HOLCIM (SINGAPORE) PTE LTD V PRECISE DEVELOPMENT PTE LTD

[2011] SGCA 1, Court of Appeal, Chan Sek Keong CJ, Andrew Phang Boon Leong JA and V K Rajah JA, 19 January 2011

Contract - Effect of force majeure clause - Meaning of the word "disrupted" - Event beyond the control of affected party - When requirement to take reasonable steps arises

The parties had entered into an agreement for the supply of ready mixed concrete when a ban of sand exports to Singapore entered into force in Indonesia with the immediate effect of raising prices. The appellant supplier said that it was no longer able to supply the concrete at pre-sand ban prices pursuant to a force majeure clause in the contract, reading: "The Supplier shall be under no obligation to supply the concrete if the said supply has been disrupted by virtue of inclement weather, strikes, labour disputes, machinery breakdowns, riots, and shortage of material, [acts] of God or any other factors arising through circumstances beyond the control of the Supplier. [emphasis added]". This turned on the meaning of the words "disrupted" and "beyond the control of". The judge at first instance had rejected the supplier's defences. This was the appeal of the supplier.