Kiri Industries Ltd v Senda International Capital Ltd and another

• Jurisdiction: Singapore
• Judge: Kannan Ramesh JAD
• Judgment Date: 03 March 2023
• Neutral Citation: [2023] SGHC(I) 4
• Court: International Commercial Court (Singapore)
• Docket Number: Suit No 4 of 2017
• Hearing Date: 27 February 2023
• Citation: [2023] SGHC(I) 4
• Year: 2023
• Plaintiff Counsel: Dinesh Dhillon Singh, Lim Dao Kai, Margaret Joan Ling Wei Wei and Dhivya Rajendra Naidu (Allen & Gledhill LLP)
• Defendant Counsel: Toh Kian Sing SC, Cheng Wai Yuen Mark, Chew Xiang, Soh Yu Xian Priscilla and Lim Wee Teck Darren (Rajah & Tann Singapore LLP),See Chern Yang, Audie Wong Cheng Siew and Teng Po Yew (Drew & Napier LLC)
• Subject Matter: Companies,Shares,Valuation of shares
• Published date: 08 March 2023

Kannan Ramesh JAD (delivering the judgment of the court): Introduction

This is our decision on the valuation of Kiri Industries Ltd’s (“Kiri”) 37.57% shareholding in DyStar Global Holdings (Singapore) Pte Ltd (“DyStar”) pursuant to a buy-out order at a price to be assessed as at the valuation date of 3 July 2018.

The factual backdrop and procedural history of the case can be found in the summary provided for in Kiri Industries Ltd v Senda International Capital Ltd and another [2023] SGHC(I) 3 (“Kiri v Senda (Remitted Issue)”) at [1]–[5]. This matter concerns the longstanding litigation between Kiri and Senda International Capital Ltd (“Senda”). In gist, the Singapore International Commercial Court (“SICC”) previously found that Senda was liable for oppressive conduct against Kiri and granted a buy-out order. Senda was ordered to purchase Kiri’s 37.57% shareholding in DyStar. In arriving at the value of Kiri’s shareholding in DyStar for the purposes of the buy-out order, one of the issues raised was the compensation to be paid for Zhejiang Longsheng Group Co, Ltd’s (“Longsheng”) unauthorised use of DyStar’s patent to produce certain dyes. The SICC previously found that the appropriate form of compensation was embedded in the concept of a notional licence fee, ie, how much Longsheng would have to pay DyStar to obtain its consent to produce the dyes using the patent (Kiri Industries Ltd v Senda International Capital Ltd and another [2021] 3 SLR 215 at [183]). The notional licence fee was to be assessed based on the quantity of infringing products produced by Longsheng falling within the scope of the patent (the “Related Products”).

Kiri’s shares in DyStar were eventually valued at US$481.6m by the SICC on 21 June 2021 (Kiri Industries Ltd v Senda International Capital Ltd and another [2021] 5 SLR 111 at [3]). Kiri and Senda both appealed to the Court of Appeal against various aspects of the SICC’s decision. On appeal, the Court of Appeal remitted the issue on the value of the notional licence fee back to the SICC to be reassessed based on the best available evidence that was before it on the quantity of the Related Products (Kiri Industries Ltd v Senda International Capital Ltd and another and other appeals and other matters [2022] SGCA(I) 5 (“Kiri v Senda (Valuation) (CA)”) at [292]).

In Kiri v Senda (Remitted Issue) at [38], the SICC, upon a robust review of the available evidence, found that the annual tonnage of the Related...