Virsagi Management (S) Pte Ltd v Welltech Construction Pte Ltd and another suit

CourtHigh Court (Singapore)
JudgeQuentin Loh J
Judgment Date16 October 2012
Neutral Citation[2012] SGHC 207
Citation[2012] SGHC 207
Publication Date17 October 2012
Docket NumberSuit No 63 of 2012 (Summons No 829 of 2012) and Suit No 64 of 2012 (Summons No 869 of 2012 and Summons No 985 of 2012)
Plaintiff CounselAndrew J Hanam (Andrew LLC)
Defendant CounselRamalingam Kasi (Raj Kumar),Cheah Kok Lim (Cheah Associates LLC)
SubjectConflicts of laws,Restraint of foreign proceedings,Natural forum,Contract,Remedies,Injunction,Tort,Inducement of breach of contract
Quentin Loh J:

This is a case involving overseas training centres for the training, testing and certification (under the requirements of the Building and Construction Authority (“BCA”)) and subsequent mobilisation of construction workers from Bangladesh to Singapore.

There were three applications in these two actions before me: In Suit No 63 of 2012 (“Suit 63”), Virsagi Management (S) Pte Ltd (“Virsagi”) sued Welltech Construction Pte Ltd (“Welltech”) (both being Singapore-incorporated companies) for an injunction to restrain Welltech from interfering with an agreement entered into between Virsagi and Gazipur Air Express International on or about 26 April 2009, (“the Gazipur Agreement”) in general, and in particular to allow Virsagi to resume registration of certain tests, processing the test results and to mobilise the workers who have passed the test, or alternatively for unlawful interference with the operation of the Gazipur Agreement, as well as for damages and an account of profits. In Suit 63, Welltech took out an application, Summons No 829 of 2012 (“Summons 829”) to stay Suit 63 on the ground of lis alibi pendens and/or forum non conveniens and to extend time to file its defence until Summons 829 was disposed of. In Suit No 64 of 2012 (“Suit 64”), Virsagi sued Ferdous Ahmed Badel (who claims it should be spelt “Fardous Ahamad Badal”) trading as Gazipur Air Express International (“Badal” or “Gazipur” as the case may be), a sole proprietorship registered in Dhaka, Bangladesh, for wrongful termination and/or breach of the Gazipur Agreement, an injunction to restrain Gazipur from terminating the Gazipur Agreement in general and in particular to allow Virsagi to resume registration of certain tests, processing the test results and to mobilise the workers who have passed the test under the Gazipur Agreement, and for damages and an account of profits. In Suit 64, Virsagi took out an application, Summons No 869 of 2012 (“Summons 869”), for an interlocutory injunction restraining Gazipur from bringing any worker tested at the Welltech Test Centre (also referred to as “WTPL’s OTC” in these grounds of decision) in Dhaka, Bangladesh into Singapore unless Gazipur complied with the Gazipur Agreement and included Virsagi in its overseas testing centre business in Dhaka, Bangladesh; alternatively, that Gazipur provides security in the sum of $1,224,000 every six months in lieu of an interlocutory injunction; and Gazipur has taken out an application, Summons in Chambers 985 of 2012 (“Summons 985”), to stay Suit 64 on the ground of lis alibi pendens and/or forum non conveniens and to extend time to file a defence until Summons 829 is disposed of.

After hearing the parties, I dismissed Virsagi’s application in Summons 869 and granted Gazipur’s and Welltech’s applications in Summons 985 and Summons 829 respectively for a stay in Suit 63 and Suit 64 with the usual cost orders in favour of the successful parties. Virsagi has appealed against my decision and I set out the reasons for my decision.

Facts The joint venture for overseas test centres

The facts in [4] to [9] herein are not in dispute. In 2006, the BCA invited companies to set up authorised overseas test centres (“OTCs”) in India and Bangladesh in a bid to get workers for the construction industry to be trained, tested and certified before bringing them into Singapore. Welltech was established in the construction industry in Singapore and met the eligibility criteria set out by the BCA. Virsagi had the necessary expertise in operating an OTC but did not meet BCA’s criteria. Virsagi’s Mr Victor Lee (“Victor”) approached Welltech to collaborate. Welltech agreed.

On 6 December 2006, BCA granted Welltech approval to operate an OTC in Dhaka, Bangladesh (“Dhaka”). This approval or licence was for 3 years from 6 December 2009 and would be reviewed on a yearly basis thereafter. It was a condition of the approval that Welltech set up a company in Bangladesh to manage the OTC and retain at least a 30% shareholding.

Virsagi introduced a Bangladesh company, Rupsha Overseas Ltd, (“Rupsha”), to Welltech to be their local partner for the joint venture. A joint venture company was incorporated on 25 November 2011 and called Welltech Test Pvt Ltd (“WTPL”). An agreement, which was undated, was entered into between Welltech, Virsagi and Rupsha (“the Rupsha Agreement”), and this was submitted to the BCA by Welltech in a letter dated 24 November 2006. One Mr Jalal Yunos, a director of Rupsha, signed the Rupsha Agreement on behalf of Rupsha.

Sometime in early 2007, Virsagi and Welltech entered into a written agreement (“the Principal Agreement”), the relevant terms of which were: A joint venture company, to be called WTPL, was to be incorporated with Virsagi holding 40%, Welltech holding 30% and the local partner holding the remaining 30% of the share capital; Virsagi would bear all costs and expenses in the set up of WTPL and the OTC – Welltech was not required to put in any funds for this purpose; Virsagi would establish the OTC, obtain all government, regulatory and other approvals required in Bangladesh to establish and operate an OTC; Welltech would receive a payment of $200 per worker who passed the test; The agreement was not terminable for the first 3 years. Thereafter either party could terminate the agreement by serving 6 months’ notice to the other party; The agreement was governed by Singapore law and the parties irrevocably submitted to the non-exclusive jurisdiction of Singapore courts.

Virsagi entered into an agreement dated 26 April 2007 with a local partner in Dhaka, GN International, to establish the OTC (“the Virsagi-GNI Agreement”). The OTC was duly set up and put into operation. As mentioned above (at [6]), WTPL was incorporated in Dhaka in November 2007. WTPL’s shares were held by representatives of the participant companies of the joint venture and not the participant companies themselves as provided for in the Principal Agreement (see [7(a)] above). Hence, out of the 100 shares that were issued, Victor held 40 shares as a representative of Virsagi, Mr Woon Wee Phong, a director of Welltech, held 30 shares and Badal/Gazipur held or came to hold 30 shares. Welltech and Badal further contend that WTPL remained dormant and operations and payments to and from the OTC (“WTPL’s OTC”) were made independently of WTPL between the parties by mutual agreement.

By a letter dated 10 January 2011, Welltech served a written notice of termination of the Principal Agreement as required under Clause 7 of the said agreement. Although Clause 11 of the Principal Agreement provided for a notice period of 6 months, at Victor’s request, Welltech extended the termination date to 31 December 2011. It is not disputed by any party that the Principal Agreement was validly brought to an end by Welltech on 31 December 2011.

Welltech alleged that the Rupsha Agreement was not properly implemented and without its knowledge, Rupsha was replaced with GN International and yet later with Gazipur. Welltech further alleged that Virsagi did not provide any funds and it later found out that almost all the funds were put up by Gazipur. Virsagi pleaded in Suit 64 that on or about 26 April 2009, GN International’s responsibilities under the Virsagi-GNI Agreement were assigned to Gazipur. Pursuant to this, Virsagi and Gazipur entered into the Gazipur Agreement.

Virsagi’s claims against Welltech did not, and indeed could not, arise under the Principal Agreement as all parties accept that the Principal Agreement was lawfully brought to an end on 31 December 2011. Virsagi instead sued Welltech in tort for inducing a breach of Gazipur Agreement and for unlawful interference with that agreement. Virsagi alleged that Welltech had taken steps together with Gazipur, to set up another OTC called Welltech Education Centre Pvt Ltd to divert the training and testing of workers away from WTPL, thereby bypassing Virsagi. Virsagi therefore sought an injunction to restrain Welltech from interfering with the Gazipur Agreement in general and in particular to allow Virsagi to resume registration for the tests, processing of test results and mobilisation of workers who have passed the tests as these were within Virsagi’s scope of works under the Gazipur Agreement.

The Gazipur Agreement

The relevant portions of the Gazipur Agreement are as follows: Clause 1, the “Introduction” clause to the Gazipur Agreement, recited some background to the BCA approving the setting up of overseas test centres, including those in Dhaka, Bangladesh and states that Virsagi, “... thru its nominee, WellTech Construction Pte Ltd, applied to set up a new OTC’s it has since been successful, and has now obtained an in principle approval from BCA”. In Clause 3, the subject matter was described as an “agreement to establish a BCA approved OTC in Dhaka Bangladesh as well as facilities for training or workers to take the test at the OTC and the mobilization of the workers to work in Singapore”; In Clause 4, the Gazipur Agreement provided that Gazipur had to deal with all the paperwork and permits from the Government of Bangladesh, procure a piece of land and erect a building suitable for the OTC at its cost, have the capacity to accommodate 500 workers, take full responsibility for the OTC as Virsagi will only be working from the Singapore side, train up the required number of workers with 3 months training and testing, make all payments for the registration and mobilization of the workers, pay the annual fee for the BCA test computers, pay $1,000 per month and all air fare, accommodation, meal and transport costs for Virsagi’s “Liaison Person” who is “to support” the BCA test (ie the tests to the standards or requirements set by the BCA), and comply fully with all instructions and directions that were given by the BCA and Welltech; Under Clause 5, Virsagi had to respond to the BCA as...

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2 cases
  • Virsagi Management (S) Pte Ltd v Welltech Construction Pte Ltd
    • Singapore
    • Court of Three Judges (Singapore)
    • 25 September 2013
    ...(‘CA 91’) were appeals against the decision by the judge (‘the Judge’) in Virsagi Management (S) Pte Ltd v Welltech Construction Pte Ltd[2012] SGHC 207 (‘the GD’). 2 We dismissed the appeals and now give the detailed grounds for our decision. The facts Background to the dispute 3 In 2006, t......
  • Virsagi Management (S) Pte Ltd v Welltech Construction Pte Ltd and another appeal
    • Singapore
    • Court of Three Judges (Singapore)
    • 25 September 2013
    ...(“CA 91”) were appeals against the decision by the judge (“the Judge”) in Virsagi Management (S) Pte Ltd v Welltech Construction Pte Ltd [2012] SGHC 207 (“the GD”). We dismissed the appeals and now give the detailed grounds for our decision. The Background to the dispute In 2006, the Buildi......

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