The court established that the claimant's failure to prove coercion voiding contracts led to liability for breach, while the insurer had standing to sue based on a valid subrogation.

JUDGMENT

Ong Chee Kwan JC:

Introduction

[1] This is my judgment after a full trial held vide remote platform, on 5 July 2021,6 July 2021 and 13 July 2021 in respect of Suit WA-22NCC-132-03-2019 ("Suit 132") and Suit No: WA-22NCC-412-09-2018 ("Suit 412") which were heard together.

[2] The parties involved in Suit 132 and Suit 412 are Agasta Co Ltd ("Agasta"), Nippon Export and Investment Insurance ("NEXI") and Rintis Malay Motors Sdn Bhd ("Rintis").

[3] Suit 412 was initially filed by Rintis against Agasta in 2018 in another Court. Pursuant to the Court Order dated 23 April 2019, Suit 412 was transferred to this Court to be heard together with Suit 132, which was an action filed by Agasta and NEXI against Rintis. In Suit 132, Rintis filed a counterclaim against Agasta which mirrors its claim in Suit 412, hence the reason for the 2 Suits to be heard together.

Background Facts

[4] Agasta entered into Sales Contracts dated 20 July 2016 with Rintis to supply fifty-three (53) used and/or reconditioned vehicles ('the Reconditioned Vehicles') to Rintis for a total sum of JPY199,493,760 upon the terms and conditions stated therein which were signed and agreed upon by both parties ('the Sales Contracts').

[5] It is not disputed that the Sales Contracts could not be fully performed and sometime on 27 July 2021, Agasta entered into an agreement with Rintis to reschedule the payment terms for the Sales Contracts ("the Agreement"). Under the Agreement, Rintis was to make payment for the sum of JPY170,195,760 by 24 September 2016 and the sum of JPY29,298,000 by 26 September 2016 to the Agasta.

[6] The Sales Contracts and the Agreement expressly stipulated that in the event Rintis failed to pay Agasta for the sum of JPY170,195,760 by 23 December 2016 and the sum of JPY29,298,000 by 25 December 2016, credits of the Reconditioned Vehicles will be transferred to NEXI. More specifically, the said term under the Sales Contracts reads as follows:

"In case of RINTIS MALAY MOTORS SDN BHD failed to make payment in Seller's bank account by 150 days from the actually date of shipment, credit of following cars is transferred to Incorporated Administrative Agency, Nippon Export and Investment Insurance (NEXI)." (pp 60 - 72 of B1)

Similarly, the Agreement contains a provision which reads as follows:

"In case of Buyer failed to make payment of JPY170,195,760 in Seller's bank account by 23 Dec 2016 and JPY29,298,000 in Seller's bank account by 25 Dec 2016, credit of the 53 units is going to be transferred to Incorporated Administrative Agency, Nippon Export and Investment Insurance (NEXI)."

[7] NEXI is an insurance company. Because Rintis had delayed taking shipment or delivery of its orders under the Sales Contracts, Agasta had purchased several Export Credit Insurance for SMEs and AFF Sector Insurance Policy from NEXI ('the Insurance Policies') to cover the risks that may arise from Rintis' default under the Sales Contracts and the Agreement. Pursuant to the Insurance Policies, Agasta had inserted as a term in the Agreement that the credits of the Reconditioned Vehicles will be transferred to NEXI in the event of Rintis' default in the payments.

[8] As it turned out, despite receiving the Reconditioned Vehicles on 13 August 2021, Rintis had failed, refused and/or neglected to make the payments of JPY199,493,760.00 to Agasta within the stipulated timeframe.

[9] Premised on Rintis's breach of the Agreement, Agasta proceeded to lodge its claim against NEXI to recover the losses. NEXI had accepted Agasta's claim and paid a sum of JPY189,519,072 to Agasta on 10 October 2017 pursuant to the terms of the Insurance Policies.

[10] On the same day, Agasta issued a Letter of Subrogation dated 10 October 2017 ("the Letter of Subrogation") to NEXI to acknowledge NEXI's payment for the sum of JPY189,519,072 and contemporaneously Agasta had 'assigned, transferred and subrogated' their rights equivalent to the paid amount and in respect of the claims under the Insurance Policies to NEXI.