Cleantech Partners v Han Cheng Fong: Breach of Fiduciary Duty & Conspiracy in Eco-Park Project

Cleantech Partners Hangzhou Pte Ltd and Cleantech Partners Pte Ltd sued Han Cheng Fong, Low Soo Chee, Liew Sok Kuan, and International Eco-City Pte Ltd in the High Court of Singapore, alleging breach of fiduciary duties and conspiracy to divert the Hangzhou Singapore Eco-Park development project. The plaintiffs claimed the defendants, former directors, used unlawful means to divert the project to IEC. Justice Tan Lee Meng dismissed the claims, finding no evidence of breach of duty or conspiracy.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Claims dismissed with costs.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Cleantech Partners sued Han Cheng Fong and others for breach of fiduciary duties and conspiracy to divert an eco-park project. The court dismissed the claims.

1.7 Decision Date

26 February 2013

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
Cleantech Partners Pte Ltd	Plaintiff	Corporation	Claim Dismissed	Lost	Tan Wei Ming of KhattarWong LLP Harpal Singh of KhattarWong LLP Chan Kia Pheng of KhattarWong LLP Favian Kang of KhattarWong LLP
Cleantech Partners Hangzhou Pte Ltd	Plaintiff	Corporation	Claim Dismissed	Lost	Tan Wei Ming of KhattarWong LLP Harpal Singh of KhattarWong LLP Chan Kia Pheng of KhattarWong LLP Favian Kang of KhattarWong LLP
Han Cheng Fong	Defendant	Individual	Judgment for Defendant	Won	Pua Lee Siang of Bih Li & Lee Anthony Lee Hwee Khiam of Bih Li & Lee
Liew Sok Kuan	Defendant	Individual	Judgment for Defendant	Won	Pua Lee Siang of Bih Li & Lee Anthony Lee Hwee Khiam of Bih Li & Lee
Low Soo Chee	Defendant	Individual	Judgment for Defendant	Won	Pua Lee Siang of Bih Li & Lee Anthony Lee Hwee Khiam of Bih Li & Lee
International Eco-City Pte Ltd	Defendant	Corporation	Judgment for Defendant	Won	Pua Lee Siang of Bih Li & Lee Anthony Lee Hwee Khiam of Bih Li & Lee

3. Judges

Judge Name	Title	Delivered Judgment
Tan Lee Meng	Judge	Yes

4. Counsels

Counsel Name	Organization
Tan Wei Ming	KhattarWong LLP
Harpal Singh	KhattarWong LLP
Chan Kia Pheng	KhattarWong LLP
Favian Kang	KhattarWong LLP
Pua Lee Siang	Bih Li & Lee
Anthony Lee Hwee Khiam	Bih Li & Lee

4. Facts

CTPHZ is a wholly-owned subsidiary of CTP.
Han was a former chairman and director of CTPHZ.
Robin and Christine were former directors of CTPHZ and CTP.
The case concerns CTPHZ’s participation in the Hangzhou Singapore Eco-Park development project.
Plaintiffs asserted that the defendants breached their statutory and fiduciary duties.
Plaintiffs alleged that the defendants conspired to divert the Hangzhou project from them to IEC.
HQEDA terminated the Tripartite Agreement because the requisite capital for HVC had not been injected.

5. Formal Citations

Cleantech Partners Hangzhou Pte Ltd and another v Han Cheng Fong and others, Suit No 266 of 2011, [2013] SGHC 52

6. Timeline

Date	Event
2009-01-01	CTP collaborated with Hangzhou Vanwarm Holdings Group Ltd to develop the Hangzhou project.
2010-03-01	CTP's founder directors, Han, Christine and Cleantech Ventures Asia Pte Ltd signed the 1 March document.
2010-03-23	CTP entered into the Tripartite Agreement with HQEDA and Vanwarm.
2010-04-07	Han informed CTP's directors that he would focus his attention on CTPHZ.
2010-04-01	CTPHZ was incorporated and Han became its chairman.
2010-05-31	Han signed the Collaboration Agreement with Vanwarm on CTPHZ's behalf.
2010-06-17	HVC was incorporated in China.
2010-08-01	Han discovered Patrick and Richard were planning to deprive him and Christine of their rights.
2010-08-01	Han discovered Patrick and Richard were trying to sell their CTP shares.
2010-08-25	Han instructed Ng to ask all CTPHZ directors to disclose their directorships.
2010-09-05	Patrick informed the other CTPHZ directors that he would address the issues raised by Han with Ng in a memo.
2010-09-18	Christine and Robin formed Green Solutions @ ARB Pte Ltd, which changed its name to IEC.
2010-09-24	Han arranged for a meeting of CTPHZ’s board to be held on 29 September 2010.
2010-09-29	CTPHZ board meeting was held.
2010-10-01	Patrick instructed Ng to retain CTPHZ’s records until further notice.
2010-10-05	Han sent an email to Patrick regarding the project.
2010-10-06	Patrick emailed Han.
2010-10-12	Patrick caused an Extraordinary General Meeting of CTPHZ to be held to remove Han and Christine as directors of CTPHZ.
2010-10-12	Michael was appointed a director of CTPHZ.
2010-10-12	CTPHZ’s board approved a resolution removing Han as the company’s corporate representative on HVC.
2010-10-21	Ng emailed to Han the resolutions that dismissed the latter from his positions in CTPHZ.
2010-10-28	Patrick and Michael went to Hangzhou to discuss matters with Vanwarm’s Liu Hai.
2010-11-17	Liu Hai asked Han to postpone the taking of legal action for wrongful dismissal.
2010-11-11	Robin, Christine, Fujimoto and a team of Japanese company representatives visited Hangzhou.
2010-11-18	Defendants attended meetings on the master plan for the Hangzhou project.
2010-11-19	Defendants attended meetings on the master plan for the Hangzhou project.
2010-11-23	Han and Robin signed a HVC board resolution.
2010-11-30	Vanwarm’s chairman, Liu Hai, came to Singapore to mediate.
2010-12-02	Patrick, Richard and Michael allegedly agreed to reinstate Han and Christine to CTPHZ’s board.
2010-12-03	Han served his writ in Suit No 908 of 2010.
2010-12-07	Michael threatened Liu Hai that CTP would terminate its relationship with Vanwarm.
2010-12-10	Michael sent another email to Liu Hai.
2010-12-15	Michael sent another email to Liu Hai.
2010-12-01	HVC managed to acquire land in the Hangzhou project.
2011-01-31	HQEDA informed CTP and Vanwarm in a Letter of Notice that HVC’s registered capital was not in place.
2011-02-02	Vanwarm terminated the Collaboration Agreement.
2011-02-10	Ikuma sent an email regarding the Hangzhou mission.
2011-02-17	Defendants went to Tokyo with representatives of Vanwarm and HQEDA to meet representatives from JETRO, METI and Japanese companies.
2011-02-18	Defendants went to Tokyo with representatives of Vanwarm and HQEDA to meet representatives from JETRO, METI and Japanese companies.
2011-02-19	Defendants went to Tokyo with representatives of Vanwarm and HQEDA to meet representatives from JETRO, METI and Japanese companies.
2011-02-26	Richard wrote to Vanwarm.
2011-03-10	CTP and CTPHZ failed to inject their share of the requisite registered capital of HVC.
2011-03-11	HQEDA informed CTP and Vanwarm that the Tripartite Agreement had been terminated.
2011-03-31	Vanwarm terminated the Collaboration Agreement.
2011-04-03	Hong Jia terminated the Loan Agreement.
2011-05-11	CTP’s Chinese solicitors informed HQEDA in a letter that CTP had decided to delay the injection of funds.
2011-06-28	Defendants attended the ground-breaking ceremony for the Hangzhou project.

7. Legal Issues

Breach of Fiduciary Duty
- Outcome: The court found that the defendants did not breach their fiduciary duties.
- Category: Substantive
- Sub-Issues:
  - Non-disclosure of conflict of interest
  - Misuse of information
  - Diversion of business opportunity
Conspiracy
- Outcome: The court found that the plaintiffs did not provide sufficient evidence to prove the existence of a conspiracy.
- Category: Substantive
Duties of Care, Skill and Diligence
- Outcome: The court found that the defendants did not breach their duties of care, skill and diligence.
- Category: Substantive

8. Remedies Sought

Damages for breach of fiduciary duties
Damages for conspiracy

9. Cause of Actions

Breach of Fiduciary Duty
Conspiracy to use unlawful means

10. Practice Areas

Commercial Litigation
Corporate Law

11. Industries

Construction
Environmental

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
Asian Corporate Services (SEA) Pte Ltd v Eastwest Management Ltd (Singapore Branch)	Singapore Court of Appeal	Yes	[2006] 1 SLR(R) 901	Singapore	Cited for the principle that proof of conspiracy is normally inferred from objective facts.
R v Siracusa	English Court of Appeal	Yes	(1990) 90 Cr App R 340	England and Wales	Cited for the principle that the origins of conspiracies are concealed and difficult to establish.
Bristol and West Building Society v Mothew	England and Wales Court of Appeal	Yes	[1998] Ch 1	England and Wales	Cited regarding breach of fiduciary duties, but distinguished because there was no proof that IEC had conflicting interests with the plaintiffs.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute Name	Jurisdiction
Companies Act (Cap 50, 2006 Rev Ed) Section 4(1)	Singapore

15. Key Terms and Keywords

15.1 Key Terms

Hangzhou Singapore Eco-Park development project
Hangzhou project
Tripartite Agreement
Collaboration Agreement
HVC
Fiduciary duties
Conspiracy
IEC
HQEDA
Vanwarm

15.2 Keywords

fiduciary duty
conspiracy
eco-park
directors duties
Hangzhou project

17. Areas of Law

Area Name	Relevance Score
Fiduciary Duties	90
Company Law	75
Conspiracy by Unlawful Means	70
Commercial Disputes	60
Contract Law	50

16. Subjects

Company Law
Contract Law
Commercial Litigation