Maniach Pte Ltd v L Capital Jones Ltd: Minority Oppression & Arbitrability

In Maniach Pte Ltd v L Capital Jones Ltd, the Singapore High Court addressed a minority oppression claim brought by Maniach Pte Ltd against L Capital Jones Ltd and Jones The Grocer Group Holdings Pte Ltd. The defendants sought a stay of proceedings in favor of arbitration, relying on an arbitration agreement within their shareholders’ agreement. The court, presided over by Vinodh Coomaraswamy J, dismissed the stay applications, holding that while the dispute was connected to the agreement, statutory claims for minority oppression are not arbitrable. The court considered arguments regarding the scope of the arbitration agreement and whether either defendant had taken steps in the proceedings that would preclude them from seeking a stay.

1. Case Overview

1.1 Court

High Court of the Republic of Singapore

1.2 Outcome

Applications to stay the proceedings were dismissed.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Singapore High Court case concerning a minority oppression claim and the arbitrability of such claims under the Companies Act. Stay application refused.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
L Capital Jones LtdDefendantCorporationApplication for stay of proceedings dismissedLost
Jones the Grocer Group Holdings Pte LtdDefendantCorporationApplication for stay of proceedings dismissedLost
Maniach Pte LtdPlaintiffCorporationApplication for stay of proceedings dismissedWon

3. Judges

Judge NameTitleDelivered Judgment
Vinodh CoomaraswamyJudgeYes

4. Counsels

Counsel NameOrganization
Koh Swee YenWongPartnership LLP
Jill Ann Koh YingWongPartnership LLP
Suegene AngWongPartnership LLP
Sim Mei LingWongPartnership LLP
Tham LijingTan Rajah & Cheah
Chew Kei-JinTan Rajah & Cheah
Stephanie TanTan Rajah & Cheah
Melissa TanTan Rajah & Cheah

4. Facts

  1. Maniach and L Capital Jones are the only two shareholders in Jones The Grocer Group Holdings Pte Ltd.
  2. Maniach holds 37% of the company, while L Capital Jones holds the remaining 63%.
  3. The parties entered into a shareholders’ agreement that included an arbitration clause.
  4. Maniach commenced proceedings against L Capital Jones and the Company under s 216 of the Companies Act, alleging minority oppression.
  5. L Capital Jones sought to stay the proceedings in favor of arbitration.
  6. Maniach alleged that L Capital Jones excluded it from management, transferred the Company’s only asset at an undervalue, and abused its voting power.
  7. The Company applied to strike out the proceedings, alternatively for a stay in favor of arbitration.

5. Formal Citations

  1. Maniach Pte Ltd v L Capital Jones Ltd and another, Suit No 182 of 2015(Summonses Nos 998 and 1936 of 2015), [2016] SGHC 65

6. Timeline

DateEvent
Company incorporated to receive L Capital Asia’s investment.
Shareholders’ agreement executed; L Capital Asia invested US$14m.
Shareholders’ agreement restated and re-executed.
L Capital Asia invested an additional US$7m in the Company in three tranches.
Shareholders agreed to a revised financing plan for the Group.
Mr. Manos received emails regarding resolutions to place the Company in judicial management.
Company and JTG International applied for judicial management.
L Capital Jones nominated Mr. Mark Watson to be a director of JG Holdings.
Administrators of the Australian companies obtained a court order regarding the loan transaction with L Capital Jones.
Fresh Bay Investment Limited proposed that JG Holdings enter into deeds of company arrangement.
Creditors of the Australian companies voted in favor of the DOCA.
Maniach sent a letter before action to L Capital Jones.
Maniach commenced proceedings against L Capital Jones and the Company.
The Company applied to strike out the proceedings, alternatively for a stay in favor of arbitration.
L Capital Jones issued a notice of arbitration.
Judgment delivered.

7. Legal Issues

  1. Arbitrability of Minority Oppression Claim
    • Outcome: The court held that the statutory claim for relief from minority oppression is not arbitrable.
    • Category: Substantive
    • Related Cases:
      • [2011] 3 SLR 414
      • [2014] 3 SLR 815
      • [2012] Ch 333
      • [2004] 1 WLR 2910
  2. Stay of Court Proceedings in Favor of Arbitration
    • Outcome: The court dismissed the defendants' applications to stay the proceedings.
    • Category: Procedural
    • Related Cases:
      • [2009] 4 SLR(R) 732
      • [2015] SGHC 225
      • [2008] 4 SLR(R) 460
  3. Taking a Step in Proceedings
    • Outcome: The court found that neither defendant had taken a step in the proceedings within the meaning of s 6(1) of the International Arbitration Act.
    • Category: Procedural
    • Related Cases:
      • [2008] 4 SLR(R) 460
      • [1978] 1 Lloyd’s Rep 357
      • [2007] 1 SLR(R) 967
      • [2014] 4 SLR 500
      • [2005] 1 SLR(R) 168
      • [2003] 4 SLR(R) 499
      • [1978] 1 Lloyd’s Rep 225
      • [2001] 2 SLR(R) 777

8. Remedies Sought

  1. Order for L Capital Jones to buy out Maniach’s shares
  2. Restraint of transfer of Company’s shares in JG Holdings
  3. Damages or equitable compensation

9. Cause of Actions

  • Minority Oppression

10. Practice Areas

  • Commercial Litigation
  • Arbitration

11. Industries

  • Investment
  • Food and Beverage

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Tjong Very Sumito and others v Antig Investments Pte LtdSingapore Court of AppealYes[2009] 4 SLR(R) 732SingaporeCited for the principle that the burden on an applicant to establish the requirements for a stay of proceedings is a light one.
Malini Ventura v Knight Capital Pte Ltd and othersSingapore High CourtYes[2015] SGHC 225SingaporeCited for the principle that the burden on an applicant to establish the requirements for a stay of proceedings is a light one, characterized as showing a prima facie case.
Carona Holdings Pte Ltd and others v Go Go Delicacy Pte LtdSingapore Court of AppealYes[2008] 4 SLR(R) 460SingaporeCited for the principles regarding what constitutes a 'step in the proceedings' that would preclude a party from seeking a stay in favor of arbitration.
Eagle Star Insurance Co Ltd v Yuval Insurance Co LtdEnglish Court of AppealYes[1978] 1 Lloyd’s Rep 357England and WalesCited for the principle that an application to strike out proceedings on grounds of a procedural defect does not constitute a step in the proceedings.
WestLB AG v Philippine National Bank and othersSingapore High CourtYes[2007] 1 SLR(R) 967SingaporeCited for the principle that a party takes a step in the proceedings by filing a summons which includes a prayer invoking the court’s jurisdiction to inquire into the merits of the parties’ dispute.
Republic of the Philippines v Maler FoundationSingapore Court of AppealYes[2008] 2 SLR(R) 857SingaporeCited for the principle that a party takes a step in the proceedings by filing a summons which includes a prayer invoking the court’s jurisdiction to inquire into the merits of the parties’ dispute.
Zoom Communications Ltd v Broadcast Solutions Pte LtdSingapore Court of AppealYes[2014] 4 SLR 500SingaporeCited for the principle that where the premise underlying one prayer in an application contradicts the premise underlying another prayer in the same application, the applicant will not be taken to concede the premise of Prayer B simply by presenting it to the court for determination, provided that Prayer B is in substance presented as an alternative to Prayer A.
Australian Timber Products Pte Ltd v Koh Brothers Building & Civil Engineering Contractor (Pte) LtdSingapore High CourtYes[2005] 1 SLR(R) 168SingaporeCited for the proposition that a defendant who applies to set aside default judgment does not thereby take a step in the proceedings and remains entitled to apply to stay the proceedings in favor of arbitration.
Patel v PatelEngland and Wales Court of AppealYes[2000] QB 551England and WalesCited for the proposition that a defendant who applies to set aside default judgment does not thereby take a step in the proceedings and remains entitled to apply to stay the proceedings in favor of arbitration.
Chong Long Hak Kee Construction Trading Co v IEC Global Pte LtdSingapore High CourtYes[2003] 4 SLR(R) 499SingaporeCited for the principle that a defendant who carries out a procedural act in proceedings while expressly reserving his right to apply for a stay of those proceedings despite that act will not be considered to have taken a step in the proceedings within the meaning of s 6(1).
Roussel-Uclaf v G D Searle & Co Ltd and G D Searle & CoEngland and Wales High CourtYes[1978] 1 Lloyd’s Rep 225England and WalesCited for the principle that resisting a plaintiff’s application for an interlocutory injunction does not amount to a step in the proceedings.
International SOS Pte Ltd v Overton Mark Harold GeorgeSingapore High CourtYes[2001] 2 SLR(R) 777SingaporeCited for the principle that a defendant who has no alternative but to challenge an interlocutory step which a plaintiff has initiated, particularly in circumstances where the defendant has made or foreshadowed an application to stay the proceedings, will generally not be held to have taken a step in the proceedings within the meaning of s 6(1).
Rickshaw Investments Ltd and another v Nicolai Baron von UexkullSingapore Court of AppealYes[2007] 1 SLR(R) 377SingaporeCited for the principle that a plaintiff has the right to present the facts which underlie its claim in whichever legal form maximises its forensic advantage.
Larsen Oil & Gas Pte Ltd v Petroprod Ltd (in official liquidation in the Cayman Islands and in compulsory liquidation in Singapore)Singapore Court of AppealYes[2011] 3 SLR 414SingaporeCited for the principle that arbitration clauses should be generously construed and that the concept of arbitrability is a cornerstone of arbitration.
Silica Investors Ltd v Tomolugen Holdings Ltd and othersSingapore High CourtYes[2014] 3 SLR 815SingaporeCited for the approach to determining whether the subject-matter of a plaintiff’s claim falls within the scope of an arbitration clause and for the analysis of arbitrability of minority oppression claims.
Premium Nafta Products Ltd v Fili Shipping Co LtdEngland and Wales House of LordsYes[2007] 2 CLC 553England and WalesCited for the principle that the parties, as rational businessmen, are likely to have intended any dispute arising out of the relationship into which they have entered or purported to enter to be decided by the same tribunal.
Fulham Football Club (1987) Ltd v Richards and anotherEngland and Wales Court of AppealYes[2012] Ch 333England and WalesCited for the principle that the statutory minority shareholder claim in English company law is arbitrable even though an arbitral tribunal is unable to grant certain statutory remedies.
Exeter City Association Football Club Ltd v Football Conference LtdEngland and Wales High CourtYes[2004] 1 WLR 2910England and WalesCited for the principle that the statutory minority shareholder claim under English company law is not arbitrable.
A Best Floor Sanding Pty Ltd v Skyer Australia Pty LtdSupreme Court of VictoriaYes[1999] VSC 170AustraliaCited for the principle that a contributory was not precluded from presenting a winding up petition under the Australian Corporations Law by an arbitration clause in the joint venture agreement.

13. Applicable Rules

Rule Name
Rules of Court (Cap 322, R 5, 2014 Rev Ed)

14. Applicable Statutes

Statute NameJurisdiction
International Arbitration Act (Cap 143A, 2002 Ed)Singapore
Companies Act (Cap 50, 2006 Rev Ed)Singapore
Companies Act (Cap 50)Singapore
Australian Corporations Act 2001 (Act 50 of 2001) (Cth)Australia

15. Key Terms and Keywords

15.1 Key Terms

  • Arbitrability
  • Minority oppression
  • Stay of proceedings
  • Shareholders’ agreement
  • Step in proceedings
  • Commercial unfairness
  • Judicial management
  • Deed of company arrangement
  • Abuse of voting power

15.2 Keywords

  • arbitration
  • minority oppression
  • stay of proceedings
  • companies act
  • shareholders agreement

17. Areas of Law

Area NameRelevance Score
Arbitration95
Minority Oppression90
Company Law70
Contract Law40

16. Subjects

  • Arbitration
  • Company Law
  • Commercial Litigation
  • Minority Rights