NTan Corporate Advisory Pte Ltd v TT International Ltd

• Jurisdiction: Singapore
• Judge: Sundaresh Menon CJ,Andrew Phang Boon Leong JA,Steven Chong JA
• Judgment Date: 19 October 2018
• Court: Court of Appeal (Singapore)
• Docket Number: Civil Appeal No 218 of 2017
• Date: 19 October 2018

nTan Corporate Advisory Pte Ltd

and

TT International Ltd

[2018] SGCA 69

Sundaresh Menon CJ, Andrew Phang Boon Leong JA and Steven Chong JA

Civil Appeal No 218 of 2017

Court of Appeal

Companies — Receiver and manager — Remuneration — Court of Appeal held in previous decision that fees to be assessed without reference to contractually-agreed formula — Whether contractually-agreed formula still relevant in determining value added to company — Whether value added to company otherwise proved

Companies — Schemes of arrangement — Remuneration of independent financial advisor cum scheme manager — Whether reasonable

Held, dismissing the appeal:

(1) The VAF Decision was a self-contained decision and it simply did not arise for argument whether the court or any of the parties thought it might have had been correctly or wrongly decided. The Court of Appeal in 2015 had also held that the VAF Decision, whether right or wrong, was final and binding. In these circumstances, the Court of Appeal could not go behind the VAF Decision and it became purely a question of valuation in accordance with the principles set out in Re Econ Corp Ltd[2004] 2 SLR(R) 264 that were summarised in the VAF Decision: at [6].

(2) It was not clear why the Judge had considered the VAF formula but then decided that it was neither fair nor reasonable to apply the formula to this case, because the effect of the VAF Decision was to exclude the terms of the contract between the parties, including the VAF formula, as relevant factors in assessing the appellant's remuneration. However, as the Judge considered that this was ultimately irrelevant, the fact that he considered the VAF formula did not affect his decision: at [9].

(3) There was no basis for departing from the rest of the Judge's analysis. While the appellant had added some value to the respondent company, there were no other acceptable means for assessing the particular value that could be specifically attributed to the appellant: at [10] and [11].

Case(s) referred to

Econ Corp Ltd, Re [2004] 2 SLR(R) 264; [2004] 2 SLR 264 (refd)

Royal Bank of Scotland NV, The v TT International Ltd [2012] 4 SLR 1182, CA (folld)

Royal Bank of Scotland NV, The v TT International Ltd [2015] 5 SLR 1104, CA (refd)

Facts

In 2008, the respondent, TT International Limited, engaged the appellant, nTan Corporate Advisory Pte Ltd, as its independent financial advisor to help in its financial restructuring. Three of the appellant's personnel were subsequently appointed as the respondent's scheme managers. The letters of engagement provided for the remuneration of the appellant, including a value-added fee (“VAF”), which in broad terms was a percentage of the amount of the debt of the respondent that would be waived, written off or extinguished pursuant to the eventual terms of the scheme of arrangement.

Although the scheme of arrangement was initially approved, in 2012 the respondent's creditors challenged the validity of the scheme on the basis that at the time the scheme was voted on and agreed to by the creditors, they had not been made aware of the contractually-agreed remuneration of the appellant, including the VAF. The Court of Appeal in 2012 held that there had been material non-disclosure of the contractually-agreed remuneration that would typically have required that the entire...