Arris Solutions, Inc. v Asian Broadcasting Network (M) Sdn Bhd

JurisdictionSingapore
CourtHigh Court (Singapore)
JudgeQuentin Loh J,Yasuhei Taniguchi IJ,Simon Thorley IJ
Judgment Date08 February 2017
Date08 February 2017
Docket NumberSuit No 4 of 2016 (HC Summons No 2940 of 2016 and SIC Summons No 4 of 2017)

[2017] SGHC(I) 1

Singapore International Commercial Court

Quentin Loh J, Yasuhei Taniguchi IJ and Simon Thorley IJ

Suit No 4 of 2016 (HC Summons No 2940 of 2016 and SIC Summons No 4 of 2017)

Arris Solutions, Inc and others
and
Asian Broadcasting Network (M) Sdn Bhd

Ramesh Kumar s/o Ramasamy and Mak Sushan, Melissa (Allen & Gledhill LLP) for the plaintiffs;

Choy Wing Kin Montague (Clifford Law LLP) for the defendants.

Beluga Chartering GmbH v Beluga Projects (Singapore) Pte Ltd [2014] 2 SLR 815 (refd)

Linden Gardens Trust Ltd v Lenesta Sludge Disposals Ltd [1994] 1 AC 85 (folld)

Taisoo Suk, Re [2016] 5 SLR 787 (distd)

Total English Learning Global Pte Ltd v Kids Counsel Pte Ltd [2014] SGHC 258 (refd)

Companies Act (Cap 50, 2006 Rev Ed) s 210

Rules of Court (Cap 322, R 5, 2014 Rev Ed) O 14, O 92 r 1, O 92 r 4, O 110

Supreme Court of Judicature Act (Cap 322, 2007 Rev Ed) s 18D(a)

Companies Act 1965 (Act 125) (M'sia) s 176

Contract — Assignment — Clause which prohibited assignment of contractual rights and duties without prior written consent of other contracting party, such consent not to be unnecessarily withheld or delayed — Whether third plaintiff had validly assigned contractual rights to first plaintiff

Insolvency Law — Cross-border insolvency — Recognition of foreign insolvency proceedings — Malaysian incorporated company seeking recognition of scheme of arrangement proceedings in Malaysia — Whether court should grant stay of proceedings and stay of execution to recognise and assist those proceedings — Order 92 r 4 Rules of Court (Cap 322, R 5, 2014 Rev Ed)

The plaintiffs applied for summary judgment for sums due from the defendant under eight contracts (“the Agreements”), interest and costs. Each Agreement contained a clause which provided that Singapore law was the governing law and a clause which prohibited the assignment of contractual rights and duties without the prior written consent of the other contracting party, such consent not to be unnecessarily withheld or delayed.

The plaintiffs alleged that the second and third plaintiffs had entered into the Agreements with the defendant. The first plaintiff claimed as assignee of the debts owing by the defendant to the third plaintiff under seven of the Agreements (“the debts under the seven Agreements”).

The defendant argued that it had contracted with General Instrument Corporation (“GIC”) and a subsidiary of GIC, Motorola Mobility General Instrument Malaysia Sdn Bhd (“Motorola Malaysia”), instead of the second and third plaintiffs.

At the hearing on 9 January 2017, the defendant sought a stay of proceedings and a stay of execution against its assets. The defendant submitted that it had commenced proceedings in Malaysia (“the Malaysian proceedings”) to effect a scheme of arrangement and had obtained an order from the Malaysian court for a stay of all present, pending or future proceedings and a stay of execution against its assets. The plaintiffs were included in a list of creditors in the Malaysian proceedings.

Held, allowing the claims in part, refusing the application for a stay of proceedings and granting the application for a stay of execution:

(1) The second plaintiff, having only undergone a change of name, was the same entity as Motorola Malaysia. Judgment was accordingly entered for the second plaintiff: at [14], [15] and [43].

(2) The third plaintiff, having also only undergone a change of name, was the same entity as GIC. However, the third plaintiff had not validly assigned the debts under the seven Agreements to the first plaintiff because the defendant's prior written consent to the assignment had not been sought, far less obtained. Thus, the first plaintiff's claim was dismissed and judgment was entered for the third plaintiff: at [16] to [18], [20], [25] and [44].

(3) The defendant had taken inconsistent positions in Malaysia and Singapore. In the present proceedings, the defendant did not accept that it owed sums to the plaintiffs. However, it was prepared to accept that it owed sums to the plaintiffs in the Malaysian proceedings. A stay of the present proceedings would not assist the Malaysian proceedings when the issue of whether the plaintiffs were the defendant's creditors was disputed: at [39] and [40].

(4) The parties had chosen to litigate in Singaporeand put all relevant evidence before the court. There was also a clear and unambiguous governing law clause. It would assist the Malaysian proceedings for the court to determine whether the defendant owed the disputed sums to the plaintiffs: at [40].

(5) A stay of execution was, in the circumstances of this case, appropriate: at [46].

8 February 2017

Simon Thorley IJ (delivering the grounds of decision of the court):

Introduction and the parties

1 The plaintiffs (“the Plaintiffs”) applied for summary judgment for sums alleged to be due to the Plaintiffs from the defendant (“the Defendant”) for equipment and services provided pursuant to a number of different but related contracts.

2 After hearing counsel on 9 January 2017, this court unanimously granted judgment to the second and third plaintiffs on terms set out below and dismissed the first plaintiff's claims. We now give our reasons.

3 Between 2011 and 2013, the Defendant, a company incorporated in Malaysia, entered into seven agreements with General Instrument Corporation (“GIC”), a company incorporated in the state of Delaware in the United States of America (“USA”), and one with a subsidiary of GIC, Motorola Mobility General Instrument Malaysia Sdn Bhd (“Motorola Malaysia”), a company incorporated in Malaysia (collectively “the Agreements”).

4 The Agreements, short details of which are set out in the annex hereto, all relate to the supply and service of media entertainment and digital communications equipment. It is common ground that the specified equipment and services were provided pursuant to these Agreements. There is no contention that the goods were not fit for purpose nor is it alleged that the services were in any way inadequate. Moreover, there is no dispute that the sums involved are owed by the Defendant; the dispute is whether the Plaintiffs are entitled to claim those sums.

5 It is not therefore necessary to consider the terms of each contract in any detail. Each contained two material clauses which are in identical terms. First, an applicable law clause which provided that:

This Agreement shall be governed by and interpreted in accordance with the Laws of the Republic of Singapore for every purpose. …

Secondly, there was an assignment clause (“the Assignment Clause”) which provided that:

Neither party shall be entitled to assign, transfer, and/or subcontract any of its rights and obligations under this Agreement without the prior written consent of the other Party, such consent not to be unnecessarily withheld or delayed.

6 In its evidence and submissions, it was made clear that the Defendant attached great weight to the Assignment Clause as it had carried out extensive pre-contractual enquiries of a number of potential suppliers, and had satisfied itself that GIC and Motorola...

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