Court dismisses bid by Uber-owned rental firm to put car supplier under judicial management

SINGAPORE - The High Court has dismissed an application by Lion City Rentals, an Uber-owned car leasing firm, to place one of its car suppliers under court supervision.

Lion City Rentals, which rents out vehicles to Uber drivers, alleged that Sunrita failed to deliver an order of more than 2,400 cars on time, and for which it paid over $130 million.

The firm applied to the court for Sunrita to be put under judicial management. Under this order, businesses can continue operating, but under the court's supervision. In the meantime, they can try and turn their business around.

The dispute was heard on July 21, and Justice Vinodh Coomaraswamy dismissed Lion City Rentals' application, with costs payable to Sunrita.

In a statement today (Aug 2), RHTLaw Taylor Wessing, which represents Sunrita, said no contractual obligations between its client and Lion City Rentals were breached, as there was "no stipulated delivery date or deadline in the contract".

Lion City Rentals allegedly wanted all the vehicles to be delivered by Dec 31 under the deal.

The Straits Times understands that the orders were placed between March and June last year (2016).

Sunrita, in written submissions to the court, said it delivered 2,186 of the 2,463 cars, and 277 cars were outstanding as of June 23. At the time of the hearing, there were 171 cars left to be delivered.

RHTLaw Taylor Wessing partner Sivakumar Murugaiyan, speaking to The Straits Times, said: "Our client's position throughout has been that Lion City Rental's application for judicial management is misconceived.

"Leaving aside the merit of disputes between the parties, Sunrita has been in existence for nearly 50 years, and is financially sound, with significant assets."

The court heard that Sunrita was "profitable and had net assets in access of $20 million".

Sunrita's main business is property investment in Singapore, Malaysia, Thailand, the Philippines and Britain but it diversified into the car business last year.

Asked about the court's decision, Lion City Rentals said it will "study the verdict and explore the next steps".