MCH International v YG Group: Contractual Interpretation, Breach of Fiduciary Duty, and Damages

MCH International Pte Ltd, Wong Kok Hwee, and Sing Lee Mee Yoke appealed against the High Court's decision in favor of YG Group Pte Ltd, YG Logistics Pte Ltd, Liong Chung Yee, Tan Keng Beng, and Ang Chee Siong, concerning a joint venture project over cold chain logistics companies in China. The Court of Appeal addressed issues of contractual interpretation, breaches of fiduciary duty by Mr. Wong, and the assessment of damages. The court allowed the appeal in part, modifying the award of default interest, and dismissed the remaining appeals.

1. Case Overview

1.1 Court

Court of Appeal of the Republic of Singapore

1.2 Outcome

Appeal allowed in part; cross-appeals dismissed in part.

1.3 Case Type

Civil

1.4 Judgment Type

Judgment

1.5 Jurisdiction

Singapore

1.6 Description

Cross-appeals concerning a joint venture dispute over cold chain logistics companies. The court addressed contractual interpretation, fiduciary duty breaches, and damage assessments.

1.7 Decision Date

14 November 2019

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
MCH International Pte Ltd	Appellant, Plaintiff, Respondent	Corporation	Appeal allowed in part	Partial	Chen Jie’An Jared of Drew & Napier LLC Wendell Wong Hin Pkin of Drew & Napier LLC Tan Si Ying Evelyn of Drew & Napier LLC
Wong Kok Hwee	Appellant, Plaintiff, Respondent, Defendant	Individual	Appeal dismissed	Lost	Chen Jie’An Jared of Drew & Napier LLC Wendell Wong Hin Pkin of Drew & Napier LLC Tan Si Ying Evelyn of Drew & Napier LLC
Sing Lee Mee Yoke	Appellant, Plaintiff, Respondent	Individual	Appeal dismissed	Lost	Chen Jie’An Jared of Drew & Napier LLC Wendell Wong Hin Pkin of Drew & Napier LLC Tan Si Ying Evelyn of Drew & Napier LLC
YG Group Pte Ltd	Respondent, Defendant, Appellant, Plaintiff	Corporation	Appeal dismissed	Lost	Navin Joseph Lobo of Bird & Bird ATMD LLP Vani Nair of Bird & Bird ATMD LLP Shaun Oon Kim San of Bird & Bird ATMD LLP Sonia Vijendran of Bird & Bird ATMD LLP
YG Logistics Pte Ltd	Respondent, Defendant, Appellant, Plaintiff	Corporation	Appeal allowed in part	Partial	Anthony Soh Leong Kiat of Taylor Vinters Via LLC Jasmine Toh of Taylor Vinters Via LLC
Liong Chung Yee	Respondent, Defendant	Individual	Neutral	Neutral	Anthony Soh Leong Kiat of Taylor Vinters Via LLC Jasmine Toh of Taylor Vinters Via LLC
Tan Keng Beng	Respondent, Defendant	Individual	Neutral	Neutral	Anthony Soh Leong Kiat of Taylor Vinters Via LLC Jasmine Toh of Taylor Vinters Via LLC
Ang Chee Siong	Respondent, Defendant	Individual	Neutral	Neutral	Anthony Soh Leong Kiat of Taylor Vinters Via LLC Jasmine Toh of Taylor Vinters Via LLC

3. Judges

Judge Name	Title	Delivered Judgment
Andrew Phang Boon Leong	Judge of Appeal	Yes
Judith Prakash	Judge of Appeal	No
Woo Bih Li	Judge	No

4. Counsels

Counsel Name	Organization
Chen Jie’An Jared	Drew & Napier LLC
Wendell Wong Hin Pkin	Drew & Napier LLC
Tan Si Ying Evelyn	Drew & Napier LLC
Navin Joseph Lobo	Bird & Bird ATMD LLP
Vani Nair	Bird & Bird ATMD LLP
Shaun Oon Kim San	Bird & Bird ATMD LLP
Sonia Vijendran	Bird & Bird ATMD LLP
Anthony Soh Leong Kiat	Taylor Vinters Via LLC
Jasmine Toh	Taylor Vinters Via LLC

4. Facts

Mr. Liong and Mr. H Wong entered into a joint venture project over four cold chain logistics companies in China.
YG Group Pte Ltd (YGG) was incorporated for the purposes of the parties’ joint venture.
The shareholding of YGG was divided between YG Logistics Pte Ltd (YGL) and MCH International Pte Ltd (MCH).
Mr. H Wong undertook to procure the Core Management Team to be hired by MCH and seconded to YGG for three years.
YGL loaned MCH S$4.5m under the Amended Loan Agreement.
Mr. H Wong signed a document to obtain a commission of US$300,000 for facilitating YGG’s purchase.
Mr. H Wong failed to disclose the YKL Offers to Mr. Liong.

5. Formal Citations

MCH International Pte Ltd and others v YG Group Pte Ltd and others and other appeals, , [2019] SGCA 68

6. Timeline

Date	Event
2015-01-01	Parties envisaged acquiring the Target Companies for US$11m.
2015-01-29	Parties entered into several agreements.
2015-08-01	Agreements amended, save for a Deed of Undertakings.
2015-08-19	YGG and the Vendors executed the Sale and Purchase Agreement.
2015-08-19	Mr. H Wong signed a document to obtain a commission of US$300,000.
2015-08-28	Mr. H Wong received US$300,000.
2016-02-03	YGL launched Suit No 104 of 2016 against Mr H Wong and MCH.
2016-04-06	YGL commenced Suit No 337 of 2016 against MCH.
2016-05-01	Mr H Wong met with YKL.
2016-07-14	YKL made a second offer to purchase the Target Companies for US$15.5m.
2016-08-18	YGG exercised the Purchaser’s Call Option.
2017-01-31	YGG filed Suit No 80 of 2017 alleging breach of fiduciary duties by Mr H Wong.
2017-02-07	MCH, Mr H Wong and Mrs Wong commenced Suit No 107 of 2017.
2019-10-29	Judgment reserved.
2019-11-15	Judgment delivered.

7. Legal Issues

Contractual Interpretation
- Outcome: The court addressed the interpretation of the Deed of Undertakings (DOU) and the Amended Loan Agreement, focusing on the parties' objective intentions and the commercial purpose of the agreements.
- Category: Substantive
- Sub-Issues:
  - Interpretation of contractual terms
  - Use of subsequent conduct in interpretation
  - Commercial purpose of contract
- Related Cases:
  - [2016] 2 SLR 1083
  - [2015] 3 SLR 885
  - [2016] 1 SLR 1069
  - [2008] 3 SLR(R) 1029
  - [2019] 1 SLR 696
  - [1999] STC 301
  - [2012] 1 SLR 447
  - [2015] 5 SLR 1187
  - [1997] AC 749
  - [2017] 1 SLR 219
Breach of Fiduciary Duty
- Outcome: The court found that Mr. H Wong had breached his fiduciary duties by failing to disclose the YKL Offers and by obtaining a secret commission.
- Category: Substantive
- Sub-Issues:
  - Failure to act in the company's best interests
  - Non-disclosure of material information
Damages
- Outcome: The court addressed the assessment of damages for breach of fiduciary duty and the calculation of interest on overdue amounts under the Amended Loan Agreement.
- Category: Procedural
- Sub-Issues:
  - Assessment of equitable compensation
  - Loss of a chance
  - Interest on overdue amounts
- Related Cases:
  - [2007] SGHC 50
Conspiracy
- Outcome: The court found that the claim for conspiracy was not made out, as there was no evidence of an intention to injure MCH, Mr. H Wong, or Mrs. Wong.
- Category: Substantive
- Sub-Issues:
  - Lawful means conspiracy
  - Intention to injure
Winding Up
- Outcome: The court found that there was no basis for a winding-up order, as there was no unfairness on the part of Mr. Liong and YGL.
- Category: Procedural
- Sub-Issues:
  - Just and equitable grounds
  - Unfairness
- Related Cases:
  - [2006] 3 SLR(R) 827
  - [2018] 1 SLR 763

8. Remedies Sought

Monetary Damages
Account of Profits
Winding Up Order

9. Cause of Actions

Breach of Contract
Breach of Fiduciary Duty
Conspiracy

10. Practice Areas

Commercial Litigation

11. Industries

Logistics

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
Hewlett-Packard Singapore (Sales) Pte Ltd v Chin Shu Hwa Corinna	Court of Appeal	Yes	[2016] 2 SLR 1083	Singapore	Cited regarding the admissibility of subsequent conduct in contractual interpretation.
HSBC Trustee (Singapore) Ltd v Lucky Realty Co Pte Ltd	High Court	Yes	[2015] 3 SLR 885	Singapore	Cited regarding the use of extrinsic evidence in the form of subsequent conduct.
Lucky Realty Co Pte Ltd v HSBC Trustee (Singapore) Ltd	Court of Appeal	Yes	[2016] 1 SLR 1069	Singapore	Cited as reversing the decision in HSBC Trustee (Singapore) Ltd v Lucky Realty Co Pte Ltd without discussion on the point of extrinsic evidence.
Zurich Insurance (Singapore) Pte Ltd v B-Gold Interior Design & Construction Pte Ltd	Court of Appeal	Yes	[2008] 3 SLR(R) 1029	Singapore	Cited for the criteria to bear in mind in the event that subsequent conduct was to be admitted.
Simpson Marine (SEA) Pte Ltd v Jiacipto Jiaravanon	Court of Appeal	Yes	[2019] 1 SLR 696	Singapore	Cited regarding the court's view on the admissibility of subsequent conduct for contractual interpretation.
Bromarin AB v IMD Investments Ltd	English Court of Appeal	Yes	[1999] STC 301	England and Wales	Cited regarding problems of construction in relation to commercial contracts.
Ang Tin Yong v Ang Boon Chye and another	Court of Appeal	Yes	[2012] 1 SLR 447	Singapore	Cited regarding the commercial purpose of the transaction or provision.
Y.E.S. F&B Group Pte Ltd v Soup Restaurant Singapore Pte Ltd (formerly known as Soup Restaurant (Causeway Point) Pte Ltd)	Court of Appeal	Yes	[2015] 5 SLR 1187	Singapore	Cited regarding the commercial purpose of the transaction or provision.
Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd	House of Lords	Yes	[1997] AC 749	United Kingdom	Cited regarding the meaning of the language of a commercial contract.
Yap Son On v Ding Pei Zhen	Court of Appeal	Yes	[2017] 1 SLR 219	Singapore	Cited regarding the principles surrounding contractual interpretation.
Susilawati v American Express Bank Ltd	Court of Appeal	Yes	[2009] 2 SLR(R) 737	Singapore	Cited regarding the principles surrounding new points on appeal.
SGB Starkstrom Pte Ltd v Commissioner for Labour	Court of Appeal	Yes	[2016] 3 SLR 598	Singapore	Cited regarding adequate notice to the other party as to the new point being argued on appeal.
Panwah Steel Pte Ltd v Koh Brothers Building & Civil Engineering Contractor (Pte) Ltd	High Court	Yes	[2006] 4 SLR(R) 571	Singapore	Cited regarding whether to allow a new point on appeal.
Asia Hotel Investments Ltd v Starwood Asia Pacific Management Pte Ltd and another	High Court	Yes	[2007] SGHC 50	Singapore	Cited regarding the High Court applying a nuanced approach to cases involving loss of a chance in a commercial context.
Sim Yong Kim v Evenstar Investments Pte Ltd	Court of Appeal	Yes	[2006] 3 SLR(R) 827	Singapore	Cited regarding the touchstone of unfairness in winding up a company.
Perennial (Capitol) Pte Ltd and another v Capitol Investment Holdings Pte Ltd and other appeals	Court of Appeal	Yes	[2018] 1 SLR 763	Singapore	Cited regarding the presence of a buy-out mechanism in the Amended August Agreements as a factor militating against the granting of a winding-up order.

13. Applicable Rules

Rule Name
Rules of Court (Cap 322, R 5, 2006 Rev Ed)

14. Applicable Statutes

Statute Name	Jurisdiction
Civil Law Act (Cap 43, 1999 Rev Ed)	Singapore
Civil Law Act (Cap 43, 2006 Rev Ed)	Singapore
Companies Act (Cap 50, 1994 Rev Ed)	Singapore
Companies Act (Cap 50, 2006 Rev Ed)	Singapore

15. Key Terms and Keywords

15.1 Key Terms

Joint Venture
Cold Chain Logistics
Deed of Undertakings
Purchaser’s Call Option
Amended Loan Agreement
Events of Default
Core Management Team
Sale and Purchase Agreement
Target Companies
Default Interest

15.2 Keywords

Contractual Interpretation
Breach of Fiduciary Duty
Damages
Joint Venture
Cold Chain Logistics

17. Areas of Law

Area Name	Relevance Score
Contract Law	90
Deeds of Undertaking	70
Commercial Disputes	70
Civil Procedure	60
Fiduciary Duties	60
Chancery and Equity	50
Damages Assessment	50
Company Law	50
Interest	40
Conspiracy by Unlawful Means	40

16. Subjects

Contract Law
Commercial Law
Civil Procedure
Equity