Beckkett Pte Ltd v Deutsche Bank AG: Discovery, Implied Undertaking, Mortgage of Personal Property, Shares

In Beckkett Pte Ltd v Deutsche Bank AG, the Court of Appeal of Singapore heard an appeal regarding the use of discovered documents. Beckkett sought to use documents disclosed by Deutsche Bank in Singapore proceedings to obtain an injunction against a third party, DSM, in Indonesia. The court dismissed the appeal, primarily due to concerns that disclosing the documents in Indonesia could expose Deutsche Bank to criminal prosecution. The court also considered whether damages would be an adequate remedy and the likelihood of a bona fide purchaser without notice.

1. Case Overview

1.1 Court

Court of Appeal of the Republic of Singapore

1.2 Outcome

Appeal Dismissed

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Beckkett sought to use discovered documents in Singapore to obtain an injunction in Indonesia. The court dismissed the appeal, citing concerns over potential criminal prosecution.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Deutsche Bank AGRespondentCorporationAppeal DismissedWon
Beckkett Pte LtdAppellantCorporationAppeal DismissedLost

3. Judges

Judge NameTitleDelivered Judgment
Chao Hick TinJustice of AppealYes
Tay Yong KwangJudgeNo

4. Counsels

Counsel NameOrganization
William OngAllen and Gledhill
Stanley LaiAllen and Gledhill
K ShanmugamAllen and Gledhill
Sim Kwan KiatRajah and Tann
Ronald ChooRajah and Tann
Steven ChongRajah and Tann

4. Facts

  1. Deutsche Bank granted a US$100m loan to Asminco, secured by Beckkett's shareholding in SME and SME's shareholding in Asminco.
  2. Asminco defaulted on the loan, giving Deutsche Bank the right to dispose of the pledged shares.
  3. Beckkett alleged that Deutsche Bank did not give it notice of the intention to dispose of the pledged shares.
  4. Deutsche Bank sold the pledged shares to PT Dianlia Setyamukti (DSM).
  5. Beckkett claimed the pledged shares were sold at a gross undervalue and sought to set aside the sale.
  6. Beckkett sought to use discovered documents to obtain an injunction in Indonesia to restrain DSM from disposing of the pledged shares.
  7. There was a previous criminal complaint lodged by Beckkett against an officer of Deutsche Bank, Mr Wolfgang Topp.

5. Formal Citations

  1. Beckkett Pte Ltd v Deutsche Bank AG, CA 34/2005, [2005] SGCA 34
  2. Beckkett Pte Ltd v Deutsche Bank AG, , [2005] SGHC 79

6. Timeline

DateEvent
Deutsche Bank granted a loan of US$100m to Asminco.
Asminco was in default.
Deutsche Bank disposed of the pledged shares.
Beckkett took out pre-action discovery by way of Originating Summons No 772 of 2002.
Beckkett instituted Suit No 326 of 2004.
Beckkett instituted an action in Indonesia.
Deutsche Bank’s solicitors reminded Beckkett’s solicitors of the Riddick principle.
Beckkett discontinued the January 2005 action.
The assistant registrar granted Beckkett's application, limiting the documents to be used in Indonesia.
Beckkett commenced a fresh civil action in Indonesia.
Beckkett’s Indonesian lawyer, Mr Kaligis, was reported to have said that a civil case as well as a criminal case would be taken up in Indonesia against DB.
Deutsche Bank’s Indonesian firm of lawyers, M/s Amir Syamsuddin & Partners, wrote to advise DB that Beckkett has now approached [the Indonesian police] to seek to reopen investigations on the ground that they have new evidence.
Beckkett applied to discontinue that action, which application was pending at the time of the hearing of the present appeal before us.
The 11 April 2005 issue of the Indonesian publication Prospektif reported that another of Beckkett’s Indonesian lawyers, Mr Lucas, again threatened to institute criminal proceedings if the shares in question were not returned to Beckkett.
New Hope was to hold a general meeting on 21 April 2005 to vote on the proposed sale.
The appeal was heard.
The appeal was dismissed.

7. Legal Issues

  1. Implied undertaking not to use discovered documents for collateral or improper purpose
    • Outcome: The court held that Beckkett should not be released from the implied undertaking due to the risk of criminal prosecution for Deutsche Bank in Indonesia.
    • Category: Procedural
    • Sub-Issues:
      • Whether discovering party should be released from implied undertaking
      • Whether overriding public interest required before discovering party can be released from implied undertaking
    • Related Cases:
      • [1977] QB 881
      • [1991] 1 WLR 756
      • [1987] AC 829
      • [1979] RPC 97
      • [1985] Ch 299
  2. Breach of mortgagee's duties
    • Outcome: The court considered whether damages would be an adequate remedy for the alleged breach but did not make a definitive ruling on the issue.
    • Category: Substantive
  3. Risk that shares may be sold to bona fide purchaser without notice
    • Outcome: The court found the concern that a bona fide purchaser without notice might come into the picture would be remote.
    • Category: Substantive
    • Related Cases:
      • (1965) 113 CLR 265
  4. Principle against self-incrimination
    • Outcome: The court considered the principle against self-incrimination and the risk of criminal prosecution in Indonesia in determining whether to grant leave to Beckkett.
    • Category: Procedural
    • Related Cases:
      • [1992] 2 SLR 273
      • [1992] 1 SLR 553
      • [1991] 2 QB 310
      • [1997] AC 238
      • [1989] 1 WLR 565
      • [1998] QB 818

8. Remedies Sought

  1. Damages
  2. Setting aside the sale of the pledged shares
  3. Injunction to restrain DSM from disposing of the pledged shares

9. Cause of Actions

  • Breach of mortgagee’s duties
  • Conspiracy

10. Practice Areas

  • Litigation
  • Banking Law
  • Securities Law

11. Industries

  • Banking
  • Finance
  • Mining

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Omar v OmarN/AYes[1995] 1 WLR 1428N/ACited as a case where the court allowed the plaintiff the use of discovered documents for the purpose of seeking an injunction against third parties in another jurisdiction.
Riddick v Thames Board Mills LtdN/AYes[1977] QB 881N/AEstablished the principle that a discovering party may not use discovered documents for a purpose other than pursuing the action in respect of which discovery is obtained.
Prudential Assurance Co Ltd v Fountain Page LtdN/AYes[1991] 1 WLR 756N/ACited to support the point that the implied undertaking of not using the documents for other purposes is also an obligation owed to the court and not just to the party who was compelled to make discovery and it is an obligation which only the court can modify.
Crest Homes Plc v MarksHouse of LordsYes[1987] AC 829N/ACited for the principle that the court will not release or modify the implied undertaking given on discovery save in special circumstances and where the release or modification will not occasion injustice to the person giving discovery.
Halcon International Inc v The Shell Transport and Trading CoN/AYes[1979] RPC 97N/ADiscusses the principle that the mere furtherance of some private interest, even when the private interest arose directly out of or was brought to light as a result of the discovery, might not be sufficient to release a discovering party from its implied undertaking.
Sybron Corporation v Barclays Bank PlcN/AYes[1985] Ch 299N/ACited for the principle that the furtherance of a private interest could justify the grant of leave to use discovered documents for the purpose of other proceedings.
Lee Thin Tuan v Louis VuittonCourt of AppealYes[1992] 2 SLR 273SingaporeCited for reiterating the principle against self-incrimination.
Guccio Gucci SpA v Sukhdav SinghN/AYes[1992] 1 SLR 553SingaporeCited as another case which applied the principle against self-incrimination.
Sociedade Nacional de Combustiveis de Angola UEE v LundqvistN/AYes[1991] 2 QB 310N/ACited for the principle that there must be grounds to apprehend danger to the defendant, and those grounds must be reasonable, rather than fanciful, in order to plead the privilege of self-incrimination.
Brannigan v DavisonPrivy CouncilYes[1997] AC 238New ZealandDiscusses the difficulties of granting the privilege against self-incrimination on account of prosecution under a foreign jurisdiction.
Arab Monetary Fund v HashimN/AYes[1989] 1 WLR 565N/AHeld that if disclosure of a document could give rise to self-incrimination in relation to the criminal law of a foreign state, that was a factor which the court could take into account.
Crédit Suisse Fides Trust SA v CuoghiCourt of AppealYes[1998] QB 818N/AAdopted the approach that if disclosure of a document could give rise to self-incrimination in relation to the criminal law of a foreign state, that was a factor which the court could take into account.
Hung Ka Ho v A-1 Office System Pte LtdN/AYes[1992] 2 SLR 379SingaporeDistinguished from the present case because no affidavit was filed setting out the basis on which the defendant sought to rely on the privilege against self-incrimination.
Tse Kwong Lam v Wong Chit SenPrivy CouncilYes[1983] 1 WLR 1349Hong KongCited for the principle that one of the remedies which Beckkett could be entitled to, and for which it has prayed, is to have the sale by DB to DSM of the pledged shares, including the Adaro shares, set aside and have the equity of redemption restored to it.
Latec Investments Limited v Hotel Terrigal Pty LimitedAustralian High CourtYes(1965) 113 CLR 265AustraliaCited for the principle that one of the remedies which Beckkett could be entitled to, and for which it has prayed, is to have the sale by DB to DSM of the pledged shares, including the Adaro shares, set aside and have the equity of redemption restored to it.
Clough v The London and North Western Railway CompanyN/AYes[1871] LR 7 Exch 26N/ACited for the principle that a purchaser of the Adaro shares with notice of Beckkett’s interest to them would not, vis-à-vis Beckkett, possess any better title to those shares than DSM, and that transaction may be set aside.
Attorney-General for Gibraltar v MayN/AYes[1999] 1 WLR 998N/ACited to support the point that the Indonesian prosecuting authorities could not be bound by the undertaking given by Beckkett to the Singapore courts.
Rio Tinto Zinc Corporation v Westinghouse Electric CorporationN/AYes[1978] AC 547N/ACited for the principle that it is for the judge to say whether there is reasonable ground or not for self-incrimination.

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

  • Implied undertaking
  • Discovery of documents
  • Pledged shares
  • Bona fide purchaser
  • Self-incrimination
  • Mortgagee's duties
  • Injunction
  • Collateral purpose
  • Arms’ length transaction
  • Equity of redemption

15.2 Keywords

  • Discovery
  • Implied Undertaking
  • Mortgage
  • Shares
  • Injunction
  • Singapore
  • Indonesia
  • Criminal Prosecution

17. Areas of Law

Area NameRelevance Score
Credit and Security80
Civil Procedure75
Mortgage65
Banking and Finance60
Injunctions50
Contract Law50
Company Law40
Jurisdiction40
Evidence40
Commercial Disputes30
Estoppel30
Misrepresentation25
Fraud and Deceit25
Statutory Demand20

16. Subjects

  • Civil Procedure
  • Banking Law
  • Securities Law
  • Discovery
  • Mortgages