AI MTBL SPV v MTBL Global Fund: Breach of Contract & Frustration in Investment Redemption
In AI MTBL SPV, LLC v MTBL Global Fund and China Capital Impetus Asset Management, the General Division of the High Court of Singapore heard a case regarding the redemption of Arena's investment in the Fund. Arena claimed against the Fund under the Subscription Agreement, and against both the Fund and the Fund Manager under the Second Side Letter. The court discharged the Framework Agreement due to non-fulfilment of an implied condition and, alternatively, by reason of frustration. The court ordered the Fund to pay Arena US$16,633,540.66 and awarded interest on that sum against both the Fund and the Fund Manager.
1. Case Overview
1.1 Court
General Division of the High Court1.2 Outcome
Judgment for Claimant
1.3 Case Type
Civil
1.4 Judgment Type
Judgment
1.5 Jurisdiction
Singapore
1.6 Description
Singapore court case regarding breach of contract and frustration in an investment redemption agreement. Judgment for claimant, discharging Framework Agreement.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| AI MTBL SPV, LLC | Claimant | Corporation | Judgment for Claimant | Won | Jimmy Yim Wing Kuen, Chloe Sobhana Ajit, Joel Leow Wei Xiang, Samuel Wittberger |
| MTBL Global Fund | Defendant | Corporation | Damages Awarded | Lost | |
| China Capital Impetus Asset Management | Defendant | Corporation | Damages Awarded | Lost | Daniel Chia Hsiung Wen, Charlene Wee Swee Ting |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Andre Maniam | Judge | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Jimmy Yim Wing Kuen | Drew & Napier LLC |
| Chloe Sobhana Ajit | Drew & Napier LLC |
| Joel Leow Wei Xiang | Drew & Napier LLC |
| Samuel Wittberger | Drew & Napier LLC |
| Daniel Chia Hsiung Wen | Prolegis LLC |
| Charlene Wee Swee Ting | Prolegis LLC |
4. Facts
- Arena invested US$20m in the Fund in May 2021.
- A Framework Agreement was entered into on 23 December 2021 to settle claims related to the investment.
- The Framework Agreement involved the Fund selling shares to Lecca for S$5m, with ZICO acting as escrow agent.
- OCBC and DBS refused to transfer the Fund's shares to ZICO.
- Arena submitted a Redemption Request on 20 May 2022 to redeem outstanding units for US$16,633,540.66.
- The Fund paid Arena S$10m pursuant to cl 1.3(c) of the Framework Agreement.
- Arena purported to terminate the Framework Agreement on 2 June 2022.
5. Formal Citations
- AI MTBL SPV, LLC v MTBL Global Fund and another, Originating Claim No 140 of 2022, [2024] SGHC 255
6. Timeline
| Date | Event |
|---|---|
| Arena invested US$20m in the Fund. | |
| Subscription Agreement signed. | |
| First Side Letter signed. | |
| Second Side Letter signed. | |
| Fund paid Arena US$1 million. | |
| Disputed settlement agreement allegedly entered into. | |
| Framework Agreement entered into. | |
| Escrow agreement entered into between Fund, Arena, and ZICO. | |
| Second escrow agreement entered into with Lecca as a party. | |
| Arena requested to exercise the Call Option. | |
| Fund made payment of S$10m to Arena. | |
| Arena reiterated request to exercise the Call Option. | |
| Arena submitted a Redemption Request. | |
| Arena's lawyers complained about breaches of the Framework Agreement. | |
| Deadline for Fund to pay US$16,633,540.66 to Arena. | |
| Arena purported to terminate the Framework Agreement. | |
| Arena commenced legal proceedings. | |
| Call Option became null and void. | |
| Memo from Cayman Islands lawyers tendered. | |
| Trial began. | |
| Fund Manager made a submission of “no case to answer”. | |
| Liquidators wrote to court. | |
| Judgment reserved. | |
| Judgment issued. |
7. Legal Issues
- Breach of Contract
- Outcome: The court found that the Fund did not commit a repudiatory breach of the Framework Agreement.
- Category: Substantive
- Sub-Issues:
- Repudiatory breach
- Failure to enter into definitive documentation
- Failure to transfer shares
- Failure to comply with call option terms
- Related Cases:
- [2007] 4 SLR(R) 413
- Implied Condition
- Outcome: The court found that the Framework Agreement was discharged due to non-fulfilment of the implied condition that the Fund would be able to transfer its shares to ZICO.
- Category: Substantive
- Related Cases:
- [2013] 4 SLR 193
- [2021] 1 SLR 631
- Frustration
- Outcome: The court found that the Framework Agreement would have been discharged by frustration if it had not been discharged by the non-fulfilment of the implied condition.
- Category: Substantive
- Related Cases:
- [2014] 3 SLR 857
- [2017] 1 All ER (Comm) 483
- Affirmation
- Outcome: The court found that Arena's conduct affirming the Framework Agreement did not keep the Framework Agreement in force because the parties' contractual obligations had already become radically or fundamentally different from what had been agreed.
- Category: Substantive
- Related Cases:
- [2017] 1 All ER (Comm) 483
8. Remedies Sought
- Monetary Damages
- Declaratory Relief
9. Cause of Actions
- Breach of Contract
10. Practice Areas
- Commercial Litigation
- Investment Disputes
11. Industries
- Finance
- Investment Management
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| RDC Concrete Pte Ltd v Sato Kogyo (S) Pte Ltd and another appeal | Court of Appeal | Yes | [2007] 4 SLR(R) 413 | Singapore | Cited for the principles on termination for repudiatory breach. |
| Max Media FZ LLC v Nimbus Media Pte Ltd | High Court | Yes | [2010] 2 SLR 677 | Singapore | Cited for the interpretation of 'time is of the essence' stipulations. |
| National Skin Centre (Singapore) Pte Ltd v Eutech Cybernetics Pte Ltd | High Court | Yes | [2001] 3 SLR(R) 801 | Singapore | Cited for the principle that time is set at large when the stipulated time for performance has passed. |
| Sembcorp Marine Ltd v PPL Holdings Pte Ltd and another and another appeal | Court of Appeal | Yes | [2013] 4 SLR 193 | Singapore | Cited for the three-step process in determining if a term should be implied into a contract. |
| Denka Advantech Pte Ltd and another v Seraya Energy Pte Ltd and another and other appeals | Court of Appeal | Yes | [2021] 1 SLR 631 | Singapore | Cited for the three-step process in determining if a term should be implied into a contract. |
| Alliance Concrete Singapore Pte Ltd v Sato Kogyo (S) Pte Ltd | Court of Appeal | Yes | [2014] 3 SLR 857 | Singapore | Cited for the definition of frustration. |
| MSC Mediterranean Shipping Co SA v Cottonex Anstalt | English Court of Appeal | Yes | [2017] 1 All ER (Comm) 483 | England and Wales | Cited for the principle that a contract cannot be affirmed when the remaining commercial purpose of the adventure has been frustrated. |
| Diab v Regent Insurance Co Ltd | Privy Council | Yes | [2007] 1 WLR 797 | United Kingdom | Cited for the principle that a defendant can rely on multiple grounds to resist a claim, even if they initially only relied on some grounds. |
| Comfort Management Pte Ltd v OGSP Engineering Pte Ltd | Court of Appeal | Yes | [2018] 1 SLR 979 | Singapore | Cited for the observation that under English law, a term of a contract which states that the contract can only be varied in writing will not prevent there being an oral variation. |
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
- Framework Agreement
- Subscription Agreement
- Side Letter
- Redemption
- Call Option
- Escrow Agent
- Implied Condition
- Frustration
- Repudiatory Breach
- Designated Mechanism
15.2 Keywords
- breach of contract
- frustration
- investment
- redemption
- framework agreement
- implied condition
16. Subjects
- Contract Dispute
- Investment Dispute
- Financial Law
17. Areas of Law
- Contract Law
- Investment Law
- Civil Procedure