Urs Meisterhans v GIP Pte Ltd: Application for Leave to Commence Legal Proceedings for Breach of Fiduciary Duties

In Urs Meisterhans v GIP Pte Ltd, the High Court of Singapore dismissed Urs Meisterhans' application for leave to commence legal proceedings on behalf of GIP Pte Ltd against two of its directors, Huber Marcel Fritz and Gut Christian Michel, for alleged breaches of fiduciary duties. The court, presided over by Justice Tay Yong Kwang, found that the application lacked merit and was not brought in good faith. The decision was made on 28 September 2010.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Application dismissed with costs.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Shareholder Urs Meisterhans sought leave to sue GIP Pte Ltd's directors for breach of fiduciary duties. The application was dismissed due to lack of merit and bad faith.

1.7 Decision Date

27 September 2010

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
Urs Meisterhans	Plaintiff	Individual	Application dismissed	Lost	Balakrishnan Ashok Kumar of Stamford Law Corporation Linda Esther Foo of Stamford Law Corporation
GIP Pte Ltd	Defendant	Corporation	Costs awarded	Won	Sim Kwan Kiat of Rajah & Tann LLP Mark Cheng of Rajah & Tann LLP Jonathan Lee of Rajah & Tann LLP Lim Huay Ching of Rajah & Tann LLP

3. Judges

Judge Name	Title	Delivered Judgment
Tay Yong Kwang	Judge	Yes

4. Counsels

Counsel Name	Organization
Balakrishnan Ashok Kumar	Stamford Law Corporation
Linda Esther Foo	Stamford Law Corporation
Sim Kwan Kiat	Rajah & Tann LLP
Mark Cheng	Rajah & Tann LLP
Jonathan Lee	Rajah & Tann LLP
Lim Huay Ching	Rajah & Tann LLP

4. Facts

Plaintiff, a shareholder and former director, sought leave to sue current directors for breach of fiduciary duties.
Plaintiff was removed as a director due to criminal investigations against him in Switzerland.
Plaintiff alleged mismanagement of SEF investments by Huber and Christian.
Plaintiff claimed lack of transparency regarding SEF's performance.
Defendant argued that the plaintiff's allegations were unmeritorious and made in bad faith.
Defendant alleged the plaintiff attempted to divert the defendant's business to another company.
The defendant was exempted by the Monetary Authority of Singapore from certain licensing requirements.

5. Formal Citations

Urs Meisterhans v GIP Pte Ltd, Originating Summons No 430 of 2010, [2010] SGHC 288

6. Timeline

Date	Event
2006-08-01	SEF made a loan of EUR 3 million to REN AG.
2007-01-01	Loan extended to Hydrotour Enerji Ltd Sti.
2008-01-01	Loan restructured with Hycarbex Asia substituting Hydrotour as the principal borrower.
2008-11-07	REN AG was put into liquidation.
2009-08-13	Urs Meisterhans was removed as a director of GIP Pte Ltd.
2009-11-07	Deadline for enforcing Kindermann’s obligations under the Kindermann Guarantee.
2010-02-27	Email from Huber, Christian, and Jonas explaining the reasons behind Urs Meisterhans’ removal.
2010-03-03	Email from Urs Meisterhans to GIP Pte Ltd's management regarding investor dissatisfaction.
2010-03-17	Plaintiff's solicitors sent a letter to the defendant's solicitors.
2010-04-15	Letter from the Trustees to the defendant confirming provision of NAVs to investors.
2010-04-21	Email from Urs Meisterhans to the officers of the Trustees alleging mismanagement.
2010-05-05	Plaintiff filed an affidavit.
2010-07-19	Email from the Trustees to certain SEF’s investors.
2010-07-20	Plaintiff filed a reply affidavit.
2010-09-28	High Court dismissed the plaintiff’s application.

7. Legal Issues

Breach of Fiduciary Duty
- Outcome: The court found that the plaintiff's allegations of breach of fiduciary duty were without merit.
- Category: Substantive
- Sub-Issues:
  - Mismanagement of investments
  - Lack of transparency
  - Failure to disclose personal interest
Application for Leave to Commence Legal Proceedings
- Outcome: The court dismissed the application, finding that it was not in the company's interest and that the plaintiff had not acted in good faith.
- Category: Procedural
- Sub-Issues:
  - Prima facie company interest
  - Good faith of complainant
- Related Cases:
  - [2002] 1 SLR(R) 471
  - [2004] 3 SLR(R) 1
  - [1998] 2 SLR(R) 426

8. Remedies Sought

Leave to commence legal proceedings

9. Cause of Actions

Breach of Fiduciary Duty

10. Practice Areas

Commercial Litigation

11. Industries

Finance
Investment Management

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
Agus Irawan v Toh Teck Chye and others	High Court	Yes	[2002] 1 SLR(R) 471	Singapore	Cited for the definition of 'complainant' under section 216A(1) of the Companies Act and the court's discretion to deem a person a 'proper person', including a director of the company.
Pang Yong Hock and Another v PKS Contracts Services Pte Ltd	Court of Appeal	Yes	[2004] 3 SLR(R) 1	Singapore	Cited for the principles governing the grant of leave under section 216A of the Companies Act, including the requirements of prima facie company interest and good faith.
Teo Gek Luang v Ng Ai Tiong and others	High Court	Yes	[1998] 2 SLR(R) 426	Singapore	Cited for the interpretation of 'prima facie' in section 216A(3)(c) and the court's role in assessing the merits of the intended action at the leave stage.
ECRC Land Pte Ltd (in liquidation) v Ho Wing On Christopher and others	High Court	Yes	[2004] 1 SLR(R) 105	Singapore	Cited for the principle that the court should be slow to interfere with commercial decisions taken by directors.
Intraco Ltd v Multi-Pak Singapore Pte Ltd	High Court	Yes	[1994] 3 SLR(R) 1064	Singapore	Cited for the principle that the court should not substitute its own decisions for those made by directors in the honest and reasonable belief that they were for the best interests of the company.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute Name	Jurisdiction
Companies Act (Cap 50, 2006 Rev Ed) section 216A	Singapore
Securities and Futures Act (Cap 289, 2006 Rev Ed)	Singapore

15. Key Terms and Keywords

15.1 Key Terms

Section 216A
Companies Act
Fiduciary duties
Leave to commence
Good faith
Prima facie
Shareholder
Director
Monetary Authority of Singapore
Fit and Proper Test
Stellar Energy Fund
Net Asset Value
REN Loan
Hycarbex Loan

15.2 Keywords

Shareholder derivative action
Companies Act section 216A
Breach of fiduciary duty
Singapore High Court
Investment fund mismanagement

17. Areas of Law

Area Name	Relevance Score
Fiduciary Duties	85
Company Law	75
Corporate Governance	60
Corporate Litigation	50
Minority shareholders	40

16. Subjects

Company Law
Fiduciary Duty
Civil Procedure