Astrata (Singapore) Pte Ltd v Tridex Technologies Pte Ltd and another and other matters

• Jurisdiction: Singapore
• Judge: Philip Pillai J
• Judgment Date: 26 August 2010
• Neutral Citation: [2010] SGHC 250
• Plaintiff Counsel: Gerald Kuppusamy, Fong Lee Cheng & Shawn Lee (Wong & Leow LLC)
• Docket Number: Originating Summons No 168 of 2010, Originating Summons No 171 of 2010 and Originating Summons No 690 of 2010
• Date: 26 August 2010
• Hearing Date: 23 July 2010,12 July 2010,13 July 2010
• Subject Matter: Performance bond,Interpleader,Civil Procedure,Injunctions,Banking
• Year: 2010
• Citation: [2010] SGHC 250
• Court: High Court (Singapore)
• Published date: 18 May 2011

Philip Pillai J:

The plaintiff is Astrata (Singapore) Pte Ltd (“Astrata”), a company incorporated in Singapore. It is part of the Astrata group of companies, of which the ultimate holding company is Astrata Group Incorporated (“AGI”), a company incorporated in Nevada, USA.

The first defendant is Tridex Technologies Pte Ltd (“Tridex”), a company incorporated in Singapore. The second defendant, Portcullis Escrow Pte Ltd (“the Escrow Agent” or “PEPL”), is the escrow agent pursuant to an Escrow Agreement dated 23 October 2007 (“the Escrow Agreement”).

Astrata is in the business of designing and developing advanced location based information technology services and solutions (telematics) that combine global positioning systems, wireless communication (satellite or terrestrial) and geographical information technology. These solutions enable businesses, institutions and governments to monitor, trace and control the movement and status of machinery vehicles, personnel or other assets. Tridex is a Singapore incorporated company which is the interposed contracting entity under the Supply Agreement but the system is to be installed, tested and delivered to the end user, which is a state.

Astrata and Tridex entered into a Supply Agreement dated 10 April 2007 under which Astrata undertook to further develop and adapt its existing designs and software for installation behind vehicle licence plates on a nationwide application and supply the same ultimately to the state. The contract sum which is approximately US$ 95.6m provides for ongoing supply, testing and installation over a period of time against phases of milestone completion and whilst the Supply Agreement sets out the principal obligations of the parties, it expressly provides that it is to be supplemented and modified from time to time by points of agreement (“POA”) of which there are twelve. The Supply Agreement is by its terms governed by English law and the parties have agreed that disputes thereunder be resolved by ICC arbitration.

The deliverables under this Supply Agreement are a system (“the System”) which comprises the E-Plate and Command and Control Backend and includes components, installation guides, operators and user manuals. The E-Plate is a bespoke licence plate enclosure to be installed on vehicles which contains a Logic Centre. The Logic Centre comprises an electronic package containing GPS location, computer and cellular communication devices which is embedded in the E-Plate. The Command and Control Backend (“CCB”) is the hardware and software to the backend operations of the System. The functional requirements of the System are set out in the System Function Requirements in Appendix 2 of the Supply Agreement.

The Supply Agreement required Astrata to provide a performance bond which is to be released only upon the successful completion of the Command and Control Backend Acceptance Test Procedure within the time frame prescribed. The performance bond has been issued by OCBC Bank and Tridex has called on this bond. The Supply Agreement prescribes testing and installation milestones which have a bearing on the Call Injunction Application.

The Supply Agreement POA#7 provides for Astrata to regularly deliver updated comprehensive source codes and comprehensive engineering diagrams from time to time to an escrow agent to be appointed. Astrata, Tridex and PEPL thereafter entered an Escrow Agreement dated 23 October 2007 under which PEPL was appointed Escrow Agent and Astrata was from time to time to deposit the comprehensive source codes (“Source Codes”) and comprehensive engineering diagrams (“Diagrams”) with the Escrow Agent. The Escrow Agreement by its terms is governed by Singapore law and the parties have agreed to submit disputes to the non-exclusive jurisdiction of the Singapore courts.

Briefly, all of the several applications before me, apart from the Call Injunction Application, have been brought into play by reason of AGI, a Nevada corporation, entering a United States Chapter 11 process. As a result, Tridex is saying that its rights under clause 7(i)(c) of the Escrow Agreement to the delivery of the Source Codes and Diagrams deposited with the Escrow Agent have been triggered. Astrata is disputing this, and the Escrow Agent has also interpleaded and sought a declaration on the construction of clause 7(i) (c) of the Escrow Agreement under Singapore law.

There are three originating summonses (“OS”) before me as follows: (a) Originating Summons No 171 of 2010 (“OS 171 of 2010”) (“the Interlocutory Injunction Application”) by Astrata seeks an interlocutory injunction (“the Interlocutory Injunction”) to restrain: (i) Tridex from demanding/calling for the release of the Documents (defined below) held under escrow by the Escrow Agent; and (ii) the Escrow Agent from breaking escrow and/or releasing the Documents it holds under escrow,

until the dispute between them is heard and determined by an arbitral tribunal, and until this application and any appeal arising therefrom is heard and finally determined.

(b) Originating Summons No 690 of 2010 (“OS 690 of 2010”) (“the Declaration Application”) by the Escrow Agent seeks, inter alia: (i) a declaration (“the Declaration”) on whether, as at the date of the Order to be made hereon, the conditions set out in the Escrow Agreement (in particular, clauses 7(i)(c) and 7(ii)(b) thereof), have been satisfied such that Tridex is entitled to demand the release of the Comprehensive Source Code and the Comprehensive Engineering Diagrams (as defined in the Escrow Agreement); (ii) pending a decision on (i) above, the Escrow Agent be granted interpleader relief (“the Interim Interpleader Relief”) and excused from making a decision as to whether the clauses 7(i)(c) and 7(ii)(b) of the Escrow Agreement have been satisfied such that Tridex is entitled to demand the release of the Source Codes and the Diagrams; (iii) the Escrow Agent be allowed to follow and rely entirely on the Order(s) of the Court in connection with the safe keeping, inspection and release of the Source Code and Diagrams held in escrow pursuant to the Escrow Agreement and (iv) costs of this application be provided for on a full indemnity basis.

Within the Declaration Application, there is an application (“the Stay Application”) via Summons No 3264 of 2010/E in OS No 690 of 2010 by Astrata praying, inter alia, for a stay (“the Stay”) of all further proceedings in the action pursuant to section 11A of the International Arbitration Act (Cap 143A, 2002 Rev Ed) (“IAA”), Astrata and Tridex having by an agreement in writing dated 10 April 2007 agreed to refer to arbitration the matters in respect of which the Escrow Agent’s action is brought.

(c) Originating Summons No 168 of 2010 (“OOS 168 of 2010”) (“the Call Injunction Application”) by Astrata is seeking an injunction (“the Call Injunction”) to restrain Tridex from making a call on, and OCBC Bank from releasing monies held pursuant to a performance bond issued by OCBC Bank (“the Performance Bond”). The Interlocutory Injunction Application

It is common ground that the Interlocutory Injunction Application, the Declaration Application and the Stay Application all turn upon the construction of clause 7 of the Escrow Agreement between Astrata, Tridex and the Escrow Agent. Accordingly I would deal with the three OSes in the order I have introduced them above.

Background to the dispute

Clause 13 of the Supply Agreement between Astrata and Tridex originally provided for the delivery by Astrata to Tridex of the intellectual property rights in various documents, which including the Source Codes and the Diagrams for the Project “on the Final Phase 1B E-Plate Payment date”.

Subsequently, the parties entered into POA#7. In POA#7 the Parties’ agreed to put the Source Codes and the Diagrams into escrow, and to enter into a three-party escrow agreement with David Chong & Company. David Chong & Company is an entity related to the Escrow Agent. In para 1(v)(d) of POA#7 the parties agreed that clause 7(i)(c) of the Escrow Agreement would contain conditions for the release of the escrow documents in essentially the same terms as those in paragraph 1(v)(a) to paragraph 1(v)(c) of POA#7.

On 6 August 2009, AGI filed a voluntary petition under Chapter 11 of the United States Bankruptcy Code Chapter 11 and its final Plan of Reorganization (“AGI’s Chapter 11”) was confirmed by the competent United States court on 15 December 2009 and became effective as of 4 January 2010. Tridex sent a letter dated 5 February 2010 to the Escrow Agent and copied to Astrata. In this letter, Tridex, having produced AGI’s Amended Disclosure Statement and Plan of Reorganization, as modified and filed by AGI on 22 October 2009 and the Confirmation Order, went on to assert that the changes to AGI’s relations with its creditors as a result of the Plan of Reorganization constituted an “arrangement for the benefit of [AGI’s] creditors” (being one of the specified entities) as that term is used in clause 7(i)(c) of the Escrow Agreement. Further, Tridex alleged that:

7. In the circumstances, pursuant to clause 7(c) [sic] of the Escrow Agreement, PEPL is obliged, without consultation or approval from Astrata, to release to Tridex all envelopes marked “Comprehensive Source Code” (“CSC”) together with the index which relates to the CSC.

8. By this letter, Tridex seeks to: (a) Put PEPL on notice of the matters referred to in paragraphs 4 and 6 above and of Tridex’s rights and entitlement and PEPL’s obligations referred to in paragraphs 3 and 7 above; (b) inform PEPL that it shall not under any circumstances release the CSC and/or the said index which relates to the CSC to Astrata or any other person or entity; and (c) inform PEPL that it shall not under any circumstances permit Astrata or any other person or...