Carlsberg v CSAPL: Breach of Contract & Best Effort Obligations in Loan Repayment Dispute
In a dispute before the Court of Appeal of the Republic of Singapore, Carlsberg Breweries A/S ("Carlsberg") appealed against CSAPL (Singapore) Holdings Pte Ltd (“CSAPLH”) regarding the dismissal of Carlsberg's claim for repayment of a US$40 million loan under a loan agreement. Carlsberg argued that CSAPLH breached a Deed of Undertaking by failing to use its best efforts to ensure a director attended board meetings, which would entitle Carlsberg to terminate a related Deed of Release and demand immediate loan repayment. The court allowed the appeal, finding that CSAPLH breached its obligations under the Deed of Undertaking.
1. Case Overview
1.1 Court
Court of Appeal of the Republic of Singapore1.2 Outcome
Appeal Allowed
1.3 Case Type
Civil
1.4 Judgment Type
Written Judgment
1.5 Jurisdiction
Singapore
1.6 Description
Carlsberg sues CSAPL for loan repayment, alleging breach of 'best efforts' to ensure director attendance. The court allowed the appeal, finding a breach.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Carlsberg Breweries A/S | Appellant, Plaintiff | Corporation | Appeal Allowed | Won | |
| CSAPL (Singapore) Holdings Pte Ltd | Respondent, Defendant | Corporation | Appeal Dismissed | Lost |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Andrew Phang Boon Leong | Justice of the Court of Appeal | Yes |
| Judith Prakash | Justice of the Court of Appeal | No |
| Jonathan Hugh Mance | International Judge | No |
4. Counsels
4. Facts
- Carlsberg extended a US$40m loan to CSAPLH to purchase shares in Carlsberg South Asia Pte Ltd (CSAPL).
- The loan agreement was amended by addenda in 2013, setting a repayment date of 8 May 2017.
- A Deed of Undertaking required CSAPLH to use its best efforts to ensure a director appointed by RKK attended board meetings.
- PPK, the director appointed by RKK, failed to attend four GBPL board meetings in 2019.
- Carlsberg alleged that CSAPLH breached the Deed of Undertaking, entitling Carlsberg to terminate a Deed of Release and demand loan repayment.
- CSAPLH commenced arbitration proceedings against Carlsberg relating to an IPO and shareholder matters.
- Mr. Jagetia knew on 9 April 2019 that PPK did not intend to attend the 26 April 2019 board meeting.
5. Formal Citations
- Carlsberg Breweries A/S v CSAPL (Singapore) Holdings Pte Ltd, Civil Appeal No 18 of 2021, [2022] SGCA(I) 2
6. Timeline
| Date | Event |
|---|---|
| Loan Agreement entered into | |
| First Addendum to Loan Agreement dated | |
| Second Addendum to Loan Agreement entered into | |
| Deed of Undertaking dated | |
| Deed of Release dated | |
| PPK failed to attend GBPL board meeting | |
| PPK failed to attend GBPL board meeting | |
| CSAPLH commenced arbitration proceedings against Carlsberg | |
| PPK failed to attend GBPL board meeting | |
| PPK failed to attend GBPL board meeting | |
| Carlsberg commenced Suit in the Singapore Courts | |
| Trial of the clause 2(c) issues heard |
7. Legal Issues
- Breach of Contract
- Outcome: The court found that CSAPLH breached the Deed of Undertaking by failing to use its best efforts.
- Category: Substantive
- Sub-Issues:
- Failure to use best efforts
- Termination of Deed of Release
- Interpretation of 'Best Efforts' Clause
- Outcome: The court determined that CSAPLH did not take all reasonable steps to ensure PPK's attendance at board meetings.
- Category: Substantive
- Sub-Issues:
- Obligations imposed by 'best efforts'
- Reasonable steps to procure outcome
8. Remedies Sought
- Repayment of Loan
- Termination of Deed of Release
- Monetary Damages
9. Cause of Actions
- Breach of Contract
- Breach of Deed of Undertaking
10. Practice Areas
- Commercial Litigation
- Arbitration
11. Industries
- Brewing
- Beverage
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Carlsberg Breweries A/S v CSAPL (Singapore) Holdings Pte Ltd | International Judge | Yes | [2021] 4 SLR 1 | Singapore | The judgment being appealed from, where the claim was dismissed. |
| KS Energy Services Ltd v BR Energy (M) Sdn Bhd | Court of Appeal | Yes | [2014] 2 SLR 905 | Singapore | Cited for the principles applicable to 'best endeavours' clauses. |
| Travista Development Pte Ltd v Tan Kim Swee Augustine | High Court | Yes | [2008] 2 SLR(R) 474 | Singapore | Cited for the duty to do everything reasonable in good faith to procure the contractually-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
- Loan Agreement
- Board Meetings
- Quorum
- Director Attendance
- RTM Model
15.2 Keywords
- Contract
- Loan
- Best Efforts
- Director
- Board Meeting
- Carlsberg
- CSAPL
- Singapore
- Appeal
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Contract Law | 85 |
| Best effort obligations | 75 |
| Breach of Contract | 70 |
| Obligations imposed | 65 |
| Shareholders Agreement | 40 |
| Company Law | 30 |
| Arbitration | 20 |
16. Subjects
- Contract Dispute
- Loan Agreement
- Shareholders Agreement
- Best Efforts Obligation