PT Sandipala v STMicroelectronics: Breach of Contract, Conspiracy, & Chip Supply Dispute

In 2017, the Singapore High Court heard a case between PT Sandipala Arthaputra (Sandipala) and STMicroelectronics Asia Pacific Pte Ltd (ST-AP), Oxel Systems Pte Ltd (Oxel), and Vincent Pierre Luc, Cousin. The dispute arose from a contract between Sandipala and Oxel for microchips needed for an Indonesian Government electronic ID card project. Sandipala claimed breach of contract, misrepresentation, and conspiracy. Oxel counterclaimed for breach of contract and conspiracy. The court dismissed Sandipala's claims and allowed Oxel's counterclaim in part, awarding damages against Sandipala, Mr. Tannos, and Ms. Tannos.

1. Case Overview

1.1 Court

High Court of the Republic of Singapore

1.2 Outcome

Sandipala's claims dismissed; Oxel's counterclaim against Sandipala, Mr. Tannos, and Ms. Tannos allowed in part.

1.3 Case Type

Civil

1.4 Judgment Type

Judgment

1.5 Jurisdiction

Singapore

1.6 Description

Singapore High Court case involving PT Sandipala, STMicroelectronics, and Oxel Systems over a chip supply contract breach and conspiracy claims.

1.7 Decision Date

11 May 2017

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
Paulus Tannos	Defendant	Individual	Counterclaim Allowed in Part	Lost	Prem Gurbani of Gurbani & Co LLC Govintharasah s/o Ramanathan of Gurbani & Co LLC Sarah Kuek of Gurbani & Co LLC
Lina Rawung	Defendant	Individual	Counterclaim Dismissed	Won	Prem Gurbani of Gurbani & Co LLC Govintharasah s/o Ramanathan of Gurbani & Co LLC Sarah Kuek of Gurbani & Co LLC
Catherine Tannos	Defendant	Individual	Counterclaim Allowed in Part	Lost	Prem Gurbani of Gurbani & Co LLC Govintharasah s/o Ramanathan of Gurbani & Co LLC Sarah Kuek of Gurbani & Co LLC
PT Sandipala Arthaputra	Plaintiff, Defendant	Corporation	Claims Dismissed	Lost	Prem Gurbani of Gurbani & Co LLC Govintharasah s/o Ramanathan of Gurbani & Co LLC Sarah Kuek of Gurbani & Co LLC
Oxel Systems Pte Ltd	Defendant, Plaintiff	Corporation	Counterclaim Allowed in Part	Partial	Zhuo Jiaxiang of Drew & Napier LLC Davinder Singh SC of Drew & Napier LLC Timothy Lin of Drew & Napier LLC
Vincent Pierre, Luc, Cousin	Defendant	Individual	Claims Dismissed	Won	Ong Tun Wei Danny of Rajah & Tann Singapore LLP Yam Wern-Jhien of Rajah & Tann Singapore LLP Jeremy Gan of Rajah & Tann Singapore LLP Eugene Ong of Rajah & Tann Singapore LLP
STMICROELECTRONICS ASIA PACIFIC PTE LTD	Defendant	Corporation	Claims Dismissed	Won	Ong Tun Wei Danny of Rajah & Tann Singapore LLP Yam Wern-Jhien of Rajah & Tann Singapore LLP Jeremy Gan of Rajah & Tann Singapore LLP Eugene Ong of Rajah & Tann Singapore LLP

3. Judges

Judge Name	Title	Delivered Judgment
George Wei	Judge	Yes

4. Counsels

Counsel Name	Organization
Prem Gurbani	Gurbani & Co LLC
Govintharasah s/o Ramanathan	Gurbani & Co LLC
Sarah Kuek	Gurbani & Co LLC
Zhuo Jiaxiang	Drew & Napier LLC
Davinder Singh SC	Drew & Napier LLC
Timothy Lin	Drew & Napier LLC
Ong Tun Wei Danny	Rajah & Tann Singapore LLP
Yam Wern-Jhien	Rajah & Tann Singapore LLP
Jeremy Gan	Rajah & Tann Singapore LLP
Eugene Ong	Rajah & Tann Singapore LLP

4. Facts

Sandipala contracted with Oxel for the supply of microchips for an Indonesian government electronic ID card project.
Sandipala claimed it was induced into contracting for chips that could not be used without changes to the existing E-KTP system.
Sandipala alleged that Oxel and ST-AP misrepresented that the supplied chips were the same as those used in the tender evaluation.
Oxel counterclaimed that Sandipala breached the agreement by refusing to accept chip shipments and failing to make payments.
Mr. Tannos, controlling Sandipala, sought alternative chips and operating systems from various companies.
Sandipala, through Mr. Tannos, took steps to modify the existing card system to accommodate Oxel's chips.
The court found that Sandipala knew the chips would not work without system changes but proceeded with the contract.

5. Formal Citations

PT Sandipala Arthaputra v STMicroelectronics Asia Pacific Pte Ltd and others, Suit No 542 of 2012, [2017] SGHC 102

6. Timeline

Date	Event
1987-01-01	Sandipala incorporated.
2009-01-01	Oxel incorporated.
2011-01-19	Mr. Tannos purchased majority shares in Sandipala.
2011-02-28	Sandipala became a member of the PNRI Consortium.
2011-05-01	MHA conducted tests and evaluations of chips provided by the PNRI Consortium.
2011-05-20	POC test conducted at Sandipala’s factory.
2011-06-09	Sandipala entered into a further agreement with the other members of the PNRI Consortium.
2011-06-21	MHA formally announced that it would award the Tender to the PNRI Consortium.
2011-07-01	PNRI Consortium entered into a written agreement with the MHA.
2011-07-01	Sandipala purchased NXP P3 chips through AvandIDe and Excelpoint.
2011-07-26	Sandipala’s share of work was reduced to producing, personalising and supplying 60% of the E-KTP Cards under the Amended Consortium Agreement.
2011-08-04	Mr. Tannos, Mr. Cousin and Mr. Kim of Ubivelox met regarding the possible sale of ST-AP’s chips to Sandipala.
2011-09-01	Mr. Tannos met Ms. Florentin and Mr. Dardanne in Jakarta.
2011-09-19	Sandipala placed an order with Oberthur for 30m modules using “ST 23 Series – NXP P3/P5 Series”.
2011-09-20	Mr. Cousin sent Mr. Tannos another quotation from ST-AP for the supply of ST23YR12 chips encoded with RUB operating system.
2011-11-09	Sandipala entered into an agreement with Oxel under which Oxel agreed to supply 100m chips.
2011-11-14	Sandipala made a down payment of US$1.2m.
2011-12-19	PNRI Consortium held a meeting without Sandipala and decided to redistribute the printing and personalisation works as between Sandipala and PNRI.
2011-12-22	First delivery of Oxel’s chips to Sandipala.
2012-01-10	Ms. Tannos sent an email to Mr. Winata requesting for a temporary reduction of Sandipala’s order of chips.
2012-01-13	Mr. Zhang rejected the request for temporary reduction of Sandipala’s order of chips.
2012-01-13	Conversation between Ms. Tannos, Mr. Jerry Chum of Sandipala and Mr. Cousin.
2012-01-19	Ms. Tannos sent Mr. Winata an email asserting that their order of 100m chips was only an indicative order, save for 10m chips for which down payment was made.
2012-01-22	Conversation between Mr. Tannos and Mr. Cousin.
2012-02-27	Sandipala received a letter from Oxel’s lawyers seeking payment of arrears.
2012-02-29	Oxel’s lawyers filed a police report on behalf of Oxel alleging that Sandipala had cheated and defrauded Oxel.
2012-04-21	Discussion between Mr. Winata, Mr. Tannos, Ms. Tannos and Mr. Cousin.
2012-06-28	Sandipala commenced the present proceedings.
2016-03-01	Trial took place over 22 days between March and May 2016.
2017-05-12	Judgment reserved.

7. Legal Issues

Breach of Contract
- Outcome: The court found that Sandipala breached the agreement with Oxel by wrongfully rejecting chips and failing to make payments.
- Category: Substantive
Fraudulent Misrepresentation
- Outcome: The court found that Sandipala did not prove that the alleged misrepresentations were made or relied upon.
- Category: Substantive
Conspiracy
- Outcome: The court found that Sandipala, Mr. Tannos, and Ms. Tannos conspired to injure Oxel by unlawful means.
- Category: Substantive
Negligence
- Outcome: The court found that ST-AP and Oxel did not owe a duty of care to Sandipala in the alleged respects.
- Category: Substantive
Unilateral Mistake
- Outcome: The court found that Sandipala was not labouring under a mistake of fact when entering the agreement.
- Category: Substantive

8. Remedies Sought

Monetary Damages

9. Cause of Actions

Breach of Contract
Fraudulent Misrepresentation
Negligence
Conspiracy

10. Practice Areas

Commercial Litigation
Breach of Contract
Fraud and Deceit
Negligence
Conspiracy

11. Industries

Technology
Government
Manufacturing

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
Panatron Pte Ltd and another v Lee Cheow Lee and another	Court of Appeal	Yes	[2001] 2 SLR(R) 435	Singapore	Cited for the essential elements of a claim in the tort of deceit.
Lim Kim Yiang and another v Foo Suan Seng and others	Unknown	Yes	[1991] 2 SLR(R) 141	Singapore	Cited for the principle that no term will be implied at common law in the face of an express term to the contrary.
ACTAtek, Inc and another v Tembusu Growth Fund Ltd	Court of Appeal	Yes	[2016] 5 SLR 335	Singapore	Cited for the business efficacy test for implying a term in fact.
Nagase Singapore Pte Ltd v Ching Kai Huat and others	Unknown	Yes	[2008] 1 SLR(R) 80	Singapore	Cited for the elements of the tort of conspiracy.
Lim Leong Huat v Chip Hup Hup Kee Construction Pte Ltd	Unknown	Yes	[2009] 2 SLR(R) 318	Singapore	Cited for the principle that a company can be a co-conspirator with its directors.
EFT Holdings, Inc and another v Marinteknik Shipbuilders (S) Pte Ltd and another	Unknown	Yes	[2014] 1 SLR 860	Singapore	Cited for the principle that an agreement for conspiracy need not be express.
The “Asia Star”	Court of Appeal	Yes	[2010] 2 SLR 1154	Singapore	Cited for the principle that a claimant may not recover damages for losses which could have been avoided had the claimant taken reasonable steps to mitigate the loss.
Sabaf SpA v MFI Furniture Centres Ltd	English Court of Appeal	Yes	[2003] RPC 14	England and Wales	Cited for the effect of a sales contract entered into on “ex-works” terms.
Dies and another v British and International Mining and Finance Corporation Limited	Unknown	Yes	[1939] 1 KB 724	England and Wales	Cited for the principle that an advance payment was not in the nature of deposit or earnest, but was a part-payment of the price.
Hyundai Heavy Industries Co Ltd v Papadopoulos	House of Lords	Yes	[1980] 1 WLR 1129	England and Wales	Cited for the question of recoverability of a down payment is essentially a matter of construction.
Cadogan Petroleum Holdings Ltd v Global Process Systems LLC	Unknown	Yes	[2013] EWHC 214 (Comm)	England and Wales	Cited for the principle that an express term which provides that the part-payment remains payable will be given effect.
Griffon Shipping LLC v Firodi Shipping Ltd	Unknown	Yes	[2013] EWHC 593 (Comm)	England and Wales	Cited for the principle that in any case where the question is whether a payment which accrued due before termination remains payable after termination it will be necessary to construe the contract with a view to determining whether the obligation to pay accrued due unconditionally or conditionally.
Lee Chee Wei v Tan Hor Peow Victor and others and another appeal	Court of Appeal	Yes	[2007] 3 SLR(R) 537	Singapore	Cited for the judicial approach to forfeitable deposits at common law.
Todd Trading Pte Ltd v Aglow Far East Trading Pte Ltd	Unknown	Yes	[1997] 1 SLR(R) 494	Singapore	Cited for the principle that a plaintiff is entitled to claim its loss of profits it would have made if the defendant had not defaulted and the compensation that it had paid to its supplier.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute Name	Jurisdiction
Sale of Goods Act (Cap. 393)	Singapore

15. Key Terms and Keywords

15.1 Key Terms

Microchips
E-KTP Cards
Operating System
Tender Evaluation Chips
PAC Operating System
RUB Operating System
Consortium Agreement
Personalisation Machines
Key Management System
Ex-Works

15.2 Keywords

breach of contract
microchips
electronic identification cards
conspiracy
misrepresentation
Singapore High Court
commercial dispute

17. Areas of Law

Area Name	Relevance Score
Commercial Law	75
Contract Law	70
Sale of Goods	70
Breach of Contract	65
Damages	60
Contracts	60
Fraud and Deceit	50
Misrepresentation	50
Conspiracy by Unlawful Means	40
Negligence	40
Torts	40
Personal Injury	30
Evidence	20
Civil Procedure	20

16. Subjects

Contract Dispute
Commercial Dispute
Sale of Goods
Smart Card Technology