CHS CPO GmbH v Vikas Goel: Fortification of Undertakings for Mareva Injunction & Anton Piller Order

CHS CPO GmbH (in bankruptcy) and Karma International Sarl sued Vikas Goel, Neeraj Chauhan, Esys Distribution Pte Ltd, and Karma Distribution (S) Pte Ltd in the High Court of Singapore, alleging fraud and seeking an accounting of profits and assets. The defendants denied the claims. This judgment concerns an application by the first and third defendants, Vikas Goel and Esys Distribution Pte Ltd, for the plaintiffs to fortify their undertakings as to damages related to a Mareva injunction and Anton Piller order previously granted. The court allowed the application in part, ordering fortification in the amount of S$315,646 for the third defendant only.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Application allowed in part.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Application for fortification of undertakings as to damages related to a Mareva injunction and Anton Piller order. The court allowed the application in part.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Vikas GoelDefendant, AppellantIndividualApplication dismissedDismissed
Karma International SARLPlaintiffCorporationApplication allowed in partPartial
Neeraj ChauhanDefendantIndividualNeutralNeutral
Esys Distribution Pte LtdDefendant, AppellantCorporationApplication allowed in partPartial
Karma Distribution (S) Pte LtdDefendantCorporationNeutralNeutral
CHS CPO GmbH (in bankruptcy)PlaintiffCorporationApplication allowed in partPartial

3. Judges

Judge NameTitleDelivered Judgment
Andrew Phang Boon LeongJudicial CommissionerYes

4. Counsels

Counsel NameOrganization
Chan Kia PhengKhattar Wong and Partners
Shaun KohKhattar Wong and Partners
Francis XavierRajah and Tann
Julian SoongRajah and Tann
Sangeeta SubrahmanyamRajah and Tann
Samuel ChackoColin Ng and Partners
Lim Shack KeongColin Ng and Partners

4. Facts

  1. Plaintiffs obtained a Mareva injunction and Anton Piller order against the defendants on 30 July 2004.
  2. Defendants applied for an order that the plaintiffs fortify their undertakings as to damages.
  3. The first plaintiff is a Swiss company in bankruptcy, distributing computer components.
  4. The third defendant is a major distributor of computer components.
  5. The first defendant is the promoter and principal shareholder of the third defendant.
  6. The plaintiffs claimed they were defrauded of their interest in Karma ME FZE.
  7. The defendants deny the plaintiffs’ claims.

5. Formal Citations

  1. CHS CPO GmbH (in bankruptcy) and Another v Vikas Goel and Others, Suit 636/2004, SIC 4292/2004, 4590/2004, [2005] SGHC 74

6. Timeline

DateEvent
Mareva injunction and Anton Piller order granted to the plaintiffs.
Mareva injunction and Anton Piller order executed.
Mareva injunction and Anton Piller order executed.
Third Defendant’s Submissions dated.
Mr Andrew Grimmett’s affidavit dated.
Mr Andrew Grimmett’s report dated.
Ms Emily Chay Suet Meng affidavit dated.
Judgment Date

7. Legal Issues

  1. Fortification of Undertakings as to Damages
    • Outcome: The court allowed the application in part, ordering the plaintiffs to fortify their undertakings as to damages in the amount of S$315,646 for the third defendant only.
    • Category: Procedural
    • Sub-Issues:
      • Assessment of risk of loss
      • Causation
      • Remoteness of damage
      • Mitigation of damage
    • Related Cases:
      • [1992] BCLC 387
      • [2004] EWHC 218
      • [1990] SLR 167

8. Remedies Sought

  1. Order that the plaintiffs fortify their undertakings to the court with regard to damages payable to the defendants.

9. Cause of Actions

  • No cause of actions

10. Practice Areas

  • Commercial Litigation

11. Industries

  • Computer Components Distribution

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Bhimji v ChatwaniEnglish High CourtYes[1992] BCLC 387England and WalesCited for the principle that the size of the claim for fortification can indicate an attempt to put pressure on the plaintiffs.
Sinclair Investment Holdings SA v CushnieEnglish High CourtYes[2004] EWHC 218England and WalesCited as a helpful authority on the principles governing fortification of damages, particularly regarding the assessment of risk of loss.
Kian Choon Investments (Pte) Ltd v Societe GeneraleSingapore High CourtYes[1990] SLR 167SingaporeCited for a brief reference to fortification of damages, but noted that the court received no meaningful proposal on the amount.
Graham v CampbellEnglish Court of AppealYes(1878) 7 Ch D 490England and WalesCited as an example of a case establishing the standard requirement of an undertaking as to damages with the grant of an injunction.
Griffith v BlakeEnglish Court of AppealYes(1884) 27 Ch D 474England and WalesCited as an example of a case establishing the standard requirement of an undertaking as to damages with the grant of an injunction.
Cheltenham & Gloucester Building Society v RickettsEnglish Court of AppealYes[1993] 1 WLR 1545England and WalesCited as an example of a case establishing the standard requirement of an undertaking as to damages with the grant of an injunction.
F Hoffmann-La Roche & Co AG v Secretary of State for Trade and IndustryHouse of LordsYes[1975] AC 295United KingdomCited as a case establishing the standard requirement of an undertaking as to damages with the grant of an injunction and for the historical development of such undertakings.
Smith v DayEnglish Court of AppealYes(1882) 21 Ch D 421England and WalesCited for a succinct and illuminating account of the historical development of undertakings as to damages.
Baxter v ClaydonN/AYes[1952] WN 376England and WalesCited for the approach of forming a view as to the kind and degree of loss that may result in deciding whether a cross-undertaking has sufficient value.
Gault v MurrayN/AYes(1891) 21 OR 458CanadaCited to emphasize that the relevant damage is that which is occasioned by the injunction and not that which is caused by the litigation as such.
Newman Brothers, Limited v Allum, SOS Motors, LimitedN/AYes[1935] NZLR Suppl 17New ZealandCited to emphasize that the relevant damage is that which is occasioned by the injunction and not that which is caused by the litigation as such.
Air Express Limited v Ansett Transport Industries (Operations) Proprietary LimitedHigh Court of AustraliaYes(1981) 146 CLR 249AustraliaCited to emphasize the distinction between damages flowing from the injunction and damages flowing from the litigation itself.
Sunseekers Pte Ltd v JoshuaSingapore High CourtYes[1990] SLR 245SingaporeCited for considering the Air Express Ltd case and emphasizing the distinction between damages flowing from the injunction and damages flowing from the litigation itself.
Harman Pictures NV v OsborneEnglish High CourtYes[1967] 2 All ER 324England and WalesCited as relevant factor if the plaintiff is outside the jurisdiction.
Tarasov v NassifEnglish Court of AppealYes(29 June 1994, unreported)England and WalesCited for the proposition that the key question is not so much whether the plaintiff is resident within the jurisdiction but, rather, whether there are assets within the jurisdiction that are readily available to satisfy any liability under the cross-undertaking.
Golf Lynx v Golf Scene Pty LtdSupreme Court of South AustraliaYes(1984) 75 FLR 303AustraliaCited for the proposition that the undertaking given by the plaintiffs ought not to be illusory.
Staines v WalshEnglish High CourtYes[2003] EWHC 1486England and WalesCited for the proposition that the plaintiffs must indicate their wealth or at least have sufficient funds to cover adequately their cross-undertaking in damages.
Select Personnel Pty Ltd v Morgan & Banks Pty LtdSupreme Court of New South WalesYes(1988) 12 IPR 167AustraliaCited for the proposition that fortification of the plaintiffs’ undertaking as to damages would usually be required.
Tharros Shipping Co Ltd v Bias Shipping LtdEnglish High CourtYes[1994] 1 Lloyd’s Rep 577England and WalesCited for the principle that the loss was and/or will be caused by the grant and implementation of the Mareva injunction and the Anton Piller order.
Re HailstoneEnglish Court of AppealYesRe Hailstone (1910) 102 LT 877England and WalesCited for the principle that the undertaking given by the plaintiff is given to the court.
In re DPR Futures LtdEnglish High CourtYes[1989] 1 WLR 778England and WalesCited for the principle that the court cannot avoid the need to make an intelligent estimate of the likely amount of any loss which may result from the grant of the injunction.
Norwest Holst Civil Engineering Ltd v Polysius LtdEnglish Court of AppealYesThe Times, 23 July 1982England and WalesCited for the principle that if there was “any real possibility” of loss having been suffered by the defendant, that would also justify an inquiry by the court.
Financiera Avenida v ShiblaqEnglish Court of AppealYesThe Times, 14 January 1991England and WalesCited as an application of the Hoffmann-La Roche case.
Schlesinger v BedfordEnglish Court of AppealYes(1893) 9 TLR 370England and WalesCited as having earlier roots in the case law for the Hoffmann-La Roche case.
Hadley v BaxendaleCourt of ExchequerYes(1854) 9 Exch 341; 156 ER 145England and WalesCited as the leading decision on contractual remoteness.
Overseas Tankship (UK) Ltd v Morts Dock & Engineering Co Ltd (The Wagon Mound)Privy CouncilYes[1961] AC 388United KingdomCited as the most oft-cited authority for the tortious concept of remoteness of damage.
Smith New Court Securities Ltd v Citibank NAHouse of LordsYes[1997] AC 254United KingdomCited for the strict approach to loss flowing directly from the tort of deceit.
Victoria Laundry (Windsor) Ld v Newman Industries LdEnglish Court of AppealYes[1949] 2 KB 528England and WalesCited as elaborating on the principles in Hadley v Baxendale.
Satef-Huttenes Albertus SpA v Paloma Tercera Shipping Co SA (The Pegase)English High CourtYes[1981] 1 Lloyd’s Rep 175England and WalesCited for the objective test used to determine actual knowledge of special circumstances.
Teck Tai Hardware (S) Pte Ltd v Corten Furniture Pte LtdSingapore High CourtYes[1998] 2 SLR 244SingaporeCited for the second rule in Hadley v Baxendale.
Yeo Leng Tow & Co v Rautenberg, Schmidt & CoN/AYes(1880) 1 Ky 491SingaporeCited as a local decision adopting the principles of remoteness of damage.
Hong Fok Realty Pte Ltd v Bima Investment Pte LtdSingapore Court of AppealYes[1993] 1 SLR 73SingaporeCited as a Singapore Court of Appeal decision adopting the principles of remoteness of damage.
City Securities Pte Ltd v Associated Management Services Pte LtdSingapore Court of AppealYes[1996] 1 SLR 727SingaporeCited as a Singapore Court of Appeal decision adopting the principles of remoteness of damage.
McElroy Milne v Commercial Electronics LtdNew Zealand Court of AppealYes[1993] 1 NZLR 39New ZealandCited as a New Zealand Court of Appeal decision that questions the viability of Hadley v Baxendale itself.
R v The Medicines Control AgencyEnglish High CourtYes[1999] RPC 705England and WalesCited for the precedential basis for a rule that the damages can be assessed only on a notional contract damages is slender.
Yukong Line Ltd v Rendsburg Investments CorporationEnglish Court of AppealYes[2001] 2 Lloyd’s Rep 113England and WalesCited for acknowledging the views of Jacob J in R v The Medicines Control Agency.
Victorian Onion and Potato Growers’ Association v FinniganVictorian Supreme CourtYes[1922] VLR 819AustraliaCited for the word “damages” in that undertaking is to be given a very general meaning, and is not necessarily to be given the same meaning as the word “damages” when used in connection with breaches of contracts.
In the Matter of an Arbitration between Robert Leigh Pemberton and Richard Cooper and Robert CooperN/AYes(1913) 107 LT 716England and WalesCited as a case in favour of the contractual rationale.
Douglass v BullenOntario Supreme CourtYes(1913) 12 DLR 652CanadaCited as a case in favour of the contractual rationale.
United Overseas Bank Ltd v Ng Huat Foundations Pte LtdSingapore High CourtYes[2005] SGHC 50SingaporeCited for the point that it is imperative that procedural and substantive justice be integrated.
MacDonald v Pottersfield Limited (No 2)N/AYes[2002] EWHC 1778England and WalesCited for the point that if the plaintiffs could not meet the amount for fortification that I had ordered, the injunction would have to be discharged.

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

  • Mareva injunction
  • Anton Piller order
  • Fortification of undertakings
  • Cross-undertaking
  • Risk of loss
  • Causation
  • Remoteness of damage
  • Mitigation of damage
  • Ordinary course of business

15.2 Keywords

  • Mareva injunction
  • Anton Piller order
  • Fortification
  • Undertaking
  • Damages
  • Civil Procedure
  • Singapore

17. Areas of Law

Area NameRelevance Score
Anton Piller Order95
Mareva Injunctions95
Injunctions90
Damages Assessment80
Civil Practice75
Fraud and Deceit60
Commercial Disputes50
Misrepresentation40
Contract Law30
Duty of Candour20
Evidence20
Enforcement of Foreign Judgments5
Estoppel5

16. Subjects

  • Civil Procedure
  • Injunctions
  • Damages