TWO private schools have gone to court to claim about $10 million in losses which they say stemmed from their 23-day suspension from an accreditation scheme.
Stansfield College and the Singapore Institute of Commerce (SIC), both owned by Mr Kannappan Chettiar, are suing the Consumers Association of Singapore (Case) and insurer NTUC Income for what they say is a wrongful suspension.
At the centre of the suit is the CaseTrust for Education scheme administered by Case, a certification which private schools must get in order to enrol foreign students.
CaseTrust schools are required to protect all their foreign students' tuition fees under a student protection scheme (SPS). Both schools went for this protection with a policy from NTUC Income.
Between Nov 20 and Dec 13, 2006, Case suspended the two schools' CaseTrust memberships for failing to insure 479 of their foreign students.
The schools claim that the suspension dented their reputations and hit their bottom lines because students began pulling out as a result.
An expert witness has pegged their losses at between $9.9 million and $10.7 million.
The schools are also seeking to recover about $105,000, which they paid in refunds to students who withdrew after the suspension.
Hearing into the case opened in the High Court yesterday.
It is undisputed that for at least six months up to October 2006, the schools did not get insurance cover for the students enrolled.
On Oct 20 that year, Case e-mailed NTUC Income about a rumour that the schools could be closing down because of investment losses in India.
A few days later, NTUC Income reset the schools' passwords to the online SPS application system, effectively barring them from accessing the facility.
Yesterday, the schools' lawyer Devinder K. Rai argued that Case did not attempt to verify the rumour before passing it on, and that NTUC Income also did not do its own checks.
On Nov 14, 2006, Case wrote to the schools, asking about discrepancies between the number of student passes issued by the immigration authorities and the number of insured students.
The suspension came a week later.
The schools now argue that Case did not hear them out before suspending them, and that its interference led to NTUC Income suspending their access to the insurance facility.
They further charge that NTUC Income, by wrongfully doing that, cost them their CaseTrust memberships.
Case, represented by Senior Counsel Cavinder Bull, argued that the suspension was necessary as Case had to protect the students' interests. It moved in and acted when investigations showed that they were uninsured.
NTUC Income, represented by Senior Counsel Lok Vi Ming, argued that the schools brought the suspension upon themselves and that the insurer was entitled to protect its commercial interests.
