Sunrise Industries v PT OKI: Breach of Contract & Bank Guarantee Dispute

Sunrise Industries (India) Ltd ("Sunrise") sued PT. OKI Pulp & Paper Mills ("OKI") and Dena Bank Limited in the General Division of the High Court of the Republic of Singapore, alleging breach of contract. The case involved two contracts: a Supply Contract and an Installation Contract for a pump mill owned by OKI. Disputes arose, and OKI invoked a bank guarantee. The court, presided over by Valerie Thean J, found that Sunrise was in breach of both contracts and that OKI was entitled to terminate the Installation Contract. The court awarded Sunrise US$688,258.70.

1. Case Overview

1.1 Court

General Division of the High Court

1.2 Outcome

Judgment partially in favor of the Plaintiff.

1.3 Case Type

Civil

1.4 Judgment Type

Judgment

1.5 Jurisdiction

Singapore

1.6 Description

Sunrise Industries sued PT OKI for breach of contract related to supplying goods. The court found Sunrise in breach and awarded damages to PT OKI.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
PT OKI Pulp & Paper MillsDefendantCorporationCounterclaim partially allowedPartial
Sunrise Industries (India) LtdPlaintiffCorporationJudgment partially in favor of the PlaintiffPartial
Dena Bank LimitedDefendantCorporationClaim withdrawnWithdrawn

3. Judges

Judge NameTitleDelivered Judgment
Valerie TheanJudge of the High CourtYes

4. Counsels

Counsel NameOrganization
Kirpalani Rakesh GopalDrew & Napier LLC
Oen Weng Yew TimothyDrew & Napier LLC
Shawn LinDrew & Napier LLC
Lim Yi ZhengAdvocatus Law LLP
Christopher Anand s/o DanielAdvocatus Law LLP
Yeo Yi Ling EileenAdvocatus Law LLP
Saadhvika JayanthAdvocatus Law LLP
Ganga d/o AvadiarAdvocatus Law LLP

4. Facts

  1. Sunrise and OKI entered into a Supply Contract for pipes, fittings, and manholes for OKI's new pump mill.
  2. The Supply Contract was amended twice, increasing the contract value to US$8,324,131.
  3. Sunrise was required to procure a bank guarantee from Dena Bank for US$832,413.20.
  4. The Goods were shipped by Sunrise before 29 February 2016 but arrived at the Port of Discharge on or about 24 March 2016.
  5. OKI invoked the Bank Guarantee and directed Dena Bank to pay the sum of US$832,413.20 to it.
  6. OKI terminated both the Supply Contract and the Installation Contract to Sunrise.
  7. Sunrise demobilised its installation team pending resolution of disputes on 8 March 2016.

5. Formal Citations

  1. Sunrise Industries (India) Ltd v PT OKI Pulp & Paper Mills and another, Suit No 8 of 2017, [2023] SGHC 3
  2. Sunrise Industries (India) Ltd v PT OKI Pulp & Paper Mills and another, , [2018] SGHC 145

6. Timeline

DateEvent
Supply Contract signed
Installation Contract signed
Supply Contract A1 signed
Installation Contract A1 signed
Bank Guarantee procured
OKI extended LC1 to Sunrise
Supply Contract A2 signed
Installation Contract A2 signed
LC1 amended by OKI to reflect increased amount (LC1 A1)
LC1 A1 amended (LC1 A2)
Bank Guarantee increased to US$832,413.20
LC2 issued by OKI
Sunrise deployed personnel to the project site
Mr. Pradeep Mahadeo Thorat arrived at the Project Site
Sunrise demobilised its installation team
Goods arrived at the Port of Discharge
OKI issued to PT Piping a completion certificate in respect of the installation works
OKI urged Sunrise to dispatch its personnel to start installation work
OKI informed Sunrise that it had no interest in continuing business with them
OKI filed its defence as well as a counterclaim
OKI issued formal notices of termination of both the Supply Contract and the Installation Contract to Sunrise
OKI invoked the Bank Guarantee
Suit commenced
OKI took out an application for the interim injunctions to be set aside
OKI filed its defence as well as a counterclaim
Interim injunctions were discharged
Sum of US$832,413.20 was eventually transferred by Dena Bank to OKI
Leave was granted for the claim against Dena Bank to be withdrawn with no order as to costs

7. Legal Issues

  1. Breach of Contract
    • Outcome: The court found that Sunrise breached both the Supply Contract and the Installation Contract.
    • Category: Substantive
    • Sub-Issues:
      • Delay in delivery
      • Non-compliant goods
      • Failure to supply goods
  2. Variation of Contract
    • Outcome: The court held that the delivery dates in the Supply Contract were not varied.
    • Category: Substantive
  3. Termination of Contract
    • Outcome: The court found that OKI was entitled to terminate the Installation Contract.
    • Category: Substantive
  4. Liquidated Damages
    • Outcome: The court awarded OKI liquidated damages under both the Supply Contract and the Installation Contract.
    • Category: Substantive
  5. Consideration
    • Outcome: The court found that there was no consideration for the purported variation of the Supply Contracts.
    • Category: Substantive

8. Remedies Sought

  1. Monetary Damages
  2. Injunction

9. Cause of Actions

  • Breach of Contract

10. Practice Areas

  • Commercial Litigation
  • Construction Disputes

11. Industries

  • Manufacturing
  • Pulp and Paper
  • Construction

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Sunrise Industries (India) Ltd v PT OKI Pulp & Paper Mills and anotherHigh CourtYes[2018] SGHC 145SingaporeCited for procedural history of the case, specifically regarding the discharge of interim injunctions.
South Caribbean Trading Ltd v Trafigura Beheever BVN/AYes[2004] All ER (D) 334 (Nov)N/ACited regarding the effect of extending a letter of credit on the underlying contract, but distinguished as a factual finding specific to that case.
W.J. Alan & Co. Ltd. v El Nasr Export and Import Co.N/AYes[1972] 2 QB 189N/ACited for the principle of waiver of contractual rights, but deemed not relevant as Sunrise's case was based on variation, not waiver.
China Resources (S) Pte Ltd v Magenta Resources (S) Pte LtdCourt of AppealYes[1997] 1 SLR(R) 103SingaporeCited regarding amendment of letter of credit, but distinguished as not suggesting that the delivery date under a letter of credit is the same as the delivery date under the underlying sale of goods contract.
Hartley v HymansN/AYes[1920] 3 KB 475N/ACited for the principle of estoppel, but deemed not relevant as Sunrise was alleging variation, not estoppel.
Aero-Gate Pte Ltd v Engen Marine Engineering Pte LtdN/AYes[2013] 4 SLR 409N/ACited for the principle that variation of contract requires offer and acceptance supported by consideration.
Ma Hongjin v SCP Holdings Pte LtdCourt of AppealYes[2021] 1 SLR 304SingaporeCited regarding the requirement of consideration for variations or modifications to a contract.
Lim Zhipeng v Seow Suat Thin and another matterCourt of AppealYes[2020] 2 SLR 1151SingaporeCited regarding pleading requirements for lack of consideration, but distinguished as not standing for the proposition that a defendant is only entitled to raise lack of consideration if it has been pleaded.
Williams v Roffey Bros & Nicholls (Contractors) LtdN/AYes[1991] 1 QB 1N/ACited regarding factual benefit as consideration for an increase in contract price, but distinguished as parties had not come to an agreement in the present case.
Foakes v BeerN/AYes(1884) 9 App Cas 605N/ACited as analogous to the present case, where a promise to accept part payment of a debt was unenforceable for lack of consideration.
Bridgeman Pte Ltd v Dukim International Pte LtdHigh CourtYes[2013] SGHC 220SingaporeCited regarding damages for overcharging, but distinguished as not necessarily the case that the market value of the manholes is directly proportionate to their size.
Giedo Van Der Garde BV and another v Force India Formula One Team Ltd (Formerly Spyker F1 Team Ltd (England))N/AYes[2010] EWHC 2372 (QB)N/ACited regarding assessment of loss by reference to the value of the kilometers and associated benefits which should have been but were not provided.
Zurich Insurance (Singapore) Pte Ltd v B-Gold Interior Design & Construction Pte LtdCourt of AppealYes[2008] 3 SLR(R) 1029SingaporeCited for canons of contract interpretation.
RDC Concrete Pte Ltd v Sato Kogyo (S) Pte LtdCourt of AppealYes[2007] 4 SLR(R) 413SingaporeCited regarding the entitlement to terminate a contract when the other party breaches a term that clearly states that the innocent party is entitled to terminate the contract.
iVenture Card Ltd and others v Big Bus Singapore City Sightseeing Pte Ltd and othersCourt of AppealYes[2022] 1 SLR 302SingaporeCited regarding renunciation of contract.
The “Asia Star”Court of AppealYes[2010] 2 SLR 1154SingaporeCited regarding mitigation of damages.
Yew San Construction Pte Ltd v Ley Choon Constructions and Engineering Pte LtdHigh CourtYes[2019] SGHC 285SingaporeCited regarding damages awarded to a main contractor in respect of works that were within its subcontractor’s scope of works, but distinguished as the main contractor paid the subcontractor for its works.

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

  • Supply Contract
  • Installation Contract
  • Bank Guarantee
  • Letter of Credit
  • Delivery Dates
  • Last Date of Shipment
  • Certificate of Performance Test Acceptance
  • Liquidated Damages
  • Variation
  • Termination

15.2 Keywords

  • breach of contract
  • bank guarantee
  • supply contract
  • installation contract
  • Singapore
  • commercial dispute

17. Areas of Law

Area NameRelevance Score
Contract Law95
Breach of Contract90
Variation90
Commercial Law80
Commercial Disputes80
Performance of Contract80
Remedies70
Damages70
Performance Bond60
Company Law30
Banking and Finance20
Costs20

16. Subjects

  • Contract Law
  • Commercial Law
  • Construction Law