Stratech Systems Ltd v Nyam Chiu Shin: Trade Secrets, Confidential Information, Inducement of Breach of Contract

Stratech Systems Ltd sued Nyam Chiu Shin, Wong Leh Hung, and Guthrie Engineering (S) Pte Ltd in the High Court of Singapore, alleging unauthorized use of confidential information and inducement of breach of contract. The case arose from a dispute over a contract with the Land Transport Authority (LTA) for an automated electronic toll collection system. The court, presided over by Justice Choo Han Teck, found Guthrie Engineering liable for inducing the breach of contract by the former employees of Stratech Systems but awarded only nominal damages of $1,000, as no substantial damage was proven. The claims regarding the use of confidential information were dismissed.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Plaintiff's claim allowed in part against the third defendant, and dismissed as against the first and second defendants.

1.3 Case Type

Civil

1.4 Judgment Type

Judgment reserved

1.5 Jurisdiction

Singapore

1.6 Description

Stratech Systems Ltd sues former employees and a competitor for unauthorized use of confidential information and inducement of breach of contract. The court found the competitor liable for inducing breach of contract but awarded only nominal damages.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Stratech Systems LtdPlaintiffCorporationClaim allowed in partPartial
Wong Leh HungDefendantIndividualClaim DismissedDismissed
Guthrie Engineering (S) Pte LtdDefendantCorporationClaim allowed in partPartial
Nyam Chiu Shin (Yan Qiuxin)DefendantIndividualClaim DismissedDismissed

3. Judges

Judge NameTitleDelivered Judgment
Choo Han TeckJudgeYes

4. Counsels

Counsel NameOrganization
N SreenivasanStraits Law Practice LLC
Collin ChooStraits Law Practice LLC
S SuresshHarry Elias Partnership
Melissa QuekHarry Elias Partnership
Goh Phai ChengAng and Partners
Melvin LumAng and Partners
Christopher GohAng and Partners

4. Facts

  1. Stratech Systems Ltd and Guthrie Engineering (S) Pte Ltd were business partners who became rivals.
  2. The dispute arose from a contract to design and install an automated electronic toll collection system for the LTA.
  3. The first and second defendants were former employees of Stratech Systems Ltd.
  4. The third defendant, Guthrie Engineering, hired the first and second defendants shortly after they left Stratech.
  5. Stratech claimed the defendants wrongfully retained and used confidential information, specifically a computer program called 'V116'.
  6. The first and second defendants terminated their employment contracts by paying two months’ pay in lieu of notice.
  7. The third defendant agreed to indemnify the employees should they be sued successfully by the plaintiff.

5. Formal Citations

  1. Stratech Systems Ltd v Nyam Chiu Shin (Yan Qiuxin) and Others, Suit 505/2003, [2004] SGHC 168

6. Timeline

DateEvent
Original vehicle entry permit system commissioned by the LTA.
LTA requested the third defendant to integrate the VEPS with the ERPS.
Plaintiff asked for payment from the third defendant in respect of the VEPS contract.
Plaintiff stopped work on the integration of the systems.
Plaintiff stopped maintenance work in respect of the VEPS.
First defendant terminated her employment contract.
Judgment reserved.

7. Legal Issues

  1. Breach of Contract
    • Outcome: The court found the third defendant liable for inducing a breach of contract by the first and second defendants.
    • Category: Substantive
    • Sub-Issues:
      • Enforceability of restrictive covenants
      • Termination clause
      • Inducement of breach
  2. Unauthorized Use of Confidential Information
    • Outcome: The court dismissed the plaintiff's claim against all defendants regarding the unauthorized use of confidential information and trade secrets.
    • Category: Substantive
    • Sub-Issues:
      • Definition of confidential information
      • Trade secrets
      • Unauthorised disclosure

8. Remedies Sought

  1. Damages
  2. Injunctive Relief

9. Cause of Actions

  • Breach of Contract
  • Inducement of Breach of Contract
  • Misuse of Confidential Information
  • Misuse of Trade Secrets

10. Practice Areas

  • Commercial Litigation
  • Employment Litigation
  • Intellectual Property Litigation

11. Industries

  • Technology
  • Engineering

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Stratech Systems Ltd v Guthrie Engineering (S) Pte LtdHigh CourtYes[2004] SGHC 146SingaporeCited as a related case involving the same parties and arising from the same set of facts.
Lock International Plc v BeswickN/AYes[1989] 1 WLR 1268N/ACited for the principle that assertions of confidentiality are no substitute for evidence of what the plaintiff’s secrets really are.
Faccenda Chicken Ltd v FowlerN/AYes[1987] Ch 117N/ACited for the difficulties in making a list of matters that can be regarded as trade secrets.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
No applicable statutes

15. Key Terms and Keywords

15.1 Key Terms

  • Confidential Information
  • Trade Secrets
  • Inducement of Breach of Contract
  • Restrictive Covenant
  • VEPS
  • ERPS
  • V116
  • Termination Clause
  • Nominal Damages

15.2 Keywords

  • breach of contract
  • confidential information
  • trade secrets
  • inducement
  • employment
  • stratech
  • guthrie
  • VEPS
  • ERPS

17. Areas of Law

Area NameRelevance Score
Breach of Confidence90
Inducement of Breach of Contract90
Trade Secrets80
Contracts60
Contract Law60
Commercial Disputes40

16. Subjects

  • Contract Dispute
  • Employment Dispute
  • Intellectual Property
  • Tort Law