Axis Megalink v Far East Mining: Unilateral Mistake, Misrepresentation & Reverse Takeover

Axis Megalink Sdn Bhd and Lee Kien Han appealed against the decision in favor of Far East Mining Pte Ltd. The Appellate Division of the High Court heard the appeal concerning a contract for a reverse takeover of China Bearing (Singapore) Ltd. The court addressed issues of unilateral mistake, fraudulent misrepresentation, and the possibility of rescission. The appeal was allowed in part, setting aside the findings of unilateral mistake and dismissal of Axis's claim, and awarding damages to Axis while upholding the damages awarded to Far East Mining for fraudulent misrepresentation.

1. Case Overview

1.1 Court

Appellate Division of the High Court

1.2 Outcome

Appeal Allowed in Part

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Appeal regarding a contract for a reverse takeover. The court addressed unilateral mistake, misrepresentation, and rescission, allowing the appeal in part.

1.7 Decision Date

9 May 2024

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
Lee Kien Han	Appellant, Defendant in counterclaim	Individual	Appeal Allowed in Part	Partial	Koong Len Sheng of Hong Zhaoneng Joshua Ang Zhao Neng of David Lim & Partners LLP Koh Choon Guan Daniel of Eldan Law LLP
Axis Megalink Sdn Bhd	Appellant, Plaintiff in counterclaim	Corporation	Appeal Allowed in Part	Partial	Koong Len Sheng of Hong Zhaoneng Joshua Ang Zhao Neng of David Lim & Partners LLP Koh Choon Guan Daniel of Eldan Law LLP
Far East Mining Pte Ltd	Respondent, Defendant	Corporation	Damages Awarded	Lost	Koh Swee Yen of WongPartnership LLP Felicia Soong Wanyi of WongPartnership LLP G Kiran of WongPartnership LLP Chng Zi Zhao Joel of WongPartnership LLP Toh Yong Xiang of WongPartnership LLP

3. Judges

Judge Name	Title	Delivered Judgment
Belinda Ang Saw Ean	Justice of the Court of Appeal	No
Kannan Ramesh	Judge of the Appellate Division	No
Philip Jeyaretnam	Judge of the High Court	Yes

4. Counsels

Counsel Name	Organization
Koong Len Sheng	Hong Zhaoneng
Joshua Ang Zhao Neng	David Lim & Partners LLP
Koh Choon Guan Daniel	Eldan Law LLP
Koh Swee Yen	WongPartnership LLP
Felicia Soong Wanyi	WongPartnership LLP
G Kiran	WongPartnership LLP
Chng Zi Zhao Joel	WongPartnership LLP
Toh Yong Xiang	WongPartnership LLP

4. Facts

Axis Megalink was engaged by Far East Mining to arrange a reverse takeover of China Bearing (Singapore) Ltd.
Axis was to receive US$2 million in shares of China Bearing after Far East Mining injected its assets.
Far East Mining claimed the contract was void due to unilateral mistake of identity and fraudulent misrepresentation.
Far East Mining alleged that Axis was owned by a representative of China Bearing, creating a conflict of interest.
The High Court initially found in favor of Far East Mining, declaring the contract void and awarding damages.
Lee Kien Han has been the beneficial owner of Axis since 22 July 2016.
The RTO Transaction was completed on 5 July 2018, with the requisite shares in CBL being issued to FEM.

5. Formal Citations

Axis Megalink Sdn Bhd and another v Far East Mining Pte Ltd, Civil Appeal No 107 of 2023, [2024] SGHC(A) 15

6. Timeline

Date	Event
2016-06-28	FEM proposed CBL as a counterparty for the RTO Transaction.
2016-07-20	Introductory Dinner between FEM representatives and CBL representatives took place.
2016-08-08	Presentation of the proposed RTO Transaction to CBL’s board of directors.
2016-08-16	Engagement Letter between FEM and Axis was executed.
2016-08-24	CBL and FEM executed a term sheet for the RTO Transaction.
2016-10-27	FEM and CBL executed a share and purchase agreement for the RTO Transaction.
2017-10-07	Letter of Undertaking signed between Mr Aljunied, Mr Hong, FEM and Mr Lee’s law firm.
2018-07-05	The RTO Transaction was completed.
2022-11-10	CBL was de-listed from the Singapore Exchange.
2023-08-31	Judgment was given.
2024-04-02	Parties' submissions heard regarding restitutio in integrum.
2024-05-10	Judgment reserved.

7. Legal Issues

Unilateral Mistake
- Outcome: The court held that the mistake concerned only a quality or attribute of its contracting counterparty and did not amount to a mistake as to the identity of the counterparty or any other fundamental term of the contract itself.
- Category: Substantive
- Sub-Issues:
  - Mistake as to identity of contracting counterparty
  - Mistake as to attributes of contracting counterparty
- Related Cases:
  - [2020] 2 SLR 20
  - [1939] 3 All ER 566
  - [2005] 1 SLR(R) 502
  - [1874–80] All ER Rep 1149
  - [2000] 2 SLR(R) 407
  - [2003] UKHL 62
  - [2008] EWHC 2257 (Comm)
  - [1861–73] All ER Rep 632
Misrepresentation
- Outcome: The court upheld the award of damages in the amount of S$10,210 in respect of FEM’s investigation expenses.
- Category: Substantive
- Sub-Issues:
  - Fraudulent Misrepresentation
  - Inducement
  - Non-Disclosure
- Related Cases:
  - (1884) 29 Ch.D 459
  - [2001] 2 SLR(R) 435
  - [2013] 3 SLR 801
  - [2023] EWHC 2759 (Comm)
Rescission
- Outcome: The court found that the remedy of rescission of the Engagement Letter is not available to FEM, even if all the ingredients of fraudulent misrepresentation are made out in law.
- Category: Remedial
- Sub-Issues:
  - Restitutio in integrum
  - Impossibility of restoration
- Related Cases:
  - [2021] 5 SLR 405
  - [1998] 3 All ER 876
  - [2008] SGHC 31
  - [2015] EWCA Civ 745
  - [1874–80] All ER Rep 271
  - [2020] 1 SLR 606
  - [2021] SGHC 193
  - [1918] AC 626
  - 1915 SC (HL) 20
  - [1985] QB 428

8. Remedies Sought

Specific Performance
Monetary Damages
Rescission of Contract

9. Cause of Actions

Breach of Contract
Fraudulent Misrepresentation

10. Practice Areas

Commercial Litigation
Mergers and Acquisitions

11. Industries

Mining
Financial Services

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
Axis Megalink Sdn Bhd v Far East Mining Pte Ltd	High Court	No	[2023] SGHC 243	Singapore	The judgment being appealed from.
Quoine Pte Ltd v B2C2 Ltd	Singapore Court of Appeal	Yes	[2020] 2 SLR 20	Singapore	Cited for the principle of unilateral mistake and consensus ad idem.
Hartog v Colin & Shields	N/A	Yes	[1939] 3 All ER 566	England and Wales	Cited for the principle that there is no true consensus between the parties’ offer and acceptance where the non-mistaken party ‘snaps up’ a purported contractual offer, which he knows to be mistaken concerning the terms of that offer.
Chwee Kin Keong and others v Digilandmall.com Pte Ltd	Singapore High Court	Yes	[2005] 1 SLR(R) 502	Singapore	Cited for the principle that there is no true consensus between the parties’ offer and acceptance where the non-mistaken party ‘snaps up’ a purported contractual offer, which he knows to be mistaken concerning the terms of that offer.
Cundy v Lindsay	House of Lords	Yes	[1874–80] All ER Rep 1149	England and Wales	Cited as a leading case on unilateral mistake of identity.
Tribune Investment Trust Inc v Soosan Trading Co Ltd	Singapore Court of Appeal	Yes	[2000] 2 SLR(R) 407	Singapore	Cited for the principle that a unilateral mistake of identity arises from a confusion of one person with another.
Shogun Finance Limited v Hudson	House of Lords	Yes	[2003] UKHL 62	England and Wales	Cited for the principle that the identity of the parties to a contract in writing fall to be determined by a process of construction of the contract.
Hector v Lyons	England and Wales Court of Appeal	Yes	(1989) 58 P & CR 156	England and Wales	Cited for the principle that the identity of the parties to a contract in writing fall to be determined by a process of construction of the contract.
Statoil ASA v Louis Dreyfus Energy Services LP	English High Court	Yes	[2008] EWHC 2257 (Comm)	England and Wales	Cited for the principle that if one party has made a mistake about a fact on which he bases his decision to enter into the contract, but that fact does not form a term of the contract itself, then, even if the other party knows that the first is mistaken as to this fact, the contract will be binding.
Smith v Hughes	N/A	Yes	[1861–73] All ER Rep 632	England and Wales	Cited for the principle of distinguishing between a motive operating on the buyer to induce him to buy with one of the essential conditions of the contract.
Pao On and others v Lau Yiu Long and others	Privy Council	Yes	[1980] AC 614	Hong Kong	Cited for the principle that it is commonplace for services to be performed prior to signing of a contract in anticipation of that contract.
CDX and another v CDZ and another	Singapore High Court	Yes	[2021] 5 SLR 405	Singapore	Cited for the proposition that equitable rescission is a flexible remedy which is available if it is possible to effect substantial restitutio in integrum to achieve practical justice.
Dunbar Bank plc v Nadeem and another	England and Wales Court of Appeal	Yes	[1998] 3 All ER 876	England and Wales	Cited for the principle that it is a condition of relief that the party obtaining rescission should make restitutio in integrum or, in modern terminology, counter restitution to the other party. If counter restitution cannot be made the claim to rescission fails.
Loh Sze Ti Terence Peter v Gay Choon Ing	Singapore High Court	Yes	[2008] SGHC 31	Singapore	Cited for the principle that it is a condition of relief that the party obtaining rescission should make restitutio in integrum or, in modern terminology, counter restitution to the other party. If counter restitution cannot be made the claim to rescission fails.
Salt v Stratstone Specialist Ltd (t/a Stratstone Cadillac Newcastle)	England and Wales Court of Appeal	Yes	[2015] EWCA Civ 745	England and Wales	Cited for the principle that it is obviously unjust for a party seeking to rescind a contract to throw that back on the other party’s hands without accounting for any benefit he may have derived from that contract.
Erlanger and others v New Sombrero Phosphate Co	N/A	Yes	[1874–80] All ER Rep 271	England and Wales	Cited for the principle that it is obviously unjust for a party seeking to rescind a contract to throw that back on the other party’s hands without accounting for any benefit he may have derived from that contract.
Liberty Sky Investments Ltd v Aesthetic Medical Partners Pte Ltd and other appeals and another matter	Singapore High Court	Yes	[2020] 1 SLR 606	Singapore	Cited for the principle that if a representor desires to contend that the representee is not entitled to the remedy of rescission, the representor should plead the impossibility of rescission and provide full particulars of why this is so.
Fuji Xerox Singapore Pte Ltd v Mazzy Creations Pte Ltd and others	Singapore High Court	Yes	[2021] SGHC 193	Singapore	Cited for the principle that the court may permit the point to be made on appeal if it causes no prejudice, including where the relevant facts have already been addressed below.
Banbury v Bank of Montreal	House of Lords	Yes	[1918] AC 626	England and Wales	Cited for the principle that a Court of Appeal is not bound to adjudicate wrongly because it had not occurred to either judge or counsel to raise a point of law in the Court below.
Boyd & Forrest v Glasgow and South-Western Railway Co.	House of Lords	Yes	1915 SC (HL) 20	Scotland	Cited for the principle that a contract for the construction of a railway could not be undone and restitutio in integrum was not possible, because the pursuers cannot take back what they gave, their work.
O’Sullivan and another v Management Agency and Music Ltd and others	N/A	Yes	[1985] QB 428	England and Wales	Cited for the proposition that once a contract of services or for services has run its course it cannot be rescinded or set aside because it is impossible to undo the services which had been rendered.
Smith New Court Securities Ltd v Citibank NA	House of Lords	Yes	[1974] AC 254	England and Wales	Cited for the principle that the legal measure is to compare the position of the plaintiff as it was before the fraudulent statement was made to him with his position as it became as a result of his reliance on the fraudulent statement.
Wishing Star Ltd v Jurong Town Corp	Singapore High Court	Yes	[2008] 2 SLR(R) 909	Singapore	Cited for the principle that the plaintiff must prove its loss before it may be awarded damages for the same.
Edgington v Fitzmaurice	N/A	Yes	(1884) 29 Ch.D 459	England and Wales	Cited for the principle that for an actionable fraudulent misrepresentation to be made out, it is not enough to show that a false representation of fact was made by a representor who knew it to be false or was reckless as to whether it was true or false. It must be shown that the representee acted on the representation – in other words, that they were induced to act upon the representation, resulting in loss being sustained.
Panatron Pte Ltd and another v Lee Cheow Lee and another	Singapore Court of Appeal	Yes	[2001] 2 SLR(R) 435	Singapore	Cited for the principle that while the false representation need not be the sole reason for the representee’s decision to enter into the transaction, it had to have played a real and substantial part and operated in their minds.
Wee Chiaw Sek Anna v Ng Li-Ann Geneveive (sole executrix of the estate of Ng Hock Seng, deceased) and another	Singapore Court of Appeal	Yes	[2013] 3 SLR 801	Singapore	Cited for the principle that an inducement requires the representation to have acted upon the mind and will of the induced person.
Loreley Financing (Jersey) No 30 Ltd v Credit Suisse Securities (Europe) Ltd and other companies	English Commercial Court	Yes	[2023] EWHC 2759 (Comm)	England and Wales	Cited for the principle that the law does require that a representation (however made) is received by the representee and that to satisfy the requirements of reliance the representee must be aware of it/have it actively present to their mind when they act on it.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute Name	Jurisdiction
Civil Law Act 1909	Singapore

15. Key Terms and Keywords

15.1 Key Terms

Reverse Takeover
Engagement Letter
Consideration Shares
Unilateral Mistake
Fraudulent Misrepresentation
Restitutio in integrum
RTO Transaction
Arranger
Acquirer

15.2 Keywords

contract
mistake
misrepresentation
reverse takeover
rescission
singapore

17. Areas of Law

Area Name	Relevance Score
Misrepresentation	80
Breach of Contract	75
Fraud and Deceit	70
Rescission	65
Mistake	60
Judgments and Orders	40

16. Subjects

Contract Law
Corporate Law
Equity
Remedies