FULL SUPPORT HEALTHCARE LIMITED v SMART GLOVE INTERNATIONAL PTE. LTD.

29 June 2026

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1 AD/CA 101/2025 (“AD 101”) and AD/CA 102/2025 (“AD 102”) were cross-appeals against the decision of a judge in the General Division of the High Court of Singapore (“Judge”) regarding alleged breaches of the Supply Agreement and the 3mil POs. AD 101 concerned FSH’s appeal against the Judge’s finding that FSH had breached the Agreements by refusing to accept delivery of gloves before it terminated the Supply Agreement and the 3mil POs. AD 102 in turn concerned SGI’s appeal against, amongst other things, the Judge’s finding that FSH had validly terminated the Supply Agreement and the 3mil POs.

2 In June 2020, at the height of the COVID-19 pandemic, FSH engaged SGI to produce and supply gloves for on-selling. The parties entered into four agreements: the Supply Agreement, the 1st PO which was issued in June 2020, a PO for 5mil gloves which was issued in August 2020 (“the 5mil PO”), and the 2nd PO which was issued in November 2020 (collectively, the “Agreements”). The Supply Agreement was the master agreement governing all three POs. Under the Agreements, SGI was to supply approximately two billion gloves to FSH in accordance with agreed delivery schedules. FSH was required to make advance payments of 80% of the purchase price for each tranche of orders, with the remaining 20% payable before or upon shipment.

3 From the outset in June 2020, SGI failed to adhere to the agreed delivery schedules. Despite persistent and significant delays, FSH repeatedly accepted revised delivery schedules proposed by SGI, continued to place new orders (including the 5mil PO in August 2020 and the 2nd PO in November 2020), and accepted multiple price increases under the 3mil POs between October 2020 and April 2021, with the price rising from the original US$82.50 per 1,000 gloves to US$104.20 per 1,000 gloves. At no point during this period did FSH allege any breach by SGI or reserve its rights.

4 By early 2021, the market price of gloves had dropped sharply and cheaper alternative suppliers had emerged. On 20 April 2021, FSH sent an email to SGI purporting to cancel all existing 3mil orders, citing the commercially unviable price rather than any breach by SGI (“20 April 2021 E-mail”). FSH then ceased taking delivery of 3mil gloves under the 3mil POs. Negotiations over pricing failed, and on 6 July 2021, FSH sent a further email cancelling all open purchase orders and demanding a refund of the advance payments (“6 July 2021 E-mail”).

5 SGI commenced HC/S 49/2022 against FSH, alleging wrongful repudiation of the Supply Agreement and the 3mil POs. FSH counterclaimed, alleging that SGI had committed repudiatory breaches entitling FSH to terminate the Agreements.

6 The Judge found that SGI had committed repudiatory breaches of the Supply Agreement, which entitled FSH to terminate the Supply Agreement and the 3mil POs. However, the Judge found that FSH only terminated the Supply Agreement and the 3mil POs through the 6 July 2021 E-mail and not the 20 April 2021 E-mail. Therefore, the Judge found that FSH was also in breach from 20 April 2021 to 6 July 2021.

7 As a result of FSH’s breach, the Judge awarded SGI only US$282,560.60 in damages for the gloves which were produced but not shipped to FSH. This sum accounted for the loss of profits that SGI would have made (ie, 5% of the applicable price).

8 As a result of SGI’s breach, the Judge awarded FSH US$51,239,650 in damages for the late deliveries. Also, the Judge found that the advance payments were refundable and not in the nature of forfeitable deposits. Therefore, the Judge found that FSH was entitled to recover the refundable advance payments in unjust enrichment. Pre-judgment interest of 5.33% per annum from 6 July 2021 was awarded on US$59,654,915.20, which was the advance payments less the sum outstanding under certain unpaid invoices (amounting to US$5,127,384.80) which FSH accepted should be set off.

9 Both FSH and SGI appealed against the Judge’s decision in AD 101 and AD 102, respectively.

10 The AD affirmed the Judge’s finding that SGI had committed a repudiatory breach of cl 1.2 of the Supply Agreement by failing to use all reasonable endeavours to meet the agreed delivery schedules. SGI had oversold its production capacity and diverted capacity to fulfil orders from other customers, thereby depriving FSH of substantially the whole benefit of the time-sensitive Agreements. This constituted a Situation 3B repudiatory breach under the RDC Concrete Pte Ltd v Sato Kogyo (S) Pte Ltd and another appeal [2007] 4 SLR(R) 413 (“RDC Concrete”) framework: at [56].

11 However, the AD disagreed with the Judge’s finding that SGI had breached cl 2.1 by increasing the prices of the gloves. The court held that cl 2.1 contained a single composite requirement (ie, that there were extenuating circumstances beyond SGI’s control that both parties agreed warranted a price change), rather than two separate cumulative requirements. FSH’s agreement to the price increases was, therefore, conclusive of the matter. By agreeing to each price increase, FSH had necessarily accepted that the extenuating circumstances cited by SGI on each occasion were valid. The price increases were thus effected in accordance with cl 2.1 and there could not have been any breach by SGI on this front: at [65]–[71].

12 The AD also found that as nothing turned on SGI’s alleged breach of cl 3.2, it was unnecessary for the Judge to have resorted to equitable rectification of the Supply Agreement to impose an obligation on SGI to furnish the EN455 certificates within a few days of FSH’s request: at [74]–[75].

13 The AD found that the principle in Comfort Resources would apply in the situation presented by the present case where there was a 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). This was because the principle in Comfort Resources is not focused on what the intention of the party seeking to terminate was at the time, but whether he had a right of termination. As a matter of law, the effect of a contracting party having wrongfully terminated the contract and expressly renouncing the contract is the same: at [92]–[93].

14 However, on the facts of this case, the AD found that FSH had waived its right to terminate the Supply Agreement and the 3mil POs by estoppel. Throughout the contractual relationship from June 2020 to April 2021, FSH accepted every delayed delivery without reservation, agreed to each revised delivery schedule, and placed two further purchase orders despite being fully aware of SGI’s persistent and severe delays. This constituted a clear and unequivocal representation that it would forbear from exercising its right to terminate, on which SGI relied to its detriment. The AD rejected the Judge’s findings that FSH lacked knowledge of SGI’s breach of cl 1.2 at the material time and that any waiver was only temporary, noting that FSH’s failure to cite the delays as a ground for termination even when it ultimately sought to end the relationship made it clear that it had decided to waive that right entirely: at [107]–[134].

15 Because FSH had waived its right to terminate, FSH was not entitled to cancel the open orders under the Supply Agreement and the 3mil POs. Thus, FSH was in breach of the Supply Agreement and the 3mil POs in refusing to take deliveries of the gloves: at [157].

16 The AD found that FSH had waived its right to claim damages for SGI’s breach of cl 1.2 by estoppel. Although the court acknowledged that waiver of a right to claim damages would be rare in a commercial context, the exceptional facts of this case supported such an inference. FSH’s conduct in placing the 5mil PO and the 2nd PO despite full knowledge of SGI’s persistent delays and without any reservation of rights constituted an unequivocal representation that it would not seek damages for those delays, on which SGI relied to its detriment by accepting further orders and thereby exposing itself to additional liability. It would have been inequitable to allow FSH to retain the benefit of SGI’s acceptance of new orders while simultaneously pursuing damages for the very delays it had accepted without complaint. Thus, the Judge’s award of damages arising from the breach was set aside: at [139]–[150], and [160].

17 The AD upheld the Judge’s finding that the 80% advance payments totalling US$64,782,300 were refundable advance payments and not forfeitable deposits, applying the framework in Li Jialin and another v Wingcrown Investment Pte Ltd [2024] 2 SLR 372. There was no express right to forfeit the payments. Nor could such a right be implied into the Supply Agreement as cl 2.4 of the Supply Agreement, which provided for set-off of advance payments against outstanding invoices, was inconsistent with a right of forfeiture. In any event, an advance payment of 80% of the total contract price was not reasonable as an earnest and could not constitute a true deposit, both in terms of its percentage of the total price and its absolute quantum. Instead, SGI was required to return the sums to FSH on the ground of unjust enrichment for a total failure of consideration: at [163]–[170].

18 The AD set aside the Judge’s decision on awarding pre-judgment interest on the refundable advance payments. The basis of the award for pre-judgment interest lies in the fact that the unsuccessful party had wrongfully kept the successful party out of monies to which he had shown to be entitled, during which time, the unsuccessful party instead had the use of it. Here, because the AD found that FSH had waived its right to terminate, SGI was vested with the choice to terminate the Supply Agreement and the 3mil POs for FSH’s subsequent breach in refusing to take delivery of the gloves. SGI had, in fact, elected to affirm the Supply Agreement and the 3mil POs. Therefore, SGI was under no obligation to return the refundable advance payments to FSH until FSH’s entitlement to them was finally determined by the court. Thus, the award of pre-judgment interest was set aside: at [172]–[175].

19 The only dispute regarding the Unpaid Invoices Claim was whether pre-judgment interest ought to be awarded for the sum. The AD agreed with the Judge that no interest should be ordered as SGI could have set off the advance payments it had received from FSH against the outstanding invoices due under the 3mil POs and the 5mil PO: at [176]–[178].

20 The AD increased SGI’s damages under the Produced Gloves Claim from US$282,560.60 to US$7,644,233.30. This was because the proper measure of damages for the 92,559,000 gloves which were produced but not delivered was the full contractual price of the gloves, not merely SGI’s net profit margin. While there was no evidence that SGI had yet to pay any costs to its suppliers (“SGG Manufacturers”), the fact remained that SGI was strictly liable to pay the SGG Manufacturers for the gloves they had produced. This unpaid liability in itself constituted recoverable loss. The decision in Freight Connect (S) Pte Ltd v Paragon Shipping Pte Ltd [2015] 5 SLR 178 was not applicable to the present case, as it concerned potential future third-party damages claims whereas SGI’s liability to the SGG Manufacturers had already crystallised: at [180]–[186] and [191].

21 The AD affirmed the Judge’s finding that SGI had failed to prove any loss arising from FSH’s cancellation of the open orders under the 3mil POs. SGI had fully mitigated its losses by reallocating its production capacity to fulfilling new orders from other customers, and had not proven that it earned lesser profits under those new orders as compared to the cancelled orders with FSH: at [194]–[195].