PSONS Ltd v UPF Holding Pte Ltd

• Jurisdiction: Singapore
• Judgment Date: 31 March 2014
• Date: 31 March 2014
• Docket Number: Suit No 750 of 2013 (Summons No 5068 of 2013)
• Court: High Court (Singapore)

PSONS Ltd

Plaintiff

and

UPF Holding Pte Ltd and others

Defendant

[2014] SGHC 55

Choo Han Teck J

Suit No 750 of 2013 (Summons No 5068 of 2013)

High Court

Civil Procedure—Mareva injunctions—Inter partes application to set aside ex parte injunction—Mining company encouraging counterpart to conduct illicit activities—Whether ex parte injunction against counterpart should be set aside

Equity—Remedies—Injunction—Mining company encouraging counterpart to conduct illicit activities—Whether mining company should be precluded from equitable relief

This was an application by the defendants to set aside the Mareva injunction that was in force against them, which prohibited the disposal of their assets in Singapore up to the value of US$900,000.

The plaintiff engaged in the business of mining and trading minerals. The first defendant was a trading company primarily involved in the wood and pulp business. On 18 November 2009, after some negotiations, the plaintiff and the first defendant signed a memorandum of understanding (‘MOU’). Under the MOU, the plaintiff was to pay US$610,000 to the first defendant in exchange for the first defendant's help to procure a mining licence for the plaintiff in Laos. The plaintiff alleged that these payments were meant to recompense the first defendant for its payments of ‘facilitation fees’ and ‘costs for the relevant applications to liaising with the various government departments to secure the licences’.

Pursuant to the MOU, the plaintiff had paid the first defendant an aggregate sum of US$841,350 (including expenses). However, the first defendant failed to procure the mining licence for the plaintiff. Furthermore, the plaintiff had discovered that the first defendant had forged an official document, allegedly from a Deputy Minister in Laos. Nevertheless, the plaintiff conducted further negotiations with the defendants to salvage the deal. A further agreement was reached on 25 July 2012, through which the plaintiff gave the defendants two to three weeks more to obtain the licence, failing which, the defendants had to return the US$841,350 to the plaintiff.

When the new deadline was reached, the licence was not obtained, nor was the plaintiff repaid. On 20 August 2013, the plaintiff commenced Suit No 750 of 2013 against the defendants, pleading breach of contract and the tort of deceit. The plaintiff applied for an urgent ex parte injunction order against the defendants. This was granted on 29 August 2013. The defendants subsequently applied to set aside the injunction.

Held, allowing the application:

(1) The ‘clean hands’ doctrine broadly stated that a plaintiff was not granted an injunction if he did not have clean hands. This doctrine applied to Mareva injunctions: at [11] .

(2) The plaintiff did not come to court with clean hands, as it had encouraged the defendants to conduct illicit activities. This was evidenced by two factors. First, its continued dealing with the defendants even after it was made aware of the forgery. Second, the circumstances of the case - the plaintiff, a company with experience in mining, approached the first defendant, a company with no experience in mining, solely because of the latter's established relationships with relevant parties in Laos: at [6] , [8] and [9] .

(3) As the plaintiff did not come to court with clean hands, it should not have been allowed resort to equitable relief: at [12] .

Beckkett Pte Ltd v Deutsche Bank AG [2011] 1 SLR 524 (folld)

Guan Chong Cocoa Manufacturer Sdn Bhd v Pratiwi Shipping SA [2003] 1 SLR (R) 157; [2003] 1 SLR 157 (refd)

Ninemia Maritime Corp v Trave Schiffahrtsgesellschaft mb H & Co KG (The Niedersachsen) [1983] 1 WLR 1412 (refd)

Solvadis Commodity Chemicals Gmb H v Affert Resources Pte Ltd [2014] 1 SLR 174 (refd)

Pradeep Pillai, Stephanie Wee and Ng Wenling (Shook Lin & Bok LLP) for theplaintiff

PPadman and Aaron Wham (Tan Kok Quan Partnership) for the defendants.

Judgment reserved.

Choo Han Teck J

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