TMT Asia v BHP Billiton: Market Manipulation, FFAs, and Securities & Futures Act
In TMT Asia Limited v BHP Billiton Marketing AG (Singapore Branch) and another, the High Court of Singapore heard appeals regarding a claim by TMT Asia against BHP Billiton for allegedly manipulating the market for Forward Freight Agreements (FFAs). TMT Asia claimed breach of the Securities and Futures Act (SFA), the tort of deceit, and a new tort of market manipulation. The court allowed the appeal against the summary determination that FFAs are not futures contracts under the SFA, dismissed the summons related to this determination, allowed in part the appeal against striking out the claim (except for the market manipulation tort), and allowed the plaintiff to amend their statement of claim.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Registrar's Appeal No 55 of 2014 is allowed and the determination of the question of law by the Assistant Registrar is set aside. Summons No 4064 of 2013 is dismissed. Registrar's Appeal No 56 of 2014 is allowed in part. The striking out order made by the Assistant Registrar in Summons 4852 of 2013 is set aside except in respect of the claim in the alleged tort of market manipulation. Summons No 1710 of 2014 is allowed and the Plaintiff shall file and serve its amended statement of claim on or before Thursday, 5 February 2015.
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
TMT Asia sued BHP Billiton for market manipulation of FFAs. The court considered whether FFAs are 'futures contracts' under the SFA and the tort of deceit.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| TMT Asia Limited | Plaintiff, Appellant | Corporation | Appeal Allowed in Part | Partial | |
| BHP Billiton Marketing AG (Singapore Branch) | Defendant, Respondent | Corporation | Appeal Dismissed in Part | Partial |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Judith Prakash | Judge | Yes |
4. Counsels
4. Facts
- The Plaintiff, TMT Asia, is a shipping company.
- The Defendants are members of the BHP Billiton Group.
- The Plaintiff claims the Defendants manipulated the market for FFAs.
- The Plaintiff purchased FFAs based on the 4TC BCI between September and November 2012.
- The Defendants allegedly procured contracts for fixtures of Capesize vessels to raise freight rates.
- The Plaintiff claims the Defendants' actions caused it to suffer a loss of US$70,000.
- The FFAs were purchased on the OTC market through brokers utilizing multilateral trading facilities and cleared on the Singapore Exchange.
5. Formal Citations
- TMT Asia Limited v BHP Billiton Marketing AG (Singapore Branch) and another, Suit No 580 of 2013 (Registrar's Appeal Nos 55 and 56 of 2014 and Summons No 1710 of 2014), [2015] SGHC 21
6. Timeline
| Date | Event |
|---|---|
| Plaintiff purchased various FFAs based on the 4TC BCI | |
| Plaintiff purchased various FFAs based on the 4TC BCI | |
| Defendants allegedly manipulated the market by procuring contracts for fixtures of Capesize vessels | |
| Summonses heard by an Assistant Registrar | |
| Assistant Registrar delivered judgment | |
| Plaintiff made an application for leave to amend its Statement of Claim | |
| Judgment reserved | |
| Plaintiff shall file and serve its amended statement of claim |
7. Legal Issues
- Market Manipulation
- Outcome: The court did not make a final determination on whether the defendants engaged in market manipulation, as the matter was sent back for trial.
- Category: Substantive
- Definition of Futures Contract
- Outcome: The court determined that the question of whether FFAs are 'futures contracts' under the SFA should be decided at trial.
- Category: Substantive
- Tort of Deceit
- Outcome: The court allowed the plaintiff to amend its claim for the tort of deceit, finding that it was not conceptually flawed.
- Category: Substantive
8. Remedies Sought
- Monetary damages in the sum of US$70,000
9. Cause of Actions
- Breach of statute under s 208 read with s 234 of the Securities and Futures Act
- Tort of deceit
- Tort of market manipulation
10. Practice Areas
- Commercial Litigation
- Securities Litigation
- Financial Regulation
- Derivatives Trading
11. Industries
- Shipping
- Financial Services
- Commodities Trading
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Lomas & Ors (together with the Joint Administrators of Lehman Brothers International (Europe) v JFB Firth Rixson Inc & Ors | English Court of Appeal | Yes | [2012] EWCA Civ 419 | England and Wales | Cited for the definition of derivatives. |
| Multi-Pak Singapore Pte Ltd (in receivership) v Intraco Ltd | High Court | Yes | [1992] 2 SLR(R) 382 | Singapore | Cited regarding the need to plead material facts to establish a cause of action. |
| Olivine Capital Pte Ltd v Chia Chin Yan and another matter | High Court | Yes | [2014] 2 SLR 1371 | Singapore | Cited regarding amendments to pleadings and the principle of finality in litigation. |
| ANB v ANF | High Court | Yes | [2011] 2 SLR 1 | Singapore | Cited regarding the requirements for summary determination and the court's discretion. |
| Payna Chettiar v Maimoon bte Ismail | High Court | Yes | [1997] 1 SLR(R) 738 | Singapore | Cited regarding complex legal questions and summary determination. |
| Obegi Melissa v Vestwin Trading Pte Ltd | Court of Appeal | Yes | [2008] 2 SLR(R) 540 | Singapore | Cited regarding factual issues and novel questions of public importance in summary determination. |
| Jeyaretnam Joshua Benjamin v Lee Kuan Yew | High Court | Yes | [1990] 1 SLR(R) 337 | Singapore | Cited regarding leave to amend pleadings. |
| Gabriel Peter & Partners (suing as a firm) v Wee Chong Jin | High Court | Yes | [1998] 1 SLR 374 | Singapore | Cited regarding the definition of a reasonable cause of action. |
| Panatron Pte Ltd v Lee Cheow Lee | High Court | Yes | [2001] 2 SLR(R) 435 | Singapore | Cited regarding the essential elements of the tort of deceit. |
| Salaman v Warner | English Court of Appeal | Yes | Salaman v Warner (1891) 65 LT 132 | England and Wales | Defendants relied on this case to argue that a party’s market manipulative conduct cannot be taken to amount to any representation of fact. |
| Salaman v Warner | English High Court | Yes | Salaman v Warner (1891) 64 LT 598 | England and Wales | Defendants relied on this case to argue that a party’s market manipulative conduct cannot be taken to amount to any representation of fact. |
13. Applicable Rules
| Rule Name |
|---|
| Rules of Court (Cap 322, R 5, 2006 Rev Ed) O 14 r 12 |
| Rules of Court (Cap 322, R 5, 2006 Rev Ed) O 18 r 19 |
| Rules of Court (Cap 322, R 5, 2006 Rev Ed) O 18 r 7 |
| Rules of Court (Cap 322, R 5, 2006 Rev Ed) O 20 r 5 |
| Rules of Court (Cap 322, R 5, 2006 Rev Ed) O 18 r 9 |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Securities and Futures Act (Cap 289, 2006 Rev Ed) s 208 | Singapore |
| Securities and Futures Act (Cap 289, 2006 Rev Ed) s 234 | Singapore |
| Securities and Futures Act (Cap 289, 2006 Rev Ed) s 2 | Singapore |
| Subordinate Courts Act (Cap 321, 2007 Rev Ed) s 54B | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Forward Freight Agreements (FFAs)
- Baltic Capesize Index (BCI)
- 4TC BCI
- Capesize vessels
- Market manipulation
- Futures contract
- Multilateral trading facilities (MTFs)
- Over-the-counter (OTC)
15.2 Keywords
- FFA
- BCI
- market manipulation
- securities
- futures contract
- derivatives
- shipping
- BHP Billiton
17. Areas of Law
16. Subjects
- Securities Regulation
- Financial Derivatives
- Market Manipulation
- Civil Procedure