Oro Negro Drilling v Integradora: Injunction for Breach of Negative Covenant in Restructuring Proceedings

In Oro Negro Drilling Pte Ltd and others v Integradora de Servicios Petroleros Oro Negro SAPI de CV and others, the High Court of Singapore, General Division, heard an originating summons by Oro Negro Drilling Pte Ltd and its subsidiaries against Integradora de Servicios Petroleros Oro Negro SAPI de CV and its directors, Alonso Del Val Echeverria and Gonzalo Gil White, concerning the validity of restructuring proceedings in Mexico. The plaintiffs sought declarations and injunctions to prevent the defendants from controlling the plaintiffs' assets and restructuring proceedings. The court entered final judgment in favor of the plaintiffs, granting declarations and permanent injunctions against the defendants, finding that the third defendant breached an implied contract and the first defendant induced that breach. The court also ordered the third defendant to pay damages to the plaintiffs, to be assessed.

1. Case Overview

1.1 Court

General Division of the High Court

1.2 Outcome

Judgment for Plaintiffs

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Singapore court grants injunction to Oro Negro Drilling, restraining Integradora from insolvency matters due to breach of negative covenant.

1.7 Decision Date

22 October 2023

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
Oro Negro Drilling Pte Ltd	Plaintiff	Corporation	Judgment for Plaintiff	Won	Ajaib Hari Dass of Haridass Ho & Partners Ragini Parasuram of Haridass Ho & Partners Shawn Tien of Haridass Ho & Partners
Oro Negro Decus Pte Ltd	Plaintiff	Corporation	Judgment for Plaintiff	Won	Ajaib Hari Dass of Haridass Ho & Partners Ragini Parasuram of Haridass Ho & Partners Shawn Tien of Haridass Ho & Partners
Oro Negro Fortius Pte Ltd	Plaintiff	Corporation	Judgment for Plaintiff	Won	Ajaib Hari Dass of Haridass Ho & Partners Ragini Parasuram of Haridass Ho & Partners Shawn Tien of Haridass Ho & Partners
Oro Negro Impetus Pte Ltd	Plaintiff	Corporation	Judgment for Plaintiff	Won	Ajaib Hari Dass of Haridass Ho & Partners Ragini Parasuram of Haridass Ho & Partners Shawn Tien of Haridass Ho & Partners
Oro Negro Laurus Pte Ltd	Plaintiff	Corporation	Judgment for Plaintiff	Won	Ajaib Hari Dass of Haridass Ho & Partners Ragini Parasuram of Haridass Ho & Partners Shawn Tien of Haridass Ho & Partners
Oro Negro Primus Pte Ltd	Plaintiff	Corporation	Judgment for Plaintiff	Won	Ajaib Hari Dass of Haridass Ho & Partners Ragini Parasuram of Haridass Ho & Partners Shawn Tien of Haridass Ho & Partners
Integradora de Servicios Petroleros Oro Negro SAPI de CV	Defendant	Corporation	Judgment against Defendant	Lost
Alonso Del Val Echeverria	Defendant	Individual	Settled	Settled
Gonzalo Gil White	Defendant	Individual	Judgment against Defendant	Lost	Siew Guo Wei of Tan Kok Quan Partnership Natalie Ng of Tan Kok Quan Partnership Paul Seah of Tan Kok Quan Partnership Grace Ho of Tan Kok Quan Partnership

3. Judges

Judge Name	Title	Delivered Judgment
Vinodh Coomaraswamy	Judge	Yes

4. Counsels

Counsel Name	Organization
Ajaib Hari Dass	Haridass Ho & Partners
Ragini Parasuram	Haridass Ho & Partners
Shawn Tien	Haridass Ho & Partners
Siew Guo Wei	Tan Kok Quan Partnership
Natalie Ng	Tan Kok Quan Partnership
Paul Seah	Tan Kok Quan Partnership
Grace Ho	Tan Kok Quan Partnership

4. Facts

All six plaintiffs are companies incorporated in Singapore with their center of main interests in Mexico.
The first plaintiff is the sole shareholder of the remaining five plaintiffs.
Until September 2017, all of the plaintiffs were under the control of the three defendants.
All six plaintiffs and the first defendant have been insolvent since September 2017.
In September 2017, the defendants purported to cause all six plaintiffs to commence restructuring proceedings in the courts of Mexico.
The plaintiffs commenced this originating summons in January 2018 seeking declarations and permanent injunctions regarding the defendants’ right to control the plaintiffs.
The third defendant has appealed against the decision.

5. Formal Citations

Oro Negro Drilling Pte Ltd and others v Integradora de Servicios Petroleros Oro Negro SAPI de CV and others, Originating Summons No 126 of 2018, [2023] SGHC 297
Oro Negro Drilling Pte Ltd and others v Integradora de Servicios Petroleros Oro Negro SAPI de CV and others and another appeal (Jesus Angel Guerra Mendez, non-party), , [2020] 1 SLR 226

6. Timeline

Date	Event
2014-01-01	First plaintiff issued over US$900m in bonds.
2016-04-01	Plaintiffs amended their constitutions to insert Art 115A.
2016-09-01	Bond Trustee gave notice requiring plaintiffs to appoint Mr Noel Cochrane Jr as Independent Director.
2017-08-31	Second and third defendants granted a power of attorney to the Guerra Lawyers.
2017-09-11	Guerra Lawyers filed a concurso petition in Mexico on behalf of Perforadora.
2017-09-20	First defendant executed a resolution to engage the Guerra Lawyers to file a concurso petition on behalf of the first plaintiff.
2017-09-25	Bond Trustee declared an event of default under cl 15.1(g) of the bond agreement.
2017-09-25	Mr Roger Hancock and Mr Roger Bartlett appointed as directors of each plaintiff.
2017-09-29	Guerra Lawyers filed a concurso petition on behalf of the first defendant.
2017-09-29	Guerra Lawyers filed six concurso petitions, one in the name of each plaintiff.
2017-10-03	Pemex caused its subsidiary to terminate its contract with Perforadora.
2017-10-04	Bond Trustee exercised its power to perfect its security under the charges.
2017-10-05	Concurso court admitted Perforadora’s concurso petition.
2017-10-06	Plaintiffs’ shareholder and its directors learned of the Petitions for the first time.
2017-10-09	Directors of each plaintiff resolved to revoke all authority previously given to represent that plaintiff.
2017-10-09	Directors of each plaintiff resolved to appoint nine named lawyers from a Mexican law firm called Cervantes Sainz Abogados S.C.
2017-10-31	Concurso court admitted the first defendant’s concurso petition.
2018-01-01	Plaintiffs filed this originating summons in Singapore.
2018-01-01	General Division granted interim injunctions.
2018-05-01	Concurso court dismissed the Petitions.
2018-09-01	General Division discharged the interim injunctions.
2019-09-01	Court of Appeal allowed the plaintiffs’ appeal and restored the interim injunctions.
2019-11-01	Plaintiffs discontinued this originating summons as against the second defendant.
2020-03-01	Plaintiffs joined four of the Guerra Lawyers as defendants to this originating summons.
2021-12-01	The concurso court finally admitted the Petitions.
2022-05-04	Plaintiffs elected to discontinue the proceedings against the Guerra Lawyers.
2022-05-01	Mr Lambertus Hendrik Veldhuizen appointed as a director of the SPVs.
2023-03-06	Final hearing of this originating summon.
2023-03-10	Vinodh Coomaraswamy J heard the case.
2023-10-23	Judgment was delivered.

7. Legal Issues

Breach of Contract
- Outcome: The court found that the third defendant breached an implied contract with the plaintiffs.
- Category: Substantive
Inducement of Breach of Contract
- Outcome: The court found that the first defendant induced the third defendant to breach his implied contract with the plaintiffs.
- Category: Substantive
Validity of Shareholder Resolutions
- Outcome: The court declared that none of the Shareholder’s Resolutions is sufficient in itself to authorise or empower any director of any of the plaintiffs to carry into effect any Insolvency Matter.
- Category: Substantive
Abuse of Process
- Outcome: The court held that the plaintiffs' claim was not an abuse of process.
- Category: Procedural
Judicial Comity
- Outcome: The court held that considerations of judicial comity were not relevant to the issue of whether to make the interim injunctions permanent.
- Category: Jurisdictional

8. Remedies Sought

Declarations
Injunctions
Damages

9. Cause of Actions

Breach of Contract
Inducement of Breach of Contract

10. Practice Areas

Commercial Litigation
Insolvency Litigation

11. Industries

Oil and Gas

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
Oro Negro Drilling Pte Ltd and others v Integradora de Servicios Petroleros Oro Negro SAPI de CV and others and another appeal (Jesus Angel Guerra Mendez, non-party)	Court of Appeal	Yes	[2020] 1 SLR 226	Singapore	The Court of Appeal narrated the events in the proceedings in Mexico up to September 2018 and restored the interim injunctions.
Anglo-Austrian Printing and Publishing Union (Isaacs’ Case)	Court of Appeal	Yes	[1892] 2 Ch 158	England and Wales	Cited for the principle that accepting appointment as a director gives rise to an agreement that the director will serve based on the terms of the company’s constitution.
Chee Kheong Mah Chaly and others v Liquidators of Baring Futures (Singapore) Pte Ltd	Court of Appeal	Yes	[2003] 2 SLR(R) 571	Singapore	Cited for the principle that a separate contract between a company and a third party can incorporate provisions from the articles of association.
Tengku Dato’ Ibrahim Petra bin Tengku Indra Petra & Ors v Perdana Petroleum Bhd (formerly known as Petra Perdana Bhd)	High Court of Malaya at Kuala Lumpur	Yes	[2013] 8 MLJ 280	Malaysia	Cited for the principle that relatively little may be required to incorporate the articles by implication into a contract between a company and its director.
Hickman v Kent Or Romney Marsh Sheep-Breeders’ Association	Chancery Division	No	[1915] 1 Ch 881	England and Wales	Cited to show that the articles constitute a contract only between a company and its members and generally do not bind third parties.
Globalink Telecommunications Ltd v Wilmbury Ltd	High Court	Yes	[2003] 1 BCLC 145	England and Wales	Cited for the dictum that relatively little may be required to incorporate the articles by implication into a contract between a company and its director.
John and others v Price Waterhouse (a firm) and another	Court of Appeal	Yes	[2002] 1 WLR 953	England and Wales	Cited for the dictum that relatively little may be required to incorporate the articles by implication into a contract between a company and its director.
Tribune Investment Trust Inc v Soosan Trading Co Ltd	High Court	Yes	[2000] 2 SLR(R) 407	Singapore	Cited for the elements of the tort of inducing a breach of contract.
Virsagi Management (S) Pte Ltd v Welltech Construction Pte Ltd and another appeal	High Court	No	[2013] 4 SLR 1097	Singapore	Cited regarding abuse of process.
PT Karya Indo Batam v Wang Zhenwen and others (Wang Zhenwen and others, third parties)	High Court	No	[2021] 5 SLR 1381	Singapore	Cited regarding abuse of process.
Henderson v Henderson	Court of Chancery	Yes	[1843-60] All ER Rep 378	England and Wales	Cited regarding the extended doctrine of res judicata.
Société Nationale Industrielle Aerospatiale v Lee Kui Jak	Privy Council	Yes	[1987] AC 871	United Kingdom	Cited regarding anti-suit injunctions.
John Reginald Stott Kirkham and others v Trane US Inc and others	Court of Appeal	Yes	[2009] 4 SLR(R) 428	Singapore	Cited regarding anti-suit injunctions.
Sun Travels & Tours Pvt Ltd v Hilton International Manage (Maldives) Pvt Ltd	Court of Appeal	Yes	[2019] 1 SLR 732	Singapore	Cited regarding anti-suit injunctions and anti-enforcement injunctions.
Beh Chew Boo v Public Prosecutor	High Court	Yes	[2021] 2 SLR 180	Singapore	Cited regarding collateral attack.
In re Norris	House of Lords	Yes	[2001] 1 WLR 1388	United Kingdom	Cited regarding collateral attack.
Hunter v Chief Constable of West Midlands Police	House of Lords	Yes	[1982] AC 529	United Kingdom	Cited as an example of an impermissible collateral attack.
Ashmore v British Coal Corporation	Court of Appeal	Yes	[1990] 2 QB 338	England and Wales	Cited as an example of an impermissible collateral attack.
Aggeliki Charis Compania Maritima SA v Pagnan SpA (The “Angelic Grace”)	Court of Appeal	Yes	[1995] 1 Lloyd’s Rep 87	England and Wales	Cited regarding anti-suit injunctions.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute Name	Jurisdiction
Companies Act 1967	Singapore
s 4 of the Companies Act 1967	Singapore
s 157 of the Companies Act	Singapore
s 157A of the Companies Act	Singapore
s 409A of the Companies Act	Singapore
Ley de Concursos Mercantiles	Mexico
Art 87 of the LCM	Mexico
Insolvency, Restructuring and Dissolution Act 2018	Singapore

15. Key Terms and Keywords

15.1 Key Terms

Concurso
Insolvency Matter
Bond Trustee
Independent Director
Shareholders’ Resolutions
Guerra Lawyers
Sainz Lawyers
Art 115A
LCM
Petitions
Integradora Group
Pemex
SPVs

15.2 Keywords

Insolvency
Restructuring
Injunction
Breach of Contract
Company Law
Singapore
Mexico

17. Areas of Law

Area Name	Relevance Score
Injunctions	75
Contract Law	70
Company Law	65
Conflict of Laws	60
Civil Procedure	50
Negative Covenant	40
Commercial Law	30

16. Subjects

Insolvency
Restructuring
Contract Law
Company Law
Civil Procedure
Injunctions