SAAG Oilfield v Shaik Abu Bakar: Scheme of Arrangement & Extinguishment of Tort Claims
In SAAG Oilfield Engineering (S) Pte Ltd v Shaik Abu Bakar bin Abdul Sukol, the Court of Appeal of Singapore on 2012-01-30, allowed the appeals, precluding Shaik Abu Bakar bin Abdul Sukol and Azman bin Kamis from pursuing their common law claims for damages against SAAG Oilfield Engineering (S) Pte Ltd due to a Scheme of Compromise and Arrangement dated 2008-07-03. The court determined that the respondents, as creditors, were bound by the Scheme, which extinguished their claims despite their non-participation.
1. Case Overview
1.1 Court
Court of Appeal1.2 Outcome
Appeals allowed. The respondents were precluded from pursuing their common law claims for damages against the appellant.
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Court of Appeal held that a scheme of arrangement binds all creditors, precluding common law claims for damages against the company.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| SAAG Oilfield Engineering (S) Pte Ltd (formerly known as Derrick Services Singapore Pte Ltd) | Appellant | Corporation | Appeal Allowed | Won | Tito Isaac, Justin Chan, Ho Seng Giap, Denyse Yeo |
| Shaik Abu Bakar bin Abdul Sukol | Respondent | Individual | Appeal Allowed | Lost | Krishna Morthy, Udeh Kumar s/o Sethuraju |
| Azman bin Kamis | Respondent | Individual | Appeal Allowed | Lost | Ramasamy K Chettiar, Nasser Ismail |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Chao Hick Tin | Justice of the Court of Appeal | Yes |
| Andrew Phang Boon Leong | Justice of the Court of Appeal | No |
| V K Rajah | Justice of the Court of Appeal | No |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Tito Isaac | Tito Isaac & Co LLP |
| Justin Chan | Tito Isaac & Co LLP |
| Ho Seng Giap | Tito Isaac & Co LLP |
| Denyse Yeo | Tito Isaac & Co LLP |
| Krishna Morthy | S K Kumar Law Practice LLP |
| Udeh Kumar s/o Sethuraju | S K Kumar Law Practice LLP |
| K Anparasan | KhattarWong |
| Grace Tan | KhattarWong |
| Ramasamy K Chettiar | Acies Law LLC |
| Nasser Ismail | Md Nasser Ismail & Co |
4. Facts
- Shaik and Azman were workmen employed by Derrick.
- Shaik and Azman sustained injuries in the course of their employment.
- Shaik and Azman commenced common law tort actions against Derrick and/or SAAG Singapore.
- Derrick entered provisional liquidation on 2008-03-24.
- SAAG Singapore acquired control of Derrick pursuant to an investment agreement conditional upon creditor approval of the Scheme.
- A Scheme of Compromise and Arrangement was approved by the court.
- Shaik and Azman did not participate in the Scheme.
5. Formal Citations
- SAAG Oilfield Engineering (S) Pte Ltd (formerly known as Derrick Services Singapore Pte Ltd) v Shaik Abu Bakar bin Abdul Sukol and another and another appeal, Civil Appeals Nos 55 and 56 of 2011, [2012] SGCA 7
- Azman bin Kamis v Saag Oilfield Engineering (S) Pte Ltd (formerly known as Derrick Services Singapore Pte Ltd) and another suit, Suit No 717 of 2009, [2011] 4 SLR 825
6. Timeline
| Date | Event |
|---|---|
| Azman suffered an injury due to an industrial accident. | |
| Shaik suffered injuries due to an industrial accident. | |
| Shaik’s WCA claim was lodged. | |
| Derrick entered provisional liquidation. | |
| Azman’s WCA claim was lodged. | |
| Court ordered a meeting of Scheme Creditors. | |
| Scheme of Compromise and Arrangement was dated. | |
| Meeting of the Scheme Creditors unanimously approved the Scheme. | |
| Court approved the Scheme. | |
| Court order approving the Scheme was lodged with the Accounting and Corporate Regulatory Authority. | |
| Shaik was notified that the Scheme had been approved and that he was to file a proof of debt. | |
| The MOM notified Shaik that it had assessed his WCA compensation at $29,400. | |
| Deadline for Scheme Creditors to submit proofs of debt. | |
| Shaik gave notice to the MOM of his intention to withdraw or suspend his WCA claim and proceed with a common law claim in tort. | |
| Scheme was terminated as per its terms. | |
| Shaik filed a writ against Derrick (subsequently amended to SAAG Singapore). | |
| Azman gave notice to the MOM of his intention to withdraw or suspend his WCA claim and proceed with a common law claim in tort. | |
| Azman filed a writ against SAAG Singapore. | |
| Court of Appeal delivered its decision. |
7. Legal Issues
- Whether the Respondents were 'creditors' within the meaning of s 210 of the Companies Act
- Outcome: The Court held that the Respondents were 'creditors' within the meaning of s 210 of the Companies Act.
- Category: Substantive
- Whether the Respondents were 'Scheme Creditors' within the meaning of that term as defined in the Scheme
- Outcome: The Court held that the Respondents were 'Scheme Creditors' within the meaning of that term as defined in the Scheme.
- Category: Substantive
- Whether the Respondents were therefore bound by the Scheme
- Outcome: The Court held that the Respondents were bound by the Scheme.
- Category: Substantive
8. Remedies Sought
- Damages
9. Cause of Actions
- Negligence
- Common law tort
10. Practice Areas
- Commercial Litigation
- Insolvency and Restructuring
11. Industries
- Oilfield Engineering
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Azman bin Kamis v Saag Oilfield Engineering (S) Pte Ltd (formerly known as Derrick Services Singapore Pte Ltd) and another suit | High Court | Yes | [2011] 4 SLR 825 | Singapore | Decision from which this appeal arose. |
| The Oriental Insurance Co Ltd v Reliance National Asia Re Pte Ltd | Court of Appeal | Yes | [2008] 3 SLR(R) 121 | Singapore | Cited for the purpose of s 210 of the Companies Act. |
| In re Midland Coal, Coke, and Iron Company | English Court of Appeal | Yes | [1895] 1 Ch 267 | England | Cited for the broad approach to the term “creditors”. |
| Re Cancol Ltd | N/A | Yes | [1996] 1 All ER 37 | England | Cited to support that the word “creditor” includes a creditor whose debt has not yet become payable. |
| In re T & N Ltd and others | N/A | Yes | [2006] 1 WLR 1728 | England | Cited to support that the word “creditor” includes a creditor even if he has yet to make a claim or is unknown. |
| Re T & N Ltd and others (No 3) | N/A | Yes | [2007] 1 All ER 851 | England | Cited to support that the word “creditor” includes a creditor even if he has yet to make a claim or is unknown. |
| Trocko v Renlita Products Pty Ltd; The Commonwealth Trading Bank and Shepherd (Claimants) | Supreme Court of South Australia | Yes | (1973) 5 SASR 207 | Australia | Cited for the minority view that tort claimants are not creditors. |
| In re Waymouth Guarantee and Discount Co Ltd | Supreme Court of South Australia | Yes | (1975) 10 SASR 407 | Australia | Endorsed the reasoning in Trocko by way of obiter dicta. |
| Re Glendale Land Development Ltd (in liq) | Supreme Court of New South Wales (Equity Division) | Yes | (1982) 7 ACLR 171 | Australia | Decisively disapproved of Trocko. |
| Re R L Child & Co Pty Ltd | N/A | Yes | (1986) 10 ACLR 673 | Australia | Clarified the scope of creditors and gave guidance to ensure that the courts would not unwittingly approve schemes of arrangement which had the unintended effect of binding tort claimants. |
| Re BDC Investments Ltd | N/A | Yes | (1988) 13 ACLR 201 | Australia | Cited as an example of Re Midland Coal holding sway in this area of the law. |
| Re Southern Australia Perpetual Forests Ltd | N/A | Yes | [1971] VR 475 | Australia | Adopted the broad approach laid down in Re Midland Coal. |
| Bond Corporation Holdings Ltd v Western Australia | N/A | Yes | (1992) 7 ACSR 472 | Australia | Rejected the points which found favor with Hogarth J in Trocko. |
| Pacrim Investments Pte Ltd v Tan Mui Keow Claire and another | High Court | Yes | [2010] SGHC 134 | Singapore | Concerned whether the plaintiff was bound by the scheme of arrangement in question. |
| Pacrim Investments Pte Ltd v Tan Mui Keow Claire and another | High Court | Yes | [2011] 2 SLR 438 | Singapore | Upheld the AR’s decision in Pacrim Investments Pte Ltd v Tan Mui Keow Claire and another [2010] SGHC 134. |
| Smith v Carr and others | N/A | Yes | (1993) 10 ACSR 427 | Australia | Cited for the approach that whether or not a particular claimant fell within the definition of “Scheme Creditor” was a question of construction. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Rules of Court (Cap 322, R 5, 2006 Rev Ed) | Singapore |
| Companies Act (Cap 50, 2006 Rev Ed) | Singapore |
| Workmen’s Compensation Act (Cap 354, 1998 Rev Ed) | Singapore |
| Bankruptcy Act (Cap 20, 2009 Rev Ed) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Scheme of Compromise and Arrangement
- Scheme Creditors
- Creditors
- Liquidation
- Common Law Claims
- Workmen’s Compensation Act
- Provisional Liquidator
- Tort Claims
- Companies Act
15.2 Keywords
- Scheme of Arrangement
- Creditors
- Tort Claims
- Companies Act
- SAAG Oilfield Engineering
- Shaik Abu Bakar
- Azman bin Kamis
16. Subjects
- Insolvency
- Company Law
- Civil Procedure
17. Areas of Law
- Company Law
- Insolvency Law
- Scheme of Arrangement
- Tort Law