Raffles Education Corp Ltd and others v Shantanu Prakash and another

• Jurisdiction: Singapore
• Judge: Audrey Lim J
• Judgment Date: 28 April 2020
• Neutral Citation: [2020] SGHC 83
• Citation: [2020] SGHC 83
• Court: High Court (Singapore)
• Published date: 05 May 2020
• Docket Number: Suit No 709 of 2019 (Summonses Nos 3947 and 4432 of 2019)
• Plaintiff Counsel: Wendy Lin, Monica Chong Wan Yee and Ho Yi Jie (Wong Partnership LLP)
• Defendant Counsel: Francis Xavier SC and Derek On (Rajah & Tann Singapore LLP),P Padman and Lim Yun Heng (KSCGP Juris LLP)
• Subject Matter: Conflict Of Laws,Natural forum,Tort,Conspiracy,Misrepresentation,Fraud and deceit
• Hearing Date: 12 February 2020,06 April 2020,08 November 2019

Audrey Lim J:

These are the defendants’ applications to stay Suit 709 of 2019 (“Suit 709”) on the grounds of forum non conveniens.

Background

The first plaintiff, Raffles Education Corporation Limited (“P1”), is a Singapore company and wholly owns the second plaintiff, Raffles Education Investment (India) Pte Ltd (“P2”), a Singapore company, and the third plaintiff, Raffles Design International India Pvt Ltd (“P3”), an India company. The plaintiffs are private education providers and will be collectively referred to as the Raffles Education Group (“REG”) or the Plaintiffs in this judgment.

The first defendant, Shantanu Prakash (“D1”), is an Antiguan national and a Singapore permanent resident. He is the founder of the Educomp group of companies (“Educomp Group”), which includes: (a) Educomp Solutions Ltd (“Educomp Solutions”), a publicly-listed India company; (b) Educomp Asia Pacific Pte Ltd (“Educomp Asia”), a Singapore company; (c) Educomp Professional Education Limited (“Educomp Professional”), an India company; and (d) Edulearn Solutions Limited (“Edulearn”), a BVI company.¹ Educomp Asia and Educomp Professional are wholly owned by Educomp Solutions, whilst Edulearn is owned by the second defendant, Dennis Lui (“D2”).² D2 is a Singapore lawyer and Singapore citizen; a director of Educomp Asia and Edulearn at the material time; and a shareholder of Edulearn.³ D1 and D2 will be collectively referred to as the Defendants in this judgment.

JVA and ERHEL

On 16 May 2008, P1 and Educomp Solutions entered into a joint venture agreement (“the JVA”) to establish and run higher education institutions in India. They were to hold equal shares in the joint venture entities established in India for this purpose. They subsequently incorporated Educomp-Raffles Higher Education Limited (“ERHEL”) in India as their joint venture vehicle. P2 and P3 jointly held REG’s interests in ERHEL.⁴

Noida College and the JRRES SPA

The Jai Radha Raman Education Society (“JRRES”) is a private non-profit society in the business of running educational institutions. Pursuant to its rules and regulations, the JRRES shall have a maximum of 16 members (“JRRES General Body”), from whom a governing body of up to 10 members (“JRRES Governing Body”) shall be drawn.⁵

On 1 July 2009, ERHEL and JRRES entered into a loan agreement whereby ERHEL loaned JRRES INR500 million for JRRES to establish Noida College in the Greater Noida Area in India.⁶ According to the Plaintiffs, the loan was disbursed to JRRES in 2009 by P1 / REG. Subsequently, the loan agreement was amended to provide for an additional loan facility of INR100 million (which was provided by P1 / REG).⁷

The construction of Noida College lacked funds and fell behind schedule. In January 2010, ERHEL incorporated Millennium Infra Developers Limited (“MIDL”), its wholly owned subsidiary. In February 2010, MIDL and JRRES entered into an agreement, whereby MIDL took over the construction of Noida College for a fee. Noida College was completed in 2011 and started operations thereafter.⁸

In around 2013 or 2014, P3 entered into a sale and purchase agreement to purchase JRRES’s 99-year lease over the land in the Greater Noida Area (“the JRRES SPA”) for INR3 billion, of which P3 was required to pay an advanced sale consideration to JRRES of INR180 million in three tranches until September 2014.⁹

SPA and BAA

On 12 March 2015, P2 and P3 entered into a share purchase agreement with Educomp Asia and Educomp Professional to purchase the latter’s stake in ERHEL for INR986.4 million (“the SPA”).¹⁰ The SPA involved the following:¹¹ P2 and P3 paying an upfront deposit of 10% of the purchase price and being allowed thereafter to take control of ERHEL and JRRES; P2 and P3 assuming responsibility for the funding of the operation of the joint venture entities; Educomp Asia and Educomp Professional procuring the resignation of their nominees in JRRES’s General Body (including D1); D1 resigning as JRRES’s president.

In conjunction with the SPA, P2 and Edulearn executed a business advisory agreement (“the BAA”) on 12 March 2015 for the provision of advisory services by Edulearn (through its board of directors including D1) to P2 for a consideration of INR100 million. On the same date, D2 (in his capacity as Edulearn’s solicitor) provided P2 with an undertaking, inter alia, confirming that D1 had been appointed director of Edulearn from 10 February 2015.¹²

Breach of SPA and SIAC Award

Pursuant to the SPA, Educomp Asia and Educomp Professional were required to satisfy certain conditions precedent before the execution of the transfer of shares, particularly the delivery of the completion documents required under clauses 4.1, 4.3 and 4.4 of the SPA. This was not done.¹³ In September 2015, P2 and P3 commenced arbitration in Singapore against them for breaches of the SPA. On 31 March 2017, the arbitral tribunal held in favour of P2 and P3 and awarded them damages of INR163.2 million (“the SIAC Award”).¹⁴

Proceedings in India

The Noida College closed in November 2017.¹⁵ Between 2017 and 2018, the Plaintiffs commenced various proceedings in India (“the Parallel Proceedings”), which I will elaborate on later.

Plaintiffs’ claim in Suit 709

On 15 July 2019, the Plaintiffs commenced Suit 709 against the Defendants for the torts of conspiracy, fraudulent misrepresentation and misrepresentation under s 2 of the Misrepresentation Act (Cap 390, 1994 Rev Ed) (“Misrepresentation Act”).

Conspiracy to injure the plaintiffs

The Plaintiffs claimed that the JVA envisaged that each party would share equally in the financing of the joint venture entities. However, the Educomp Group started defaulting on their obligation to make equal contributions and the burden of funding fell increasingly on the Plaintiffs. When P1 approached D1 to rationalise this mismatch, the Plaintiffs alleged that the “Conspiring Parties” – who were initially stated in the Plaintiffs’ Statement of Claim (“SOC”) to be D1, D2 and/or associates of D1 and/or the Educomp Group (or any two or more of them together) – began to conspire and devise a plan through which the Plaintiffs would be misled into believing that Educomp Solutions / the Educomp Group were agreeable to a buy-out of the latter’s stake in the joint venture even though they had no intention to do so. This is so that the Plaintiffs would continue to fund the joint venture exclusively while D1 would continue to retain control of JRRES and Noida College (“the Conspiracy”).¹⁶ The Plaintiffs alleged three main conspiracies on the Defendants’ part: the “SPA conspiracy”, the “BAA conspiracy”, and a conspiracy to engage in wrongful conduct vis-à-vis JRRES and Noida College (see [15]–[19] below). It should be noted that the Plaintiffs subsequently amended their SOC to remove the associates of D1 and Educomp Group as part of the Conspiring Parties – a matter I will return to later.

SPA conspiracy and representations

The Plaintiffs claimed that, from in or around late 2014, in furtherance of the Conspiracy, the Defendants made the following false representations to induce P2 and P3 to enter into the SPA with Educomp Asia and Educomp Professional, which the Defendants never intended for Educomp Asia and Educomp Professional to comply with and did subsequently induce Educomp Asia and Educomp Professional to breach (the “Pre-SPA Representations”):¹⁷ Educomp Solutions and/or the Educomp Group would give up their stake in or control of the joint venture entities (including ERHEL and JRRES); Educomp Solutions and/or the Educomp Group were in a position to, and would, ensure that complete control over JRRES would be ceded to the Plaintiffs following their exit from the joint venture. Specifically, they were able to procure the resignations of their nominee members in the JRRES Governing Body and JRRES General Body and to provide for the Plaintiffs’ nominees to take over those positions.

Following the execution of the SPA (and contrary to it), P2 and P3 continued to fund the joint venture exclusively while D1 continued to retain control of JRRES by refusing to resign as JRRES’s president.

BAA conspiracy and representations

The Plaintiffs also claimed that, in furtherance of the Conspiracy, the Defendants made the following false representations to induce P2 to enter into the BAA with Edulearn (in conjunction with the SPA), which the Defendants never intended Edulearn to comply with and did subsequently induce Edulearn to breach (the “Pre-BAA Representations”):¹⁸ the Defendants and/or Educomp Asia and/or Educomp Professional would take steps to ensure that closing under the SPA would materialise; Edulearn would abide by the terms of the BAA, specifically, cl 3.2.5.1, which required it to refund the initial 10% payment of INR10 million to P2 if closing under the SPA did not materialise due to Educomp Asia and Educomp Professional’s default (“initial BAA payment”).

Consequently, Edulearn, in breach of the BAA, retained the initial BAA payment for D1’s benefit following non-completion under the SPA.

Wrongful conduct conspiracy

The Plaintiffs also claimed that the Conspiring Parties engaged in wrongful conduct vis-à-vis JRRES and Noida College by, eg, causing JRRES to default on its contractual obligations (including the repayment of loans extended to it by P1 / REG), its obligations under the JRRES SPA with P3, and its obligation to make payment to employees, faculty members and essential service providers of Noida College.¹⁹ The Plaintiffs claimed that the conspiracy was achieved through unlawful means because the Defendants breached their duties as directors owed to Educomp Asia / Educomp Professional / Edulearn by participating in the conspiracy, and the conspiracy was brought about through fraudulent misrepresentations.²⁰

The Plaintiffs claimed that they suffered the following losses:²¹ the sums awarded to P2 and P3 in the...