BC Andaman Co Ltd and others v Xie Ning Yun and another

• Jurisdiction: Singapore
• Judge: Quentin Loh J
• Judgment Date: 04 April 2017
• Neutral Citation: [2017] SGHC 64
• Plaintiff Counsel: Sarjit Singh Gill, SC, Probin Dass, Charles Lim, and Jamal Siddique (Shook Lin & Bok LLP)
• Docket Number: Originating Summons No 884 of 2016
• Date: 04 April 2017
• Hearing Date: 17 October 2016
• Subject Matter: Anti-suit Injunction,Arbitration
• Published date: 05 April 2017
• Defendant Counsel: Raymond Wong (Wong Thomas & Leong)
• Court: High Court (Singapore)
• Citation: [2017] SGHC 64
• Year: 2017

Quentin Loh J:

The five plaintiffs (“the Plaintiffs”) seek a permanent anti-suit injunction to restrain the two defendants (“the Sias”) from commencing or pursuing two proceedings before the Civil Court of Southern Bangkok, Thailand, viz, Reference Case Entry Nos Phor 1466/2557 (“the First Thai Proceedings”) and Phor 1288/2559 (“the Second Thai Proceedings”), and from commencing any other proceedings in breach of an arbitration agreement between the Sias and the 1st to 4th plaintiffs.

Further, the Plaintiffs seek a declaration that all claims in connection with the Blue Canyon Country Club in Phuket, Thailand, have been dismissed with prejudice by the arbitral tribunal constituted to hear dispute No 076 of 2015 (“the Tribunal”), in the final award dated 14 July 2016 (Award No 077 of 2016) issued in respect of those proceedings (“the Final Award”).

The Plaintiffs bring their applications pursuant to s 4(10) of the Civil Law Act (Cap 43, 1999 Rev Ed) (“CLA”) and paragraph 14 to the First Schedule of the Supreme Court of Judicature Act (Cap 322, 2007 Rev Ed) (“SCJA”).

Entry into the joint venture

The 5th plaintiff, Murex Co Limited (“Murex”), is a Thai-incorporated company. It owns the Blue Canyon Country Club and various hotels, golf courses, and condominiums in Phuket, Thailand (collectively, “the Blue Canyon Project”).

In 1998, the Sias invested in Murex through the 2nd plaintiff, their British Virgin Islands (“BVI”) incorporated company, Legacy Resources Limited (“Legacy”). As part of the investment, Legacy was given the right to appoint two directors to the board of Murex. Legacy exercised this right by appointing the Sias to the board of Murex. The Sias remained directors of Murex up until the events that constituted the Alleged Coup (see [14]–[15] below).¹

In 2002, the Sias entered into a joint venture (“JV”) with Deutsche Bank AG (“Deutsche”) to re-develop for profit the facilities and land of the Blue Canyon Project. The Sias and Deutsche established the 3rd plaintiff, BVI-incorporated Ace United International Limited (“Ace”), as the JV vehicle. The Sias held 37.4% of Ace through Legacy. Deutsche held the remaining 62.6% of Ace through its fund, RREEF Global Opportunities Fund II LLC (“RREEF”).

Ace holds 49% of the shares of the 1st plaintiff, Thai-incorporated BC Andaman Co Limited (“Andaman”). A Thai national, allegedly acting as a nominee, one Mr Chayut, holds another 50.4% of the shares (amounting to 505 shares) in Andaman.

Andaman and Ace, in turn, hold 50.6% and 48.7% respectively of the shares in the 4th plaintiff, Thai-incorporated Legacy Resources (Thailand) Co Limited (“Legacy Thailand”). Following the parties’ entry into the JV, Legacy Thailand and Ace own respectively 3.2% and 96.0% of the shares in Murex.

The Plaintiffs helpfully produced the following diagram of the relevant companies (“the Blue Canyon Ownership Structure”):

On or around 14 December 2005, Ace ran into financial difficulties and took out a loan (“the Bridge Loan”) from Deutsche for the purposes of the Blue Canyon Project. The Bridge Loan was secured, inter alia, by charges over the Sias’ shares in Legacy (“the Legacy Charge”) and Legacy’s shares in Ace (“the Ace Charge”) (collectively, “the Share Charges”).

On or around 29 September 2006, various entities in the scheme of the JV entered into an amended and restated shareholders’ agreement (“the ARSHA”) to govern their relationship in relation to the Blue Canyon Project. The ARSHA was signed by the Sias, Andaman, Legacy, Ace, Legacy Thailand, RREEF, and four other entities, viz, the BVI-incorporated Ancaster Enterprises Limited (“Ancaster”), as well as Thai-incorporated Canyon Capital Limited (“CC”), BC Golf Resort Management Ltd (“BCGRM”), and Blue Canyon Holdings (Thailand) Limited (“BCH”).²

Although the ARSHA made reference to Murex, Murex was not a party to it.

The relevant clauses of the ARSHA are as follows: Clauses 3.1 and 3.2: that Legacy and RREEF be entitled to nominate directors to, inter alia, the boards of Andaman, Ace, Legacy Thailand, Ancaster, CC, and BCGRM; Clause 3.3: that the board of Murex comprise nine directors, of whom four are nominated by Ace and five are nominated by RREEF; Clause 6.1: that each of Legacy and RREEF has the right of first offer with respect to transfers by the other of its shares in Ace other than to affiliates of Legacy or RREEF (“the Pre-Emption Rights”); Clause 7.4: that each of Legacy and RREEF that desires to transfer its shares in Ace must procure that the other can transfer the other’s shares in Ace on the same terms (“the Tag-Along Rights”); Clause 11.1: that the ARSHA is governed by English law; and Clause 11.2: that “[a]ny dispute arising out of or in connection with this Agreement, including any question regarding its existence, validity or termination, shall be referred to and finally resolved by arbitration in the English language in Singapore in accordance with the Arbitration rules … of the Singapore International Arbitration Centre” (“the Arbitration Agreement”).

The Alleged Coup

On 9 August 2013, Deutsche assigned its interest in the Bridge Loan and the Share Charges to RREEF. On 19 February 2014, RREEF transferred its shares in Ace to its wholly-owned Macau-incorporated subsidiary True Colour Global Limited (“True Colour”). Two days later, RREEF assigned its interest in the Bridge Loan and the Share Charges to BVI-incorporated Prominent Investment Opportunity VI Limited (“Prominent”). Amidst these events Mr Chayut transferred his 505 shares in Andaman to another Thai national, one Mr Praphant.

By way of a letter dated 24 February 2014, Prominent demanded the immediate repayment of the Bridge Loan by Ace. When Ace failed to make the repayment, Prominent purported to enforce the Legacy Charge by appointing receivers in and over Legacy on 28 February 2014. The receivers then removed the Sias as directors of Legacy and of Ace, and procured the termination of the Sias’ employment with Murex (“the Alleged Coup”).

The proceedings between the parties

Broadly, the Sias alleged that the events that constituted the Alleged Coup were perpetuated by some or all of the parties mentioned in [11] above, including the Plaintiffs, to gain control of Legacy. In a bid to regain control of Legacy, the Sias commenced various proceedings in a number of jurisdictions, each time against some combination of these parties, including the Plaintiffs, and related persons and entities. These actions form the basis of the Plaintiffs’ applications in this Originating Summons (“OS”). I set them out below.

The BVI Proceedings

On or around 17 April 2014, the Sias commenced proceedings in the High Court of Justice of the BVI (“the BVI Proceedings”) against 19 entities (“the BVI Defendants”): Murex; All nine parties to the ARSHA besides the Sias (ie, Andaman, Legacy, Ace, Legacy Thailand, RREEF, Ancaster, CC, BCGRM, and BCH) (see [11] above); Deutsche, Deutsche Asset Management (Hong Kong) Limited (“Deutsche HK”), an asset management division of Deutsche in Hong Kong, and Deutsche Bank AG London; True Colour and Prominent (see [14] above); and Blue Canyon Property Co Limited, Pacific Alliance Asia Opportunity Fund LP (“Pacific”), Delta Golf Opportunity Investment V Limited (“Delta”), and Thungkha Blue Canyon Co Limited (“Thungkha”).

In the statement of claim filed in the BVI Proceedings (“the BVI SOC”), the Sias alleged that the BVI Defendants had conspired to perpetrate the events that constituted the Alleged Coup. This was done to enable RREEF to sell its shares in Ace free of Legacy’s Pre-Emption Rights and Tag-Along Rights under the ARSHA, and to oust the Sias from the boards of Murex and the other companies within the Blue Canyon Ownership Structure, in order to exclude the Sias from further participation in the management and development of the Blue Canyon Project and from their share of the financial benefits thereunder.³

The specific allegations made by the Sias in the BVI Proceedings include the following:⁴ that RREEF, Andaman, Legacy, Ace, and Legacy Thailand breached an understanding that the Bridge Loan was to be replaced by a loan from a Thai financial institution (“a Thai Loan”) by obstructing the efforts of the Sias to replace the Bridge Loan with a Thai Loan; that Prominent as chargee breached its duty to the Sias to enforce its security under the Share Charges bona fide for the purpose of obtaining repayment of the Bridge Loan, by enforcing the Share Charges for the ulterior purpose of gaining control of Legacy; and that some or all of the BVI Defendants had conspired to defraud and injure the Sias by lawful or unlawful means by procuring the following: the sale of RREEF’s shares in Ace free of Legacy’s Pre-Emption Rights and Tag-Along Rights under the ARSHA; the removal of the Sias as directors of Murex; and the breaches by RREEF, Andaman, Legacy, Ace, and Legacy Thailand of the ARSHA.

On or around 4 November 2014, Legacy, Ace, True Colour, Prominent, Ancaster, Delta, Deutsche, Deutsche HK and RREEF (“the BVI Stay Applicants”) applied to the BVI High Court to have the BVI Proceedings stayed. On 16 December 2014, Pacific also applied to the BVI High Court for a stay of the BVI Proceedings.

On 10 February 2015, the BVI High Court recorded a consent order (“the BVI Consent Order”) between the Sias, the BVI Stay Applicants and Pacific. Thereunder, it was agreed that “[a]ll claims against the [BVI Stay Applicants] … be referred to arbitration under the rules of the Singapore International Arbitration Centre in accordance with the terms of clause 11.2 of the [ARSHA] …”. The BVI Proceedings were then stayed as against the BVI Stay Applicants and Pacific. By consent, it was further ordered that the costs of Deutsche, Deutsche HK, and RREEF (“the Deutsche parties”) in the BVI Proceedings (“the BVI Costs”) were to be...