Panasonic v Stratech: Misrepresentation & Breach of Contract in ERP System Implementation
PT Panasonic Gobel Indonesia ("Panasonic") sued Stratech Systems Limited (“Stratech”) in the High Court of Singapore, alleging misrepresentation and breach of contract concerning the implementation of an Enterprise Resource Planning (“ERP”) system. Panasonic claimed Stratech failed to deliver a functional system, while Stratech counterclaimed for Panasonic's breach of contract. The court, presided over by Judith Prakash J, found Stratech liable for breach of contract and dismissed Stratech's counterclaim. The court awarded damages to Panasonic, to be assessed, and costs.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Judgment for Plaintiff for damages to be assessed and costs. Defendant's counterclaim is dismissed with costs.
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Panasonic sues Stratech for misrepresentation and breach of contract related to a failed ERP system implementation. The court found Stratech liable for breach of contract.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Stratech Systems Ltd | Defendant | Corporation | Counterclaim Dismissed | Lost | |
| PT Panasonic Gobel Indonesia | Plaintiff | Corporation | Judgment for Plaintiff | Won |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Judith Prakash | Judge | Yes |
4. Counsels
4. Facts
- Panasonic engaged Stratech to revamp its information management systems.
- Stratech recommended the JDE system for Panasonic.
- The Services Agreement was signed in November 2001, backdated to June 2001.
- Stratech was to provide, customize, and implement four modules of the JDE system.
- The implementation was originally scheduled to be completed by August 2002 but was extended to October 2002.
- The attempt to go-live with all four modules in June 2003 failed.
- Panasonic engaged PriceWaterhouseCoopers Indonesia to evaluate the problems with the implementation.
- Stratech proposed a re-test and re-launch of the Finance and Distribution Module, requiring additional payment.
- Panasonic made the payment, but Stratech never re-commenced work on the implementation.
5. Formal Citations
- PT Panasonic Gobel Indonesia v Stratech Systems Ltd, Suit 34/2007, [2008] SGHC 172
6. Timeline
| Date | Event |
|---|---|
| Panasonic sought a company to revamp its information management systems. | |
| Stratech completed a consultancy study for Panasonic. | |
| Stratech and Panasonic entered into the Services Agreement (backdated). | |
| The Services Agreement was signed. | |
| Implementation of the JDE system was scheduled to commence. | |
| Parties had a meeting to discuss the extension of the project. | |
| Services Agreement was amended by a Revised Project Schedule. | |
| Extended deadline for Stratech’s implementation of the JDE system. | |
| HRM and CSM modules went live. | |
| Attempt was made for the JDE system to go-live. | |
| Stratech furnished Panasonic with its “Proposal to Re-test and Re-launch Finance and Distribution Module”. | |
| Panasonic made payment on the balance of the contract price due under the Services Agreement. | |
| Panasonic furnished Stratech with further and better particulars of para 8 of the statement of claim. | |
| Judgment reserved. |
7. Legal Issues
- Breach of Contract
- Outcome: The court found that Stratech had breached its obligations under the Services Agreement by failing to successfully launch the F&D and PSI modules.
- Category: Substantive
- Sub-Issues:
- Failure to meet technical specifications
- Failure to provide services
- Failure to implement system
- Misrepresentation
- Outcome: The court found that the statements made by Stratech were representations as to intention and future performance, not statements of fact, and therefore not actionable misrepresentations.
- Category: Substantive
- Entire Agreement Clause
- Outcome: The court held that the entire agreement clauses in the Services Agreement merged any promises or assurances made during negotiations, so they had no contractual force unless reflected in the agreement.
- Category: Substantive
- Failure of Consideration
- Outcome: The court rejected Panasonic's argument that Stratech's failure to implement and deliver the JDE system amounted to a total failure of consideration because Panasonic had not pleaded this claim.
- Category: Substantive
8. Remedies Sought
- Damages
- Repayment of moneys paid
9. Cause of Actions
- Breach of Contract
- Misrepresentation
10. Practice Areas
- Commercial Litigation
- Technology Disputes
11. Industries
- Information Technology
- Electronics
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Esso Petroleum v Mardon | N/A | Yes | [1976] 2 WLR 583 | N/A | Cited for the principle that a party with special knowledge and skill has a duty of care to ensure representations are correct during pre-contractual negotiations. |
| Hedley Byrne & Co v Heller & Partners | N/A | Yes | [1963] 2 All ER 575 | N/A | Cited for the principle that a party with special knowledge and skill has a duty of care to ensure representations are correct during pre-contractual negotiations. |
| Tan Chin Seng v Raffles Town Club | High Court | No | [2002] SGHC 278 | Singapore | Cited to illustrate the principle that courts are reluctant to rescind contracts based on exuberant language by salesmen (caveat emptor). |
| Lee Chee Wei v Tan Hor Peow Victor | Court of Appeal | Yes | [2007] 3 SLR 357 | Singapore | Cited with approval for the statement on the purpose and effect of an entire agreement clause. |
| Inntrepreneur Pub Co v East Crown Ltd | N/A | Yes | [2000] 2 Lloyd’s Rep 611 | N/A | Cited for the purpose and effect of an entire agreement clause. |
| IBM Singapore Pte Ltd v UNIG Pte Ltd | High Court | Yes | [2003] SGHC 71 | Singapore | Cited for the observation that entire agreement clauses ensure the contractual relationship is circumscribed by the signed agreements alone. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Evidence Act | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Enterprise Resource Planning
- ERP
- J.D. Edwards OneWorld Xe System
- JDE system
- Services Agreement
- Legacy System
- Go-live
- Customisation
- Modules
- Technical Specifications
- Implementation
- Consultancy Study
15.2 Keywords
- ERP system
- breach of contract
- misrepresentation
- IT implementation
- Panasonic
- Stratech
- Singapore High Court
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Breach of Contract | 90 |
| Contract Law | 85 |
| Civil Practice | 75 |
| Misrepresentation | 60 |
16. Subjects
- Contract Dispute
- IT System Implementation
- Commercial Dispute