CJM v CJT: Recourse Against Arbitration Award for Dismissal of Earn-Out Payment Claim
Plaintiffs CJM, CJN, CJO, CJP, CJQ, CJR, and CJS sought recourse in the Singapore International Commercial Court against Defendant CJT regarding a Singapore International Arbitration Centre arbitration award. The plaintiffs challenged the dismissal of their claim for an Earn-Out Payment, alleging a failure to show that the defendant's breach caused actual loss. Anselmo Reyes IJ dismissed the plaintiffs' originating summons to set aside two paragraphs in the award and dismissed the plaintiffs’ application to amend their originating summons to set aside two further paragraphs.
1. Case Overview
1.1 Court
SINGAPORE INTERNATIONAL COMMERCIAL COURT1.2 Outcome
Plaintiffs' Originating Summons to set aside two paragraphs in the Award is dismissed. The plaintiffs’ application to amend their Originating Summons to set aside two further paragraphs is likewise dismissed.
1.3 Case Type
Arbitration
1.4 Judgment Type
Judgment
1.5 Jurisdiction
Singapore
1.6 Description
Shareholders CJM seek recourse against an arbitration award dismissing their claim for an Earn-Out Payment due to a failure to prove actual loss. The court dismissed the application.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| CJM | Plaintiff | Other | Application Dismissed | Lost | Francis Xavier s/o Subramaniam Xavier Augustine, Chia Xin Ran Alina, Gani Hui Ying Tracy |
| CJN | Plaintiff | Other | Application Dismissed | Lost | Francis Xavier s/o Subramaniam Xavier Augustine, Chia Xin Ran Alina, Gani Hui Ying Tracy |
| CJO | Plaintiff | Other | Application Dismissed | Lost | Francis Xavier s/o Subramaniam Xavier Augustine, Chia Xin Ran Alina, Gani Hui Ying Tracy |
| CJP | Plaintiff | Other | Application Dismissed | Lost | Francis Xavier s/o Subramaniam Xavier Augustine, Chia Xin Ran Alina, Gani Hui Ying Tracy |
| CJQ | Plaintiff | Other | Application Dismissed | Lost | Francis Xavier s/o Subramaniam Xavier Augustine, Chia Xin Ran Alina, Gani Hui Ying Tracy |
| CJR | Plaintiff | Other | Application Dismissed | Lost | Francis Xavier s/o Subramaniam Xavier Augustine, Chia Xin Ran Alina, Gani Hui Ying Tracy |
| CJS | Plaintiff | Other | Application Dismissed | Lost | Francis Xavier s/o Subramaniam Xavier Augustine, Chia Xin Ran Alina, Gani Hui Ying Tracy |
| CJT | Defendant | Other | Judgment for Defendant | Won | Vergis S Abraham, Asiyah binte Ahmad Arif, Zhuo Jiaxiang |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Anselmo Reyes | International Judge | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Francis Xavier s/o Subramaniam Xavier Augustine | Rajah & Tann Singapore LLP |
| Chia Xin Ran Alina | Rajah & Tann Singapore LLP |
| Gani Hui Ying Tracy | Rajah & Tann Singapore LLP |
| Vergis S Abraham | Providence Law Asia LLC |
| Asiyah binte Ahmad Arif | Providence Law Asia LLC |
| Zhuo Jiaxiang | Providence Law Asia LLC |
4. Facts
- Plaintiffs are shareholders of a company.
- Defendant entered into an agreement to purchase the plaintiffs’ shares in the Company.
- The Agreement provided for the defendant to purchase the remaining 40% of the Company in five parcels between 2017 and 2021.
- The consideration for the final parcel included an additional component known as the “Earn-Out Payment”.
- The Earn-Out Payment was to be based on the Company’s actual EBITDA in financial year (“FY”) 2021.
- In November 2017 the plaintiffs commenced the SIAC arbitration for anticipatory breach of the Agreement.
- The plaintiffs claimed damages for loss of the Earn-Out Payment.
5. Formal Citations
- CJM and others v CJT, Originating Summons No 5 of 2021, [2021] SGHC(I) 4
6. Timeline
| Date | Event |
|---|---|
| Defendant entered into an agreement to purchase the plaintiffs’ shares in the Company. | |
| Plaintiffs commenced SIAC arbitration for anticipatory breach of the Agreement. | |
| Hearing date. | |
| Judgment reserved. | |
| Judgment date. |
7. Legal Issues
- Recourse against award
- Outcome: The court dismissed the plaintiffs' application for recourse against the arbitration award.
- Category: Substantive
- Setting aside
- Outcome: The court dismissed the plaintiffs' application to set aside the arbitration award.
- Category: Substantive
8. Remedies Sought
- Setting aside of arbitration award
9. Cause of Actions
- Breach of Contract
10. Practice Areas
- Arbitration
- Commercial Litigation
11. Industries
- No industries specified
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| No cited cases | |||||
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
- Arbitration
- Award
- Recourse
- Setting aside
- Earn-Out Payment
- EBITDA
- Anticipatory breach
15.2 Keywords
- Arbitration
- Award
- Recourse
- Setting aside
- Earn-Out Payment
- EBITDA
- Anticipatory breach
16. Subjects
- Arbitration
- Contract Law
17. Areas of Law
- Arbitration Law
- Contract Law