Tomolugen v Silica: Arbitrability of Minority Oppression & Stay of Proceedings
In Tomolugen Holdings Ltd and another v Silica Investors Ltd and other appeals, the Singapore Court of Appeal addressed whether a dispute over minority oppression is arbitrable and the approach to potentially overlapping court and arbitral proceedings. Silica Investors Limited, a minority shareholder in Auzminerals Resource Group Limited (AMRG), sought relief under s 216 of the Companies Act, alleging oppressive conduct. The defendants, including Tomolugen Holdings Limited and Lionsgate Holdings Pte Ltd, applied for a stay of court proceedings in favor of arbitration based on an arbitration clause in the Share Sale Agreement between Silica Investors and Lionsgate. The Court of Appeal allowed the appeals in part, holding that disputes over minority oppression are generally arbitrable, and provided directions for the conduct of the suit.
1. Case Overview
1.1 Court
Court of Appeal1.2 Outcome
Appeal allowed in part.
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Singapore Court of Appeal addresses arbitrability of minority oppression claims and stay of court proceedings pending arbitration. Appeal allowed in part.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| TOMOLUGEN HOLDINGS LIMITED | Appellant | Corporation | Appeal allowed in part | Partial | |
| AUZMINERALS RESOURCE GROUP LIMITED | Defendant | Corporation | Neutral | Neutral | |
| SILICA INVESTORS LIMITED | Respondent | Corporation | Appeal allowed in part | Partial | |
| LIM SING HOK MERVYN | Defendant | Individual | Neutral | Neutral | |
| LIONSGATE HOLDINGS PTE LTD (FKA TOMOLUGEN PTE LTD) | Appellant | Corporation | Appeal allowed in part | Partial |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Sundaresh Menon | Chief Justice | Yes |
| Chao Hick Tin | Justice of the Court of Appeal | No |
| Chan Sek Keong | Senior Judge | No |
4. Counsels
4. Facts
- Silica Investors, a minority shareholder in AMRG, alleged oppressive conduct.
- The Share Sale Agreement between Silica Investors and Lionsgate contained an arbitration clause.
- Silica Investors commenced a suit seeking relief under s 216 of the Companies Act.
- Lionsgate applied for a stay of court proceedings in favor of arbitration.
- The High Court dismissed the stay applications.
- The Court of Appeal heard appeals against the High Court's decision.
5. Formal Citations
- Tomolugen Holdings Ltd and another v Silica Investors Ltd and other appeals, Civil Appeals Nos 123, 124 and 126 of 2014, [2015] SGCA 57
6. Timeline
| Date | Event |
|---|---|
| Original Share Sale Agreement dated | |
| Share Sale Agreement modified by supplemental agreement | |
| Amended completion date of Share Sale Agreement | |
| AMRG shares issued | |
| AMRG executed guarantees securing obligations of Australian Gold Corporation Pte Ltd | |
| Silica Investors commenced Suit No 560 | |
| High Court judge dismissed stay applications | |
| Judgment reserved | |
| Court of Appeal decision date |
7. Legal Issues
- Arbitrability of Minority Oppression Claims
- Outcome: The Court held that disputes over minority oppression or unfairly prejudicial conduct are generally arbitrable.
- Category: Substantive
- Stay of Court Proceedings Pending Arbitration
- Outcome: The Court addressed the proper approach to adopt when dealing with potentially overlapping court and arbitral proceedings and provided directions for the conduct of the suit.
- Category: Procedural
- Standard of Review in a Stay Application under the IAA
- Outcome: The Court held that a Singapore court should adopt a prima facie standard of review when hearing a stay application under s 6 of the IAA.
- Category: Procedural
8. Remedies Sought
- Share buy-out order
- Orders regulating the conduct of AMRG’s affairs
- Order that AMRG be placed in liquidation
9. Cause of Actions
- Minority Oppression
- Breach of Contract
10. Practice Areas
- Commercial Litigation
- Arbitration
11. Industries
- Mining
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Silica Investors Ltd v Tomolugen Holdings Ltd and others | High Court | Yes | [2014] 3 SLR 815 | Singapore | Decision from which this appeal arose. |
| Dallah Real Estate and Tourism Holding Co v Ministry of Religious Affairs of the Government of Pakistan | Supreme Court | Yes | [2011] 1 AC 763 | United Kingdom | Cited for account of the kompetenz-kompetenz principle in international law tribunals. |
| Sim Chay Koon and others v NTUC Income Insurance Co-operative Limited | Court of Appeal | Yes | [2015] SGCA 46 | Singapore | Cited for the application of the prima facie standard in a stay application under s 6(1) of the Arbitration Act. |
| The Titan Unity | Singapore High Court | Yes | [2013] SGHCR 28 | Singapore | Cited for the court only needing to be satisfied that an arbitration agreement exists on a prima facie level for the purposes of establishing the first precondition under section 6(1) of the IAA. |
| Malini Ventura v Knight Capital Pte Ltd and others | Singapore High Court | Yes | [2015] SGHC 225 | Singapore | Cited for the prima facie approach to stay applications under s 6 of the IAA. |
| Larsen Oil and Gas Pte Ltd v Petroprod Ltd (in official liquidation in the Cayman Islands and in compulsory liquidation in Singapore) | Court of Appeal | Yes | [2011] 3 SLR 414 | Singapore | Cited for the principle that it would be pointless for the court to stay court proceedings in favor of arbitration in cases where the applicable law does not permit the subject matter of the dispute to be resolved by arbitration. |
| Four Pillars Enterprises Co Ltd v Beiersdorf Aktiengesellschaft | Court of Appeal | Yes | [1999] 1 SLR(R) 382 | Singapore | Cited for the observation that a winding-up order was a relief which was not available in arbitration. |
| A Best Floor Sanding Pty Ltd v Skyer Australia Pty Ltd | Supreme Court of Victoria | Yes | [1999] VSC 170 | Australia | Cited for the issue of whether a dispute over the liquidation of a company is arbitrable. |
| In re Cybernaut Growth Fund LP | Financial Services Division of the Grand Court | Yes | Cause No FSD 73 of 2013 | Cayman Islands | Cited for the holding that a petition for the liquidation of an exempted limited partnership was non-arbitrable. |
| Gamlestaden Fastigheter AB v Baltic Partners Ltd and others | House of Lords | Yes | [2007] Bus LR 1521 | United Kingdom | Cited for the statement that a creditor’s winding-up petition seeks an order to put a company into an insolvent liquidation that will affect the interests of all creditors as well as of all members. |
| Re a Company (No 007923 of 1994) | Court of Appeal | Yes | [1995] 1 WLR 953 | United Kingdom | Cited for the purpose of an advertisement serving the purpose of giving notice primarily to creditors and contributories who were entitled to be heard on the winding-up application. |
| Kuah Kok Kim v Chong Lee Leong Seng Co (Pte) Ltd | Court of Appeal | Yes | [1991] 1 SLR(R) 795 | Singapore | Cited for the holding that an application for relief under s 216 of the Companies Act need not be advertised under the Companies (Winding Up) Rules, even when winding up is sought as a relief. |
| Fulham Football Club (1987) Ltd v Richards and another | Court of Appeal | Yes | [2012] Ch 333 | United Kingdom | Cited for the holding that a dispute giving rise to a claim for relief under s 994 of the Companies Act 2006 (c 46) (UK) was arbitrable. |
| Exeter City Association Football Club Ltd v Football Conference Ltd and another | High Court | Yes | [2004] 1 WLR 2910 | United Kingdom | Cited as an earlier English High Court decision that an unfair prejudice petition was not arbitrable, which was overruled in Fulham FC v Richards. |
| ACD Tridon v Tridon Australia | Supreme Court of New South Wales | Yes | [2002] NSWSC 896 | Australia | Cited as a case where disputes over oppressive or unfairly prejudicial conduct towards minority shareholders have been held to be arbitrable. |
| Paul Brazis and others v Emilio Rosati and others | Supreme Court of Victoria | Yes | [2014] VSC 385 | Australia | Cited as a case where disputes over oppressive or unfairly prejudicial conduct towards minority shareholders have been held to be arbitrable. |
| Ennio Zanotti v Interlog Finance Corp and others | High Court | Yes | Claim No BVIHCV 2009/0394 | British Virgin Islands | Cited as a case where disputes over oppressive or unfairly prejudicial conduct towards minority shareholders have been held to be arbitrable. |
| ABOP LLC v Qtrade Canada Inc | Court of Appeal | Yes | (2007) 284 DLR (4th) 171 | Canada | Cited as a case where disputes over oppressive or unfairly prejudicial conduct towards minority shareholders have been held to be arbitrable. |
| Re Quiksilver Glorious Sun JV Ltd | High Court | Yes | [2014] 4 HKLRD 759 | Hong Kong SAR | Cited for the approach taken by the courts in England and in Hong Kong SAR commends itself to us because it seeks to strike a balance between, on the one hand, upholding the agreement of the parties as to how their disputes are to be resolved and, on the other, recognising that there are jurisdictional limitations on the powers that are conferred on an arbitral tribunal. |
| Fiona Trust & Holding Corporation and others v Privalov and others | Court of Appeal | Yes | [2007] 2 Lloyd’s Rep 267 | United Kingdom | Cited for the principle that the court does not adopt a technical approach, but construes the clause based on the presumed intentions of the parties as rational commercial parties. |
| Premium Nafta Products Ltd v Fili Shipping Co Ltd | House of Lords | Yes | [2008] 1 Lloyd’s Rep 619 | United Kingdom | Cited for the principle that the court does not adopt a technical approach, but construes the clause based on the presumed intentions of the parties as rational commercial parties. |
| PT Thiess Contractors Indonesia v PT Kaltim Prima Coal, Standard Chartered Bank, Singapore Branch | High Court | Yes | [2011] Arb LR 26 | Singapore | Cited for the importance of identifying the “substance of the controversy”, rather than the formal nature of the proceedings. |
| Tanning Research Laboratories Inc v O’Brien | High Court of Australia | Yes | (1990) 91 ALR 180 | Australia | Cited for the dichotomy between a “discrete controversy” and a “mere issue”. |
| Flint Ink NZ v Huhtamaki Australia Pty Ltd and Lion-Dairy & Drinks Pty Ltd | Supreme Court of Victoria | Yes | [2014] VSCA 166 | Australia | Cited for the test that the semantic distinction between a “discrete controversy” and a “mere issue” is so fine that it may be illusory. |
| Hi-Fert Pty Ltd and another v Kiukiang Maritime Carriers Inc and another | Federal Court of Australia | Yes | (1998) 159 ALR 142 | Australia | Cited for the principle that there is a significant overlap between the claims made against KMC under the bills of lading and the contractual claims made against WBC. It would be undesirable for those claims to be adjudicated in different places by different tribunals. |
| Recyclers of Australia Pty Ltd and another v Hettinga Equipment Inc and another | Federal Court of Australia | Yes | (2000) 175 ALR 725 | Australia | Cited for the principle that in the event that a proceeding includes matters that are not capable of being referred to arbitration, but the determination of which is dependent upon the determination of the matters required to be submitted to arbitration, a court may, in the exercise of its discretion, stay the whole proceeding. |
| Casaceli v Natuzzi SpA | Federal Court of Australia | Yes | [2012] FCA 691 | Australia | Cited as a similar result reached in similar circumstances. |
| Amcor Packaging (Australia) Pty Ltd v Baulderstone Pty Ltd | Federal Court of Australia | Yes | [2013] FCA 253 | Australia | Cited as a similar result reached in similar circumstances. |
| Brazis and others v Rosati and others | Supreme Court of Victoria | Yes | (2014) 102 ACSR 626 | Australia | Cited as the Victoria Court of Appeal has since granted leave for an appeal against Robson J’s decision. |
| Michael Wilson & Partners Ltd v Nicholls and others | High Court of Australia | Yes | (2011) 282 ALR 685 | Australia | Cited for hints that pursuing such a course may amount to an abuse of court process. |
| Dalimpex v Janicki | Court of Appeal | Yes | (2003) 228 DLR (4th) 179 | Canada | Cited as the leading case in Canada. |
| Blind Spot Holdings Ltd v Decast Holdings Inc | Ontario Superior Court of Justice | Yes | (2014) 25 BLR (5th) 122 | Canada | Cited for the Dalimpex approach was adopted and developed. |
| Reichhold Norway ASA and another v Goldman Sachs International (a firm) | Court of Appeal | Yes | [2000] 1 WLR 173 | United Kingdom | Cited as the leading decision in England. |
| Reichhold Norway ASA and Anor v Goldman Sachs International | High Court | Yes | [1999] CLC 486 | United Kingdom | Cited for the principle that a plaintiff who has claims against a number of different people is entitled to choose for himself whom to sue and whom not to sue. |
| Mabey and Johnson Ltd v Jonathan Laszlo Danos | High Court | Yes | [2007] EWHC 1094 (Ch) | United Kingdom | Cited for a different result was reached. |
| ET Plus SA v Welter | High Court | Yes | [2006] 1 Lloyd’s Rep 251 | United Kingdom | Cited for Reichhold Norway (CA) was cited and followed. |
| Danone Asia Pacific Holdings Pte Ltd and others v Fonterra Co-operative Group Limited | High Court | Yes | [2014] NZHC 1681 | New Zealand | Cited for the New Zealand High Court’s decision in Danone Asia Pacific Holdings Pte Ltd and others v Fonterra Co-operative Group Limited [2014] NZHC 1681 (“Danone v Fonterra”) is instructive. |
| Danone Asia Pacific Holdings Pte Ltd and others v Fonterra Co-operative Group Limited | Court of Appeal | Yes | [2014] NZCA 536 | New Zealand | Cited for the New Zealand Court of Appeal did not think so, and dismissed the appeal. |
| Montgomery Watson NZ Ltd v Milburn NZ Ltd | High Court | Yes | [2000] BCL 1022 | New Zealand | Cited for Young J did not allow court proceedings to proceed alongside arbitration in that case because he thought that that would allow the plaintiff to subvert the arbitration clause in question. |
| Lai Swee Lin Linda v Attorney-General | Court of Appeal | Yes | [2006] 2 SLR(R) 565 | Singapore | Cited for the doctrine of abuse of process. |
| Goh Nellie v Goh Lian Teck and others | Court of Appeal | Yes | [2007] 1 SLR(R) 453 | Singapore | Cited for the doctrine of abuse of process. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Companies Act (Cap 50, 2006 Rev Ed) | Singapore |
| International Arbitration Act (Cap 143A, 2002 Rev Ed) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Arbitrability
- Minority oppression
- Stay of proceedings
- Arbitration clause
- Kompetenz-kompetenz
- Prima facie
- Case management
- Share Sale Agreement
- Companies Act
- International Arbitration Act
15.2 Keywords
- arbitration
- company law
- minority oppression
- stay of proceedings
- Singapore
- court of appeal
17. Areas of Law
16. Subjects
- Arbitration
- Company Law
- Civil Procedure