Btn v Btp

• Jurisdiction: Singapore
• Court: High Court (Singapore)
• Judge: S Mohan J
• Judgment Date: 30 November 2021
• Docket Number: Originating Summonses Nos 1401 of 2019, 874 of 2020, 1274 of 2020 (Summons No 471 of 2021) and 1275 of 2020 (Summons No 472 of 2021)

BTN and another

and

BTP and another and other matters

[2021] SGHC 271

S Mohan J

Originating Summonses Nos 1401 of 2019, 874 of 2020, 1274 of 2020 (Summons No 471 of 2021) and 1275 of 2020 (Summons No 472 of 2021)

General Division of the High Court

Arbitration — Award — Recourse against award — Setting aside — Tribunal deciding that plaintiffs were precluded on basis of issue estoppel from raising as part of their counterclaim various factual allegations — Whether awards were made infra petita, in breach of natural justice or were contrary to public policy

Arbitration — Award — Recourse against award — Setting aside — Tribunal not allowing plaintiffs to raise defence on basis that it had not been pleaded — Whether awards were made infra petita or in breach of natural justice

Held, dismissing the applications:

(1) Order 69A r 2(4) of the Rules of Court (2014 Rev Ed) (“ROC”) did not stipulate a time limit on when the originating summons for an application to set aside an award had to be served on the defendant. Order 6 r 4(1)(b) read with O 7 r 5 of the ROC applied such that the plaintiff had to serve the originating summons on the defendant within six months after the originating summons was issued (or within 12 months if the defendant was served out of jurisdiction): at [60].

(2) There was also no stipulated guidance as to whether and when the affidavit in support had to be filed, though the affidavit in support had to be served with the originating summons under O 69A r 2(4A)(d) of the ROC. The word “affidavit” could be construed as including the plural form. The affidavit(s) in support had to reasonably contain all the facts, evidence and grounds relied upon in support of the setting-aside application. When the defendant was served with the originating summons and any affidavit(s) in support, the originating summons and affidavit(s) were meant to compendiously inform the defendant of the specific grounds of the setting-aside challenge. The facts and circumstances relied upon to challenge the award should be sufficiently particularised so the defendant would know the case being mounted: at [61] and [62].

(3) While it might be common practice for a plaintiff to file further reply affidavits after the defendant filed its affidavit in opposition to the application, the plaintiff should not be permitted to advance new grounds in subsequent affidavits by introducing new facts and circumstances that could and should have been raised at first instance: at [63].

(4) The Confidentiality Pleading Issue was not a new issue or ground raised by the plaintiffs only in the second affidavit of Mr [K]. While the averments were somewhat bare, Mr [K] repeatedly raised the contention that the plaintiffs' main defence, ie, that the defendants were not entitled to the Earn Outs, was not considered or decided by the Tribunal. These averments were, in substance, the same as the Confidentiality Pleading Issue or at the least, broad enough to cover it. It was therefore not a new ground raised belatedly: at [65] to [67].

(5) The Tribunal's decision on the Confidentiality Pleading Issue amounted in substance to a determination of its jurisdiction. Thus, whether the matters pertaining to the Confidentiality Pleading Issue were pleaded and within the scope of submission were issues to be reviewed de novo: at [72] and [73].

(6) On a de novo review, the Confidentiality Pleading Issue was not a new issue that was unpleaded or otherwise raised belatedly. The plaintiffs pleaded that the Earn Outs were subject to the conditions precedent in the SPA and would not be satisfied if there is a breach of cl 11.1.2 of the SPA. A connection or link was made between the allegations concerning the defendants' breach of confidentiality and a breach of cl 11.1.2(c) of the SPA. The plaintiffs also requested that the Tribunal declare that the defendants were in breach of their obligations under the SPA. Considering all the plaintiffs' pleadings holistically, they did sufficiently plead and place in the arena the issues of whether the defendants breached their confidentiality obligations under cl 11.1.2 of the SPA and whether the conditions precedent in the SPA were satisfied. It was also reasonably clear that the defendants were cognisant of this allegation and responded accordingly: at [75] to [85].

(7) While the Confidentiality Pleading Issue could and ought to have been pleaded better or more clearly by the plaintiffs, a practical (as opposed to a technical) view ought to be taken to ascertain if the issue had in substance been submitted to the Tribunal for determination. The Confidentiality Pleading Issue was pleaded and put in issue before the Tribunal at the very least by reasonable implication. The Tribunal ought to have heard and decided the Confidentiality Pleading Issue on its merits. In not doing so, the Tribunal fell foul of the infra petita rule: at [87] to [90].

(8) However, it was not appropriate to set aside the Awards because no actual or real prejudice had been suffered by the plaintiffs. Even if the Tribunal had allowed the Confidentiality Pleading Issue and considered it on the merits, it would not have altered the balance of the award. This was because the Tribunal's findings in relation to issue estoppel on the Counterclaim Preclusion Issue would also have applied to bar the plaintiffs' defence based on the allegations of breach of confidentiality: at [99] to [103].

(9) Even assuming that there was any breach of natural justice, this ground also failed due to the lack of any actual or real prejudice: at [109] to [111].

(10) The Counterclaim Preclusion Issue was not a matter pertaining to the Tribunal's jurisdiction and the Tribunal's decision on the Counterclaim Preclusion Issue was not a negative jurisdictional ruling. The Tribunal had the jurisdiction to determine the counterclaim on its merits and the merits of the counterclaim included deciding whether the factual allegations in support of it were precluded by reason of the application of issue estoppel. The Tribunal's decision on issue estoppel was one that touched only on the question of admissibility of those factual allegations. Thus, irrespective of whether the Tribunal was right or wrong in the application of issue estoppel to the merits of the plaintiffs' counterclaim, there was no justification for curial intervention: at [118] and [119].

(11) Reading the Second Partial Award reasonably, generously, commercially, as a whole and in context, it was not difficult to draw the conclusion that the Tribunal disagreed (at least implicitly) with the plaintiffs that the fact that they were not in fact aware of the MIC proceedings was sufficient to amount to special circumstances such as to disapply the application of issue estoppel: at [131] to [134].

(12) The Tribunal came to its decision on the Counterclaim Preclusion Issue after considering all of the arguments and evidence on the issue. It did not fail to decide an issue that was before it. It also did not fail to understand the plaintiffs' arguments. The Tribunal's decision on the Counterclaim Preclusion Issue was not made infra petita: at [137].

(13) The plaintiffs were given a reasonable opportunity to be heard on the Counterclaim Preclusion Issue and were not wrongfully precluded from presenting their case. Accordingly, the plaintiffs' objection based on a breach of natural justice, which was predicated on an assumption that the Tribunal failed to consider or try and understand their arguments, evidence and submissions, fell away. The plaintiffs' public policy objection was also of no merit: at [139] and [144].

Case(s) referred to

AKN v ALC [2015] 3 SLR 488 (refd)

AQZ v ARA [2015] 2 SLR 972 (refd)

BRS v BRQ [2021] 1 SLR 390 (refd)

BTN v BTP [2020] 5 SLR 1250, HC (refd)

BTN v BTP [2021] 1 SLR 276, CA (refd)

BZV v BZW [2022] 3 SLR 447 (distd)

CAJ v CAI [2022] 1 SLR 505 (refd)

CDM v CDP [2021] 2 SLR 235 (refd)

China Machine New Energy Corp v Jaguar Energy Guatemala LLC [2020] 1 SLR 695 (refd)

CKR v CKT [2021] SGHCR 4 (refd)

CRW Joint Operation v PT Perusahaan Gas Negara (Persero) TBK [2011] 4 SLR 305 (refd)

JVL Agro Industries Ltd v Agritrade International Pte Ltd [2016] 4 SLR 768 (refd)

Kingdom of Lesotho v Swissbourgh Diamond Mines (Pty) Ltd [2019] 3 SLR 12 (refd)

L W Infrastructure Pte Ltd v Lim Chin San Contractors Pte Ltd [2013] 1 SLR 125 (refd)

Prometheus Marine Pte Ltd v King, Ann Rita [2018] 1 SLR 1 (refd)

PT Asuransi Jasa Indonesia (Persero) v Dexia Bank SA [2007] 1 SLR(R) 597; [2007] 1 SLR 597 (refd)

PT Prima International Development v Kempinski Hotels SA [2012] 4 SLR 98 (refd)

Soh Beng Tee & Co Pte Ltd v Fairmount Development Pte Ltd [2007] 3 SLR(R) 86; [2007] 3 SLR 86 (refd)

TMM Division Maritima SA de CV v Pacific Richfield Marine Pte Ltd [2013] 4 SLR 972 (refd)

Zhang Run Zi v Koh Kim Seng [2015] SGHC 175 (refd)

Facts

The defendants, BTP and BTQ, were individuals and owners of a group of companies (“the Group”) of which the second plaintiff, BTO, was the principal holding company. On 26 September 2012, the defendants along with two others entered into a share and purchase agreement (the “SPA”) with the first plaintiff, BTN. Pursuant to the SPA, BTN acquired 100% ownership and control of the Group. The defendants were to be paid, amongst others, certain payments defined as “Earn Out Consideration” (the “Earn Outs”). The SPA also stipulated that the defendants had to be employed by BTO. Their employment was governed by “Promoter Employment Agreements” (the “PEAs”) signed in November 2012, and which were governed by Malaysian law. BTP and BTQ were employed as the chief executive officer and chief technical officer respectively. Under the PEAs read with the SPA, the defendants would be entitled to be paid the Earn Outs if their employment was terminated “Without Cause” but not if the termination was “With Cause”.

The parties' substantive dispute concerned the defendants' entitlement...