Oro Negro Drilling v Integradora: Anti-Suit Injunction, Director's Duties & Concurso Proceedings

The High Court of Singapore heard an application by Oro Negro Drilling Pte. Ltd. and others (the Plaintiffs) against Integradora De Servicios Petroleros Oro Negro, S.A.P.I. De C.V. and others (the Defendants) to set aside an interim injunction. The injunction had restrained the defendants from taking legal action in Mexico on behalf of the plaintiffs. The court granted the Setting Aside Application, discharging the injunction, citing the plaintiffs' failure to make full and frank disclosure of material facts, including relevant Mexican insolvency laws and potential conflicts of interest. The court also dismissed the plaintiffs' application for leave to appeal the setting aside of the ex parte injunction and the costs awarded to a non-party, Jesús Ángel Guerra Méndez.

1. Case Overview

1.1 Court

High Court of the Republic of Singapore

1.2 Outcome

Setting Aside Application granted; Order of Court dated 30 January set aside; Leave Application dismissed.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Singapore court discharges an anti-suit injunction, citing the plaintiffs' lack of full disclosure regarding Mexican insolvency laws and conflicting interests.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Oro Negro Drilling Pte LtdPlaintiffCorporationSetting Aside Application granted againstLost
Oro Negro Decus Pte LtdPlaintiffCorporationSetting Aside Application granted againstLost
Oro Negro Fortius Pte LtdPlaintiffCorporationSetting Aside Application granted againstLost
Oro Negro Impetus Pte LtdPlaintiffCorporationSetting Aside Application granted againstLost
Oro Negro Laurus Pte LtdPlaintiffCorporationSetting Aside Application granted againstLost
Oro Negro Primus Pte LtdPlaintiffCorporationSetting Aside Application granted againstLost
Integradora de Servicios Petroleros Oro Negro SAPI de CVDefendantCorporationSetting Aside Application granted in favor ofWon
Alonso Del Val EcheverriaDefendantIndividualSetting Aside Application granted in favor ofWon
Gonzalo Gil WhiteDefendantIndividualSetting Aside Application granted in favor ofWon
Jesús Ángel Guerra MéndezOtherIndividualCosts awarded toWon

3. Judges

Judge NameTitleDelivered Judgment
Lai Siu ChiuSenior JudgeYes

4. Counsels

Counsel NameOrganization
Mohammad Haireez bin Mohameed JufferieHaridass Ho & Partners
Calvin LiangEssex Court Chambers Duxton (Singapore Group Practice)
Ajaib HaridassHaridass Ho & Partners
Ragini d/o ParasuramHaridass Ho & Partners
Cavinder Bull SCDrew & Napier LLC
Rajaram Vikram RajaDrew & Napier LLC
Lua Jie Ying, KellyDrew & Napier LLC
Thio Shen Yi SCTSMP Law Corporation
Md Noor E AdnaanTSMP Law Corporation

4. Facts

  1. The plaintiffs are Singapore-incorporated companies that own jack-up oil rigs located in Mexican waters.
  2. The first defendant, Integradora, is the sole shareholder of Oro Negro and provides oilfield services in Mexico.
  3. Perforadora, a Mexican subsidiary of Integradora, entered into bareboat charters with the rig owners and then chartered the rigs to Pemex.
  4. In 2017, Pemex proposed amendments to the Pemex Charters that would have reduced the charter hire and revenue of Oro Negro and the rig owners.
  5. Oro Negro issued bonds to bondholders under a Bond Agreement subject to Norwegian law.
  6. The plaintiffs sought an injunction to restrain the defendants from commencing or maintaining any concurso petition or insolvency action in Mexico on behalf of the plaintiffs.
  7. The defendants applied to set aside the order granting leave to serve the originating summons outside Singapore and to discharge the injunction.

5. Formal Citations

  1. Oro Negro Drilling Pte Ltd and others v Integradora de Servicios Petroleros Oro Negro, SAPI de CV and others, Originating Summons No 126 of 2018(Summons Nos 2473, 2960 and 4396 of 2018), [2019] SGHC 35
  2. , , Civil Appeal No 194 of 2018
  3. , , Civil Appeal Originating Summons No 41 of 2018

6. Timeline

DateEvent
Court granted an interim injunction against the defendants.
Defendants applied to set aside the Order of Court dated 30 January.
Jesús Ángel Guerra Méndez sought to vary the Order of Court dated 30 January.
Prolonged hearing began for Setting Aside and Variation Applications.
Hearing continued for Setting Aside and Variation Applications.
Hearing continued for Setting Aside and Variation Applications; Leave Application heard and dismissed.
Hearing continued for Setting Aside and Variation Applications.
Court granted the Setting Aside Application and dismissed the Leave Application.
Rig owners issued Powers of Attorney to members of Guerra.
Perforadora filed a petition to place itself in concurso mercantil.
Nordic Trustee sent a letter asserting the filing of the First Concurso Petition amounted to an event of default.
Nordic Trustee purportedly removed the second and third defendants as directors from the boards of directors of the plaintiffs.
Mendez filed a petition for the first defendant and the plaintiffs to be placed in concurso proceedings.
Pemex purportedly terminated the Pemex Charters in respect of the Primus, Laurus, Fortius and Decus rigs.
Nordic Trustee exercised its powers under a share charge and transferred the first defendant’s shares in Oro Negro to OND Pte Ltd.
The Mexican court issued various injunctions as part of the proceedings in the First Concurso Petition.
The newly appointed directors passed resolutions purportedly to rescind on the plaintiffs’ behalf any and all authorities including any Powers of Attorney given by the Company to any person previously.
A lawyer filed a motion to withdraw the Second Concurso Petition.
Mendez filed an “inefficiency and punitive damages claim” in the Second District Court on behalf of the plaintiffs, Perforadora and the first defendant.
The Mexican court accepted the Second Concurso Petition of the plaintiffs and added it to the pending First Concurso Petition of Perforadora.
Chavez filed another motion to revoke the Inefficiency Motion on behalf of OND.
Chavez filed an application seeking a declaration that Mendez lacked the authority to represent the plaintiffs.
The second defendant was notified by DB Mexico that a sum of US$23m was transferred from the plaintiffs’ account to the bank account of Nordic Trustee.
The Mexican court ruled that a provision in the Pemex Charters was invalid for contravening Mexican law.
Chavez filed a motion in the Mexican court asking for the Nordic Trustee Service Order to be revoked.
The rig owners commenced proceedings against Perforadora in the US District Court for the Southern District of New York.
The Mexican court allowed OND’s Revocation Motion on purely procedural grounds.
The second defendant filed petitions in the US Bankruptcy Court to commence proceedings in the name of the first defendant and Perforadora.
The Mexico court found that the POAs that the plaintiffs had granted to Mendez on 31 August 2017 had not been validly revoked or rescinded.
Proceedings in the US District Court were stayed by an order of the US Bankruptcy Court.
The US Bankruptcy Court granted the orders sought on 20 April 2018.
The US Bankruptcy Court issued a further order granting various discretionary reliefs.

7. Legal Issues

  1. Setting Aside of Ex Parte Injunction
    • Outcome: The court set aside the ex parte injunction due to the plaintiffs' failure to make full and frank disclosure of material facts.
    • Category: Procedural
    • Sub-Issues:
      • Full and frank disclosure
      • Conflict of interest
  2. Jurisdiction
    • Outcome: The court declared that it had no jurisdiction over the defendants in respect of the reliefs sought in the originating summons.
    • Category: Jurisdictional
  3. Director's Duties
    • Outcome: The plaintiffs alleged that the second and third defendants breached their duties as directors of the Singapore-incorporated plaintiffs.
    • Category: Substantive
    • Sub-Issues:
      • Breach of duty of care
      • Misrepresentation
  4. Anti-Suit Injunction
    • Outcome: The court considered whether to grant an anti-suit injunction to restrain proceedings in Mexico.
    • Category: Procedural

8. Remedies Sought

  1. Injunction
  2. Declaration

9. Cause of Actions

  • Breach of Director's Duties
  • Misrepresentation

10. Practice Areas

  • Commercial Litigation

11. Industries

  • Oil and Gas
  • Shipping

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Rappo Tania v Accent DelightCourt of AppealYes[2017] 2 SLR 265SingaporeCited for the determining factors in deciding the appropriate forum for a dispute.
RGA Holdings v Loh Choon Ping and AnorCourt of AppealYes[2017] 2 SLR 997SingaporeCited in relation to injunctions to prevent the breach of negative covenants.
Tang Yoke Kheng v Lek BenedictHigh CourtYes[2004] 3 SLR(R) 12SingaporeCited as a High Court authority on injunctions granted pursuant to s 409A of the Companies Act.
Lee Kuan Yew v Tang Liang HongN/AYes[1997] 2 SLR(R) 862SingaporeCited for the legal requirements for leave to appeal.
The Xin Chang ShuHigh CourtYes[2016] 3 SLR 1195SingaporeCited in relation to whether a wrongful arrest order was an “interlocutory order”.

13. Applicable Rules

Rule Name
Rules of Court (Cap 322, R 5, 2006 Rev Ed) O 15 r 6(2)(b)
Rules of Court (Cap 322, R 5, 2006 Rev Ed) O 29 r 1
Rules of Court (Cap 322, R 5, 2006 Rev Ed) O 52 r 4

14. Applicable Statutes

Statute NameJurisdiction
Supreme Court of Judicature Act (Cap 322, 2007 Rev Ed) s 34(2)(d)Singapore
Companies Act (Cap 50, 2006 Rev Ed) s 157Singapore
Companies Act (Cap 50, 2006 Rev Ed) s 409ASingapore

15. Key Terms and Keywords

15.1 Key Terms

  • Concurso mercantil
  • Pemex Charters
  • Bond Agreement
  • Event of Default
  • Ad Hoc Group
  • Powers of Attorney
  • Share Charge
  • Nordic Trustee
  • Article 87 LCM
  • Anti-suit injunction

15.2 Keywords

  • Injunction
  • Director's duties
  • Concurso proceedings
  • Singapore
  • Mexico
  • Companies Act
  • Setting aside
  • Leave to appeal

17. Areas of Law

Area NameRelevance Score
Civil Procedure80
Injunctions75
Appeal60
Jurisdiction50
Company Law40

16. Subjects

  • Insolvency
  • Company Law
  • Civil Procedure
  • International Law