Koh Kien Chon and another v Ding Asset Ltd

• Jurisdiction: Singapore
• Judge: Judith Prakash JCA
• Judgment Date: 11 August 2023
• Neutral Citation: [2023] SGCA 24
• Court: Court of Appeal (Singapore)
• Docket Number: Originating Application No 10 of 2023
• Hearing Date: 23 June 2023
• Citation: [2023] SGCA 24
• Year: 2023
• Plaintiff Counsel: Mansurhusain Akbar Hussein, Remesha Chandran Pillai and Shauna Low (Jacob Mansur & Pillai)
• Defendant Counsel: N Sreenivasan SC, Jerrie Tan and Felicia Tee (K&L Gates Straits Law LLC) (instructed), Ravindran s/o Ramasamy (CNPLaw LLP)
• Subject Matter: Civil Procedure,Appeals,Permission
• Published date: 16 August 2023

Steven Chong JCA (delivering the judgment of the court): Introduction

This is an application for permission to appeal against the decision of a Judge sitting in the General Division of the High Court (the “Judge”) in HC/RA 45/2023 (“RA 45”). The applicants, Mr Koh Kien Chon (“Mr Ken Koh”) and Koh Yang Kee Pte Ltd (“KYK”), are respectively the first and fourth defendants to HC/OC 265/2022 (“OC 265”), while the respondent, Ding Asset Ltd (“Ding Asset”), is the claimant in OC 265. In HC/SUM 4292/2022 (“SUM 4292”), an assistant registrar (the “AR”) granted Mr Ken Koh and KYK a stay of the actions against them in OC 265 in favour of arbitration in Singapore. However, on appeal, the Judge allowed Ding Asset’s appeal against the AR’s decision in RA 45, with the effect that OC 265 was to proceed against Mr Ken Koh and KYK. Mr Ken Koh and KYK now seek permission to appeal against the Judge’s decision.

Having considered the parties’ submissions, we are of the view that Mr Ken Koh and KYK have not raised any grounds on which permission to appeal should be granted. Accordingly, we dismiss the application.

The material facts The parties to the dispute

The first applicant is Mr Koh Kien Chon, also known as Mr Ken Koh. Mr Ken Koh is the Managing Director and sole shareholder of the second applicant, KYK. The other director of KYK is Mr Koh Yang Kee (“Mr Koh YK”), who is Mr Ken Koh’s father.

Mr Ken Koh and Mr Koh YK are also shareholders of Yang Kee Logistics Pte Ltd (“YKL”). They were directors of YKL until it was placed into receivership on 12 May 2022. YKL is the sole shareholder of Yang Kee Logistics (Singapore) Pte Ltd (“YKLS”). Mr Ken Koh and Mr Koh YK were also previously directors of YKLS.

The respondent is Ding Asset, a company incorporated in the British Virgin Islands. The ultimate beneficial shareholder and director of Ding Asset is Mr Ding Yanzhong (“Mr Ding”).

According to Ding Asset, in or around late 2018, Mr Ken Koh and/or Mr Koh YK met with Mr Ding on several occasions and verbally represented to Mr Ding that he or his company could invest in “a Yang Kee company”. Mr Ding agreed to do so and nominated Ding Asset as his investment vehicle. Consequently, two agreements were entered into, as follows: A share subscription agreement executed between Ding Asset and YKLS in or around October or November 2018 (the “Subscription Agreement”), wherein it was agreed that Ding Asset would be issued 454,445 ordinary shares in YKLS (the “Subscription Shares”) for a consideration of S$5m (the “Subscription Consideration”). A put option agreement executed among Ding Asset, Mr Ken Koh and KYK in or around October or November 2018 (the “Put Option Agreement”), wherein it was agreed that Ding Asset had a put option to sell to KYK during a specified “Put Option Period” all of the Subscription Shares at a specified “Put Option Price”.

Ding Asset claims that around the time that the Subscription Agreement and the Put Option Agreement were executed, Mr Ding was informed by “[Mr Ken Koh], [Mr Koh YK], and/or an associate of [Mr Ken Koh] and/or [Mr Koh YK] acting on their behalf” that the Subscription Consideration should be paid into a bank account belonging to YKL (the “Representation”). In reliance on the Representation, Mr Ding issued a cheque for S$5m on behalf of Ding Asset to YKL, instead of YKLS. Mr Ding did not realise at that time that the Subscription Consideration was being paid to a different company from the company that was the party to the Subscription Agreement.

On or around 13 November 2018, the Subscription Consideration was credited to YKL’s bank account. However, Ding Asset alleges that in breach of the Subscription Agreement, YKLS did not allot the Subscription Shares to it.

OC 265

On 15 September 2022, Ding Asset commenced OC 265. The first to fifth defendants in OC 265 are respectively Mr Ken Koh, Mr Koh YK, YKL, KYK and YKLS (collectively, the “Defendants”). Ding Asset’s pleaded causes of action include the following claims: YKLS breached the Subscription Agreement by failing to allot the Subscription Shares to Ding Asset. Mr Ken Koh and Mr Koh YK are liable in misrepresentation as they made the Representation to Mr Ding, despite knowing that the bank account in question belonged to YKL (not YKLS), and/or that it was not the bank account which Ding Asset was supposed to pay the Subscription Consideration into. Alternatively, Mr Ken Koh and/or Mr Koh YK made the Representation without belief in its truth or recklessly. In reliance on the Representation, Ding Asset paid the Subscription Consideration to YKL and therefore suffered loss. The Defendants are liable for unlawful means conspiracy, as they had a common intention to injure and cause loss to Ding Asset by unlawful means. Despite the Defendants being aware of Ding Asset’s intention to invest in YKLS and not YKL, Mr Ken Koh and Mr Koh YK made the Representation intending for Ding Asset to pay the Subscription Consideration to YKL instead of YKLS. Alternatively, the Defendants are liable for lawful means conspiracy, as they conspired and combined together wrongfully with the sole or predominant intention of injuring and/or causing loss to Ding Asset, by accepting the S$5m without issuing the Subscription Shares to it.

Based on the above causes of action, Ding Asset seeks, inter alia, damages to be assessed in relation to Ding Asset’s inability to sell the Subscription Shares at the Put Option Price under the Put Option Agreement.

The Defendants deny that they conspired to injure and cause loss to Ding Asset by unlawful or lawful means. According to Mr Ken Koh, YKL, KYK and YKLS, there was an oral variation made by Mr Ken Koh and Mr Ding to the Subscription Agreement and the Put Option Agreement, such that Ding Asset agreed to receive shares in YKL, rather than YKLS. Mr Ken Koh and Mr Koh YK also deny making the Representation to Mr Ding. In addition, Mr Ken Koh and KYK highlight that the Put Option Agreement (which they are parties to) contains an arbitration clause, while YKLS highlights that the Subscription Agreement (which it is party to) contains an arbitration clause. The arbitration clauses in the two agreements are identically worded, as follows:

Any and all disputes arising out of or in connection with this Agreement, including any question regarding its existence, validity or termination, shall be referred to and finally resolved by arbitration in Singapore in accordance with the Arbitration Rules of the Singapore International Arbitration Centre for the time being in force, which rules are deemed to be incorporated by reference in this Clause. The Tribunal shall consist of one arbitrator to be appointed by the Chairman of the Singapore International Arbitration Centre. The language of the arbitration shall be English and the decision of the arbitrator shall be final and binding on the Parties and shall be enforced in accordance with its terms.

The proceedings below

On 29 November 2022, Mr Ken Koh and KYK filed SUM 4292 seeking a stay of OC 265 in favour of arbitration. On 2 December 2022, YKLS filed a similar application in HC/SUM 4332/2022 (“SUM 4332”). However, Mr Koh YK and YKL did not file any similar application.

On 13 February 2023, the AR allowed SUM 4292 and SUM 4332, thus staying the actions against Mr Ken Koh, KYK and YKLS in favour of arbitration.

On 27 February 2023, Ding Asset appealed against the AR’s decision by filing RA 45 and HC/RA 46/2023 (“RA 46”) respectively. On 28 April 2023, the Judge allowed the appeals in RA 45 and RA 46. As there has been no application for permission to appeal against the Judge’s decision in RA 46 (in respect of YKLS), we set out the Judge’s reasoning only in relation to RA 45.

The Judge found that Ding Asset’s claims against Mr Ken Koh and KYK were governed by the arbitration clause in the Put Option Agreement, and that the applicable legislative provision was s 6 of the Arbitration Act 2001 (2020 Rev Ed) (the “AA”). Sections 6(1) and 6(2) of the AA provide as follows:

Stay of legal proceedings

6.—(1) Where any party to an arbitration agreement institutes any proceedings in any court against any other party to the agreement in respect of any matter which is the subject of the agreement, any party to the agreement may, at any time after filing and serving a notice of intention to contest or not contest and before delivering any pleading (other than a pleading asserting that the court does not have jurisdiction in the proceedings) or taking any other step in the proceedings, apply to that court to stay the proceedings so far as the proceedings relate to that matter. (2) The court to which an application has been made in accordance with subsection (1) may, if the court is satisfied that — (a) there is no sufficient reason why the matter should not be referred in accordance with the arbitration agreement; and (b) the applicant was, at the time when the proceedings were commenced, and still remains, ready and willing to do all things necessary to the proper conduct of the arbitration,

make an order, upon any terms that the court thinks fit, staying the proceedings so far as the proceedings relate to that matter.

The Judge proceeded on the basis that the requirement in s 6(2)(b) of the AA was satisfied, and therefore turned to consider if there was sufficient reason to refuse a stay. Having regard to the factors articulated in CSY v CSZ [2022] 2 SLR 622 (“CSY”) as to whether sufficient reason existed to refuse a stay, the Judge found that the “key factors of concern” in the present case were: (a) the likelihood of injustice in having the same witnesses deal with the same factual issues before two different fora; (b) the overlap between the issues in dispute such that there was a real prospect of inconsistent findings; and (c) the consequent likelihood of disrepute to the...