Publicis Group SA v Chong Hon Kuan Ivan

CourtHigh Court (Singapore)
JudgeTan Lee Meng J
Judgment Date28 February 2003
Neutral Citation[2003] SGHC 41
Citation[2003] SGHC 41
Published date07 October 2003
Plaintiff CounselPrakash Mulani and Parhana Moreta (J Koh & Co)
Defendant CounselChong Boon Leong, Ajinderpal Singh, and Louis Chan (Rajah & Tann)
Subject MatterCivil Procedure,Whether proceedings begun by originating summons should continue as if they had been begun by writ,Rules of Court Order 28 rule 8(1).

1 In OS No 948 of 2002, the plaintiffs, Publicis Groupe SA ("Publicis"), a French public-listed advertising company, which entered into a Call and Put Option Agreement with the defendant, Mr Ivan Chong Hon Kuan ("Ivan"), the former managing director and chief executive of Publicis Eureka Pte Ltd with respect to the latter’s shares in that company, sought to enforce the terms of the said contract. After hearing the arguments of counsel for both parties, I ordered that the proceedings continue as if the cause or matter had been begun by writ for reasons which are set out below.

Background

2 Ivan is the founding member of Eureka Advertising Pte Ltd ("Eureka"), a local advertising agency. Under his management, Eureka made profits between 1980 and 1996. Having established the company in the local market, Ivan sought to raise Eureka’s profile in 1996 by entering into a joint venture with Publicis, a French company with an interest in the Asia-Pacific region. In December 1996, Publicis acquired 60% of the shares in Eureka, which was renamed Publicis Eureka Pte Ltd ("PEP"). The acquisition was on the assumption that Publicis and Ivan would work together to build PEP’s business. As such, Ivan was appointed PEP’s managing director and chief executive officer.

3 Publicis and Ivan also entered into a Call and Put Option Agreement, under which the former were granted an option to purchase the latter’s 76,800 shares in PEP "at any time within sixty (60) Business Days after the termination of [his] employment with the Company by notice in writing to [him] for all the option shares". The price for the shares was to be fixed with reference to an agreed formula and it was to be calculated and certified by PEP’s auditors.

4 Things did not turn out as expected. The working relationship between Publicis and Ivan deteriorated after the former incorporated a wholly owned subsidiary, FCA Communications, in Singapore and it worsened after Publicis acquired the interests of Saatchi & Saatchi, an international advertising agency, in September 2000. Ivan complained vociferously that Publicis diverted lucrative business from PEP to their other companies. On the other hand, Publicis, which denied diverting profits from PEP to FCA, contended that FCA sheltered PEP from operating losses.

5 On 6 November 2000, Ivan’s solicitors, Rajah & Tann, asserted in a letter to Publicis’ solicitors, J Koh & Co, that Publicis had acted in a manner prejudicial to Ivan’s interest and added that he and two other original shareholders were prepared to sell their shares (the "original shareholders’ shares") in PEP to Publicis for not less than $6.4m.

6 Negotiations for the sale and purchase of the original shareholders’ shares continued without a breakthrough for a while. To break the impasse, Publicis’ chairman and chief executive officer, Mr Maurice Levy, informed Ivan on 15 May 2001 that his company was prepared to purchase the original shareholders’ shares for $4.4m and pay for them on the basis of a time-table proposed by Ivan. On 21 May 2001, Ivan, who claimed to have accepted Maurice’s offer, replied that he was glad that the parties had "finally come to an agreement".

7 The parties were supposed to sign legal documents with respect to the sale and purchase of the said shares. Unfortunately, these documents were not signed because of some disagreement between the parties. On 2 October 2001, Ivan informed Publicis that as the latter had reneged on the agreement to purchase his shares, he would commence legal proceedings. On 9 February 2002, Ivan’s employment with PEP was terminated. On 11 June 2002, Publicis sought to exercise their right under the Call and Put Option Agreement to purchase Ivan’s shares in PEP for only $2,267,904, the price calculated and certified by PEP’s auditors, Ernst & Young. Ivan refused to transfer the shares in question to Publicis.

8 A number of suits were filed by Ivan as a result of the dispute between the parties. These include actions in relation to his claim for damages for wrongful termination of his contract of employment, his application for leave under section 216A of the Companies Act to commence an action on behalf of PEP against Publicis, and his allegation of oppression against minority shareholders. Ivan could not serve the requisite documents in his numerous suits on Publicis in Singapore as the latter refused to appoint local solicitors to accept service of the said documents. Having made it difficult for Ivan to serve the said documents in Singapore, Publicis then instructed J Koh & Co to file OS No 948 of 2002 on 9 July 2002 to enforce the terms of the Call and Put Option Agreement.

9 Frustrated at not being able to serve on Publicis in Singapore the requisite documents in connection with his suits, Ivan sought leave for substituted service of the said documents on J Koh & Co. He also attempted to have his suits consolidated with OS No 948 of 2002. Publicis opposed Ivan’s applications, claiming that they had no intention to evade service and that service of the requisite documents in France was neither impossible nor impracticable. The Deputy Registrar, who heard Ivan’s application...

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1 books & journal articles
  • Contract Law
    • Singapore
    • Singapore Academy of Law Annual Review Nbr. 2003, December 2003
    • 1 December 2003
    ...v Tai Kee Sing (No 2)[2003] SGHC 296 (also referred to infra, with regard to conflict of laws); Publicis Group SA v Chong Hon Kuan Ivan[2003] SGHC 41 (also referred to infra, with regard to employment contracts and at para 9.14 infra, with regard to ‘Offer and acceptance’); Lim Yee Ming v U......

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