Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2011 MarsdenLR 278

HIGH COURT MALAYA KUALA LUMPUR
SCANDINAVIAN BUNKERING (SINGAPORE) PTE LTD – Appellant
Versus
MISC BERHAD – Respondent
[Suit No: D-22-191-2009]

Petitioner Advocates:Sitpah Selvaratnam,Siti Rahayu Mumazaini ,Respondent Advocate: YM Raja Eileen Soraya Raja Aman

The damages for breach of contract are assessed based on the difference between the contract price and market price at the time of breach, under the applicable law of England.

Headnote:(A) Sale of Goods Act, 1979 (UK) - Section 50 - Breach of contract for non-acceptance of goods - The court finds that damages for breach are governed by English law, which allows for assessing damages based on the difference between the contract price and the market price at the time of breach. The plaintiff, as assignee of the contract, is entitled to recover damages amounting to USD25,246,233.17 with interest at 8% per annum from the date of breach until realization. (Paras 46-74)

(B) Contract Law - The court concludes that the obligation imposed by the defendant to accept delivery of a specific quantity of goods cannot be disregarded, and the argument surrounding applicable market rates was dismissed. (Paras 5-5)

Facts of the case:
The plaintiff established a contract for the supply of marine fuel oil with the defendant, which failed to accept several deliveries, leading to a claim for damages amounting to USD27,517,211.47. Following the defendant’s repudiation, the plaintiff accepted the breach, thus seeking damages for non-acceptance. (Paras 3-4)

Findings of Court:
The court determined that the plaintiff's damages would be calculated based on the difference between the Fixed Price Contract price and the market price at the time of non-acceptance, allowing damages of USD25,246,233.17. (Paras 73)

Issues: The primary issues addressed included the applicable law for assessing damages and the calculation based on market rates following a breach of a fixed-price contract. (Paras 6)

Ratio Decidendi: The court established that under English law, the plaintiff was entitled to recover damages corresponding to the market price difference at the time of anticipated delivery, holding the defendant liable for the losses incurred through non-acceptance. (Paras 49)

Result: Plaintiff's claim allowed, and damages awarded. (Paras 74)

Table of Content
1. judgment affirmed; limited to damages assessment. (Para 1 , 2)
2. plaintiff's claims include specific damages. (Para 3 , 4 , 5)
3. legal basis for damages under english law. (Para 6 , 7 , 8 , 9 , 10)
4. damages limited to losses proven by marinehub. (Para 11 , 12 , 13 , 14 , 15)
5. key issues in damages assessment clarified. (Para 16 , 17 , 18 , 19 , 20)
6. rival arguments regarding applicable law established. (Para 21 , 22 , 23 , 24 , 25 , 26 , 27)
7. judicial view on law governing damages articulated. (Para 28 , 29 , 30 , 31)
8. differences in law interpretation discussed. (Para 32 , 33 , 34 , 35 , 36)
9. entitlement for damages asserted in judgments. (Para 37 , 38 , 39)
10. expert testimony threaded into damage claims. (Para 40 , 41 , 42 , 43)
11. discussion of available market impact on damages. (Para 44 , 45 , 46 , 47)
12. comparison of malaysian and english law on damages. (Para 48 , 49 , 50)
13. malaysian law aligns with common law principles. (Para 51 , 52)
14. findings on damages measurement reiterated. (Para 53 , 54 , 55 , 56 , 57)
15. method for establishing market price detailed. (Para 58 , 59 , 60 , 61)
16. choice of market index for damages examined. (Para 62 , 63 , 64)
17. court rejects plaintiff's argument on indexing. (Para 65 , 66 , 67 , 68)
18. court's final ruling on measure of damages. (Para 69 , 70 , 71)
19. plaintiff's claim awarded in specified amount. (Para 72 , 73)

Hanipah Farikullah JC:

Introduction

[1] Judgment on liability was entered against the defendant by the High Court on 23 September 2009 and damages are to be assessed. This judgment on liability was upheld by the Court of Appeal on 6 July 2010.

[2] Thus, the proceedings before this Court are limited to issues relating to assessment of damages that can be validly claimed by the plaintiff.

Plaintiff's Claim

[3] In this present case the plaintiff claims:

(i) Damages in the sum of USD27,517,211.47 as pleaded in its Amended Statement of Claim or such other sum as this Court may assess or find proper.

(ii) Interest on all sums payable by the defendant at the rate of 8% per annum from 19 November 2008 to the date of final payment.

(iii) Costs.

Agreed Facts

[4] The following are the salient facts that are not in dispute.

(i) On 10 September 2008, the defendant issued an open Invitation to Bid ("ItB") for the supply of marine fuel oil ("MFO "), towards concluding a Bunker Fixed Price Agreement - TCM45/2008.

(ii) By the ItB, the defendant invited tenders for the supply of 102,600 mt & plusmn;5% operational tolerance level (basis 34,200 mt monthly) of MFO, for a period from 1 October 2008 to 31 December 2008.

(iii) Marinehub submitted its bid for the supply and delivery of MFO at the price of USD560.00/mt. This price was later revised to USD559.80/mt ("the FPC Price").

(iv) The defendant accepted Marinehub's bid for the supply and delivery of MFO, by a Letter of Award dated 16 September 2008 ("the Letter of Award"). The Letter of Award was duly accepted by Marinehub on 17 September 2008.

(v) A binding contract for the supply and delivery of 102,600 mt MFO & plusmn;5% operational tolerance level at the total price of USD57,435,480.00, on the monthly basis of 34,200 mt from 1 October 2008 to 31 Decenber 2008 at the fixed FPC Price of USD559.80/mt, was accordingly concluded between the defendant and Marinehub, incorporating Part I and Part II of the ItB and the Letter of Award as the terms of the FPC. The delivery of the MFO was to be in Singapore.

(vi) The defendant took 18 separate deliveries amounting to a total of 20,334.59mt of MFO under the FPC for the month of October 2008.

(vii) There remained 13,865.174 mt MFO for the defendant to accept delivery of under the FPC, in October 2008.

(viii) A dispute arose as to the defendant's alleged entitlement to carry forward from October 2008 the 13,865 mt MFO for delivery in November 2008, at the "Means Platt Bunkerwire at the contracted port on delivery date" by virtue of cl 3.3 of the FPC, rather than the FPC Price of USD559

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2011 MarsdenLR 278

HIGH COURT MALAYA KUALA LUMPURSCANDINAVIAN BUNKERING (SINGAPORE) PTE LTD – AppellantVersusMISC BERHAD – Respondent[Suit No: D-22-191-2009]

The damages for breach of contract are assessed based on the difference between the contract price and market price at the time of breach, under the applicable law of England.

Cases Referred (2)

HIGH COURT MALAYA KUALA LUMPUR
SCANDINAVIAN BUNKERING (SINGAPORE) PTE LTD – Appellant
Versus
MISC BERHAD – Respondent
[Suit No: D-22-191-2009]