DPT & Anor v DPV & Ors

Facts

DPX is a fintech joint venture whose main product is an e-wallet payment method. The applicants, DPT and DPU, are sister companies that held the majority of its shares; the first and second respondents, DPV and DPW, were its founders and minority shareholders. The relationship broke down from early 2020. The founders were dismissed and removed as directors, and on 21 May 2021 twelve convertible loan notes held by DPT were converted into 197,309,509 shares, cutting the founders' stake from 10.71% to 0.4%.

In an SIAC arbitration, the founders claimed breaches of the shareholders' and investment agreements and minority oppression under s 216 of the Companies Act 1967. The tribunal unanimously found several breaches and acts of oppression. A majority declared the share issuance null and void as regards the founders, valued DPX at US$120m as at 31 December 2021 by reference to an arm's length investment, held that the founders need not make a notional top-up to keep their 12.28% share because the loan notes were worthless as debt, and ordered DPT to buy out the founders for US$14,736,000. A dissenting arbitrator would have accounted for the loan debt.

In Originating Application No 10 of 2025 in the Singapore International Commercial Court, the applicants sought to set aside the partial award for breach of natural justice under s 24(b) of the International Arbitration Act 1994 and Article 34(2)(a)(ii) of the Model Law.

Issues

1. Whether the tribunal breached the fair hearing rule by valuing the buyout on a no top-up basis that the founders had allegedly agreed not to run
2. Whether the majority's findings that the loan notes were worthless as debt and that the conversion did not change DPX's value lacked any reasonable nexus to the parties' cases
3. Whether the tribunal failed to consider the applicants' responsive witness evidence answering DPX's former chief executive

Holding

The Singapore International Commercial Court dismissed the application to set aside the partial award in its entirety, finding no breach of natural justice on either ground. Costs were to be heard separately.

Reasoning

The court first held that the complaint about the top-up was a new ground not raised in the supporting affidavit and was out of time, but it considered the merits anyway. The founders' pleading that the price should be based on a 16.67% shareholding excluding illegitimate dilution was broad enough to cover a no top-up valuation; a claimant need not plead which deductions do not apply. Counsel's answers to impromptu questions about assumed top-up scenarios were not clear and unequivocal concessions abandoning that case, especially given the tribunal's broad discretion in valuation. The applicants had also engaged with the point on the merits in reply submissions, supplied a model that allowed a zero top-up, and agreed that the tribunal should decide on the existing evidence, so under China Machine they could not now complain.

On the impugned findings, the majority cited evidence for its view of the loan debt, and an unsupported inference would at most be an error of fact or law, not a breach of natural justice; the no evidence rule was rejected in CEF v CEH. The majority valued DPX on a post-conversion basis and referred to pre-conversion value only in deciding whether a deduction was due. If the applicants lacked evidence on pre-conversion value, that was the result of their own litigation strategy.

On the responsive evidence, silence in an award is ambiguous, and the inference that the tribunal completely failed to consider the evidence must be clear and virtually inescapable. The tribunal had referred to the evidence, cited one statement in ruling recordings inadmissible, and could only have directed the parties away from credibility matters after reading it. Its case management directions were accepted without objection at the time.

The court added that no prejudice was shown: the responsive evidence was largely repetitive or bare denials, the findings rested on contemporaneous documents, the other acts of oppression were unchallenged, and the applicants could not identify coherent partial relief short of a variation the court has no power to make.

From the judgment