The Wellness Group v TWG Tea Co & Ors: Director Appointment Dispute Under Shareholders' Agreement
The Wellness Group Pte Ltd (Wellness) applied to the High Court of Singapore for an order to appoint Associate Professor Mak Yuen Tee (AP Mak) as a director of TWG Tea Company Pte Ltd (TWG Tea), based on a Shareholders’ Agreement (SHA) signed with TWG Tea, OSIM International Pte Ltd (OSIM), and Paris Investment Pte Ltd (Paris). The court, presided over by Justice Chua Lee Ming, dismissed the application on 10 July 2017, finding that Wellness had initially attached unacceptable conditions to the appointment, and the defendants were entitled to reconsider the appointment without those conditions. Wellness was ordered to pay costs to TWG Tea, OSIM and Paris.
1. Case Overview
1.1 Court
High Court of Singapore1.2 Outcome
Application dismissed
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Wellness Group sought to appoint a director to TWG Tea's board based on a shareholders' agreement. The court dismissed the application, finding Wellness had attached unacceptable conditions.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| The Wellness Group Pte Ltd | Plaintiff | Corporation | Application dismissed | Lost | |
| TWG Tea Company Pte Ltd | Defendant | Corporation | Application dismissed | Won | |
| Paris Investment Pte Ltd | Defendant | Corporation | Application dismissed | Won | |
| OSIM International Pte Ltd | Defendant | Corporation | Application dismissed | Won |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Chua Lee Ming | Judge | Yes |
4. Counsels
4. Facts
- Wellness sought to appoint AP Mak as a director of TWG Tea based on the SHA.
- OSIM and Paris rejected the appointment due to ancillary matters requested by Wellness.
- Wellness conceded it was not entitled to impose conditions on AP Mak’s appointment.
- The court found Wellness had changed its position regarding the ancillary matters.
- The defendants were entitled to reconsider AP Mak’s appointment without the conditions.
5. Formal Citations
- The Wellness Group Pte Ltd v TWG Tea Co Pte Ltd and others, Originating Summons No 206 of 2017, [2017] SGHC 298
6. Timeline
| Date | Event |
|---|---|
| Shareholders’ Agreement signed | |
| Manoj Mohan Murjani resigned as CEO of TWG Tea | |
| Manoj Mohan Murjani resigned as a director of TWG Tea | |
| OSIM purchased all the shares in Paris Investment Pte Ltd | |
| Wellness and Manoj commenced a minority oppression action in S 187/2014 | |
| Claims in S 187/2014 dismissed | |
| Wellness’ appeal in Civil Appeal No 64 of 2016 was dismissed | |
| Wellness informed TWG Tea that it wished to re-appoint Manoj as a director of TWG Tea | |
| OSIM and Paris wrote to Wellness stating that they were unable to agree to the appointment of Manoj | |
| TWG Tea informed Wellness that the board was of the view that Manoj’s appointment to the board would not be in the best interests of TWG Tea | |
| Wellness wrote to TWG Tea and proposed the appointment of AP Mak as a director of TWG Tea | |
| Wellness wrote to TWG Tea reiterating its request that TWG Tea “immediately take all necessary steps to formalise the appointment of [AP] Mak | |
| Wellness wrote another letter demanding that TWG Tea “take immediate steps to formalise the appointment of [AP] Mak” | |
| TWG Tea informed Wellness that it would not be appointing AP Mak | |
| Wellness filed the present application | |
| Wellness wrote to TWG Tea stating, inter alia, that (a) the refusal to appoint AP Mak was a breach of the SHA | |
| Application dismissed | |
| Judgment Date |
7. Legal Issues
- Breach of Shareholders' Agreement
- Outcome: The court found that the defendants were entitled to reconsider the appointment of the director afresh because the plaintiff had attached unacceptable conditions to the appointment.
- Category: Substantive
- Sub-Issues:
- Refusal to appoint director
- Imposition of conditions on appointment
8. Remedies Sought
- Order for appointment of director
- Execution of documents to give effect to appointment
9. Cause of Actions
- Breach of Contract
10. Practice Areas
- Commercial Litigation
- Corporate Law
11. Industries
- Food and Beverage
- Retail
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| The Wellness Group Pte Ltd and another v OSIM International Ltd and others | High Court | Yes | [2016] 3 SLR 729 | Singapore | Cited for the finding that there is an implied term in the SHA regarding the appointment of directors based on shareholding percentage. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Companies Act (Chapter 50 of Singapore) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Shareholders' Agreement
- Board of Directors
- Director Appointment
- Implied Term
- Ancillary Matters
- Shareholding Percentage
15.2 Keywords
- shareholders agreement
- director appointment
- TWG Tea
- Wellness Group
- OSIM
- corporate governance
17. Areas of Law
16. Subjects
- Corporate Governance
- Shareholder Agreements
- Director Appointment