BBA v BAZ: Setting Aside Arbitration Award for Alleged Misrepresentation in Pharmaceutical Stake Sale

The Singapore Court of Appeal dismissed appeals by BBA, BBB, BBC, BBD, BBM, BBN, BBO, BBP, BBQ, BBR, BBS, BBT, BBF, BBG, and BBH against BAZ, a Japanese corporation, relating to an arbitration award. The dispute arose from the sale and purchase of a controlling stake in an Indian pharmaceutical company, where BAZ alleged misrepresentation and concealment of material facts by the sellers. The court upheld the High Court's decision, finding no grounds to set aside the arbitration award under the International Arbitration Act or the UNCITRAL Model Law.

1. Case Overview

1.1 Court

Court of Appeal of the Republic of Singapore

1.2 Outcome

Appeal Dismissed

1.3 Case Type

Civil

1.4 Judgment Type

Judgment

1.5 Jurisdiction

Singapore

1.6 Description

Singapore court dismisses appeal to set aside arbitration award, finding no breach of jurisdiction or public policy in a dispute over misrepresentation in a pharmaceutical stake sale.

1.7 Decision Date

27 May 2020

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
BBA	Appellant	Individual	Appeal Dismissed	Lost	Alvin Yeo of WongPartnership LLP
BBB	Appellant	Individual	Appeal Dismissed	Lost	Alvin Yeo of WongPartnership LLP
BBC	Appellant	Individual	Appeal Dismissed	Lost	Alvin Yeo of WongPartnership LLP
BBD	Appellant	Individual	Appeal Dismissed	Lost	Alvin Yeo of WongPartnership LLP
BBM	Appellant	Individual	Appeal Dismissed	Lost	Alvin Yeo of WongPartnership LLP
BBN	Appellant	Individual	Appeal Dismissed	Lost	Alvin Yeo of WongPartnership LLP
BBO	Appellant	Individual	Appeal Dismissed	Lost	Alvin Yeo of WongPartnership LLP
BBP	Appellant	Individual	Appeal Dismissed	Lost	Alvin Yeo of WongPartnership LLP
BBQ	Appellant	Individual	Appeal Dismissed	Lost	Alvin Yeo of WongPartnership LLP
BBR	Appellant	Individual	Appeal Dismissed	Lost	Alvin Yeo of WongPartnership LLP
BBS	Appellant	Individual	Appeal Dismissed	Lost	Alvin Yeo of WongPartnership LLP
BBT	Appellant	Individual	Appeal Dismissed	Lost	Alvin Yeo of WongPartnership LLP
BBF	Appellant	Individual	Appeal Dismissed	Lost	Narayanan Sreenivasan of K&L Gates Straits Law LLC
BBG	Appellant	Individual	Appeal Dismissed	Lost	Narayanan Sreenivasan of K&L Gates Straits Law LLC
BBH	Appellant	Individual	Appeal Dismissed	Lost	Narayanan Sreenivasan of K&L Gates Straits Law LLC
BAZ	Respondent	Corporation	Appeal Dismissed	Won	Gopal Subramanium of Oon & Bazul LLP

3. Judges

Judge Name	Title	Delivered Judgment
Sundaresh Menon	Chief Justice	No
Judith Prakash	Justice of the Court of Appeal	No
Quentin Loh	Judge	Yes

4. Counsels

Counsel Name	Organization
Alvin Yeo	WongPartnership LLP
Narayanan Sreenivasan	K&L Gates Straits Law LLC
Gopal Subramanium	Oon & Bazul LLP

4. Facts

BAZ, a Japanese corporation, purchased a 64% stake in C, an Indian pharmaceutical company.
Disputes arose over alleged misrepresentation and concealment of material facts by the Sellers.
BAZ commenced arbitration in Singapore against the Sellers.
The arbitration tribunal held in favor of BAZ and awarded damages.
The Sellers sought to set aside the arbitration award.
The High Court dismissed the OS 784 Sellers’ setting aside application and SUM 4499, but allowed the Minors’ setting aside application and SUM 4497.
The OS 784 Sellers appealed the High Court's decision.

5. Formal Citations

BBA and others v BAZ and another appeal, Civil Appeal Nos 9 and 10 of 2019, [2020] SGCA 53

6. Timeline

Date	Event
2007-12-01	BAZ approached BBA to negotiate the purchase of the Shares.
2008-06-11	The parties signed the Sale and Purchase Agreement.
2008-11-07	Completion of the Sale and Purchase Agreement took place.
2009-05-24	BBA resigned as a director of C.
2011-12-01	Settlement or consent decree reached with DOJ and FDA.
2012-11-14	BAZ commenced arbitration against the Sellers.
2013-05-13	C paid the DOJ the settlement sum of US$500 million.
2014-04-06	BAZ announced the merger of C with another company.
2014-09-29	Substantive hearings of the arbitration were held in Singapore.
2015-03-25	The Merger of C with Y Co was completed.
2015-04-21	BAZ sold all its shares in Y Co in the open market.
2016-04-29	The Majority rendered their Award.
2016-05-17	BAZ commenced proceedings for leave to enforce the Award in New Delhi and Singapore.
2016-05-18	An ex parte leave order was made in Singapore.
2016-08-03	The Sellers filed OS 784 and OS 787 to set aside the Award.
2016-09-15	The Sellers applied to set aside the ex parte order.
2017-09-06	The New Delhi High Court reserved judgment.
2018-01-31	The New Delhi High Court pronounced judgment.
2018-04-01	Hearing conducted in April 2018.
2018-12-01	The Judge delivered her decision.
2020-02-24	Judgment reserved.
2020-05-28	Judgment delivered.

7. Legal Issues

Setting Aside Arbitration Award
- Outcome: The court dismissed the appeal to set aside the arbitration award.
- Category: Procedural
- Sub-Issues:
  - Excess of jurisdiction
  - Breach of natural justice
  - Breach of public policy
Fraudulent Misrepresentation
- Outcome: The court upheld the tribunal's finding of fraudulent misrepresentation.
- Category: Substantive
Time Bar
- Outcome: The court held that the claim was not time-barred.
- Category: Procedural
Joint and Several Liability
- Outcome: The court upheld the tribunal's finding of joint and several liability.
- Category: Substantive

8. Remedies Sought

Monetary Damages
Setting Aside Arbitration Award

9. Cause of Actions

Fraudulent Misrepresentation
Breach of Contract

10. Practice Areas

Commercial Litigation
Arbitration

11. Industries

Pharmaceutical

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
BAZ v BBA and others	High Court	Yes	[2018] SGHC 275	Singapore	Refers to the High Court decision being appealed.
Larsen Oil and Gas Pte Ltd v Petroprod Ltd (in official liquidation in the Cayman Islands and in compulsory liquidation in Singapore)	Court of Appeal	Yes	[2011] 3 SLR 414	Singapore	Cited for the principle that an arbitral tribunal exceeds its jurisdiction if it decides on issues beyond the scope of the arbitration clause.
AKN and another v ALC and others and other appeals	Court of Appeal	Yes	[2015] 3 SLR 488	Singapore	Cited for the principle that courts should not interfere in the merits of an arbitral award.
Soh Beng Tee & Co Pte Ltd v Fairmount Development Pte Ltd	High Court	Yes	[2007] 3 SLR(R) 86	Singapore	Cited for the principle that courts should not interfere in the merits of an arbitral award.
BLC and others v BLB and another	High Court	Yes	[2014] 4 SLR 79	Singapore	Cited for the principle that errors of law or fact, even if serious, go to the merits of the award and are outside the remit of the court.
TMM Division Maritima SA de CV v Pacific Richfield Marine Pte Ltd	High Court	Yes	[2013] 4 SLR 972	Singapore	Cited for the principle that the court should not nit-pick at the award and infelicities are to be expected.
The Oriental Insurance Co Ltd v Reliance National Asia Re Pte Ltd	High Court	Yes	[2009] 2 SLR(R) 385	Singapore	Cited for the distinction between interest as damages and interest upon the damages.
Sempra Metals Ltd (formerly Metallgesellschaft Ltd) v Inland Revenue Commissioners	House of Lords	Yes	[2008] 1 AC 561	United Kingdom	Cited regarding the issue of whether a claimant seeking a remedy on the ground of unjust enrichment was entitled to an award for restitution of the value of money that is measured by compound interest.
BNA v BNB and another	Court of Appeal	Yes	[2020] 1 SLR 456	Singapore	Cited for the principle that where the parties had not chosen the lex arbitri, it did not follow that the governing law of the agreement should also be taken as the express governing law of the arbitration agreement.
Swissbourgh Diamond Mines (Pty) Ltd and others v Kingdom of Lesotho	Court of Appeal	Yes	[2019] 1 SLR 263	Singapore	Cited for the distinction between jurisdiction and admissibility in arbitration.
PT First Media TBK (formerly known as PT Broadband Multimedia TBK) v Astro Nusantara International BV and others and another appeal	Court of Appeal	Yes	[2014] 1 SLR 372	Singapore	Cited for the principle that issues of time bar arising from statutory limitation periods go towards admissibility, not jurisdiction.
Chong Kim Beng v Lim Ka Poh (trading as Mysteel Engineering Contractor) and others	Court of Appeal	Yes	[2015] 3 SLR 652	Singapore	Cited for the principle that where the facts to establish joint liability are pleaded, there is no requirement that the words “joint and several” must be used in pleadings.
L W Infrastructure Pte Ltd v Lim Chin San Contractors Pte Ltd and another appeal	Court of Appeal	Yes	[2013] 1 SLR 125	Singapore	Cited for the principles that the applicant must establish (a) which rule of natural justice was breached; (b) how it was breached; (c) in what way the breach was connected to the making of the award; and (d) how the breach did or could prejudice its rights.
China Machine New Energy Corporation v Jaguar Energy Guatemala LLC and another	Court of Appeal	Yes	[2020] 1 SLR 695	Singapore	Cited for the principle that an assertion that the tribunal has acted in material breach of natural justice is a very serious charge.
Trustees of Rotoaira Forest Trust v Attorney-General	New Zealand High Court	Yes	[1999] 2 NZLR 452	New Zealand	Cited for the principle that an arbitrator is not under any general obligation to disclose what he is minded to decide just so the parties may have a further opportunity of criticising his mental processes before he finally commits himself.
PT Asuransi Jasa Indonesia (Persero) v Dexia Bank SA	High Court	Yes	[2007] 1 SLR(R) 597	Singapore	Cited for the principle that mere errors of law do not cross the high threshold of making out a breach of Singapore’s public policy.
AJU v AJT	High Court	Yes	[2011] 4 SLR 739	Singapore	Cited for the principle that mere errors of law do not cross the high threshold of making out a breach of Singapore’s public policy.
R C Thakkar v Gujarat Housing Board	Gujarat High Court	Yes	AIR 1973 Guj 34	India	Cited regarding damages recoverable under s 19 of the Indian Contract Act.
Smith New Court Securities Ltd v Citibank NA	House of Lords	Yes	[1997] AC 254	United Kingdom	Cited regarding damages recoverable for fraudulent misrepresentation.
Noharlal Verma v Disst. Coop. Central Bank Limited	Indian Supreme Court	Yes	(2008) 14 SCC 445	India	Cited for the principle that limitation goes to the root of the matter.
Case Concerning the Northern Cameroons (Cameroon v United Kingdom)	International Court of Justice	Yes	[1963] ICJ 97	International	Cited for the principle that admissibility relates to the nature of the claim, or to particular circumstances connected with it.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute Name	Jurisdiction
International Arbitration Act (Cap 143A, 2002 Rev Ed)	Singapore
Indian Contract Act 1872	India
Indian Limitation Act 1963	India
Foreign Limitation Periods Act (Cap 111A, 2013 Rev Ed)	Singapore

15. Key Terms and Keywords

15.1 Key Terms

Arbitration Award
Misrepresentation
Concealment
Sale and Purchase Agreement
Damages
Time Bar
Joint and Several Liability
WACC
UNCITRAL Model Law
International Arbitration Act

15.2 Keywords

arbitration
misrepresentation
pharmaceutical
stake sale
Singapore
contract
damages

17. Areas of Law

Area Name	Relevance Score
Arbitration	95
Recognition and Enforcement of Foreign Arbitral Awards	70
International Arbitration Act	60
Misrepresentation	60
UNCITRAL Model Law	50
Contract Law	50
Commercial Disputes	40
Jurisdiction	30
Collections	20

16. Subjects

Arbitration
Contract Law
Commercial Dispute