Appellate Division of the High Court · Decided 29 June 2026

A buyer that waived the seller's breach did not validly end the supply contract

Full Support Healthcare Ltd v Smart Glove International Pte Ltd and another appeal

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[2026] SGHC(A) 19Case no. Appellate Division / Civil Appeal No 101 of 2025

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A buyer that waived the seller's breach did not validly end the supply contract

Summary by laws.sgParagraphs [158], [160]

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Grounds of decision

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Introduction
[1] The business world is typically characterised by volatility, uncertainty, complexity and ambiguity – otherwise known as “VUCA”. The COVID-19 pandemic in the not-so-distant past exemplified this business reality.
[2] A clear example of this could be seen in the healthcare industry, which had to cope with an unprecedented demand for healthcare services and products. This included an astronomical surge in the demand for personal protective equipment (“PPE”). This created business opportunities for those who could rise to the occasion to meet that demand. But those opportunities emerged in a challenging environment afflicted with global lockdowns and supply chain disruptions. Those who attempted to seize upon the opportunities had to navigate these challenges effectively to come out on top.
[3] The genesis of the present dispute can be traced to the opportunities and challenges which confronted the parties during the pandemic. The appellant, Full Support Healthcare Ltd (“FSH”), is in the business of buying and selling PPE, including gloves. In June 2020, at the height of the pandemic, FSH engaged the respondent, Smart Glove International Pte Ltd (“SGI”), to produce gloves which FSH intended to on-sell. This resulted in the conclusion of four agreements:
(b) the 1st Purchase Order (“1st PO”);
(c) the 5mil Purchase Order (“5mil PO”); and
(d) the 2nd Purchase Order (“2nd PO”).
The Supply Agreement, the 1st PO, the 5mil PO and the 2nd PO will collectively be referred to as the “Agreements”; and the 1st PO and the 2nd PO will collectively be referred to as the “3mil POs”.
[4] The effect of the Agreements was that SGI was to produce an enormous supply of some two billion gloves for FSH to be delivered by SGI in accordance with an agreed schedule. But, from the outset, the produced quantities and the timing of the deliveries of the gloves for each month did not adhere to the agreed delivery schedules. Each time a request was made by SGI for a revised delivery schedule, FSH acceded to it. At the same time, various price increases were requested by SGI during the contractual relationship, which FSH also accepted. Evidently, there was some measure of give and take between the parties. The overall picture was that the parties never insisted on strict adherence to the Agreements because the market price of the gloves was rising due to what seemed to be an ever-increasing demand, which meant that FSH continued to make a healthy profit margin in spite of the price increases.
[5] All that changed by March 2021, some nine months into the contractual relationship, because the market price of the gloves had dropped drastically and there was the emergence of new manufacturers who were able to supply gloves to FSH at prices significantly lower than the contractually revised price.
[6] It was in this context that FSH informed SGI that, at the prevailing price that SGI was supplying the gloves to FSH, which had been revised multiple times, FSH would not be able to sell the gloves for a profit, and that unless the price was reduced, it would have “no option but to cancel all of [its] existing … orders [under the 3mil POs]”. When negotiations between the parties failed to reach a resolution, FSH decided to cancel all open orders and ceased taking further deliveries.
[7] In HC/S 49/2022, SGI alleged that FSH had wrongfully repudiated the contract by ceasing to take further deliveries. In response, FSH lodged a counterclaim, alleging that SGI had breached its obligations, which entitled FSH to terminate the contract. In the court below, a Judge of the High Court (“Judge”) held that FSH and SGI had both breached the Agreements. Both parties have appealed to this court.
[8] As will be seen, the crux of the two cross-appeals before us ultimately turns on whether FSH was entitled to rely on grounds not stated in its notice of renunciation to justify the termination of the Agreements and if so, whether it had waived any such repudiatory breach by SGI.
Background facts
[9] The facts are laid out in extensive detail in the Judge’s decision in Smart Glove International Pte Ltd v Full Support Healthcare Ltd [2025] SGHC 168 (“Judgment”). We adopt the background facts stated therein and only highlight the facts material to these appeals.
The Supply Agreement
[10] In May 2020, FSH approached SGI to enquire about the supply of gloves. On 11 June 2020, SGI and FSH entered into the Supply Agreement for the tentative sale and purchase of 1.3 billion pieces of Gen-X 3mil nitrile powder-free blue gloves (“3mil gloves”).
[11] The Supply Agreement was the first agreement concluded between the parties. In the court below, SGI argued that the Supply Agreement only applied to the 1st PO but not the 2nd PO and the 5mil PO. However, the Judge found that the 2nd PO and the 5mil PO were also governed by the Supply Agreement, unless overridden by the specific provisions in the 2nd PO and the 5mil PO (Judgment at [88]). As this finding has not been challenged on appeal, we will proceed on the basis that the Supply Agreement was the master agreement which governed the 1st PO, the 5mil PO and the 2nd PO.
[12] The relevant clauses of the Supply Agreement are as follows:
The 1st PO
[13] After the Supply Agreement was concluded, FSH issued the 1st PO on 12 June 2020. The terms of the 1st PO were then revised three times, and were finalised on or about 21 August 2020. The final version of the 1st PO also included a summary page (“1st PO Summary Page”) which specified, amongst other details, the delivery schedule. It is undisputed that SGI did not adhere to the delivery schedule set out in the 1st PO, but the parties are in dispute as to whether SGI was obligated to do so under cl 1.2 of the Supply Agreement.
[14] Included in the 1st PO was also the payment schedule. It is reproduced here:
[15] Under the Remarks/Special Instructions to the 1st PO, an explanation to the payment schedule was attached, which read as follows:
[16] The transactions which took place pursuant to the 1st PO are summarised in the table below:
Although the parties agree with the contents of this table, they disagree on the characterisation of the 80% paid upfront by FSH for each tranche of the orders pursuant to the payment schedule. SGI contends that they are forfeitable deposits which it is entitled to retain, while FSH argues that these are refundable advance payments which it is entitled to the return of upon cancellation.
The 5mil PO
[17] On 4 August 2020, FSH issued the 5mil PO for SGI to supply FSH with a total of 346,590,000 pieces of “Gen-X 5mil Dark Smart Blue Regular Cuff & One order for Long Cuff gloves” (“5mil gloves”), which was revised on 6 August 2020. The 5mil PO also included a payment schedule, which followed a similar structure to that in the 1st PO (see [14] above). It is reproduced below:
[18] A similar explanation to the payment schedule (see [15] above) was attached to the 5mil PO.
[19] The transactions which occurred pursuant to the 5mil PO are summarised in the table below:
Again, the parties agree with the contents of this table but disagree on the characterisation of the 80% paid upfront by FSH for each tranche of the orders pursuant to the payment schedule.
The 2nd PO
[20] In November 2020, FSH informed SGI that it was looking to order at least 50 containers of gloves per month, in addition to the original orders under the 1st PO. Thereafter, on 19 November 2020, FSH issued the 2nd PO, which was for an additional 469,000,000 pieces of 3mil gloves. The 2nd PO also included a summary page (“2nd PO Summary Page”) which specified a delivery schedule. As with the 1st PO, it is undisputed that SGI did not adhere to the delivery schedule in the 2nd PO, but the parties are in dispute as to whether SGI was obligated to do so. The 2nd PO also contained a payment schedule, which followed a similar structure to that in the 1st PO (see above at [14]). It is reproduced below:
[21] Like the 1st PO and the 5mil PO, a similar explanation to the payment schedule was also attached to the 2nd PO (see [15] above).
[22] The transactions which took place under the 2nd PO are summarised in the table below:
As with the 1st PO and 5mil PO, the parties agree with the contents of this table but disagree on the characterisation of the 80% paid upfront by FSH for each tranche of the orders pursuant to the payment schedule.
The events that occurred after the conclusion of the Agreements
[23] After the conclusion of the Agreements, several key events occurred. We will expand on them briefly as they have a material bearing on the issues in the appeals.
The delays
[24] As alluded to above at [13] and [20], SGI did not adhere to the delivery schedules set out in both the 1st PO and the 2nd PO. Based on a comparison of the agreed number of deliveries per month in the delivery schedules against the actual number of deliveries per month, it is apparent that the delays began from the very outset of the Supply Agreement (ie, June 2020) (Judgment at [113]; see [110] below). However, on each occasion when SGI proposed a revised delivery schedule, FSH agreed to the same.
The price increases
[25] From September 2020 to April 2021, SGI sought to revise the price of the 3mil gloves on multiple occasions, which FSH agreed to each time. Over the course of this period, the price of the 3mil gloves was revised six times.
The EN455 certificate request
[26] On 19 March 2021, FSH wrote to SGI to ask about the shelf life of certain 3mil and 5mil gloves that had already been delivered, which was to be verified via the EN455 certification. Clause 3.2 of the Supply Agreement provided that SGI would, upon request by FSH, supply the EN455 certification. On the same day, SGI replied to FSH attaching a technical report dated 12 February 2019 on the shelf life of the 3mil gloves, but stated that it would “revert to [FSH] by next week” with more information.
[27] After further correspondence on this matter, the required EN455 shelf-life certifications for the 3mil and 5mil gloves were eventually provided by SGI to FSH on 1 June 2021.
The 20 April 2021 E-mail
[28] On 20 April 2021, FSH sent an e-mail to SGI, purporting to “cancel all of [FSH’s] existing 3mil orders” on the basis that at the current contractually revised price, it “simply [could not] sell the gloves” (“20 April 2021 E-mail”). The relevant content of the e-mail is reproduced below:
[29] Following the 20 April 2021 E-mail, FSH began declining to take delivery of the 3mil gloves. However, the parties continued corresponding to negotiate the price of the 3mil gloves. The parties disagree on whether these negotiations went towards the possibility of concluding a fresh agreement (which is FSH’s position), or whether the negotiations were made in the context of the existing Supply Agreement and the 3mil POs (which is SGI’s position).
The 6 July 2021 E-mail
[30] On 6 July 2021, FSH sent SGI a further e-mail stating that FSH wished to “cancel all open POs” as the parties were unable to reach an agreement on the pricing of the 3mil gloves (“6 July 2021 E-mail”). The relevant content of the e-mail is reproduced below:
[31] Although the 6 July 2021 E-mail quantified the “deposit” (referring to the 80% purchase price which FSH had already paid SGI for the 3mil gloves) to be US$59,654,915.20, the parties accept that this amount should in fact be US$64,782,300, being the total amount paid for gloves that were eventually undelivered under the 1st PO (ie, US$45,988,800) and the 2nd PO (ie, US$18,793,500). To date, these sums remain with SGI, who claims that it is entitled to retain them on the basis that they are forfeitable deposits.
The commencement of the action
[32] On 22 January 2022, SGI commenced HC/S 49/2022 against FSH. Apart from defending the claim, FSH lodged a counterclaim.
Summary of the parties’ cases below
SGI’s case
[33] SGI’s primary case was that FSH had committed a breach and/or repudiatory breach of the Supply Agreement and the 3mil POs. SGI was always willing and able to fulfil its obligations under the Supply Agreement and the 3mil POs. However, after FSH sent the 20 April 2021 E-mail, SGI alleged that FSH breached the Supply Agreement and the 3mil POs by: (a) failing to arrange shipment or take delivery of some 92,559,000 pieces of 3mil gloves that SGI had already produced under the 3mil POs; (b) repeatedly demanding price reductions for both unshipped orders and retrospective price reductions for the gloves which had already been shipped whilst threatening cancellation of all open orders; and (c) sending the 6 July 2021 E-mail (Judgment at [59]).
[34] Despite FSH’s repudiation, SGI did not accept the repudiation and continued performing by procuring the production of the remaining 855,491,000 pieces of the 3mil gloves under the 3mil POs. SGI sought specific performance for FSH to arrange shipment and/or to take delivery of the 855,491,000 pieces of gloves that SGI had produced and/or procured the production of. Alternatively, SGI claimed damages for FSH’s breaches of the Supply Agreement and the 3mil POs (Judgment at [60]–[61]). This was referred to as the “Cancelled Gloves Claim” by the Judge (Judgment at [339]).
[35] Further, SGI claimed:
FSH’s defence and counterclaim
[36] FSH denied committing any breach and argued that it had instead validly terminated the Supply Agreement and the 3mil POs after accepting SGI’s repudiatory breaches of them through the 20 April 2021 E-mail. This termination was reiterated in the 6 July 2021 E-mail. FSH alleged that SGI committed three main repudiatory breaches of the Supply Agreement and the 3mil POs: (a) failing to use all reasonable endeavours to meet the agreed delivery schedules under the 3mil POs; (b) increasing the prices of the gloves; and (c) failing to supply the EN455 shelf-life certificate within a reasonable time after FSH had requested it (Judgment at [63]).
[39] FSH argued that, in the light of its purported termination of the Supply Agreement and the 3mil POs on 20 April 2021, it was no longer obliged to accept deliveries or make further payments for the undelivered gloves. FSH denied that seeking price reductions from SGI constituted repudiatory breaches on its part as they were sought in response to SGI’s price increases despite being in breach (ie, delay) (Judgment at [66]–[67]). This resulted in FSH having to pay more for the gloves and selling them when the market price had fallen substantially between the date on which the orders should have been delivered and the date on which the orders were in fact delivered.
[40] FSH acknowledged that it had not paid the balance US$5,127,384.80 due for the delivered gloves under the 5mil PO and the 3mil POs but argued that this should be set off against the advance payments it had made for the undelivered gloves (US$45,988,800 under the 1st PO and US$18,793,500 under the 2nd PO), which it characterised as refundable advance payments, after which the balance should be returned to FSH. Alternatively, FSH sought restitution of the above sum on the basis that SGI had been unjustly enriched.
[41] Apart from seeking the refund of the advance payments, FSH also claimed:
SGI’s defence to FSH’s counterclaim and FSH’s reply
[42] In its defence to FSH’s counterclaim, SGI denied any breach of the Agreements. SGI also argued that FSH had in any event waived all rights arising out of any breach of the Agreements by SGI (in particular, FSH’s right to terminate and its right to seek damages for any breach).
[43] On the other hand, FSH denied any waiver on its part (Judgment at [70]).
The decision below
[44] As mentioned above at [11], the Judge found that the terms of the Supply Agreement governed the 3mil POs and the 5mil PO (Judgment at [88]).
[45] As regards the merits, the Judge found that SGI had committed the following breaches of the Agreements:
(a) Clause 1.2 of the Supply Agreement in relation to the 3mil POs, by failing to exercise all reasonable endeavours to meet the delivery schedules (Judgment at [129]). The Judge found that SGI had oversold its capacity in breach of its obligation to use all reasonable endeavours to deliver the gloves to FSH punctually (Judgment at [111]);
(b) Clause 2.1 of the Supply Agreement in relation to the 1st PO, by increasing the price of the 3mil gloves without the presence of extenuating circumstances beyond SGI’s control (Judgment at [151]); and
(c) Clause 3.2 of the Supply Agreement, in relation to the 3mil POs and the 5mil PO, by failing to produce the EN455 certificates within a reasonable time (Judgment at [160]). As cl 3.2 of the Supply Agreement did not provide a specific timeframe for SGI to produce the EN455 certification, FSH argued that the obligation to provide the EN455 certificate forthwith or within two days should be implied. However, the Judge rejected that argument, as she found that there was no “true gap” to imply the term. Instead, the Judge found that the proper remedy should be equitable rectification. Under the rectified cl 3.2, the Judge found that SGI’s obligation was to provide the EN455 certificates requested by FSH within a reasonable time (Judgment at [158]).
[46] However, only the breach of cl 1.2 was found to be a repudiatory breach of the Supply Agreement and the 3mil POs under the Situation 3B classification in RDC Concrete Pte Ltd v Sato Kogyo (S) Pte Ltd and another appeal [2007] 4 SLR(R) 413 (“RDC Concrete”) (Judgment at [224]). The Judge found that FSH had lost the commercial benefit which the parties had envisioned from the “time-sensitive” Supply Agreement and the 3mil POs. Thus, the breach of cl 1.2, which resulted in the delays, had deprived FSH of substantially the whole benefit of the Supply Agreement and the 3mil POs and thus entitled FSH to terminate the Supply Agreement and the 3mil POs (Judgment at [214] and [231]). Notwithstanding that FSH did not at the material time rely on the breach of cl 1.2 to terminate the Supply Agreement and the 3mil POs, the Judge held that FSH was entitled to rely on the principle in Alliance Concrete Singapore Pte Ltd v Comfort Resources Pte Ltd [2009] 4 SLR(R) 602 (“Comfort Resources”) to retrospectively justify its purported termination (Judgment at [265]).
[47] Next, the Judge held that FSH had not waived its consequent right to terminate and its right to seek damages for loss that arose from SGI’s various breaches of the Supply Agreement. First, there could not be any waiver by estoppel because FSH did not have full knowledge of SGI’s breaches of cl 1.2 of the Supply Agreement (Judgment at [245]). Further, FSH’s conduct did not suggest a waiver by estoppel of the right to terminate or the right to damages for SGI’s breach of cl 1.2 of the Supply Agreement (Judgment at [246]–[261]). The Judge also found that FSH did not waive its right to damages for SGI’s breaches of cl 2.1 and cl 3.2 of the Supply Agreement (Judgment at [276]–[278] and [280]).
[48] As for when the termination of the Supply Agreement and the 3mil POs had occurred, the Judge found that FSH had only validly terminated the Supply Agreement and the 3mil POs on 6 July 2021 through the 6 July 2021 E-mail (Judgment at [290]), rejecting FSH’s argument that it had earlier terminated through the 20 April 2021 E-mail (Judgment at [284]). In the Judge’s view, FSH had continued to operate on the basis that the Supply Agreement and the 3mil POs were still alive even after the 20 April 2021 E-mail, and it was only on 6 July 2021 that FSH had unequivocally demonstrated by its conduct that it had elected to terminate the contracts.
[49] In the light of the Judge’s findings as to when FSH had terminated the contracts, FSH had committed an RDC Concrete Situation 2 repudiatory breach of the Supply Agreement and the 3mil POs, between 20 April 2021 and 6 July 2021 by conveying to SGI that it would not accept delivery of the gloves through the 20 April 2021 E-mail (ie, by renouncing the Supply Agreement and the 3mil POs) (Judgment at [293]).
[50] Having found breaches of contract by both FSH and SGI, the Judge made the following orders:
(a) Remedies awarded to SGI arising from FSH’s breach:
(i) “Unpaid Invoices Claim”: SGI was entitled to payment of the unpaid invoices totalling US$5,127,384.80 (Judgment at [303]). However, the Judge denied SGI’s claim for pre-judgment interest on this sum (Judgment at [301]).
(ii) “Produced Gloves Claim”: This claim concerned the 92,559,000 gloves which had been produced by SGI and which FSH refused to take delivery of after it had purported to terminate the Supply Agreement and the 3mil POs on 20 April 2021 (“Produced Gloves”). The Judge rejected SGI’s claim for the revenue it would have earned from selling the Produced Gloves to FSH. This was because the Judge agreed with FSH that, due to the structure of the relationship between SGI and the SGG Manufacturers (comprising Smart Glove Corporation Sdn Bhd, GX Corporation Sdn Bhd, Platinum Glove Industries Sdn Bhd, and Sigma Glove Industries Sdn Bhd (“Sigma”)), SGI did not in fact incur any costs on the Produced Gloves. Rather, under the structure of the relationship, the SGG Manufacturers (which are separate legal entities) were the ones incurring the costs of the production of gloves (Judgment at [315]). Therefore, SGI was entitled only to damages amounting to its net profit that it would have earned on these gloves. This was taken to be 5% of SGI’s selling price to FSH less any “variable costs of sales” (Judgment at [315]–[316]). After considering the steps taken by SGI to mitigate its loss, this sum amounted to US$282,560.60. The Judge granted SGI liberty to apply for directions should the issues of any potential claims from SGG Manufacturers materialise which SGI could claim against FSH (Judgment at [319]).
(iii) “Cancelled Gloves Claim”: This claim concerned the balance unproduced gloves on outstanding orders which FSH had cancelled. SGI was not entitled to the remedy of specific performance (Judgment at [342]–[344]). Although SGI was entitled to damages for the period of the breach from 21 April 2021 to 6 July 2021 (Judgment at [345] and [352]), based on the evidence, SGI had mitigated its loss fully by re-allocating the production lines meant for FSH to producing gloves for other customers (Judgment at [357] and [359]). As SGI had not proven that it “earned lesser profits under the new orders as compared to the cancelled orders [with FSH], it ha[d] not proven that it suffered any loss” (Judgment at [363]).
(b) Remedies awarded to FSH arising from SGI’s breaches:
(i) “Late Delivery Claim”: The Judge accepted that the formula to calculate this loss was as follows:
(A) FSH’s actual profits (comprising FSH’s total revenue from the sale of the delivered 3mil gloves less the amount paid to SGI for all 3mil gloves and the associated shipping costs) (“Actual Scenario”), compared with FSH’s profits but for SGI’s breaches, ie, if all deliveries had been made punctually and were not quarantined (comprising the same three components) (“But For Scenario”).
(B) Applying the formula, FSH was awarded damages of US$51,239,650.02 for SGI’s breaches of cl 1.2 and cl 2.1, this representing the difference between the Actual Scenario and the But For Scenario (Judgment at [437]).
(ii) “Storage Claim”: FSH had not proven its loss (Judgment at [442]).
(iii) “Indemnity Claim”: FSH was granted liberty to apply for directions when the issues of FSH’s customer’s potential claim against FSH would translate into damages which FSH can claim against SGI (Judgment at [445]).
(iv) Pre-judgment Interest: For the losses assessed for the Late Delivery Claim (ie, US$51,239,650.02), pre-judgment interest of 5.33% per annum was awarded only from the date of writ to the date of judgment (Judgment at [479]).
(v) The monies totalling US$64,782,300 paid to SGI by FSH, representing the total of the sums paid by FSH for gloves that had not been delivered, were found to be refundable advance payments and not forfeitable deposits that SGI was entitled to retain (Judgment at [463]). FSH was also found to be entitled to recover the refundable advance payments in unjust enrichment (Judgment at [470]). Pre-judgment interest of 5.33% per annum was awarded on US$59,654,915.20 (ie, US$64,782,300 less US$5,127,384.80, which sum represented the “Unpaid Invoices Claim” which FSH accepted should be set off against the sum refundable to it) from 6 July 2021, being the date when FSH first acquired the right to have these monies returned following its valid termination of the Supply Agreement and the 3mil POs (Judgment at [478]).
Outline of the parties’ respective submissions on appeal
AD/CA 101/2025
Appellant-FSH’s Case
[51] In AD/CA 101/2025 (“AD 101”), FSH submits that the Judge erred in the following findings:
Respondent-SGI’s Case
[52] SGI resists these points of FSH’s appeal and has also filed an appeal in AD 102.
AD/CA 102/2025
Appellant-SGI’s Case
[53] In AD/CA 102/2025 (“AD 102”), SGI submits that the Judge erred in the following findings:
Respondent-FSH’s Case
[54] FSH resists these points of SGI’s appeal.
The Issues
[55] The following issues can be distilled from the parties’ respective submissions:
SGI’s alleged breaches of the Supply Agreement
SGI was in breach of cl 1.2 of the Supply Agreement
[56] The Judge found that SGI had committed a Situation 3B repudiatory breach of cl 1.2 of the Supply Agreement in failing to exercise all reasonable endeavours to meet the delivery schedules. As held by the Court of Appeal in KS Energy Services Ltd v BR Energy (M) Sdn Bhd [2014] 2 SLR 905 at [47], the obligation to use best endeavours “involves taking all those reasonable steps which a prudent and determined man, acting in the interests of the obligee and anxious to procure the contractually stipulated outcome within a reasonable time, would have taken” [emphasis in original]. Given the Judge’s finding, which we accept, that SGI had oversold its production capacity and diverted some of its production capacity to fulfil new orders from other customers (Judgment at [124]; see [45(a)]–[46] above), we agree that SGI had indeed committed a repudiatory breach of cl 1.2 of the Supply Agreement.
[57] We note that FSH has also argued that the Judge erred in finding that SGI had not renounced the contract by their conduct (ie, SGI did not commit a Situation 2 breach). Having upheld the finding that SGI had committed the Situation 3B repudiatory breach, it is unnecessary to decide on this point.
The price increases were not in breach of cl 2.1 of the Supply Agreement
[58] FSH accepts the Judge’s finding that SGI’s breach of cl 2.1 by increasing the price of the gloves was not a repudiatory breach. Instead, it relies on this breach in order to nullify the various price increases so as to adopt the original price in the Supply Agreement of US$82.50 as the base price to quantify the damages payable on its Late Delivery Claim arising out of SGI’s repudiatory breach of cl 1.2. This is because, on the methodology adopted by the Judge, a lower deduction to account for the price payable to SGI would result in it being awarded a higher amount in terms of its net profit for the Late Delivery Claim. In the light of our finding below that FSH had waived its right to damages for loss resulting from the breach of cl 1.2 (ie, the Late Delivery Claim) (see [136]–[150] below), this issue, from FSH’s perspective, is rendered moot. However, as we have some misgivings about the Judge’s interpretation of cl 2.1, we consider it useful to explain why we disagree with the Judge’s interpretation. Further, if there was no breach of cl 2.1, this would mean that the price increases were valid, which will in turn have a bearing on SGI’s claim for damages based on the relevant contractually revised price.
[59] Clause 2.1 of the Supply Agreement provides as follows:
For present purposes, what is material is that cl 2.1 expressly provided for the possibility of the parties deviating from the original price of US$82.50 per 1000 gloves, save that this would depend on whether “there [were] extenuating circumstances beyond [SGI’s] control that both parties agree[d] warrant[ed] a change”. The issue at hand as to whether SGI was in breach of cl 2.1 turns on whether the price increases during the parties’ contractual relationship satisfied the condition stipulated in cl 2.1.
[60] Between October 2020 and April 2021, SGI sought to revise the price of 3mil gloves on six separate occasions, which FSH accepted at each relevant time. The price increases can be summarised as follows (Judgment at [49]):
[62] For example, on 24 March 2021, SGI informed FSH that the price of gloves shipped in April would be the same as that applicable to the gloves shipped in March, that is, US$106.42 per 1,000 pieces for the 3mil gloves. FSH objected and suggested that SGI review its pricing, noting that the prices from SGI’s competitors were about 10 to 15% lower. After further discussion, the parties eventually settled on a price of US$104.20 per 1,000 pieces for the 3mil gloves.
[63] It is clear, therefore, that FSH did not have to agree to the price increases but nonetheless did so, even if it might have only done so with reluctance or was not entirely happy with the situation. In this respect, we observe from the evidence before us that FSH’s practice was to perform some independent market checks to satisfy itself that the proposed price increases were justified. For example, following SGI’s second proposed price increase on 17 November 2020, Mr Matthew Simpson of FSH circulated the following internal e-mail on 18 November 2020:
This e-mail clearly demonstrated that FSH did not have any issue with the price increase, as in its own internal assessment, the increased price of $93.50 was still “a reasonable price in comparison to the marketprice [sic]”. In fact, in the exchange of correspondence for the April 2021 revision, the price was revised downwards to $104.20 after FSH objected to the price put forward by SGI (see above at [62]). The point is that the price revisions were not always upwards.
[64] In the court below, FSH acknowledged that it had agreed to all the price increases. However, the Judge accepted FSH’s argument that there were two cumulative requirements for the price to be varied under cl 2.1: (a) first, there had to be extenuating circumstances beyond SGI’s control warranting an increase in price; and (b) second, FSH had to agree to the price increase. The Judge found at [151] of the Judgment that given her finding “that there were no extenuating circumstances which would have triggered the operation of cl 2.1, it [was] unnecessary for [her] to decide if FSH had agreed to any consequent price increases”.
[65] With respect, the Judge was incorrect in her interpretation of cl 2.1 as providing for two cumulative requirements for a variation of the price. Instead, we find that there was only one composite requirement, ie, that “there [were] extenuating circumstances beyond [SGI’s] control that both parties agree[d] warrant[ed] a change”.
[67] FSH does not deny that it had agreed to the price increases. However, FSH argues that its agreement was not done in a vacuum. Instead, it pleaded that its acceptance of the price increases was done in the belief that there were extenuating circumstances. In our view, this is a distinction without a difference. The fact that FSH agreed to the price increases in the belief that there were extenuating circumstances means that there was a meeting of the minds between the parties that there were “extenuating circumstances beyond [SGI’s] control that … warrant[ed] a change” in the price pursuant to cl 2.1.
[68] FSH’s point appears to be that it was under a mistaken belief as to the truth of whether there were objectively “extenuating circumstances” supporting a price increase as SGI claimed. In other words, with the benefit of hindsight, FSH doubts the veracity of SGI’s claim of “extenuating circumstances”. However, that, in our view, misses the point. What cl 2.1 focuses on is not on the objective existence or otherwise of extenuating circumstances, but on whether the parties are of the view – and thus in agreement – as to whether such circumstances exist. By agreeing to the price increases requested by SGI, FSH must have accepted that the reasons or extenuating circumstances cited by SGI were valid. If it did not, it would not have assented to the price increases and SGI could not have revised the price unilaterally. Contrary to its submission, FSH’s agreement to the price increases is conclusive of the matter.
[69] In our judgment, it is not open to FSH to revisit the price revisions retrospectively after having agreed to the price increases and after the parties have continued to perform the Supply Agreement on the footing of the price increases. The fact that FSH may now think better of whether there were extenuating circumstances at the material time does not mean that it did not think that such circumstances existed at the time it gave its agreement.
Nothing turns on the alleged breach of cl 3.2 of the Supply Agreement
[72] Clause 3.2 of the Supply Agreement provides as follows:
[73] This breach was alleged against SGI only for a specific delivery, ie, lots GT20J10 and GT20K02 in March 2021. The Judge rejected FSH’s argument that a term should be implied into cl 3.2 for SGI to provide the EN455 certificates within a reasonable time. Instead, the Judge decided that the correct remedy should be an equitable rectification of the Supply Agreement to impose an obligation on SGI to furnish the certificates within a few days of FSH’s request even though equitable rectification was not pleaded and the breach of cl 3.2 was not stated in the 20 April 2021 E-mail (Judgment at [160]). While it may have been open to the Judge to resort to equitable rectification, the question is whether it was necessary or even appropriate to do so in the light of the Judge’s own findings.
[74] The Judge found that the Supply Agreement was terminated by the 6 July 2021 E-mail. By that time, the certificates had already been provided on 1 June 2021. Furthermore, the Judge found at [442] of the Judgment that FSH had not proven its loss for any purported breach of cl 3.2. It appears to us that the discussion over the breach of cl 3.2 has no bearing on the validity of FSH’s purported termination and/or its claim for damages.
[75] Given the above findings by the Judge, it was unnecessary for the Judge to have resorted to equitable rectification.
FSH’s Purported Termination
[76] We had found above at [56] that the Judge was correct in finding that SGI had committed a repudiatory breach of cl 1.2 of the Supply Agreement. This would have entitled FSH to terminate the Supply Agreement and the 3mil POs.
[77] In the light of the fact that it was FSH’s pleaded case that the termination was effected on 20 April 2021, albeit a breach of cl 1.2 was not cited as a justification for termination in the 20 April 2021 E-mail, we think it is necessary to examine whether the Judge was correct in finding that FSH had validly terminated the Supply Agreement and the 3mil POs with respect to SGI’s repudiatory breach of cl 1.2 via the 6 July 2021 E-mail, instead of 20 April 2021 as FSH submitted.
[78] FSH pleaded that it had accepted SGI’s repudiatory breach by way of the 20 April 2021 E-mail and cancelled all open orders. The purported acceptance of SGI’s repudiation of the Supply Agreement and the 3mil POs was reiterated in the 6 July 2021 E-mail.
[79] In its Defence and Counterclaim, FSH sought to justify the termination of the Supply Agreement and the 3mil POs on three grounds:
[80] It is common ground that none of the three grounds were stated in the 20 April 2021 E-mail, the 6 July 2021 E-mail, or in any correspondence prior to the commencement of the action. In fact, the first time these three grounds appeared was in the Defence and Counterclaim.
[81] Despite this, the Judge found that FSH was not precluded from relying on the breach of cl 1.2 as a ground for terminating the Supply Agreement and the 3mil POs (Judgment at [262]), relying on the Court of Appeal’s endorsement in Comfort Resources (at [63]) of the principle in Taylor v Oakes, Roncoroni & Co (1922) 127 LT 267 (“Taylor”) that:
For ease of reference, we shall refer to this proposition as the “principle in Comfort Resources” in this judgment.
[82] However, the Judge recognised that the principle in Comfort Resources is subject to two qualifications (Judgment at [264], citing Comfort Resources at [65] and [67]):
[83] The Judge found that, even if FSH had given a wrong reason to terminate the Supply Agreement and the 3mil POs, this did not deprive FSH of a justification which in fact existed, ie, SGI’s repudiatory breach of cl 1.2 of the Supply Agreement (Judgment at [265]). This was an application of the principle in Comfort Resources. That said, the Judge did not completely accept FSH’s case as she considered that a valid termination of the Supply Agreement and the 3mil POs was only effected by the later 6 July 2021 E-mail and not the initial 20 April 2021 E-mail.
[84] With respect to the two qualifications, the Judge found that the only relevant qualification in issue was whether there was waiver by election and/or waiver by estoppel since the evidence did not suggest that SGI would or could have rectified the situation had it been afforded the opportunity to do so (Judgment at [265]). In that regard, the Judge found that there was no question of waiver by election or waiver by estoppel (Judgment at [265]). Thus, FSH was not precluded from relying on the principle in Comfort Resources to justify the termination.
[85] Three significant points of the Judge’s application of the principle in Comfort Resources merit closer examination. First, whether FSH is precluded from relying on a breach not stated in its termination notice to justify its termination of the Supply Agreement and the 3mil POs based on the principle in Comfort Resources. Second, if the principle in Comfort Resources is applicable, when such termination would have taken effect given the Judge’s view that FSH only validly terminated the Supply Agreement and the 3mil POs on 6 July 2021 and not 20 April 2021 as FSH had claimed. Third, in any event, whether FSH is precluded from relying on the new grounds for termination by reason of waiver by election and/or waiver by estoppel, and/or other qualifications to the principle in Comfort Resources.
Application of the principle in Comfort Resources
[86] We first address the Judge’s application of the principle in Comfort Resources. While we agree with the Judge’s finding that the principle would be applicable to permit FSH to rely on a breach not stated in its termination notice, subject to the possible application of the qualifications to the principle which we address below, we find it necessary to elaborate further.
[87] We begin with the genesis of the principle, which is best explained by an examination of the decision in Comfort Resources. That case concerned a sale and purchase agreement for sand. By the terms of the contract, the buyer was required to order a specified minimum amount of sand from the seller every month, and the buyer was to make payment within 60 days of delivery. During the course of the contract, the seller issued a termination notice which purported to terminate the contract on account of the buyer’s breach in making late payments. However, the payment term was not a condition (such that any breach thereof was not a repudiatory breach), and therefore, the seller could not rely on it to terminate the contract. The question was whether the seller could rely on an additional ground which existed at the time of the purported termination to justify the termination (ie, the buyer’s under-ordering in breach of the minimum contractual quantity obligation) even though the seller may not have been aware of its existence or relied on it at the material time. The Court of Appeal accepted based on the principle stated in Taylor (which we have set out at [81] above) that the seller could, in principle, rely on the additional ground, although the court ultimately found that it did not assist the seller as the additional ground itself did not constitute a repudiatory breach that entitled the seller to terminate and, in any event, one of the qualifications applied (Comfort Resources at [68]–[77]).
[88] The court in Comfort Resources addressed a specific scenario concerning a contracting party who clearly intended to exercise a right to terminate a contract for a repudiatory breach of the counterparty but stated an incorrect or invalid reason. There was no ambiguity as to the intention to accept a repudiation. The question was whether a contracting party could rely on a repudiatory breach which did exist at the time of the purported termination to justify what would otherwise have been a wrongful termination on account of the stated reason being non-existent or invalid. The Court of Appeal accepted that this was permissible.
[89] However, the situation before us is quite different. Here, both the 20 April 2021 E-mail and the 6 July 2021 E-mail clearly stated that the reason for the cancellation was because SGI could not supply the gloves at the US$80 to US$85 mark and, after the price increase in April, FSH “simply [could not] sell the gloves at [that] price”. In short, FSH had sought, unsuccessfully, to renegotiate the price notwithstanding its earlier agreement to the price increase to US$104.20. When that failed, FSH decided to cancel the open orders because the price was no longer competitive and at that price FSH “simply cannot sell the gloves”. Significantly, there was no mention of any repudiatory breach by SGI whatsoever. Instead, FSH’s declaration that it would not perform anymore would itself have constituted a renunciation, and therefore a repudiatory breach, on its part. Thus, the facts of the present case seemed, at first blush, to be a step removed from Comfort Resources to the extent that the intention that FSH had manifested was for it (FSH) to commit a repudiatory breach of the Supply Agreement and the 3mil POs as opposed to accepting a repudiatory breach by SGI. It was in this context that we asked counsel for FSH, Ms Melissa Mak (“Ms Mak”), at the hearing, whether the principle in Comfort Resources would apply in the situation presented by this case where there was a clear disconnect between FSH’s manifested intention – ie, to commit a repudiatory breach – and the intention that was sought to be retrospectively imputed to FSH – ie, to accept a repudiatory breach by SGI.
[90] In this regard, Ms Mak helpfully referred us to the Court of Appeal’s decision of Phosagro Asia Pte Ltd v Piattchanine, Iouri [2016] 5 SLR 1052 (“Phosagro”) which cited, with approval, Boston Deep Sea Fishing and Ice Company v Ansell (1888) 59 L T 345; 39 Ch D 339 (“Boston Deep Sea Fishing”). Specifically, Ms Mak relied on Phosagro at [42], which is reproduced below:
[91] We are satisfied that the principle in Comfort Resources remains applicable to the present case where, instead of accepting a (non-existent) repudiatory breach by the other party, the party seeking to terminate has itself committed a repudiatory breach for two reasons. First, this is in line with the Court of Appeal’s interpretation of Boston Deep Sea Fishing in Phosagro. It is material that the court in Taylor, when enumerating the principle that was adopted by the Court of Appeal in Comfort Resources, had likewise relied on Boston Deep Sea Fishing as its authority. Therefore, the Court of Appeal’s interpretation of Boston Deep Sea Fishing illuminates the basis of the principle itself. Second, from the above extract in Phosagro, it is clear that the Court of Appeal accepted that it is possible to convert a renunciation, which is a breach of contract by one party, into a lawful termination pursuant to a repudiatory breach by the counterparty.
[92] In our judgment, notwithstanding that the manifested intention is to renounce the contract rather than to accept the other party’s repudiatory breach, the principle in Comfort Resources would apply because it is not focused on what the intention of the party seeking to terminate is, but whether he had a right of termination. If that is answered in the affirmative, the principle in Comfort Resources essentially deems him to have been exercising that right even if, as a matter of fact, his manifested intention was something else. Indeed, there is a further point to this, which is that, as a matter of law, the effect of one party seeking to terminate for a non-existent repudiatory breach by the other party and the former expressly renouncing the contract is the same: in both events, he would be himself committing a repudiatory breach. This is because, when a party purports to terminate the contract on a certain ground and that ground turns out to be invalid, such wrongful termination would amount to a renunciation of the contract on his part, constituting a Situation 2 repudiatory breach under RDC Concrete. A wrongful termination or an express renunciation are both, at base, renunciations of the contract albeit couched in different terms. There is thus no relevant distinction between them as a matter of law. Seen from this perspective, what the principle in Comfort Resources does, as mentioned above, is to effectively convert what would otherwise be a repudiatory breach of the contract by one party into the exercise of a right of termination, regardless of what his manifested intention may have been.
[93] Accordingly, we find that the Judge was correct in finding that the principle in Comfort Resources can apply to the present case. Even though FSH had effectively communicated the intention to renounce the Supply Agreement and the 3mil POs and made no reference to any repudiatory breaches by SGI or to any intention to accept such breaches by SGI, FSH would have been entitled to rely on any repudiatory breach of SGI that existed at the time to justify the termination. Thus, so long as at the time when FSH purported to terminate the contract (ie, 20 April 2021), there was an existing repudiatory breach by SGI, FSH could rely on the principle in Comfort Resources to terminate the contract.
[94] As a corollary to the finding above, there is some doubt as to whether the Judge was correct in finding that FSH’s termination took effect only on 6 July 2021 (via the 6 July 2021 E-mail) and not 20 April 2021 (via the 20 April 2021 E-mail). As explained above, the effect of the principle in Comfort Resources is that a breaching party cannot complain of the counterparty’s renunciation of the contract, because it in effect converts one party’s renunciation of the contract into an acceptance of the repudiatory breach of the counterparty. So long as SGI was in repudiatory breach of the Supply Agreement and the 3mil POs when FSH sought to terminate these contracts on 20 April 2021, the principle in Comfort Resources would deem FSH as exercising its right of termination for such repudiatory breach(es) by SGI on that date.
[95] The foregoing analysis, however, is subject to the important qualifications to the principle in Comfort Resources (see [82] above). In our judgment, while the principle in Comfort Resources may have been applicable, it was ultimately not applicable on the facts of this case because FSH had waived SGI’s repudiatory breach of cl 1.2, and therefore its right to terminate the Supply Agreement and the 3mil POs. We elaborate on the reasons for our finding of waiver below.
Qualifications to the principle in Comfort Resources
Whether FSH had waived the right to terminate the Supply Agreement and the 3mil POs
[96] SGI’s case is that FSH had waived its right to terminate the 3mil POs and the Supply Agreement. This is because, between June 2020 and April 2021, FSH had accepted each revised delivery schedule following discussions between the parties, and did not once allege during this time that SGI had committed any breach of the delivery schedules in the Supply Agreement and the 3mil POs. On the other hand, FSH submits that it did not waive any of its rights. Alternatively, its conduct was, at best, a temporary waiver while it was assessing the consequences of SGI’s breach.
[97] The Judge found that FSH could not have made any election to affirm the Agreements because FSH did not have knowledge of SGI’s failure to use all reasonable endeavours as required under cl 1.2 of the Supply Agreement, and that FSH had only discovered that SGI had failed to do so “by chance subsequently” in the course of the trial (Judgment at [238]).
[98] In arriving at this finding, the Judge held that SGI, being the party with full knowledge that it had overcommitted itself, could not have detrimentally relied on any representation by FSH (which had no knowledge of the same) in relation to any of SGI’s breaches of cl 1.2 of the Supply Agreement (Judgment at [241]–[245], citing Lim Ah Mee v Summerview Development Pte Ltd [1998] SGHC 87 (“Lim Ah Mee”) at [92]–[94]).
[99] While it appeared that FSH had accepted SGI’s revised schedules and was not insisting on strict adherence to the original delivery schedules, the Judge held that SGI’s obligation under cl 1.2 was not to ensure strict adherence to the delivery schedules per se but to exercise all reasonable endeavours to ensure punctual delivery of the gloves. FSH’s conduct in not insisting on strict adherence to the original delivery schedules therefore did not suggest that SGI was not required to exercise all reasonable endeavours in delivering the gloves in accordance with the original delivery schedules (Judgment at [247] and [260]). Even if FSH had waived any right(s) consequent to any breaches by SGI, the Judge found that any such waiver was made only for the time being for FSH to assess its position (Judgment at [270]).
[100] In considering whether FSH had waived its right to terminate, it should be borne in mind that there are two distinct forms of waiver, ie, waiver by election and waiver by estoppel.
[101] The doctrine of waiver by election concerns a situation where a party has a choice between two inconsistent rights. If he elects not to exercise one of those rights, he will be held to have abandoned that right if he has communicated his election in clear and unequivocal terms to the other party. He must also be aware of the facts which have given rise to the existence of the right he is said to have elected not to exercise. Once the election is made, it is final and binding, and the party is treated as having waived that right by his election (Audi Construction Pte Ltd v Kian Hiap Construction Pte Ltd [2018] 1 SLR 317 (“Audi Construction”) at [54]).
[102] Waiver by estoppel requires an unequivocal representation by one party that he will not insist upon his legal rights against the other party, and such reliance by the representee as will render it inequitable for the representor to go back upon his representation. This doctrine does not depend on any particular knowledge on the part of the representor. Instead, it is premised on inequity (Audi Construction at [57]; DJY v DJZ [2025] 2 SLR 142 at [59]–[65]; Chai Cher Watt v SDL Technologies Pte Ltd [2012] 1 SLR 152 (“Chai Cher Watt”) at [33], citing Motor Oil Hellas (Corinth) Refineries SA v Shipping Corp of India (The “Kanchenjunga”) [1990] 1 Lloyd’s Rep 391 (“The “Kanchenjunga””) at 399).
[103] The requisite representation is different as between waiver by election and waiver by estoppel. A party making an election is communicating his choice whether or not to exercise a right which has become available to him. The party to an equitable estoppel, on the other hand, is representing that he will not in future enforce his legal rights (Audi Construction at [57]; see also Chai Cher Watt at [33]).
[104] While mere silence or inaction will normally not amount to an unequivocal representation, in certain circumstances, particularly where there is a duty to speak, mere silence may amount to such a representation (Audi Construction at [58], citing Fook Gee Finance Co Ltd v Liu Cho Chit [1998] 1 SLR(R) 385 at [36]–[37]). The expression “duty to speak” does not refer to a legal duty, but to circumstances in which a failure to speak would lead a reasonable party to think that the other party has elected between two inconsistent rights or will forbear to enforce a particular right in the future, as the case may be. In other words, the duty necessary to found an estoppel by silence or acquiescence arises where a reasonable man would expect the person against whom the estoppel is raised, acting honestly and responsibly, to bring the true facts to the attention of the other party known by him to be under a mistake as to their respective rights and obligations (The “Bunga Melati 5” [2016] 2 SLR 1114 (“The “Bunga Melati 5””) at [15], citing Tradax Export SA v Dorada Compania Naviera SA (The “Lutetian”) [1982] 2 Lloyd’s Rep 140 (“The “Lutetian””) at 157). This is an objective assessment made by reference to how a reasonable person apprised of the relevant facts would view the silence in the circumstances (Audi Construction at [61]; The “Bunga Melati 5” at [16]).
[105] Relevant to the present case, in the case of a repudiatory breach of contract, the innocent party has at least two rights arising from the breach: (a) the right to damages to make good any loss suffered as a result of the breach; and (b) the right to terminate the contract (Aero-Gate Pte Ltd v Engen Marine Engineering Pte Ltd [2013] 4 SLR 409 at [120]). Each of those rights must be examined separately as it is possible for either, both or neither of these rights to be waived.
[106] For the principle in Comfort Resources to apply, FSH must not have waived its right to terminate the Supply Agreement and the 3mil POs.
(1) Waiver by estoppel
[107] We start by considering whether FSH is estopped from exercising its right to terminate.
[108] In order to establish waiver by estoppel, SGI must establish the following two elements:
(a) FSH must have unequivocally represented to SGI, by its words or conduct, that it would, in future, not insist upon its right to terminate the Supply Agreement and the 3mil POs on the basis of SGI’s breach of cl 1.2 of the Supply Agreement; and
(b) SGI must have relied on this representation to its detriment such that it would be inequitable for FSH to resile on its representation.
(A) Representation
(I) FSH’s conduct between June 2020 and April 2021
[109] In evaluating whether FSH had waived any breach of cl 1.2, it is imperative to bear in mind that the Judge held that the breach by SGI occurred from the outset of the Supply Agreement. This is borne out in her calculation of the damages in favour of FSH which commenced from June 2020. Based on FSH’s own case, it had purported to terminate the Supply Agreement and the 3mil POs for SGI’s alleged repudiatory breach only in April 2021. Therefore, FSH’s conduct from June 2020 to April 2021 must be examined for the purpose of determining whether FSH had waived the alleged breach.
[110] At [113] of the Judgment, the Judge helpfully set out a table comparing the original agreed number of deliveries to be made by SGI as set out in the 1st PO Summary Page and the 2nd PO Summary Page, against the actual number of deliveries made by SGI on each month, up until 20 April 2021, when FSH purported to terminate the Supply Agreement and the 3mil POs. This table is reproduced with slight modifications below:
[111] From the above table, it is evident that SGI had been late on its deliveries from the very beginning (ie, June 2020) up until FSH purported to terminate the Supply Agreement and the 3mil POs on 20 April 2021. Throughout that period from June 2020 to April 2021, SGI would frequently provide FSH with revised delivery schedules to inform FSH that deliveries would be delayed. Thereafter, SGI remained persistently late – it never once met its scheduled monthly delivery target, much less made any progress towards remedying the accumulating shortfall from each passing month. While FSH would occasionally object to a revised delivery schedule, it would ultimately agree or at least acquiesce to SGI’s requests, and it is undisputed that up until 20 April 2021, FSH accepted every delayed delivery without any reservation of rights. This can be illustrated from a sampling of the parties’ conduct in relation to the delayed deliveries.
[112] Pursuant to the original delivery schedule in the 1st PO Summary Page, SGI was to deliver the first 30 containers of gloves in June 2020. However, SGI in fact made no deliveries in June 2020. FSH did not raise any complaints regarding this initial delay; in fact, FSH had proactively assured SGI that it would be “OK” if the first batch of orders were delayed in an e-mail dated 21 June 2020 (three days after SGI had confirmed receipt of the advance payments for this order):
[113] Thereafter, on 1 July 2020, SGI sent FSH a new delivery schedule providing for the delivery of 390 containers between July and December 2020:
[114] However, matters did not improve in July. Pursuant to the original delivery schedule in the 1st PO Summary Page, SGI was to have delivered 90 containers by the end of July, while the revised delivery schedule provided for 60 containers by that date. But, as it turned out, SGI was only able to ship 16 containers on 15 July 2020, and a further 6 containers on 1 August 2020.
[115] As a result, in an e-mail dated 3 August 2020, Mrs Sarah Jane Stoute (“Mrs Stoute”), the Chief Executive Officer of FSH, informed SGI that FSH was “having a problem with the glove delivery schedule as the dates keep slipping and the customers are becoming concerned” and asked if this was something that could be resolved. In another e-mail sent later that same day, another representative from FSH, Ms Shiah Yoong, stated:
[116] It also appeared that FSH had expressed similar concerns in a call to SGI, as recorded in the following internal e-mail from SGI (also dated 3 August 2020):
[117] Notwithstanding these complaints, FSH continued to accept the late deliveries from SGI. Further, despite having just stated that it required assurance that its orders could be fulfilled before placing another order with SGI, FSH went on the very next day to issue the 5mil PO to SGI on 4 August 2020.
[118] Another point of significance is that the subsequent delivery schedules provided by SGI (on 12 August and 17 August 2020) reduced the weekly deliveries under the 1st PO to 15 containers per week for the last two weeks of August, and 10 containers per week for the months of September to December. This meant that SGI would no longer be attempting to “catch up” with the present shortfall in deliveries, and the total of 390 containers under the 1st PO would no longer be delivered by December, as initially agreed by the parties. This was because, according to SGI, it could at best commit to delivering 15 containers (inclusive of deliveries under the 1st PO and the 5mil PO) each week. FSH did not object to this arrangement. In FSH’s response on 18 August 2020, it even proposed an “amended plan” for the number of deliveries per month under the 1st PO to be reduced in order to prioritise the deliveries under the 5mil PO, before it would “switch back” in later months. In the proceedings below, FSH’s Mrs Stoute conceded during cross-examination that FSH’s position meant that SGI was in “severe breach” and that the delays reflected in “the 17 August schedule” would have entitled FSH to terminate the Supply Agreement and the 1st PO. Therefore, there is no question that FSH was fully aware of its rights but elected to affirm the Supply Agreement and 1st PO notwithstanding the alleged breaches by SGI.
[119] After August 2020, SGI continued to face difficulties in making deliveries on time, even after lowering the previous expectation of 20 containers per week to 15 containers per week. For example, in a revised delivery schedule sent on 22 October 2020 (the third sent in the month of October alone), SGI informed FSH that it could only ship a total of four containers of gloves in the last week of October, and specifically, that it would only be delivering one container of gloves pursuant to the 1st PO despite having previously represented (in the prior two October revised schedules) that it could deliver four containers that week. In response, on that same day, FSH informed SGI that:
[120] SGI replied that “[t]he best plan that the production can do is [sic] for next few weeks is 8 containers due to the former issue”. FSH did not respond further. However, it continued to accept all deliveries from SGI notwithstanding that SGI was unable to meet the total of 12 deliveries that FSH had requested on 22 October 2020. We also note that in the proceedings below, FSH’s Mrs Stoute agreed under cross-examination that FSH’s position as of 22 October 2020 was that the delays were “entirely [SGI’s] fault” and while FSH could have terminated the Supply Agreement and 1st PO on this basis, FSH had made a “commercial decision” to carry on with the Supply Agreement and 1st PO.
[121] Despite these persistent delays, on 19 November 2020, FSH issued the 2nd PO to SGI. Further, after the parties entered into the 2nd PO, deliveries for the 3mil POs continued to be delayed. In this regard, we note that deliveries under the 2nd PO were, as with the 1st PO, delayed from the outset. The original delivery schedule in the 2nd PO Summary Page provided that SGI would deliver 20 containers of gloves in the month of December. However, SGI only shipped six containers to FSH. As regards the orders under the 1st PO, compared to the 60 containers scheduled in the original delivery schedule, or even the eight containers scheduled in a revised schedule sent on 27 November 2020, SGI in fact delivered only six containers in December 2020.
[122] On 4 January 2021, FSH and SGI met to discuss changes to the delivery schedule for 2021. At this meeting, it was agreed that SGI would return to delivering a total of 20 containers per week from February 2021. However, SGI’s revised delivery schedule of 15 January 2021 departed from this agreement, providing for delivery of only approximately 10 containers per week up to end-March 2021. In its response on 18 January 2021, FSH noted that “[the parties’] plan for February [was] 20 containers but [SGI’s] proposed production schedule only deliver[ed] 10” and that “[t]his was way below [FSH’s] expectation[s]”. Following this, FSH sent another e-mail on 19 January 2021 informing SGI that it had arranged for shipments of 15 containers per week, and requesting for SGI’s revised delivery schedule.
[123] On 25 January 2021, SGI informed FSH that the “best quantities that [it could] deliver is 10 containers/week” [emphasis in original]. FSH responded with the following:
[124] For completeness, we note that despite these discussions, SGI was in any case unable to deliver the agreed 10 containers on time in February. Nor was SGI able to meet the revised 12 containers per week that FSH had sought for at any point in March. Nevertheless, FSH continued to accept each delayed delivery without any reservation of rights.
[125] Finally, on 20 April 2021, FSH purported to “cancel all of [FSH’s] existing 3mil orders”, not on the basis of the delays, but rather due to a significant drop in the prices of the gloves that rendered the 3mil POs commercially unviable as explained above at [89]. Evidently, FSH did not consider the delays and potential breach of cl 1.2 of the Supply Agreement significant enough to cite it as a ground for termination when it purported to terminate on 20 April 2021, even though doing so would have provided it with a straightforward justification for the termination.
(II) FSH’s conduct unequivocally represented that it would forbear to exercise its right to terminate
[126] In our view, it is clear from the entirety of the parties’ relationship that FSH had unequivocally represented that it would forbear to exercise its right to terminate the Supply Agreement and the 3mil POs arising from SGI’s breach of cl 1.2 of the Supply Agreement. Even though FSH did not make any express representation to this effect, there is little doubt in our minds that a representation can be implied from FSH’s conduct. Despite the persistent delays in delivery from the outset, FSH continued to treat the Agreements as alive from June 2020 to April 2021. FSH’s conduct clearly demonstrated that FSH saw an opportunity to profit from the pandemic and was prepared to tolerate the delayed deliveries in order to maximise its profits during that period. And, as observed above at [120], FSH conceded that it had made a “commercial decision” to carry on with the Supply Agreement and 1st PO even in spite of SGI’s “severe breach” through the delayed deliveries that would have justified FSH’s termination. In these circumstances, a reasonable party in SGI’s position would have understood that FSH was content to keep the contractual relationship alive and prepared to accept the delayed deliveries. It is apparent that FSH’s predominant concern was to preserve the Agreements as a source of profit for as long as the pandemic-driven demand persisted.
[127] The Judge also separately accepted (for completeness) that if there was any waiver by FSH, it would only be for the time being (Judgment at [266]). However, given FSH’s continued acceptance of the further deliveries notwithstanding the delays from June 2020 to April 2021, and its acceptance of the revised delivery schedules, we disagree with this finding. If the waiver for the time being was to allow FSH to “assess its position” and subsequently terminate the Supply Agreement and the 3mil POs as the Judge seemed to suggest (Judgment at [270]), it is significant that the purported termination by the 20 April 2021 E-mail or the 6 July 2021 E-mail did not refer to the delayed deliveries as a ground for termination in spite of the effluxion of time to enable FSH to “assess its position”. The fact that FSH did not cite a breach of cl 1.2 of the Supply Agreement due to the delay in deliveries when it came down to it makes clear that, even on the Judge’s view that FSH was seeking to “assess its position”, it had ultimately decided to waive its right to terminate on account of these breaches by SGI.
(B) Reliance
[128] In our view, it is also clear that SGI had relied on the aforesaid representation from FSH to its detriment, by continuing to perform its obligations under the revised delivery schedules.
[129] In the court below, the Judge found that FSH had only discovered SGI’s breach of cl 1.2 by chance during the trial and that it therefore did not have knowledge of SGI’s failure to exercise reasonable endeavours at the material time (Judgment at [238]–[239]). She then found that without such knowledge, there could have been no waiver by estoppel. In coming to this view, the Judge relied on the decision in Lim Ah Mee, which she considered to be authority for the proposition that where the defaulting party has full knowledge of its wrongdoing, and the innocent party does not, the defaulting party could not have detrimentally relied on any representations or conduct by the innocent party (Judgment at [241]–[242]).

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A buyer that waived the seller's breach did not validly end the supply contract

Grounds of decision

Introduction

Background facts

The Supply Agreement

The 1st PO

The 5mil PO

The 2nd PO

The events that occurred after the conclusion of the Agreements

The delays

The price increases

The EN455 certificate request

The 20 April 2021 E-mail

The 6 July 2021 E-mail

The commencement of the action

Summary of the parties’ cases below

SGI’s case

FSH’s defence and counterclaim

SGI’s defence to FSH’s counterclaim and FSH’s reply

The decision below

Outline of the parties’ respective submissions on appeal

AD/CA 101/2025

Appellant-FSH’s Case

Respondent-SGI’s Case

AD/CA 102/2025

Appellant-SGI’s Case

Respondent-FSH’s Case

The Issues

SGI’s alleged breaches of the Supply Agreement

SGI was in breach of cl 1.2 of the Supply Agreement

The price increases were not in breach of cl 2.1 of the Supply Agreement

Nothing turns on the alleged breach of cl 3.2 of the Supply Agreement

FSH’s Purported Termination

Application of the principle in Comfort Resources

Qualifications to the principle in Comfort Resources

Whether FSH had waived the right to terminate the Supply Agreement and the 3mil POs

(1) Waiver by estoppel

(A) Representation

(I) FSH’s conduct between June 2020 and April 2021

(II) FSH’s conduct unequivocally represented that it would forbear to exercise its right to terminate

(B) Reliance