of the duty that has been breached. |
| Y.E.S F&B Group Pte Ltd v Soup Restaurant Singapore Pte Ltd (formerly known as Soup Restaurant (Causeway Point) Pte Ltd | Singapore Court of Appeal | Yes | [2015] 5 SLR 1187 | Singapore | The process of contractual interpretation requires the court to ascertain, based on all the relevant objective evidence, the intention of the parties at the time they entered into the contract. |
| Auston International Group Ltd and another v Ng Swee Hua | Singapore Court of Appeal | Yes | [2009] 4 SLR(R) 628 | Singapore | The doctrine of loss of a chance only applies in situations where the chance to acquire the asset or benefit which has allegedly been lost is dependent on the actions of a third party; the doctrine does not apply in situations where the chance alleged to be lost is dependent on the defendant’s actions. |
| Lavarack v Woods of Colchester Ltd | English Court of Appeal | Yes | [1967] 1 QB 278 | England and Wales | A defendant may not be considered an “independent third party”. |
| Latham Scott v Credit Suisse First Boston | Singapore Court of Appeal | Yes | [2000] 2 SLR(R) 30 | Singapore | A plaintiff is only entitled to damages in respect of benefits deprived by a breach of contract when these benefits are those which the defendant was contractually obliged to confer in the first place. |
| Vita Health Laboratories Pte Ltd and others v Pang Seng Meng | Singapore High Court | Yes | [2004] 4 SLR(R) 162 | Singapore | Courts should be slow to interfere with commercial decisions taken by directors. |
| Durham Tees Valley Airport v BMIBaby Ltd and another | England and Wales Court of Appeal | Yes | [2010] EWCA Civ 485 | England and Wales | A party will be assumed to have acted in good faith (albeit with its own commercial interests in mind) and not uncommercially to spite the other party. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| No applicable statutes | |
15. Key Terms and Keywords
15.1 Key Terms
- Joint Venture
- Coal Briquetting
- Tabang Plant
- BCB Process
- Coal Supply Obligations
- Wasted Expenditure
- Loss of a Chance
- Nameplate Capacity
- Priority Loan Funding Agreement
- Payments Reconciliation Mechanism
15.2 Keywords
- contract
- joint venture
- coal
- damages
- singapore
- breach
- wasted expenditure
- loss of chance
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Contract Law | 80 |
| Breach of Contract | 75 |
| Damages | 70 |
| Joint Venture Law | 65 |
| Commercial Disputes | 60 |
| Company Law | 30 |
| Arbitration | 25 |
| International Commercial Court Practice | 20 |
| Bankruptcy | 15 |
16. Subjects
- Contract Dispute
- Damages Assessment
- Joint Venture Agreement
- Coal Industry