Cordlife receives first letter of demand from client for breach of contract

Cordlife has received its first letter of demand from lawyers acting on behalf of one of its clients for breach of a service agreement and breach of duty of care in negligence, the company said in a Singapore Exchange filing on May 2.

A letter of demand is an expression of a claimant's intention to commence court proceedings should the claims or demands continue to go unanswered.

Cordlife said the sum its client is claiming is between $60,000 and $250,000.

Cordlife is a private cord blood banking and processing facility in Singapore and South-east Asia. Cord blood banking is the process of storing a child's umbilical cord blood, which is a rich source of stem cells, should the need for a stem cell transplant ever arise.

Processes at the company have been in the spotlight after it was revealed on Nov 30 that cryopreserved cord blood units in seven of its 22 storage tanks were exposed to sub-optimal storage temperatures. Damage to cord blood units in two tanks and in a dry shipper -- a container to transport cord blood units at extremely low temperatures -- has been confirmed.

The company sought legal advice on the letter of demand and does not agree with the claimant's contention that Cordlife is precluded from relying on various clauses of the client's contract.

So far, Cordlife said it has not been given supporting details by the client's lawyer to prove the basis of the amount claimed and that it intends to defend the claim.

Separately, Cordlife said it also received notice of a claim lodged against the company in February in the Small Claims Tribunals (SCT) from another client, alleging damage to the cord blood unit of the client's child resulting from improper storage.

The SCT has jurisdiction to deal with claims not exceeding $20,000.

Proceedings in the SCT are ongoing.

Cordlife said it is unable to determine the exact financial impact of the claim in the letter of demand. Its legal advisers have advised that there are grounds to challenge the claim and allegations made.

But should the company be ultimately required to settle the claim in the letter of demand, the SCT claim or claims made by multiple clients, this will likely result in a negative impact on the financial position of the group for the financial year ending Dec 31, 2024.

The Straits Times understands that two groups of parents have sought legal advice to pursue action against Cordlife.

Source: Straits Times © SPH Media Limited. Permission required for reproduction.

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