Straits Advisors v Behringer Holdings: Interpretation of Consultancy Agreement & Share Issuance

In Straits Advisors Pte Ltd v Behringer Holdings (Pte) Ltd and Another, the Singapore High Court addressed an appeal regarding the interpretation of a consultancy agreement between Straits Advisors and Behringer Holdings. The dispute centered on whether Straits Advisors was entitled to shares in Behringer Corporation Limited upon termination of the agreement before an IPO activation notice was issued. Lee Seiu Kin J upheld the Assistant Registrar's decision, finding that the share issuance clause was contingent upon the IPO activation notice being given, and dismissed the appeal.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Appeal dismissed; the court upheld the Assistant Registrar's decision that Clause 4 of the Consultancy Agreement is operative only one month after the Plaintiff receives written notification from the Defendants of the decision to proceed with a plan to list on a recognised stock exchange or there is an anticipated takeover action of the Defendants.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

The High Court addressed whether Straits Advisors was entitled to shares under a consultancy agreement with Behringer Holdings upon termination before an IPO activation notice.

1.7 Decision Date

7 April 2009

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
Straits Advisors Pte Ltd	Plaintiff, Respondent	Corporation	Appeal Dismissed	Lost	Surenthiraraj s/o Saunthararajah of Harry Elias Partnership Sharmini Selvaratnam of Harry Elias Partnership
Behringer Holdings (Pte) Ltd	Defendant, Appellant	Corporation	Judgment in favor of Defendant	Won	Gregory Vijayendran of Rajah & Tann LLP Sung Jing Yin of Rajah & Tann LLP
Behringer Corporation Limited	Defendant, Appellant	Corporation	Judgment in favor of Defendant	Won	Gregory Vijayendran of Rajah & Tann LLP Sung Jing Yin of Rajah & Tann LLP

3. Judges

Judge Name	Title	Delivered Judgment
Lee Seiu Kin	Judge	Yes

4. Counsels

Counsel Name	Organization
Surenthiraraj s/o Saunthararajah	Harry Elias Partnership
Sharmini Selvaratnam	Harry Elias Partnership
Gregory Vijayendran	Rajah & Tann LLP
Sung Jing Yin	Rajah & Tann LLP

4. Facts

Straits Advisors and Behringer entered into a consultancy agreement on 10 November 2006.
The agreement concerned services related to a potential IPO of Behringer Corporation Limited.
A dispute arose over whether Straits Advisors was entitled to shares upon termination before an IPO activation notice.
The consultancy agreement superseded previous agreements between the parties.
No IPO activation notice was provided by the defendants.
The plaintiff claimed entitlement to shares under the consultancy agreement, valued at approximately US$340,131.

5. Formal Citations

Straits Advisors Pte Ltd v Behringer Holdings (Pte) Ltd and Another, Suit 487/2008, RA 414/2008, [2009] SGHC 86

6. Timeline

Date	Event
2006-01-11	Defendants engaged the plaintiff to provide services related to an intended initial public offering.
2006-01-11	Plaintiff and defendants entered into four separate agreements.
2006-10-16	Defendants appointed a new CFO, Roch Low, and DA’s responsibilities as CFO were transferred to Roch Low.
2006-11-10	Plaintiff and the defendants entered into a consultancy agreement.
2008-08-04	Statement of Claim filed.
2008-01-01	Plaintiff commenced Originating Summons No 417 of 2008 against the defendants, claiming to be entitled to shares.
2008-01-01	OS 417/08 was heard by Belinda Ang J, who ordered it to be converted into a writ.
2008-01-01	Defendants applied under O 14 r 12 of the Rules of Court for the determination of the question.
2008-01-01	Summons No 4224 of 2008 was taken out by the defendants.
2009-04-08	Judgment reserved.
2009-04-08	Decision Date.

7. Legal Issues

Interpretation of Contractual Clauses
- Outcome: The court interpreted the consultancy agreement to mean that the share issuance clause was contingent upon the IPO activation notice being given.
- Category: Substantive
- Sub-Issues:
  - Ambiguity in contract terms
  - Applicability of termination clauses
  - Conditions precedent for share issuance

8. Remedies Sought

Specific Performance (issuance of shares)

9. Cause of Actions

Breach of Contract

10. Practice Areas

Commercial Litigation

11. Industries

Finance

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
Zurich Insurance (Singapore) Pte Ltd v B-Gold Interior Design & Construction Pte Ltd	Court of Appeal	Yes	[2008] 3 SLR 1029	Singapore	Cited for the applicable canons of interpretation of contracts, including the holistic approach and consideration of commercial objectives.
Lee Chee Wei v Tan Hor Peow Victor	N/A	Yes	[2007] 3 SLR 537	Singapore	Cited regarding the potential impact of entire agreement clauses.

13. Applicable Rules

Rule Name
Rules of Court

14. Applicable Statutes

Statute Name	Jurisdiction
No applicable statutes

15. Key Terms and Keywords

15.1 Key Terms

Consultancy Agreement
IPO Activation
Shares
Success Fee
Pre-Listing Terms
IPO Advisory Terms
Termination Fee

15.2 Keywords

consultancy agreement
IPO
share issuance
contract interpretation
termination
Straits Advisors
Behringer

17. Areas of Law

Area Name	Relevance Score
Contract Law	90
Consultancy Agreement	70
Corporate Finance	50
Business Litigation	30

16. Subjects

Contractual Interpretation
Share Issuance
Corporate Advisory Services