Creative Technology Ltd and another v Huawei International Pte Ltd
Court | High Court (Singapore) |
Judge | Chan Seng Onn J |
Judgment Date | 16 August 2017 |
Neutral Citation | [2017] SGHC 201 |
Citation | [2017] SGHC 201 |
Docket Number | Suit No 55 of 2012/H consolidated with Suit No 606 of 2012/Z |
Hearing Date | 22 July 2015,15 July 2015,10 October 2016,19 April 2016,02 December 2015,11 April 2016,09 July 2015,10 July 2015,13 October 2016,21 July 2015,14 July 2015,27 July 2017,16 July 2015,24 July 2015,18 April 2016,12 October 2016,07 July 2015,30 November 2015,03 December 2015,08 July 2015,23 July 2015 |
Plaintiff Counsel | Yim Wing Kuen Jimmy SC, Soo Ziyang, Daniel, Lee Yicheng Andrew (Li Yicheng), and Huang Junjie (Drew & Napier LLC) |
Defendant Counsel | Andre Francis Maniam SC, Yong Shuyi, Alma, Ho Weijie, and Siew Guowei (WongPartnership LLP) |
Subject Matter | Contract,Misrepresentation Act,Breach,Anticipatory breach,Contractual terms,Implied terms,Exclusion clauses |
Published date | 25 July 2018 |
In Suit No 55 (“Suit No 55”), Creative Technology Ltd (“CTL”) and its wholly-owned subsidiary, QMAX Communications Pte Ltd (“QMAX”) (collectively referred to as “Creative”) claimed against Huawei International Pte Ltd (“Huawei”) for loss and damage arising from Huawei’s repudiatory breach of a contract in which Huawei was to build, design and operate a WiMAX network for Creative in the 2.3GHz spectrum (“WiMAX Network”). Prior to its acquisition by CTL sometime in February 2009, QMAX was the holder of exclusive spectrum rights for the 2.3GHz frequency band in Singapore.
Alternatively, Creative claimed against Huawei under s 2(1) of the Misrepresentation Act (Cap 390, 1994 Rev Ed) and under tort for Huawei’s negligent misstatement. Under each of these alternative causes of action, Creative sought the return of the sum of US$9,295,388.98 paid to Huawei under the contract. Creative also claimed damages of S$19,253,120.01 and US$22,000, being the expenses incurred by Creative for the WiMAX Network.
In the same Suit No 55, Huawei counterclaimed against Creative for wrongful rescission and/or termination of the contract and claimed the additional sums of US$9,649,935.86 and S$6,224.19 that Huawei would have received from Creative had the WiMAX Network been completed successfully.
In Suit No 606 of 2012/Z (“Suit No 606”), which was consolidated with Suit No 55, Huawei claimed against CTL’s wholly-owned subsidiary, ZiiMAX Singapore Pte Ltd (“ZiiMAX”) an outstanding payment of US$104,860 for indoor Customer-Premises Equipment (“CPE”) purchased by and supplied to ZiiMAX under a purchase order dated 13 May 2011 (“CPE Agreement”). ZiiMAX counterclaimed against Huawei in the same Suit No 606 for the return of US$85,600 paid by ZiiMAX to Huawei for the Universal Serial Bus (“USB”) dongles supplied by Huawei to ZiiMAX under a purchase order dated 28 April 2011 (“USB Agreement”). ZiiMAX had intended to use the CPE and USB dongles with the WiMAX Network to be operated by QMAX.
Background facts Events leading up to the Contract In early 2009, Creative explored the possibility of engaging Huawei to construct a WiMAX Network to provide mobile data services using WiMAX technology after Creative’s representatives PW1 Koh Zi Kai (“PW1-Koh”) and PW3 Lian Yam Fei (“PW3-Lian”) had met up with Huawei’s sales representative DW1 Leong Yu Ming (“DW1-Leong”) at a WiMAX Forum Congress Asia held in Singapore in April 2009 at which Huawei’s representatives presented a paper titled “Build a Successful WIMAX Network” that would entail a “quick and low cost WiMAX deployment”. On 15 May 2009, PW1-Koh followed up with an email requesting Huawei for more information including its presentation materials, an “Information Template” that Huawei would require its customers to provide, a “Sample RFI/RFP [
It is unclear to me whether Huawei had sent the information that Creative had requested. However, on 17 June 2009, Creative wrote a brief letter inviting its potential vendor, Huawei, to submit a proposal for the “design, build, maintenance and operation of a 2.3 GHz WiMAX” and requested detailed information to be furnished on Huawei’s WiMAX proposal including the “Estimated number of sites needed to cover Singapore (Military areas, cemeteries & large bodies of water are to be excluded from the planned coverage)” (“nationwide coverage”) with the estimate to be minimally “accurate up to ±10%”. By way of an email dated 1 July 2009, PW1-Koh asked Huawei to plan for a target data-rate requirement of 1 Megabits per second (“Mbps”) for the Down Link (“DL”) and 256 kilobits per second (“kbps”) for the Up Link (“UL”) at the cell edge. According to PW1-Koh,1 Creative had also made clear from the outset that it wanted the proposed WiMAX Network to have nationwide coverage with first wall penetration. This was corroborated by DW1-Leong2 during his cross-examination.
Thereafter, Huawei submitted various wireless network planning proposals to Creative with different numbers of radio sites based on different network equipment, antenna configurations and end-user devices. In these proposals, the number of radio sites ranged from 184 to 360 radio sites to cover a total area of 256.93km
The proposal for 184 radio sites was premised on a two-way antenna transmitting and receiving configuration (with two transmitters and two receivers,
In an email dated 28 July 2009, Huawei informed Creative that the cost of equipping a typical radio site would be between US$79,715 to US$89,610. Hence, if the WiMAX Network required more radio sites, the total project cost would accordingly increase. In August 2009, Creative requested for a revised proposal using a four-way antenna transmitting and receiving configuration (with four transmitters and four receivers,
After PW1-Koh and PW3-Lian notified DW1-Leong and Huawei’s Vice-President of Solutions and Sale Support, An Jian, at a meeting on 28 October 2009 that Creative’s budget was US$20m, DW1-Leong sent an email dated 30 October 2009 to PW1-Koh stating that Huawei was able to provide the WiMAX Network based on 220 radio sites, which was lower than Creative’s budget expectation.
Finally, in its WiMAX Network Planning Proposal dated 25 January 2010, Huawei provided a detailed link budget calculation explaining the radio frequency parameters it had chosen for the penetration loss (inclusive of first wall penetration) for its three different clutters under Dense Urban (
Clearly, the changes in the number of radio sites from 256 down to 220 and finally to 225 were made
I note that in the introduction to the WiMAX Network Planning Proposal to Creative, Huawei claimed that it “has already deployed WIMAX, CDMA, UMTS and GSM commercial networks around the world and accumulated plenty of networks planning experience through theoretic research and project implementation”. Huawei stated very impressively that it had “over 2000 engineers and experts specializing in radio network planning and optimization”.
From January to June 2010, Huawei continued to represent in its various correspondence and documents that 225 radio sites were sufficient to meet Creative’s requirements. Amongst the documents were (a) the “WiMAX 16e Wireless Network Planning Proposal For Singpore [
On 28 June 2010, Creative and Huawei executed the “
Paragraph 8 of Annexure 6 of the Contract is central to this dispute and it states as follows:
[Huawei’s response]:
Comply.
Based on Huawei WIMAX radio network planning , the coverage criterion for each scenario is:
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