Contractor sues over e-channels

PUBLISHED : Wednesday, 28 June, 2006, 12:00am
UPDATED : Wednesday, 28 June, 2006, 12:00am

Singapore equipment supplier claims $34m in fees, damages

A Singaporean company claims the Hong Kong Immigration Department is using copyright-infringing technology at its e-channel border crossings, according to a writ filed to the High Court yesterday.

Stratech Systems is suing Hong Kong company ATAL Technologies for more than $34 million in unpaid fees and damages. A Stratech boss said the company understood it had not been paid because the Immigration Department had not paid ATAL.

ATAL Technologies was awarded a 10-year, $595 million contract by the Immigration Department in 2002 to install, operate and maintain automated passenger and vehicle clearance systems at border checkpoints. According to the writ, Stratech was subcontracted by ATAL in May 2004 to supply cameras, monitoring systems and related software and services for the checkpoints.

The writ states that there have been no complaints about the system, pointing out it has been fully operational since December 2004 and has received international awards.

In March this year, ATAL terminated the subcontract, claiming Stratech had failed to execute the contract with due diligence, had ignored instructions and breached its contractual obligations.

The writ alleges that because ATAL has not paid Stratech, the company's use of the software since March 31 is in breach of Stratech's copyright and intellectual property rights.

The original value of ATAL's contract with Stratech was $17.37 million, the writ states. Stratech says it is still owed more than $15.48 million, and is claiming $18.69 million in damages, as well as interest.

Lam Wei Choong, Stratech's chief executive officer, said last night: 'As one of our claims against ATAL is for infringement of intellectual property rights and copyright, the writ might affect the further usage of the software for the e-channel system and the ... Immigration Department may also be found to be using unlicensed [or] unauthorised software.'

He added: 'It is very unfortunate that almost one and a half years after e-channel went operational, we have still not been paid for the software and system. We have been informed by ATAL Technologies that this is because they have, in turn, not been paid by the Immigration Department.'

Neither the government nor ATAL could be reached for comment last night about Mr Lam's allegation. Earlier, Lau Chun-kay, an ATAL director, said he had not seen the writ, but denied there had been any nonpayment or copyright infringement. 'We don't think there are any grounds for the allegations,' he said.

He said the Immigration Department was aware of the dispute between the two companies.

It is understood that the consul-general of Singapore has approached Secretary for Security Ambrose Lee Siu-kwong to ask him to intervene in the dispute.

A Hong Kong government spokesman said: 'We have discharged our contractual obligations.'

The spokesman said the issue was a matter between the main contractor and subcontractor and the government had 'only entered into a contractual relationship with the prime contractor'.

Stratech, which is listed on the Singapore Stock Exchange, is expected to make an announcement to shareholders about the writ today.