PT Sandipala v STMicroelectronics: Conspiracy, Directors' Liability & Contract Breach
In PT Sandipala Arthaputra v STMicroelectronics Asia Pacific Pte Ltd, the Singapore Court of Appeal heard an appeal regarding a microchip supply contract dispute. PT Sandipala sued STMicroelectronics and Oxel Systems for breach of contract and misrepresentation. Oxel counterclaimed against Sandipala and its directors, the Tannoses, for breach of contract and conspiracy. The High Court dismissed Sandipala's claims and allowed Oxel's counterclaims. The Court of Appeal upheld the dismissal of Sandipala's claims and the finding of breach of contract, but allowed the appeal against the conspiracy finding, relieving the Tannoses of personal liability. The court found that the Tannoses were protected by the Said v Butt principle.
1. Case Overview
1.1 Court
Court of Appeal of the Republic of Singapore1.2 Outcome
Appeal allowed in part; unlawful means conspiracy claim against the Tannoses dismissed; Sandipala remains liable for breach of contract.
1.3 Case Type
Civil
1.4 Judgment Type
Judgment
1.5 Jurisdiction
Singapore
1.6 Description
Singapore Court of Appeal case involving PT Sandipala's microchip supply contract breach, conspiracy claim against directors, and directors' liability.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Paulus Tannos | Appellant | Individual | Appeal allowed | Won | |
| Catherine Tannos | Appellant | Individual | Appeal allowed | Won | |
| PT Sandipala Arthaputra | Appellant | Corporation | Appeal dismissed in part | Partial | |
| ST Microelectronics Asia Pacific Pte Ltd | Respondent | Corporation | Appeal dismissed | Won | |
| Oxel Systems Pte Ltd | Respondent | Corporation | Appeal allowed in part | Partial | |
| Vincent Pierre, Luc, Cousin | Respondent | Individual | Appeal dismissed | Won |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Sundaresh Menon | Chief Justice | No |
| Judith Prakash | Judge of Appeal | No |
| Steven Chong | Judge of Appeal | Yes |
4. Counsels
4. Facts
- Sandipala contracted with Oxel for the supply of 100 million microchips for an electronic identification card project in Indonesia.
- The microchips were not compatible for use with the electronic identification cards for the project.
- Sandipala commenced an action against Oxel for breach of contract.
- Oxel counterclaimed against Sandipala for breach of contract and against Sandipala's directors for conspiracy.
- The High Court dismissed Sandipala's claims and allowed Oxel's counterclaims.
- The Court of Appeal upheld the dismissal of Sandipala's claims and the finding of breach of contract.
- The Court of Appeal overturned the finding of conspiracy against Sandipala's directors.
5. Formal Citations
- PT Sandipala Arthaputra and others v STMicroelectronics Asia Pacific Pte Ltd and others, Civil Appeal No 106 of 2017, [2018] SGCA 17
- PT Sandipala Arthaputra v STMicroelectronics Asia Pacific Pte Ltd and others, , [2017] SGHC 102
- PT Sandipala Arthaputra v STMicroelectronics Asia Pacific Pte Ltd and others, , [2018] SGHC 20
6. Timeline
| Date | Event |
|---|---|
| Tender launched for electronic identification cards in Indonesia. | |
| Proof of concept testing carried out by bidders. | |
| Indonesian government awarded the Tender to the Consortium. | |
| Supply Contract concluded between Sandipala and Oxel. | |
| Sandipala paid US$1.2m as down payment for the first batch of chips. | |
| First batch of Oxel chips delivered. | |
| Ms. Tannos requested a temporary reduction of Sandipala’s order. | |
| Ms. Tannos asserted that the order for 100m chips was only an indicative order. | |
| Sandipala rejected chips delivered to it. | |
| Sandipala rejected chips delivered to it. | |
| Sandipala commenced proceedings against ST-AP, Oxel and Mr. Cousin. | |
| The Judge found the Tannoses guilty of contempt of court and sentenced them to seven days’ imprisonment each. | |
| Court of Appeal heard the case. | |
| Judgment reserved. |
7. Legal Issues
- Breach of Contract
- Outcome: The court found that Sandipala breached the Supply Contract by failing to take delivery of and pay for the microchips.
- Category: Substantive
- Sub-Issues:
- Failure to take delivery of microchips
- Non-payment for microchips
- Unlawful Means Conspiracy
- Outcome: The court initially found Sandipala and the Tannoses liable for unlawful means conspiracy, but the Court of Appeal overturned the finding against the Tannoses.
- Category: Substantive
- Sub-Issues:
- Attempt to unlawfully extricate from contractual obligations
- Creation of false paper trail
- Bringing false claims
- Directors' Liability
- Outcome: The court held that directors are immune from liability for their company's contractual breaches if their acts are not in breach of any fiduciary or other personal legal duties owed to the company.
- Category: Substantive
- Sub-Issues:
- Scope of authority
- Acting bona fide
- Breach of fiduciary duty
- Related Cases:
- [1920] 2 KB 497
- Fraudulent Misrepresentation
- Outcome: The court found that there was no misrepresentation made and even if it had been made, it was highly improbable that Sandipala had relied upon it when it entered into the Supply Contract
- Category: Substantive
- Sub-Issues:
- Exclusive distributorship
- Suitability of chips
8. Remedies Sought
- Monetary Damages
9. Cause of Actions
- Breach of Contract
- Conspiracy
10. Practice Areas
- Commercial Litigation
11. Industries
- Technology
- Government
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Said v Butt | King's Bench | Yes | [1920] 2 KB 497 | England and Wales | Cited for the principle that a servant acting bona fide within the scope of his authority does not become liable for breach of contract between his employer and a third person. |
| The Company and Its Directors as Co-conspirators | Singapore Academy of Law Journal | Yes | [2009] 21 SAcLJ at 409 | Singapore | Cited for the question of whether two legal persons who share one and the same mind can conspire. |
| PT Sandipala Arthaputra v STMicroelectronics Asia Pacific Pte Ltd and others | High Court | Yes | [2017] SGHC 102 | Singapore | Cited as the judgment under appeal, providing the factual background and the High Court's decision. |
| Chong Hon Kuan Ivan v Levy Maurice and others | High Court | Yes | [2004] 4 SLR(R) 801 | Singapore | Cited for the application of the Said v Butt principle in Singapore law. |
| Nagase Singapore Pte Ltd v Ching Kai Huat and others | High Court | Yes | [2008] 1 SLR(R) 80 | Singapore | Cited for the principle that a company can conspire with its director to cause harm to a third party. |
| O’Brien v Dawson | High Court of Australia | Yes | (1942) 66 CLR 18 | Australia | Cited for the application of the Said v Butt principle in Australia. |
| Imperial Oil Ltd v C&G Holdings Ltd | Newfoundland Court of Appeal | Yes | (1989) 62 DLR (4th) 261 | Canada | Cited for the application of the Said v Butt principle in Canada. |
| M+W Singapore Pte Ltd v Leow Tet Sin and another | High Court | Yes | [2015] 2 SLR 271 | Singapore | Cited for the application of the Said v Butt principle in Singapore. |
| Ng Joo Soon (alias Nga Ju Soon) v Dovechem Holdings Pte Ltd and another suit | High Court | Yes | [2011] 2 SLR 1155 | Singapore | Cited as an example where directors were immune from liability as they acted within their authority and in good faith. |
| Scammell G & Nephew Ltd v Hurley | King's Bench | Yes | [1929] 1 KB 419 | England and Wales | Cited for endorsement of the Said v Butt principle. |
| DC Thomson & Co Ltd v Deakin and others | Chancery Division | Yes | [1952] Ch 646 | England and Wales | Cited for endorsement of the Said v Butt principle. |
| Ridgeway Maritime Inc v Beulah Wings Ltd and Dr Tunji Braithwaite (The “Leon”) | High Court | Yes | [1991] 2 Lloyd’s Rep 611 | England and Wales | Cited for investigating the limitations of a director’s liability for his company’s breach of contract. |
| Knights Capital Group Ltd v Bajada and Associates Pty Ltd | Supreme Court of Western Australia | Yes | [2016] WASC 69 | Australia | Cited for canvassing the uncertainty of the scope of the Said v Butt principle. |
| ADGA Systems International Ltd v Valcom Ltd | Ontario Court of Appeal | Yes | [1999] OJ No 27 | Canada | Cited for approving the Said v Butt principle as an exception to the general rule that directors are personally liable for their tortious conduct. |
| Vita Health Laboratories Pte Ltd and others v Pang Seng Meng | High Court | Yes | [2004] 4 SLR(R) 162 | Singapore | Cited for the warning against unduly putting directors at risk of legal liability for commercial decisions. |
| Otech Pakistan Pvt Ltd v Clough Engineering Ltd and Another | High Court | Yes | [2005] SGHC 98 | Singapore | Cited for interpreting the requirement of bona fide in the Said v Butt principle. |
| Lim Leong Huat v Chip Hup Hup Kee Construction Pte Ltd | High Court | Yes | [2009] 2 SLR(R) 318 | Singapore | Cited for the observation that an intention to injure the third party would suffice to take the director outside the Said v Butt principle. |
| Lim Leong Huat v Chip Hup Hup Kee Construction Pte Ltd | High Court | Yes | [2011] 1 SLR 657 | Singapore | Cited for the substantive claim in conspiracy. |
| Tembusu Growth Fund Ltd v ACATek, Inc and others | High Court | Yes | [2015] SGHC 206 | Singapore | Cited as an example where a director was not entitled to immunity from personal liability because he had acted in his own interest instead of the company’s interest. |
| O’Brien v Dawson | Supreme Court of New South Wales | Yes | [1941] 43 SR (NSW) 295 | Australia | Cited for the principle that agents are not in the position of outsiders who are influencing the independent volition of a contracting party. |
| Chew Kong Huat and others v Ricwil (Singapore) Pte Ltd | Court of Appeal | Yes | [1999] 3 SLR(R) 1167 | Singapore | Cited for the principle that a director can be liable for a tort committed by the company if he directed or procured the commission thereof. |
| Gabriel Peter & Partners (suing as a firm) v Wee Chong Jin and others | High Court | Yes | [1997] 3 SLR(R) 649 | Singapore | Cited for affirming that a director can be liable for a tort committed by the company if he directed or procured the commission thereof. |
| TV Media Pte Ltd v De Cruz Andrea Heidi and another appeal | High Court | Yes | [2004] 3 SLR(R) 543 | Singapore | Cited as an example where a director was held personally liable for authorising his company to import slimming tablets containing undeclared substances. |
| Welsh Development Agency v Export Finance Co Ltd | English Court of Appeal | Yes | [1992] BCLC 148 | England and Wales | Cited for Dillon LJ expressing “grave reservations” about the Said v Butt principle. |
| Sabaf SpA v MFI Furniture Centres Ltd | England and Wales Court of Appeal (Civil Division) | Yes | [2002] EWCA Civ 976 | England and Wales | Cited for the principle that title and risk in goods sold on ex-works terms pass to the buyer as soon as the goods leave the factory gate. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Sale of Goods Act (Cap 393, 1999 Rev Ed) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Microchips
- Supply Contract
- Electronic identification cards
- Directors' liability
- Unlawful means conspiracy
- Said v Butt principle
- e-KTP cards
- Tender Evaluation Chips
- PAC operating system
- Mitigation of losses
15.2 Keywords
- Contract
- Breach
- Conspiracy
- Director
- Liability
- Microchips
- Singapore
- Court of Appeal
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Breach of Contract | 90 |
| Contract Law | 85 |
| Torts | 75 |
| Conspiracy by Unlawful Means | 70 |
| Director's Liability | 60 |
| Misrepresentation | 40 |
| Corporate Law | 30 |
16. Subjects
- Contract Law
- Tort Law
- Company Law