Linkchina Capital Pte. Ltd. v Sparrow Tech Private Limited

LinkChina Capital Pte Ltd, a business advisory firm, was appointed by Sparrow Tech Pte Ltd, which ran a digital-asset options trading platform, as its exclusive consultant for a divestment under a letter of engagement dated 20 August 2021. Clause 3 provided for a success fee of 3% of the "enterprise value of the Company as agreed between the Company and the Buyer", payable even after termination if the divestment was completed within two years.

LinkChina introduced Amber Global Ltd. A term sheet signed on 18 November 2021 stated Amber's belief that the target shares were worth USD50 million, on the assumption that a payment licence would be obtained from MAS by the long stop date. The licence was not obtained in time and, according to Sparrow Tech, that deal fell through. Sparrow Tech terminated the engagement on 12 May 2022. On 28 July 2022 the shareholders of the restructured holding company signed a share purchase agreement with Amber, and the transaction was completed on 29 November 2022. LinkChina invoiced a success fee, later revised to US$1,644,417.93, which was not paid, and sued in Originating Claim No 777 of 2023.

1. Whether the success fee clause was engaged by the share purchase agreement despite the earlier termination.
2. Whether LinkChina's allegations that Sparrow Tech's evidence was unreliable should be accepted.
3. What enterprise value meant in the engagement agreement and whether it required an express agreement between seller and buyer.
4. How much the enterprise value was on the evidence.

There was no credible challenge to liability, so the court held that clause 3 was engaged because the share purchase agreement was signed within the two-year window.

The court did not accept LinkChina's attacks on Sparrow Tech's credibility. The low sale price was explained by the 2022 crypto crash and by a liquidity crunch after Vauld suspended withdrawals, evidence corroborated by Amber's Chief Legal Officer. The USD50 million figure in the term sheet was only a belief resting on assumptions that no longer held. Some of LinkChina's discovery applications had been dismissed without appeal, so it could not describe this as a persistent refusal to produce documents. A document wrongly described as a completion statement was a red herring.

Both experts agreed that enterprise value means equity value plus total debt minus cash, and the court adopted that meaning. It rejected the argument that no fee was due because buyer and seller never expressly agreed an enterprise value, holding that this must be determined objectively from the deal terms and the target's accounts.

The arm's length purchase consideration was taken as the best evidence of equity value. Applying the share purchase agreement formula, the court took the recovered Vauld receivables at US$6,067,046.29 on the best evidence. Since Sparrow Tech gave no evidence on whether the conditions for the further contingent payment had been met, the court presumed they had been and took the maximum of US$4 million. Adding the agreed debt of US$21,595,136.30 and deducting cash of US$178,252 produced the enterprise value.

Lee Seiu Kin SJ entered judgment for the claimant for US$803,663.83, being 3% of an enterprise value found to be US$26,788,794.29, well below the sum invoiced, so the claim was allowed in part. The defendant was ordered to pay interest at 5.33% per annum from the date of the writ until payment, and costs to be taxed unless agreed.