Shanghai Shipyard v Opus Tiger: Joinder in Derivative Action under Companies Act s 216A
The Singapore Court of Appeal heard appeals by Shanghai Shipyard Co Ltd (SSY) against the decision of the High Court to dismiss its applications to be joined to leave applications under s 216A of the Companies Act, brought by Reignwood International Investment (Group) Co Ltd (Reignwood) in the names of Opus Tiger 1 Pte Ltd, Opus Tiger 2 Pte Ltd, Opus Tiger 3 Pte Ltd and Opus Tiger 4 Pte Ltd (the OT Companies). The leave applications sought to commence derivative arbitral proceedings against SSY. The Court of Appeal dismissed the appeals, holding that the High Court did not have the power to order SSY's joinder at the time the joinder applications were brought.
1. Case Overview
1.1 Court
Court of Appeal of the Republic of Singapore1.2 Outcome
Appeals dismissed.
1.3 Case Type
Civil
1.4 Judgment Type
Ex tempore judgment
1.5 Jurisdiction
Singapore
1.6 Description
Singapore Court of Appeal addresses joinder of intended defendant in derivative action under s 216A of the Companies Act, dismissing appeal.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Shanghai Shipyard Co Ltd | Appellant | Corporation | Appeal Dismissed | Lost | |
| Opus Tiger 1 Pte Ltd | Respondent | Corporation | Appeal Dismissed | Won | |
| Reignwood International Investment (Group) Company Ltd | Respondent | Corporation | Appeal Dismissed | Won | |
| Opus Tiger 2 Pte Ltd | Respondent | Corporation | Appeal Dismissed | Won | |
| Opus Tiger 3 Pte Ltd | Respondent | Corporation | Appeal Dismissed | Won | |
| Opus Tiger 4 Pte Ltd | Respondent | Corporation | Appeal Dismissed | Won |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Sundaresh Menon | Chief Justice | No |
| Andrew Phang Boon Leong | Justice of the Court of Appeal | No |
| Judith Prakash | Justice of the Court of Appeal | Yes |
4. Counsels
4. Facts
- SSY is a party to shipbuilding contracts with the OT Companies.
- The OT Companies are subsidiaries of Opus Offshore Ltd (OOL).
- Reignwood is a 70% shareholder and a creditor of OOL.
- Reignwood provided SSY with a guarantee in respect of certain obligations of OT1 and OT2.
- Disputes arose under the Contracts in December 2016.
- OOL became insolvent in February 2017.
- SSY served notices terminating the Contracts with the OT Companies in February and March 2017.
- Reignwood applied for leave under s 216A(2) of the Companies Act to commence derivative arbitral proceedings in December 2018.
- SSY applied to be joined to the Leave Applications in October 2019.
- The Judge dismissed the Joinder Applications.
5. Formal Citations
- Shanghai Shipyard Co Ltd v Opus Tiger 1 Pte Ltd and another and other appeals and another matter, , [2021] SGCA 109
- Shanghai Shipyard Co Ltd v Opus Tiger 1 Pte Ltd and Reignwood International Investment (Group) Company Ltd, 179 of 2020, Civil Appeal No 179 of 2020
- Shanghai Shipyard Co Ltd v Opus Tiger 2 Pte Ltd and Reignwood International Investment (Group) Company Ltd, 180 of 2020, Civil Appeal No 180 of 2020
- Shanghai Shipyard Co Ltd v Opus Tiger 3 Pte Ltd and Reignwood International Investment (Group) Company Ltd, 181 of 2020, Civil Appeal No 181 of 2020
- Shanghai Shipyard Co Ltd v Opus Tiger 4 Pte Ltd and Reignwood International Investment (Group) Company Ltd, 182 of 2020, Civil Appeal No 182 of 2020
- Shanghai Shipyard Co Ltd v Opus Tiger 1 Pte Ltd and another and other appeals and another matter, 81 of 2021, Summons No 81 of 2021
6. Timeline
| Date | Event |
|---|---|
| Disputes arose under the Contracts. | |
| OOL became insolvent and was put into provisional liquidation. | |
| SSY served a notice terminating the Contract with OT1. | |
| SSY terminated the Contracts with the remaining OT Companies. | |
| SSY made an unsuccessful demand on Reignwood on the guarantee given in connection with OT1. | |
| SSY commenced proceedings against Reignwood in the English courts to enforce the guarantee. | |
| Reignwood applied for leave under s 216A(2) of the Companies Act to commence derivative arbitral proceedings. | |
| The Judge granted Reignwood leave to commence derivative arbitral proceedings. | |
| SSY applied to be joined to the Leave Applications. | |
| The Joinder Applications were heard by the Judge. | |
| Judgment delivered by the Court of Appeal. |
7. Legal Issues
- Joinder of Parties
- Outcome: The court held that the Judge had no power to order SSY’s joinder at the time the Joinder Applications were brought.
- Category: Procedural
- Sub-Issues:
- Necessity of joinder
- Just and convenient joinder
- Derivative Action
- Outcome: The court held that the intended defendant of proposed derivative proceedings cannot have a say on how the company’s claim against itself should be managed.
- Category: Substantive
- Sub-Issues:
- Leave to commence derivative action
- Interests of the company
8. Remedies Sought
- Joinder to Leave Applications
9. Cause of Actions
- No cause of actions
10. Practice Areas
- Commercial Litigation
- Appeals
11. Industries
- Shipping
- Construction
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Ernest Ferdinand Perez De La Sala v Compañia De Navegación Palomar, SA and others and other appeals | Court of Appeal | Yes | [2018] 1 SLR 894 | Singapore | Endorsed the principle that the power to order joinder post-judgment exists if something remains to be done in the matter. |
| The Duke of Buccleuch | Court of Appeal | Yes | [1892] P 201 | England and Wales | Cited for the proposition that the court has the power to order joinder post-judgment if and only if something remains to be done in the matter, such as the assessment of damages. |
| C Inc plc v L and another | English High Court | Yes | [2001] 2 Lloyd’s Rep 459 | England and Wales | Discussed the liberal standard adopted by the English High Court regarding the interpretation of 'proceedings' in the context of joinder of parties after judgment. |
| Dunwoody Sports Marketing v Prescott | England and Wales | Yes | [2007] 1 WLR 2343 | England and Wales | Accepted the proposition that the court has the power to order joinder of parties after judgment has been given, consistent with the position under The Duke of Buccleuch. |
| Lim Meng-Eu Judy v RSP Investments (S) Pte Ltd | High Court | Yes | [1998] 2 SLR(R) 525 | Singapore | Cited for the principle that there is no requirement that the question or issue involving the third-party be common with the existing question or issue in the main dispute. |
| Fong Wai Lyn Carolyn v Airtrust (Singapore) Pte Ltd and another | High Court | Yes | [2011] 3 SLR 980 | Singapore | Cited for the principle that the application is not concerned with the substantive merits of the contemplated derivative proceedings, but only whether those proceedings are legitimate or arguable, and not frivolous, vexatious or bound to be unsuccessful. |
| Urs Meisterhans v GIP Pte Ltd | High Court | Yes | [2011] 1 SLR 552 | Singapore | Cited for the principle that the application is not concerned with the substantive merits of the contemplated derivative proceedings, but only whether those proceedings are legitimate or arguable, and not frivolous, vexatious or bound to be unsuccessful. |
| JWR Pte Ltd v Edmond Pereira Law Corp and another | Court of Appeal | Yes | [2020] 2 SLR 744 | Singapore | Cited as a caution against acting in abuse of the appellate process by discarding the entire basis on which the Joinder Applications had proceeded before the Judge and seeking to re-argue the Joinder Applications afresh before the court. |
13. Applicable Rules
| Rule Name |
|---|
| Rules of Court (Cap 322, R 5, 2014 Rev Ed) O 15 r 6(2)(b) |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Companies Act (Cap 50, 2006 Rev Ed) s 216A(2) | Singapore |
| Companies Act s 216A(1)(c) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Joinder
- Derivative action
- Companies Act
- s 216A
- Leave application
- Rules of Court
- Order 15 r 6(2)(b)
- Intended defendant
- Insiders
- Proper person
15.2 Keywords
- Joinder
- Derivative action
- Companies Act
- Singapore
- Civil Procedure
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Civil Practice | 75 |
| Shipbuilding Contracts | 65 |
| Corporate Law | 60 |
| Company Law | 60 |
| Joinder Applications | 55 |
| Arbitration | 50 |
| Derivative Arbitral Proceedings | 50 |
| Contract Law | 40 |
| Breach of Contract | 40 |
| Guarantee | 35 |
| Contracts | 30 |
| Commercial Law | 30 |
| Litigation | 20 |
16. Subjects
- Civil Procedure
- Companies Law