The High Court of the Republic of Singapore recently considered the liability of a subcontractor for welding defects discovered in portions of a vessel in Seatrium New Energy Ltd (formerly known as Keppel FELS Ltd) v HJ Shipbuilding & Construction Co, Ltd (formerly known as Hanjin Heavy Industries and Construction Co Ltd) [2023]. This judgment, although provided by the Singaporean High Court, serves as an important reminder to those entering into a shipbuilding contract under English law on the scope of the builder’s warranty obligations.
This alert considers: (a) the existence of defects; (b) whether there was a breach of contractual duty; (c) the warranty provision; (d) the effect of a side letter entered into by the parties; and (e) the doctrine of promissory estoppel.
Background
Keppel FELS (now Seatrium New Energy Limited) had agreed to design, build, test and sell a semi-submersible accommodation unit (the “Vessel”) for Floatel International Limited pursuant to a shipbuilding contract dated 17 August 2012 (the “Main Contract”). Keppel FELS in turn appointed Hanjin Heavy Industries (now HJ Shipbuilding & Construction Co, Ltd) as a subcontractor to fabricate, assemble and erect the pontoons and lower columns of the Vessel (the “Works”) under an agreement dated 17 January 2013 (the “Sub Contract”).
