AKRO Group DMCC v Discovery Drilling Pte Ltd
| Judge | Patricia Bergin IJ |
| Judgment Date | 31 May 2019 |
| Neutral Citation | [2019] SGHC(I) 8 |
| Citation | [2019] SGHC(I) 8 |
| Court | International Commercial Court (Singapore) |
| Published date | 05 June 2019 |
| Docket Number | Suit No 1 of 2017 |
| Plaintiff Counsel | The plaintiff and the defendants in counterclaim were not represented and did not appear |
| Defendant Counsel | Visheshwar Shrivastav (V Shrivastav & Co) (Registered Foreign Lawyer) |
| Subject Matter | Contract,Breach,Tort,Misrepresentation,Fraud and deceit,Equity,Fiduciary relationships,Breach of fiduciary duties |
| Hearing Date | 08 April 2019 |
This case has had a rather extraordinary history.
In summary, the plaintiff, AKRO Group DMCC (“AKRO”), commenced the proceedings in the High Court in December 2016 against the defendant, Discovery Drilling Pte Ltd (“DDPL”), seeking payment of US$3,202,559.63 for allegedly outstanding project management fees. DDPL denied its indebtedness on various bases including alleged breaches of contract by AKRO.
The matter was transferred into the SICC and a trial date was set for November 2017. However, DDPL was granted leave to amend its Counterclaim to include claims in fraud and conspiracy against AKRO, two of AKRO’s directors, AYBI Energy FZE (“AYBI”), a company related to AKRO, and two former representatives of DDPL. These claims were based on allegedly fraudulent and/or fabricated invoices purportedly from third-party suppliers created by AKRO and AYBI with the involvement and assistance of DDPL’s former representatives.
After DDPL was granted this leave and filed its amended pleading AKRO took no further part in the proceedings. Its lawyers were granted leave to withdraw from acting further in the proceedings. On DDPL’s application in reliance upon AKRO’s failure to appear and to comply with the Court’s orders, Judgment was entered in favour of DDPL on AKRO’s claim against it and on its claim against AKRO but for the claims in respect of the allegedly fraudulent and/or fabricated invoices. DDPL then took some time to gather its evidence on these latter claims.
Although DDPL has served all of its pleadings and evidence on all the Defendants in Counterclaim (whom I shall refer to as the “Cross-Defendants”), none of those parties (apart from AKRO) entered an appearance in the proceedings. DDPL claims that in a meeting in May 2018 with the directors of DDPL, one of AKRO’s/AYBI’s directors “confessed” to committing the fraud.
A hearing took place on 8 April 2019 in relation to the assessment of damages in respect of the Judgments that were entered in DDPL’s favour and in respect of the claims relating to the allegedly fraudulent and/or fabricated invoices. Neither AKRO nor any of the other Cross-Defendants appeared at the trial. Judgment was reserved on that date.
BackgroundAKRO is a company incorporated in Dubai in the United Arab Emirates (UAE), and provides specialist professional consultancy services in procurement led project management and supply chain management activities, including in the energy sector. AYBI is a company also incorporated in Dubai, UAE.
DDPL is a company incorporated in Singapore and is part of the Drilling Division of the Jindal Group of companies incorporated in Mumbai, India. The Jindal Group has had a lengthy contractual relationship with the Oil and Natural Gas Corporation (“ONGC”), India’s largest Government controlled oil exploration and production company, and has been providing offshore drilling services to ONGC since the 1980s.
In late 2015 DDPL purchased the rig “Rowan Louisiana” (“the Rig”) then located in Houston, Texas, USA, for the purposes of providing it to another company in the Jindal Group, Jindal Drilling and Industries Ltd (“JDIL”), which had been awarded a contract by ONGC for the Charter Hire of the Rig.
On 12 December 2015, DDPL and JDIL signed a Memorandum of Understanding confirming that the Rig would be “made available” to JDIL “on lease basis for operations in Indian waters” under the contract awarded to JDIL by ONGC. On 15 December 2015 DDPL and JDIL entered into a Charter Hire Agreement in respect of the Rig pursuant to which the amount of the Charter Hire was fixed at US$28,526 per day. That Agreement required the Rig to be deployed with ONGC by 11 April 2016. DDPL agreed to appoint “a project manager of experience” who would ensure refurbishment and deployment of the Rig “in time”. It was agreed that any delay in deployment of the Rig would be DDPL’s responsibility and that JDIL would be entitled to recover from DDPL liquidated damages of US$87,132 per week or part thereof, for any delay in deployment. It was also agreed that JDIL would be entitled to receive from DDPL any loss of hire due to delay in deployment of the Rig after 11 April 2016 because JDIL would be putting in place “complete operational team and other support systems ready for the operation of the Rig”.
The Rig required various works including refurbishment, repair and installation of equipment before it would be ready for activation and mobilisation from Texas to India for delivery to ONGC (“the Project”). DDPL made a decision that the refurbishment of the Rig would be completed in Houston. In this regard DDPL needed to obtain specialised project management services (“SPM Services”) in order to complete the Project and it approached AKRO to provide such services.
The contractIn October 2015 AKRO and DDPL conducted negotiations in Houston, Texas in respect of AKRO providing the SPM Services for the Project.
On 4 November 2015 AKRO and DDPL executed an agreement in Delhi, India pursuant to which AKRO agreed to provide the SPM Services to DDPL (“the Contract”).
The Contract included the following:
[DDPL] have identified the need to engage a suitably qualified project management company and to provide project management and support services for the activation of their newly acquired Jack-Up drilling unit “Rowan Louisiana” which is to be mobilised from the Sabine Pass in the state of Texas in the USA in Q1 2016.
The overall scope will entail the provision of all project management services identified by DDPL in support of the refurbishment programme. Key areas of focus will be the AKRO project delivery assurance process and the project execution plan (PEP) designed and employed to meet or exceed the deadlines and budgets determined and set by DDPL and agreed by AKRO. The PMEP (09001-AKRO-PR-PEP-002) will form the basis and the framework for the deliverables.
AKRO agreed to provide services which included Procurement Support services which in turn included the identification and qualification of initial suppliers and service providers. AKRO also agreed to prepare and issue all equipment and tangible tenders and to evaluate them for the purpose of contracts being issued and materials delivered.
The Contract provided relevantly as follows:
A Service Order will be raised on a day rate basis and cover the period of the project as detailed in the approved Project Execution Plan (Contract start Date 10-04-2016).
The day rate payable will be USD 800.00 per day and will include all USA site costs for accommodation, local transportation, and meals. All international travel for the period will be provided by DDPL.
The project management fee does NOT include any genuine third-party charges applicable (additional insurance premiums incurred, fees and other project specific charges incurred by AKRO) DDPL to reimburse pre-approved Third-party charges at documented cost.
Payment Terms will be 7 days from submission of invoice and supporting timesheet.
Two employees of JDIL, Parmod Kumar (“Mr Kumar”) and Sunil Kumar Arora (“Mr Arora”), acted as DDPL’s representatives in respect of the Project. The two AKRO personnel in charge of the delivery of services for the Project were David William Fowler (“Mr Fowler”), a director of AKRO, and Arjun Suresh Kandoth (“Mr Kandoth”), the managing director of AKRO and AYBI.
AKRO was required to obtain at least three quotes for materials, equipment and services for the Project and negotiate for the best prices for the provision of such materials, equipment and services. Messrs Fowler and Kandoth provided those quotes to Mr Kumar and/or Mr Arora who would consolidate them into “Comparative Statements” from which the lowest bidder was selected. Thereafter DDPL would issue a Purchase Order to AKRO or AYBI or in some instances, directly to the third-party supplier.
The refurbishment of the Rig was completed to the point enabling it to be transported to its destination in India. It was not delivered to ONGC by the agreed date. However, ONGC accepted delivery of the Rig but sought liquidated damages from JDIL in respect of the late delivery, which in turn sought liquidated damages from DDPL.
Procedural history As referred to earlier, AKRO commenced proceedings against DDPL in the High Court by way of Statement of Claim filed on 13 December 2016. It claimed,
On 12 January 2017 DDPL filed its Defence and Counterclaim in which it denied it was the cause of the delay in delivery of the Rig and claimed damages and various other amounts from AKRO both in respect of the late delivery of the Rig and in respect of its provision of SPM services. On 27 January 2017 AKRO filed its Reply to DDPL’s Defence and its Defence to DDPL’s Counterclaim.
The proceedings were thereafter transferred into the SICC.
AKRO filed detailed AEICs in March and June 2017. Those affidavits were of David William Fowler, the first sworn on 30 March 2017; and the second sworn on 5 June 2017; Arjun Suresh Kandoth, affirmed on 5 June 2017; Parmod Kumar affirmed on 2 June 2017; and Sunil Kumar Arora affirmed on 2 June 2017.
On 4 July 2017 AKRO filed its Amended Statement of Claim which amended certain aspects of documents referred to in the earlier pleading and identified with more precision the length of the alleged delay in the delivery of the Rig to India. It also filed an amended Reply to DDPL’s Defence and an amended Defence to DDPL’s Counterclaim.
On 18 July 2017 DDPL filed an Amended Defence and Counterclaim...
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