Darcet Pte Ltd v Schweizer Energy Production: Misrepresentation & Oral Contract Dispute

In Darcet Pte Ltd v Schweizer Energy Production Singapore Pte Ltd, the Singapore High Court dismissed the plaintiff's claim against the defendants for fraudulent or negligent misrepresentation, breach of an oral contract, and unjust enrichment. The plaintiff, Darcet Pte Ltd, alleged that the defendants, Schweizer Energy Production Singapore Pte Ltd, Maren Celine Christine Schweizer, and Pang Yoke Lee, induced them into an oral agreement and a Share Subscription Agreement (SSA) based on false representations. The court, presided over by Mavis Chionh JC, found that no oral contract existed and that the plaintiff failed to prove the alleged misrepresentations or their reliance on them. The court also rejected the claims of repudiatory breach and unjust enrichment. The judgment was delivered on 30 January 2020.

1. Case Overview

1.1 Court

High Court of the Republic of Singapore

1.2 Outcome

Plaintiff's action dismissed; the court found that the plaintiff failed to prove its claims.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Singapore High Court case involving Darcet Pte Ltd and Schweizer Energy Production concerning alleged misrepresentation and a disputed oral contract.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Darcet Pte LtdPlaintiffCorporationClaim DismissedLost
Schweizer Energy Production Singapore Pte LtdDefendantCorporationJudgment for DefendantWon
Maren Celine Christine SchweizerDefendantIndividualJudgment for DefendantWon
Pang Yoke LeeDefendantIndividualJudgment for DefendantWon

3. Judges

Judge NameTitleDelivered Judgment
Mavis ChionhJudicial CommissionerYes

4. Counsels

Counsel NameOrganization
Hu HuiminCNPLaw LLP
See Tow Soo LingCNPLaw LLP
Lim Ming YiI.N.C. Law LLC
Yeo Shan HuiI.N.C. Law LLC
Jaryl Lim Zhi WeiI.N.C. Law LLC

4. Facts

  1. Plaintiff claimed the 3rd defendant made representations to induce the plaintiff to enter into an oral agreement with the 1st defendant.
  2. Plaintiff alleged it agreed to vary the Oral Contract by entering into a Share Subscription Agreement (SSA) based on further representations.
  3. Plaintiff claimed the 1st defendant refused to proceed with the arrangements agreed under the Oral Contract.
  4. Defendants denied making the representations and denied any oral contract was entered into.
  5. Soh signed the Schmid Contract on behalf of Darcet Jiangyin.
  6. Plaintiff paid US$1.5 million to Schmid, but no equipment was delivered because the payment fell short of the required down payment.
  7. Plaintiff paid a total of US$2 million towards the SSA, and the 1st defendant made loans totaling US$1.25 million to the plaintiff.

5. Formal Citations

  1. Darcet Pte Ltd v Schweizer Energy Production Singapore Pte Ltd and others, Suit No 253 of 2017, [2020] SGHC 22

6. Timeline

DateEvent
Schweizer Electronic AG set up a project group to study the feasibility of venturing into the solar energy business.
Investment Agreement signed between NETDA-AC and Schweizer Energy Pte Ltd.
Investment Agreement novated from SEPL to the 1st defendant.
Schweizer Energy Nantong Co Ltd (PNT) contracted with the 1st defendant to supply a production line.
Soh Boon Wah first met the 3rd defendant, Pang Yoke Lee.
Soh emailed the 3rd defendant a set of PowerPoint slides setting out his proposal for collaboration.
Plaintiff claimed the Oral Contract was entered into.
Darcet Pte Ltd incorporated in Singapore.
Discussions between parties regarding Soh taking up shares in the 1st defendant.
Soh signed an agreement with Schmid for the purchase of equipment.
Soh met with the 2nd and 3rd defendants, during which the 2nd defendant allegedly expressed concern that the 1st defendant’s position was “not secure” under the Oral Contract.
Share Subscription Agreement (SSA) signed.
US$250,000 paid as first tranche under SSA.
US$700,000 paid as second tranche under SSA.
The 1st defendant made a loan of US$700,000 to the plaintiff.
Plaintiff paid US$1.5 million to Schmid.
US$500,000 paid as third tranche under SSA.
Parties had discussions on how the work for Jiangyin’s subsequent operations should be divided.
The 1st defendant made a loan of US$550,000 to the plaintiff.
US$550,000 paid as fourth tranche under SSA.
Parties had discussions on how the various costs would be paid.
Parties had discussions on management of the various certificates, licences, seals.
Soh sent the 2nd and 3rd defendants an email attributing the delay inter alia to the fact that his company’s funds “are from China and these investment funds have to go through the company under the China company registration requirements”.
Greger presented a proposal that Schweizer Pte Ltd reduce its shareholding in the 1st defendant so as to bring a new investor into the company.
Soh allegedly approached the 3rd defendant to ask that the Oral Contract be put down in writing.
The last of the Four Licences was granted.
It was acknowledged that a 35MW production line would not be financially viable or attractive enough.
Soh signed the 1st Amendment Agreement to the Schmid Contract.
Action item list forwarded by Greger to various persons including Soh and the 3rd defendant.
Darcet Jiangyin was finally registered.
Meeting between the parties where it was agreed that they should acquire higher-capacity plasma tools.
Soh signed a 2nd Amendment Agreement to the Schmid Contract.
Soh sent the 3rd defendant an email regarding issues with the bank.
Soh accompanied the 3rd defendant to a meeting with representatives of the Nantong government.
Soh was admitted to hospital for a head injury.
The 3rd defendant emailed Soh stating that they had heard he was unable to travel to Singapore to sign the documents necessary for the funds transfer.
Soh emailed the 3rd defendant to say that he planned to come back to Singapore “by end of the week to do the transaction”.
The 3rd defendant wrote back to Soh to alert him to “the mood now in both Schweizer and Schmid”.
Soh sent the 3rd defendant an email stating that the plaintiff had invested in 40% of the 1st defendant’s shares “with the understanding that there is a value of USD 13 Millions incentive”.
Soh sent an email to the 2nd defendant assuring her that he was “presently preparing the USD 3 million transaction for PSG [the 1st defendant] share allotment”.
The 2nd defendant responded to Soh’s email.
Soh was notified via an email from the 2nd defendant that the 3rd defendant would “not be in charge anymore”.
Soh had a meeting with the 2nd defendant.
Soh sent the 2nd defendant an email stating that he felt it was “an appropriate time for both sides to nail down a JV agreement with the appropriate terms and condition”.
Soh signed a shareholders’ resolution for a capital reduction of US$1.25 million of the plaintiff’s shares in the 1st defendant.
Soh sent the 2nd defendant an email in which he claimed that the plaintiff had considered itself “as the role of financer” from the outset.
The 2nd defendant told Soh that the 1st defendant “would like [the plaintiff] to consider taking over the Jiangyin project completely”.
Soh replied inter alia that the plaintiff was “not familiar with solar industry”.
Soh further asserted that it would be too much of a deviation from “the original intent” for the plaintiff to take over the role of investor for the production line.
Schweizer Electronic AG announced its withdrawal from the solar energy business.
Soh signed a shareholder’s resolution to approve a capital reduction of US$3 million in the value of Schmid’s shareholding in the 1st defendant.
The 2nd defendant informed Soh that Schweizer Pte Ltd had decided to withdraw from the energy business and would be terminating its production line contract with Schmid.
Soh sent the 2nd defendant an email stating that the plaintiff was not agreeable to Schweizer Pte Ltd’s decision.
Defence was filed.
Trial began.
Trial continued.
Trial continued.
Trial continued.
Trial continued.
Trial continued.
Trial continued.
Trial continued.
Trial continued.
Judgment delivered.

7. Legal Issues

  1. Misrepresentation
    • Outcome: The court found that the plaintiff failed to prove that the representations were false or that they induced the plaintiff to enter into the SSA.
    • Category: Substantive
  2. Breach of Oral Contract
    • Outcome: The court found that no oral contract existed between the plaintiff and the 1st defendant.
    • Category: Substantive
  3. Unjust Enrichment
    • Outcome: The court found no factual basis for the plaintiff’s claim in total failure of consideration/basis.
    • Category: Substantive

8. Remedies Sought

  1. Return of monies paid under the Share Subscription Agreement
  2. Return of monies paid to Schmid under a contract
  3. Damages related to the acquisition and maintenance of the Jiangyin Factory

9. Cause of Actions

  • Fraudulent Misrepresentation
  • Negligent Misrepresentation
  • Breach of Contract
  • Unjust Enrichment

10. Practice Areas

  • Commercial Litigation

11. Industries

  • Solar Energy

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
No cited cases

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
Misrepresentation ActSingapore

15. Key Terms and Keywords

15.1 Key Terms

  • Oral Contract
  • Share Subscription Agreement
  • Jiangyin Factory
  • Nantong Incentives
  • Capital Injection
  • Schmid Contract
  • Repudiatory Breach
  • Failure of Consideration

15.2 Keywords

  • contract
  • misrepresentation
  • solar energy
  • share subscription agreement
  • fraud
  • negligence
  • singapore
  • high court

17. Areas of Law

Area NameRelevance Score
Misrepresentation85
Breach of Contract75
Contract Law60

16. Subjects

  • Contract Dispute
  • Misrepresentation
  • Commercial Litigation