Intas Pharmaceuticals Ltd v DealStreetAsia Pte Ltd

• Jurisdiction: Singapore
• Judge: George Wei J
• Judgment Date: 10 April 2017
• Neutral Citation: [2017] SGHC 74
• Plaintiff Counsel: Ang Cheng Hock SC, Lim Jun Rui, Ivan and Ramesh Kumar s/o Ramasamy (Allen & Gledhill LLP)
• Date: 10 April 2017
• Docket Number: Originating Summons 734 of 2016 (Registrar’s Appeals Nos 362 and 378 of 2016)
• Hearing Date: 10 February 2017
• Subject Matter: Pre-action Disclosure,Civil Procedure,Disclosure of Documents,Discovery of Documents,Norwich Pharmacal Orders
• Year: 2017
• Defendant Counsel: Sim Bock Eng, Sngeeta Rai and Lim Si Wei, Samuel (WongPartnership LLP)
• Court: High Court (Singapore)
• Citation: [2017] SGHC 74
• Published date: 29 December 2017

George Wei J: Introduction

The Plaintiff is Intas Pharmaceuticals Limited (“Intas”), an India incorporated company in the business of manufacturing, marketing and distributing pharmaceutical products. The Defendant is DealStreetAsia Pte Ltd (“DealStreetAsia”), a Singapore incorporated company which operates a financial news website at the Internet address www.dealstreetasia.com.

These appeals arise out of an application by the Plaintiff for pre-action interrogatories and pre-action discovery against the Defendant. The application was granted in part by the learned Assistant Registrar (“the AR”) on 26 September 2016. Both parties (“Parties”) appealed against different aspects of the AR’s decision. Having considered the arguments, I allow the Plaintiff’s appeal in part and dismiss the Defendant’s appeal.

Facts

The Parties’ dispute centres on an article published on the Defendant’s website on 21 December 2015 (“the Article”). The Article was written by one of the Defendant’s correspondents, Ms Bhawna Gupta (“Ms Gupta”). In gist, the Article reported that a competitor of the Plaintiff, Sun Pharmaceuticals Industries Ltd (“SPI”), was in “early talks” to acquire the Plaintiff’s business (“the alleged intended acquisition”).¹

A day prior to the publication of the Article, Ms Gupta had written an email to the Plaintiff’s Chief Financial Officer, Mr Jayesh Shah (“Mr Shah”), on 20 December 2015.² The email stated:

This is regarding a story we are doing on Intas Pharmaceuticals Ltd Ltd [sic]. We understand that the company is looking to sell its business and is in talks with Sun Pharmaceutical Industries Ltd for the same.

The email continued with Ms Gupta seeking confirmation and additional details in relation to the alleged intended acquisition.³

Mr Shah replied Ms Gupta on the morning of 21 December 2015, stating: “This report is completely base less [sic] and we fully deny it.”⁴

The Defendant asserts that Ms Gupta also contacted SPI and the Kotak Mahindra Group (who according to Ms Gupta’s source had been appointed to lead the mandate on behalf of SPI for the proposed deal) for their comments.⁵

Mr Thomas Philip Joji (“Mr Joji”) who is a director, shareholder and editor-in-chief of the Defendant asserts that Ms Gupta also sent the Article to him for review and comments.⁶ After vetting, the Article was published on 21 December 2015. The Article cited “multiple sources familiar with the development” and “executive(s) who [are] directly aware of the development”. The Article also reported that:⁷ Mr Shah had denied the alleged intended acquisition in response to email inquiries from the Defendant. The Kotak Mahindra Group also denied the statement and had stated that they were not aware of any such transaction. SPI had declined to comment. “Temasek” had purchased a 10% stake in Intas.

I pause to note that the reference to “Temasek” appears to be a reference to Temasek Holdings Private Limited, the Singapore-based investment company.

Following the publication of the Article, the Plaintiff’s Vice Chairman, Mr Binish Chudgar (“Mr Chudgar”) sent an email to Ms Gupta on 24 December 2015, describing the Article as “false, baseless, unjustified and lacking substantial proof” and demanding that the Defendant publish an apology.⁸

Emailing Mr Chudgar in reply, Mr Joji stated that the Defendant had carried out “due diligence” and published the story “only after confirmations from reliable sources”.⁹ The Defendant also updated the Article on its website by inserting the following “Editor’s Note”:¹⁰

Editor’s Note: The above story, titled, ‘Exclusive: India’s Sun Pharma in ‘early talks’ to buy rival Intas in blockbuster $2b deal’, was based on information provided by reliable sources, and published after following all standard protocol. The DEALSTREETASIA correspondent had included Intas’ comments/denial, in the original version, and had also sought reactions from all parties, including the advisors from both sides, before publishing the story. There was no deliberate attempt from our side “to create unnecessary confusion among the various stakeholders of our company so as to destabilize its smooth/efficient functioning” – as has been suggested by the company.

This portal wants to reiterate that the story was done after all requisite due diligence, and also wishes to clarify that there was no intention to harm Intas Pharmaceuticals.

Subsequently, the Plaintiff’s solicitors in Ahmedabad, India, Messrs Singhi & Co, wrote to the Defendant (specifically addressing Mr Joji and Ms Gupta) on 30 December 2015, calling upon the Defendant to explain what due diligence it had carried out in relation to the Article, and to provide details of the sources it had relied on (“the Sources”). The Defendant, however, refused to furnish the information sought by the Plaintiff. The letter was sent to the address of DealStreetAsia Pte Ltd situated in Boat Quay, Singapore. Whilst the letter was addressed to Ms Gupta at the Singapore office address, the Defendant claims that Ms Gupta was at that time based in India and that the Article was in fact written and published in India.¹¹

The Plaintiff subsequently instructed solicitors in Singapore, Messrs Allen & Gledhill LLP, who sent a letter to the Defendant on 10 March 2016. The letter stated that the Plaintiff intended to commence proceedings against the Defendant for malicious falsehood, and requested that the Defendant furnish certain information as set out in a schedule to the letter.

The information sought generally related to what the Sources had communicated to the Defendant (“the Communications”), how the Communications were made and the identity of the Sources. Having received the letter, Mr Joji wrote an email to Mr Chudgar on 18 March 2016. The tone of the email was apologetic, and Mr Joji expressed a hope that the Parties could resolve their dispute amicably. However, as before, the Defendant did not furnish the requested information.

On 21 July 2016, the Plaintiff filed Originating Summons 734 of 2016 (“OS 734”) in the High Court. By OS 734, the Plaintiff sought leave to serve pre-action interrogatories on the Defendant under O 26A rr 1(1) and 1(5) of the Rules of Court (Cap 322, R 5, 2014 Rev Ed) (“the Rules”); as well as an order for pre-action discovery against the Defendant under O 24 rr 6(1) and 6(5) of the Rules. Again, broadly speaking, the Plaintiff sought disclosure of the Communications and the identity of the Sources.

Decision below

The AR allowed the Plaintiff’s application in part and ordered the Defendant to provide pre-action discovery of certain documents sought (“the Documents”). The AR was of the view that the Plaintiff ought to be shown these documents as these would “assist the Plaintiff in pursing their intended claim for malicious falsehood”.¹²

For convenience, I reproduce below the list of Documents which the Defendant was ordered to disclose:¹³ (a) All documents and correspondence evidencing the statement in the “Editor’s Note” to the Article that the Article was “based on information provided by reliable sources”, namely the following: (i) Documents and correspondence evidencing the statement in the Article that “multiple sources familiar with the development” had told the Defendant that “Sun Pharmaceutical Industries Ltd is now sweeting its sights to acquire local rival Intas Pharmaceuticals Ltd, and is in ‘early talks’ in what could be a Rs 15,0000 ($2.3 billion) deal”. (ii) Documents and correspondence evidencing the statement in the Article that “one of the executives who is directly aware of the development” had told the Defendant that the Acquisition would be a “cash-cum-stock deal [that] will see Sun Pharma cough up Rs 7,500 crore in cash and issue shares for the remaining amount. (iii) Documents and correspondence evidencing the statement in the Article that “another of the executives quoted above” had told the Defendant that “Sun Pharma has hired Kotak Mahindra while Intas Pharma has appointed a leading Mumbai-based advisory firm to lead the mandate for the proposed deal”. (iv) Documents and correspondence evidencing the statement in the “Editor’s Note” to the Article that the Defendant had “sought reactions” from the “leading Mumbai-based advisory firm” (as identified in (iii) above) that was allegedly appointed by the Plaintiff to “lead the mandate for the proposed deal”.

However, the AR declined to allow any of the interrogatories sought by the Plaintiff. He also took the view that it was not sufficiently material for the Plaintiff to know the identity of the Sources to pursue its claim in malicious falsehood against the Defendant.¹⁴ As such, the AR further directed that, in disclosing the Documents, the Defendant could redact any information that may lead to identification of the Sources.¹⁵

The Parties’ arguments on appeal The Plaintiff’s arguments

By Registrar’s Appeal 362 of 2016, the Plaintiff appeals, first, against the AR’s decision declining to allow it to serve interrogatories on the Defendant, and secondly, against the AR’s decision allowing the Defendant to redact from the Documents, any information which may lead to identification of the Sources.

The Plaintiff states that it requires pre-action disclosure of the Communications and the identity of the Sources for two purposes: First, to determine whether it has a viable cause of action against the Defendant for malicious falsehood (“the First Purpose”); and Secondly, to identify the Defendant’s sources so as to commence proceedings for malicious falsehood against the Sources themselves (“the Second Purpose”).¹⁶

In applying for disclosure for the Second Purpose, the Plaintiff effectively seeks a Norwich Pharmacal order. Such orders are named after the English decision of Norwich Pharmacal Co v Customs and Excise Commissioners [1974] AC 133 (“Norwich Pharmacal”), and are sought by a...