Alliance Concrete Singapore Pte Ltd v Sato Kogyo (S) Pte Ltd

Tan Lee Meng J:

[1] The plaintiff, Alliance Concrete Singapore Pte Ltd (“Alliance”), a manufacturer of ready-mixed concrete (“RMC”), sued the defendant, Sato Kogyo (S) Pte Ltd (“SK”), a building contractor, for money due for the supply of RMC to the latter. SK disputed the amount owed to Alliance and counterclaimed for losses incurred when it had to purchase RMC from other suppliers because of Alliance’s alleged failure to supply RMC to it.

[2] In January 2007, SK was the main contractor for the following three construction projects in Singapore (“the Projects”):

(a) an extension to the Boon Lay MRT (“the Boon Lay project”);

(b) a teaching and laboratory facility at the Nanyang Technological University (“the NTU project”); and

(c) a six-storey building at Telok Blangah Road (“Harbourfront project”).

[3] Pursuant to three separate agreements in 2006 (“the Contracts”) for the Projects, Alliance agreed to supply RMC to SK. The quantity of RMC to be supplied to SK under the contract for the NTU project was disputed, with Alliance contending that it was 35,000mwhereas SK claimed that Alliance had agreed to supply 51,000mof RMCto it.

[4] On 23 January 2007, the Indonesian authorities announced a ban on the export of sand to Singapore (“the Sand Ban”) as from 5 February 2007.

[5] Sand is an essential ingredient for the production of RMC. On 24 January 2007, the Building and Construction Authority of Singapore (“the BCA”) stated that the impact of the Sand Ban on construction work in Singapore would not be significant as there were alternative sources of sand to meet the needs of the construction industry. The BCA announced that it would, in the meantime, release sand from its stockpile of sand to meet the needs of the construction industry.

[7] On 1 February 2007, the BCA announced that to ensure the orderly release of sand from its stockpile, it would release sand only to main contractors with on-going projects. The contractors were expected to pass the sand released to them to their RMC suppliers for the latter to produce RMC for their building projects. Contractors applying for the sand had to use the official BCA form and the amount of concrete, grade of concrete and concreting sand required on a weekly basis by a contractor had to be certified by the professional engineer of the building project. These measures were intended to ensure that sand for RMC was released only to those who required it for on-going projects and to prevent the hoarding of sand.

[8] Notwithstanding the BCA’s moves to calm the construction industry, Alliance decided that it was no longer bound by the Contracts. On 29 January 2007, it wrote to SK as follows:

[9] On 2 February 2007, Alliance informed SK that as the previously agreed prices of RMC were no longer applicable, the parties should discuss SK’s needs on a case-by-case basis. At various meetings in January and early February 2007, SK reiterated that the Contracts remained in force. SK contended that while sand had become more expensive to procure, it was still available for the production of RMC. SK also made it clear that it would obtain sand from the BCA stockpile to ensure that Alliance had enough sand to produce the RMC required for the Projects.

[11] Initially, there was some confusion in SK’s orders for RMC, with some project managers noting in their orders that a surcharge for sand had been requested by Alliance.

[13] After the Sand Ban came into effect, Alliance supplied RMC to SK intermittently but the supply eventually stopped in late February 2007.

[14] In the meantime senior management of both parties tried to break the deadlock on new prices for RMC. At a meeting on 6 March 2007, Alliance insisted that SK accept its new prices for RMC. On 16 May and 30 May 2007, the parties met again but could not resolve their differences.

[15] SK claimed that between February 2007 and May 2007, it obtained approval for the release of 7,980.63 tonnes of sand from the BCA stockpile for the Projects. However, only 3,824.17 tonnes of sand were delivered to Alliance and the remainder of the sand was either forfeited or delivered to SK’s alternative supplier, Pan United Concrete Pte Ltd (“Pan United”), after Alliance allegedly failed to respond to SK’s orders for RMC.

[17] As the trial was bifurcated, this judgment is only concerned with the question of liability.

[18] Alliance’s claim is for the price or value of RMC supplied and delivered to SK for the Projects. It contended that it was no longer bound by the Contracts because of frustration arising from the Sand Ban and in the case of the contracts for the NTU and Harbourfront projects, the application of force majeure clauses.

[19] Alliance’s alternative claim for the value of RMC supplied to SK is premised on the soundness of its position that the Sand Ban had frustrated the Contracts or that the force majeure clauses that were allegedly in the contracts for the Harbourfront and NTU projects had been triggered by the Sand Ban.

[20] SK, which asserted that Alliance was trying to take advantage of the Sand Ban to make massive profits, submitted that the increased price of sand did not frustrate the Contracts. It added that the Contracts did not contain any force majeure clause and that even if two of them did, the said clauses had not been triggered by the Sand Ban. SK contended that Alliance evinced an intention not to be bound by the Contracts by:

(i) refusing or failing to deliver RMC to the Projects shortly after the Sand Ban despite receiving orders for the RMC;

(ii) stating at the meeting on 6 March 2007 that it was unable to honour its contracts with SK for the supply of RMC;

(iii) issuing a letter dated 20 April 2007 to the effect that it would not supply RMC for both the Boon Lay and Harbourfront projects unless SK agreed to the revised quotation attached thereto, which sought to impose new terms and prices for the RMC; and

(iv) issuing a facsimile dated 28 February 2007 stating that it would not be able to supply RMC for the NTU project because of an alleged shortage of 20mm granite from Indonesia.

[21] SK submitted that it accepted Alliance’s repudiation of the Contracts and that the latter was responsible for the losses arising from its purchase of RMC from alternative sources at higher prices. Evidently, if SK’s position is upheld, the amount due from Alliance to SK may exceed the amount due to Alliance for the RMC supplied to SK.

[22] Alliance’s response to SK’s counterclaim was that it was not obliged to supply SK any RMC because the latter had not accepted its new terms and increased prices for the supply of RMC following the alleged termination of the Contracts. It also asserted that the Contracts had been varied by subsequent agreements, an assertion vehemently denied by SK.

[23] Alliance asserted that it was not liable to supply RMC to SK under the old prices because the Contracts had been superseded or varied by fresh agreements between it and SK after the Sand Ban. It alleged that after the Sand Ban, SK had readily agreed to Alliance’s surcharges on the RMC for the Projects. SK pointed out that prior to the amendment by Alliance of its pleadings in June 2009, the latter had never taken the position, whether at meetings or in correspondence, that the Contracts had been varied or superseded by new agreements. It added that while its staff may have taken note of Alliance’s demand for a surcharge on the old prices for RMC, there was no proof of its unqualified acceptance of Alliance’s surcharges. This was not surprising as Alliance knew that SK regarded the Contracts as still binding while the senior management of both parties tried without success to resolve their differences on new prices for the RMC required for the Projects after the Sand Ban.

[24] When cross-examined, Alliance’s Sales Director, Mr Patrick Hong Chim Chew (“Patrick Hong”), effectively scuttled Alliance’s position that the Contracts had been superseded by new agreements as he testified that even as late as May 2007, the parties were still trying to settle the new price for Alliance’s RMC. The relevant part of the proceedings is as follows:

[25] Alliance’s invoices to SK also did not support the assertion that the Contracts had been superseded. Patrick Hong testified as follows:

[26] I thus find that the Contracts had not be superseded or varied by subsequent contracts between Alliance and SK.

[27] There was no proof of a term, express or implied, that sand for the RMC required for the Projects had to come from Indonesia although it was common knowledge that Indonesia was the cheapest source of sand at the material time. As such, the lack of Indonesian sand did not, without more, excuse Alliance from performing its obligations under the Contracts to supply RMC for the Projects.

[28] Alliance’s witnesses accepted that what mattered was whether the sand intended for manufacturing RMC met the requisite specifications and not where the sand came from. When cross-examined, Patrick Hong stated as follows:

[29] Clearly, Alliance had to perform its obligations under the Contracts after the Sand Ban came into effect unless the Contracts were frustrated or there were force majeure clauses in the Contracts which were triggered by the Sand Ban.

[30] The courts have referred to the circumstances under which a contract would be frustrated on innumerable occasions. In Glahe International Expo AG v ACS Computer Pte Ltd and another appeal [1999] 1 SLR(R) 945 (“Glahe”), the Court of Appeal explained at [26]:

The court in Glahe also approved of the following statement by Lord Simon of Glaisdale in National Carriers Ltd v Panalpina (Northern) Ltd [1981] 1 AC 675 at 700:

[31] Alliance emphasised that the Sand Ban was unforeseen and unexpected and that this was not denied by SK. However, what matters is whether or not the Sand Ban radically altered the nature of Alliance’s obligations under the Contracts or merely made it more expensive or onerous for it to fulfil its obligations to SK.

[32] SK asserted that notwithstanding the Sand Ban, Alliance was in a position to fulfil its obligations under the Contracts. It added that Alliance initially had surplus stocks of sand and that sand was readily available for the Projects from the BCA stockpile. Furthermore, Alliance had other sources for the supply of sand.

[33] Alliance surplus stocks of sand in February 2007 must have been quite sizeable because it initially agreed to supply RMC to SK on the basis that the latter would subsequently return the quantities of sand used by his company for batching RMC for the Projects. Patrick Hong explained in his affidavit of evidence-in-chief (“AEIC”) (at para 56) as follows:

[34] When cross-examined, Patrick Hong explained why Alliance was prepared to use its surplus stocks of sand to supply RMC to SK. The relevant part of the proceedings is as follows:

[35] Obviously, the fact that sand was obtainable from the BCA stockpile by SK and not by Alliance did not bother the latter as SK had made it clear all along that it was prepared to comply with the BCA procedure for obtaining sand from the stockpile to enable Alliance to manufacture RMC for the Projects. SK’s project manager, Mr Takahiro Maruyama (“Maruyama”), had written to Patrick Hong on 5 February 2007 as follows:

[36] Crucially, the BCA did not intend to hinder the production of RMC by RMC manufacturers by releasing sand only to contractors. BCA’s Senior Executive Development Officer, Ms Jean Lau Seo Leng (“Jean Lau”), testified as follows:

[37] Patrick Hong did not disagree with Jean Lau as he testified as follows:

[39] Alliance could also have sourced for sand from other countries. It knew that the Housing and Development Board had already looked into importing sand from other countries. There was evidence that Alliance had been offered Vietnamese sand in May 2007 by Sin Heng Chan Pte Ltd but it rejected the offer because it thought that the price of $54 per ton of Vietnamese sand was not competitive. That sand was available from sources other than the BCA stockpile was also evidenced by the dwindling number of applications for the release of sand from the BCA stockpile shortly after the Sand Ban. Indeed, BCA’s Jean Lau testified that to the best of her recollection, the applications for the release of sand from the BCA stockpile started to dwindle after February 2007.

In similar vein, in Glahe, the Court of Appeal said (at [39]):

[41] The truth was that although Alliance knew that sand was available at the material time, it had wanted fresh contracts with SK as it was concerned about the increase in the price of sand as well as other components of RMC, such as granite aggregates, which also had to be released from the BCA’s granite stockpile in late February and March 2007. After all, if sand was really unavailable, increasing the price of RMC will not solve the problem of unavailability of sand. This was conceded by Alliance’s Dolly Hwa, who testified as follows:

[43] While there may be no assurance that sand will remain available in the future, it is only when the unavailability of sand radically alters the obligations undertaken by Alliance under the Contracts that the question of frustration will arise. In any case, Patrick Hong could not have believed that the Contracts had been frustrated by the end of January 2007 as he testified that the Contracts were still subsisting after the Sand Ban. The relevant part of the proceedings is as follows:

[44] Alliance asserted that in determining whether or not its obligations under the Contracts had been radically altered by the Sand Ban, note ought to be taken of Edwinton Commercial Corporation v Tsavliris Russ (Worldwide Salvage & Towage) Ltd (The Sea Angel) [2007] 2 Lloyd’s Rep 517, where Rix LJ, who outlined a multi-factorial approach for the doctrine of frustration, explained as follows (at [111]-[112]):

[46] Crucially, Alliance’s attempt to increase its prices for its RMC immediately after the Sand Ban left much to be desired. Although the price of sand increased in February 2007 by only around $4 for 1m of RMC, Alliance sought to impose a surcharge of more than $24 for 1m of RMC. Patrick Hong, conceded this when he testified as follows:

[49] In seeking to justify its refusal to supply RMC to SK without the latter agreeing to its increased prices for RMC, Alliance relied on two cases, namely Holcim (Singapore) Pte Ltd v Kwan Yong Construction Pte Ltd [2009] 2 SLR(R) 193 (“Kwan Yong”) and Holcim (Singapore) Pte Ltd v Precise Development Pte Ltd and another application [2011] 2 SLR 106 (“Precise (CA)”). However, each case on frustration depends on its own facts and these two cases are easily distinguishable from the present case.

[50] In Kwan Yong, where the High Court held that the contract between the plaintiff RMC supplier and the defendant contractor had been frustrated by the Sand Ban, an important fact to note was that the contractor had refused to assist the RMC manufacturer by applying for the release of sand from the BCA stockpile. In these circumstances, the RMC manufacturer had no sand to produce RMC for the contractor.

[51] In Precise Development Pte Ltd v Holcim (Singapore) Pte Ltd [2010] 1 SLR 1083 (“Precise (HC)”), which was heard by the same judge in Kwan Yong and which also concerned a contract for the supply of RMC to a building contractor, the RMC supplier based its defence on a force majeure clause and did not plead frustration. The judge held that the defence of force majeure failed. In distinguishing the facts in Precise (HC) from those in Kwan Yong, the trial judge stated (at [47]–[49]:

[52] Admittedly, the decision in Precise (HC) was overruled by the Court of Appeal, which opined that had frustration been pleaded, this defence would have succeeded. It is noteworthy that the dicta of the Court of Appeal in Precise (CA) in relation to frustration rested on its finding that it was impossible for the supplier to meet orders exceeding 100m of RMC within two days after the order had been placed, as required by the contract. The court highlighted the following facts (at [60]–[61]):

[53] The evidence before the court in Precise (CA) on the availability of sand from the BCA stockpile following the Sand Ban was apparently quite different from the evidence presented in the present case. The BCA’s Jean Lau testified that so long as the requisite forms required by the BCA were properly filled, sand was disbursed from the BCA stockpile. The relevant part of the proceedings is as follows:

[54] Jean Lau’s evidence was supported by Mr Simon Lee Fun, the executive director of the Singapore Contractors’ Association at the material time, who stated in his AEIC (at para 17) as follows:

[55] It was not established that SK did not obtain or could not have obtained the required sand for Alliance to manufacture RMC for the Projects. Alliance complained that SK had failed to give it sufficient notice as to when sand will be delivered to its batching plants and that it had rejected SK’s sand because of logistical difficulties. It asserted that there were long queues for the delivery trucks, which had to wait three hours to offload sand. However, there was insufficient evidence that it was impossible for Alliance to accept SK’s deliveries of sand. As such, this case can be distinguished from Kwan Yong.

[56] Alliance sought to bring its case within the facts of Precise (CA) by pointing out that the Contracts envisaged that orders exceeding 100m or 200m of RMC were to be delivered within two days of the order. Its operations director, Mr Lincoln Lim, deposed in his AEIC that Alliance would not have been able to deliver such quantities of RMC within two days. However, Alliance’s basis for this assertion was unclear and there was insufficient evidence that the Sand Ban made it impossible for Alliance to meet SK’s orders. The facts in the present case are thus quite different from the facts in Precise (CA).

[57] To sum up, previous cases on the Sand Ban, like Precise (CA) and Kwan Yong, were decided on their own particular facts and need not be followed where, as in the present case, the circumstances were different. Alliance was in a position to continue supplying RMC to the SK but was unwilling to do so unless SK agreed to a higher price for the RMC. For the reasons stated, the Sand Ban had merely made it more expensive for Alliance to manufacture RMC for the Projects and did not frustrate the Contracts.

[58] In relation to Alliance’s reliance on force majeure to excuse its performance of the Contracts, two questions arise. First, were there force majeure clauses in the Contracts? Secondly, if Contracts had force majeure clauses, were these clauses triggered by the Sand Ban?

[59] Alliance did not plead force majeure in relation to the Boon Lay Project. However, it claimed that there were force majeure clauses in Contract No ACS 109/106/Q/TT-rev2 (“Contract No 109”) for the NTU project (“the NTU FM Clause”) and in Contract No ACS 980/0906/QD-rev3 (“Contract No 980”) for the Harbourfront project (“the Harbourfront FM Clause”).

[60] SK asserted that Contract No 109 and Contract No 980 had nothing to do with the NTU and Harbourfront projects respectively. It pointed out that as it found Alliance’s terms in Contract No 109 and Contract No 980 unacceptable, it did not sign these documents. Instead, SK made a counter-offer by issuing separate purchase orders, namely PO-009 and PO-013 (“the Purchase Orders”), which did not contain any force majeure clauses. These two Purchase Orders were signed by both parties and are binding on it and Alliance.

[61] Alliance accepted that Contract No 109 and Contract No 980 were not signed by SK and were not referred to in the Purchase Orders. However, it pointed out that the Purchase Orders could not have been intended to embody all of the parties’ rights and obligations and that SK’s Mr Hitoshi Tanaka had admitted that the Purchase Order for the NTU Project was not the contract but the most “important document to make [the] contract” in question. Even so, it was not Alliance’s pleaded case that Contract Nos 109 and 980 had been signed or modified by SK. In any case, even if the Purchase Orders omitted certain details that does not mean that the parties had intended that Contract Nos 109 and 980 and all the terms therein were applicable to them. As such, I find that in the “battle of forms” in relation to offer and acceptance, SK fired the last shot. As its Purchase Orders were signed by both parties, I find that the NTU and Harbourfront contracts did not include force majeure clauses.

[62] I will, for the sake of completeness, consider the position if the force majeure clauses were incorporated into the contracts for the NTU and Harbourfront projects.

[63] The difference between the application of doctrine of frustration and force majeure clauses was explained by the Court of Appeal in RDC Concrete Pte Ltd v Sato Kogyo (S) Pte Ltd and another appeal [2007] 4 SLR(R) 413 (“RDC Concrete”) as follows (at [56]):

[64] In RDC Concrete, the Court of Appeal emphasised that the effect of a force majeure clause depends on its precise language and explained (at [54] and [58]):

[65] As the wording of the NTU FM Clause differs from the Harbourfront FM Clause, these two clauses will be considered separately.

[66] The NTU FM Clause reads as follows:

[67] The wording of this clause is substantially similar to the force majeure clause that was considered in Precise (CA), which reads as follows:

[68] In interpreting the above force majeure clause, the Court of Appeal held that words “disrupt” and “hinder” connote a lower degree of negativity compared to the word “prevent” and the word “disrupt” suggests a datum measure of difficulty that interfered with the successful completion of the transaction concerned and unlike a situation involving “prevention”, a “disruption” does not render further performance by one party, or by both, impossible. The court added (at [56]):

[69] A question arises as to whether Alliance is required to prove that it took all reasonable steps to avoid the force majeure effects of the event in question. In Precise (CA), the Court of Appeal held (at [66]) that there is no blanket principle that the party relying on a force majeure clause must take all reasonable steps to avoid the disruption before it can rely on the force majeure clause and that much depends on the precise language of the clause concerned. The force majeure clause relied on by Alliance in the present case refers to circumstances “beyond our control”. In Precise (CA), the Court of Appeal held (at [69]) that the party relying on a force majeure clause ought to show that it has taken all reasonable steps to avoid the event or events concerned if there is the requirement that the event or events must be beyond the control of that particular party.

[70] On the facts of Precise (CA), the court found that the force majeure clause was triggered for the following reasons:

(i) While a mere increase in price is ordinarily insufficient to constitute a “disruption”, the circumstances of the case were sufficiently difficult to constitute a “disruption”: at [78].

(ii) The RMC supplier had taken reasonable steps to avoid the operation of the force majeure clause. In particular, it had informed the contractor of its inability to procure sand from the BCA and it had offered to credit back to the contractor the price of sand at a price higher than the cost of procuring sand from the BCA. However, time and again, the contractor had been unwilling to assist to procure sand from the BCA. In addition, the contractor did not adduce any evidence that there were alternative supplies of concreting sand from local or overseas sources: at [100].

[71] The facts in the present case are quite different. First, unlike the supplier in Precise (CA), Alliance appears to have had access to other sources of sand. Secondly, unlike the contractor in Precise (CA), SK was willing and did procure sand from the BCA for Alliance, but Alliance had refused to take delivery because of alleged logistical difficulties.

[73] In my view, there was no “disruption” within the meaning of the NTU FM Clause, nor were sufficient steps taken by Alliance to avoid the consequences of the Sand Ban.

[74] The Harbourfront FM Clause states:

[75] This clause is awkwardly drafted and difficult to understand. Alliance simply assumed that Precise (CA) had conclusively decided that the Sand Ban was an event of force majeure. As has been shown, however, this is a false assumption as the court in Precise (CA) had made it clear that much depends on the precise wording of the clause in question and the specific difficulties that the particular supplier faced.

[76] The key differences between the Harbourfront FM Clause and the NTU FM Clause are that:

(i) the Harbourfront FM Clause uses the phrase “the affected party” instead of “supply has been disrupted”; and

(ii) the Harbourfront FM Clause specifies that Alliance’s obligations are only suspended or limited until the event constituting force majeure ceases.

[77] The use of the word “affected” instead of “disrupted” might suggest an even lower threshold of hindrance that would trigger the Harbourfront FM Clause. However, the parties could not have intended the said clause to be triggered whenever the supplier is affected in however small a way by a shortage of raw materials. Since the clause was drafted by Alliance, it should be narrowly construed, and the better view is that “affected” connotes the same level of hindrance as the word “disrupted”. As noted in Sir Guenter Treitel, Frustration and Force Majeure (Sweet & Maxwell, 2 Ed, 2004) at para 12-024:

[78] For the same reasons given for the NTU FM Clause, the Harbourfront FM Clause had not been triggered by the Sand Ban.

[79] I will now consider SK’s application to its employers for the Projects for, inter alia, additional payments based on the changed circumstances arising from the Sand Ban. For instance, on 5 February 2007, Maruyama wrote to the contract administrator for the NTU project as follows:

[80] Alliance noted that SK was trying to hold it to the terms of the original contract while claiming extensions of time from its employers on the basis of the Sand Ban. However, SK pointed out that it had not claimed that its contracts with the employers for the Projects had been frustrated and that it had written to the employers shortly after the Sand Ban regarding the question of force majeure as a “protective measure”. Maruyama explained in his AEIC (at para 90) as follows:

[81] SK’s Project Manager for the Harbourfront Project, Mr Keizo Shoji, also defended his company’s position in his AEIC (at para 90) as follows:

[82] The above-mentioned applications by SK for relief from its employers thus cannot support Alliance’s assertion that the performance of the Contracts after the Sand Ban had been so radically altered as to result in the frustration of the Contracts or triggering of the force majeure clauses in the contracts for the NTU and Harbourfront projects.

[83] As mentioned, there was a dispute regarding the quantity of RMC Alliance had agreed to supply for the NTU project. While Alliance insisted that the agreed quantity was 35,000m, SK contended that it was 51,000m, as reflected in P0-009.The difference is significant because Alliance asserted that the RMC that it supplied for the NTU project had already reached the contractual target of 35,000mby early February 2007, in which case, it would have completed its obligation to supply RMC under the contract for this project and SK cannot claim to have suffered any loss in relation to this project.

[84] I accept SK’s evidence that the agreed quantity of RMC for the NTU contract was 51,000m and that this figure in PO-009 was not a typographical error. If this figure had been an error, Alliance should have, as it had done in the past, pointed out this error in writing to SK. Patrick Hong said that this was not done as he trusted SK’s Maruyama but as an experienced supplier of RMC for decades, he ought to have known the legal implication of not noting in writing an obvious error in a document signed by him. Furthermore, in Alliance’s own quotation dated 9 February 2007, there was a balance of 15,000mof RMC for the NTU project. By then, more than 35,000mof RMC had been supplied for the NTU project. If the agreed quantity to be supplied to this project was indeed 35,000m, there would have been no outstanding quantity of RMC to be supplied for the NTU project on 9 February 2007.

[85] The events in the present case do not justify a conclusion that the Contracts had been frustrated or that Alliance was entitled to rely on force majeure clauses allegedly incorporated into the contracts for the NTU and Harbourfront projects. As such, Alliance was obliged to fulfil its contractual obligations under the Contracts and supply RMC to SK under the prices fixed in the Contracts. As it refused to do so, SK was entitled to treat the Contracts as repudiated and obtain RMC from other sources.

[87] SK claimed that it was entitled to set off against the amount owed to Alliance damages for its losses arising from for the latter’s breach of contract. The damages allegedly suffered by SK will have to be assessed. SK’s claim for damages will undoubtedly be strenuously resisted by Alliance. During the assessment of damages, SK will have to prove, among other things, that Alliance had actually failed to supply the quantities of RMC ordered by it pursuant to the Contracts. Alliance contended that SK has to date not adduced sufficient evidence that it had actually failed to comply with orders by the latter for RMC for the Projects. Alliance pointed out that SK’s project managers had testified that their orders for RMC had been made by way of a phone call on the day the RMC was needed and as the said project managers did not themselves make the phone calls, their evidence on whether the phone orders for RMC had been made to Alliance’s staff was hearsay. This assertion and the effect of recent amendments to the Evidence Act (Cap 97, Rev Ed, 1997) in relation to hearsay will no doubt be considered by the court when damages are assessed.