(delivering the Judgment of the Board): This appeal from an order of the Court of Appeal in Singapore (Wee Chong Jin C.J., Sinnathuray and Abdul Wahab Ghows JJ.) dated July 8, 1983, the grounds of judgment for which were issued on January 31, 1984, setting aside an order of Kulasekaram J. dated June 28, 1982, is confined to the question whether the counterclaim has been correctly dealt with in the courts in Singapore.

The plaintiffs, who are the appellants before this Board, are a company incorporated in Spain whose principal activity is the manufacture and sale of lashing systems for securing cargo and of cargo handling equipment, the latter category including spreaders which are used to lift containers from quay to ship or vice versa. The appellants' claim was in respect of goods supplied on consignment to the defendants, who are the respondents here, pursuant to an arrangement the precise nature and extent of which were in dispute. The respondents contended that by the arrangement made by oral agreement in September 1977 they were appointed the appellants' sole agents and distributors for the Far East and Asean (Singapore, Malaysia, Thailand, Indonesia and the Philippines) regions for a period of two years from January 1978. The appellants contended that provisionally in September 1977 and finally in January 1978 the respondents were appointed as their distributor for Singapore, Malaysia and Hong Kong only, that there was no sole agency and that the appointment was not for any fixed period. The claim and the counterclaim, so far as relating to commission on the goods which are the subjects of the claim, have been decided by the judge in a manner not criticised before their Lordships by either party.

In their counterclaim the respondents alleged that the appellants, by incorporating on May 30, 1978 a company for the sale of the appellants' products in the Far East and Asean regions, had breached this arrangement and they counterclaimed for damages for the unexpired portion of the two years' terms estimated at $1,120,000, being 8% on a turnover estimated by them at $7,000,000 per annum. The appellants replied that the arrangement had been lawfully terminated on or about May 20, 1978 by reason of the conduct of the respondents. The conduct of the respondents alleged by the appellants and relied upon as justifying this termination was that the respondents secretly and fraudulently manufactured imitations of the appellants' products and offered them for sale or sold them in competition with the appellants' products at lower prices.

After a trial which began on November 11, 1981 and occupied some ten days in all, having frequently been adjourned and eventually terminating in the afternoon of June 28, 1982, the judge immediately delivered an oral judgment in which he found that the respondents were the sole distributors or agents for the appellants' goods for the Far East and South East Asia, that in breach of the fiduciary duty which they in consequence owed to the appellants, the respondents were on May 19, 1978, fabricating articles in their factory in Jurong which were copies of the appellants' goods without the knowledge or approval of the appellants and that in consequence the appellants were justified in terminating forthwith the contract under which the respondents were appointed as sole distributors and agents for the appellants and no damages for breach of the contract were due.

The learned trial jduge considered the issue he had to determine was essentially a question of fact which depended on whether or not he accepted the evidence of Merten, the appellants' president and principal witness, that on May 19, 1978 he had seen the unauthorised fabrication taking place in the respondents' factory at Jurong. The learned judge accepted Merten's evidence of what he saw that day. Although the learned judge found for the appellants on the matter disputed before him, he awarded the plaintiffs only half th