Singapore Court of Appeal: The instant appeal filed against assessment of damages by an International Judge of the Singapore International Commercial Court (SICC) in matters pertaining to repudiatory breach of contract by CSDS Aircraft Sales & Leasing Inc (CSDS). The Single Judge Bench comprising of Steven Chong JCA., rejected appellant’s claim that the SICC had made an error in valuation of the aircraft by completely overlooking the expert evidence during the evaluation of market value of the aircraft.
Background:
In September 2018, CSDS and Singapore Airlines Limited (SAI) entered into a contract for sale of Boeing 777-212 aircraft without engines. The purchase price as per the contract was US $6.5 M. CSDS made a deposit payment of US $ 250,000 but failed to pay the balance sum of US $6.25 M. Following the non-payment by CSDS, SIA finally terminated the contract on 04-11-2018 and claimed damages from CSDS. Subsequently the case was heard in SICC and it was held, that CSDS was in repudiatory breach of contract and hence the SIA was entitled to damages.
The SICC assessed the damages at US $4.75 M., which was determined as per Section 50(3) of the English Sale of Goods Act, 1979. The damages were calculated by determining the difference between the contract price and market value of the aircraft. The expert evaluated the market value of Boeing 777-212 by taking the market value of the cheaper B777-200 model and adjusting upwards to reach the Aircraft’s model (B777-212). The modifications and calculations made by expert were based on information obtained from the Aircraft Values Book published by International Bureau of Aviation Group Limited. The final market value of the aircraft was decided to be US $ 1.5 M by the judge of SICC.
CSDS appealed the decision of the SICC in the Court of Appeal arguing that the judge of SICC only relied on the factual evidence while completely undermining expert evidence. This argument of CSDS was based on a concession made by the expert during cross examination, that he may have miscalculated the price of aircraft by deducing the price of Trent 884 engines rather than the Trent 875 engines.
Issues before CoA:
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Whether the Judge had wrongly disregarded expert evidence and whether the concession made by the expert should not have been ignored.
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Whether the third-party offer in the March 2019 Requests for Proposals (RFP) should be given due weight in determining the market value of the Aircraft.
Analysis:
The Court while answering the issue at hand observed that contrary to CSDS’s claim, the SICC did account for expert evidence. The Court observed, that the courts while forming its judgement holistically examines and weighs factual as well as expert evidences. It was further held, that it is the duty of judges to decide which evidence has greater reliability depending upon factors such as the nature, issue and facts of case and also on the reliability of presented evidences. The Court further clarified that it is entirely acceptable for the SICC to disregard the expert evidence just like any other inherently tenuous or questionable evidence as there is no rule of law that the court must unquestioningly accept the unchallenged evidence of any witness, even for expert witnesses.
The Court while determining the second issue observed, evidence of a genuine third-party offer to acquire an asset, which is not speculative or conditional should be taken into account when determining fair market value. This was on the basis that the resale price constituted good evidence of the market value, and no other available market had appeared until the time of the resale.
The Court of Appeal while upholding the judgement of SICC ordered sum of $100,000 inclusive of disbursement of the court submission in favour of SIA.
[CSDS Aircraft Sales & Leasing Inc v. Singapore Airlines Limited, [2023] SGCA(I) 5, decided on 09-06-2023]
