Maroju v Epoch Minerals: Conspiracy & Failure of Consideration
Mr. Gangadhara Brhmendra Srikanth Maroju appealed against the decision of the General Division in Epoch Minerals Pte Ltd v Raffles Asset Management (S) Pte Ltd and others. The Judge found Mr. Maroju jointly and severally liable with two other defendants for conspiring to injure the plaintiff, Epoch Minerals Pte Ltd (EMPL), by unlawful means in respect of a total payment of US$600,000 that was given for a purpose that turned out to be untrue. Mr. Maroju was also found to be liable for dishonest assistance in aiding the second defendant, AKS Consultants Pte Ltd (AKS), in breach of trust in respect of monies from EMPL. The Judge also found that there was total failure of consideration in respect of a sum of US$100,000 that EMPL paid to Mr Maroju, who was consequently made personally liable to repay a sum of US$100,000 to EMPL. The Appellate Division of the High Court dismissed the appeal.
1. Case Overview
1.1 Court
Appellate Division of the High Court1.2 Outcome
Appeal Dismissed
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Appeal dismissed. Maroju found liable for conspiracy to injure Epoch Minerals by unlawful means and total failure of consideration.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Gangadhara Brhmendra Srikanth Maroju | Appellant | Individual | Appeal Dismissed | Lost | Chong Chi Chuin Christopher, Josh Samuel Tan Wensu |
| Epoch Minerals Pte Ltd | Respondent, Plaintiff | Corporation | Judgment for Respondent | Won | Jeremy Gan Eng Tong, Tan Eu Shan Kevin, Liew Min Yi, Glenna |
| Raffles Asset Management (S) Pte Ltd | Defendant | Corporation | Action Stayed | Stayed | |
| AKS Consultants Pte Ltd | Defendant | Corporation | Judgment against Defendant | Lost | |
| Kamil Bin Jumat | Defendant | Individual | Judgment against Defendant | Lost |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Belinda Ang Saw Ean | Judge of the Appellate Division | Yes |
| Woo Bih Li | Judge of the Appellate Division | No |
| Quentin Loh | Judge of the Appellate Division | No |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Chong Chi Chuin Christopher | Drew & Napier LLC |
| Josh Samuel Tan Wensu | Drew & Napier LLC |
| Jeremy Gan Eng Tong | Rajah & Tann Singapore LLP |
| Tan Eu Shan Kevin | Rajah & Tann Singapore LLP |
| Liew Min Yi, Glenna | Rajah & Tann Singapore LLP |
4. Facts
- EMPL was part of the “Lotus” group of companies, in which one Mr Madan Sharma was a director.
- Mr. Sharma met Mr. Maroju, who was a private banker with Standard Chartered Bank.
- Mr. Maroju informed Mr. Sharma that he found a Singapore-based investor for EMPL, Raffles Asset Management (S) Pte Ltd (RAM).
- EMPL arranged for payments totalling US$700,000 to be made for the purported financing transaction.
- The payments included US$100,000 as personal commission to Mr. Maroju, US$200,000 in “margin money”, and US$100,000 in fees payable to AKS.
- The purported financing was initially promised to come through by end of 2016, but it did not.
- RAM informed EMPL that it was withdrawing from the financing transaction, stating EMPL’s inability to fulfil the conditions as set out in the Term Sheet.
- AKS transferred the margin money to Mr. Schiff, who was the escrow agent of Clear Point Enterprise Inc.
- The margin money was transferred from Mr. Schiff to Mr. Schaffer, who was the escrow agent for Salt Lake Ore AG (SLO).
5. Formal Citations
- Gangadhara Brhmendra Srikanth Maroju v Epoch Minerals Pte Ltd, Civil Appeal No 8 of 2022, [2022] SGHC(A) 35
6. Timeline
| Date | Event |
|---|---|
| Mr. Sharma met Mr. Maroju | |
| Mr. Maroju informed Mr. Sharma that he found a Singapore-based investor for EMPL | |
| Investor agreed to increase the investment in EMPL from US$5m to US$10m | |
| AKS entered into a contract with Clear Point | |
| AKS transferred the margin money to Mr. Schiff | |
| Mr. Maroju e-mailed Mr. Sharma a draft version of the term sheet for the financing transaction | |
| A copy of the Term Sheet signed by Mr. Kamil on behalf of RAM was provided to Mr. Sharma through Mr. Maroju | |
| AKS entered into a contract with SLO | |
| The margin money was transferred from Mr. Schiff to Mr. Schaffer | |
| Mr. Sharma gave instructions to Mr. Maroju for the financing transaction to be cancelled and for the margin money to be refunded | |
| Mr. Sharma repeated his instructions to Mr. Maroju | |
| Mr. Sharma repeated his instructions to Mr. Maroju | |
| RAM informed EMPL by way of a letter signed by Mr. Kamil that RAM was withdrawing from the financing transaction | |
| EMPL sued RAM, AKS, Mr. Kamil and Mr. Maroju | |
| Epoch Minerals Pte Ltd v Raffles Asset Management (S) Pte Ltd and others [2021] SGHC 288 | |
| Appeal heard | |
| Appeal dismissed |
7. Legal Issues
- Conspiracy to Injure by Unlawful Means
- Outcome: The court found Mr. Maroju was a co-conspirator with AKS and Mr. Kamil to defraud EMPL.
- Category: Substantive
- Sub-Issues:
- Agreement to defraud
- Concerted action
- Related Cases:
- [2014] 1 SLR 860
- [2012] 1 SLR 992
- Total Failure of Consideration
- Outcome: The court held that Mr. Maroju was personally liable to return the US$100,000 for total failure of consideration.
- Category: Substantive
- Breach of Trust
- Outcome: The court found that AKS had acted in breach of trust by transferring the margin money first to Mr. Schiff and later to Mr. Schaffer, for AKS’s own investments promising bigger gains.
- Category: Substantive
- Related Cases:
- [2010] 2 SLR 589
- Dishonest Assistance
- Outcome: The court found both Mr Maroju and Mr Kamil liable for dishonest assistance in the aid of AKS’s breach of trust.
- Category: Substantive
- Related Cases:
- [2010] 2 SLR 589
- [2018] AC 391
8. Remedies Sought
- Monetary Damages
9. Cause of Actions
- Conspiracy to Injure
- Breach of Trust
- Dishonest Assistance
- Failure of Consideration
10. Practice Areas
- Commercial Litigation
11. Industries
- Finance
- Banking
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Epoch Minerals Pte Ltd v Raffles Asset Management (S) Pte Ltd and others | High Court | Yes | [2021] SGHC 288 | Singapore | The current appeal is against the decision of the judge in this case. |
| Tat Seng Machine Movers Pte Ltd v Orix Leasing Singapore Ltd | Court of Appeal | Yes | [2009] 4 SLR(R) 1101 | Singapore | Cited for the principle that an appellate court’s power of review with respect to findings of fact made in the course of trial is limited. |
| EFT Holdings, Inc and another v Marinteknik Shipbuilders (S) Pte Ltd and another | Court of Appeal | Yes | [2014] 1 SLR 860 | Singapore | Cited for the principle that in order to establish a combination between Mr Maroju and the other defendants, it must be shown that there was an agreement amongst them to defraud EMPL and that concerted action had been taken pursuant to that agreement. |
| The “Dolphina” | High Court | Yes | [2012] 1 SLR 992 | Singapore | Cited for the principle that an agreement or combination is rarely expressed; the unlawful acts themselves taken together with the relevant surrounding circumstances can justify the inference that their commission was the product of concert between the alleged conspirators. |
| EFT Holdings, Inc v Marinteknik Shipbuilders (S) Pte Ltd | Court of Appeal | Yes | [2013] 1 SLR 1254 | Singapore | Cited for the principle that it is not a requirement that all the conspirators must all join the conspiracy at the same time, and it suffices that they were sufficiently aware of the surrounding circumstances and share the same object for it to be properly said that they were acting in concert. |
| George Raymond Zage III and another v Ho Chi Kwong and another | Court of Appeal | Yes | [2010] 2 SLR 589 | Singapore | Cited for the elements of a claim in dishonest assistance. |
| Ivey v Genting Casinos (UK) Ltd (trading as Crockfords Club) | UK Supreme Court | Yes | [2018] AC 391 | United Kingdom | Cited for the principle that whether a person has acted dishonestly is determined by reference to what he subjectively knew or believed and the standards of ordinary decent people. |
| Wei Ho-Hung v Lyu Jun | High Court | Yes | [2022] SGHC(A) 30 | Singapore | Cited for the evidence of exclusivity of purpose for a Quistclose trust to arise. |
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
- Margin Money
- Due Diligence Fee
- Financing Transaction
- Term Sheet
- Funding Principal
- Escrow Agent
- Convertible Bond
15.2 Keywords
- Conspiracy
- Breach of Trust
- Dishonest Assistance
- Failure of Consideration
- Margin Money
- Due Diligence
- Financing
- Singapore
16. Subjects
- Conspiracy
- Restitution
- Trusts
- Contract Law
- Banking
- Finance
17. Areas of Law
- Tort
- Conspiracy
- Restitution
- Contract Law
- Trust Law