Eng Teng Cheng v Government of the City of Buenos Aires: Corporate Veil Lifting and Choice of Law
In Nicholas Eng Teng Cheng v Government of the City of Buenos Aires, the Singapore Court of Appeal addressed the issue of which law, Argentine or Singapore law, governs the lifting of the corporate veil of HN Singapore Pte Ltd, a Singapore-incorporated company, to hold its controller, Nicholas Eng Teng Cheng, personally liable for the company's contractual debts. The respondent, Government of the City of Buenos Aires, brought a breach of contract claim against HN Singapore and Nicholas Eng Teng Cheng. The High Court found HN Singapore and Nicholas Eng Teng Cheng jointly and severally liable. The Court of Appeal allowed the appeal, holding that Singapore law, as the law of incorporation, should apply, and under Singapore law, there was no legal basis to lift the corporate veil of HN Singapore.
1. Case Overview
1.1 Court
Court of Appeal of the Republic of Singapore1.2 Outcome
Appeal Allowed
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Singapore Court of Appeal addresses whether Argentine or Singapore law governs lifting the corporate veil of a Singapore-incorporated company. Appeal allowed.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Nicholas Eng Teng Cheng | Appellant | Individual | Appeal Allowed | Won | |
| Government of the City of Buenos Aires | Respondent | Government Agency | Appeal Dismissed | Lost |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Sundaresh Menon | Chief Justice | No |
| Tay Yong Kwang | Justice of the Court of Appeal | Yes |
| Steven Chong | Justice of the Court of Appeal | No |
4. Counsels
4. Facts
- Appellant was the sole director and shareholder of HN Singapore.
- HN Singapore was incorporated in Singapore in 2016.
- Respondent entered into an agreement with HN Singapore to supply COVID-19 test kits.
- The governing law of the Varied SPA was Argentine law.
- HN Singapore failed to deliver any test kit by the agreed delivery date.
- HN Singapore did not refund the balance sum of US$237,619.35.
- HN Singapore had a paid-up capital of S$1.
5. Formal Citations
- Nicholas Eng Teng Cheng v Government of the City of Buenos Aires, Civil Appeal No 44 of 2023, [2024] SGCA 15
6. Timeline
| Date | Event |
|---|---|
| HN Singapore incorporated | |
| Respondent sought to purchase COVID-19 test kits | |
| Respondent entered into an agreement with HN Singapore to supply COVID-19 test kits | |
| Respondent paid the purchase price in full | |
| Number of test kits reduced due to changes in packaging and unit price | |
| HN Singapore entered into a sale and purchase agreement with Wondfo for the purchase of test kits | |
| Agreed delivery date of test kits | |
| Respondent terminated the Varied SPA | |
| HN Singapore transferred US$1,532,380.65 back to the respondent | |
| Respondent filed Suit 160 against HN Singapore and the appellant for breach of contract and misrepresentation | |
| HN Singapore and the appellant filed AD/CA 82/2023 to appeal against the Judge’s decision | |
| The appellant filed AD/SUM 43/2023 to amend its Notice of Appeal | |
| Amendment to Notice of Appeal allowed | |
| The appellant filed an amended Notice of Appeal that removed HN Singapore as a party to the appeal | |
| The appellant filed CA/OA 33/2023 for the whole of the proceedings in AD 82 to be transferred to the Court of Appeal | |
| Transfer application granted | |
| Hearing date | |
| Judgment date |
7. Legal Issues
- Choice of Law for Lifting Corporate Veil
- Outcome: The court held that Singapore law, as the law of incorporation, should apply to the issue of lifting the corporate veil.
- Category: Substantive
- Sub-Issues:
- Applicability of lex incorporationis
- Applicability of lex contractus
- Related Cases:
- [1897] 1 AC 22
- [2019] EWHC 1705 (Fam)
- Lifting the Corporate Veil
- Outcome: The court held that under Singapore law, there was no legal basis to lift the corporate veil of HN Singapore.
- Category: Substantive
- Sub-Issues:
- Alter ego doctrine
- Undercapitalization
- Related Cases:
- [2013] 2 AC 415
- [2013] 4 SLR 308
- Misrepresentation
- Outcome: The court upheld the Judge’s decision that misrepresentation was not made out.
- Category: Substantive
- Sub-Issues:
- Implied representation
- Fraudulent misrepresentation
- Related Cases:
- [2017] 1 SLR 219
8. Remedies Sought
- Monetary Damages
9. Cause of Actions
- Breach of Contract
- Misrepresentation
10. Practice Areas
- Commercial Litigation
- Corporate Law
- Contract Disputes
11. Industries
- Import and Export
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Aron Salomon v A Salomon and Co, Ltd | House of Lords | Yes | [1897] 1 AC 22 | United Kingdom | Cited for the principle of separate legal personality in company law. |
| Gabriel Peter & Partners (suing as a firm) v Wee Chong Jin and others | Court of Appeal | Yes | [1997] 3 SLR(R) 649 | Singapore | Cited for the principle that members cannot be sued for the company’s liabilities. |
| 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 the principle of separate legal entity as the bedrock of company law. |
| Miao Weiguo v Tendcare Medical Group Holdings Pte Ltd (formerly known as Tian Jian Hua Xia Medical Group Holdings Pte Ltd) (in judicial management) and another | Court of Appeal | Yes | [2022] 1 SLR 884 | Singapore | Cited for the principle that members of a company are generally shielded from personal liability. |
| Tjong Very Sumito and others v Chan Sing En and others | High Court | Yes | [2012] SGHC 125 | Singapore | Cited for the two justifications for lifting the corporate veil under common law. |
| Excalibur Ventures LLC v Texas Keystone Inc | English High Court | No | [2013] EWHC 2767 (Comm) | United Kingdom | Observed that it would be anomalous if the liability of the dominator was determined by four different laws. |
| Enka Insaat Ve Sanayi AS v OOO “Insurance Company Chubb” | Supreme Court | Yes | [2020] 1 WLR 4117 | United Kingdom | Cited for the rule that the proper law of the contract governs the consequences and reliefs that flow from a breach of that contract. |
| Akhmedova v Akhmedov | English High Court | No | [2019] EWHC 1705 (Fam) | United Kingdom | Discussed in relation to the enforcement of a judgment for the division of matrimonial assets and the evasion principle. |
| Oro Negro Drilling Pte Ltd and others v Integradora de Servicios Petroleros Oro Negro SAPI de CV and others and another appeal (Jesus Angel Guerra Mendez, non-party) | Court of Appeal | Yes | [2020] 1 SLR 226 | Singapore | Cited for issues of corporate governance and internal management. |
| Grupo Torras SA v Al-Sabah (No.1) | Queen's Bench Division | Yes | [1996] 1 Lloyd’s Rep 7 | United Kingdom | Cited for the principle that the law of the place of incorporation determines the capacity of the company. |
| Prest v Petrodel | UK Supreme Court | No | [2013] 2 AC 415 | United Kingdom | Discussed in relation to the scope of corporate veil piercing and the evasion principle. |
| Alwie Handoyo v Tjong Very Sumito and another and another appeal | Court of Appeal | Yes | [2013] 4 SLR 308 | Singapore | Cited for the principle that whether the company was carrying on the business of its controller is a question of fact. |
| Simgood Pte Ltd v MLC Shipbuilding Sdn Bhd | High Court | Yes | [2016] 1 SLR 1129 | Singapore | Cited for the principle that the doctrine of separate legal personality will not be displaced simply because the owners of the company incorporated it for the very purpose of insulating themselves from liability. |
| NEC Asia Pte Ltd v Picket & Rail Asia Pacific Pte Ltd | Court of Appeal | Yes | [2011] 2 SLR 565 | Singapore | Cited for the principle that evidence of sole shareholding and control of the company without more will not move the court to intervene. |
| Yap Son On v Ding Pei Zhen | Court of Appeal | Yes | [2017] 1 SLR 219 | Singapore | Cited for the three principles in section 108 of the Evidence Act. |
| Government of the City of Buenos Aires v HN Singapore Pte Ltd | High Court | No | [2023] SGHC 139 | Singapore | The High Court decision that was appealed in this case. |
| Liew Kit Fah and others v Koh Keng Chew and others | Court of Appeal | Yes | [2020] 1 SLR 275 | Singapore | Cited for the principle that an appellate Court will generally be willing to consider new legal arguments on questions of law that can be answered without the need for further evidence. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Companies Act 1967 (2020 Rev Ed) | Singapore |
| Evidence Act 1893 (2020 Rev Ed) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Corporate Veil
- Law of Incorporation
- Law of the Contract
- Separate Legal Personality
- Alter Ego
- Misrepresentation
- COVID-19 Test Kits
- Repudiatory Breach
15.2 Keywords
- corporate veil
- choice of law
- Singapore
- contract
- misrepresentation
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Lifting corporate veil | 90 |
| Breach of Contract | 80 |
| Corporate Law | 75 |
| Misrepresentation | 70 |
| Choice of Law | 65 |
| Civil Procedure | 60 |
| Property Law | 30 |
16. Subjects
- Company Law
- Conflict of Laws
- Contract Law
- Civil Procedure