SME Clinic

SME Clinic

We had been selling software for a supplier based in the United States under a value-added distribution agreement for eight years when it courted our Thai reseller and dumped us in 2005, without giving a reason.

In compliance with an agreement that we had with the company, we fulfilled all outstanding payments and returned our paid stock inventory when it made a request.

One of the terms of this agreement stated clearly that the company had a right to decide within 30 days whether to buy back the stock. But after we returned the stock promptly, we never heard from it again.

It refused to pay us even though we sent reminders about the terms of the agreement and regular invoices. We even hired a debt collection company to help us in the past five years.

The US firm has since opened an office in Singapore.

What can we do? Is there any government authority that I can refer to for help with this issue?

Mr Eddy Tan, CCNS

There is no government authority that can help directly as this is a civil matter - a matter of contract between you and the US company.

Much depends on the terms of the contract.

Assuming it is governed by US law and provides for US courts to have jurisdiction, you will, assuming you have no limitation issues, have to commence legal proceedings in the US for repayment.

Under Singapore law for example, a party generally has six years to take action for breach of contract.

If there is an arbitration clause in favour of Singapore as the venue for arbitration, you can then commence arbitration proceedings here.

If you obtain a favourable outcome, the fact that the US company has opened an office here may be useful.

If it is a branch office and not a separate subsidiary, you may be able to enforce the award against the branch.

As to whether you have recourse against the Thai reseller, this again depends on the terms of the contract, but it is difficult to see what recourse you would have against it.

Mr Ajinderpal Singh, partner at Rodyk & Davidson LLP

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