Uber-owned firm's case against supplier dismissed

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, for which it paid over $130 million.

The firm applied to the court for Sunrita to be put under judicial management.

While businesses can continue operating under such a order, it will have to be with the court's supervision. In the meantime, they can try and turn their businesses around.

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

In a statement yesterday, 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, however, claimed in its court application that all the vehicles should have been delivered by Dec 31 last year. The Straits Times understands that the orders were placed between March and June last year.

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 this year. 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."

Mr Murugaiyan added that the directors and shareholders of Sunrita are "very gratified" that the judicial management application has been dismissed.

The court also heard that Sunrita was "profitable and had net assets in excess of $20 million", said RHTLaw Taylor Wessing.

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".

Lion City Rentals was formed in early 2015 by Uber. The firm has been tight-lipped on its fleet size, but an ST report said in March that it had nearly 10,000 cars.

There are more than 42,000 private-hire cars on the roads now.

In 2012, before ride-hailing apps Uber and Grab entered the market, there were only close to 500 private-hire cars, which were mainly operated by limousine firms.

A version of this article appeared in the print edition of The Straits Times on August 03, 2017, with the headline 'Uber-owned firm's case against supplier dismissed'. Print Edition | Subscribe