Ram Parshotam Mittal v Portcullis Trustnet (Singapore) Pte Ltd and others

JudgeLee Kim Shin JC
Judgment Date16 July 2014
Neutral Citation[2014] SGHC 138
Citation[2014] SGHC 138
Docket NumberSuit No 785 of 2011/T (Summonses No 12 and 1378 of 2014)
Published date16 July 2014
Hearing Date09 June 2014,26 May 2014
Plaintiff CounselLin Weiqi Wendy and Chong Wan Yee Monica (WongPartnership LLP)
Date16 July 2014
Defendant CounselHri Kumar Nair SC, Yeo Zhuquan Joseph and Harsharan Kaur Bhullar (Drew & Napier LLC)
CourtHigh Court (Singapore)
Subject MatterCivil Procedure,Restraint of Foreign Proceedings,Stay of Proceedings,Conflict of Laws
Lee Kim Shin JC: Introduction

On 26 May 2014, I heard two interlocutory applications which were but skirmishes in a protracted battle fought between two brothers over the ownership of a hotel in India. This dispute has spawned multiple legal proceedings in India, Singapore and Labuan over a period of more than 8 years.

Summons No 12 of 2014 was filed by the plaintiff (“the Plaintiff”) in Suit 785 of 2011/T (“Suit 785”) on 31 December 2013. This was an application for an anti-suit injunction to restrain the second defendant (“the 2nd Defendant”) in Suit 785 from maintaining the prosecution of proceedings it had commenced in the High Court of Sabah and Sarawak at the Federal Territory of Labuan (“the ASI Application”).

Summons No 1378 of 2014 was filed on 17 March 2014 and was an application by all three defendants in Suit 785 (collectively “the Defendants”) to stay the proceedings in Singapore pending the determination of proceedings in Labuan (“the Limited Stay Application”).

On 9 June 2014, I dismissed the ASI Application because Singapore was not the natural forum for the determination of the matters raised in the Labuan proceedings. I granted the Limited Stay Application in part and ordered that Suit 785 be stayed until 31 October 2014 with both parties being at liberty to apply. This was because (amongst other factors) a limited stay of Suit 785 would reduce the risk of conflicting judgments and would promote international comity. I also ordered that the Plaintiff pay costs to the Defendants for both applications, fixed at $8,000 plus reasonable disbursements.

The Plaintiff has since filed an appeal against my decision to grant the Limited Stay Application. I therefore set out the grounds of my decision. For completeness, these will include my reasons for dismissing the ASI Application.

Facts Parties

The Plaintiff is an Indian national. The first defendant (“the 1st Defendant”) is a Singapore-incorporated company and the 2nd Defendant is a Labuan-incorporated company. Both Defendants are part of the Portcullis Group and in the business of providing offshore corporate and trust services. The third defendant (“the 3rd Defendant”) is the chairman and founder of the Portcullis Group.

Background to the dispute The incorporation of Cardiff and Hillcrest

At the heart of Suit 785 lies a dispute between the Plaintiff and his brother, Ashok Mittal, over the beneficial ownership of an Indian company, Hotel Queen Road Pvt Ltd (“HQR”), a Labuan company, Cardiff Ltd (“Cardiff”) and a Malaysian company, Hillcrest Realty Sdn Bhd (“Hillcrest”).

HQR is the owner of a hotel named Hotel Indraprastha (“the Hotel”) in New Delhi, India. It is the Plaintiff’s case that until sometime in late 2009, he, through his wholly owned company, Moral Trading and Investment Ltd, had held 99.97% of the share capital of HQR. Around late 2002 or early 2003, the Plaintiff says that he decided to invest offshore funds into HQR for the upgrading and renovation of the Hotel. These offshore funds are said to comprise monies that Ashok Mittal held on trust for the Plaintiff in various accounts that Ashok Mittal managed and controlled.

To this end, the Plaintiff alleges that sometime in early 2003, he met the 3rd Defendant at the 1st Defendant’s office in Singapore for advice on setting up a corporate structure to route the offshore funds to HQR. The parties agreed on an arrangement which involved setting up two special purpose vehicles, namely, Cardiff and Hillcrest. Hillcrest is a wholly-owned subsidiary of Cardiff. Cardiff’s share capital comprises a single ordinary share.

The ownership of this single share is the subject of a fierce dispute between the Plaintiff and Ashok Mittal as ownership of Cardiff is crucial to the ownership and control of the Hotel.

Under this corporate structure, the offshore funds were to be transferred into Cardiff’s bank account. Cardiff was to then transfer the funds to Hillcrest’s bank account, after which Hillcrest was to remit the funds to HQR in India. The fund transfers to Cardiff and from Cardiff to Hillcrest were to occur by way of shareholder loans. However, the fund transfer from Hillcrest to HQR was to occur through the subscription of redeemable preference shares in HQR.

Pursuant to this corporate structure, in April and June 2003, a sum of approximately US$6,000,000 (“the Disputed Sum”) was remitted into Cardiff’s bank account. Cardiff then remitted the Disputed Sum to Hillcrest, which in turn utilised the Disputed Sum to subscribe for redeemable preference shares in HQR.

It is not disputed that the single share in Cardiff was initially held by Portcullis Trust (Labuan) Sdn Bhd (“PTLSB”) until it was transferred to the 2nd Defendant on 19 March 2004. The Plaintiff’s case in Suit 785 is that the sole share in Cardiff is held on trust for him, first by PTLSB and later by the 2nd Defendant, therefore making him the sole beneficial owner of both Cardiff and Hillcrest.

Conversely, the Defendants’ case is that the sole share in Cardiff is being held on trust for both the Plaintiff and Ashok Mittal. In this regard, they plead that the Plaintiff and Ashok Mittal had entered into a written service agreement (“the Service Agreement”) with PTLSB on or around 11 March 2003 for the provision of corporate and secretarial services and that both the Plaintiff and Ashok Mittal were identified as principals in the Service Agreement. The Service Agreement was later assigned to the 2nd Defendant sometime in early 2004. I should also point out that although the Plaintiff admits to entering into a written agreement with a Portcullis entity, he denies that this was the Service Agreement as pleaded by the Defendants.

The Indian Proceedings

Sometime in May 2005, the board of Hillcrest, acting on Ashok Mittal’s instructions, passed resolutions to appoint attorneys to bring actions against HQR for the non-payment of dividends to Hillcrest as a redeemable preference shareholder. Subsequently, the board of Hillcrest passed another resolution dated 2 June 2005, to call for an extraordinary general meeting (“EOGM”) of HQR to remove the Plaintiff and his wife as directors of HQR.

This led to the first of various legal proceedings between the Plaintiff and Ashok Mittal. On 22 July 2005, the Plaintiff commenced Civil Suit No 992 of 2005 (“Suit 992”) in India to invalidate the said resolutions and to prevent Hillcrest from convening the EOGM or from exercising voting rights in HQR. By an interim order dated 3 August 2005, the High Court of Delhi allowed Hillcrest to conduct the EOGM. On 4 August 2005, a shareholder resolution was passed at the EOGM to remove the Plaintiff and his wife as directors of HQR. However, pursuant to an interlocutory application by the Plaintiff in Suit 992, the High Court of Delhi made an order on 12 August 2005 restraining Hillcrest from giving effect to the shareholder resolution until Suit 992 was determined (“the 12 August 2005 Order”).

Hillcrest commenced Civil Suit No 1832 of 2008 (“Suit 1832”) on 30 August 2008 to seek a declaration that HQR had been converted to a public limited company in 2002. In or around January 2009, following various interlocutory applications in both Suit 1832 and Suit 992 , the High Court of Delhi lifted the injunction granted on 12 August 2005. By doing so, it gave effect to the 4 August 2005 shareholder resolution removing the Plaintiff and his wife as directors of HQR. Ashok Mittal’s son, Vikram Mittal, and Ashok Mittal’s brother-in-law, JK Gupta, were appointed as directors of HQR in place of the Plaintiff and his wife. Ashok Mittal, who was already a director of HQR at that time, was appointed chairman of HQR. Subsequently, as a result of a share issue in HQR, Ashok Mittal acquired substantial voting rights in HQR.

During the course of the Indian proceedings and sometime in April 2007, Vikram Mittal wrote several letters to Cardiff, claiming that he had loaned Cardiff the Disputed Sum and had assigned the benefit of the loan to an entity called Bamberg Management Inc (“Bamberg”). On 22 October 2009, a Cardiff board resolution was passed by the single vote of Ashok Mittal to amend Cardiff’s accounts to reflect the Disputed Sum as being a loan from Bamberg.

On 5 May 2010, the Plaintiff and various other parties filed a company petition (“the CP”) before the Company Law Board in India, against, inter alia, HQR, Ashok Mittal, Vikram Mittal, Hillcrest, Cardiff and the 1st and 2nd Defendants. In the CP, the Plaintiff challenged the propriety of the share issue by HQR, the ownership of the Disputed Sum and alleged other acts of oppression by the respondents to the CP.

These various Indian proceedings are still pending. The issues to be decided by the Indian courts include: whether the Hillcrest board resolutions appointing the attorneys were valid; whether the Plaintiff is the sole beneficial owner of Cardiff and Hillcrest; whether the 1st and the 2nd Defendants were the Plaintiff’s trustees; whether the 1st Defendant, the 2nd Defendant, Cardiff and Hillcrest colluded with Ashok Mittal to the Plaintiff’s detriment; and the true owner of the Disputed Sum.

The Singapore Proceedings

On 3 November 2011, the Plaintiff commenced Suit 785 in Singapore. The original defendants named in Suit 785 were the 1st Defendant, the 2nd Defendant, Cardiff and Hillcrest. Against them the Plaintiff sought declarations to the effect that: that he is the sole and ultimate beneficial owner of Cardiff and Hillcrest; and that the Hillcrest board resolutions appointing the attorneys (see [15] above) and the Cardiff board resolution of 22 October 2009 (see [18] above) were null and void.

He also sought orders to restrain the attorneys appointed by Hillcrest from acting and to require the named defendants to take all necessary steps to undo the effects of the Cardiff board resolution of 22 October 2009.

In...

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2 books & journal articles
  • Civil Procedure
    • Singapore
    • Singapore Academy of Law Annual Review No. 2014, December 2014
    • 1 d1 Dezembro d1 2014
    ...decision to set aside the service. Stay of proceedings 8.87 In Ram Parshotam Mittal v Portcullis Trustnet (Singapore) Pte Ltd[2014] 3 SLR 1337 (Ram Parshotam), the High Court referred to the Court of Appeal's decision in Chan Chin Cheung v Chan Fatt Cheung[2010] 1 SLR 1192 and clarified tha......
  • Conflict of Laws
    • Singapore
    • Singapore Academy of Law Annual Review No. 2014, December 2014
    • 1 d1 Dezembro d1 2014
    ...in the foreign proceedings. 11.40 Without going into too much detail, Ram Parshotam Mittal v Portcullis Trustnet (Singapore) Pte Ltd[2014] 3 SLR 1337 is an illustration of how an application for an anti-suit injunction did not succeed because the plaintiff could not show that Singapore was ......

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