Asidokona Mining Resources v Alternative Advisors: Ratification & Loan Agreement Dispute
The Appellate Division of the High Court of Singapore heard an appeal between Asidokona Mining Resources Pte Ltd and Soh Sai Kiang (Appellants) and Alternative Advisors Investments Pte Ltd (Respondent) regarding a loan agreement. The court allowed the appeal, finding that the loan agreement was not validly ratified by Supreme Star Investments Ltd (SSI), the purported lender. The court held that Alternative Advisors Investments Pte Ltd (AAI) did not have a valid cause of action when the suit was commenced. The court ordered each party to bear their own costs in respect of the appeal and the action below.
1. Case Overview
1.1 Court
Appellate Division of the High Court1.2 Outcome
Appeal Allowed
1.3 Case Type
Civil
1.4 Judgment Type
Judgment
1.5 Jurisdiction
Singapore
1.6 Description
Singapore court allows appeal, holding that a loan agreement was not validly ratified. Key issues: agency, assignment, and contract illegality.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Alternative Advisors Investments Pte Ltd | Respondent, Plaintiff | Corporation | Appeal Dismissed | Lost | |
| Asidokona Mining Resources Pte Ltd | Appellant, Defendant | Corporation | Appeal Allowed | Won | |
| Soh Sai Kiang | Appellant, Defendant | Individual | Appeal Allowed | Won | |
| Supreme Star Investments Ltd | Plaintiff | Corporation | Claim Struck Out | Struck Out |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Woo Bih Li | Judge of the Appellate Division | No |
| Kannan Ramesh | Judge of the Appellate Division | Yes |
| Quentin Loh | Senior Judge | No |
4. Counsels
4. Facts
- Mr. Soh sought assistance from Mr. Wong to arrange a $2m loan to Asidokona.
- Mr. Wong contacted Mr. Ong, who had a client (SSI) willing to contribute $1m.
- Mr. Wong raised the remaining $1m himself, including funds from AAI.
- SSI was named the sole lender in the Loan Agreement, despite contributing only half the loan.
- Mr. Wong signed the Loan Documents purportedly for SSI in 2018, not in 2016 when the loan was disbursed.
- Asidokona defaulted on the loan, having repaid some $900,000 towards interest.
- SSI purportedly assigned its interest in the loan to AAI to enable AAI to recover the debt.
- Ms. Lou asserted she only knew about the Loan Documents, Deeds of Assignment, and Mr. Wong’s actions in March 2020.
- SSI passed a director’s resolution to ratify Mr. Wong’s actions in July 2021.
5. Formal Citations
- Asidokona Mining Resources Pte Ltd and another v Alternative Advisors Investments Pte Ltd, Civil Appeal No 28 of 2022, [2023] SGHC(A) 6
- Alternative Advisors Investments Pte Ltd and another v Asidokona Mining Resources Pte Ltd and another, Suit No 734 of 2018, [2022] SGHC 41
6. Timeline
| Date | Event |
|---|---|
| Mr. Soh sought assistance to arrange a loan of $2m to Asidokona. | |
| Mr. Soh signed the Loan Documents. | |
| $1.69m was disbursed by JLC Advisors to Asidokona. | |
| Asidokona defaulted on the Loan. | |
| First Deed of Assignment was purportedly signed. | |
| Mr. Wong signed the Loan Documents. | |
| AAI commenced the action below. | |
| Second Deed of Assignment was signed. | |
| AAI amended its statement of claim to introduce the Second Deed of Assignment. | |
| SSI was added as a co-plaintiff. | |
| SSI was struck off the BVI register of companies. | |
| Ms. Lou came to know about the Loan Documents, the Deeds of Assignment and the action below. | |
| SSI's claim was struck out. | |
| SSI was restored to the BVI register of companies. | |
| Ms. Lou procured SSI to pass the Ratification. | |
| Hearing date. | |
| Judgment reserved. |
7. Legal Issues
- Ratification
- Outcome: The court held that the loan agreement was not validly ratified by Supreme Star Investments Ltd (SSI).
- Category: Substantive
- Sub-Issues:
- Validity of ratification
- Retrospective effect of ratification
- Authority to ratify
- Related Cases:
- [2022] SGHC 41
- (1889) 41 Ch D 295
- (1880) 57 Cal 12
- Cause of Action
- Outcome: The court held that Alternative Advisors Investments Pte Ltd (AAI) did not have a valid cause of action when the suit was commenced.
- Category: Procedural
- Sub-Issues:
- Existence of valid cause of action at commencement of action
- Related Cases:
- [1994] 1 SLR(R) 505
- Maintenance and Champerty
- Outcome: The court found that the assignment did not savor of maintenance and champerty.
- Category: Substantive
- Related Cases:
- [1997] 1 SLR(R) 775
- [1982] AC 679
- [1920] 1 KB 399
- Illegality
- Outcome: The court did not make a positive finding that the funds came from other clients of JLC Advisors.
- Category: Substantive
- Penalty Clause
- Outcome: The court did not decide whether the default interest rate was a penalty as the issue was moot.
- Category: Substantive
- Locus Standi
- Outcome: The court concluded that the risk of double recovery was overstated.
- Category: Procedural
8. Remedies Sought
- Recovery of Loan Principal
- Accrued Interest
- Enforcement of Rights Against Charged Shares
- Costs on an Indemnity Basis
9. Cause of Actions
- Breach of Contract
- Recovery of Debt
10. Practice Areas
- Commercial Litigation
- Appellate Litigation
11. Industries
- Mining
- Financial Services
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Alternative Advisors Investments Pte Ltd and another v Asidokona Mining Resources Pte Ltd and another | High Court | Yes | [2022] SGHC 41 | Singapore | The judgment below, which was appealed, is referenced for the factual background of the case. |
| JWR Pte Ltd v Edmond Pereira Law Corp and another | High Court | Yes | [2020] 4 SLR 832 | Singapore | Cited regarding the effect of reinstatement of a company struck off the register on actions pursued during the period of being struck off. |
| Saga Foodstuffs Manufacturing (Pte) Ltd v Best Food Pte Ltd | High Court | Yes | [1994] 1 SLR(R) 505 | Singapore | Cited for the fundamental rule of civil procedure that a plaintiff must have a valid cause of action at the time of commencement of action. |
| Multistar Holdings Ltd v Geocon Piling & Engineering Pte Ltd | High Court | Yes | [2016] 2 SLR 1 | Singapore | Cited regarding the principle that a claimant would not be allowed to introduce a new cause of action in relation to which limitation has set in by way of an amendment. |
| Bolton Partners v Lambert | Court of Appeal | Yes | (1889) 41 Ch D 295 | England and Wales | Cited for the principle that ratification confers authority from the outset, but criticized for preventing a third party from withdrawing before ratification. |
| Wittenbrock v Bellmer | Supreme Court of California | Yes | (1880) 57 Cal 12 | United States | Cited for the principle that if a party has no cause of action at the time of the institution of his action, he cannot maintain it by filing a supplemental complaint founded upon matters which have subsequently occurred. |
| Danish Mercantile Co Ltd and others v Beaumont and another | High Court | Yes | [1951] Ch 680 | England and Wales | Cited for the principle that it is open at any time to the plaintiff to ratify the commencement of action. |
| Smith v Henniker-Major & Co (a firm) | High Court | Yes | [2003] Ch 182 | England and Wales | Cited for the principle that ratification was not effective if it would unfairly prejudice the counterparty. |
| Presentaciones Musicales SA v Secunda | High Court | Yes | [1994] Ch 271 | England and Wales | Cited for the principle that if the act sought to be ratified was a nullity, there would be nothing to ratify. |
| The Jarguh Sawit | Court of Appeal | Yes | [1997] 3 SLR(R) 829 | Singapore | Cited for the principle that a cause of action was in existence at the date of the writ. |
| BXH v BXI | Court of Appeal | Yes | [2020] 1 SLR 1043 | Singapore | Cited for expressing doubts on whether the authorities relied upon in Jarguh Sawit stood for the proposition that an assignment after commencement of action could retrospectively vest rights in an assignee. |
| POA Recovery Pte Ltd v Yau Kwok Seng and others and another appeal | Court of Appeal | Yes | [2022] 1 SLR 1165 | Singapore | Cited for holding that the observations in BXH were made in obiter, this court was bound by the ratio decidendi in Jarguh Sawit. |
| Lim Lie Hoa and another v Ong Jane Rebecca | Court of Appeal | Yes | [1997] 1 SLR(R) 775 | Singapore | Cited for the approach taken by the court in respect of maintenance and champerty. |
| Trendtex Trading Corporation v Crédit Suisse | House of Lords | Yes | [1982] AC 679 | United Kingdom | Cited for the approach taken by the court in respect of maintenance and champerty. |
| Ellis v Torrington | King's Bench Division | Yes | [1920] 1 KB 399 | England and Wales | Cited regarding the circumstances where there is neither champerty nor maintenance. |
13. Applicable Rules
| Rule Name |
|---|
| Rules of Court |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Moneylenders Act 2008 | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Ratification
- Loan Agreement
- Deed of Assignment
- Cause of Action
- Agency
- Locus Standi
- Maintenance
- Champerty
15.2 Keywords
- ratification
- loan agreement
- assignment
- agency
- contract
- Singapore
- civil appeal
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Contract Law | 85 |
| Ratification | 75 |
| Agency Law | 70 |
| Assignment | 65 |
| Commercial Disputes | 60 |
| Damages | 50 |
| Illegality and public policy | 40 |
| Maintenance and champerty | 40 |
| Estoppel | 30 |
16. Subjects
- Contract Law
- Agency Law
- Civil Procedure
- Banking Law