Kiran Global Alkali Sdn. Bhd. and another v Param Deep Singh

• Jurisdiction: Singapore
• Judge: Seah Chi-Ling
• Judgment Date: 22 June 2021
• Neutral Citation: [2021] SGDC 113
• Court: District Court (Singapore)
• Docket Number: District Court Suit No 589 of 2020, DC/RA 21 of 2021, HC/RAS 14 of 2021
• Published date: 03 July 2021
• Year: 2021
• Hearing Date: 19 May 2021,05 April 2021
• Plaintiff Counsel: Bhaskaran Sivasamy, Yao Qinzhe (Skandan Law LLC)
• Defendant Counsel: Poonam Bai (Eldan Law LLP)
• Subject Matter: Conflict of Laws,Natural Forum,Stay of proceedings,Whether Plaintiffs deprived of legitimate juridical advantage if stay granted,Whether Plaintiffs acted reasonably in not filing a protective writ in Malaysia
• Citation: [2021] SGDC 113

District Judge Seah Chi-Ling: Introduction

The present appeal arose out of DC/SUM 148/2020 filed in DC 589/2020 (the “Suit”), which is the Defendant’s application to stay the Suit commenced by the Plaintiffs before the District Court on the grounds of forum non conveniens. The learned Deputy Registrar (“DR”) allowed the application and stayed the Singapore action in favour of the Malaysian courts. The Plaintiffs appealed against the DR’s decision by way of a Registrar’s Appeal under Order 55B of the Rules of Court (“ROC”). I heard the Registrar’s Appeal, and allowed the appeal as I was, among other things, of the view that Malaysia was not clearly the more appropriate for the dispute. The Defendant is dissatisfied with my decision and has filed the present appeal to the High Court under Order 55C of the ROC.

Background Facts The Parties

The 1st Plaintiff, Kiran Global Alkali Sdn Bhd (“KA” or “1st Plaintiff”) is a company incorporated in Malaysia, and a subsidiary of Kiran Global Chems Limited (“KGCL”), a company incorporated in India. KGCL is the parent company of the Kiran group of companies (the “Kiran group”), which is in the business of manufacturing industrial chemicals, including sodium silicates. The Kiran group operates in a number of countries in the Middle East and Africa.

The 2nd Plaintiff, PTAL International FZE (“PTAL”) is a wholly owned subsidiary of KGCL, and is incorporated in the United Arab Emirates.

The founder of the KGCL is Mr. Manmohan Singh Jain (“M.S. Jain”). The CEO of KGCL is Mr. Fernando Rufus Navis Charles (“Rufus”). Both are based in India.

The Defendant is Mr Param Deep Singh, a businessman who has been involved in the trade of oils and oil seeds, and chemical trading for more than 30 years. M.S. Jain and the Defendant have been friends for more than 40 years, having known each other when they worked for a company in India, before the Defendant moved to Singapore in the 1980s.

In 2013, the Kiran group decided to expand into Southeast Asia. To that end, Kiran Global Chemicals Sdn Bhd (“KGC”) was incorporated under the laws of Malaysia on or around 2 April 2013.

In 2013, KGC encountered legal issues when it attempted to acquire certain land in Malaysia (the “Earlier Land Transaction”). KGC was concerned whether the seller was the true owner of the land, and eventually withdrew from the deal. The counterparty to the Earlier Land Transaction had then threatened to sue KGC for failing to conclude the deal.

The Defendant learnt of KGC’s troubles and offered to help KGC source for a suitable plot of land in Malaysia to set up a local office and factory to produce sodium silicates.

The Land Deal

On or around 4 July 2013, the Defendant successfully secured a letter of offer for KGC to purchase another plot of land, namely a land in Tanjong Langsat, Plot PLO 208 (the “Land”). The seller was a Malaysian entity called Johor Corporation, and the total purchase price was RM 2,186,654 (the “Land Deal”).

The Letter of Offer (the “Letter of Offer”) issued by Johor Corporation to KGC provided for the payment of the initial 30% of the purchase price to Johor Corporation as follows: 10% of the purchase price amounting to RM218,665.40 was to be paid within 2 weeks of the Letter of Offer, i.e. 18 July 2013; KGC was to execute the sale and purchase agreement within 1 month from the date of receipt of the 10% payment; and 20% of the purchase price was to be paid upon signing of the sale and purchase agreement.

On 30 August 2013, the Kiran group transferred the sum of RM 218,665.40, being 10% of the purchase price, to the Defendant. According to the Plaintiff, KGC did not have a Malaysian bank account at that time. It was thus agreed with the Defendant that the Defendant would receive funds on behalf of KGC in the Defendant’s Singapore bank account, and thereafter make payment to Johor Corporation¹. Payment of the first 10% of the Purchase Price was duly effected by the Defendant to Johor Corporation.

As it turned out, the sale and purchase agreement was not executed by KGC on 30 September 2013 as envisaged under the Letter of Offer. According to the Plaintiffs, the delay in the execution of the sale and purchase agreement was occasioned by Kiran group’s concerns about potential lawsuits due to the Earlier Land Transaction which had surfaced around that time.

In view of the potential lawsuits affecting KGC, Kiran group eventually decided to incorporate a new company in Malaysia for future business transactions in Malaysia. Pursuant thereto, the 1st Plaintiff, KA, was incorporated on 9 January 2014. Defendant was made a director, as well as a one-third shareholder, of KA. Rufus was also appointed as a director of KA.

The plan was for KA to take over the operations of KGC, including the purchase of the Land from Johor Corporation. Johor Corporation was duly informed of this arrangement in or around February 2014², and agreed to KGC’s request to change the name of the buyer from KGC to KA. ³

In or around March 2014, Johor Corporation sent fair copies of the sale and purchase agreement (the “Sale and Purchase Agreement”) to KGC. KGC did not execute the Sale and Purchase Agreement as the name of the purchaser was still reflected as KGC, and not KA as previously requested by KGC. It was not disputed that the 20% purchase price to be paid to Johor Corporation upon execution of the Sale and Purchase Agreement was not effected in March 2014.

The Disputed Cash Transfer

At or around the same time, on 1 March 2014, a sum of US$150,000.00 (the “Sum”) was transferred by the 2nd Plaintiff, at the instructions of the KGCL, to the Defendant’s Oversea-Chinese Banking Corporation (“OCBC”) account in Singapore. The Sum forms the subject matter of the present dispute. The Plaintiffs’ case was that the Sum was intended for payment of the 20% payment price upon the execution of the Sale and Purchase Agreement. However, as the Sale and Purchase Agreement sent over by Johor Corporation in March 2014 still reflected KGC as the purchaser, it was decided by KA, upon consultation with the Defendant, that the payment of the 20% purchase price would be placed on hold pending the rectification of KA as the buyer under the Sale and Purchase Agreement. Defendant had informed M.S. Jain and Rufus that he would pay the Sum to Johor Corporation after the latter had corrected the error and reflected KA as the buyer under the agreement⁴.

The Defendant did not dispute that he received the Sum in his OCBC bank account in Singapore and thereafter withdrew it for his own use. His sole defence, however, was that the Sum was paid to him by way of salary for the work he had undertaken on behalf of the Kiran group in Malaysia. He claimed that at the time he was asked to assist M.S. Jain in Kiran group’s Malaysian venture, an agreement was reached between him and M.S. Jain whereby he would be paid a sum US$6,500.00 on a monthly basis as compensation for services rendered by him. The payments would commence with effect from April 2013⁵. It was further agreed that once KGC became operational, the Defendant’s remuneration would increase to US$10,000 a month. The agreement was, however, not reduced into writing, and no documentary proof of the remuneration agreement was produced in these proceedings. Defendant contended that given his long-standing friendship with M.S. Jain, he had no reason to doubt that such an oral agreement would not be honoured.

The Plaintiffs admitted that it was agreed between M.S. Jain and the Defendant that he would be remunerated for his services to KA and/or KGC. However, the definitive terms of his remuneration or compensation were never formally discussed, much less, agreed. At any rate, the Sum was not intended to be applied in payment of the Defendant’s salary. Instead it was meant to effect payment of the 20% of the purchase price which would have become due once the draft Sale and Purchase Agreement sent by Johor Corporation in March 2014 had been signed. But for the fact that the Vendors had not rectified the name of the purchaser from KGC to KA, the Sale and Purchase Agreement would have been signed, and the 20% payment made, in March 2014.

The Suit

On 26 February 2020, KA and PTAL caused a writ to be issued against Defendant before the Singapore courts (DC 589/2020 (the “Suit”)).

The claims by the 1st Plaintiff against the Defendant are for (i) breach of trust by misappropriating monies held on trust; (ii) breach of fiduciary duties by the Defendant as a director of KA, and (iii) unjust enrichment.

The claims by the 2nd Plaintiff against the Defendant are for (i) breach of trust by misappropriating monies held on trust and (ii) unjust enrichment.

Defendant’s stay application

The Plaintiffs contended that the Defendant had, through his lawyers, requested additional time to file a Defence and to make without prejudice proposals to the Plaintiffs. The Plaintiffs granted the Defendant the indulgence, and refrained from entering a judgment in default of defence against the Defendant. This point was not disputed by the Defendant.

However, instead of filing a defence or putting forward any without prejudice proposals, on 20 April 2020, the Defendant’s counsel filed the present application DC/SUM 1482/2020 (“SUM 1482”) to stay the Suit on the grounds of forum non conveniens under Order 12, Rule 7(2) of the Rules of Court.

In SUM 1482, the Defendant argued that the Malaysia was the more appropriate forum for the trial of the present action. In view of the stay application, the Defendant did not file a Defence in these proceedings. It was, however, apparent from the Defendant’s affidavits filed in support of SUM 1482 that his sole defence was that the Sum was made to him as payment for alleged salaries and expenses owed to him.

Hearing before the Deputy Registrar

SUM 1482 was first heard on 8 January 2021 before the learned...