Court of Appeal, Singapore

Yong Pung How CJ, Karthigesu J,LP Thean JA

26 April 1994; 15 September 1994

KEYWORDS

International Trade – Bare fob contract – buyer’s right to nominate shipment time with the shipping period – buyer must give reasonable notice for nominating time – repudiation – wrongful allegation of repudiation is itself a repudiation which the other party may accept or refuse

FACTS

The events in chronological order was as follows:

26 April 1988  Contract for sale and purchase of latex was entered between seller and buyer, on bare fob terms.

3 May 1988     Buyer notified seller that space has been booked on board a particular vessel (Majapahit) eta loading port (Singapore) 13 June 1998 for loading between 10 June 1998 and 15 June 1988.

28 May 1988   Buyer confirmed nomination of Majapahit as firm and final.

7 June 1988     Buyer notified seller that the goods must be delivered to the shipowner by next day, 8 June 1998 12.00 pm, or else the loading will be on another vessel (Gowa), scheduled to arrive at Singapore on 27 June 1988.

8 June 1988     Buyer wrote to seller that the booking on Majapahit has been cancelled due to lack of response from the seller.

Buyer also claimed that the seller had breached the contract.

9 June 1988     Buyer wrote to seller that the buyer was ready to nominate Gowa, with reservation of rights for damage.

11 June 1988   Buyer wrote to seller that the sale and purchase contract, by lack of response from the seller, had been repudiated by the seller and that the buyer accepted the same.

Seller replied, refusing any repudiation and stating it will supply as soon as possible.

14 June 1988   Buyer demanded return of letter of credit

15 June 1988   Seller returned the letter of credit

Buyer sued the seller for damages.

HELD (BY COURT OF APPEAL – UNANIMOUSLY)

1. In bare fob contracts, generally the buyer has the right to determine the exact time within the shipping period at which the goods are to be shipped, but the buyer has to give reasonable notice, failing which buyer may be taken to repudiate the contract.

• Confirmed Nomination of Majapahit on 28 May 1988 was valid, hence loading between 10 June 1988 and 15 June 1988.

• Call of seller on 7 June 1988 to deliver to the cargo to the shipowner by noon next day, even before Majapahit arrived, was both unreasonable and, as vessel not arrived yet, premature.

• Buyer, by the message of 11 June 1988, claiming it accepted the repudiation by the seller (which was non existent), had itself repudiated.

• Seller, by return of the letter of credit on 15 June, had accepted the buyer’s repudiation.

• Accordingly, case of the buyer dismissed.

Overview by ARUN KASI