eSys Technologies Pte Ltd v nTan Corporate Advisory Pte Ltd

eSys Technologies Pte Ltd v [2013] SGCA 27
nTan Corporate Advisory Pte Ltd
managing director of the company. The Appellant’s commercial relationship
with Seagate Technology (“Seagate”), a US-based multinational company
which designs, manufactures and markets hard drives, was critical to its
business. In particular, the Appellant relied heavily on its distributorship
agreements with Seagate as 40% of its sales comprised Seagate products.
3 On 6 November 2006, Seagate decided to terminate its worldwide
distributorship agreement with the Appellant and filed a public announcement
with the US Securities and Exchange Commission (“the SEC
Announcement”) to this effect. The SEC announcement alleged that:
(a) The Appellant had committed material breaches of its
distribution agreements with Seagate;
(b) The Appellant had refused to allow Seagate to perform a
contractual audit of its sales records to confirm the accuracy of
its rebate claims;
(c) The Appellant’s officials had indicated that an audit would
reveal irregularities in the Appellant’s compliance with the
terms of Seagate’s sales incentive programs and other
unspecified irregularities;
(d) Some US$50 million was owed by the Appellant to Seagate;
and
(e) Seagate fully intended to pursue its contractual audit rights and
claims against the Appellant.
4 The SEC announcement not only had a crippling effect on the
Appellant’s bottom-line but also seriously damaged its commercial reputation.
2