ARS v ART and another

JurisdictionSingapore
JudgeQuentin Loh J
Judgment Date08 April 2015
Neutral Citation[2015] SGHC 78
CourtHigh Court (Singapore)
Docket NumberSuit No [AA]
Year2015
Published date10 April 2015
Hearing Date27 May 2014,28 May 2014,29 May 2014,26 May 2014
Plaintiff CounselPaul Wong Por Luk, Daniel Tay and Tang Jin Sheng (Rodyk & Davidson LLP)
Defendant CounselDinesh Dhillon, Paul Ong and Cai Chengying (Allen & Gledhill LLP)
Subject MatterContract,Formation,Tort,Inducement of breach of contract,Conspiracy,Restitution
Citation[2015] SGHC 78
Quentin Loh J: Introduction

The gravamen of the plaintiff’s claim lies in the alleged involvement of the first defendant in the replacement of the plaintiff as the close-circuit television (“CCTV”) supplier for the Integrated Security System (“ISS”) in the redevelopment of a specific project.

A significant portion of the case revolves around the numerous disputes of fact between the parties. This judgment will be unfortunately lengthy to deal with the numerous factual allegations made by the parties. This is not helped by the fact that these disputes arose from events that took place in 2001−2002 and for various reasons, which I shall come to, the trial in Singapore only came to be held some 12 years later. Given the best of intentions, witnesses’ evidence of events that occurred so long ago may not be most reliable. They may have well been coloured by the onset of subsequent events and the disputes that have arisen. To compound matters, unlike other cases where the documentary evidence becomes an important aid to witnesses’ recollection and oral evidence, the objective evidence by way of relevant contemporaneous documents is very limited in this case. Another factor that hampered the fact-finding process is that some relevant witnesses were not called to give evidence; perhaps not without some excuse, as there were multiple proceedings in various jurisdictions, and because of conflicting interests.

Before I delve into the minutiae, I should state my conclusion at the outset. Having considered the matter and the evidence before me, I find that there is insufficient evidence to support the plaintiff’s claims. The plaintiff has failed to discharge its burden of proof and I accordingly dismiss its claims against the first defendant.

Background facts The parties

The plaintiff is [ARS], a corporation incorporated under the laws of Japan. It manufactures a whole range of CCTV products since 1975.1 [Saul] is the major shareholder, director and the President of the plaintiff.2 He is the “brains” of the operations of the plaintiff and its related companies, and makes all the major decisions for them.3

The first defendant is [ART], a corporation incorporated under Swiss law.4 It is the ultimate holding company of a group of companies (referred to as [Z]) which provides electronic security products and services, fire protection products and services, valves and controls, and other industrial products.5 [BA] is a business division and major segment of the [Z] group of companies, comprising the subsidiaries owned directly and indirectly by the first defendant (as the ultimate holding company),6 carrying on the business of designing, manufacturing, installing and servicing of electronic security systems, fire protection, detection and suppression systems, sprinklers and fire extinguishers, among others.7 To be clear, it is not disputed that [BA] is not a legal entity.8

The second defendant, [ARU], is the Singapore branch of [BB] which is a wholly owned subsidiary of the first defendant.9 The second defendant owns and operates under the business name of [BC], even though its operations are not confined to the fire and security-related businesses which operate under [BC].10 The plaintiff’s claims against the second defendant were struck out as they were time-barred under the Limitation Act (Cap 163, 1996 Rev Ed).

Facts leading up to the replacement of the plaintiff as the CCTV supplier for the [Project]

The redevelopment of the specific project started in or around late 1999.11 It encompassed the construction of [xxx] of [xxx], [xxx] and [xxx], which were to be implemented in five separate phases.12 The disputes comprised in this action are in relation to the first phase of the project (henceforth referred to as “the [Project]”). [XA] and [XB] were the employers and the clients in the [Project].13 The main consultant for the [Project] was [XC], which was succeeded by [XD] during the course of the [Project], and the security consultant was [XF].14

In or around 2000, [XG] won a tender issued by [XB] for the consulting, design, engineering and project management of security, communication and computerised systems for the initial phase of the [Project].15 [XG] is a company incorporated in Israel in 1977 as a consulting and engineering firm in the field of security and communication.16 At that time, [XG]’s credentials included the design and supervision of the [overseas project] in Israel.17 The plaintiff’s Israeli affiliate, [ARS (Israel)], a company incorporated in Israel, is a CCTV supplier and had actively cooperated with [XG] on many projects for which [XG] was the consultant, including the [overseas project].18 [Saul] is also the major shareholder and director of [ARS (Israel)], which is under the charge of his son-in-law, [Abel].

[Saul] claims that he learnt about the [Project] from [Michael], the principal of [XG].19 What happened next is one of the points of contention between the parties. The plaintiff claims that [ARS (Israel)] entered into discussions with another company, [KA], with a view to collaborate and pursue the ISS package of the [Project] (“the ISS sub-contract”).20 [KA] is a system integrator/designer, distributor and installer of access control, alarms and integrated systems, CCTV and digital CCTV recording systems in Israel.21 [KA] had previously worked with [ARS (Israel)] for the supply and installation of security systems in several of the [projects] in Israel, including the [overseas project].22 As a result of the discussions with [KA], the plaintiff and [ARS (Israel)] allegedly reached an oral agreement with [KA] to cooperate to pursue the ISS sub-contract (“the [First] Agreement”).23 The alleged terms of the [First] Agreement are set out below at [16]. The first defendant does not admit the existence of the [First] Agreement.24

In due course, [XA] issued the Request for Information and Pre-Qualification for Design, Installation, Integration, Commissioning and Management of Integrated Security System for the Redevelopment of the [Project] in Singapore (“the RFI”).25 The submission date for the RFI was 10 May 2001.26 The parties who were interested in submitting a tender for the ISS sub-contract had to meet the pre-qualification requirements set out in the RFI, namely: the tenderer had to be either a Singapore company or an entity (either a foreign company or a joint venture) which included a Singapore company that will provide the support, commissioning and management of the ISS during the defects liability period and the warranty period;27 and the tenderer had to have experience and a track record in [projects] of significant value and at least one project involving video transmission and camera control of [xxx] cameras through decentralized system of [xxx] video matrices to [xxx] monitors in [xxx] separate control centres.28

The parties who were shortlisted at the RFI stage would be nominated as the final bidders for the Request for Proposal (“the RFP”), which was the final and closed stage of the tender for the ISS sub-contract.29 The successful party at the RFP stage would then be nominated as the sub-contractor.30

One of the parties interested in the ISS sub-contract was [BD], a company incorporated under the laws of Singapore and in the business of trading, installing and maintaining fire safety devices and apparatuses, among others.31 The first defendant is the ultimate holding company of [BD].32 As alluded to earlier (see [9] above), [KA] had plans to secure the ISS sub-contract. [Saul] introduced [BD] and [KA] to each other, and this eventually resulted in the formation of the joint venture company known as [JVC] on or around 8 May 2001.33 [KB], which is a part of the same group of companies as [KA] with common offices and directors, was added to the joint venture in order to meet the minimum capital and financial requirements under the RFI which [KA], by itself, would not have met.34

[JVC] eventually won the bid for the ISS sub-contract on 21 February 2002.35

The circumstances preceding the formation of [JVC], apart from the introduction by [Saul], are heavily contested by the parties. The plaintiff’s contention, essentially, is that there was an oral agreement between the plaintiff, [ARS (Israel)] and [BD] to the effect that it would only offer the plaintiff’s CCTV products if [BD] manages to enter into a joint venture to bid for the ISS sub-contract as a result of [Saul]’s introduction (“the [Second] Agreement”).36 The alleged terms of the [Second] Agreement is set out below at [17]. The plaintiff asserts that [Saul] introduced [BD] and [KA] to each other after having been assured by [BD] and [KA] that they would abide by the [First] Agreement and [Second] Agreement (“the [Two] Agreements”).37 The first defendant denies the existence of both agreements.

At the RFI and RFP stages, the plaintiff was [JVC]’s proposed CCTV supplier. However, the plaintiff was subsequently replaced by [PT].38 The parties dispute the circumstances surrounding the replacement of the plaintiff as the CCTV supplier for the ISS sub-contract. The plaintiff contends that notwithstanding the existence of the [Two] Agreements, the plaintiff was replaced with [PT] on the pretext that the plaintiff’s CCTV sub-system did not comply with the RFP specifications and the requirements of [XA]. This is denied by the first defendant. The plaintiff submits that it is the circumstances under which the plaintiff was replaced as the CCTV supplier for the ISS sub-contract and the involvement of the first defendant which gave rise to the claims. The plaintiff’s case is that the first defendant was involved in the replacement of the plaintiff through certain key personnel in [BC] who were representatives of the first defendant and/or acted for and on behalf of the first defendant, namely: [Paul], the managing director of [BC];39 [Amos], the vice president of...

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5 books & journal articles
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