Government of the City of Buenos Aires v HN Singapore Pte Ltd & Anor

Facts

Early in the Covid-19 pandemic, the Government of the City of Buenos Aires sought rapid test kits through an emergency public procurement process under Argentine law. HN Singapore Pte Ltd, a Singapore company whose sole director and shareholder was Mr Nicholas Eng Teng Cheng, offered Wondfo-brand kits made in China, with delivery stated as 10(+10) days upon payment. The city awarded HN Singapore the contract by an administrative resolution and on 6 April 2020 paid US$1,770,000 in full. The contract was varied on 12 April 2020 to 182,475 kits in English packaging for the same price, deliverable by 26 April 2020.

No kits arrived by that date. The parties kept corresponding, the delivery estimate kept slipping, and on 23 May 2020 Mr Eng said the Chinese government had not granted Wondfo a new export approval. The city terminated the contract on 27 May 2020 and asked for a refund. HN Singapore repaid US$1,532,380.65 but kept US$237,619.35, saying it had been spent on non-refundable charges, and later claimed the termination was unlawful.

In Suit No 160 of 2021 the city sued HN Singapore and Mr Eng for breach of contract and misrepresentation, and sought to lift the corporate veil to make Mr Eng personally liable. The defendants relied on waiver and on frustration by Chinese export regulations, and HN Singapore counterclaimed for wrongful termination.

Issues

1. Whether the varied contract was governed by Argentine law or Singapore law.
2. Whether the city was entitled to terminate, or had waived the breach, or the contract was frustrated by Chinese export rules.
3. Whether the defendants were liable for misrepresentation about the delivery time.
4. Whether HN Singapore's corporate veil should be lifted to make Mr Eng personally liable, and the damages due.

Holding

Lee Seiu Kin J allowed the claim in part. HN Singapore was liable for breach of contract and ordered to pay damages of US$237,619.35. Applying Argentine law, the judge lifted the corporate veil so that Mr Eng was also liable for that sum. Interest was ordered at 5.33% from the date of the writ, with standard costs against both defendants. The misrepresentation claim, the claim for additional damages of 10% of the price and for delay, and HN Singapore's counterclaim were dismissed.

Reasoning

With no express choice of law, the judge inferred that the parties intended Argentine law. The contract had a public dimension: it was awarded by an Argentine public authority through an emergency procurement for the city's residents, under an administrative act framed in Argentine law, for delivery in Buenos Aires; HN Singapore was a party only by chance. Argentine law would also have the closest connection. The English language and US dollar currency were neutral.

The city's unchallenged expert on Argentine law said non-delivery in time entitled it to terminate. Under Singapore law the result was the same: the delivery date was not a condition, but by 27 May 2020 the city had received none of the kits and so was deprived of substantially the whole benefit. Continuing to press for delivery was at most an election to affirm for the time being, not a waiver. Frustration failed because the March 2020 Chinese rules came before the varied contract, which was designed around them; the later rules were proved only by raw texts without expert evidence; and HN Singapore had offered kits from a US warehouse.

The delivery promise concerned the future. The city did not prove that HN Singapore could not deliver when it contracted, nor fraud. HN Singapore lacked reasonable grounds for its belief, relying only on a middleman's word, but without a false statement there was no actionable misrepresentation. Other alleged representations were unpleaded and unproved.

On the veil, the expert's unopposed evidence was that Argentine law allows piercing where a company is undercapitalised, and HN Singapore had paid-up capital of S$1. Under Singapore law the judge would not have lifted it: sole control of a one-man company is not enough, the company existed years before and had other dealings, and no sham or fraud was shown.

The balance of the price was recoverable. The 10% claim failed because the procurement law provisions applied only where a performance guarantee had been given, and no loss from delayed refund was proved.

From the judgment