Indulge Food Pte Ltd v Torabi Marashi Bahram: Breach of Contract & Recovery of Sums Paid

In Indulge Food Pte Ltd v Torabi Marashi Bahram, the Singapore High Court addressed a claim by Indulge Food Pte Ltd to recover sums paid under a share subscription agreement, and a counterclaim by Torabi Marashi Bahram to recover further sums due under the same contract. Indulge Food Pte Ltd sought to recover $500,000 already paid to Euoro International Pte Ltd, arguing non-compliance with conditions precedent. Marashi counterclaimed for the remaining $500,000. The court dismissed both the main action and the counterclaim, finding that Marashi had not breached the conditions precedent, but also that Euoro's cessation of business prevented it from fulfilling its obligations under the agreement.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Both Indulge’s claim against Marashi and Marashi’s counterclaim against Indulge on behalf of Euoro were dismissed.

1.3 Case Type

Civil

1.4 Judgment Type

Written Judgment

1.5 Jurisdiction

Singapore

1.6 Description

Singapore High Court case concerning breach of contract and recovery of sums paid. The court dismissed both the claim and counterclaim.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Indulge Food Pte LtdPlaintiffCorporationClaim DismissedLost
Torabi Marashi BahramDefendantIndividualCounterclaim DismissedLost

3. Judges

Judge NameTitleDelivered Judgment
Belinda Ang Saw EanJudgeYes

4. Counsels

Counsel NameOrganization
Renu MenonTan Rajah & Cheah
Sugidha NithiTan Rajah & Cheah
Harish KumarRajah & Tann LLP
Goh Seow HuiRajah & Tann LLP

4. Facts

  1. Indulge agreed to invest $1m in Euoro in return for 50% of Euoro’s shares plus one share.
  2. The investment was to be made in four tranches of $250,000 each.
  3. Indulge paid the first two tranches totalling $500,000 to Euoro.
  4. Indulge refused to pay the third and fourth tranches, citing non-compliance with conditions precedent.
  5. Marashi denied breach and counterclaimed for the remaining $500,000.
  6. Euoro ceased business in August 2008.
  7. Euoro's operations were not generating sufficient sales to cover its expenses.

5. Formal Citations

  1. Indulge Food Pte Ltd v Torabi Marashi Bahram, Suit No 717 of 2007, [2010] SGHC 22

6. Timeline

DateEvent
Indulge, Marashi, and Euoro entered into a tripartite share subscription agreement.
Marashi and Euoro's solicitors held Indulge to its obligations under the Subscription Agreement.
Financial year 2007, management accounts showed not much of the $500,000 paid to Euoro was left by end April 2007.
Indulge attempted to negotiate a Supplemental Deed with Marashi and Euoro.
Indulge filed Suit No 717 of 2007.
Euoro ceased business.
Oral judgment delivered dismissing both the main action and the defendant’s counterclaim.
Written judgment issued.

7. Legal Issues

  1. Breach of Contract
    • Outcome: The court found that Marashi was not in breach of the conditions precedent to the payment of the third tranche. However, the court also found that Euoro's cessation of business prevented it from fulfilling its obligations under the agreement.
    • Category: Substantive
    • Sub-Issues:
      • Non-compliance with conditions precedent
      • Failure to transfer shares
      • Failure to provide satisfactory evidence of share transfer
      • Failure to use best endeavours to ensure continued growth of revenues
  2. Action for an Agreed Sum
    • Outcome: The court held that an action for an agreed sum to recover the third and fourth tranches, if brought by Euoro, would not be sustainable due to Euoro's inability to fulfill its continuing obligations under the Subscription Agreement.
    • Category: Substantive
  3. Specific Performance
    • Outcome: The court held that Marashi's counterclaim for specific performance on behalf of Euoro was legally unsustainable because Euoro was not a party to the proceedings and the requirement of reciprocity was not met.
    • Category: Substantive
  4. Implied Terms
    • Outcome: The court found that there was no implied condition that Sutti Corp was to remain as a 30% shareholder of Nate Corp.
    • Category: Substantive

8. Remedies Sought

  1. Recovery of sums already paid under a contract
  2. Recovery of further sums due under the same contract

9. Cause of Actions

  • Breach of Contract
  • Recovery of Sums Paid

10. Practice Areas

  • Commercial Litigation

11. Industries

  • Food and Beverage

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Zurich Insurance (Singapore) Pte Ltd v B-Gold Interior Design & Construction Pte LtdUnknownYes[2008] 3 SLR(R) 1029SingaporeCited for the principle of construing contractual terms in light of the contract as a whole and the underlying commercial purpose.
Straits Advisors Pte Ltd v Behringer Holdings (Pte) LtdCourt of AppealYes[2009] SGCA 55SingaporeCited for the principle that a contractual discretion must be exercised in good faith for the purpose for which it was conferred.
Beswick v BeswickUnknownYes[1968] AC 58EnglandCited in relation to the doctrine of privity of contract, but distinguished from the present case.
Family Food Court v Seah Boon LockUnknownYes[2008] 4 SLR(R) 272SingaporeCited in relation to the doctrine of privity of contract, but distinguished from the present case.
Chia Kok Leong v Prosperland Pte LtdUnknownYes[2005] 2 SLR(R) 484SingaporeCited in relation to the doctrine of privity of contract, but distinguished from the present case.
Forefront Medical Technology (Pte) Ltd v Modern Pak Pte LtdUnknownYes[2006] 1 SLR(R) 927SingaporeCited for the test for implying a term in fact.
Ng Giap Hon v Westcomb Securities Pte LtdCourt of AppealYes[2009] 3 SLR(R) 518SingaporeCited for the test for implying a term in fact.
Mattock, Executor of Southwood v KinglakeQueen's BenchYesMattock, Executor of Southwood v Kinglake (1839) 10 Ad & E 50EnglandCited as a direct authority for the action for an agreed sum.
Workman, Clark & Co. Limited v Lloyd BarzilenoUnknownYes[1908] 1 KB 968EnglandCited with approval of Mattock v Kinglake.
Westralian Farmers Ltd v Commonwealth Agricultural Service Engineers LtdUnknownYesWestralian Farmers Ltd v Commonwealth Agricultural Service Engineers Ltd (1936) 54 CLR 361AustraliaCited for the proprietary characteristics of a debt.
Slade’s CaseUnknownYes(1602) 4 Co Rep 92bEnglandCited for the establishment of a general promissory action.
Turner v BladinHigh Court of AustraliaYes(1951) 82 CLR 463AustraliaCited for the action to recover sums due under an agreement to sell land was not an action on the agreement but an action of indebitatus assumpsit.
Young v Queensland Trustees LtdUnknownYes(1956) 99 CLR 560AustraliaCited for the action of debt on a simple contract.
Pordage v ColeUnknownYes(1669) 85 ER 449EnglandCited for the doctrine of independent promises.
Tiger Airways Pte Ltd v Swissport Singapore Pte LtdUnknownYes[2009] 4 SLR(R) 992SingaporeCited for the principle of construing contractual terms in light of the contract as a whole and the underlying commercial purpose.
Travista Development Pte Ltd v Tan Kim Swee Augustine and othersUnknownYes[2008] 2 SLR(R) 474SingaporeCited for the definition of a 'best endeavours' clause.
Boone v EyreUnknownYesBoone v Eyre (1789) 1 H Bl 273EnglandCited for the origins of the doctrines of repudiatory breach and anticipatory breach.
Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha LtdUnknownYes[1962] 2 QB 26EnglandCited as the modern point of departure for the doctrines of repudiatory breach and anticipatory breach.
Hochster v De La TourUnknownYes(1853) 118 ER 922EnglandCited for the origins of the doctrines of repudiatory breach and anticipatory breach.

13. Applicable Rules

Rule Name
Rules of Court (Cap 322, R 5, 2006 Rev Ed)

14. Applicable Statutes

Statute NameJurisdiction
Civil Law Act (Cap 43, 1999 Rev Ed)Singapore
Sale of Goods Act (Cap 393, 1999 Rev Ed)Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Share Subscription Agreement
  • Conditions Precedent
  • Best Endeavours
  • Action for an Agreed Sum
  • Reciprocity
  • Performance Interest
  • Nate Corporation
  • Euoro International Pte Ltd
  • Sutti Corporation

15.2 Keywords

  • breach of contract
  • share subscription
  • conditions precedent
  • agreed sum
  • Singapore
  • High Court

17. Areas of Law

Area NameRelevance Score
Share Subscription Agreement80
Contract Law75
Breach of Contract75
Company Law60
Corporate Law60
Commercial Disputes50
Performance of Contract40
Share Purchase Agreement40
Formation of contract40
Corporate Governance30

16. Subjects

  • Contract Law
  • Investment Law
  • Civil Litigation