Reignwood v Opus Tiger: Joinder Application in Derivative Action
In Reignwood International Investment (Group) Co Ltd v Opus Tiger 1 Pte Ltd and other matters, the Singapore High Court dismissed Shanghai Shipyard Co Ltd's applications to be joined as a party to Reignwood's s 216A applications for leave to commence derivative proceedings against Shanghai Shipyard in the name of the Opus Tiger Companies. The court held that Shanghai Shipyard, as an intended defendant, did not meet the requirements for joinder under Order 15 r 6(2)(b) of the Rules of Court. The court also declined to exercise its inherent jurisdiction to allow Shanghai Shipyard to be heard on the Directions Applications.
1. Case Overview
1.1 Court
General Division of the High Court1.2 Outcome
Shanghai Shipyard Co Ltd's joinder applications dismissed.
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Singapore High Court dismisses Shanghai Shipyard's application to join derivative proceedings, clarifying rules on third-party intervention.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Reignwood International Investment (Group) Co Ltd | Plaintiff | Corporation | Leave to commence derivative proceedings granted | Won | Hing Shan Shan Blossom, Tan Yi Yin Amy, Teo Wei Ling, Kiu Yan Yu |
| Opus Tiger 1 Pte Ltd | Defendant | Corporation | Application for joinder dismissed | Neutral | Tnee Zixian, Keith, Chin Wan Yew, Rachel, Darren Ng Zhen Qiang |
| Opus Tiger 2 Pte Ltd | Defendant | Corporation | Application for joinder dismissed | Neutral | Tnee Zixian, Keith, Chin Wan Yew, Rachel, Darren Ng Zhen Qiang |
| Opus Tiger 3 Pte Ltd | Defendant | Corporation | Application for joinder dismissed | Neutral | Tnee Zixian, Keith, Chin Wan Yew, Rachel, Darren Ng Zhen Qiang |
| Opus Tiger 4 Pte Ltd | Defendant | Corporation | Application for joinder dismissed | Neutral | Tnee Zixian, Keith, Chin Wan Yew, Rachel, Darren Ng Zhen Qiang |
| Shanghai Shipyard Co Ltd | Applicant | Corporation | Application for joinder dismissed | Lost | Daniel Chia Hsiung Wen, Ker Yanguang, Annette Liu Jia Ying |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Vinodh Coomaraswamy | Judge of the High Court | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Hing Shan Shan Blossom | Drew & Napier LLC |
| Tan Yi Yin Amy | Drew & Napier LLC |
| Teo Wei Ling | Drew & Napier LLC |
| Kiu Yan Yu | Drew & Napier LLC |
| Tnee Zixian, Keith | Tan Kok Quan Partnership |
| Chin Wan Yew, Rachel | Tan Kok Quan Partnership |
| Darren Ng Zhen Qiang | Tan Kok Quan Partnership |
| Daniel Chia Hsiung Wen | Morgan Lewis Stamford LLC |
| Ker Yanguang | Morgan Lewis Stamford LLC |
| Annette Liu Jia Ying | Morgan Lewis Stamford LLC |
4. Facts
- Reignwood sought leave to commence derivative proceedings against Shanghai Shipyard in the name of Opus Tiger Companies.
- Shanghai Shipyard applied to be joined as a party to the s 216A applications after leave was granted.
- The Opus Tiger Companies are wholly owned subsidiaries of Opus Offshore Ltd (OOL).
- OOL is under provisional liquidation in Bermuda.
- Shanghai Shipyard claimed Opus Tiger 1 breached a contract by failing to pay the final installment.
- Reignwood guaranteed Opus Tiger 1's obligation to pay the final installment.
- Shanghai Shipyard commenced proceedings against Reignwood in the English Commercial Court to enforce the guarantee.
5. Formal Citations
- Reignwood International Investment (Group) Co Ltd v Opus Tiger 1 Pte Ltd and other matters, Originating Summons No 1513 of 2018, [2021] SGHC 133
- Reignwood International Investment (Group) Co Ltd v Opus Tiger 1 Pte Ltd and other matters, Originating Summons No 1514 of 2018, [2021] SGHC 133
- Reignwood International Investment (Group) Co Ltd v Opus Tiger 1 Pte Ltd and other matters, Originating Summons No 1515 of 2018, [2021] SGHC 133
- Reignwood International Investment (Group) Co Ltd v Opus Tiger 1 Pte Ltd and other matters, Originating Summons No 1516 of 2018, [2021] SGHC 133
6. Timeline
| Date | Event |
|---|---|
| Supreme Court of Bermuda made an order winding up Opus Offshore Ltd. | |
| Reignwood commenced four originating summonses. | |
| Shanghai Shipyard commenced proceedings against Reignwood in the English Commercial Court. | |
| Court granted Reignwood leave to commence derivative proceedings. | |
| Deadline expired for Opus Tiger Companies to appeal against the s 216A orders. | |
| Reignwood started the first arbitration against Shanghai Shipyard. | |
| Shanghai Shipyard informed the Opus Tiger Companies that Reignwood's demand for arbitration had purported to exercise Opus Tiger 1's rights. | |
| Reignwood started the remaining three arbitrations against Shanghai Shipyard. | |
| Opus Tiger Companies filed four applications seeking directions from the court. | |
| Shanghai Shipyard filed the four joinder applications. | |
| Arguments heard in court. | |
| Further arguments heard in court. | |
| Judgment issued. |
7. Legal Issues
- Joinder of Parties
- Outcome: The court held that while it had the power to order joinder even after granting leave, the intended defendant did not meet the requirements for joinder under O 15 r 6(2)(b).
- Category: Procedural
- Sub-Issues:
- Non-party applying for joinder after final order made
- Whether court still had power to order joinder
- Whether power to order joinder should be exercised
- Statutory Derivative Action
- Outcome: The court considered the principles governing statutory derivative actions in the context of the joinder application.
- Category: Substantive
8. Remedies Sought
- Joinder as a party to the s 216A applications
- Reversal of the s 216A orders
- Revocation of Reignwood's leave to commence the arbitrations
9. Cause of Actions
- No cause of actions
10. Practice Areas
- Commercial Litigation
- Corporate Law
11. Industries
- Construction
- Shipping
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 | Cited for the two-stage inquiry involved in O 15 r 6(2)(b) applications and the meaning of 'at any stage of the proceedings'. |
| The Duke of Buccleuch | English Court of Appeal | Yes | [1892] P 201 | England | Cited for the interpretation of the phrase 'at any stage of the proceedings' in the context of joinder applications. |
| Universal Project Management Services Ltd v Fort Gilkicker Ltd and others | High Court | Yes | [2013] Ch 551 | England | Cited to define double derivative proceedings. |
| C Inc plc v L | Unknown | Yes | [2001] Lloyd’s Rep 459 | England | Cited as an example of the pragmatic advantages of the more liberal standard for determining when proceedings are concluded for the purposes of joinder. |
| Tan Cheng Bock v Attorney-General | Unknown | Yes | [2017] 2 SLR 850 | Singapore | Cited for the principle that the starting point for ascertaining the meaning of O 15 r 6(2)(b) is the ordinary meaning of its words, taking into account its context. |
| ARW v Comptroller of Income Tax and another and another appeal | Court of Appeal | Yes | [2019] 1 SLR 499 | Singapore | Cited for the approach of considering whether the non-discretionary requirements of each limb of O 15 r 6(2)(b) are satisfied before undertaking the discretionary assessment. |
| Pang Yong Hock and another v PKS Contracts Services Pte Ltd | Court of Appeal | Yes | [2004] 3 SLR(R) 1 | Singapore | Cited for the legislative intention of s 216A to protect genuinely aggrieved minority interests. |
| Lederer v 372116 Ontario Ltd (cob Hemispheres International Manufacturing Co) | Ontario Court of Appeal | Yes | [2001] OJ No. 565 | Canada | Cited for the principle that the seeking of leave to commence a derivative action is fundamentally a proceeding between the complainants on the one hand and the corporation and the directors on the other. |
| Pierce v Chalice Capital Inc | Supreme Court of British Columbia | Yes | [2016] BCJ No. 892 | Canada | Cited for the principle that potential defendants of the derivative action should not be given notice and standing in petition proceedings to commence a derivative action. |
| Ang Thiam Swee v Low Hian Chor | Unknown | Yes | [2013] 2 SLR 340 | Singapore | Cited for the principle that the proceedings have a legitimate or arguable basis. |
| Jian Li Investments Holding Pte Ltd v Healthstats International Pte Ltd | Unknown | Yes | [2019] 4 SLR 825 | Singapore | Cited for the principle that the court does not adjudicate factual disputes arising from the proposed derivative proceedings on a s 216A application. |
| Wee Soon Kim Anthony v Law Society of Singapore | Unknown | Yes | [2001] 2 SLR(R) 821 | Singapore | Cited for the purpose of O 15 r 6(2)(b) to prevent a multiplicity of proceedings. |
| Actis Excalibur Ltd v KS Distribution Pte Ltd and others | Singapore High Court | Yes | [2016] SGHCR 11 | Singapore | Cited for the principle that it was not objectionable to join an intended defendant to a s 216A application so that it could demonstrate to the court that the complainant could not establish the third and fourth conditions precedent. |
| A R Evans Capital Partners Limited v Gen2 Partners Inc | Hong Kong Court of First Instance | Yes | [2012] HKCU 1284 | Hong Kong | Cited for the principle that the court considered that it would be likely, in general, to be assisted by submissions that bear on such questions as the jurisdiction to make an order under the section, or indeed as to the merits of the proposed claim. |
| Siow Doreen and others v Lo Pui Sang and others (Horizon Partners Pte Ltd, first intervener, and Reghenzani Claude Augustus, second intervener) | High Court | Yes | [2008] 1 SLR(R) 172 | Singapore | Cited to illustrate when a person affected by proceedings may apply to be joined as a party to those proceedings. |
| Pegang Mining Co Ltd v Choong Sam | Unknown | Yes | [1969] 2 MLJ 52 | Malaysia | Cited as authority for the proposition that a person may be joined to any proceedings where that person would be directly affected by any order that court may make in those proceedings. |
| Comptroller of Income Tax v ARW and another (Attorney-General, intervener) | High Court | Yes | [2017] SGHC 180 | Singapore | Cited as authority for the Attorney-General's application to be joined as a party to proceedings under both limbs of O 15 r 6(2)(b) in order to oppose the defendant's discovery application against the Comptroller of Income Tax. |
| Family Food Court | Unknown | Yes | [2008] 4 SLR(R) 272 | Singapore | Cited for the principle that the court's inherent jurisdiction should not be circumscribed by rigid criteria or tests but by the strict and essential touchstone of necessity. |
| Roberto Building Material Pte Ltd and others v Oversea-Chinese Banking Corp Ltd and another | Unknown | Yes | [2003] 2 SLR(R) 353 | Singapore | Cited for the principle that the court's inherent jurisdiction should be invoked only in exceptional circumstances where there is a clear need for it and the justice of the case so demands. |
| Chan Tong Fan and another v Chiam Heng Luan Realty Pte Ltd (Chiam Toon Tau and another, non-parties) | High Court | Yes | [2013] SGHC 192 | Singapore | Cited to establish that an intended defendant is, in practice, routinely joined as a party to a s 216A application. |
| Tam Tak Chuen v Eden Aesthetics Pte Ltd and another (Khairul bin Abdul Rahman and another, non-parties) | Unknown | Yes | [2010] 2 SLR 667 | Singapore | Cited to establish that an intended defendant is, in practice, routinely joined as a party to a s 216A application. |
| Law Chin Eng and Another v Hiap Seng & Co Pte Ltd (Lau Chin Hu and others, applicants) | High Court | Yes | [2009] SGHC 223 | Singapore | Cited to establish that an intended defendant is, in practice, routinely joined as a party to a s 216A application. |
| Low Hian Chor v Steel Forming & Rolling Specialists Pte Ltd and another | High Court | Yes | [2012] SGHC 10 | Singapore | Cited to establish that an intended defendant is, in practice, routinely joined as a party to a s 216A application. |
| Lee Kuan Yew v Tang Liang Hong and other suits | Unknown | Yes | [1997] 1 SLR(R) 248 | Singapore | Cited for the principle that where a plaintiff seeks a Mareva injunction freezing property said to be beneficially owned by a defendant but legally owned by a non-party, the legal owner may be joined as a party to the proceedings. |
| People’s Parkway Development Pte Ltd v Ramanathan Yogendran | Unknown | Yes | [1990] 2 SLR(R) 338 | Singapore | Cited for the principle that where determining proceedings in a plaintiff’s favour will result in a non-party, such as a guarantor, becoming liable to the plaintiff, the guarantor may be joined to the proceedings. |
| Lew Kiat Beng v Hiap Seng & Co Pte Ltd and another appeal | Unknown | Yes | [2012] 1 SLR 488 | Singapore | Cited for the principle that a successful complainant has a right on a purposive interpretation of s 216A(5)(a) of the Act to return to the court for orders which are necessary for the derivative action to be brought in a fair manner for adjudication by the court at a trial. |
13. Applicable Rules
| Rule Name |
|---|
| Rules of Court (Cap 322, R 5, 2014 Rev Ed) |
| O 15 r 6(2)(b) of the Rules of Court (Cap 322, R 5, 2014 Rev Ed) |
| O 92 r 4 |
| O 70 r 16(2) |
| O 72 r 4 |
| O 18 r 19 of the Rules of Court |
| British Columbia’s Supreme Court Civil Rules, BC Reg 168/09 |
| Rule 9(3)(a) of the Legal Profession (Professional Conduct) Rules 2015 (S 706/2015) |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Companies Act (Cap 50, 2006 Rev Ed) | Singapore |
| s 216A(2) of the Companies Act (Cap 50, 2006 Rev Ed) | Singapore |
| s 216A(1)(c) | Singapore |
| s 216A(5)(a) | Singapore |
| Interpretation Act (Cap 1, 2002 Rev Ed) | Singapore |
| Section 9A of the Interpretation Act (Cap 1, 2002 Rev Ed) | Singapore |
| Ontario Business Corporations Act, RSO 1990, c B-16 | Canada |
| British Columbia’s Business Corporations Act, SBC 2002, c 57 | Canada |
| Hong Kong Companies Ordinance (Cap 32) | Hong Kong |
15. Key Terms and Keywords
15.1 Key Terms
- Joinder
- Derivative proceedings
- s 216A application
- Rules of Court
- Companies Act
- Originating summons
- Interlocutory summons
- Repudiatory breach
- Provisional liquidation
- Liberty to apply
- Inherent jurisdiction
- Lis
- Majority rule
15.2 Keywords
- Joinder
- Derivative action
- s 216A
- Rules of Court
- Companies Act
- Singapore
- Shanghai Shipyard
- Reignwood
- Opus Tiger
- Intervention
16. Subjects
- Civil Procedure
- Company Law
- Derivative Actions
- Joinder of Parties
17. Areas of Law
- Civil Procedure
- Company Law
- Statutory Derivative Action
- Joinder