Sinco Technologies v Singapore Chi Cheng: Forum Non Conveniens & Stay of Proceedings
Sinco Technologies Pte Ltd, a Singaporean company, sued Singapore Chi Cheng Pte Ltd and Chang Tsuei-Yun in the High Court of Singapore, alleging fraudulent or negligent misrepresentation and unjust enrichment related to a letter of intent (LOI) for acquiring shares in Zhuhai Chi Cheng Technology Co Ltd (ZCC). The defendants applied for a stay of proceedings based on forum non conveniens, arguing that China was the more appropriate forum. The High Court granted the stay, finding that the connecting factors overwhelmingly pointed to China, and ordered Sinco Technologies to commence proceedings in Zhuhai.
1. Case Overview
1.1 Court
High Court of the Republic of Singapore1.2 Outcome
The defendants’ applications for a stay of proceedings were granted, with a stay of six months until 2018-01-12. The plaintiff was ordered to commence proceedings afresh in Zhuhai, to be tried together with the first defendant’s claim against the plaintiff there.
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Singapore court grants stay of proceedings in fraudulent misrepresentation and unjust enrichment claim due to forum non conveniens, favoring Chinese courts.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Sinco Technologies Pte Ltd | Plaintiff | Corporation | Proceedings Stayed | Stayed | |
| Singapore Chi Cheng Pte Ltd | Defendant, Respondent | Corporation | Stay of Proceedings Granted | Won | |
| Chang Tsuei-Yun | Defendant, Respondent | Individual | Stay of Proceedings Granted | Won |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Lai Siu Chiu | Senior Judge | Yes |
4. Counsels
4. Facts
- Sinco Technologies sued Singapore Chi Cheng and Chang Tsuei-Yun for misrepresentation and unjust enrichment.
- The suit arose from a failed acquisition of shares in Zhuhai Chi Cheng Technology Co Ltd (ZCC).
- Sinco paid a US$3m deposit under a letter of intent (LOI) for the share acquisition.
- The alleged misrepresentations concerned the financial status and recoverability of debts of ZCC.
- The defendants applied for a stay of proceedings based on forum non conveniens.
- The LOI stipulated Zhuhai as the place of performance.
- The court found that the connecting factors pointed to China as the more appropriate forum.
5. Formal Citations
- Sinco Technologies Pte Ltd v Singapore Chi Cheng Pte Ltd and another, Suit No 7 of 2017, [2017] SGHC 234
6. Timeline
| Date | Event |
|---|---|
| Sinco Technologies Pte Ltd incorporated in Singapore. | |
| Singapore Chi Cheng Pte Ltd incorporated as an investment company. | |
| Equity Transfer Agreement signed regarding KCC shares. | |
| Shareholders of ZCC decided to divest their shares. | |
| Plaintiff's representatives met with the second defendant and others at ZCC's office in Zhuhai. | |
| Plaintiff conducted due diligence on ZCC in China (May to July). | |
| Plaintiff informed the first defendant it was ready to pay a deposit for the purchase of ZCC shares. | |
| Bill Lu informed the plaintiff it had to pay US$3m to ZCC as earnest money. | |
| Xue emailed Leon Chen a draft letter of intent. | |
| Second defendant emailed Chee stating ZCC shareholders did not agree to the draft LOI. | |
| Letter of intent signed for acquisition of shares in ZCC. | |
| Plaintiff paid the US$3m deposit into the first defendant’s bank account. | |
| ZCC received a letter of demand from the buyers. | |
| Leon Chen informed the plaintiff that the buyers had threatened proceedings against ZCC. | |
| Plaintiff allegedly informed by Leon Chen and Bill Lu that the buyers had threatened proceedings against ZCC. | |
| Leon Chen forwarded the buyers’ letter of demand to the plaintiff via email. | |
| Chee called Leon Chen to say he was not worried about the Account Receivable. | |
| Xue advised Chee that the dispute on the ET Agreement was controllable. | |
| Chee called Leon Chen to say he was not worried about the Account Receivable. | |
| Plaintiff made an advance payment of US$2.6m to the first defendant. | |
| ZCC shareholders indicated they were prepared to compromise on expenses. | |
| Plaintiff unilaterally withdrew from the acquisition of ZCC’s shares. | |
| First defendant refunded the plaintiff the sum of US$2.6m but refused to refund the deposit of US$3m. | |
| TCC sold its interest to Finno Technology (Hong Kong) Company Ltd. | |
| First defendant and other shareholders of ZCC commenced proceedings against the plaintiff in Zhuhai. | |
| Plaintiff commenced Suit No 7 of 2017. | |
| Hearing for the summonses. | |
| Grounds of Decision issued. | |
| Six-month stay of proceedings ends. |
7. Legal Issues
- Forum Non Conveniens
- Outcome: The court held that China was the more appropriate forum for the case to be heard.
- Category: Jurisdictional
- Related Cases:
- [1987] AC 460
- [2017] 2 SLR 265
- Fraudulent Misrepresentation
- Outcome: The court did not rule on the merits of the misrepresentation claim, but determined that the claim should be heard in China.
- Category: Substantive
- Unjust Enrichment
- Outcome: The court did not rule on the merits of the unjust enrichment claim, but determined that the claim should be heard in China.
- Category: Substantive
8. Remedies Sought
- Monetary Damages
9. Cause of Actions
- Fraudulent Misrepresentation
- Negligent Misrepresentation
- Unjust Enrichment
10. Practice Areas
- Commercial Litigation
11. Industries
- Manufacturing
- Investment
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| JIO Minerals FZC and Others v Mineral Enterprises Ltd | Court of Appeal | Yes | [2011] 1 SLR 391 | Singapore | Cited for the "substance" test and the "three stage approach" to determine the governing law of a contract. |
| Spiliada Maritime Corporation v Cansulex Ltd | House of Lords | Yes | [1987] AC 460 | United Kingdom | Cited for the two-stage test to determine whether a stay of proceedings should be granted on the ground of forum non conveniens. |
| Rappo Tania v Accent Delight International Ltd | Court of Appeal | Yes | [2017] 2 SLR 265 | Singapore | Cited to reaffirm the two-stage test in Spiliada Maritime Corporation v Cansulex Ltd for determining forum non conveniens. |
| UBS AG v Telesto Investments Ltd | N/A | Yes | [2011] 4 SLR 50 | Singapore | Cited in support of the argument that reliance on representations took place in Singapore. |
13. Applicable Rules
| Rule Name |
|---|
| Order 110 r 12(4) of the Rules of Court (Cap 322, R 5 2014 Rev Ed) |
| Order 110 r 7(1)(a) of the Rules of Court (Cap 322, R 5 2014 Rev Ed) |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| No applicable statutes | |
15. Key Terms and Keywords
15.1 Key Terms
- Forum Non Conveniens
- Letter of Intent
- Stay of Proceedings
- Due Diligence
- Misrepresentation
- Unjust Enrichment
- Share Acquisition
- Deposit
- Place of Performance
15.2 Keywords
- forum non conveniens
- stay of proceedings
- misrepresentation
- unjust enrichment
- Singapore
- China
- Zhuhai
- letter of intent
- share acquisition
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Natural forum | 90 |
| Private International Law | 85 |
| Jurisdiction | 80 |
| Contract Law | 50 |
| Misrepresentation | 40 |
16. Subjects
- Conflict of Laws
- Civil Procedure
- Contract Law
- International Law