International Construction Law Review
CORRESPONDENT REPORT – SINGAPORE
Chen Han Toh
Partner at Pinsent Masons MPillay LLP
Sand supply frustration
Singapore’s construction industry was stunned in early 2007, when the Indonesian government suddenly announced a ban on sand exports to Singapore.
The sand ban caused tremendous practical and commercial difficulties for both buyers and sellers of sand and sand-derivatives. They struggled in the aftermath to cope with the demands of on-going projects, because Singapore had been heavily dependent on Indonesia for sand.
This has precipitated at least five separate pieces of litigation in the Singapore Courts1. All but one has gone up to the apex Court of Appeal2. These cases involved contracts for the supply of sand and ready-mixed-concrete, with suppliers arguing force majeure, frustration and even repudiatory breach to justify their failure or refusal to continue under the contracts in question.
This article considers how the Singapore courts approached frustration in the three sand ban cases where that cautiously applied doctrine was asserted ie:
- (a) Holcim (Singapore) Pte Ltd v Kwan Yong Construction Pte Ltd 3 ;
- (b) Holcim (Singapore) Pte Ltd v Precise Development Pte Ltd 4 ; and
- (c) Alliance Concrete Singapore Pte Ltd v Sato Kogyo (S) Pte Ltd 5 .
These cases are notable for at least two reasons:
- (a) The two cases involving Holcim held that there was (or could have been) frustration, notwithstanding applicable force majeure provisions; and
- (b) Alliance Concrete established that there may be frustration where the particular source from which the subject-matter of a contract is derived becomes unavailable, even if the source was not specified in the contract, so long as both parties had contemplated that source.
1 NCC International AB v Alliance Concrete Singapore Pte Ltd [2007] SGHC 64 (HC), Holcim (Singapore) Pte Ltd v Kwan Yong Construction Pte Ltd [2009] 2 SLR(R) 193 (HC), Alliance Concrete Singapore Pte Ltd v Comfort Resources Pte Ltd [2009] 4 SLR(R) 602 (CA), Holcim (Singapore) Pte Ltd v Precise Development Pte Ltd [2011] 2 SLR 106 (CA), Alliance Concrete Singapore Pte Ltd v Sato Kogyo (S) Pte Ltd [2014] 3 SLR 857 (CA).
2 The High Court’s decision NCC International v Alliance Concrete case, dismissing an application for an interlocutory mandatory injunction, was not appealed. Note that there was an unsuccessful appeal in Holcim (Singapore) Pte Ltd v Kwan Yong Construction Pte Ltd but no written grounds rendered by the Court of Appeal.
3 [2009] 2 SLR(R) 193 (HC).
4 [2011] 2 SLR 106 (CA).
5 [2014] 3 SLR 857 (CA).
Pt 3] Correspondent Report – Singapore
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