Pacific Century v Canadian Imperial: Tag-Along Clause & Share Transfer Dispute

In Pacific Century Regional Development Ltd v Canadian Imperial Investment Pte Ltd, the Singapore Court of Appeal heard a case regarding the interpretation of a 'tag-along' clause in a Shareholders' Agreement. Pacific Century Regional Development (PCRD) appealed a decision in favor of Canadian Imperial Investment Pte Ltd (CIIP), formerly Orient Freedom Property Ltd (OFPL). The dispute arose from PCRD's corporate restructuring, which CIIP claimed breached the agreement. The Court of Appeal allowed the appeal, finding that PCRD's actions did not trigger the tag-along clause, and dismissed CIIP's claim.

1. Case Overview

1.1 Court

Court of Appeal

1.2 Outcome

Appeal Allowed

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Court of Appeal case involving Pacific Century and Canadian Imperial concerning the interpretation of a tag-along clause in a shareholders' agreement.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Pacific Century Regional Development LtdAppellant, RespondentCorporationAppeal AllowedWon
Canadian Imperial Investment Pte LtdRespondent, AppellantCorporationClaim DismissedLost

3. Judges

Judge NameTitleDelivered Judgment
Chao Hick TinJustice of the Court of AppealYes
L P TheanJustice of the Court of AppealNo
Yong Pung HowChief JusticeNo

4. Counsels

Counsel NameOrganization
Edwin TongAllen & Gledhill
Kasiviswanathan ShanmugamAllen & Gledhill
Siraj OmarDrew & Napier
Davinder SinghDrew & Napier
Hri KumarDrew & Napier

4. Facts

  1. PCRD and OFPL entered into a Shareholders' Agreement regarding a joint venture in Quinliven Pte Ltd (QL).
  2. PCRD decided to restructure its operations, including acquiring a listed shell company, Tricom Holdings Ltd.
  3. PCRD transferred its shares in QL to Newco, a subsidiary of PCRD.
  4. PCRD and PCG transferred their shares in Newco to Tricom.
  5. CIIP claimed PCRD breached cl 11(E) of the Shareholders' Agreement by failing to obtain an offer for CIIP's shares in QL.
  6. The Acquisition Agreement was dated 30 April 1999.
  7. Newco did not execute a deed of ratification and accession to be bound by the Agreement.

5. Formal Citations

  1. Pacific Century Regional Development Ltd v Canadian Imperial Investment Pte Ltd, CA 130/2000, 133/2000, [2001] SGCA 21

6. Timeline

DateEvent
OFPL's parent company saw an opportunity to develop an underground car-park in Shanghai, PRC.
Shareholders' Agreement entered into between PCRD and OFPL.
Newco incorporated in the British Virgin Islands.
PCRD decided to restructure its operations.
Acquisition Agreement entered into between PCRD, PCG, Tricom and Star.
PCRD issued a letter to its shareholders regarding the corporate restructuring.
Case Number CA 130/2000, 133/2000
Decision Date of the Court of Appeal.

7. Legal Issues

  1. Interpretation of Contractual Terms
    • Outcome: The Court of Appeal held that the 'tag-along' clause was not triggered in the circumstances of the case.
    • Category: Substantive
    • Sub-Issues:
      • Ambiguity in contract language
      • Application of 'tag-along' clause
    • Related Cases:
      • [1998] 1 All ER 98
      • [1976] 3 All ER 570
  2. Admissibility of Evidence
    • Outcome: The Court of Appeal held that the judge erred in admitting evidence of negotiation and of the intent of one party to the negotiation.
    • Category: Procedural
    • Sub-Issues:
      • Scope of 'factual matrix'
      • Admissibility of previous negotiations
      • Declarations of subjective intent
    • Related Cases:
      • [1998] 1 All ER 98

8. Remedies Sought

  1. Monetary Damages

9. Cause of Actions

  • Breach of Contract

10. Practice Areas

  • Commercial Litigation
  • Corporate Restructuring
  • Mergers and Acquisitions

11. Industries

  • Real Estate
  • Technology
  • Investment

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Investors Compensation Scheme v West Bromwich Building SocietyHouse of LordsYes[1998] 1 All ER 98England and WalesCited for principles relating to the admissibility of evidence on factual matrix in contract interpretation, but distinguished regarding the admissibility of previous negotiations and subjective intent.
Reardon Smith Line v Hansen-TangenN/AYes[1976] 3 All ER 570N/ACited for the principle that evidence on factual matrix may be admitted to assist in the construction of a document.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
No applicable statutes

15. Key Terms and Keywords

15.1 Key Terms

  • Tag-along clause
  • Shareholders' Agreement
  • Associated company
  • Subsidiary
  • Restructuring
  • Acquisition Agreement
  • Factual matrix
  • Back-door listing
  • Transfer of shares

15.2 Keywords

  • contract
  • shareholder
  • agreement
  • tag-along
  • transfer
  • shares
  • subsidiary
  • restructuring
  • acquisition

17. Areas of Law

Area NameRelevance Score
Contract Law90
Shareholders Agreement85
Tag-along Rights80
Interpretation of contractual terms70
Rules of construction65
Company Law60
Corporate Law60

16. Subjects

  • Contract Law
  • Corporate Law
  • Shareholder Agreements
  • Mergers and Acquisitions