Leiman v Noble Resources: Contractual Terms, Implied Terms, and R&O Committee Discretion

Ricardo Leiman and Rothschild Trust Guernsey Limited appealed against Noble Resources Ltd and Noble Group Ltd's decision to deny Leiman's post-resignation entitlements. The Court of Appeal of the Republic of Singapore, led by Sundaresh Menon CJ, allowed the appeal in part, finding the R&O Committee's decision invalid due to a failure to comply with fairness requirements. The court ordered an assessment of damages for the wrongful denial of share options and shares, reversing the High Court's decision on Leiman's breach of contractual obligations.

1. Case Overview

1.1 Court

Court of Appeal of the Republic of Singapore

1.2 Outcome

Appeal Allowed in Part

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Appeal concerning post-resignation entitlements. Court reviewed R&O Committee's discretion and construction of contractual terms.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Ricardo LeimanAppellant, PlaintiffIndividualAppeal Allowed in PartPartial
Rothschild Trust Guernsey LimitedAppellant, PlaintiffCorporationAppeal Allowed in PartPartial
Noble Resources LtdRespondent, DefendantCorporationAppeal Partially UpheldPartial
Noble Group LtdRespondent, DefendantCorporationNo AppearanceNeutral

3. Judges

Judge NameTitleDelivered Judgment
Sundaresh MenonChief JusticeYes
Andrew Phang Boon LeongJustice of the Court of AppealNo
Judith PrakashJudge of AppealNo
Steven ChongJudge of AppealNo
Belinda Ang Saw EanJudgeNo

4. Counsels

Counsel NameOrganization
Andre Francis ManiamWongPartnership LLP
Davinder SinghDavinder Singh Chambers LLC
Kenneth Jerald PereiraAldgate Chambers LLC
Jeremy Bay Choon SingAldgate Chambers LLC

4. Facts

  1. Ricardo Leiman was employed by Noble Resources Ltd as Chief Operating Officer and later as CEO.
  2. Leiman was awarded share options and shares during his employment, assigned to Rothschild Trust.
  3. Disagreements arose between Leiman and Noble regarding accounting and corporate governance.
  4. Leiman and Noble planned for his exit, resulting in a Settlement Agreement and Advisory Agreement.
  5. The Settlement Agreement outlined terms for Leiman's resignation and post-resignation entitlements.
  6. Noble hired a private investigator to monitor Leiman's activities after his resignation.
  7. The R&O Committee refused to approve the exercise of Leiman's share options based on the investigator's findings.

5. Formal Citations

  1. Leiman, Ricardo and another v Noble Resources Ltd and another, Civil Appeal No 153 of 2018, [2020] SGCA 52
  2. Leiman, Ricardo and another v Noble Resources Ltd and another, , [2018] SGHC 166

6. Timeline

DateEvent
Employment Agreement signed between Ricardo Leiman and Noble Resources Ltd
Ricardo Leiman employed by Noble Resources Ltd as Chief Operating Officer of Noble Group Ltd
Share options granted to Ricardo Leiman
Share options granted to Ricardo Leiman
Ricardo Leiman appointed an Executive Director of Noble Group Ltd
Share options granted to Ricardo Leiman
Ricardo Leiman appointed the Chief Executive Officer of Noble Group Ltd
Shares awarded to Ricardo Leiman via letter
Settlement Agreement signed by Ricardo Leiman
Settlement Agreement signed by Richard Samuel Elman on behalf of Noble Resources Ltd
Advisory Agreement signed by Ricardo Leiman and Richard Samuel Elman on behalf of Noble Resources Ltd
Ricardo Leiman ceased to be the CEO of Noble Group Ltd
R&O Committee convened and resolved to refuse to approve the exercise of five million of Ricardo Leiman’s Share Options
R&O Committee reconvened and reaffirmed its 1 March 2012 decision
Share options were to vest to Ricardo Leiman
Ricardo Leiman commenced Suit 393 against Noble Resources Ltd
Hearing date
Judgment reserved

7. Legal Issues

  1. Construction of Contractual Terms
    • Outcome: The court interpreted the contractual terms, establishing a 'two track' regime for dispute resolution.
    • Category: Substantive
  2. Implied Terms
    • Outcome: The court considered whether certain terms should be implied into the contract.
    • Category: Substantive
  3. Liquidated Damages or Penalty
    • Outcome: The court determined whether a clause was an unenforceable penalty.
    • Category: Substantive
  4. Employees’ Duties
    • Outcome: The court examined the scope of an employee's duties of good faith and fidelity.
    • Category: Substantive
    • Sub-Issues:
      • Good faith
      • Fidelity
  5. Employers’ Duties
    • Outcome: The court considered the duties of an employer in the context of the employment agreement.
    • Category: Substantive
  6. Conspiracy
    • Outcome: The court dismissed the claim for conspiracy by unlawful means.
    • Category: Substantive
  7. Inducement of Breach of Contract
    • Outcome: The court dismissed the claim for wrongful inducement of breach of contract.
    • Category: Substantive
  8. Unlawful Interference
    • Outcome: The court dismissed the claim for unlawful interference.
    • Category: Substantive
  9. R&O Committee Discretion
    • Outcome: The court reviewed the exercise of discretion by the Remuneration and Options Committee.
    • Category: Procedural

8. Remedies Sought

  1. Declaration that R&O Committee's decisions were invalid
  2. Damages for conspiracy by unlawful means
  3. Damages for wrongful inducement of breach of contract
  4. Damages for unlawful interference
  5. Monetary value of Share Options, Shares, and 2011 Bonus

9. Cause of Actions

  • Breach of Contract
  • Conspiracy by Unlawful Means
  • Wrongful Inducement of Breach of Contract
  • Unlawful Interference

10. Practice Areas

  • Commercial Litigation

11. Industries

  • Commodities
  • Supply Chain Management

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
CIFG Special Assets Capital I Ltd (formerly known as Diamond Kendall Ltd) v Ong Puay KoonSingapore Court of AppealYes[2018] 1 SLR 170SingaporeCited for the principles of contractual interpretation.
Lucky Realty Co Pte Ltd v HSBC Trustee (Singapore) LtdSingapore Court of AppealYes[2016] 1 SLR 1069SingaporeCited for the principle that the court looks to the text that the parties have used in contractual interpretation.
Zurich Insurance (Singapore) Pte Ltd v B-Gold Interior Design & Construction Pte LtdSingapore Court of AppealYes[2008] 3 SLR(R) 1029SingaporeCited for the principle that the court may have regard to the relevant context in contractual interpretation.
Sembcorp Marine Ltd v PPL Holdings Pte LtdSingapore Court of AppealYes[2013] 4 SLR 193SingaporeCited for the principle that the court has regard to the relevant context because it then places itself in the best possible position to ascertain the parties’ objective intentions.
Yap Son On v Ding Pei ZhenSingapore Court of AppealYes[2017] 1 SLR 219SingaporeCited for the principle that the meaning ascribed to the terms of the contract must be one which the expressions used by the parties can reasonably bear.
MCH International Pte Ltd v YG Group Pte LtdSingapore Court of AppealYes[2019] 2 SLR 837SingaporeCited for the principle that the exercise of ascertaining what the parties objectively intended is to be rooted, broadly speaking, in the context of the contractual purpose.
Smile Inc Dental Surgeons Pte Ltd v Lui Andrew StewartSingapore Court of AppealYes[2012] 4 SLR 308SingaporeCited for the legal tests for competitive activity.
Travista Development Pte Ltd v Tan Kim Swee AugustineSingapore High CourtYes[2008] 2 SLR(R) 474SingaporeCited for the presumption against redundancy in contractual interpretation.
PH Hydraulics & Engineering Pte Ltd v Airtrust (Hong Kong) LtdSingapore Court of AppealYes[2017] 2 SLR 129SingaporeCited for the principle that it would be the court’s task to ensure that NRL was adequately compensated for the loss of its bargain with Mr Leiman through the grant of appropriate remedies.
Dunlop Pneumatic Tyre Company, Limited v New Garage and Motor Company, LimitedHouse of LordsYes[1915] AC 79United KingdomCited for the traditional test for ascertaining whether a clause is a penalty clause.
Cavendish Square Holding BV v MakdessiUK Supreme CourtYes[2016] AC 1172United KingdomCited for the modified test for ascertaining whether a clause is a penalty clause.
Xia Zhengyan v Geng ChangqingSingapore Court of AppealYes[2015] 3 SLR 732SingaporeCited for the law on penalty clauses.
Photo Production Ltd v Securicor Transport LtdHouse of LordsYes[1980] AC 827United KingdomCited for the formulation of primary obligations that parties undertake to perform in their contracts, whose breach gives rise to secondary obligations on the part of the defaulting party to remedy the breach.
Bintai Kindenko Pte Ltd v Samsung C&T CorpSingapore Court of AppealYes[2018] 2 SLR 532SingaporeCited for the rules of natural justice.
Re Shankar Alan s/o Anant KulkarniSingapore High CourtYes[2007] 1 SLR(R) 85SingaporeCited for the rules of natural justice.
Stansfield Business International Pte Ltd v Minister for Manpower (formerly known as Minister for Labour)Singapore High CourtYes[1999] 2 SLR(R) 866SingaporeCited for the rules of natural justice.
Ridge v Baldwin and OthersHouse of LordsYes[1964] AC 40United KingdomCited for the law regarding master and servant.
Vasudevan Pillai and another v City Council of SingaporePrivy CouncilYes[1968–1970] SLR(R) 100SingaporeCited for the law regarding master and servant.
Lim Tow Peng and another v Singapore Bus Services LtdSingapore Court of AppealYes[1974–1976] SLR(R) 673SingaporeCited for the law regarding master and servant.
Arokiasamy Joseph Clement Louis v Singapore Airlines LtdSingapore High CourtYes[2002] 2 SLR(R) 924SingaporeCited for the law regarding master and servant.
Lai Swee Lin Linda v Attorney-GeneralSingapore High CourtYes[2010] SGHC 345SingaporeCited for the law regarding master and servant.
Stevenson v United Road Transport UnionCourt of Appeal of England and WalesYes[1977] 2 All ER 941England and WalesCited for the law regarding discretionary power to terminate the tenure or enjoyment by another of an employment or an office or a post or a privilege.
Long Kim Wing v LTX-Credence Singapore Pte LtdSingapore High CourtYes[2017] SGHC 151SingaporeCited for the requirement of “due inquiry”.
Velayutham M v Port of Singapore AuthoritySingapore High CourtYes[1974–1976] SLR(R) 307SingaporeCited for the requirement of “due inquiry”.
Kay Swee Pin v Singapore Island Country ClubSingapore Court of AppealYes[2008] 2 SLR(R) 802SingaporeCited for the proposition that a party liable to be directly affected by the outcome of proceedings should be given notice of the allegations against him and a fair opportunity to be heard.
Haron bin Mundir v Singapore Amateur Athletic AssociationSingapore High CourtYes[1991] 2 SLR(R) 494SingaporeCited for the law regarding disciplinary proceedings that were conducted in the context of social or sporting clubs and associations.

13. Applicable Rules

Rule Name
Order 57 Rule 9A(5) of the Rules of Court

14. Applicable Statutes

Statute NameJurisdiction
No applicable statutes

15. Key Terms and Keywords

15.1 Key Terms

  • Settlement Agreement
  • Advisory Agreement
  • R&O Committee
  • Share Options
  • Restricted Stock
  • Non-Competition
  • Confidentiality
  • Detriment
  • Good Leaver
  • Final Determination

15.2 Keywords

  • contractual terms
  • implied terms
  • liquidated damages
  • penalty
  • employees’ duties
  • good faith
  • fidelity
  • employers’ duties
  • conspiracy
  • inducement of breach of contract
  • unlawful interference

17. Areas of Law

Area NameRelevance Score
Contract Law90
Breach of Contract85
Contractual Interpretation75
Contractual terms70
Implied Terms65
Rules of construction60
Measure of Damages60
Employment Law50
Employees’ Duties45
Good Faith and Fidelity40
Inducement of Breach of Contract40
Conspiracy by Unlawful Means35
Employers’ duties35
Torts30
Unlawful Interference30
Company Law20

16. Subjects

  • Contract Law
  • Employment Law
  • Corporate Governance
  • Share Options
  • Settlement Agreements