Advantest v SL Link: Enforceability of Non-Competition Clause in Manufacturing Agreement

Advantest Corporate Office (Singapore) Pte Ltd and Advantest (S) Pte Ltd sued SL Link Co Ltd and SL Link (S) Pte Ltd in the High Court of Singapore on 22 April 2005, alleging breach of a manufacturing agreement and seeking to enforce a non-competition clause. The court, presided over by Lai Kew Chai J, found that SL Link had breached the agreement by soliciting Advantest's customers and that the non-competition clause was enforceable. The court allowed Advantest's claim and dismissed SL Link's counterclaim.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Claim allowed. Counterclaim dismissed.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Advantest sues SL Link for breach of contract, seeking to enforce a non-competition clause. The court found SL Link liable for breach.

1.7 Decision Date

21 April 2005

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
Advantest Corporate Office (Singapore) Pte Ltd	Plaintiff	Corporation	Judgment for Plaintiff	Won	Thio Shen Yi of TSMP Law Corporation Adrian Tan of TSMP Law Corporation Dean Cher of TSMP Law Corporation
Advantest (S) Pte Ltd (formerly known as Advantest Asia Pte Ltd)	Plaintiff	Corporation	Judgment for Plaintiff	Won	Thio Shen Yi of TSMP Law Corporation Adrian Tan of TSMP Law Corporation Dean Cher of TSMP Law Corporation
SL Link Co Ltd (also known as Solar Link Co Ltd)	Defendant	Corporation	Claim Dismissed	Lost	Leo Cheng Suan of Infinitus Law Corporation Teh Ee-Von of Infinitus Law Corporation
SL Link (S) Pte Ltd	Defendant	Corporation	Claim Dismissed	Lost	Leo Cheng Suan of Infinitus Law Corporation Teh Ee-Von of Infinitus Law Corporation

3. Judges

Judge Name	Title	Delivered Judgment
Lai Kew Chai	Judge	Yes

4. Counsels

Counsel Name	Organization
Thio Shen Yi	TSMP Law Corporation
Adrian Tan	TSMP Law Corporation
Dean Cher	TSMP Law Corporation
Leo Cheng Suan	Infinitus Law Corporation
Teh Ee-Von	Infinitus Law Corporation

4. Facts

The first plaintiff and Solar Link Co Ltd entered into a manufacturing agreement.
SL Link was to assemble and sell Hi-Fix sets to the first plaintiff.
The manufacturing agreement contained a non-competition clause.
SL Link solicited business from MSA, a customer of the first plaintiff.
The benefits of the manufacturing agreement were assigned to the second plaintiff.
Both defendants approached and solicited business from MSA and Infineon.
The first plaintiff provided SL Link with confidential information, including socket files and circuit diagrams.

5. Formal Citations

Advantest Corporate Office (Singapore) Pte Ltd and Another v SL Link Co Ltd (also known as Solar Link Co Ltd) and Another, Suit 10/2004, [2005] SGHC 75

6. Timeline

Date	Event
1999-11-18	Solar Link Co Ltd registered in Taiwan
2000-11-01	ATI entered into a contract with SL Link
2001-02-01	SL Link incorporated in Taiwan
2001-02-01	SL Link sent a memo to its customers informing them of its name change
2001-10-01	MSA placed a purchase order for five sets of Hi-Fix with SL Link
2001-11-28	Meeting between Mr. Cheng and Mr. Alex Wang in Singapore
2001-12-04	Mr. Cheng sent a proposal
2001-12-05	Mr. Alex Wang accepted the proposal
2001-12-11	Memorandum of understanding signed
2002-01-01	Mr. Cheng and Mr. Kenneth Ng met with Mr. Alex Wang in Taiwan
2002-02-01	ATEI and SL Link entered into an appointment agreement
2002-03-12	Manufacturing service agreement signed
2002-03-18	SL Link provided the first plaintiff with a quotation for a full set of Hi-Fix
2002-10-01	SL Link solicited business from MSA
2003-08-22	Mr. Alex Wang resigned as director
2003-10-01	Benefits of the Manufacturing Agreement were assigned to the second plaintiff
2004-01-01	Suit filed (Suit 10/2004)
2005-04-22	Judgment reserved

7. Legal Issues

Breach of Contract
- Outcome: The court found that SL Link had breached the manufacturing agreement.
- Category: Substantive
- Sub-Issues:
  - Enforceability of non-competition clause
Inducement of Breach of Contract
- Outcome: The court found that the second defendant induced SL Link to breach its obligations under the Manufacturing Agreement.
- Category: Substantive
Enforceability of Non-Competition Clause
- Outcome: The court held that the non-competition clause in the Manufacturing Agreement was enforceable.
- Category: Substantive

8. Remedies Sought

Declaration
Costs

9. Cause of Actions

Breach of Contract
Inducement of Breach of Contract
Conspiracy to Cause Harm

10. Practice Areas

Commercial Litigation

11. Industries

Semiconductor

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
Esso Petroleum Co Ltd v Harper’s Garage (Stourport) Ltd	N/A	Yes	[1968] AC 269	N/A	Cited regarding the court's role in substituting its views for those of current commerce and contracting parties.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute Name	Jurisdiction
Taiwanese Company Law of 2001 Art 36	Taiwan
Taiwanese Civil Code 2000 Art 169	Taiwan

15. Key Terms and Keywords

15.1 Key Terms

Hi-Fix
Manufacturing Agreement
Non-Competition Clause
Socket Files
Circuit Diagrams
Tooling
Confidential Information

15.2 Keywords

contract
non-competition
manufacturing
Advantest
SL Link
Hi-Fix
Taiwan
Singapore

17. Areas of Law

Area Name	Relevance Score
Inducement of Breach of Contract	80
Breach of Contract	75
Contract Law	70
Breach of Confidence	65
Commercial Disputes	60
Company Law	30
Submission to Jurisdiction	30
Misrepresentation	25
Estoppel	20

16. Subjects

Contract Dispute
Breach of Contract
Non-Competition Agreement
Tort
Confidentiality