Leiman v. Noble Resources: Breach of Contract, Share Options & Fiduciary Duty
Mr. Ricardo Leiman and Rothschild Trust Guernsey Limited, as trustee, sued Noble Resources Ltd and Noble Group Limited in the High Court of Singapore, alleging wrongful forfeiture of share options and shares following Mr. Leiman's resignation. Mr. Leiman claimed breach of contract, conspiracy, and unlawful interference. Noble Resources counterclaimed for repayment of sums paid under a settlement and advisory agreement, alleging breaches of fiduciary and contractual duties. The court dismissed both the plaintiffs' claim and the defendant's counterclaim.
1. Case Overview
1.1 Court
High Court of Singapore1.2 Outcome
Both the plaintiffs' claim and the defendant's counterclaim are dismissed.
1.3 Case Type
Civil
1.4 Judgment Type
Judgment
1.5 Jurisdiction
Singapore
1.6 Description
Ricardo Leiman sues Noble Resources for wrongful forfeiture of share options after resignation, alleging breach of contract and conspiracy.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Ricardo Leiman | Plaintiff | Individual | Claim Dismissed | Lost | Andre Francis Maniam, Liew Yik Wee, Sim Mei Ling, Joel Quek, Jeremy Tan |
| Rothschild Trust Guernsey Limited | Plaintiff | Trust | Claim Dismissed | Lost | Andre Francis Maniam, Liew Yik Wee, Sim Mei Ling, Joel Quek, Jeremy Tan |
| Noble Resources Ltd | Defendant | Corporation | Counterclaim Dismissed | Lost | Davinder Singh, Jaikanth Shankar, Tan Ruoyu, Srruthi Ilankathir, Kenetth Pereira, Jeremy Bay |
| Noble Group Limited | Defendant | Corporation | Claim Dismissed | Won | Davinder Singh, Jaikanth Shankar, Tan Ruoyu, Srruthi Ilankathir, Kenetth Pereira, Jeremy Bay |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| George Wei | Judge | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Andre Francis Maniam | WongPartnership LLP |
| Liew Yik Wee | WongPartnership LLP |
| Sim Mei Ling | WongPartnership LLP |
| Joel Quek | WongPartnership LLP |
| Jeremy Tan | WongPartnership LLP |
| Davinder Singh | Drew & Napier LLC |
| Jaikanth Shankar | Drew & Napier LLC |
| Tan Ruoyu | Drew & Napier LLC |
| Srruthi Ilankathir | Drew & Napier LLC |
| Kenetth Pereira | Aldgate Chambers LLC |
| Jeremy Bay | Aldgate Chambers LLC |
4. Facts
- Mr. Leiman was employed by NRL and served as COO and CEO of NGL.
- Mr. Leiman was granted shares and share options in NGL as part of his remuneration.
- Mr. Leiman assigned most of his shares and share options to the Adelaide Trust.
- Mr. Leiman resigned from NRL in late 2011 after disagreements with Mr. Elman.
- Mr. Leiman entered into a Settlement Agreement and Advisory Agreement with NRL.
- Noble hired a PI to investigate Mr. Leiman's activities after his resignation.
- The R&O Committee refused to approve Mr. Leiman's request to exercise his share options.
5. Formal Citations
- Leiman, Ricardo and another v Noble Resources Ltd and another, Suit No 393 of 2012, [2018] SGHC 166
6. Timeline
| Date | Event |
|---|---|
| Employment Agreement between Mr. Leiman and NRL signed. | |
| Mr. Leiman employed by NRL as Chief Operating Officer of NGL. | |
| Adelaide Trust set up. | |
| Mr. Leiman appointed as an Executive Director of NGL. | |
| Mr. Leiman became the Chief Executive Officer of NGL. | |
| Mr. Leiman resigned from NRL. | |
| Settlement Agreement and Advisory Agreement entered into between Mr. Leiman and NRL. | |
| NGL publicly announced Mr. Leiman’s resignation. | |
| Mr. Leiman ceased to be CEO of NGL. | |
| Mr. Alam informed Mr. Leiman that he was not entitled to use the cashless facility to exercise and sell his share options. | |
| R&O Committee convened and resolved to refuse to approve Mr. Leiman’s/Rothschild Trust’s exercise of the share options. | |
| R&O Committee affirmed its decision. | |
| Mr. Leiman commenced the present action against NRL. | |
| Mr. Leiman became a consultant at a Brazilian investment bank, BTG Pactual. | |
| Mr. Leiman joined BTG Pactual as a partner. | |
| Trial began. | |
| Judgment reserved. | |
| Judgment delivered. |
7. Legal Issues
- Breach of Contract
- Outcome: The court found that while there was a breach of non-compete obligations and duty of fidelity, the R&O Committee's decisions were valid.
- Category: Substantive
- Sub-Issues:
- Failure to honor share options
- Wrongful forfeiture of shares
- Failure to consider bonus
- Fiduciary Duty
- Outcome: The court found that Mr. Leiman was in breach of his duty of fidelity.
- Category: Substantive
- Sub-Issues:
- Conflict of interest
- Non-disclosure of information
- Breach of duty of fidelity
- Validity of R&O Committee Decisions
- Outcome: The court upheld the validity of the R&O Committee's decisions, finding they were not arbitrary, capricious, or made in bad faith.
- Category: Procedural
- Sub-Issues:
- Arbitrariness
- Bad faith
- Capriciousness
- Rationality
- Penalty Clause
- Outcome: The court found that the clause regarding forfeiture of share options was not an unenforceable penalty clause.
- Category: Substantive
- Sub-Issues:
- Enforceability of forfeiture provisions
- Genuine pre-estimate of loss
- Locus Standi
- Outcome: The court found that both Mr. Leiman and Rothschild Trust had the requisite locus standi to bring the action.
- Category: Jurisdictional
- Sub-Issues:
- Right to sue on contract
- Assignment of rights
8. Remedies Sought
- Declaration that R&O Committee's decisions are invalid
- Order that defendants take action to remedy breaches
- Damages for conspiracy
- Damages for inducing breach of contract
- Damages for causing loss by unlawful means
9. Cause of Actions
- Breach of Contract
- Conspiracy
- Inducement of Breach of Contract
- Unlawful Interference
10. Practice Areas
- Commercial Litigation
- Contract Disputes
- Employment Disputes
11. Industries
- Commodities Trading
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Family Food Court (a firm) v Seah Boon Lock and another (trading as Boon Lock Duck and Noodle House) | Court of Appeal | Yes | [2008] 4 SLR(R) 272 | Singapore | Cited for the exceptions to the general rule that a plaintiff cannot recover substantial damages for breach of contract where he has suffered no loss. |
| Braganza v BP Shipping Limited | United Kingdom Supreme Court | Yes | [2015] UKSC 17 | United Kingdom | Cited for the principle that courts will imply a term as to the manner in which contractual powers are exercised, ensuring they are not abused. |
| Steven Andrew Clark v Nomura International Plc | N/A | Yes | [2000] IRLR 766 | N/A | Cited to distinguish between cases of wrongful dismissal and cases where an employer exercises a discretion in breach of contract. |
| Mark Hills v Niksun Inc | England and Wales Court of Appeal (Civil Division) | Yes | [2016] EWCA Civ 115 | England and Wales | Cited regarding the exercise of contractual discretion. |
| British Telecommunications plc v Telefonica O2 UK Ltd | United Kingdom Supreme Court | Yes | [2014] UKSC 42 | United Kingdom | Cited for the principle that a contractual discretion must be exercised in good faith and not arbitrarily or capriciously. |
| MGA International Pte Ltd v Wajilam Exports (Singapore) Pte Ltd | High Court | Yes | [2010] SGHC 319 | Singapore | Cited for the limitations on a decision-maker’s discretion, including honesty, good faith, genuineness, and the absence of arbitrariness. |
| Socimer Bank Ltd v Standard Bank Ltd | N/A | Yes | [2008] All ER (D) 331 | N/A | Cited for the limitations on a decision-maker’s discretion, including honesty, good faith, genuineness, and the absence of arbitrariness. |
| Associated Provincial Picture Houses Ltd v Wednesbury Corp | N/A | Yes | [1947] 2 All ER 680 | N/A | Cited for the concept of Wednesbury unreasonableness in administrative decision-making. |
| Kay Swee Pin v Singapore Island Country Club | N/A | Yes | [2008] 2 SLR(R) 802 | N/A | Cited as an example of a case involving decisions made by disciplinary committees. |
| Singapore Amateur Athletics Association v Haron bin Mundir | N/A | Yes | [1993] 3 SLR(R) 407 | N/A | Cited as an example of a case involving decisions made by disciplinary committees. |
| Smile Inc Dental Surgeons Pte Ltd v Lui Andrew Stewart | Court of Appeal | Yes | [2012] 4 SLR 308 | Singapore | Cited for the proposition that an employee’s implied duty of good faith and fidelity is only breached if more than mere preparatory steps towards future competition had been taken by the employee. |
| Shepherds Investments Ltd v Walters | N/A | Yes | [2007] FSR 15 | N/A | Cited for examples of actions that would or would not be in conflict with the best interests of the company and the employer. |
| Robb v Green | N/A | Yes | [1895] 2 QB 1 | N/A | Cited for the principle that an employee who makes arrangements for setting up his own office is not necessarily in breach of the duty of fidelity unless such acts interfere with his work or if he actually starts business whilst still employed. |
| Balston Filters v Headline Filters | N/A | Yes | [1987] FSR 330 | N/A | Cited for the principle that an employee who makes arrangements for setting up his own office is not necessarily in breach of the duty of fidelity unless such acts interfere with his work or if he actually starts business whilst still employed. |
| Lancashire Fires Ltd v SA Lyons & Co Ltd | N/A | Yes | [1996] FSR 629 | N/A | Cited for the principle that an employee who makes arrangements for setting up his own office is not necessarily in breach of the duty of fidelity unless such acts interfere with his work or if he actually starts business whilst still employed. |
| Saltman Engineering Co v Campbell Engineering Co | N/A | Yes | (1948) 65 RPC 203 | N/A | Cited for the basic principles of the law on confidence. |
| Coco v AN Clark (Engineers) Ltd | N/A | Yes | [1969] RPC 41 | N/A | Cited for the basic principles of the law on confidence. |
| PH Hydraulics & Engineering Pte Ltd v Intrepid Offshore Construction Pte Ltd and another | N/A | Yes | [2012] 4 SLR 36 | N/A | Cited for the basic principles of the law on confidence. |
| Invenpro (M) Sdn Bd v JCS Automation Pte Ltd and another | N/A | Yes | [2014] 2 SLR 1045 | N/A | Cited for the basic principles of the law on confidence. |
| A-G v Newspaper Publishing plc | N/A | Yes | [1989] 2 FSR 27 | N/A | Cited for the inherently perishable nature of confidential information. |
| Dunlop Pneumatic Tyre Co Ltd v New Garage and Motor Co Ltd | N/A | Yes | [1915] AC 79 | N/A | Cited for the classic test for distinguishing between a penalty and liquidated damages. |
| Xia Zhengyan v Geng Changqing | Court of Appeal | Yes | [2015] 3 SLR 732 | Singapore | Cited for the classic test for distinguishing between a penalty and liquidated damages. |
| Cavendish Square Holding BV v Makdessi | N/A | Yes | [2016] AC 1172 | N/A | Cited for the modern approach to penalty clauses, focusing on whether the provision is penal rather than a pre-estimate of loss. |
| Legione v Hateley | N/A | Yes | [1983] 152 CLR 406 | N/A | Cited for the definition of a penalty as a punishment for non-observance of a contractual stipulation. |
| ABN AMRO Clearing Bank NV v 1050 Capital Pte Ltd | N/A | Yes | [2016] 1 SLR 186 | N/A | Cited for the principle that the Court must not substitute its own decision for that of the decision-maker. |
| Imam-Sadeque v Bluebay Asset Management (Services) Ltd | N/A | Yes | [2012] EWHC 3511 (QB) | N/A | Cited for the approach to forfeiture of share options in employment contracts and the applicability of the penalty doctrine. |
| Latham Scott v Credit Suisse First Boston | Court of Appeal | Yes | [2000] 2 SLR(R) 30 | Singapore | Cited for the principle that unless a bonus is guaranteed, an employee cannot claim to be legally entitled to it. |
| Leong Hin Chuee v Citra Group Pte Ltd and others | N/A | Yes | [2015] 2 SLR 603 | N/A | Cited for the principle that much will turn on the construction of the particular provision on bonus payments to see whether the parties had intended the bonus to be guaranteed. |
| Rutherford v Seymour Pierce Ltd | N/A | Yes | [2010] IRLR 606 | N/A | Cited for the proposition that where an employee had not in fact been considered for a bonus, the absence of a decision would amount to a breach of contract. |
| Horkulak v Cantor Fitzgerald International | N/A | Yes | [2005] ICR 402 | N/A | Cited for the principle that if there is an obligation on the employer to consider the employee’s entitlement to a bonus, then the employer would have been in breach of that obligation for not even making a decision regarding its employee’s bonus. |
| Cheah Peng Hock v Luzhou Bio-Chem Technology Ltd | N/A | Yes | [2013] 2 SLR 577 | N/A | Cited for the principle that the implied term of mutual trust and confidence or fidelity imposed on the employee and employer should not to be confused with a duty of good faith. |
| Brader Daniel John and others v Commerzbank AG | N/A | Yes | [2014] 2 SLR 81 | N/A | Cited for the proposition that there is a term implied in law that an employer shall not, without reasonable and proper cause, conduct itself in a manner calculated and likely to destroy or seriously damage the relationship of confidence and trust between employer and employee. |
| Wong Leong Wei Edward v Acclaim Insurance Brokers Pte Ltd | N/A | Yes | [2010] SGHC 352 | N/A | Cited for the proposition that there is a term implied in law that an employer shall not, without reasonable and proper cause, conduct itself in a manner calculated and likely to destroy or seriously damage the relationship of confidence and trust between employer and employee. |
| Tan Hup Thye v Refco (Singapore) Pte Ltd (in members’ voluntary liquidation) | N/A | Yes | [2010] 3 SLR 1069 | N/A | Cited for the principle that the Singapore position favoured the view that the employer’s discretion is unfettered. |
| Gimpex Ltd v Unity Holdings Business Ltd and others and another appeal | Court of Appeal | Yes | [2015] 2 SLR 686 | Singapore | Cited for the elements of conspiracy. |
| M + W Singapore Pte Ltd v Leow Tet Sin and another | Court of Appeal | Yes | [2015] 2 SLR 271 | Singapore | Cited for the elements of inducement of breach of contract. |
| Paragon Shipping Pte Ltd v Freight Connect (S) Pte Ltd | N/A | Yes | [2014] 4 SLR 574 | N/A | Cited for the elements of causing loss by unlawful means. |
| Mok Kwong Yue v Ding Leng Kong | N/A | Yes | [2012] 1 SLR 737 | N/A | Cited for the principle that where both the claim and the counterclaim are dismissed, the court will look to whether the subject matter of the counterclaim was identical to or part of the defence. |
| Medway Oil and Storage Co Ltd v Continental Contractors Ltd and others | N/A | Yes | [1929] 1 AC 88 | N/A | Cited for the principle that where both the claim and the counterclaim are dismissed, the court will look to whether the subject matter of the counterclaim was identical to or part of the defence. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
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
- Share Options
- Settlement Agreement
- Advisory Agreement
- R&O Committee
- Detriment
- Non-Competition
- Confidential Information
- Fiduciary Duty
- Good Faith
- Solicitation
15.2 Keywords
- breach of contract
- share options
- fiduciary duty
- employment
- conspiracy
- singapore
- noble resources
- ricardo leiman
16. Subjects
- Contract Law
- Employment Law
- Corporate Governance
- Share Options
- Fiduciary Duties
17. Areas of Law
- Contract Law
- Employment Law
- Tort Law
- Privity of Contract
- Damages
- Good Faith
- Fiduciary Duty