Nava Bharat (Singapore) Pte Ltd v Straits Law Practice LLC and another and another appeal

• Jurisdiction: Singapore
• Judge: Sundaresh Menon CJ
• Judgment Date: 22 February 2016
• Neutral Citation: [2016] SGCA 12
• Plaintiff Counsel: Francis Xavier, SC, Ang Tze Phern and Alina Chia (Rajah & Tann Singapore LLP) (instructed counsel), Liew Teck Huat, and Jason Yeo (Global Law Alliance LLC)
• Docket Number: Civil Appeal Nos 129 and 133 of 2015
• Date: 22 February 2016
• Hearing Date: 22 February 2016
• Subject Matter: Contract,Negligence,Professional Negligence,Breach,Tort
• Year: 2016
• Citation: [2016] SGCA 12
• Defendant Counsel: and Cavinder Bull, SC, Chia Voon Jiet, Darryl Ho and Yeo Wen An Jeremy (Drew & Napier LLC)
• Court: Court of Appeal (Singapore)
• Published date: 25 June 2016

Sundaresh Menon CJ (delivering the judgment of the court ex tempore):

Civil Appeal No 129 of 2015 (“CA 129/2015”) and Civil Appeal No 133 of 2015 (“CA 133/2015”) arise from a professional negligence suit brought by the plaintiff, Nava Bharat (Singapore) Pte Ltd (“the plaintiff”), against the defendant solicitors, Straits Law Practice LLC and its senior director, M Rajaram (“the defendants”). Following a trial that lasted more than 40 days, the Judge delivered a 327 page judgment, dismissing the plaintiff’s claim. The decision of the High Court is published as Nava Bharat (Singapore) Pte Ltd v Straits Law Practice LLC and another and another suit [2015] SGHC 146.

The Judge was presented with a wide array of issues, but in the appeals before us, only a single issue remains, and on that issue, both parties have appealed. The sole issue in question pertains to an oral undertaking that was furnished on 19 December 2008. The context of the undertaking may be stated briefly. The defendants were engaged as the plaintiff’s solicitors in a transaction concerning the plaintiff’s acquisition of an interest in a coal mine in Indonesia. In the course of negotiating and finalising the deal, an issue arose in respect of a lend-use permit that had to be obtained from the Indonesian Ministry of Forestry before mining could commence (“the Forestry Licence”). The plaintiff’s Indonesian counsel made it clear that the Forestry Licence was an essential prerequisite to the deal. The counterparty to the transaction, one Mr Dicky Tan, maintained that no licence was required and in fact that he was and had already been mining coal without such a licence. This came to a head at a meeting on 19 December 2008. Faced with an impasse, and the prospect of the deal being scuppered, Mr Dicky Tan orally undertook to obtain the Forestry Licence, if this should prove necessary.

It was undisputed that at the meeting on 19 December 2008, Mr Ashwin Devineni, the plaintiff’s main representative, was aware that his Indonesian counsel and business team had advised that a Forestry Licence would be necessary if the deal was to proceed. Shortly after the meeting, as Mr Rajaram testified, he reminded Mr Devineni that without the Forestry Licence, the plaintiff could not proceed with the deal. We are therefore satisfied that as matters stood, as far as the plaintiff was concerned, the deal could and would only go forward if the Forestry Licence was in fact procured. A few days later, on 23 December 2008, in correspondence exchanged between Mr Rajaram and Mr Dicky Tan’s lawyers, it was acknowledged in writing by the latter that Mr Dicky Tan was to apply for and obtain the Forestry Licence from the relevant government department in Indonesia, if this was found to be necessary.

As things transpired, the parties went forward with the transaction on that basis. Initial completion of the transaction took place on 22 and 28 January 2009. Pursuant to the terms in the initial completion documents, on 28 January 2009, the plaintiff released a loan of US$3m to Mr Dicky Tan. Indeed, before us, it is this payment of...