Alternative Advisors Investments v Asidokona Mining: Ratification of Loan Agreement

In a civil appeal before the Court of Appeal of the Republic of Singapore, Alternative Advisors Investments Pte Ltd (AAI) appealed against the decision of the Appellate Division of the High Court regarding a $2 million loan agreement between Supreme Star Investments Ltd (SSI) and Asidokona Mining Resources Pte Ltd (Asidokona). The court dismissed the appeal, finding that AAI had not proven that Mr. Wong was authorized by SSI to enter into the Loan Agreement, and therefore the Loan Agreement was not validly ratified.

1. Case Overview

1.1 Court

Court of Appeal of the Republic of Singapore

1.2 Outcome

Appeal dismissed.

1.3 Case Type

Civil

1.4 Judgment Type

Judgment

1.5 Jurisdiction

Singapore

1.6 Description

Singapore Court of Appeal case concerning the validity of a loan agreement ratification and whether the assignee can maintain the action.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Alternative Advisors Investments Pte LtdAppellantCorporationAppeal DismissedLostN Sreenivasan, Muralli Rajaram, Tan Si Xin Adorabelle
Asidokona Mining Resources Pte LtdRespondentCorporationAppeal upheldWonGregory Vijayendran Ganesamoorth, Tomoyuki Lewis Ban, Mulani Prakash P, Ng Ying Tian
Soh Sai KiangRespondentIndividualAppeal upheldWonGregory Vijayendran Ganesamoorth, Tomoyuki Lewis Ban, Mulani Prakash P, Ng Ying Tian

3. Judges

Judge NameTitleDelivered Judgment
Sundaresh MenonChief JusticeNo
Steven ChongJustice of the Court of AppealYes
Belinda Ang Saw EanJustice of the Court of AppealNo

4. Counsels

Counsel NameOrganization
N SreenivasanK&L Gates Straits Law LLC
Muralli RajaramK&L Gates Straits Law LLC
Tan Si Xin AdorabelleK&L Gates Straits Law LLC
Gregory Vijayendran GanesamoorthRajah & Tann Singapore LLP
Tomoyuki Lewis BanRajah & Tann Singapore LLP
Mulani Prakash PM&A Law Corporation
Ng Ying TianM&A Law Corporation

4. Facts

  1. Mr. Soh sought a $2m loan for Asidokona from Mr. Wong.
  2. Mr. Wong approached Mr. Ong, who said a 'HK investor' would contribute half the loan.
  3. SSI was named as the lender in the Loan Agreement.
  4. Mr. Wong did not know SSI was the lender until later.
  5. $1.69m was disbursed to Asidokona.
  6. Asidokona defaulted on the loan.
  7. SSI purportedly assigned the Loan Agreement to AAI.
  8. Ms. Lou of SSI denied knowledge of the Loan and Mr. Wong's authorization.
  9. SSI passed a resolution to ratify the Loan Documents and the Suit.
  10. Mr. Wong was not authorized by SSI to enter into the Loan Agreement.

5. Formal Citations

  1. Alternative Advisors Investments Pte Ltd v Asidokona Mining Resources Pte Ltd and another, Civil Appeal No 18 of 2023, [2024] SGCA 3

6. Timeline

DateEvent
Mr. Soh approached Mr. Wong to seek assistance to procure a loan of $2m for Asidokona.
Mr. Wong was provided with a copy of the draft Loan Agreement.
Mr. Soh executed the Loan Documents on behalf of Asidokona.
$1.69m was disbursed by JLC Advisors to Asidokona.
Asidokona defaulted on the Loan.
A statutory demand in the name of SSI was issued to Mr. Soh through JLC Advisors.
The Loan Agreement and the Personal Guarantee were assigned pursuant to a deed of assignment.
Mr. Ong informed Mr. Wong that the “HK investor” was, in fact, Ms. Lou, the sole director and shareholder of SSI.
AAI commenced HC/S 734/2018 (the “Suit”).
The Deed of Charge was assigned pursuant to a deed of assignment.
SSI was struck off the BVI Register of Companies.
Ms Lou received a letter from M&A Law Corporation.
SSI was restored to the BVI Register of Companies.
SSI passed the Resolution.
Hearing date.
Judgment reserved.

7. Legal Issues

  1. Validity of Ratification
    • Outcome: The court held that the Loan Agreement was not validly ratified.
    • Category: Substantive
    • Sub-Issues:
      • Conditions for valid ratification
      • Nexus between principal and act or contract
      • Agent purporting to act on principal's behalf
      • Principal's knowledge for ratification
    • Related Cases:
      • [1901] AC 240
      • (1843) 6 Man & G 236
  2. Agent's Authority
    • Outcome: The court found that Mr. Wong was not authorized by SSI to enter into the Loan Agreement.
    • Category: Substantive
    • Sub-Issues:
      • Actual authority
      • Apparent authority
  3. Cause of Action
    • Outcome: The court found that AAI did not have a valid cause of action at the commencement of the Suit.
    • Category: Procedural

8. Remedies Sought

  1. Repayment of Loan
  2. Interest
  3. Enforcement of Guarantee
  4. Enforcement of Security

9. Cause of Actions

  • Breach of Contract
  • Enforcement of Guarantee
  • Enforcement of Security

10. Practice Areas

  • Commercial Litigation

11. Industries

  • Mining
  • Financial Services

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Ma Hongjin v SCP Holdings Pte LtdHigh CourtYes[2021] 1 SLR 304SingaporeCited regarding the burden of proof when a submission of "no case to answer" is made.
Keighley, Maxsted & Co v DurantHouse of LordsYes[1901] AC 240United KingdomCited for the principle that a contract made by a person intending to contract on behalf of a principal, but without his authority, cannot be ratified by the principal.
Wilson and another v Tumman and FretsonCourt of Common PleasYes(1843) 6 Man & G 236United KingdomCited for the requirement of a nexus between the principal and the act or contract which the principal seeks to ratify.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
Moneylenders Act 2008Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Loan Agreement
  • Ratification
  • Agent
  • Authority
  • Assignment
  • Cause of Action
  • Resolution
  • Deed of Assignment
  • Personal Guarantee
  • Share Charge

15.2 Keywords

  • Loan
  • Agreement
  • Ratification
  • Agency
  • Authority
  • Assignment
  • Singapore
  • Contract

16. Subjects

  • Agency
  • Contract
  • Finance
  • Civil Procedure

17. Areas of Law

  • Agency Law
  • Contract Law
  • Civil Procedure