Case Details
- Citation: [2020] SGCA 112
- Court: Court of Appeal of the Republic of Singapore
- Date of decision: 17 November 2020
- Dates mentioned in the judgment: 19 October 2020 (hearing); 17 November 2020 (grounds of decision)
- Judges: Andrew Phang Boon Leong JA, Tay Yong Kwang JA and Belinda Ang Saw Ean J
- Case title: Bjornar Feen also known as Bjoernar Feen & 4 Ors v Viking Engineering Pte Ltd
- Procedural history: Appeals against the High Court decision in Viking Engineering Pte Ltd v Feen, Bjornar and others and another matter [2020] SGHC 78
- Appeals: Civil Appeals Nos 45 and 46 of 2020
- Summons: Summons No 81 of 2020 (CA 45)
- Originating summons / suit references: Originating Summons No 1324 of 2019; High Court/Suit No 294 of 2017
- Parties (applicants/appellants): Bjornar Feen (also known as Bjoernar Feen); Feen Marine Pte Ltd; Viking Inert Gas Pte Ltd; Scanjet Feen IGS Pte Ltd; Feen Marine Scrubbers Pte Ltd
- Parties (respondent): Viking Engineering Pte Ltd
- Legal area(s): Companies; minority oppression; judicial review of valuation / expert determination
- Statutes referenced: Companies Act (Cap 50, 2006 Rev Ed)
- Rules of Court referenced: O 45 r 6(2) of the Rules of Court (Cap 322, R 5, 2014 Rev Ed); O 57 rr 13(3) and 13(4); O 14 r 1
- Key statutory provision: s 216 of the Companies Act (minority oppression relief, including buyout orders)
- Key cited cases: [2020] SGCA 112; [2020] SGHC 78; The Oriental Insurance Co Ltd v Reliance National Asia Re Pte Ltd [2009] 2 SLR(R) 385; The Royal Bank of Scotland NV v TT International Ltd [2015] 5 SLR 1104; Goh Nellie v Goh Lian Teck [2007] 1 SLR(R) 453
- Judgment length: 23 pages; 6,444 words
Summary
In Bjornar Feen also known as Bjoernar Feen & 4 Ors v Viking Engineering Pte Ltd ([2020] SGCA 112), the Court of Appeal dismissed two appeals arising from minority oppression proceedings under s 216 of the Companies Act. The central dispute concerned a court-ordered buyout of a minority shareholder’s stake in a joint venture company, with the purchase price to be determined by an independent valuer. The appellants sought to set aside the valuation and, separately, to resist enforcement of the buyout order.
The Court of Appeal held that the High Court judge did not err in refusing to set aside the valuation. Applying the narrow grounds for judicial intervention in an expert determination, the court found that the independent valuer had acted within the scope of his instructions and that the alleged “manifest error” amounted, at most, to differences in expert opinion rather than a justifying error. The Court of Appeal also refused to allow a new argument challenging the validity of the buyout order, finding it barred by the extended doctrine of res judicata and, in any event, unpersuasive on the merits.
What Were the Facts of This Case?
The dispute began between joint venture partners in Viking Inert Gas Pte Ltd (“VIG”). The first appellant, Mr Bjornar Feen (“Mr Feen”), and the respondent, Viking Engineering Pte Ltd (“Viking Engineering”), were joint venture partners in VIG. Mr Feen also controlled several companies that were relevant to the alleged diversion of business opportunities: Feen Marine Pte Ltd, Scanjet Feen IGS Pte Ltd, and Feen Marine Scrubbers Pte Ltd. For convenience, the Court of Appeal referred to the defendants in the oppression suit collectively as “the Defendants”.
Viking Engineering commenced proceedings in the High Court under s 216 of the Companies Act, alleging minority oppression. In High Court/Suit No 294 of 2017 (“S 294”), Viking Engineering alleged, among other things, that Mr Feen had diverted VIG’s business opportunities to companies he controlled. The oppression claim sought relief in the form of a buyout order (or, alternatively, a winding-up order). The buyout mechanism became the focus of subsequent applications.
After Viking Engineering applied for summary judgment in S 294 (via HC/SUM 4101/2017 (“SUM 4101”)), the High Court found that oppression had been made out. On 9 April 2018, the judge ordered Mr Feen to purchase Viking Engineering’s 30% shareholding in VIG. Crucially, the purchase price was to be determined by an independent valuer under a “Buyout Order” with detailed valuation instructions. These instructions required the valuer to ascertain fair value as at 9 April 2018 on a going concern basis, without applying a minority discount, and to make specific adjustments reflecting the assumption that VIG had undertaken the business diverted away to the Defendants.
Following the Buyout Order, the parties agreed on an independent valuer, Mr Richard Hayler of FTI Consulting (Singapore) Pte Ltd (“FTI”). The parties signed a letter of engagement dated 13 June 2018. The valuer produced a valuation report (the “FTI Report”) around 2 November 2018, after delays by the Defendants in providing documents. The FTI Report valued VIG at approximately $44m as at 9 April 2018 and valued the shares to be bought out at $13.2m. Viking Engineering then applied for an order that Mr Feen pay $13.2m within seven days, while the Defendants sought to challenge the valuation’s finality and/or to set it aside.
What Were the Key Legal Issues?
The Court of Appeal identified three issues. First, it had to determine whether the Defendants should be granted leave to raise a new argument in CA 45 challenging the validity of the Buyout Order. The new argument was that Viking Engineering should have availed itself of buyout provisions in VIG’s articles of association before commencing the oppression proceedings, and that failure to do so amounted to an abuse of process.
Second, assuming the Buyout Order was valid, the Court had to consider the grounds on which a valuation made pursuant to such an order could be challenged. This required the court to examine the legal framework for setting aside an expert determination—particularly the threshold for “material departure from instructions” and “manifest error” that would justify judicial intervention.
Third, the Court of Appeal had to decide whether the FTI Report should be set aside. The Defendants relied on the argument that the valuer materially departed from his instructions and that the valuation contained manifest errors. They also sought to adduce a competing valuation report in CA 45 (via CA/SUM 81/2020), which the Court of Appeal ultimately refused.
How Did the Court Analyse the Issues?
Issue 1: Leave to raise a new argument and res judicata. The Court of Appeal rejected the Defendants’ attempt to raise a new legal argument in CA 45. The court emphasised the extended doctrine of res judicata, which can bar issues that were not previously decided because they were not raised earlier, even if they could and should have been raised. The inquiry is whether, considering the substance and reality of the earlier action, the issue reasonably ought to have been raised.
Applying that approach, the Court of Appeal found that the abuse-of-process argument should have been ventilated during SUM 4101, when Viking Engineering sought summary judgment in S 294. The Defendants’ failure to raise the point at that stage meant it was barred. The court also indicated that, even if the procedural bar were overcome, it was not persuaded by the merits of the new argument. In short, the Court of Appeal treated the attempt to reframe the case at the appellate stage as impermissible.
Issue 2: Grounds for challenging a court-ordered valuation. The parties agreed below that the FTI Report was an expert determination. The Court of Appeal therefore applied the principles in The Oriental Insurance Co Ltd v Reliance National Asia Re Pte Ltd [2009] 2 SLR(R) 385. Under those principles, an expert determination could only be set aside on limited grounds: (a) where the expert materially departed from instructions; (b) where there is a manifest error that justly requires judicial intervention; or (c) where there is fraud, corruption, collusion, dishonesty, bad faith, bias, or similar misconduct.
The Court of Appeal’s analysis focused on the first two grounds. It underscored that the court is not to conduct a merits review of the valuation as if it were an appeal on the correctness of the expert’s methodology or conclusions. Instead, the court asks whether the expert stayed within the scope of the instructions and whether any error is of such a character that it is “manifest” and justifies intervention.
Issue 3: Whether the FTI Report should be set aside. The High Court had found that the valuer acted within the scope of the Buyout Order and the letter of engagement. The Court of Appeal agreed. The Buyout Order gave the valuer wide discretion in how to use financial information and records “as the valuer may deem necessary, relevant or desirable” for ascertaining the purchase price. It also required specific adjustments based on the assumption that VIG had undertaken diverted business, but it did not prescribe a single rigid method for implementing those assumptions.
The Defendants argued that the valuer materially departed from instructions and that the valuation was in manifest error. Their manifest error case relied on an expert report by KPMG Services Pte Ltd (“KPMG”). However, the Court of Appeal accepted the High Court’s view that the KPMG submissions largely reflected differences in expert opinion rather than a manifest error. In valuation disputes, courts are cautious: where the criticism is essentially that another expert would have valued differently, that does not necessarily establish a manifest error. The Court of Appeal therefore treated the Defendants’ challenge as an attempt to re-litigate valuation methodology rather than to demonstrate a qualifying error.
Additionally, the Court of Appeal noted that the valuer’s approach—using a discounted cash flow analysis and a comparative analysis based on listed companies—was consistent with the task of determining fair value on a going concern basis. The Court did not accept that the valuer had ignored or contradicted the Buyout Order’s core instructions, including the direction not to apply a minority discount and the requirement to attribute goodwill and revenue earned by the other Defendants to VIG (subject to the specified exception). The Court’s reasoning reflects a practical judicial stance: where the expert has been given a structured mandate with discretion, the court will not readily interfere unless the mandate is clearly exceeded or a glaring error is shown.
SUM 81/2020: Competing valuation report. In CA 45, the Defendants sought leave to adduce a competing valuation report. The Court of Appeal dismissed that application. This outcome is consistent with the overall approach to expert determinations: the court will not allow a party to introduce a new valuation simply to create a contest of experts, absent the narrow grounds for setting aside the expert determination. The Court of Appeal’s refusal to admit the competing report reinforces that the expert determination mechanism is intended to provide finality and reduce protracted valuation litigation.
What Was the Outcome?
The Court of Appeal dismissed both appeals (CA 45 and CA 46). It upheld the High Court’s decision refusing to set aside the FTI Report and confirmed that the valuation should stand as the basis for the buyout price.
In addition, the Court of Appeal dismissed CA/SUM 81/2020, the Defendants’ application to adduce a competing valuation report. Practically, this meant that Mr Feen remained obliged to purchase Viking Engineering’s shares at the court-ordered price of $13.2m, determined by the independent valuer’s report.
Why Does This Case Matter?
This decision is significant for practitioners dealing with minority oppression remedies under s 216 of the Companies Act, particularly where the court orders a buyout with valuation to be determined by an independent expert. The Court of Appeal’s reasoning underscores that such valuations are treated as expert determinations subject to limited judicial review. Lawyers should therefore frame challenges carefully within the recognised grounds—material departure from instructions, manifest error, or misconduct—rather than relying on general disagreements about valuation methodology.
From a procedural standpoint, the case also illustrates the strength of the extended doctrine of res judicata in Singapore. Parties cannot hold back arguments that they reasonably ought to have raised earlier, especially in the context of interlocutory applications such as summary judgment. The Court of Appeal’s approach promotes litigation finality and discourages tactical re-labelling of issues at the appellate stage.
For valuation disputes, the decision provides practical guidance on evidential strategy. Criticisms supported by a competing expert report may be insufficient if they do not demonstrate a manifest error of the kind that justifies intervention. The case therefore encourages parties to focus on whether the expert actually exceeded the scope of the court’s instructions or made a glaring, objectively identifiable error, rather than attempting to reopen the valuation through a second expert.
Legislation Referenced
- Companies Act (Cap 50, 2006 Rev Ed), s 216 [CDN] [SSO]
- Rules of Court (Cap 322, R 5, 2014 Rev Ed): O 14 r 1; O 45 r 6(2); O 57 rr 13(3) and 13(4)
Cases Cited
- [2020] SGCA 112 (the present case)
- [2020] SGHC 78 (High Court decision in Viking Engineering Pte Ltd v Feen, Bjornar and others and another matter)
- The Oriental Insurance Co Ltd v Reliance National Asia Re Pte Ltd [2009] 2 SLR(R) 385
- The Royal Bank of Scotland NV (formerly known as ABN Amro Bank NV) and others v TT International Ltd (nTan Corporate Advisory Pte Ltd and others, other parties) and another appeal [2015] 5 SLR 1104
- Goh Nellie v Goh Lian Teck and others [2007] 1 SLR(R) 453
Source Documents
This article analyses [2020] SGCA 112 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the full judgment for the Court's complete reasoning.