Shipworks v Sembcorp Marine: Breach of Contract & Illegality in Shipyard Services

Shipworks Engineering Pte Ltd and Lanka Marine Services Pte Ltd sued Sembcorp Marine Integrated Yard Pte Ltd and Jurong Shipyard Pte Ltd in the General Division of the High Court of Singapore, Suit No 1040 of 2020, consolidated with HC/Suits Nos 1042, 1051 and 1052 of 2020, for $26,589,879.95 in unpaid invoices and quantum meruit claims. Sembcorp Marine Integrated Yard Pte Ltd and Jurong Shipyard Pte Ltd counterclaimed $20,822,519.59, alleging irregularities in the invoices. The court, presided over by Choo Han Teck J, partially allowed both the claims and the counterclaim, finding that the defendants' contractual discretion was not unfettered and addressing issues of forgery and the admissibility of evidence.

1. Case Overview

1.1 Court

High Court of the Republic of Singapore

1.2 Outcome

Claims and counterclaim partially allowed.

1.3 Case Type

Civil

1.4 Judgment Type

Judgment

1.5 Jurisdiction

Singapore

1.6 Description

Shipworks sues Sembcorp Marine for unpaid invoices. Sembcorp counterclaims, alleging irregularities. The court addresses contractual discretion and evidence of forgery.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Shipworks Engineering Pte LtdPlaintiff, Defendant-in-CounterclaimCorporationClaim Partially AllowedPartial
Lanka Marine Services Pte LtdPlaintiff, Defendant-in-CounterclaimCorporationClaim Partially AllowedPartial
Sembcorp Marine Integrated Yard Pte LtdDefendant, Plaintiff-in-CounterclaimCorporationCounterclaim Partially AllowedPartial
Jurong Shipyard Pte LtdDefendant, Plaintiff-in-CounterclaimCorporationCounterclaim Partially AllowedPartial

3. Judges

Judge NameTitleDelivered Judgment
Choo Han TeckJudge of the High CourtYes

4. Counsels

Counsel NameOrganization
Harish KumarRajah & Tann Singapore LLP
Devathas SatianathanRajah & Tann Singapore LLP
Marissa Zhao YunanRajah & Tann Singapore LLP
Kiran Jessica MakwanaRajah & Tann Singapore LLP
Yong Yi XiangRajah & Tann Singapore LLP
Koh Swee YenWongPartnership LLP
Lin ChunlongWongPartnership LLP
Magdalene Ong Li MinWongPartnership LLP
Tian KeyunWongPartnership LLP
Dikaios Pang SiranWongPartnership LLP
Reinvs Loh Zhi WeiWongPartnership LLP

4. Facts

  1. Shipworks claimed $26,048,727.76 for 203 unpaid invoices.
  2. Shipworks also claimed $541,152.19 on quantum meruit for 12 completed works.
  3. Sembcorp counterclaimed $20,384,284.41 for payments made due to alleged irregularities.
  4. Sembcorp also counterclaimed $438,235.18 for administrative charges.
  5. The dispute involved manpower, sub-task, and miscellaneous jobs.
  6. Sembcorp alleged irregularities in timesheets and work completion reports.
  7. Shipworks claimed partial payments were progress payments, not advances.

5. Formal Citations

  1. Shipworks Engineering Pte Ltd and anothervSembcorp Marine Integrated Yard Pte Ltd and another and other suits, Suit No 1040 of 2020, [2024] SGHC 325

6. Timeline

DateEvent
Suit filed (Suit No 1040 of 2020)
Administrative Charges Agreements entered
Mr. Woi Cha How left the defendants’ employ
Trial began
Trial concluded
Judgment reserved

7. Legal Issues

  1. Breach of Contract
    • Outcome: The court found that the plaintiffs were entitled to payment for work done, but some claims were reduced due to irregularities and successfully impugned signatures.
    • Category: Substantive
    • Sub-Issues:
      • Failure to pay invoices
      • Dispute over work performed
      • Dispute over supporting documents
  2. Contractual Discretion
    • Outcome: The court held that the defendants' contractual discretion was not unfettered and must be exercised rationally.
    • Category: Substantive
    • Sub-Issues:
      • Extent of discretion
      • Rationality of discretion
      • Abuse of discretion
    • Related Cases:
      • [2022] SGHC 74
      • [2022] 1 SLR 1318
  3. Illegality and Public Policy
    • Outcome: The court addressed the issue of forged documents and their impact on the claims, applying the doctrine of ex turpi causa.
    • Category: Substantive
    • Sub-Issues:
      • Forgery
      • Fabrication of documents
    • Related Cases:
      • [2013] 3 SLR 666
  4. Admissibility of Evidence
    • Outcome: The court ruled on the admissibility of various pieces of evidence, including expert testimony and witness statements.
    • Category: Procedural
    • Sub-Issues:
      • Expert evidence
      • Hearsay evidence
      • Documentary evidence

8. Remedies Sought

  1. Monetary Damages

9. Cause of Actions

  • Breach of Contract
  • Quantum Meruit

10. Practice Areas

  • Commercial Litigation
  • Construction Law
  • Shipbuilding Contracts

11. Industries

  • Construction
  • Maritime

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Carlsberg South Asia Pte Ltd v Pawan Kumar JagetiaHigh CourtYes[2022] SGHC 74SingaporeCited for the principle that contractual discretions are subject to an implied term of rational exercise, even when described as 'absolute'.
Dong Wei v Shell Eastern Trading (Pte) Ltd and anotherSingapore Law ReportsYes[2022] 1 SLR 1318SingaporeCited for the principle that a party’s contractual discretion must not be exercised in a manner that warps the contractual bargain.
ANC Holdings Pte Ltd v Bina Puri Holdings BhdSingapore Law ReportsYes[2013] 3 SLR 666SingaporeCited for the doctrine of ex turpi causa, stating that courts will not aid a cause of action founded on an immoral or illegal act.
Masood v ZahoorHigh Court of JusticeYes[2008] EWHC 1034 (Ch)England and WalesCited regarding striking out a claim for forgery, but distinguished based on the level of corruption of the trial process.
Excalibur & Keswick Groundworks Ltd v McDonaldEnglish Court of AppealYes[2023] 1 WLR 2139England and WalesCited for the principle that a claim should not be struck out for forgery unless the litigant's conduct corrupts the trial process.
MGA International Pte Ltd v Waijilam Exports (Singapore) Pte LtdN/AYesMGA International Pte Ltd v Waijilam Exports (Singapore) Pte LtdSingaporeCited for the principle that a contractual discretion should be exercised rationally.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
Unfair Contract Terms Act (Cap 396, 1994 Rev Ed)Singapore
Evidence Act 1893 (2020 Rev Ed)Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Invoices
  • Work Orders
  • Timesheets
  • Work Completion Reports
  • Sub-Task Work Lists
  • Payment Summaries
  • Irregularities
  • Forgery
  • Contractual Discretion
  • Progress Payments
  • Administrative Charges
  • Manpower Jobs
  • Sub-Task Jobs
  • Miscellaneous Jobs

15.2 Keywords

  • Contract
  • Shipbuilding
  • Invoices
  • Forgery
  • Singapore
  • Litigation
  • Sembcorp
  • Shipworks

17. Areas of Law

Area NameRelevance Score
Breach of Contract90
Contracts85
Contractual terms70
Illegality and public policy60
Contractual discretions55
Evidence Law50
Commercial Disputes40

16. Subjects

  • Contract Law
  • Construction Law
  • Shipbuilding
  • Civil Litigation