Affle Global Pte Ltd v OSLabs Pte Ltd: Validity of Resolutions for Share Purchase

In Affle Global Pte Ltd v OSLabs Pte Ltd and PhonePe Private Limited, the General Division of the High Court of Singapore addressed the validity of resolutions passed at an extraordinary general meeting (EGM) concerning PhonePe's purchase of shares in OSLabs. Affle challenged the EGM's validity, arguing that non-members were permitted to vote and that the resolutions were incapable of ratification. The court dismissed Affle's applications, finding that the Vendor Shareholders were entitled to vote and that the resolutions were validly ratified, ordering Affle to pay costs to each defendant.

1. Case Overview

1.1 Court

General Division of the High Court

1.2 Outcome

Applications dismissed

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

The case concerns the validity of resolutions for OSLabs' share purchase by PhonePe. The court dismissed Affle's applications, upholding the EGM's validity.

1.7 Decision Date

24 March 2022

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
Affle Global Pte Ltd	Plaintiff	Corporation	Applications dismissed	Lost	Kenneth Tan SC of Kenneth Tan Partnership Tan Soo Peng Daniel of Dan Tan Law Corporation Lee Yew Boon of Dan Tan Law Corporation Jonas Chung Teck Hong of Dan Tan Law Corporation
OSLabs Pte Ltd	Defendant	Corporation	Judgment for Defendant	Won	Tan Teng Muan of Mallal & Namazie Loh Li Qin of Mallal & Namazie
PhonePe Private Limited	Defendant	Corporation	Judgment for Defendant	Won	Sarbjit Singh Chopra of Selvam LLC Luis Inaki Duhart Gonzalez of Selvam LLC Lee Wen Rong Gabriel of Selvam LLC

3. Judges

Judge Name	Title	Delivered Judgment
Andrew Ang	Senior Judge	Yes

4. Counsels

Counsel Name	Organization
Kenneth Tan SC	Kenneth Tan Partnership
Tan Soo Peng Daniel	Dan Tan Law Corporation
Lee Yew Boon	Dan Tan Law Corporation
Jonas Chung Teck Hong	Dan Tan Law Corporation
Tan Teng Muan	Mallal & Namazie
Loh Li Qin	Mallal & Namazie
Sarbjit Singh Chopra	Selvam LLC
Luis Inaki Duhart Gonzalez	Selvam LLC
Lee Wen Rong Gabriel	Selvam LLC

4. Facts

OSLabs is a holding company that owns and operates the “Indus App Bazaar”.
PhonePe sought to purchase 91.8% of the shares of OSLabs.
Affle initially approved PhonePe becoming a majority shareholder of OSLabs.
Affle later objected to the Term Sheet, claiming it was non-binding and invalid.
The May Resolutions were proposed to approve the Proposed Transaction.
Affle challenged the validity of the May Resolutions.
The Emergency Arbitrator issued an award regarding the transfer of shares.

5. Formal Citations

Affle Global Pte Ltd v OSLabs Pte Ltd and another and another matter, , [2022] SGHC 65

6. Timeline

Date	Event
2021-03-09	Affle's board gave in-principle approval for PhonePe to become a majority shareholder of OSLabs.
2021-03-10	OSLabs circulated PhonePe's term sheet to its shareholders.
2021-03-16	Affle re-signed and returned the term sheet.
2021-03-18	The Term Sheet was signed in counterparts by PhonePe, OSLabs and OSLabs’ shareholders.
2021-04-21	Affle objected to the Term Sheet.
2021-04-29	Affle maintained its position that the Term Sheet was an expired document.
2021-05-03	OSLabs circulated a written shareholders’ resolution to approve PhonePe’s proposed acquisition of shares.
2021-05-05	OSLabs circulated a written shareholders’ resolution for various matters unrelated to the Proposed Transaction itself.
2021-05-07	Affle filed its Application for Emergency Interim Relief at the SIAC against OSLabs.
2021-05-07	Affle received letters from the Board of Directors of OSLabs stating that the 3 and 5 May Resolutions “have been duly passed by the shareholders in writing.
2021-05-08	Affle replied to give notice that it objected to the passing of the May Resolutions in writing without convening a general meeting.
2021-05-15	The Emergency Arbitrator issued an award that OSLabs must not take any further steps to facilitate or register the transfers of shares by the Founders or the Key Shareholder to PhonePe.
2021-05-17	Affle filed HC/OS 468/2021.
2021-05-20	Court granted leave for Affle to amend the ex parte application to an inter partes application.
2021-05-21	Court granted OS 468 Prayers 2 and 3 in terms.
2021-05-22	PhonePe commenced HC/S 449/2021 against OSLabs, VPF, and Affle.
2021-05-24	PhonePe was joined as the second defendant in OS 468.
2021-05-31	Hearing in respect of SUM 2394, SUM 2410, as well as OS 468 Prayers 1 and 4.
2021-06-10	OSLabs wrote to PhonePe and Affle to propose to convene the EGM.
2021-06-11	PhonePe responded that it would be agreeable to convening the EGM as proposed.
2021-06-14	Affle responded that it was not agreeable to convening the EGM by way of shorter notice.
2021-06-18	Parties applied to amend the order relating to OS 468 Prayer 4.
2021-06-23	OSLabs sent out a notice for the EGM to be convened on 15 July 2021.
2021-07-15	The EGM was held.
2021-08-06	Affle filed HC/OS 800/2021.
2021-08-24	Affle applied in HC/SUM 3963/2021, for an interim injunction.
2021-09-09	Court delivered an ex tempore judgment dismissing Affle’s applications in OS 800 and, consequently, SUM 3963.
2021-09-10	Affle filed its Notice of Appeal against the whole of my decision given on 9 September 2021.
2021-11-15	Affle filed another Notice of Appeal against my decision given on 18 June 2021.

7. Legal Issues

Validity of Shareholder Resolutions
- Outcome: The court held that the resolutions passed at the EGM were valid.
- Category: Substantive
- Sub-Issues:
  - Compliance with Companies Act
  - Proper Convening of EGM
  - Entitlement to Vote
Ratification of Resolutions
- Outcome: The court held that the resolutions were capable of ratification.
- Category: Substantive
- Sub-Issues:
  - Meaning of Ratification
  - Retrospective Application
  - Formal Consent
Voting Rights of Shareholders
- Outcome: The court held that the Vendor Shareholders were entitled to vote at the EGM.
- Category: Substantive
- Sub-Issues:
  - Registered Members
  - Vendor Shareholders
  - Proxy Voting

8. Remedies Sought

Order declaring the EGM invalid
Injunction restraining OSLabs from taking further action
Order for OSLabs to convene a general meeting

9. Cause of Actions

Breach of Shareholders’ Agreement
Invalidity of Resolutions

10. Practice Areas

Commercial Litigation
Corporate Law

11. Industries

Technology
Finance

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
Cavenagh Investment Pte Ltd v Kaushik Rajiv	High Court	Yes	[2013] 2 SLR 543	Singapore	Cited to define ratification in agency law as approving or adopting a contract entered into by an agent purportedly on the principal’s behalf.
Koenigsblatt v Sweet	Chancery Division	Yes	[1923] 2 Ch 314	England and Wales	Cited to explain that ratification is equivalent to an antecedent authority.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute Name	Jurisdiction
Companies Act (Cap 50, 2006 Rev Ed)	Singapore
s 184A of the Companies Act	Singapore
s 184D of the Companies Act	Singapore
s 184DA of the Companies Act	Singapore
s 180 of the Companies Act	Singapore
s 19(6A) of the Companies Act	Singapore
s 64(1) of the Companies Act	Singapore
s 182 of the Companies Act	Singapore

15. Key Terms and Keywords

15.1 Key Terms

Extraordinary General Meeting
EGM
May Resolutions
Proposed Transaction
Shareholders’ Agreement
SHA
Investor Shareholders
Vendor Shareholders
Term Sheet
Right of First Refusal

15.2 Keywords

shareholder resolution
extraordinary general meeting
EGM
Companies Act
ratification
voting rights
share transfer
majority shareholder

17. Areas of Law

Area Name	Relevance Score
Shares	80
Company Law	75
Shareholders Agreement	70
Corporate Governance	60
Shareholder Disputes	50
Civil Procedure	40
Meetings	40

16. Subjects

Company Law
Shareholder Rights
Corporate Governance
Mergers and Acquisitions