Ebony Ritz v Sumatec: Summary Judgment, Pleadings Amendment, Striking Out Defense
In Suit No 534 of 2016, the Singapore High Court heard appeals related to a claim by Ebony Ritz Sdn Bhd against Sumatec Resources Berhad for sums due under the Option and Financial Representation Agreement (OFRA) and a Guarantee. Sumatec defended on grounds of compromised claims and estoppel, seeking to amend its defense. The court granted summary judgment to Ebony Ritz on the OFRA claim, finding Sumatec's defenses unsustainable, but allowed Sumatec unconditional leave to defend the Guarantee claim. The court dismissed Sumatec's Amendment Appeal and allowed Ebony Ritz's Striking Out Appeal in part.
1. Case Overview
1.1 Court
High Court of the Republic of Singapore1.2 Outcome
Summary judgment granted to Ebony Ritz for the OFRA claim; Sumatec granted unconditional leave to defend the Guarantee claim.
1.3 Case Type
Civil
1.4 Judgment Type
Judgment
1.5 Jurisdiction
Singapore
1.6 Description
Singapore High Court case involving summary judgment, defense striking, and pleading amendments in a contract dispute. Judgment for Ebony Ritz.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Malaysian Trustees Berhad | Other | Corporation | |||
| Ebony Ritz Sdn Bhd | Plaintiff, Defendant-in-Counterclaim, Appellant | Corporation | Summary judgment granted for OFRA claim | Won | |
| Sumatec Resources Berhad | Defendant, Plaintiff-in-Counterclaim, Respondent | Corporation | Summary judgment granted against for OFRA claim | Lost | |
| Hoe Leong Corporation Ltd | Other | Corporation | |||
| Auspicious Journey Sdn Bhd | Other | Corporation | |||
| Semua International Sdn Bhd | Other | Corporation | |||
| Setinggi Holdings Limited | Other | Corporation |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| George Wei | Judge | Yes |
4. Counsels
4. Facts
- Ebony Ritz and Sumatec entered into the OFRA, where Sumatec guaranteed a minimum profit for Ebony Ritz's tanker chartering business.
- The audited profit for FY2011 fell short of the guaranteed amount, resulting in a financial shortfall.
- Ebony Ritz exercised its Priority Call Option to have the shortfall satisfied by transferring shares, but Sumatec failed to comply.
- The parties entered into the 2012 SPA, which included conditions for releasing Sumatec from liabilities under the OFRA.
- The 2nd Completion under the 2012 SPA never took place.
- Ebony Ritz claimed sums due under the OFRA and a Guarantee, leading to the lawsuit.
- Sumatec argued that Ebony Ritz had compromised its claims and was estopped from bringing them.
5. Formal Citations
- Ebony Ritz Sdn Bhd v Sumatec Resources Bhd, Suit No 534 of 2016(Registrar’s Appeal Nos 48–52 and 85 of 2017), [2017] SGHC 282
6. Timeline
| Date | Event |
|---|---|
| Ebony Ritz and Sumatec entered into the 2010 SPA. | |
| Ebony Ritz, Sumatec, and Auspicious Journey entered into the OFRA. | |
| Ebony Ritz advanced the first loan to SISB. | |
| Ebony Ritz advanced the eighth loan to SISB. | |
| Ebony Ritz exercised the Priority Call Option. | |
| Ebony Ritz, Sumatec, Hoe Leong, and Setinggi entered into the 2012 SPA. | |
| The 2012 SPA was supplemented by Addendum No 1. | |
| Hoe Leong paid consideration for the 1st Tranche Sale Shares. | |
| Sumatec, Hoe Leong, Setinggi, SISB, and the CLO Bondholders entered into the CLO Agreement. | |
| The 1st Tranche Sale Shares were transferred to Hoe Leong. | |
| SISB did not pay the 2nd Tranche Dividends to the Trustee. | |
| James Kuah requested an extension of time to pay the 2nd Tranche Dividends. | |
| The Trustee received partial payment of the 2nd Tranche Dividends from Hoe Leong. | |
| Ebony Ritz's lawyers demanded payment of the Financial Shortfall for FY2011 from Sumatec. | |
| Ebony Ritz demanded repayment of RM 10m under the Guarantee from Sumatec. | |
| Ebony Ritz commenced Suit 534 of 2016. | |
| Sumatec filed its defence and counterclaim. | |
| Ebony Ritz filed Summons Nos 3547 and 3548 of 2016. | |
| Sumatec filed Summons No 5450 of 2016. | |
| The AR heard arguments from the parties in respect of the Striking Out, Summary Judgment, and Amendment Applications. | |
| The AR made orders on the Striking Out, Summary Judgment, and Amendment Applications. | |
| Sumatec and Ebony Ritz filed appeals. | |
| Sumatec proposed a stay of the provision of the Security. | |
| Ebony Ritz rejected Sumatec's proposal for a stay. | |
| Sumatec filed Summons No 1066 of 2017. | |
| Ebony Ritz sent a draft judgment to Sumatec's solicitors. | |
| Ebony Ritz submitted the Draft Judgment to the Court for approval. | |
| The AR heard and granted Sumatec's Stay Application. | |
| Ebony Ritz filed Registrar's Appeal 85 of 2017. | |
| Judgment reserved. | |
| Judgment delivered. |
7. Legal Issues
- Summary Judgment
- Outcome: Summary judgment granted to Ebony Ritz for the OFRA claim.
- Category: Procedural
- Striking Out Defence
- Outcome: Sumatec's defence to the OFRA claim was deemed to disclose no reasonable defence or to be frivolous or vexatious.
- Category: Procedural
- Amendment of Pleadings
- Outcome: Sumatec's Amendment Appeal was dismissed as the AR was right to have disallowed the Paragraph 15 amendments
- Category: Procedural
- Breach of Contract
- Outcome: Sumatec breached the OFRA by failing to transfer to Ebony Ritz the shares equivalent in value to the Financial Shortfall for FY2011 pursuant to the Priority Call Option.
- Category: Substantive
- Corporate Veil Piercing
- Outcome: The court found that the attempt to lift the corporate veil of Ebony Ritz was devoid of merit.
- Category: Substantive
- Estoppel
- Outcome: The court found that Sumatec's Estoppel defence was unsustainable and did not raise any triable issue.
- Category: Substantive
- Interpretation of Contractual Clauses
- Outcome: The court interpreted clauses in the OFRA and 2012 SPA to determine the parties' rights and obligations.
- Category: Substantive
8. Remedies Sought
- Monetary Damages
9. Cause of Actions
- Breach of Contract
- Failure to fulfill financial representation
10. Practice Areas
- Commercial Litigation
11. Industries
- Oil and Gas
- Shipping
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Jeyaretnam Joshua Benjamin v Lee Kuan Yew | Court of Appeal | Yes | [1990] 1 SLR(R) 337 | Singapore | Cited for the principle that any amendment which would itself be liable to be struck out pursuant to O 18 r 19(1) of the Rules will not be allowed. |
| Lee Hsien Loong v Review Publishing Co Ltd and another and another suit | High Court | Yes | [2009] 1 SLR(R) 177 | Singapore | Recognized that the application to strike out is really a mirror of the application for summary judgment. |
| M2B World Asia Pacific Pte Ltd v Matsumura Akihiko | High Court | Yes | [2015] 1 SLR 325 | Singapore | Cited for the principle that the plaintiff seeking summary judgment must first show that he has a prima facie case for summary judgment. |
| Ritzland Investment Pte Ltd v Grace Management & Consultancy Services Pte Ltd | High Court | Yes | [2014] 2 SLR 1342 | Singapore | Cited regarding resisting summary judgment. |
| Home and Overseas Insurance Co Ltd v Mentor Insurance Co (UK) Ltd (in liquidation) | English Court of Appeal | Yes | [1990] 1 WLR 153 | England | Cited for the principle that in summary judgment proceedings, it is generally inappropriate for the court to delve into points of construction that may take hours or days. |
| Habibullah Mohamed Yousuff v Indian Bank | Court of Appeal | Yes | [1999] 2 SLR(R) 880 | Singapore | Cited for the principle that where a defendant shows that he has a fair case for a defence, or reasonable grounds for setting up a defence, or even a fair probability that has a bona fide defence, he ought to have leave to defend. |
| Wee Cheng Swee Henry v Jo Baby Kartika Polim | Court of Appeal | Yes | [2015] 4 SLR 250 | Singapore | Cited for the principle that a condition will be imposed where the defence is found to be shadowy, or where it appears to the court that a defence may succeed but that it is improbable that it would. |
| Gabriel Peter & Partners (suing as a firm) v Wee Chong Jin and others | Court of Appeal | Yes | [1997] 3 SLR(R) 649 | Singapore | Cited for the principle that the power to strike out a pleading is only exercised in plain and obvious cases. |
| The “Tokai Maru” | High Court | Yes | [1998] 2 SLR(R) 646 | Singapore | Cited for the principle that a reasonable defence is one that has some chance of success when only the allegations in the pleadings are considered. |
| Riduan bin Yusof v Khng Thian Huat and another | High Court | Yes | [2005] 2 SLR(R) 188 | Singapore | Cited for the interpretation of the words frivolous or vexatious. |
| Afro-Asia Shipping Co (Pte) Ltd v Haridass Ho & Partners and another | High Court | Yes | [2003] 2 SLR(R) 491 | Singapore | Cited for the interpretation of the words frivolous or vexatious. |
| Tan Swee Wan and another v Lian Tian Yong Johnny | High Court | Yes | [2016] SGHC 206 | Singapore | Cited for the principle that pleadings which are unnecessary or which include improper or irrelevant details may prejudice, embarrass or delay the fair trial of the action. |
| The “Pacific Vigorous” | High Court | Yes | [2006] 3 SLR(R) 374 | Singapore | Discusses the doctrines of common law election and equitable election. |
| Gay Choon Ing v Loh Sze Ti Terence Peter and another appeal | Court of Appeal | Yes | [2009] 2 SLR(R) 332 | Singapore | Cited for the proposition that where parties demonstrate that they intended to dispose of their actual or potential dispute by reaching an amicable resolution agreeable to both parties, this compromise will be recognised and given effect to by the courts. |
| Smith, Stone and Knight Ltd v Lord Mayor, Alderman and Citizens of the City of Birmingham | High Court | Yes | [1939] 4 All ER 116 | England | Cited as an example of a judicial exception to the separate entity doctrine. |
| Miller Freeman Exhibitions Pte Ltd v Singapore Industrial Automation Association and another | Court of Appeal | Yes | [2000] 3 SLR(R) 177 | Singapore | Cited for the principle that the indicia in Smith, Stone & Knight are helpful guidelines but not a conclusive or definitive test applicable in all circumstances in determining whether a business is carried on by a subsidiary as the principal or as an agent for its holding company. |
| Simgood Pte Ltd v MLC Shipbuilding Sdn Bhd and others | High Court | Yes | [2016] 1 SLR 1129 | Singapore | Comprehensive examination of the law on piercing the corporate veil. |
| Simgood Pte Ltd v MLC Barging Pte Ltd and others | Court of Appeal | Yes | [2016] SGCA 46 | Singapore | Upholds the decision in Simgood Pte Ltd v MLC Shipbuilding Sdn Bhd and others [2016] 1 SLR 1129. |
| Adams and others v Cape Industries plc and another | Chancery Division | Yes | [1990] Ch 433 | England | Cited for the principle that a company has a separate legal personality from its owners and controllers, even if it is one of a number of companies which form a group of companies through common or interlocking ownership or control. |
| Public Prosecutor v Lew Syn Pau and another | High Court | Yes | [2006] 4 SLR(R) 210 | Singapore | Cited for the principle that the doctrine of separate legal personality is not displaced simply because companies are organised as a single economic unit. |
| Prest v Petrodel Resources Ltd and others | UK Supreme Court | Yes | [2013] 2 AC 415 | United Kingdom | Cited for the principle that the corporate veil may be pierced only to prevent the abuse of corporate legal personality. |
| Manuchar Steel Hong Kong Ltd v Star Pacific Line Pte Ltd | High Court | Yes | [2014] 4 SLR 832 | Singapore | Cited for the view that the doctrine of lifting the corporate veil was limited to cases where there had been an abuse of corporate form. |
| Tiger Airways Pte Ltd v Swissport Singapore Pte Ltd | Court of Appeal | Yes | [2009] 4 SLR(R) 992 | Singapore | The recitals to a contract do not impose legal obligations on the parties. |
| The “STX Mumbai” and another matter | Court of Appeal | Yes | [2015] 5 SLR 1 | Singapore | Decision concerning anticipatory breach, and lifting of the corporate veil was not in issue. |
| Ngee Ann Development Pte Ltd v Takashimaya Singapore Ltd | Court of Appeal | Yes | [2017] SGCA 42 | Singapore | Mindful of the need for the court to consider the context of the parties’ agreement as part of the interpretive exercise |
13. Applicable Rules
| Rule Name |
|---|
| O 14 r 1 of the Rules |
| O 14 r 3 of the Rules |
| O 14 r 4 of the Rules |
| O 18 r 7 of the Rules |
| O 18 r 19 of Rules of Court |
| O 18 r 19(1)(a) of the Rules |
| O 18 r 19(1)(b) of the Rules |
| O 18 r 19(1)(c) of the Rules |
| O 18 r 19(1)(d) of the Rules |
| O 42 r 7(1) |
| O 42 r 8 |
| O 42 r 8(2) |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Rules of Court (Cap 322, R 5, 2014 Rev Ed) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Option and Financial Representation Agreement
- OFRA
- Financial Representation
- Priority Call Option
- Financial Shortfall
- 2010 SPA
- 2012 SPA
- CLO Agreement
- 1st Completion
- 2nd Completion
- Sumatec Guarantees
- Corporate Veil
- Estoppel
15.2 Keywords
- summary judgment
- striking out
- pleadings
- contract
- financial representation
- corporate veil
- estoppel
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Summary Judgement | 80 |
| Civil Practice | 75 |
| Contract Law | 60 |
| Estoppel | 50 |
| Striking out | 40 |
| Amendment of Pleadings | 40 |
| Corporate Law | 30 |
16. Subjects
- Contract Dispute
- Summary Judgment
- Civil Procedure
- Corporate Law