Terrenus Energy SL2 Pte Ltd v Attika Interior + MEP Pte Ltd [2025] SGHC(A) 4
Our Singapore Green Plan 2030 aims to increase solar energy deployment to at least 2 gigawatt-peak (GWp) to meet the annual electricity needs of around 350,000 households by 2030.
But energy projects are not without challenges, like delays and defects. A recent decision of the Appellate Division of the High Court of Singapore offers guidance on whether a party’s intention to rectify defects is relevant to whether the “cost of cure” should be awarded.
Terrenus had engaged Attika as its main contractor for a solar energy project. Terrenus claimed substantial damages for Attika’s alleged failure to meet depth specifications for solar panel mounting structure rods, risking structural failure during high winds.
The Appellate Division reiterated the fundamental principle that damages aim to put the claimant in the same position as if the contract had been performed, protecting expectation loss. It disagreed with a previous ruling that the cost of cure as a loss was not yet “crystallised” until actually incurred, as that would be contrary to the general principle that loss arising from breach of contract is suffered at the time of breach. The Court is moreover not concerned with the use to which a claimant puts an award of damages.
The Court emphasised that intention to cure is thus neither a prerequisite nor a weighty factor. It is one of several factors, including the level of disproportionality between the cost of cure and the benefit to the promisee, the extent and seriousness of of the damage or defect, the nature and purpose of the contract and any personal subjective value attached to the promised performance. Here, Terrenus had proven neither the extent of non-compliance nor the risk of structural failure and was not entitled to substantial damages to begin with. Absent structural risk, Terrenus also could not justify claiming the cost of cure.
The decision highlights the importance of a holistic assessment of reasonableness and proportionality in claiming cost of cure damages.
The judgment is available here.
Our Edwin Lee and Amanda Koh successfully represented Attika in the appeal, assisted by Smrithi Sadasivam.
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