Carlsberg v CSAPL: Breach of Contract & Best Efforts in Director Attendance
In a suit before the Singapore International Commercial Court, Carlsberg Breweries A/S ("Carlsberg") claimed against CSAPL (Singapore) Holdings Pte Ltd ("CSAPLH") for repayment of a loan, alleging breaches of a Deed of Undertaking. Carlsberg argued that CSAPLH failed to ensure the attendance of a director at Gorkha Breweries Pte Ltd ("GBPL") board meetings, a breach that would allow Carlsberg to terminate a Deed of Release and demand immediate loan repayment. CSAPLH raised defenses and cross-claims. The court found that CSAPLH did not fail in using its best efforts to ensure the attendance of PPK at the four board meetings. The court ruled in favor of CSAPLH, finding no breach of the Deed of Undertaking.
1. Case Overview
1.1 Court
SINGAPORE INTERNATIONAL COMMERCIAL COURT1.2 Outcome
Judgment for Defendant
1.3 Case Type
Civil
1.4 Judgment Type
Judgment
1.5 Jurisdiction
Singapore
1.6 Description
Carlsberg sues CSAPL for loan repayment due to breach of contract. The court addresses whether CSAPL used 'best efforts' to ensure director attendance.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Carlsberg Breweries A/S | Plaintiff | Corporation | Claim Dismissed | Lost | |
| CSAPL (Singapore) Holdings Pte Ltd | Defendant | Corporation | Judgment for Defendant | Won |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Jeremy Lionel Cooke | International Judge | Yes |
4. Counsels
4. Facts
- Carlsberg extended a US$40 million loan to CSAPLH for a 40% shareholding in Carlsberg South Asia Pte Ltd (CSAPL).
- CSAPLH was obligated under a Deed of Undertaking to ensure the attendance of a director appointed by Rajendra Kumar Khetan (RKK) at GBPL board meetings.
- PPK, the director appointed by RKK, did not attend four GBPL board meetings in 2019.
- Carlsberg claimed CSAPLH breached the Deed of Undertaking by failing to ensure PPK's attendance, seeking repayment of the loan.
- CSAPLH argued it made genuine efforts to persuade PPK to attend the meetings, but PPK's concerns about GBPL's management prevented his attendance.
- PPK had concerns about the management and governance of GBPL and the unilateral conduct of Carlsberg in their decision-making.
- PPK's concerns included the delayed dividend payment to RKK, the managing director's work permit, and the new Route to Market Key Performance Indicators (RTM KPIs).
5. Formal Citations
- Carlsberg Breweries A/S v CSAPL (Singapore) Holdings Pte Ltd, Suit No 5 of 2019, [2021] SGHC(I) 1
6. Timeline
| Date | Event |
|---|---|
| Loan agreement concluded between Carlsberg and CSAPLH | |
| Loan agreement amended by addendum | |
| Loan agreement amended by addendum | |
| Deed of Undertaking executed | |
| Deed of Release executed | |
| GBPL board meeting held | |
| GBPL board meeting held | |
| GBPL board meeting held | |
| GBPL board meeting held | |
| Suit No 5 of 2019 filed | |
| Trial began | |
| Trial continued | |
| Trial continued | |
| Trial continued | |
| Trial continued | |
| Trial continued | |
| Judgment reserved |
7. Legal Issues
- Breach of Contract
- Outcome: The court found that CSAPLH did not breach the 'best efforts' clause in the Deed of Undertaking and therefore was not in breach of contract.
- Category: Substantive
- Sub-Issues:
- Failure to fulfill obligations under Deed of Undertaking
- Interpretation of 'best efforts' clause
- Interpretation of 'Best Efforts' Clause
- Outcome: The court interpreted the 'best efforts' clause to require the obligor to do everything reasonable in good faith to procure the contractually stipulated outcome within the time allowed.
- Category: Substantive
- Sub-Issues:
- Reasonable steps to procure contractually stipulated outcome
- Good faith efforts
8. Remedies Sought
- Repayment of Loan
- Termination of Deed of Release
9. Cause of Actions
- Breach of Contract
10. Practice Areas
- Commercial Litigation
11. Industries
- Brewing
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| KS Energy Services Ltd v BR Energy (M) Sdn Bhd | Court of Appeal | Yes | [2014] 2 SLR 905 | Singapore | Cited to define the meaning of 'best efforts' or 'best endeavours' in a contractual obligation, requiring the obligor to do everything reasonable in good faith to procure the stipulated outcome. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| No applicable statutes | |
15. Key Terms and Keywords
15.1 Key Terms
- Best Efforts
- Deed of Undertaking
- Deed of Release
- GBPL Board Meetings
- Director Attendance
- Loan Agreement
- Quorum
- Minority Shareholder
- Corporate Governance
15.2 Keywords
- Contract
- Breach
- Best Efforts
- Director
- Attendance
- Loan
- Carlsberg
- CSAPL
- GBPL
- Board Meeting
- Shareholder
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Breach of Contract | 75 |
| Best Efforts Clause | 70 |
| Contract Law | 70 |
| Deeds of Undertaking | 60 |
| Loan Agreement | 55 |
| Company Law | 50 |
| Shareholders Agreement | 45 |
| Commercial Law | 30 |
| Arbitration | 30 |
| Corporate Law | 25 |
| Banking and Finance | 25 |
16. Subjects
- Contract Law
- Corporate Governance
- Commercial Dispute