PT Sandipala Arthaputra v STMicroelectronics Asia Pacific Pte Ltd and others

• Jurisdiction: Singapore
• Court: High Court (Singapore)
• Judge: George Wei J
• Judgment Date: 23 September 2015
• Neutral Citation: [2015] SGHC 245
• Citation: [2015] SGHC 245
• Defendant Counsel: Danny Ong, Yam Wern-Jhien and Eugene Ong (Rajah & Tann LLP)
• Published date: 26 September 2015
• Plaintiff Counsel: Govintharasah s/o Ramanathan and Sarah Kuek Xin Xin (Gurbani & Co LLC)
• Hearing Date: 04 September 2015,28 August 2015
• Date: 23 September 2015
• Docket Number: Suit No 542 of 2012 (Summons Nos 3342 of 2015 and 4013 of 2015)
• Subject Matter: Conflict of Laws,Vexatious and Oppressive Conduct,Restraint of Foreign Proceedings

George Wei J:

Two summonses were heard together on 28 August 2015. Summons No 3342 of 2015 (“SUM 3342”) was the first and third defendants’ (“the Applicants”) application for a final anti-suit injunction. By SUM 3342, the Applicants sought an order that: the plaintiff be ordered to forthwith withdraw, and be restrained from pursuing, or continuing to pursue, the claim which it had filed against STMicroelectronics NV (“ST-NV”) and/or the third Defendant (“Mr Cousin”) in the Central Jakarta District Court (“CJDC”) on 13 February 2015 in Civil Claim No 67/PDT.G/2015/PN.JKT.PST (“Prayer 1”); and the plaintiff be restrained from commencing or continuing any further or other proceedings of any nature in Indonesia or anywhere else in the world against STMicroelectronics Asia Pacific Pte Ltd (“ST-AP”), ST-NV, or any of its agent and/or employees, including Mr Cousin, in relation to the Indonesian Government’s E-KTP card production project for the years 2011 and 2012 (“Prayer 2”).

Earlier, I had granted an interim anti-suit injunction (“the Interim Order”) set to expire on 28 August 2015 (unless otherwise ordered). This is the date on which the application for the final anti-suit injunction application was due to be heard. The interim anti-suit injunction was intended to preserve the status quo pending the hearing of the final anti-suit injunction application.

The second application brought before me was Summons No 4013 of 2015 (“SUM 4013”) in which the plaintiff sought to set aside: (a) the application for a final anti-suit injunction in SUM 3342, and (b) the Interim Order. In SUM 4013, the plaintiff also sought compensation from the Applicants for damages and costs arising from its compliance with the Interim Order.

My decision was delivered on 4 September 2015. I granted Prayer 1 of SUM 3342 and in brief, ordered the plaintiff to withdraw and be restrained from continuing the Jakarta Action that had been filed against the third defendant and the parent company of the first defendant or any of its agents and employees. I also dismissed the prayers sought in SUM 4013. At the hearing, I indicated that written grounds would follow. My grounds are set out below.

Background The parties

The plaintiff is a company incorporated in Indonesia and carries on the business of, inter alia, the production of personalised electronic identification cards.¹ Paulus Tannos (“Mr Tannos”) is the President Director (equivalent to a managing director) of the plaintiff company.² Catherine Tannos (“Ms Tannos”), the daughter of Mr Tannos, is a director of the plaintiff-company.³

At all material times, Mr Tannos and Ms Tannos were acting on behalf of the plaintiff.⁴ It also appears that they have been residing in Singapore since around March 2012.⁵

The first defendant, ST-AP, is a company incorporated in Singapore and carries on the business of, inter alia, the marketing and sales of integrated circuit chips (“electronic chips”).⁶

ST-AP is a wholly owned subsidiary of ST-NV, a company incorporated in the Netherlands.⁷ It is significant to note that ST-NV is a holding company which does not carry out any operational activity and it is asserted that it does not have any employees of its own.⁸ The relevance of this point will become clearer later.

The second defendant, Oxel Systems Pte Ltd (“Oxel”), is a company incorporated in Singapore, and carries on the business of “trading of software and services such as resale and development”.⁹

The third defendant, Mr Cousin, was at all material times ST-AP’s Country Manager for Indonesia.¹⁰ He is at present based in and residing in Singapore. That said, the plaintiff asserts that Mr Cousin owns property in Indonesia and has family members in Indonesia.

The tender

In early 2011, the Ministry of Home Affairs of the Indonesian Government invited tenders for the production and supply of personalised electronic identification cards (“E-KTP Cards”) for the Indonesian population.¹¹

By reason of their common interest in participating in the tender, the plaintiff and four other Indonesian companies entered into a consortium agreement.¹² The Consortium comprised: (i) the plaintiff, (ii) Perusahaan Umum Percetakan Negara Republik Indonesia (“PNRI”), (iii) Perusahaan Superintending Company of Indonesia, (iv) PT Quadra Solutions and (v) PT Len Industri.¹³ It appears that PNRI is the “leader” of the Consortium.¹⁴

The Consortium contracted with ST-AP to supply 100,000 pieces of electronic chips for use in the tender evaluation (“Tender Evaluation Chips”).¹⁵ If the Consortium was successful in the tender, the Consortium was to source for the same electronic chips from ST-AP for the mass production of E-KTP Cards.¹⁶

The Consortium dealt with Mr Cousin, who was ST-AP’s Country Manager for Indonesia.¹⁷ Mr Cousin was the one who prepared and signed the document which contained the specifications of the Tender Evaluation Chips.¹⁸ It is to be stressed that in the proceedings in Singapore (“the Singapore Action”), the plaintiff takes the position that Mr Cousin was an employee of and acted on behalf of ST-AP. ¹⁹ The significance of this will become clearer later in the decision.

The E-KTP Cards made with the Tender Evaluation Chips, upon testing by the Indonesian Government, worked successfully with the card reading system.²⁰ The tender was awarded to the Consortium. The tender was for approximately 172m personalised E-KTP Cards which were to be produced and supplied in 2011 and 2012 (“the E-KTP Project”).²¹

Within the Consortium, the member companies agreed among themselves on their respective roles and obligations with respect to the Card Production Agreement.²² Notably, the plaintiff was required to produce, supply and personalise 60% of the E-KTP Cards (which translated to approximately 103m E-KTP Cards). PNRI, on the other hand, was allocated the remaining 40%.²³

Following the award of the tender, Mr Tannos proceeded to enter into negotiations with Mr Cousin for the purchase of 100m electronic chips from ST-AP. Mr Cousin then introduced Mr Tannos to Mr Andi Winata and made the following representations: first, that Mr Winata’s company, Oxel, was the exclusive distributor of ST-AP’s electronic chips in Indonesia;²⁴ and second, that Oxel would supply electronic chips that were the same as the Tender Evaluation Chips.²⁵

In reliance upon the aforesaid representations, the plaintiff entered into a contract with Oxel on 9 November 2011 for the supply of 100m electronic chips.

Thereafter, the plaintiff requested ST-AP to provide samples of electronic chips to be furnished for functional testing before delivery of the order.²⁶ ST-AP failed to do so.²⁷ Subsequently, the first 5.8m chips were delivered in nine batches between 22 December 2011 and 9 February 2012. The first three batches comprising some 908,046 chips were delivered on 22, 27 and 29 December 2011.²⁸

After the first batches of electronic chips were delivered, the plaintiff discovered that the cards made with those electronic chips could not be personalised, unlike the cards that were made with the Tender Evaluation Chips.²⁹ The plaintiff was told that the problem was with the Key Management System it was using which should be changed to one that Oxel had developed.³⁰

To resolve the problem, Mr Tannos tried to persuade the Indonesian Government officials to accept the E-KTP Cards made with the electronic chips supplied by the defendants, together with the Key Management System developed by Oxel.³¹ He failed. He was later contacted by one Ms Marie France Florentin (“Ms Florentin”) who allegedly represented that she would make a trip to Indonesia to explain the error to the Indonesian Government officials and that the ST-AP would ensure that the correct type of electronic chip with the software would be provided henceforth for the production of the E-KTP Card.³² It is noted that the plaintiff took the position in the Singapore Action that Ms Florentin was acting on behalf of ST-AP.³³

The long and short of it is that the problem with the electronic chips and the software was not resolved.

The reduction of the plaintiff’s share of work

As mentioned earlier, the plaintiff was originally supposed to produce and personalise 103m E-KTP Cards. The plaintiff’s share of work in the E-KTP Project was subsequently reduced by the Consortium on two occasions. The first reduction took place on 19 December 2011 when the plaintiff’s share of work was reduced from 103m to 60m (“the First Reduction”). The second reduction took place on 10 July 2013 where due to the disruption caused to the plaintiff’s production schedule, the plaintiff had no choice but to agree to stop production at 45m E-KTP cards (“the Second Reduction”). ³⁴

To be clear, the above summary is based on the plaintiff’s pleadings and it is to be noted that many points of detail are disputed by the defendants in the Singapore Action.

The Singapore Action

On 28 June 2012, the Singapore Action action was commenced against ST-AP and Oxel in Singapore. At the material time, the plaintiffs were PT Sandipala, Mr Tannos and Ms Tannos (“the Original Plaintiffs”). Aside from claims for breach of contract, misrepresentation and conspiracy, a defamation claim was also brought against Oxel for, inter alia, making police reports and publishing defamatory statements about the Original Plaintiffs. These allegations were in connection with the E-KTP Project. The defamation action was subsequently dropped on 15 January 2013, and Mr Tannos and Ms Tannos ceased to be plaintiffs in the Singapore Action.

Central to the plaintiff’s remaining claims in the Singapore Action are the following representations that were allegedly made by Mr Cousin: that Oxel was ST-AP’s exclusive distributor in Indonesia; that the electronic chips offered by Oxel were the same as the Tender Evaluation Chips; and that Oxel would be able to procure and...