Oon Swee Gek v Violet Oon Inc: Oppression, Economic Duress & Undue Influence in Shareholders' Agreement Dispute

In Oon Swee Gek and others versus Violet Oon Inc Pte Ltd and others, the General Division of the High Court of Singapore addressed claims of oppression, economic duress, and undue influence related to a revised shareholders' agreement. The claimants, Oon Swee Gek, Tay Su-Lyn, and Tay Yiming, alleged that Mr. Murjani Manoj Mohan and Group MMM Pte Ltd exerted illegitimate pressure to alter the original shareholder arrangements. Justice Philip Jeyaretnam set aside the 2019 Agreements, finding economic duress and undue influence, and ordered the defendants to sell their shares to the claimants at fair value.

1. Case Overview

1.1 Court

General Division of the High Court

1.2 Outcome

Judgment for Claimants

1.3 Case Type

Civil

1.4 Judgment Type

Judgment

1.5 Jurisdiction

Singapore

1.6 Description

Violet Oon Inc case: Court sets aside revised shareholders' agreement due to economic duress and undue influence, ordering buyout of defendant's shares.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Oon Swee GekClaimantIndividualJudgment for ClaimantWon
Tay Su-LynClaimantIndividualJudgment for ClaimantWon
Tay YimingClaimantIndividualJudgment for ClaimantWon
Violet Oon Inc. Pte. Ltd.DefendantCorporationNeutralNeutral
Murjani Manoj MohanDefendantIndividualOrder to sell sharesLost
Group MMM Pte. Ltd.DefendantCorporationOrder to sell sharesLost

3. Judges

Judge NameTitleDelivered Judgment
Philip JeyaretnamJudgeYes

4. Counsels

Counsel NameOrganization
Meryl Koh JunningDrew & Napier LLC
Justin Lai Wen-JinDrew & Napier LLC
Shahera SafrinDrew & Napier LLC
Daniel Wong Sheng JieDrew & Napier LLC
Chew Xizhi StephanieTSMP Law Corporation
Thio Shen Yi SCTSMP Law Corporation
Phoon WueiTSMP Law Corporation

4. Facts

  1. Claimants incorporated Violet Oon Inc Pte Ltd in 2012.
  2. Mr. Murjani acquired a 50% shareholding in the Company in 2014.
  3. Claimants increased their salaries incrementally between 2015 and 2018 without informing Mr. Murjani.
  4. Mr. Murjani discovered the salary increases in December 2018 and took issue with them.
  5. Mr. Murjani proposed that the Company compensate him for the salary increments.
  6. Claimants and Mr. Murjani executed a revised shareholders’ agreement in 2019.
  7. Claimants allege the 2019 Agreements were obtained by duress or undue influence.

5. Formal Citations

  1. Oon Swee Gek and others v Violet Oon Inc Pte Ltd and others and other matter, Originating Claim No 301 of 2022, [2024] SGHC 13
  2. Oon Swee Gek and others v Violet Oon Inc Pte Ltd and others and other matter, Companies Winding Up No 195 of 2022, [2024] SGHC 13

6. Timeline

DateEvent
Violet Oon Inc Pte Ltd incorporated
Claimants employed in the Company
Mr. Murjani became acquainted with the claimants
2014 Shareholders' Agreement executed
Mr. Murjani appointed as a director of the Company
Claimants exercised their discretion to increase their respective salaries incrementally
Claimants exercised their discretion to increase their respective salaries incrementally
Mr. Murjani found out about the salary increases
Mr. Murjani emailed Mr. Tay a list of terms, to which the claimants agreed
Claimants and Mr. Murjani executed a revised shareholders’ agreement
Parties agreed that the claimants’ salaries would be withheld by the Company
Mr. Tay sought the reinstatement of monthly payments of the claimants’ salaries
Mr. Murjani rejected the reinstatement of salaries
Claimants filed originating claim OC 301
Claimants filed originating application HC/CWU 195/2022
Defendants offered to acquire the claimants’ cumulative 50% shareholding in the Company for $6,000,000
Hearing began
Judgment reserved

7. Legal Issues

  1. Oppression
    • Outcome: The court found that Mr. Murjani exerted illegitimate pressure and undue influence, thus the 2019 Agreements were set aside.
    • Category: Substantive
    • Related Cases:
      • [2018] 2 SLR 333
      • [2010] 2 SLR 776
  2. Economic Duress
    • Outcome: The court found that the 2019 Agreements were obtained by economic duress and set them aside.
    • Category: Substantive
    • Related Cases:
      • [1990] 1 SLR(R) 96
      • [1980] AC 614
      • [2009] 2 SLR(R) 240
      • [2011] 2 SLR 232
      • [2019] 1 SLR 349
  3. Undue Influence
    • Outcome: The court found that the 2019 Agreements were obtained by undue influence and set them aside.
    • Category: Substantive
    • Related Cases:
      • [2019] 1 SLR 349
  4. Abuse of Process
    • Outcome: The court held that there was no abuse of process.
    • Category: Procedural
    • Related Cases:
      • [2023] 4 SLR 484
      • [2023] 4 SLR 1133
  5. Winding Up
    • Outcome: The court made no order on the winding up application.
    • Category: Substantive

8. Remedies Sought

  1. Order for Group MMM to sell its shares to the claimants
  2. Winding up of the Company
  3. Setting aside of the 2019 Terms and 2019 SHA

9. Cause of Actions

  • Oppression
  • Economic Duress
  • Undue Influence

10. Practice Areas

  • Commercial Litigation
  • Shareholder Disputes
  • Oppression Remedy
  • Economic Duress
  • Undue Influence
  • Winding Up

11. Industries

  • Food and Beverage

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Ho Yew Kong v Sakae Holdings LtdCourt of AppealYes[2018] 2 SLR 333SingaporeCited for the principle that commercial unfairness is the touchstone of a claim under s 216 of the Companies Act.
Over & Over Ltd v Bonvests Holdings LtdHigh CourtYes[2010] 2 SLR 776SingaporeCited for the principle that the commercial agreement between the parties sets the frame against which commercial unfairness is to be judged.
Re Saul D Harrison & Sons plcUnknownYes[1995] 1 BCLC 14EnglandCited for the principle that legitimate expectation describes the correlative right that the claimant shareholder is entitled to protect, a right that arises from the personal relationship between the parties.
O’Neill v PhillipsHouse of LordsYes[1999] 1 WLR 1092EnglandCited for the principle that legitimate expectation describes the correlative right that the claimant shareholder is entitled to protect, a right that arises from the personal relationship between the parties.
Third World Development Ltd v Atang LatiefCourt of AppealYes[1990] 1 SLR(R) 96SingaporeCited for the principle that economic duress is a coercion of the will so as to vitiate consent.
Pao On and others v Lau You Long and othersPrivy CouncilYes[1980] AC 614Hong KongCited for the principle that duress is a coercion of the will so as to vitiate consent.
Occidental Worldwide Investment Corporation v Skibs A/S AvantiUnknownYes[1976] 1 Lloyd’s Rep 293EnglandCited for the principle that in a contractual situation commercial pressure is not enough for duress.
Barton v ArmstrongPrivy CouncilYes[1976] AC 104AustraliaCited for the principle that in determining whether there was a coercion of will such that there was no true consent, it is material to inquire whether the person alleged to have been coerced did or did not protest.
Maskell v HornerUnknownYes[1915] 3 KB 106EnglandCited for the principle that in determining whether there was a coercion of will such that there was no true consent, it is material to inquire whether the person alleged to have been coerced acted voluntarily or not.
Tam Tak Chuen v Khairul bin Abdul RahmanHigh CourtNo[2009] 2 SLR(R) 240SingaporeCited for the two elements of duress that the claimant must satisfy: pressure amounting to compulsion of the will of the victim; and the illegitimacy of the pressure exerted. The current judgement disagrees with the burden of proof.
Universe Tankships Inc of Monrovia v International Transport Workers FederationHouse of LordsYes[1983] 1 AC 366EnglandCited for the two elements of duress that the claimant must satisfy: pressure amounting to compulsion of the will of the victim; and the illegitimacy of the pressure exerted.
E C Investment Holding Pte Ltd v Ridout Residence Pte Ltd and another (Orion Oil Ltd and another, interveners)High CourtNo[2011] 2 SLR 232SingaporeCited for the principle that once illegitimate pressure is established, the burden lies on the defendant to prove that the pressure had not contributed to the plaintiff’s decision to execute the agreement. The current judgement disagrees with the burden of proof.
Alexander Barton v Alexander Ewan Armstrong and othersPrivy CouncilYes[1976] AC 104AustraliaCited for the principle that once illegitimate pressure is established, the burden lies on the defendant to prove that the pressure had not contributed to the plaintiff’s decision to execute the agreement.
DSND Subsea Ltd v Petroleum Geo-Services ASAUnknownYes[2000] BLR 530EnglandCited for the principle that the question of whether the pressure had contributed to the plaintiff’s decision to execute the agreement is a question of fact that is determined with reference to the circumstances of the case.
BOM v BOK and another appealCourt of AppealYes[2019] 1 SLR 349SingaporeCited for the principle that duress requires a transaction to have been procured by the illegitimate pressure that is exerted by one party over the other.
Kroll, Daniel v Cyberdyne Tech Exchange Pte Ltd and othersCourt of AppealYes[2023] 4 SLR 484SingaporeCited for the two-stage framework on the issue of abuse of process.
Leong Quee Ching Karen v Lim Soon Huat and othersCourt of AppealYes[2023] 4 SLR 1133SingaporeCited for the modified Kroll Framework on the issue of abuse of process.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
Companies Act 1967Singapore
Companies Act 1967 s 216Singapore
Insolvency, Restructuring and Dissolution Act 2018Singapore
Insolvency, Restructuring and Dissolution Act 2018 s 125Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Shareholders' Agreement
  • Economic Duress
  • Undue Influence
  • Commercial Unfairness
  • Legitimate Expectations
  • Personal Guarantees
  • Salary Increments
  • Winding Up
  • Abuse of Process

15.2 Keywords

  • shareholder agreement
  • economic duress
  • undue influence
  • oppression
  • winding up
  • abuse of process
  • Violet Oon

17. Areas of Law

Area NameRelevance Score
Winding Up95
Company Law90
Contract Law85
Minority Oppression80
Undue Influence75
Duress75
Bankruptcy70
Abuse of Process60
Civil Procedure50
Remedies40
Lifting corporate veil40
Estoppel30

16. Subjects

  • Company Law
  • Contract Law
  • Insolvency Law
  • Shareholder Disputes