Power Solar System Co Ltd v Suntech Power Investment Pte Ltd: Loan Recovery & Share Consideration Dispute
Power Solar System Co Ltd (in liquidation) sued Suntech Power Investment Pte Ltd in the High Court of Singapore, claiming US$197,501,785 for unpaid loans and share consideration. The plaintiff sought to recover US$1,513,000, US$27,000,015, and US$123,428,770 in loans, plus US$55,560,000 for shares in Shanghai Suntech. Mavis Chionh JC ruled in favor of the plaintiff, awarding the full amount claimed with interest.
1. Case Overview
1.1 Court
High Court of the Republic of Singapore1.2 Outcome
Judgment for Plaintiff
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Power Solar System Co Ltd sues Suntech Power Investment Pte Ltd for US$197,501,785 over unpaid loans and share consideration. Judgment for Plaintiff.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Power Solar System Co Ltd (in liquidation) | Plaintiff | Corporation | Judgment for Plaintiff | Won | Ashok Kumar, Gregory Leong, Cephas Yee |
| Suntech Power Investment Pte Ltd | Defendant | Corporation | Judgment for Plaintiff | Lost | Danny Ong, Yam Wern-Jhien, Vince Gui, Danitza Hon |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Mavis Chionh | Judicial Commissioner | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Ashok Kumar | BlackOak LLC |
| Gregory Leong | BlackOak LLC |
| Cephas Yee | BlackOak LLC |
| Danny Ong | Rajah & Tann Singapore LLP |
| Yam Wern-Jhien | Rajah & Tann Singapore LLP |
| Vince Gui | Rajah & Tann Singapore LLP |
| Danitza Hon | Rajah & Tann Singapore LLP |
4. Facts
- Plaintiff claimed US$197,501,785 from Defendant, comprising loans and unpaid share consideration.
- Plaintiff transferred US$1,513,000 to Defendant on 24 September 2008 for an Australian mining project.
- Plaintiff transferred US$27,000,015 to Defendant on 10 November 2010 for a shareholder loan to Rietech.
- Plaintiff transferred US$103,428,770 and US$20,000,000 to Defendant in December 2010 for share purchases.
- Plaintiff transferred its shares in Shanghai Suntech to Defendant under an Equity Transfer Agreement.
- Defendant did not pay the US$55,560,000 consideration for the Shanghai Suntech shares.
- Defendant's audited financial statements recognized amounts due to Plaintiff.
5. Formal Citations
- Power Solar System Co Ltd (in liquidation) v Suntech Power Investment Pte Ltd, Suit No 59 of 2014, [2018] SGHC 233
6. Timeline
| Date | Event |
|---|---|
| Defendant incorporated | |
| Equity Transfer Agreement signed | |
| Plaintiff instructs ABN Singapore for fund transfer of US$1,513,000 | |
| Plaintiff transfers US$1,513,000 to Defendant | |
| Defendant transfers US$1.5m to Koolgarra Mining Pty Ltd | |
| Defendant transfers AUD13,174.82 to M/s Colin Biggers & Paisley | |
| Plaintiff transfers US$27,000,015 to Defendant | |
| Defendant transfers US$27,000,015 to Rietech Investments Ltd | |
| Defendant's board approves share purchases in Best Treasures and Invest Wise | |
| Plaintiff transfers US$103,428,770 to Defendant | |
| Defendant transfers US$103,428,770 to Golden Potential Limited | |
| Plaintiff transfers US$20,000,000 to Defendant | |
| Defendant transfers US$20,000,000 to Golden Potential Limited | |
| Wuxi Suntech placed in bankruptcy reorganisation | |
| Plaintiff's shares in Defendant and Suntech Japan transferred to Wuxi Suntech | |
| Jiangsu Shunfeng agrees to purchase Wuxi Suntech | |
| SPH placed into provisional liquidation | |
| Plaintiff placed into liquidation | |
| WIPC approves Wuxi Suntech reorganisation plan | |
| Liquidators issue letter of demand to Defendant | |
| Fast Fame Global Limited incorporated | |
| Writ of summons filed | |
| Wuxi Suntech transfers equity interest in Defendant to Fast Fame | |
| Defendant divests itself of subsidiaries | |
| Shareholders approve Wuxi Suntech reorganisation plan | |
| Plaintiff successfully applies for worldwide Mareva injunction against Defendant | |
| Defendant's first application to strike out Plaintiff's claim | |
| SPH placed in official liquidation | |
| Defendant files second application to strike out Plaintiff's claim | |
| Trial begins | |
| Judgment given for Plaintiff | |
| Grounds of Decision issued |
7. Legal Issues
- Loan Recovery
- Outcome: The court found that the Plaintiff had proven the existence of the loans and the Defendant's obligation to repay them.
- Category: Substantive
- Related Cases:
- [1968] 1 WLR 1083
- Share Consideration
- Outcome: The court found that the Plaintiff had made out its claim for the unpaid share consideration.
- Category: Substantive
- Limitation Period
- Outcome: The court found that the Plaintiff's claim was not time-barred under PRC law.
- Category: Procedural
- Contractual Interpretation
- Outcome: The court interpreted the Equity Transfer Agreement to allow for alternative payment methods.
- Category: Substantive
- Adverse Inference
- Outcome: The court drew an adverse inference against the Defendant for failing to call certain witnesses.
- Category: Procedural
8. Remedies Sought
- Monetary Damages
9. Cause of Actions
- Breach of Contract
- Debt Recovery
10. Practice Areas
- Commercial Litigation
- Insolvency Law
11. Industries
- Energy
- Finance
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Tribune Investment Trust Inc v Soosan Trading Co Ltd | Court of Appeal | Yes | [2000] 2 SLR(R) 407 | Singapore | Cited for the principle that whether an adverse inference should be drawn depends on the evidence and circumstances of the case. |
| Cheong Ghim Fah and another v Murugian s/o Rangasamy | High Court | Yes | [2004] 1 SLR(R) 628 | Singapore | Cited for the principle that Section 116(g) of the Evidence Act encapsulates a common sense rule regarding adverse inferences. |
| Wisniewski v Central Manchester Health Authority | English Court of Appeal | Yes | [1985] 5 PIQR P324 | England and Wales | Cited for the principle that drawing an adverse inference can strengthen the evidence of the other party. |
| Chapman v Copeland | Unknown | Yes | 110 SJ 569 | England and Wales | Cited for the principle that a defendant's decision not to give evidence can warrant an adverse inference. |
| ARS v ART & another | High Court | Yes | [2015] SGHC 78 | Singapore | Cited for the principle that an adverse inference can be drawn when a party fails to call key witnesses. |
| Fustar Chemicals Ltd (Hong Kong) v Liquidator of Fustar Chemicals Pte Ltd | Court of Appeal | Yes | [2009] 4 SLR(R) 458 | Singapore | Cited for the principle that a liquidator is not bound to take extraordinary steps and incur extraordinary costs to go behind documents unless there is a reasonable basis to be suspicious. |
| City Hardware Pte Ltd v Kenrich Electronics Pte Ltd | High Court | Yes | [2005] 1 SLR(R) 733 | Singapore | Cited for the definition of a loan transaction. |
| Donald McArthy Trading Pte Ltd v Pankaj s/o Dhirajlal | Court of Appeal | Yes | [2007] 2 SLR(R) 321 | Singapore | Endorsed the analysis in City Hardware Pte Ltd v Kenrich Electronics Pte Ltd on the definition of a loan transaction. |
| Britestone Pte Ltd v Smith & Associates Far East, Ltd | Court of Appeal | Yes | [2007] 4 SLR(R) 855 | Singapore | Cited for the definitions of legal and evidential burdens of proof. |
| SCT Technologies Pte Ltd v Western Copper Co Ltd | Court of Appeal | Yes | [2016] 1 SLR 1471 | Singapore | Cited for the definitions of legal and evidential burdens of proof and the principle that pleadings determine the incidence of the legal burden of proof. |
| Young v Queensland Trustees Limited | High Court of Australia | Yes | [1956] 99 CLR 560 | Australia | Cited for the principle that the defendant must allege and prove payment by way of discharge as a defence to an action for indebtedness. |
| Anti-Corrosion Pte Ltd v Berger Paints Singapore Pte Ltd & another appeal | Court of Appeal | Yes | [2012] 1 SLR 427 | Singapore | Cited for the explanation of how a claimant in a trial goes about discharging the legal and evidential burdens of proof. |
| Seldon v Davidson | English Court of Appeal | Yes | [1968] 1 WLR 1083 | England and Wales | Central case. Cited for the principle that proof of payment imports a prima facie obligation to repay in the absence of circumstances from which presumption of advancement can or may arise. |
| Cary and others, executors of Greatorex v Gerrish | Unknown | Yes | (1801) 4 Esp. 9 | England and Wales | Distinguished from Seldon v Davidson. Cited as an example where the presumption of repayment did not apply. |
| Lau Siew Kim v Yeo Guan Chye Terence and another | High Court | Yes | [2008] 2 SLR(R) 108 | Singapore | Cited for the principle that presumptions are evidential instruments that operate where there is no direct evidence. |
| Zheng and Yu and anor v Qiu and Yu | New Zealand High Court | Yes | [2007] NZHC 1827 | New Zealand | Cited for the principle that the Court of Appeal in Seldon was speaking about a factual presumption that it was prepared to apply in the particular circumstances of that case. |
| Re a company, ex parte Shooter; Re a company, ex parte Broadhurst and others (No 2) | Unknown | Yes | [1991] BCLC 267 | England and Wales | Cited as an example of an application of Seldon in a case involving commercial transactions. |
| Barring Horticulture New Zealand Ltd (in liq) v Barring & Anor | New Zealand High Court | Yes | [2016] NZHC 304 | New Zealand | Cited as another example of an application of Seldon in a case involving commercial transactions. |
| Big Island Construction (HK) Ltd v Wu Yi Development Co Ltd & anor | Hong Kong Court of Final Appeal | Yes | [2015] 6 HKC 527 | Hong Kong | Discussed in relation to the proposition that the payment of money prima facie imported an obligation to repay. |
| Patel v Mirza | English Court of Appeal | Yes | [2014] EWCA Civ 1046 | England and Wales | Cited as a case where the English Court of Appeal stated that Seldon was not a “trust case” but that it was “none the less instructive”. |
| Chapman v Jaume | English Court of Appeal | Yes | [2012] EWCA Civ 476 | England and Wales | Cited as a recent case in which Seldon was applied. |
| Wee Kah Lee v Silverdale Investment Pte Ltd | High Court | Yes | [2000] 2 SLR(R) 838 | Singapore | Cited as a Singapore case in which Seldon was referred to. |
| Lai Meng v Harjantho Johnny | Court of Appeal | Yes | [1999] 2 SLR(R) 738 | Singapore | Cited as a Singapore case in which Seldon was distinguished on the facts. |
| Heydon v The Perpetual Executors, Trustees and Agency Co (W.A.) Ltd | High Court of Australia | Yes | [1930] 45 CLR 111 | Australia | Discussed in relation to the legal burden of proof. |
| Chandradhar v Gauhati Bank | Supreme Court of India | Yes | 1967 AIR 1058 | India | Cited for the principle that mere entries in books of accounts are not by themselves sufficient evidence to charge any person with liability. |
| Re Ice-Mack Pte Ltd (in liquidation) | High Court | Yes | [1989] 2 SLR(R) 283 | Singapore | Cited for the principle that it is necessary to put the applicant to strict proof of its assertions given the close relationship between two associate companies. |
| Popular Industries Ltd v Eastern Garment Manufacturing Sdn Bhd | High Court | Yes | [1989] 3 MLJ 360 | Malaysia | Cited for the principle that mere entries in books of account are not by themselves sufficient to charge any person with liability. |
| SIC College of Business and Technology Pte Ltd v Yeo Poh Siah and others | Court of Appeal | Yes | [2016] 2 SLR 118 | Singapore | Cited for the principle that the obvious danger of relying on account book entries is even greater if the claimant or one of his affiliates was the one who was making the records. |
| Multi-Pak Singapore Pte Ltd (in receivership) v Intraco Ltd and others | Court of Appeal | Yes | [1992] 2 SLR(R) 382 | Singapore | Cited for the principle that facts material to a party’s claim must be pleaded. |
| Ong Seow Pheng and others v Lotus Development Corp and another | Court of Appeal | Yes | [1997] 2 SLR(R) 113 | Singapore | Cited for the principle that the court cannot make a finding based on facts which have not been pleaded. |
| Kaufman, Gregory Laurence and others v Datacraft Asia Ltd and another | High Court | Yes | [2005] SGHC 174 | Singapore | Discussed in relation to the independence of expert witnesses. |
| Pacific Recreation Pte Ltd v S Y Technology Inc and another appeal | Court of Appeal | Yes | [2008] 2 SLR(R) 491 | Singapore | Cited for the principle that an expert has to put forward not only his view of the effect of the foreign statute in question, but also the foreign rules of construction which he applied in reaching his views. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Evidence Act (Cap 97, 1997 Rev Ed) | Singapore |
| General Principles of the Civil Law of the PRC | China |
| PRC Contract Law | China |
15. Key Terms and Keywords
15.1 Key Terms
- Loan
- Share Consideration
- Equity Transfer Agreement
- Liquidation
- Mareva Injunction
- Wuxi Restructuring
- Reporting Packages
- Audited Financial Statements
- Intercompany Claims Transfer Agreements
- Net Asset Valuation
15.2 Keywords
- Loan Recovery
- Share Consideration
- Contract Dispute
- Singapore High Court
- Civil Litigation
16. Subjects
- Contract Law
- Financial Law
- Civil Procedure
- Insolvency Law
17. Areas of Law
- Credit and security
- Money and moneylenders
- Contract Law
- Evidence Law
- Loans of money