MCH International v YG Group: Breach of Contract, Director Duties, Conspiracy in Logistics JV
In 2019, the High Court of Singapore addressed four suits stemming from a failed joint venture between MCH International Pte Ltd, Wong Kok Hwee, and Sing Lee Mee Yoke (collectively, "MCH") and YG Group Pte Ltd and YG Logistics Pte Ltd (collectively, "YG") aimed at acquiring Chinese cold chain logistics firms. YG initiated legal action against MCH for contract breach and loan default. MCH responded with a counterclaim alleging conspiracy and seeking YGG's winding up. Simultaneously, YGG pursued a case against Wong for breaching director duties. The court ruled that Wong had indeed breached his duties, dismissed MCH's claims, and sided with YG regarding the contract breach and loan default. The request to wind up YGG was also denied.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Judgment for YG Group and YG Logistics; claims by MCH International dismissed.
1.3 Case Type
Civil
1.4 Judgment Type
Judgment
1.5 Jurisdiction
Singapore
1.6 Description
Singapore case on contract breach, director duties, conspiracy in a failed logistics JV. Judgment for YG Group; MCH claims dismissed.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| MCH International Pte Ltd | Plaintiff, Defendant | Corporation | Claim Dismissed | Lost | |
| Wong Kok Hwee | Plaintiff, Defendant | Individual | Claim Dismissed | Lost | |
| Sing Lee Mee Yoke | Plaintiff, Defendant | Individual | Claim Dismissed | Lost | |
| YG Group Pte Ltd | Defendant, Plaintiff | Corporation | Judgment for Plaintiff | Won | |
| YG Logistics Pte Ltd | Defendant, Plaintiff | Corporation | Judgment for Plaintiff | Won | |
| Liong Chung Yee | Defendant | Individual | Claim Dismissed | Neutral | |
| Tan Keng Beng | Defendant | Individual | Claim Dismissed | Neutral | |
| Ang Chee Siong | Defendant | Individual | Claim Dismissed | Neutral | |
| Yong Gui Investment Pte Ltd | Other | Corporation | |||
| Lim Chee Kian | Other | Individual | |||
| Cai Yong Cheng | Other | Individual | |||
| Koh Chaik Ming | Other | Individual |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Valerie Thean | Judge | Yes |
4. Counsels
4. Facts
- MCH and YGL formed YGG to acquire cold chain logistics companies.
- Wong, controlling MCH, was to lead the acquisition and management.
- YGL loaned MCH S$4,500,000 for its share of the acquisition.
- Wong signed secret commission and trust agreements with the Vendors.
- Wong delayed exercising the Purchaser's Call Option.
- Wong negotiated secretly with YKL to sell YGIPL shares.
- MCH defaulted on loan interest payments.
5. Formal Citations
- MCH International Pte Ltd and others v YG Group Pte Ltd and others and other suits, Suits No 107 of 2017, 80 of 2017, 337 of 2016 and 104 of 2016, [2019] SGHC 43
6. Timeline
| Date | Event |
|---|---|
| YG Group Pte Ltd incorporated | |
| Shareholders Agreement signed | |
| Subscription Agreement signed | |
| Call Option Agreement signed | |
| Deed of Undertakings signed | |
| Loan Agreement signed | |
| Deed of Personal Guarantee signed | |
| Deed of Share Charge signed | |
| Amendment Agreement signed in respect of the Shareholders Agreement | |
| Amendment Agreement signed in respect of the Subscription Agreement | |
| Amendment Agreement signed in respect of the Call Option Agreement | |
| Amendment Agreement signed in respect of the Loan Agreement | |
| Side Deed signed in respect of the Deed of Personal Guarantee | |
| Sale and Purchase Agreement executed | |
| Lawsuit filed | |
| YGL exercised rights under Deed of Share Charge | |
| Extraordinary general meeting held | |
| Lawsuit filed | |
| Director removed | |
| Director appointed | |
| Purchaser’s Call Option exercised | |
| Managing Director appointment revoked | |
| Lawsuit filed | |
| Lawsuit filed | |
| Loan matured | |
| Trial began | |
| Trial continued | |
| Trial continued | |
| Trial concluded | |
| Judgment reserved |
7. Legal Issues
- Breach of Contract
- Outcome: The court found that Mr. Wong breached the Deed of Undertakings. The court also found that MCH defaulted on the loan agreement.
- Category: Substantive
- Sub-Issues:
- Failure to perform obligations under the Deed of Undertakings
- Failure to repay loan
- Breach of Directors' Duties
- Outcome: The court found that Mr. Wong breached his duties as a director of YGG.
- Category: Substantive
- Sub-Issues:
- Failure to act in the best interest of the company
- Conflict of interest
- Failure to disclose material information
- Conspiracy
- Outcome: The court found that there was no conspiracy on the part of YGL and Mr. Liong.
- Category: Substantive
- Sub-Issues:
- Lawful means conspiracy
- Unlawful means conspiracy
- Interpretation of Contractual Terms
- Outcome: The court interpreted the phrase 'completion of the Acquisition' to mean the point when YGG acquired 40% of YGIPL. The court also interpreted the 'Event of Default' clauses in the Loan Agreement.
- Category: Substantive
- Sub-Issues:
- Interpretation of 'completion of the Acquisition' in the Deed of Undertakings
- Interpretation of 'Event of Default' in the Loan Agreement
- Winding Up
- Outcome: The court dismissed the application to wind up YGG.
- Category: Substantive
- Sub-Issues:
- Just and equitable ground for winding up
8. Remedies Sought
- Monetary Damages
- Winding Up of YGG
- Equitable Compensation
9. Cause of Actions
- Breach of Contract
- Breach of Directors' Duties
- Conspiracy
- Loan Default
10. Practice Areas
- Commercial Litigation
- Corporate Law
11. Industries
- Logistics
- Cold Chain Logistics
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Yap Son On v Ding Pei Zhen | Court of Appeal | Yes | [2017] 1 SLR 219 | Singapore | Cited for contract interpretation principles. |
| Jhaveri Darsan Jitendra and others v Salgaocar Anil Vassudeva and others | High Court | Yes | [2018] SGHC 24 | Singapore | Cited for the definition of 'outsider reverse piercing'. |
| Jones and Another v Lipman and another | English Court | Yes | [1962] 1 WLR 832 | England | Cited for lifting the corporate veil principles. |
| Sun Electric Pte Ltd and another v Menrva Solutions Pte Ltd and another | High Court | Yes | [2018] SGHC 264 | Singapore | Cited for limited liability benefits. |
| Gimpex Ltd v Unity Holdings Business Ltd and others and another appeal | Court of Appeal | Yes | [2015] 2 SLR 686 | Singapore | Cited for tort of conspiracy elements. |
| EFT Holdings, Inc and another v Marinteknik Shipbuilders (S) Pte Ltd and another | High Court | Yes | [2014] 1 SLR 860 | Singapore | Cited for self-interest vs. intention to injure. |
| Singapore Swimming Club v Koh Sin Chong Freddie | Court of Appeal | Yes | [2016] 3 SLR 845 | Singapore | Cited for fiduciary's duty of loyalty. |
| Bristol & West Building Society v Mothew | English Court of Appeal | Yes | [1998] Ch 1 | England | Cited for fiduciary's obligation of loyalty. |
| Ho Kang Peng v Scintronix Corp Ltd (formerly known as TTL Holdings Ltd) | Court of Appeal | Yes | [2014] 3 SLR 329 | Singapore | Cited for duty to act bona fide. |
| Ng Eng Ghee and others v Mamata Kapildev Dave and others (Horizon Partners Pte ltd, intervener) and another appeal | Court of Appeal | Yes | [2009] 3 SLR(R) 109 | Singapore | Cited for no-conflict rule. |
| Goh Chan Peng and others v Beyonics Technology Ltd and another and another appeal | Court of Appeal | Yes | [2017] 2 SLR 592 | Singapore | Cited for no-profit rule. |
| Ho Yew Kong v Sakae Holdings Ltd and other appeals and other matters | Court of Appeal | Yes | [2018] 2 SLR 333 | Singapore | Cited for statutory duty under Companies Act s 157(1). |
| Prima Bulkship Pte Ltd v Lim Say Wan | High Court | Yes | [2017] 3 SLR 839 | Singapore | Cited for standard of care for directors. |
| Quality Assurance Management Asia Pte Ltd v Zhang Qing and others | High Court | Yes | [2013] SGHC 96 | Singapore | Cited for breach of honesty and fidelity. |
| Then Khek Koon and another v Arjun Permanand Samtani and another and other suits | High Court | Yes | [2014] 1 SLR 245 | Singapore | Cited for breach of honesty and fidelity. |
| Beyonics Technology Ltd and another v Goh Chan Peng and others | High Court | Yes | [2016] 4 SLR 472 | Singapore | Cited for breach of honesty and fidelity. |
| Tongbao (Singapore) Shipping Pte Ltd and another v Woon Swee Huat and others | High Court | Yes | [2018] SGHC 165 | Singapore | Cited for breach of honesty and fidelity. |
| Winsta Holding Pte Ltd and another v Sim Poh Ping and others | High Court | Yes | [2018] SGHC 239 | Singapore | Cited for 'but-for' test for fiduciary duties. |
| Maryani Sadeli v Arjun Permanand Samtani and another and other appeals | Court of Appeal | Yes | [2015] 1 SLR 496 | Singapore | Cited for approaches to causation. |
| Allied Maples Group Ltd v Simmons & Simmons | English Court of Appeal | Yes | [1995] 1 WLR 1602 | England | Cited for loss of chance framework. |
| Asia Hotel Investments Ltd v Starwood Asia Pacific Management Pte Ltd and another | Court of Appeal | Yes | [2005] 1 SLR(R) 661 | Singapore | Referenced framework for loss of chance. |
| Sports Connection Pte Ltd v Asia Law Corp and Another | High Court | Yes | [2015] SGHC 213 | Singapore | Cited for causation in loss of chance. |
| JSI Shipping (S) Pte Ltd v Teofoongwonglcloong (a firm) | Court of Appeal | Yes | [2007] 4 SLR(R) 460 | Singapore | Cited for proving action to secure benefit. |
| Asia Hotel Investments Ltd v Starwood Asia Pacific Management Pte Ltd and Another | High Court | Yes | [2007] SGHC 50 | Singapore | Cited for assessment decision for Asia Hotel. |
| Mona Computer Systems (S) Pte Ltd v Singaravelu Murugan | High Court | Yes | [2013] 1 SLR 847 | Singapore | Cited for account of profit remedy. |
| Sabyasachi Mukherjee and another v Pradeepto Kumar Biswas and another suit | High Court | Yes | [2018] SGHC 271 | Singapore | Cited for requirement of proof of loss. |
| AIB Group (UK) plc v Mark Redler & Co Solicitors | United Kingdom Supreme Court | Yes | [2014] 3 WLR 1367 | United Kingdom | Cited for commercial trusts parameters. |
| Target Holdings Ltd v Redferns | House of Lords | Yes | [1996] AC 421 | United Kingdom | Cited for scope and purpose of trust. |
| Sim Yong Kim v Evenstar Investments Pte Ltd | Court of Appeal | Yes | [2006] 3 SLR(R) 827 | Singapore | Cited for winding up on just and equitable grounds. |
| 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 for commercial unfairness in winding up. |
| Johnson v Gore Wood & Co (a firm) | House of Lords | Yes | [2002] 2 AC 1 | United Kingdom | Cited for principle of reflective loss. |
| Townsing Henry George v Jenton Overseas Investment Pte Ltd (in liquidation) | Court of Appeal | Yes | [2007] 2 SLR(R) 597 | Singapore | Cited for reflective loss policy reasons. |
| Chaplin v Hicks | English Court of Appeal | Yes | [1911] 2 KB 786 | England | Cited for impossibility of certainty. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Companies Act (Cap 50, 2006 Rev Ed) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Cold Chain Logistics
- Joint Venture
- Target Companies
- Deed of Undertakings
- Purchaser’s Call Option
- Secret Commission Agreement
- Secret Trust Deeds
- Directors' Duties
- Event of Default
- Share Charge
- Core Management Team
15.2 Keywords
- Breach of Contract
- Directors' Duties
- Conspiracy
- Loan Default
- Winding Up
- Joint Venture
- Acquisition
- Fiduciary Duty
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Breach of Contract | 80 |
| Contract Law | 75 |
| Director's Duties | 70 |
| Fiduciary Duties | 70 |
| Contractual terms | 70 |
| Company Law | 65 |
| Equitable Compensation | 65 |
| Chancery and Equity | 60 |
| Corporate Law | 60 |
| Loss of Chance | 55 |
| Winding Up | 50 |
| Conspiracy | 45 |
| Torts | 40 |
| Arbitration | 30 |
16. Subjects
- Contract Law
- Company Law
- Fiduciary Duty
- Mergers and Acquisitions
- Joint Ventures
- Corporate Governance