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2024 MarsdenLR 2284
HIGH COURT MALAYA SHAH ALAM
EU HOLIDAYS PTE LTD – Appellant
Versus
FLEXIROAM SDN BHD – Respondent
[Civil Appeal No: BA-12BNCVC-51-11/2023]
The Appellant, as distributor, was responsible for obtaining necessary licenses under the agreement; the contracts were valid, and the Respondent had no obligation to assist without a request.
Headnote:(A) Contracts - Obligations - Distributor Agreement - The Appellant sought a refund of unutilized funds and declared contracts null and void due to alleged illegality and frustration - The court found the Appellant responsible for obtaining necessary licenses, ruling that the agreements remained valid and enforceable (Paras 16, 39, 70).
(B) Jurisdiction - Choice of Law - Both parties submitted to Malaysian jurisdiction but the governing law was Singaporean law as per the Agreements - The court affirmed the SCJ's application of Malaysian law in evaluating evidence (Paras 20, 28).
(C) Best Endeavours - The Respondent was not liable for failing to assist the Appellant in obtaining the SBO licence since the Appellant did not request assistance (Paras 56, 68).
Facts of the case:
The Appellant, a Singaporean travel agency, entered into agreements with the Respondent, a Malaysian mobile service provider, for distributing SIM cards. The Appellant claimed for a refund on unutilized funds after ceasing distribution due to licensing issues.
Findings of Court:
The SCJ found that the Appellant was responsible for obtaining the necessary SBO licence and that the agreements were not frustrated or illegal (Paras 39-72).
Issues: The court addressed the validity of the agreements, the responsibility for obtaining licenses, and the applicability of Singaporean law (Paras 20, 28).
Ratio Decidendi: The court ruled that the Appellant had not taken necessary steps to comply with legal requirements and that the agreements remained valid, emphasizing the importance of contractual obligations (Paras 39, 70).
Result: Appeal dismissed with costs awarded to the Respondent (Para 78).
JUDGMENT
Introduction
[1] This is an appeal by the Appellant/Plaintiff against the decision of the learned Session Court Judge (SCJ), who had dismissed the Appellant's claim for a refund of the unutilized sum of SGD104,812.75 and for a declaration that the contracts entered into between them were null and void. The Appellant was also ordered to pay a cost of RM20,000.00.
[2] After hearing both parties, perusing the appeal record and reading the submissions filed, I found that the SCJ's reasons for dismissing theAppellant's claim were reasonable and adequately explained by the SCJ.
[3] The appeal was dismissed, and the SCJ's decision was affirmed. The Appellant has now appealed to the Court of Appeal, and I have set out my reasons below.
The Facts
[4] The Appellant is a company incorporated in Singapore that operates as a travel agency. The Respondent is a Malaysian company with the brand name "FLEXIROAM" and a mobile roaming service provider.
[5] The FLEXIROAM service is an international roaming service that allows end-users to stay connected to their home country while travelling abroad by purchasing credit reloads from distributors of the Respondent's FLEXIROAM services. These top-ups enable users to use the services beyond the initially allocated credit associated with the purchase of a Europe Buzz SIM card (Buzz SIM card).
[6] Both Appellant and Respondent then entered into three (3) agreements, all dated 1 July 2014, as follows:
1. Sales and Purchase Agreement for the Appellant to purchase 10,000 units of SIM cards worth SGD300,000.00 as free gifts to the Appellant's customers.
2. The Distributor Agreement (Distributor Agreement) appointing the Appellant as distributor for the sale of Respondent's services to endusers in Singapore.
3. Advertising & Promotion Agreement (Advertising Agreement) was for the Appellant to render advertising and promotional services to market the Respondent's services in Singapore for SGD300,000.00.
(All three (3) agreements hereinafter, collectively referred to as "the Agreements").
[7] Under the Distributor Agreement and as part of the consideration for the grant of distributorship in Singapore, the Appellant agreed to remit a total of SGD500,000.00 to the Respondent in four (4) instalment terms, outlined as follows:
- 1st instalment (10%): SGD50,000 payable before 1 July 2014
- 2nd instalment (20%): SGD100,000 payable before 1 October 2014
- 3rd instalment (40%): SGD200,000 payable before 1 January 2015
- 4th instalment (30%): SGD150,000 payable before 1 April 2015
[8] Notwithstanding the stipulated payment terms, as a common practice, the Appellant will only make payments after the issuance of invoices by the Respondent.
[9] The Appellant had made a pre-payment of SGD144,292.75 to the Respondents through cheques as tabulated in paragraph 13 of the Statement of Claim (SoC). After the pre-payment, the Appellant commenced distributing and promoting the Respondent's FLEXIROAM services in Singapore.
[10] On 29 May 2015, the Infocomm Development Authority of Singapore (IDA Singapore), via letter dated the same, sought clarifications from the Appellant on, among other things, its contractual agreement with the Respondent, and its actions taken towards the promotion and distribution of the Respondent's services in Singapore. The letter also asked if the Appellant was aware that the Respondent did not possess the Service Based Operator's (Individual) Licence (SBO Licence) to provide FLEXIROAM services in Singapore.
[11] Upon receiving the letter from IDA Singapore, the Appellant was informed of the compulsory requirement of an SBO licence to distribute the Respondent's FLEXIROAM products and services in Singapore. Subsequently, officers from IDA Singapore directed the Appellant to cease the product and service distribution pending the investigation's conclusion.
[12] In response to the above, the Appellant immediately ceased distributing the Respondent's FLEXIROAM product and services in Singapore.
