Hainan Hui Bang v Ma Binxiang: Investment Agreement Dispute under PRC Law

In Hainan Hui Bang Construction Investment Group Ltd v Ma Binxiang, the High Court of Singapore addressed a dispute over S$1,784,350 transferred to the defendant. The plaintiff, Hainan Hui Bang Construction Investment Group Ltd, claimed the funds were for investment under an oral agreement, while the defendant, Ma Binxiang, argued it was remuneration. The court found in favor of the plaintiff, determining the existence of the Investment Agreement and ordering the defendant to return the principal sum, RMB680,000 payment, and investment returns, less HK$2,785,000 already returned.

1. Case Overview

1.1 Court

General Division of the High Court of the Republic of Singapore

1.2 Outcome

Judgment for Plaintiff

1.3 Case Type

Civil

1.4 Judgment Type

Judgment

1.5 Jurisdiction

Singapore

1.6 Description

Singapore court adjudicates a dispute over funds transferred to the defendant for investment, claimed as remuneration. Judgment for Plaintiff.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Ma BinxiangDefendantIndividualCounterclaim DismissedLost
Hainan Hui Bang Construction Investment Group LtdPlaintiffCorporationJudgment for PlaintiffWon

3. Judges

Judge NameTitleDelivered Judgment
Chan Seng OnnSenior Judge of the High CourtYes

4. Counsels

Counsel NameOrganization
Foo Yuet MinDrew & Napier LLC
Tan Yi FanDrew & Napier LLC
Koh Boon Hao SamuelDrew & Napier LLC
Beatrice WeeDrew & Napier LLC
Toh Yunyuan SelinaPremier Law LLC
Lin YuankaiPremier Law LLC
Boey Swee SiangPremier Law LLC

4. Facts

  1. Plaintiff and defendant entered into an oral Investment Agreement in early to mid-2015.
  2. Plaintiff transferred S$1,784,350 to the defendant for investment in equity stocks.
  3. Defendant was to return the principal sum and investment returns to the plaintiff.
  4. Defendant executed a Declaration on 15 March 2018 stating the assets in the accounts belonged to the plaintiff.
  5. Defendant transferred HK$2,785,000 from the plaintiff's CCB Account to Li in August 2018.
  6. Plaintiff paid RMB680,000 to the defendant in September 2018 as reimbursement of income tax.
  7. Defendant failed to return the remainder of the principal sum and investment returns.

5. Formal Citations

  1. Hainan Hui Bang Construction Investment Group Ltd v Ma Binxiang, Suit No 242 of 2019, [2022] SGHC 13

6. Timeline

DateEvent
Defendant employed by Weiye Holdings Limited
Li Keyi joined Hainan Hui Bang Construction Investment Group Ltd as a director
Plaintiff changed its name to Hainan Hui Bang Construction Investment Group Ltd
Plaintiff sought to invest in foreign stocks
Plaintiff transferred funds to defendant
Li received news of defendant's investigation by Weiye
Defendant executed the Declaration
Defendant left Weiye to set up his own investment firm
Defendant indicated he would liquidate shares
Defendant asked plaintiff to reimburse personal income tax
First tranche of RMB680,000 transferred to defendant
Defendant was to fly to Singapore to complete transfer procedures
Defendant asked Li to meet him in the PRC
Li met defendant in the PRC
Meeting between defendant, Li, and Wang
Plaintiff commenced action
Defendant responded with defence and counterclaim
Trial commenced
Trial continued
Trial concluded
Judgment reserved

7. Legal Issues

  1. Breach of Contract
    • Outcome: The court found that the defendant breached the Investment Agreement by failing to return the remainder of the principal sum and the investment returns.
    • Category: Substantive
  2. Governing Law of Contract
    • Outcome: The court determined that PRC law governs the Investment Agreement.
    • Category: Procedural
    • Related Cases:
      • [2008] 2 SLR(R) 491
      • [1996] 2 SLR(R) 589
      • [1954] P 150
  3. Admissibility of Evidence
    • Outcome: The court addressed the admissibility and weight of statutory declarations as evidence.
    • Category: Procedural
    • Related Cases:
      • [2015] SGHC 190
      • [2015] 2 SLR 686
  4. Validity of Contract under PRC Law
    • Outcome: The court found that the Investment Agreement was valid under PRC law.
    • Category: Substantive

8. Remedies Sought

  1. Monetary Damages
  2. Account of Profits

9. Cause of Actions

  • Breach of Contract
  • Breach of Trust

10. Practice Areas

  • Commercial Litigation

11. Industries

  • Construction
  • Investment

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Pacific Recreation Pte Ltd v S Y Technology IncCourt of AppealYes[2008] 2 SLR(R) 491SingaporeCited for the three-stage approach to determining the governing law of a contract.
Las Vegas Hilton Corp v Khoo Teng Hock SunnyCourt of AppealYes[1996] 2 SLR(R) 589SingaporeCited for factors to consider when determining the system of law with which the contract has its closest and most real connection.
The AssunzioneNot AvailableYes[1954] P 150England and WalesCited for the objective test of the reasonable man in determining the system of law with which the contract has its closest and most real connection.
The “Bunga Melati 5”High CourtYes[2015] SGHC 190SingaporeCited for the admission of statements made by persons who refuse to give evidence.
Gimpex Ltd v Unity Holdings Business Ltd and others and another appealCourt of AppealYes[2015] 2 SLR 686SingaporeCited for the court's discretion to exclude evidence that is declared to be admissible.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
Contract Law of the PRCPRC
Administrative Measures for Personal Foreign ExchangePRC
Foreign Exchange Control RegulationsPRC

15. Key Terms and Keywords

15.1 Key Terms

  • Investment Agreement
  • Declaration
  • Contractual Entrustment
  • Principal Sum
  • Investment Returns
  • Zhang Wei's Arrangement
  • Asset Exchange Agreement

15.2 Keywords

  • Investment Agreement
  • Breach of Contract
  • PRC Law
  • Singapore High Court
  • Hainan Hui Bang
  • Ma Binxiang

17. Areas of Law

Area NameRelevance Score
Contract Law95
Evidence70
Commercial Law60
Foreign Law60
Investment Disputes50
Contractual Interpretation40
Oral Agreement40
Civil Procedure40
Procedural Law30
Accounting20
Arbitration20

16. Subjects

  • Contract Law
  • Investment Law
  • Conflict of Laws