PT Kiani Kertas v PT Indorimagas Pratama: Conspiracy, Secret Commissions & Breach of Contract

In PT Kiani Kertas v PT Indorimagas Pratama, the Singapore High Court heard an appeal by PT Kiani Kertas against a decision regarding the order of trials for their claim against PT Indorimagas Pratama and others, concerning allegations of conspiracy and secret commissions related to a pulp mill project. The plaintiffs claimed breach of contract and sought recovery of funds. The second defendant counterclaimed, alleging a collateral contract that restricted the use of provided information. Lai Siu Chiu J allowed the plaintiffs' appeal in part, ordering the preliminary issue regarding the collateral contract to be tried by the same judge before the main case.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Plaintiffs' appeal allowed in part; order varied to have the preliminary issue tried by the same trial judge before the main case.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

PT Kiani Kertas sued PT Indorimagas Pratama for conspiracy and secret commissions. The court addressed whether a collateral contract barred the action.

1.7 Decision Date

30 October 2001

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
PT Kiani Kertas	Plaintiff, Appellant	Corporation	Appeal allowed in part	Partial	Adrian Wong of Lee & Lee Andre Yeap of Lee & Lee
PT Indorimagas Pratama	Defendant	Corporation	Part of application granted	Partial	Philip Tay of Rajah & Tann
Tony Chua Chwee Thiam	Defendant, Respondent	Individual	Part of application granted	Partial	Philip Tay of Rajah & Tann
Orn Holding (H K) Limited	Defendant	Corporation	Neutral	Neutral

3. Judges

Judge Name	Title	Delivered Judgment
Lai Siu Chiu	Judge	Yes

4. Counsels

Counsel Name	Organization
Adrian Wong	Lee & Lee
Andre Yeap	Lee & Lee
Philip Tay	Rajah & Tann

4. Facts

PT Kiani Kertas (plaintiffs) are the developer and owner of a pulp mill in East Kalimantan.
CAPC submitted a bid to construct the project but was initially opposed by Endicott and Helm.
CAPC entered into a joint-venture agreement with PT Indorimagas Pratama (first defendants).
Plaintiffs alleged that CAPC, the first and second defendants entered into a conspiracy with Endicott to pay secret commissions.
A contract was awarded to CAPC for the construction of the project.
Plaintiffs alleged they discovered the secret commissions in mid-1999.
The second defendant alleged that GW reassured him that information provided would only be used against CAPC.

5. Formal Citations

PT Kiani Kertas v PT Indorimagas Pratama and Others, Suit 379/2000/B, [2001] SGHC 330

6. Timeline

Date	Event
1992-01-01	Plaintiffs invited companies to submit tenders as general contractors for construction of the pulp mill.
1993-01-01	Commonwealth Asia Pacific Constructors Pte Ltd (CAPC) was incorporated.
1993-10-15	CAPC entered into a joint-venture agreement with PT Indorimagas Pratama.
1994-05-01	CAPC was informed that it was not awarded the contract.
1994-06-01	CAPC, the first and second defendants entered into a conspiracy with Endicott.
1994-06-02	Letter written by the second defendant to CCC on the subject of appointing him as a director of CAPC.
1994-07-19	The second defendant requested a monthly retainer from CCC.
1994-10-01	A second bid was made by CAPC for the construction of the project.
1994-12-20	A contract was awarded to CAPC.
1995-01-01	CAPC paid secret commissions to Endicott and Helm.
1996-02-01	CAPC, the first and second defendants entered into a further conspiracy with Endicott.
1996-01-01	The first and third defendants together with two (2) Indonesian companies PT Jaya Sumpiles (PTJS) and PT Nirmala Matranusa entered into another conspiracy with Helm.
1998-08-21	CAPC was wound-up by the Singapore Court.
1999-01-01	CAPC commenced arbitration proceedings in New York against the plaintiffs.
1999-01-01	Plaintiffs allegedly discovered the secret commissions.
1999-10-07	The first defendant entered into an agreement with the plaintiffs relating to the information and documents to be provided by the second defendant.
1999-10-20	The second defendant swore a statutory declaration in Singapore.
2000-01-01	Plaintiffs applied for discovery for proceedings in Vancouver, British Columbia, against Endicott and Helm.
2000-06-01	Plaintiffs commenced this suit.
2001-01-10	Plaintiffs' attempt to obtain summary judgment against the first and second defendant was unsuccessful.
2001-03-07	The second defendant filed an affidavit in support of the application.
2001-05-02	Assistant Registrar granted part of the second defendant's application.
2001-05-24	I heard and allowed the plaintiffs' appeal in Registrar's Appeal No. 96 of 2001.
2001-10-31	Decision Date

7. Legal Issues

Breach of Contract
- Outcome: The court considered whether the plaintiffs were precluded from suing the defendants due to an alleged collateral contract/undertaking.
- Category: Substantive
- Sub-Issues:
  - Breach of collateral contract
  - Breach of undertaking
Conspiracy
- Outcome: The plaintiffs alleged that the defendants entered into a conspiracy to pay secret commissions.
- Category: Substantive
Secret Commissions
- Outcome: The plaintiffs sought to recover sums as monies had and received as well as under s 14 of the Prevention of Corruption Act (Cap 241).
- Category: Substantive
Order of Trials
- Outcome: The court addressed the order in which the preliminary issue and other issues should be tried.
- Category: Procedural

8. Remedies Sought

Recovery of funds
Damages
Inquiry into and an account of all secret commissions received by the defendants

9. Cause of Actions

Breach of Contract
Conspiracy
Monies had and received
Constructive trust

10. Practice Areas

Commercial Litigation

11. Industries

Construction

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
Federal Insurance v Nakano Singapore (Pte) Ltd	Court of Appeal	Yes	[1992] 1 SLR 390	Singapore	Cited to support the argument that a trial of the preliminary issue would resolve both the claim and counterclaim thereby saving both time and costs; distinguished because the second defendant has a counterclaim which is founded on his defence.
Chan Kum Loong v Hii Sui Eng	N/A	Yes	[1980] 1 MLJ 313	N/A	Cited to reinforce the view that trial of the preliminary issue involving facts and law would not determine the matter between the parties one way or the other, rather it would result in an unjustified waste of time and an equally unjustified increase in costs.

13. Applicable Rules

Rule Name
Rules of Court O 33 r 2

14. Applicable Statutes

Statute Name	Jurisdiction
Prevention of Corruption Act (Cap 241)	Singapore

15. Key Terms and Keywords

15.1 Key Terms

Secret commissions
Collateral contract
Preliminary issue
Conspiracy
Joint venture agreement
Statutory declaration
Arbitration

15.2 Keywords

conspiracy
secret commissions
breach of contract
collateral contract
preliminary issue
Singapore High Court

17. Areas of Law

Area Name	Relevance Score
Contract Law	70
Breach of Contract	70
Secret Commissions	65
Collateral Contract	60
Fraud and Deceit	60
Undertaking	50
Company Law	50
Winding Up	40
Joint Venture Agreement	40
Arbitration	30
Administrative Law	30

16. Subjects

Civil Procedure
Contract Law
Corruption