EFT Holdings v Marinteknik: Conspiracy, Unlawful Means, and Investment Loss
EFT Holdings Inc and EFT Investment Co Ltd (collectively, "EFT") sued Marinteknik Shipbuilders (S) Pte Ltd and its director, Lim Lan Eng Priscilla, along with Hsiao Zhong-Xing and Lu Tso-Chun, for conspiracy to injure by unlawful means, alleging that the defendants conspired to mislead EFT into investing US$19.193 million in Excalibur International Marine Corporation (EIMC). EFT claimed that EIMC's financial statements were overstated, leading EFT to believe EIMC was financially robust. The High Court of Singapore dismissed EFT's action, finding that EFT failed to prove the elements of unlawful means conspiracy. The court held that EFT did not demonstrate an agreement between the Singapore defendants and the other defendants to deceive EFT, nor did they prove the necessary intention to injure EFT. The court also addressed conflict of laws issues and an issue estoppel defense, ultimately ruling in favor of the defendants, Marinteknik and Priscilla.
1. Case Overview
1.1 Court
High Court1.2 Outcome
EFT’s action against Marinteknik and Priscilla is dismissed with costs.
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Singapore High Court dismisses EFT Holdings' claim against Marinteknik for conspiracy to injure by unlawful means, relating to a failed investment.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| EFT Holdings, Inc | Plaintiff | Corporation | Claim Dismissed | Lost | Hee Theng Fong, Nandakumar s/o Renganathan, Leong Fu Sheng Eugene |
| EFT Investment Co Ltd | Plaintiff | Corporation | Claim Dismissed | Lost | Hee Theng Fong, Nandakumar s/o Renganathan, Leong Fu Sheng Eugene |
| Marinteknik Shipbuilders (S) Pte Ltd | Defendant | Corporation | Judgment for Defendant | Won | Ajaib Haridass, Sivakumaran Murugaiah Balakrishnan |
| Lim Lan Eng Priscilla | Defendant | Individual | Judgment for Defendant | Won | Ajaib Haridass, Sivakumaran Murugaiah Balakrishnan |
| Hsiao Zhong-Xing | Defendant | Individual | Default Judgment Entered | Default | |
| Lu Tso-Chun | Defendant | Individual | Default Judgment Entered | Default |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Belinda Ang Saw Ean | J | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Hee Theng Fong | RHTLaw Taylor Wessing LLP |
| Nandakumar s/o Renganathan | RHTLaw Taylor Wessing LLP |
| Leong Fu Sheng Eugene | RHTLaw Taylor Wessing LLP |
| Ajaib Haridass | Haridass Ho & Partners |
| Sivakumaran Murugaiah Balakrishnan | Haridass Ho & Partners |
4. Facts
- EFT invested US$19.193 million in EIMC by subscribing for 48.81% of its shares.
- EFT alleges EIMC's 2007 financial statements overstated equity and assets.
- EFT claims it was misled into investing in EIMC due to inflated paid-up capital.
- Marinteknik entered into shipbuilding contracts with Mr. Lu for two catamarans.
- The shipbuilding contracts were later novated to EIMC.
- Transfer Affidavits stated that Hull 189 and Hull 190 had been fully paid for, which was untrue.
- Transfer Addenda qualified the statements in the Transfer Affidavits, stating no physical payment was made.
5. Formal Citations
- EFT Holdings, Inc and another v Marinteknik Shipbuilders (S) Pte Ltd and others, Suit No 571 of 2010, [2012] SGHC 246
6. Timeline
| Date | Event |
|---|---|
| Marinteknik and Mr. Lu entered into shipbuilding contracts for Hull 189 and Hull 190. | |
| Purchase price of each newbuilding increased to US$27.5 million. | |
| Investment Agreement signed, Mr. Lu to acquire shares in EIMC. | |
| Transfer Affidavits signed by Priscilla, Mr. Hsiao, and Mr. Lu. | |
| Validity period of Transfer Affidavits expired. | |
| Marinteknik contracted to sell Hulls 189 and 190 to Giant Dragon. | |
| Priscilla and Mr. Hsiao signed the April 2008 MOUs. | |
| April 2008 MOUs rescinded due to non-payment. | |
| EIMC entered into a memorandum of agreement with Ezone to purchase OCEAN LALA. | |
| Mr. Qin met Mr. Chiao and Mr. Hsiao for the first time. | |
| Business presentation by Mr. Chiao to Mr. Qin. | |
| P1 and EIMC executed the Subscription Agreement and the Loan Agreement. | |
| P1 granted a loan of US$19.193 million to EIMC. | |
| EFT invested in EIMC through its subsidiary, P2. | |
| P2 transferred US$19.193 million to EIMC. | |
| EFT took over the management of EIMC. | |
| Ezone commenced arbitration against EIMC. | |
| Suit No 571 of 2010 commenced (the Singapore Action). | |
| Judgment of the Shihlin District Court. | |
| Taiwan High Court upheld dismissal of Mr. Chiao’s claim. | |
| Order for a split trial on the issues of liability and quantum recorded. | |
| Decision Date of the Singapore High Court. |
7. Legal Issues
- Unlawful Means Conspiracy
- Outcome: The court held that the elements of unlawful means conspiracy were not proven against the defendants.
- Category: Substantive
- Sub-Issues:
- Agreement between parties
- Unlawful means used
- Intention to injure
- Causation of damage
- Related Cases:
- [1996] 3 SLR(R) 637
- [1999] 3 SLR(R) 1167
- [2009] 3 SLR(R) 452
- [2000] 2 All ER (Comm) 271
- [2008] 1 AC 1174
- [2008] 1 AC 1
- [2008] Ch 244
- [1984] 1 NZLR 354
- Conflict of Laws
- Outcome: The court determined that the place of the tort was Taiwan and that EFT failed to plead and prove that the alleged wrongdoings were actionable under Taiwanese law.
- Category: Procedural
- Sub-Issues:
- Double actionability rule
- Lex loci delicti
- Lex fori
- Related Cases:
- [2007] 1 SLR(R) 377
- [1990] QB 391
- [1997] 1 SLR(R) 811
- [2012] SGHC 233
- Issue Estoppel
- Outcome: The court found that the issue of whether the Taiwanese judgments are recognized and enforceable in Singapore was not squarely addressed by either party, and therefore there was nothing much to the issue estoppel defense.
- Category: Procedural
- Sub-Issues:
- Res judicata
- Foreign judgments
- Recognition of foreign judgments
8. Remedies Sought
- Damages
- Refund of US$19.193 million investment
9. Cause of Actions
- Conspiracy to Injure by Unlawful Means
10. Practice Areas
- Commercial Litigation
- Corporate Law
- International Law
11. Industries
- Shipping
- Financial Services
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Quay Kay Tee v Ong and Co Pte Ltd | Court of Appeal | Yes | [1996] 3 SLR(R) 637 | Singapore | Cited for the requirements of unlawful means conspiracy. |
| Chew Kong Huat v Ricwil (Singapore) Pte Ltd | Court of Appeal | Yes | [1999] 3 SLR(R) 1167 | Singapore | Approved the statement of law in Quay Kay Tee v Ong and Co Pte Ltd regarding unlawful means conspiracy. |
| Beckkett Pte Ltd v Deutsche Bank AG | Court of Appeal | Yes | [2009] 3 SLR(R) 452 | Singapore | Approved the statement of law in Quay Kay Tee v Ong and Co Pte Ltd regarding unlawful means conspiracy. |
| Kuwait Oil Tanker Co SAK v Al Bader | Court of Appeal | Yes | [2000] 2 All ER (Comm) 271 | England and Wales | Cited for the principle that the overt act must be done pursuant to the conspiracy. |
| Revenue and Customs Commissioners v Total Network SL | House of Lords | Yes | [2008] 1 AC 1174 | United Kingdom | Approved the principle that unlawful means do not have to be independently actionable against any of the conspirators. |
| OBG Ltd and another v Allan and others | House of Lords | No | [2008] 1 AC 1 | United Kingdom | Views expressed on the mental requirements of the tort of causing loss by unlawful means are applicable to the tort of conspiracy. |
| Meretz Investments NV v ACP Ltd and others | Court of Appeal | Yes | [2008] Ch 244 | England and Wales | Views expressed in OBG Ltd and another v Allan and others on the mental requirements of the tort of causing loss by unlawful means are applicable to the tort of conspiracy. |
| Van Camp Chocolates Ltd v Auslebrooks Ltd | High Court | Yes | [1984] 1 NZLR 354 | New Zealand | Cited for the principle that the defendant must intend to injure the claimant. |
| De Krassel and Chu Vincent | Court of First Instance | Yes | [2010] 2 HKLRD 937 | Hong Kong | Cited for the elements that EFT has to prove. |
| Re H (Minors) | House of Lords | Yes | [1996] AC 563 | United Kingdom | Cited for the standard of proof required for serious allegations. |
| Hornal v Newberger Products Ltd | Court of Appeal | Yes | [1954] 1 QB 247 | England and Wales | Cited for the standard of proof required for serious allegations. |
| Tang Yoke Kheng v Lek Benedict | Court of Appeal | Yes | [2005] 3 SLR(R) 263 | Singapore | Cited for the standard of proof required for serious allegations. |
| Chua Kwee Chen and others (as Westlake Eating House) and another v Koh Choon Chin | Court of Appeal | Yes | [2006] 3 SLR(R) 469 | Singapore | Cited for the standard of proof required for serious allegations. |
| Standard Chartered Bank v Pakistan Shipping Corporation | House of Lords | Yes | [2003] 1 AC 959 | United Kingdom | Cited for the principle that a fraudulent director cannot escape personal liability. |
| The Ocean Frost | Court of Appeal | Yes | [1985] 1 Lloyd’s Rep 1 | England and Wales | Cited for the court’s approach to assessing the credibility of a witness. |
| Rickshaw Investments Ltd v Nicolai Baron von Uexkull | Court of Appeal | Yes | [2007] 1 SLR(R) 377 | Singapore | Cited for the double actionability rule with the flexible exception test. |
| Metall und Rohstoff AG v Donaldson Lufkin & Jenrette Inc | Queen's Bench Division | Yes | [1990] QB 391 | England and Wales | Cited for the substance of the tort test. |
| Grupo Torras SA v Al-Sabah (No 5) | High Court | Yes | [1999] CLC 1469 | England and Wales | Cited for the factors to determine the place of the tort. |
| Goh Chok Tong v Tang Liang Hong | High Court | No | [1997] 1 SLR(R) 811 | Singapore | Cited for the argument that there was no need to plead and prove Taiwanese law. |
| Low Tuck Kwong v Sukamto Sia | High Court | Yes | [2012] SGHC 233 | Singapore | Applied the double actionability rule to a defamation case. |
| Bank of Tokyo-Mitsubishi UFJ Ltd and another v Baskan Gida Sanayi Ve Pazarlama AS and 13 others | High Court | Yes | [2010] Bus LR Digest | England and Wales | Cited as a useful guide on what is required in the analysis of the facts to draw out from the allegations pleaded the key ingredients of the tort of conspiracy by unlawful means. |
| OMG Holdings Pte Ltd v POS Sdn Bhd | Court of Appeal | Yes | [2012] 4 SLR 231 | Singapore | Cited for the principle that A may contract to sell B something that A does not presently have. |
| JSI Shipping (S) Pte Ltd v Teofoongwonglcloong (a firm) | Court of Appeal | No | [2007] 4 SLR(R) 460 | Singapore | Cited for the proposition that any extraordinary detail in the 2006/2007 Financial Statements should have been brought to the attention of Mr Qin. |
13. Applicable Rules
| Rule Name |
|---|
| Order 92 rule 1 of the Rules of Court, Cap 322. R5, 2006 Rev Ed |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Companies Act of Taiwan | Taiwan |
| Reciprocal Enforcement of Foreign Judgments Act (Cap 265, 2001 Rev Ed) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Unlawful means conspiracy
- Financial statements
- Paid-up capital
- Subscription agreement
- Loan agreement
- Transfer affidavits
- Transfer addenda
- Misrepresentation
- Investment
- Ezone
- OCEAN LALA
- Hulls 189 and 190
- Tripartite Agreement
15.2 Keywords
- conspiracy
- unlawful means
- investment
- financial statements
- misrepresentation
- shipping
- Taiwan
- Singapore
16. Subjects
- Conspiracy
- Torts
- Company Law
- Investments
- Shipping
- Commercial Litigation
17. Areas of Law
- Tort Law
- Conspiracy
- Civil Procedure
- Conflict of Laws
- Company Law