Gokul Patnaik v Nine Rivers Capital Ltd: Setting Aside SIAC Award for Put Option Dispute
In Gokul Patnaik v Nine Rivers Capital Ltd, the Singapore International Commercial Court heard an application by Gokul Patnaik to set aside a SIAC arbitral award related to a put option dispute. Nine Rivers Capital Limited commenced arbitration against Gokul Patnaik and others, seeking payment of a Put Option Amount. The court dismissed the application, finding no grounds to set aside the award under the International Arbitration Act or the UNCITRAL Model Law.
1. Case Overview
1.1 Court
SINGAPORE INTERNATIONAL COMMERCIAL COURT1.2 Outcome
Application dismissed.
1.3 Case Type
Civil
1.4 Judgment Type
Judgment
1.5 Jurisdiction
Singapore
1.6 Description
Application to set aside SIAC Award for put option dispute. Court dismissed application, finding no grounds for setting aside award.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Gokul Patnaik | Applicant | Individual | Application dismissed | Lost | |
| Nine Rivers Capital Limited | Respondent | Corporation | Application dismissed | Won |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Vivian Ramsey | International Judge | Yes |
4. Counsels
4. Facts
- In 2009, Nine Rivers invested 300 million INR into Global Agrisystem Private Limited (GAPL).
- A Share Subscription and Shareholders Agreement (SSSA) was signed in 2010.
- The SSSA defined a Qualified Exit as an IPO or strategic sale of GAPL with a minimum value of INR 4,000,000,000.
- Nine Rivers had a Drag Along Right if a Qualified Exit was not accomplished by March 31, 2014.
- Katra Finance exercised its ROFO, leading to the 2014 SPA.
- Katra Finance did not purchase the Sale Securities, leading to the 2015 Amendment.
- Neither Katra Finance nor Mr Vangal completed the purchase.
- Nine Rivers sent a Put Option Notice to the Promoters to purchase the Investor Securities for INR 1,329,000,000.
- Neither Katra Finance nor Mr Patnaik complied with the Put Option Notice, leading to arbitration.
5. Formal Citations
- Gokul Patnaik v Nine Rivers Capital Ltd, Originating Summons No 4 of 2020, [2020] SGHC(I) 23
6. Timeline
| Date | Event |
|---|---|
| Share Subscription and Shareholders Agreement signed | |
| Qualified Exit not accomplished | |
| Addendum Agreement dated | |
| Nine Rivers sent a Notice of Default | |
| Nine Rivers sent Mr Patnaik, GAPL and Katra Finance a Put Option Notice | |
| Nine Rivers commenced the Arbitration | |
| Mr Charles Peter Manzoni QC, SC was appointed as the sole arbitrator | |
| Hearing held in Singapore | |
| Arbitrator made his award | |
| Mr Patnaik commenced proceedings by Originating Summons HC/OS 1191/2019 to make an application to set aside the Award | |
| First Affidavit of Mr Patnaik filed | |
| Cause papers were served on Nine Rivers | |
| Nine Rivers appointed solicitors | |
| Mr Patnaik filed evidence on Indian law in Justice Patnaik’s Affidavit | |
| Nine Rivers filed the Second Affidavit of Jageshwar Juggernauth in reply to the Application | |
| Nine Rivers filed an application to strike out, HC/SUM 830/2020 | |
| Mr Patnaik filed a Third Affidavit in reply to the Strike Out Application | |
| Nine Rivers filed the Third Affidavit of Jageshwar Juggernauth in response to that affidavit | |
| Matter was transferred to the SICC as SIC/OS 4/2020 | |
| Mr Patnaik filed a Fourth Affidavit in response to Nine Rivers’ reply affidavit | |
| Nine Rivers filed the Fourth Affidavit of Jageshwar Juggernauth in reply to that affidavit | |
| Case Management Conference held | |
| Application dealt with | |
| Application dealt with | |
| Court informed the parties that I had decided that no reliance could be placed on Justice Patnaik’s Affidavit in relation to the application under Art 34(2)(b)(ii) of the Model Law | |
| Judgment reserved |
7. Legal Issues
- Setting Aside Arbitral Award
- Outcome: The court dismissed the application to set aside the arbitral award.
- Category: Procedural
- Breach of Natural Justice
- Outcome: The court found no breach of the rules of natural justice.
- Category: Procedural
- Public Policy
- Outcome: The court found that the award was not in conflict with the public policy of Singapore.
- Category: Substantive
- Jurisdiction of Arbitrator
- Outcome: The court held that the arbitrator had jurisdiction to deal with the claim.
- Category: Jurisdictional
8. Remedies Sought
- Setting aside of arbitral award
9. Cause of Actions
- Breach of Contract
10. Practice Areas
- Commercial Litigation
- Arbitration
11. Industries
- No industries specified
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| PT Perusahaan Gas Negara (Persero) TBK v CRW Joint Operation | Singapore High Court | Yes | [2010] 4 SLR 672 | Singapore | Cited to define the scope of disputes that may be referred to arbitration. |
| PT Prima International Development v Kempinski Hotels SA and other appeals | Singapore Court of Appeal | Yes | [2012] 4 SLR 98 | Singapore | Cited regarding the role of pleadings in defining the jurisdiction of the arbitrator. |
| AUF v AUG | Singapore High Court | Yes | [2016] 1 SLR 859 | Singapore | Cited regarding the arbitrator being confined to reaching a decision on the issues identified between the parties by the pleadings filed between them. |
| CRW Joint Operation v PT Perusahaan Gas Negara (Persero) TBK | Singapore Court of Appeal | Yes | [2011] 4 SLR 305 | Singapore | Cited for the two-stage enquiry in assessing whether an arbitral award ought to be set aside under Art 34(2)(a)(iii) of the Model Law. |
| BBA and others v BAZ and another appeal | Singapore Court of Appeal | Yes | [2020] 2 SLR 453 | Singapore | Cited regarding an arbitral tribunal exceeding its jurisdiction if it decides on issues that are beyond the scope of the arbitration clause. |
| PT Asuransi Jasa Indonesia (Persero) v Dexia Bank SA | Singapore Court of Appeal | Yes | [2007] 1 SLR(R) 597 | Singapore | Cited for the two-stage enquiry in assessing whether an arbitral award ought to be set aside under Art 34(2)(a)(iii) of the Model Law. |
| Bloomberry Resorts and Hotels Inc and another v Global Gaming Philippines LLC and another | Singapore High Court | Yes | [2020] SGHC 113 | Singapore | Cited regarding the erroneous exercise by the Tribunal of an available power as opposed to the Tribunal’s exercise of a power that it did not possess. |
| China Machine New Energy Corp v Jaguar Energy Guatemala LLC and another | Singapore Court of Appeal | Yes | [2020] 1 SLR 695 | Singapore | Cited for the principles in respect of a court setting aside a decision on the grounds of breach of natural justice. |
| AKN and another v ALC and others and other appeals | Singapore Court of Appeal | Yes | [2015] 3 SLR 488 | Singapore | Cited regarding the parties to an arbitration only have a right to a decision that is within the ambit of their consent to have their dispute arbitrated, and that is arrived at following a fair process. |
| BLB and another v BLC and others | Singapore High Court | Yes | [2013] 4 SLR 1169 | Singapore | Cited regarding the duty to deal with all essential issues in the arbitration. |
| Soh Beng Tee & Co Pte Ltd v Fairmount Development Pte Ltd | Singapore High Court | Yes | [2007] 3 SLR(R) 86 | Singapore | Cited regarding the need to prove that the breach, if any, had caused actual or real prejudice to the party seeking to set aside an award. |
| CEB v CEC and another matter | Singapore High Court | Yes | [2020] 4 SLR 183 | Singapore | Cited regarding the factors as having to be established by a party challenging an arbitral award on the basis of a breach of natural justice. |
| AJU v AJT | Singapore Court of Appeal | Yes | [2011] 4 SLR 739 | Singapore | Cited regarding the true question that was being considered was whether, if a Singapore court disagrees with the Tribunal’s finding that the Concluding Agreement is not illegal under Singapore law, the court’s supervisory power extends to correcting the Tribunal’s decision on this issue of illegality. |
| Westacre Investments Inc v Jugoimport-SPDR Holding Co Ltd | English High Court | Yes | [1999] QB 740 | England and Wales | Cited regarding the circumstances in which the court may reopen an arbitral tribunal’s decision that an underlying contract was legal. |
| Westacre Investments Inc v Jugoimport-SPDR Holding Co Ltd | England Court of Appeal | Yes | [2000] 1 QB 288 | England and Wales | Cited regarding the circumstances in which the court may reopen an arbitral tribunal’s decision that an underlying contract was legal. |
| Soleimany v Soleimany | England Court of Appeal | Yes | [1999] QB 785 | England and Wales | Cited regarding the circumstances in which the court may reopen an arbitral tribunal’s decision that an underlying contract was legal. |
| Omnium de Traitement et de Valorisation SA v Hilmarton Ltd | England Court of Appeal | Yes | [1999] 2 Lloyd’s Rep 222 | England and Wales | Cited regarding the circumstances in which the court may reopen an arbitral tribunal’s decision that an underlying contract was legal. |
| Peh Teck Quee v Bayerische Landesbank Girozentrale | Singapore Court of Appeal | Yes | [1999] 3 SLR(R) 842 | Singapore | Cited regarding an agreement whose object to be attained is a breach of international comity will be regarded by the courts as being against public policy and void. |
| Foster v Driscoll | England and Wales Court of Appeal | Yes | [1929] 1 KB 470 | England and Wales | Cited regarding an agreement whose object to be attained is a breach of international comity will be regarded by the courts as being against public policy and void. |
| Sheagar s/o T M Veloo v Belfield International (Hong Kong) Ltd | Singapore Court of Appeal | Yes | [2014] 3 SLR 524 | Singapore | Cited regarding the principle of international comity as established in Foster v Driscoll. |
| BTN and another v BTP and another | Singapore High Court | Yes | [2019] SGHC 212 | Singapore | Cited regarding the Award cannot be reviewed de novo by the courts in a setting aside action, save for jurisdictional decisions. |
| Sinolanka Hotels & Spa (Private Limited) v Interna Contract SpA | Singapore High Court | Yes | [2018] SGHC 157 | Singapore | Cited regarding insofar as a setting aside action is brought on non-jurisdictional grounds, the parties are not allowed to adduce fresh evidence on those grounds. |
| Ralli Bros v Compania Naviera Sota y Aznar | England and Wales Court of Appeal | Yes | [1920] 2 KB 287 | England and Wales | Cited regarding a contract was invalid in so far as the performance of it was unlawful by the law of the country where it was to be performed. |
| Sui Southern Gas Co Ltd v Habibullah Coastal Power Co (Pte) Ltd | Singapore Court of Appeal | Yes | [2010] 3 SLR 1 | Singapore | Cited regarding the high threshold for establishing public policy grounds. |
| BAZ v BBA and others and other matters | Singapore High Court | Yes | [2018] SGHC 275 | Singapore | Cited regarding the high threshold for establishing public policy grounds. |
13. Applicable Rules
| Rule Name |
|---|
| SIAC Rules Rule 20.5 |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| International Arbitration Act | Singapore |
| Evidence Act (Cap 97, 1997 Rev Ed) s 108 | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Put Option
- Qualified Exit
- Drag Along Right
- ROFO
- Investor Securities
- Sale Securities
- Promoter
- Investor
- 2014 SPA
- 2015 Amendment
- FEMA Regulations
- International Comity
15.2 Keywords
- arbitration
- setting aside
- SIAC
- put option
- international arbitration
- contract
17. Areas of Law
16. Subjects
- Arbitration
- Contract Law
- International Law