NEC Asia v Picket & Rail: Claim for Projector Price, Piercing Corporate Veil & Dishonoured Cheque

NEC Asia Pte Ltd (now known as NEC Asia Pacific Pte Ltd) sued Picket & Rail Asia Pacific Pte Ltd, Digital Network Pte Ltd, and Faisal Alsagoff in the High Court of Singapore, claiming US$1,402,380.30 for Mitsubishi High End Projectors. The claim against Picket & Rail was stayed due to liquidation. NEC argued Faisal Alsagoff used his companies interchangeably, making him personally liable, and sought payment for a dishonoured cheque from Digital Network Pte Ltd. The court, presided over by Belinda Ang Saw Ean J, dismissed the claim against Faisal Alsagoff, finding no basis to pierce the corporate veil, but ruled in favor of NEC against Digital Network Pte Ltd for the amount of the dishonoured cheque.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Judgment for Plaintiff against the second defendant, Digital Network Pte Ltd; claim against the third defendant, Faisal Alsagoff, dismissed.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

NEC Asia sued Picket & Rail for the price of projectors. The court addressed alter ego claims and liability for a dishonoured cheque, ruling against piercing the corporate veil but finding the cheque issuer liable.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
NEC Asia Pte Ltd (now known as NEC Asia Pacific Pte Ltd)PlaintiffCorporationClaim against the third defendant, Faisal Alsagoff, dismissed.Lost
Picket & Rail Asia Pacific Pte LtdDefendantCorporationAction stayedStayed
Digital Network Pte LtdDefendantCorporationJudgment for PlaintiffLost
Faisal AlsagoffDefendantIndividualClaim DismissedWon

3. Judges

Judge NameTitleDelivered Judgment
Belinda Ang Saw EanJudgeYes

4. Counsels

Counsel NameOrganization
Francis GohHarry Elias Partnership LLP
Geraldine OwHarry Elias Partnership LLP
Navinder SinghNavin & Co LLP

4. Facts

  1. NEC agreed to supply projectors to Picket & Rail Asia Pacific Pte Ltd.
  2. The initial order was for 2300 projectors, later revised to 2390.
  3. The projectors were delivered directly to KUB Telekomunikasi Sdn Bhd in Malaysia.
  4. Digital Network Pte Ltd issued a cheque to NEC for the price of the projectors.
  5. Payment on the cheque was stopped by Faisal Alsagoff.
  6. D3 was a director and shareholder of HTI and Comat, and the sole shareholder and director of D1 and D2.
  7. D1 was interposed in the supply of the projectors.

5. Formal Citations

  1. NEC Asia Pte Ltd (now known as NEC Asia Pacific Pte Ltd) v Picket & Rail Asia Pacific Pte Ltd and others, Suit No 536 of 2009, [2010] SGHC 359

6. Timeline

DateEvent
Faisal Alsagoff became a director of Digital Network Pte Ltd.
NEC issued quotations to D1 for the supply of projectors.
HTI issued a purchase order to D1 (unsigned copy).
D3 indicated to Shawn that the projectors would not be needed until April 2008.
MEA confirmed that it would not invoice NEC for the projectors because of further delays with the PPSMI project.
Comat met MEA to negotiate directly for a reduced unit price of US$598.75.
NEC gave written confirmation of its authorisation to MEA to deliver the 2390 units of projectors directly to KUB.
HTI issued a purchase order to D1 for 2390 projectors.
HTI emailed MEA to confirm the purchase of the projectors.
MEA delivered the projectors to KUB.
NEC issued its quotation for the supply of 2390 units of projectors.
Shawn arranged for Job to meet D3 to confirm the four-party pass-through deal.
D1 issued a letter and purchase order to NEC to explain the change in pricing and quantity of projectors.
KUB's letter of credit to HTI as beneficiary was issued.
David went to see D3 to ask for payment as the projectors had been delivered on 7 June 2008.
D1 sent a letter to NEC treating the June order as a variation of the February order.
Job learned that the projectors were delivered by MEA to the end buyer.
D3 raised for the first time that payment by cheque would be subject to UAT.
NEC received D2’s cheque post-dated to 8 August 2008.
D3 claimed that NEC had cut-off the deal unilaterally.
D3 emailed NEC complaining about the warranties and delivery documents.
Post-dated cheque date.
NEC presented the cheque but was informed that the cheque payment had been stopped.
Comat sent a letter to NEC suggesting that it was NEC’s counterparty.
Faisal Alsagoff ceased to be a director of D2.
NEC sued for payment.
Chan Seng Onn J refused NEC’s application for leave to continue with its claims against D1.
Judgment reserved.

7. Legal Issues

  1. Piercing the Corporate Veil
    • Outcome: The court found no basis to pierce the corporate veil and dismissed the claim against Faisal Alsagoff personally.
    • Category: Substantive
    • Related Cases:
      • [1987] SGHC 71
      • [2009] 1 SLR(R) 524
      • [2001] 2 SLR(R) 44
      • [1939] 4 All ER 116
  2. Liability for Dishonoured Cheque
    • Outcome: The court found Digital Network Pte Ltd liable for the sum of the dishonoured cheque.
    • Category: Substantive
  3. Breach of Contract
    • Outcome: The court found that NEC had performed its obligations under the contract and was entitled to payment.
    • Category: Substantive
  4. Illegality of Contract
    • Outcome: The court found that the contract between NEC and D1 was not tainted by illegality.
    • Category: Substantive
    • Related Cases:
      • [1973] 1 WLR 828

8. Remedies Sought

  1. Monetary Damages

9. Cause of Actions

  • Breach of Contract
  • Claim on Dishonoured Cheque

10. Practice Areas

  • Commercial Litigation

11. Industries

  • Technology

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Asteroid Maritime Co Ltd v Owners of the ship or vessel “Saudi Al Jubail”High CourtYes[1987] SGHC 71SingaporeCited as an instance where the court lifted the corporate veil when the corporate vehicle was found to have been used as a sham or a facade.
Children’s Media Ltd v Singapore Tourism BoardCourt of AppealYes[2009] 1 SLR(R) 524SingaporeCited as an instance where the court lifted the corporate veil when the corporate vehicle was found to have been used as a sham or a facade.
Sitt Tatt Bhd v Goh Tai HockHigh CourtYes[2001] 2 SLR(R) 44SingaporeCited to show that the corporate veil was not lifted because there was no evidence that the corporation in question was created as a sham or facade.
Smith, Stone and Knight, Ltd v Mayor, Alderman and Citizens of the City of BirminghamNot AvailableYes[1939] 4 All ER 116EnglandCited for the principle that the key question in an alter ego argument is whether the company is carrying on the business of its controller.
Ashmore Benson Pease & Co Ltd v DawsonNot AvailableYes[1973] 1 WLR 828EnglandCited for the doctrine of common law illegality, where a contract is unenforceable if the party seeking to enforce the contract has incited the commission of, or actively participated in, the illegal performance.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
Bills of Exchange Act (Cap 23, 2004 Rev Ed)Singapore
Bills of Exchange Act (Cap 23, 2004 Rev Ed) s 27Singapore
Bills of Exchange Act (Cap 23, 2004 Rev Ed) s 55Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Projectors
  • Pass-through deal
  • Dishonoured cheque
  • Alter ego
  • Corporate veil
  • User Acceptance Test
  • PPSMI project
  • Letter of Credit
  • Delivery Order
  • Purchase Order

15.2 Keywords

  • Projectors
  • Breach of contract
  • Dishonoured cheque
  • Corporate veil
  • Singapore

17. Areas of Law

Area NameRelevance Score
Contract Law95
Breach of Contract90
Commercial Disputes85
Commercial Law80
Company Law70
Lifting corporate veil65
Restructuring and Insolvency35
Bankruptcy30
Liquidation25
Estoppel20
Misrepresentation15
Sham Contract10
Fraud and Deceit10
Best Efforts Clause5
Warranties5

16. Subjects

  • Contract Law
  • Corporate Law
  • Commercial Law
  • Bills of Exchange