ISU Specialty Chemical Co Ltd v C&D (Singapore) Business Pte Ltd: Contract Formation Dispute

In ISU Specialty Chemical Co Ltd v C&D (Singapore) Business Pte Ltd, the High Court of Singapore addressed a dispute over the formation of a contract for the sale of Light Cycle Oil (LCO). ISU Specialty Chemical Co Ltd, the claimant, sued C&D (Singapore) Business Pte Ltd, the defendant, for breach of contract, alleging the defendant repudiated an oral contract for the purchase of LCO. The defendant denied the existence of the contract and counterclaimed for legal costs incurred in abortive arbitration proceedings. The court found in favor of the claimant, holding that a contract existed and the defendant was in breach. The defendant's counterclaim was dismissed.

1. Case Overview

1.1 Court

General Division of the High Court of the Republic of Singapore

1.2 Outcome

Judgment for Claimant

1.3 Case Type

Civil

1.4 Judgment Type

Judgment

1.5 Jurisdiction

Singapore

1.6 Description

The case involves a dispute over the formation of a contract for the sale of Light Cycle Oil (LCO). The court found a contract existed and ruled in favor of the claimant, ISU.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
ISU Specialty Chemical Co LtdClaimantCorporationJudgment for ClaimantWon
C&D (Singapore) Business Pte LtdDefendantCorporationClaim DismissedLost

3. Judges

Judge NameTitleDelivered Judgment
Choo Han TeckJudge of the High CourtYes

4. Counsels

Counsel NameOrganization
Chow Ee NingSelvam LLC
Sarbjit Singh ChopraSelvam LLC
Luis Inaki Duhart GonzalezSelvam LLC
Nicholas Lum Kin LeongCLASIS LLC
Leong Lu YuanCLASIS LLC
Joshua Ho Jun YangCLASIS LLC

4. Facts

  1. ISU and the defendant had six previous transactions for the sale of LCO between July 2020 and January 2021.
  2. The transactions were negotiated between John Wu, agent for ISU, and Jason Ke, representative for the defendant.
  3. The dispute concerns the sale of 300,000 barrels of LCO for delivery in March 2021 (the March cargo).
  4. The claimant alleges that Jason Ke made an oral offer to purchase the March cargo at US$8.50/BBL above MOPS on 2 February 2021.
  5. ISU then made a back-to-back offer to Hyundai Korea, which was accepted on 3 February 2021 for US$20,846,796.83.
  6. The defendant denies making any offer and claims that no contract was formed.
  7. The claimant sold the March cargo to Wisope Energy International Pte Ltd to mitigate its losses.

5. Formal Citations

  1. ISU Specialty Chemical Co Ltd v C&D (Singapore) Business Pte Ltd, Originating Claim No 82 of 2022, [2024] SGHC 285

6. Timeline

DateEvent
Originating Claim filed
ISU and the claimant entered into a spin-off merger agreement
Spin-off merger agreement carried out
Defendant purchased LCO from ISU on six occasions between July 2020 to January 2021
Discussions between ISU and the defendant regarding the sale of LCO for delivery in March 2021
Defendant offered ISU an FOB price of US$7.70/BBL for the March cargo
ISU submitted a bid to Hyundai Singapore for the March cargo at an FOB price of US$6.20/BBL
Phone calls between John Wu and Jason Ke regarding the March cargo
Hyundai Korea accepted ISU's offer for the sum of US$20,846,796.83
Defendant allegedly repudiated the contract
ISU commenced arbitration proceedings under SIAC
SIAC terminated the arbitration reference against the defendant
Trial began
Judgment reserved
Judgment issued

7. Legal Issues

  1. Breach of Contract
    • Outcome: The court found that the defendant was in repudiatory breach of contract.
    • Category: Substantive
    • Sub-Issues:
      • Repudiation of contract
  2. Contract Formation
    • Outcome: The court found that an oral contract was formed between the parties.
    • Category: Substantive
    • Sub-Issues:
      • Offer
      • Acceptance
  3. Mitigation of Damages
    • Outcome: The court held that the defendant was precluded from arguing that the claimant failed to reasonably mitigate its losses because it was not properly pleaded.
    • Category: Substantive
    • Related Cases:
      • [2012] 1 SLR 131

8. Remedies Sought

  1. Monetary Damages

9. Cause of Actions

  • Breach of Contract

10. Practice Areas

  • Commercial Litigation

11. Industries

  • Commodities Trading
  • Oil and Gas

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Apex Energy International Pte Ltd v Wanxiang Resources (Singapore Pte LtdHigh CourtYes[2020] SGHC 138SingaporeCited as persuasive evidence for the existence of a deal based on the defendant's refusal to respond to or protest a deal recap.
Yip Holdings Pte Ltd v Asia Link Marine Industries Pte LtdCourt of AppealYes[2012] 1 SLR 131SingaporeCited for the principle that mitigation of damages as a defence must be properly pleaded and proved.

13. Applicable Rules

Rule Name
Rule 28.1 of the SIAC Rules 2016
r 34.7 of the SIAC Rules 2016
O 21 r 2(1) of the Rules of Court 2021

14. Applicable Statutes

Statute NameJurisdiction
No applicable statutes

15. Key Terms and Keywords

15.1 Key Terms

  • Light Cycle Oil
  • LCO
  • MOPS
  • CIF
  • FOB
  • Back-to-back trade
  • Deal recap
  • Laycan

15.2 Keywords

  • contract
  • LCO
  • oil
  • Singapore
  • ISU
  • C&D
  • breach of contract
  • formation
  • trade

17. Areas of Law

Area NameRelevance Score
Breach of Contract95
Contracts90
Formation of contract80
Contractual terms70
Commercial Disputes60
Offer60
Litigation30

16. Subjects

  • Contract Formation
  • Breach of Contract
  • Sale of Goods
  • Commercial Dispute