DyStar Global Holdings (Singapore) Pte Ltd v Kiri Industries Ltd and others

• Jurisdiction: Singapore
• Judge: Anselmo Reyes IJ
• Judgment Date: 29 May 2019
• Neutral Citation: [2019] SGHC(I) 9
• Court: International Commercial Court (Singapore)
• Docket Number: Suit No 3 of 2017 (Summons No 26 of 2019)
• Year: 2019
• Published date: 15 June 2019
• Hearing Date: 29 May 2019
• Plaintiff Counsel: Kevin Lee and Eunice Lau (instructed counsel, Drew & Napier LLC)
• Defendant Counsel: Lim Dao Kai, Margaret Joan Ling Wei Wei and Teh Shi Ying (Allen & Gledhill LLP)
• Citation: [2019] SGHC(I) 9

Anselmo Reyes IJ (delivering the judgment of the court ex tempore): Introduction

The facts have previously been set out by this court in its Judgment of 3 July 2018 (DyStar Global Holdings (Singapore) Pte Ltd v Kiri Industries Ltd and others and another suit [2018] SGHC(I) 06). The abbreviations defined in that Judgment will also be used here.

In the Judgment, this court ordered (among other matters) that: (1) Senda purchase Kiri’s 37.57% shareholding in DyStar on the basis of a valuation to be assessed, and (2) Kiri pay DyStar the sums of €1.7 million and S$443,813. The €1.7 million was for Process Technology Development fees (“PTD fees”) which this court found that Kiri had agreed to pay to DyStar at a meeting of DyStar’s Board on 26 and 27 October 2011. The S$443,813 was for KPMG LLP’s fees for conducting a further audit of DyStar in May 2012. This additional audit was done at Kiri’s request and, as this court held in the Judgment, on the condition that Kiri agreed (as it had done) to bear the costs of the audit. By its decision communicated to the parties on 19 July 2018, this court ordered statutory interest of 5.33% to run on the €1.7 million and S$443,813 from the date of the Writ of Summons (27 January 2016) to the date of the Judgment (3 July 2018). That interest amounts to €220,194.71 and S$57,485.45 respectively.

Kiri now applies for a stay of execution of this court’s orders that Kiri pay DyStar the sums of €1.7 million and S$443,813 together with interest. It asks for such a stay pending the valuation of Kiri’s shares in DyStar and the payment by Senda of the value of those shares. Kiri’s application for a stay was prompted by DyStar seeking an order that Kiri be wound up on account of its failure to comply with DyStar’s demands to pay the €1.7 million and S$443,813 (together with interest thereon). Kiri initially attempted to have DyStar’s winding-up application struck out as an abuse of process. But Kiri’s summons for striking-out was dismissed by Vinodh Coomaraswamy J on 22 April 2019.

The grounds for Kiri’s stay application are as follows: In its Oral Judgment dated 8 January 2019 (“the Oral Judgment”) dealing with directions for the valuation of Kiri’s shares in DyStar, this court stated at [10]: “[A]ny sum that Kiri will have to pay DyStar will be factored in the ultimate valuation of Kiri’s shareholding.” In light of that statement, Kiri suggests that this court must have envisaged that Kiri would not be required to pay the relevant amounts now, but that instead those sums are to be “factored in the ultimate valuation of Kiri’s shareholding”. A winding up order in the event of Kiri’s non-payment of the relevant amounts would (Kiri submits) be “inconsistent with – and in fact amounts to a subversion of – the ongoing valuation proceedings before the SICC regarding Kiri’s shares in DyStar”. Kiri’s shares in DyStar being Kiri’s only asset in Singapore, DyStar is in effect attempting to seize the shares that this court directed Senda to buy. If a winding-up order is granted, those shares would vest in a liquidator. It is unknown how the liquidator would value Kiri’s shares for the purposes of realising their value. Kiri says that the valuation may be on wholly a different basis from that which this court has directed in relation to Senda’s buy-out. In that case, the result would be the negation of this court’s buy-out order. There is no prejudice to DyStar. Once Senda buys out Kiri’s shares, Kiri “has no objection whatsoever to the amount payable to DyStar … being set off from the amount payable by Senda to Kiri”. Thus, according to Kiri, it is simply a matter of time before DyStar will receive the sums due to it. On the other hand, there is the possibility of prejudice to Kiri. Noting that DyStar and Senda are both controlled by Longsheng, Kiri suggests that, while Longsheng would benefit indirectly from a payment now by Kiri to DyStar, there is a significant risk that Longsheng will later cause Senda not to comply with this court’s buy-out order. Taking a broad view of the equities of the matter, this court should lean in favour of a stay.

Discussion

I am not persuaded that the grounds relied on by Kiri justify the grant of a stay.

First, Kiri’s abortive striking-out application before Coomaraswamy J also relied on this court’s statement at [10] of the Oral Judgment. In his decision rejecting the striking-out, Coomaraswamy J stated:

Mr Dhillon [Kiri’s counsel] relies on the reference in [the Oral Judgment] that any sums which Kiri “will have to pay” [DyStar] will be “factored in” to the ultimate value of Kiri’s shareholding.

I agree with Mr Yim [DyStar’s counsel] in context, what the SICC [is] saying there is that the valuation exercise which has been ordered as part of the [minority] oppression remedy and buy-out order will have to take into account the extent to which [DyStar]’s assets have been or will be enlarged by the payment of approximately S$3.6m by [Kiri] to [DyStar] pursuant to the SICC’s judgment in SIC 3/2017. I do not read those words as indicating in any way that...