Singapore Asia Trust Company Pte Ltd v Avium Origins Pte Ltd & Anor

Facts

Avium Origins Pte Ltd (AOPL) and Avant Talents Sdn Bhd (ATSB), an e-sports talent agency, agreed in October 2022 to set up a decentralised e-sports organisation. AOPL was to keep money in escrow until the organisation's first NFT launch, with drawdown rights depending on the launch revenue. Under an escrow agreement of December 2022, Singapore Asia Trust Company Pte Ltd (SATC) held US$200,000. It was to pay out only on a written release instruction "substantially in the form" of the template in Appendix 2 (for ATSB) or Appendix 3 (for AOPL), or under a court order, judgment or arbitral award. Each template required the issuer to state which clause of the services agreement it relied on.

The NFT launch never happened. ATSB issued a release instruction on 6 April 2023 that omitted, and later struck through, the paragraph naming the clause. AOPL objected and on 7 April 2023 issued its own instruction citing an alleged breach rather than a specified clause. Each side then claimed the other had repudiated the services agreement, and ATSB began an SIAC arbitration. SATC applied in HC/OA 643/2023 for interpleader relief without taking a position on validity. In HC/SUM 2720/2023, AOPL applied to expunge extracts of its director's emails, exhibited by ATSB, as privileged. Assistant Registrar Perry Peh heard both.

Issues

1. Whether the validity of the release instructions had to be decided at the first stage of the interpleader inquiry, when the court asks whether the applicant is under a liability
2. Whether either release instruction was substantially in the form required by the escrow agreement
3. Whether the court could order payment of the escrow monies to AOPL even if interpleader relief was refused
4. Whether the email extracts were protected by without prejudice privilege despite concerning the services agreement and being copied to SATC

Holding

The Assistant Registrar dismissed OA 643, holding that SATC was under no liability for the escrow monies because neither release instruction was valid, so no consequential orders could be made and the money stays in escrow under the subsisting escrow agreement. SUM 2720 was allowed and the email extracts were ordered to be expunged. Costs and consequential directions were reserved.

Reasoning

Applying the two-stage approach in Precious Shipping Public Co Ltd and others v OW Bunker Far East (Singapore) Pte Ltd and others and other matters [2015] 4 SLR 1229 to O 13 r 10 of the Rules of Court 2021, the court held that an applicant must show an actual liability for the subject matter, not merely an arguable one; the lower prima facie test applies only to whether competing claims exist. As SATC's duty to pay could only be triggered by a valid release instruction, validity had to be decided at stage 1. An escrow agent cannot use interpleader to avoid deciding whether its obligation has arisen.

On validity, the two agreements were separate and SATC need not check whether the underlying conditions were met. But a valid instruction must show that the drawdown is made under one of the designated clauses, so the paragraph naming the clause had to be included and completed. Otherwise every drawdown would provoke a dispute and stall the arrangement. SATC's acknowledgment of ATSB's instruction did not decide the point. Both instructions were invalid. Had both been valid, the claims would have been competing and adverse, and the court would have stayed the application in favour of the arbitration.

AOPL's request for payment failed because once stage 1 fails the court has no power to determine entitlement. In any event, whether the services agreement had ended was for the arbitration, and SATC held the money under the escrow agreement, which was still in force.

On privilege, the extracts were admissions against AOPL's interest, offering to let ATSB draw down in full and final settlement, made while the drawdown was disputed. That they concerned the services agreement did not matter, as the policy of encouraging settlement favoured protection. Copying SATC, which had a direct interest, did not make the negotiations open.

From the judgment