Case Details
- Citation: [2020] SGHC 78
- Title: Viking Engineering Pte Ltd v Feen, Bjornar and others and another matter
- Court: High Court of the Republic of Singapore
- Date of Decision: 27 April 2020
- Judge: Valerie Thean J
- Case Number: Suit No 294 of 2017 (Summonses Nos 4610 of 2019 and 793 of 2020) and Originating Summons No 1324 of 2019 and Summons No 751 of 2020
- Procedural Posture: Applications arising from a minority oppression buy-out order; challenge to an expert valuation report and enforcement of the valuation-based purchase price
- Plaintiff/Applicant: Viking Engineering Pte Ltd
- Defendant/Respondent: Feen, Bjornar and others and another matter
- Parties (as described): Viking Engineering Pte Ltd; Mr Bjornar Feen (also known as Bjoernar Feen); Feen Marine Pte Ltd; Viking Inert Gas Pte Ltd (VIG); Scanjet Feen IGS Pte Ltd; Feen Marine Scrubbers Pte Ltd
- Legal Areas: Companies — Oppression; Professions — Valuer
- Key Statute Referenced: Companies Act (minority oppression framework)
- Rules of Court Referenced: O 45 r 6 of the Rules of Court (Cap 322, R 5, 2014 Rev Ed) (as referenced in the extract)
- Key Procedural Instruments: Buyout Order (9 April 2018); Terms of Reference; Letter of Engagement dated 13 June 2018; valuation report by Mr Richard Hayler of FTI Consulting (Singapore) Pte Ltd
- Applications: SUM 4610/2019 (enforcement of valuation purchase price); OS 1324/2019 (challenge to report); SUM 751/2020 (admission of further affidavits); SUM 793/2020 (leave to file further affidavit, withdrawn)
- Judgment Length: 24 pages, 13,053 words
- Counsel: Mahesh Rai s/o Vedprakash Rai and Yong Wei Jun Jonathan (Drew & Napier LLC) for the plaintiff in SUM 4610/2019 and the defendant in OS 1324/2019; Wong Soon Peng Adrian, Ang Leong Hao and Sara Sim (Rajah & Tann Singapore LLP) for the defendants in SUM 4610/2019 and the plaintiffs in OS 1324/2019
Summary
Viking Engineering Pte Ltd v Feen, Bjornar and others and another matter [2020] SGHC 78 concerned the enforceability of an expert valuation report used to determine the buy-out price of shares in a minority oppression dispute. The High Court (Valerie Thean J) had previously ordered, in the context of minority oppression proceedings under s 216 of the Companies Act, that the majority shareholder purchase the minority shareholder’s shares in Viking Inert Gas Pte Ltd (“VIG”) at “fair value” as ascertained by an independent valuer. After the valuer produced a report, the minority shareholder sought immediate enforcement of the purchase price stated in the report, while the majority shareholder challenged the report on the basis that the valuer allegedly departed from instructions and committed manifest errors.
The court dismissed the challenge. Applying established principles governing judicial review of expert determinations, the court held that the valuer had not materially departed from his instructions and that there was no manifest error that justly required judicial intervention. As a result, the court fixed the purchase price at S$13.2 million, being the valuation figure in the report, and ordered the majority shareholder to pay accordingly.
What Were the Facts of This Case?
The dispute arose from a joint venture relationship between Viking Engineering Pte Ltd (“Viking Engineering”) and Mr Bjornar Feen. Viking Engineering and Mr Feen were shareholders in VIG, and their relationship deteriorated following alleged breaches of undertakings and diversion of corporate opportunities. On 4 April 2017, Viking Engineering commenced Suit No 294 of 2017 (“S 294/2017”) as minority shareholders of VIG, alleging minority oppression under s 216 of the Companies Act. The minority oppression claim was tied to a sale and purchase agreement dated 10 September 2013, under which Viking Engineering sold a 21% shareholding in VIG to Mr Feen, resulting in Mr Feen holding 70% and Viking Engineering holding 30%.
Under the 2013 sale and purchase agreement, Mr Feen undertook, among other things, to change the corporate name of VIG to “Feen Marine Pte Ltd” (the same name later used for a separate company, Feen Marine Pte Ltd). Viking Engineering’s case was that Mr Feen did not comply with the undertaking and instead incorporated a company using the same name, and then transferred his entire shareholding in VIG to Feen Marine. Viking Engineering further alleged that business and corporate opportunities of VIG were diverted to the “Feen Companies”, including contracts and supply arrangements relating to oil discharge monitors, inert gas systems (“IGS”), and exhaust gas cleaning services (“ECGS”).
During the minority oppression proceedings, Viking Engineering sought summary judgment and later obtained leave to amend its prayers to include a buy-out of Viking Engineering’s shares. On 14 February 2018, the court granted an injunction restraining Mr Feen and his agents from using the name “Viking” in ways that could compete with or be associated with Viking Engineering’s business. On 9 April 2018, the court ordered Mr Feen to purchase Viking Engineering’s entire shareholding in VIG, with the fair value of the shares to be ascertained by an independent valuer appointed by agreement of the parties. The court also addressed the question of whether a discount should apply to the minority holding, holding that no discount should be applied and that the valuer should make adjustments reflecting Mr Feen’s conduct and the diversion of opportunities to the Feen Companies. The costs of the valuation exercise were agreed to be borne by Mr Feen.
Following the Buyout Order, the parties agreed draft terms of reference and appointed Mr Richard Hayler of FTI Consulting (Singapore) Pte Ltd (“FTI”) to conduct the valuation. Mr Hayler issued a Letter of Engagement dated 13 June 2018 (“LOE”), which reflected that Mr Feen would bear the costs. Although the LOE and the Buyout Order contemplated Mr Feen paying for the valuation, he initially failed to do so. FTI withheld the report pursuant to its contractual rights under cl 33 of the LOE. After further court directions under O 45 r 6(2) of the Rules of Court, Mr Feen paid the requisite sums and the report was released around 28 July 2019. The report then became the subject of the subsequent applications.
What Were the Key Legal Issues?
The central issue was whether the expert valuation report was binding between the parties or whether it should be set aside or disregarded. The court treated the report as an expert determination. In Singapore law, such determinations are not lightly disturbed; the court’s role is limited to specific grounds that justify judicial intervention.
It was common ground that the report could only be set aside on three categories of grounds: (a) where the expert materially departed from instructions; (b) where there is a manifest error in the expert’s determination that justly requires judicial intervention; or (c) where there was fraud, corruption, collusion, dishonesty, bad faith, bias, or the like. In this case, only the first two grounds were in issue: material departure from instructions and manifest error.
Accordingly, the court had to decide (i) what the parties had agreed to remit to the valuer (the scope of the mandate), and (ii) whether the valuer’s approach and conclusions amounted to a material departure from that mandate or involved manifest errors warranting setting aside. A further practical issue was the enforcement application: if the report remained binding, the court would order payment of the purchase price stated in the report within a short timeframe.
How Did the Court Analyse the Issues?
The court began by restating the governing framework for reviewing expert determinations. It relied on prior authority, including The Oriental Insurance Co Ltd v Reliance National Asia Re Pte Ltd [2009] 2 SLR(R) 385 and Poh Cheng Chew v K P Koh & Partners Pte Ltd and another [2014] 2 SLR 573, which articulate the limited grounds for intervention. The court also drew on the two-step approach to “departure from instructions” described in Oriental Insurance, adopting the dictum from Jones v Sherwood Computer Services Plc [1992] 1 WLR 277. Under this approach, the court first determines what the parties had agreed to remit to the expert, and second asks whether the expert departed from his instructions in a material respect.
Applying the two-step approach, the court examined the Buyout Order and the LOE/terms of reference to identify the valuer’s mandate. The defendants argued that the valuer had departed from his instructions, contending that the mandate should be derived primarily from the Buyout Order. They also argued that their conduct in the valuation process should not be held against them. The court’s analysis therefore required careful attention to the relationship between the court’s earlier orders (including the “no discount” ruling and the instruction to adjust for the majority shareholder’s conduct and diversion of opportunities) and the valuer’s contractual terms of engagement.
On the first step—scope of the mandate—the court treated the Buyout Order as the starting point but also considered the agreed terms of reference and the LOE as clarifying how the valuation was to be carried out. The court’s reasoning reflected a practical view: where parties have agreed an expert’s appointment and terms, the mandate is not limited to the bare wording of the court order but includes the agreed framework for the valuation exercise. In other words, the court looked for the actual “instructions” that the valuer was to follow, as reflected in the documents governing the appointment.
On the second step—whether there was a material departure—the court assessed the defendants’ complaints against the identified mandate. The defendants’ challenge was not merely that the valuation was arguably wrong; it had to show a material departure from instructions. The court’s approach emphasised that “material” departure is a threshold concept: minor deviations or differences in methodology that remain within the mandate do not justify setting aside. The court also considered whether the valuer’s treatment of the relevant issues (including adjustments for the majority shareholder’s conduct and diversion of opportunities, and the valuation of the minority holding without a discount) remained faithful to the instructions given.
Turning to the second ground—manifest error—the court applied the concept that manifest error must be sufficiently clear and serious to justify judicial intervention. The court’s reasoning indicated that it would not re-run the valuation exercise as if it were an appeal on the merits. Instead, it would intervene only where the expert’s determination contained an error that was manifest and that “justly requires” the court’s correction. This reflects a broader principle in Singapore jurisprudence: expert determinations are meant to bring finality and technical expertise, and the court’s supervisory function is restrained.
In the course of analysis, the court also addressed the defendants’ attempt to rely on a competing valuation report (from Mr Mark Collard of KPMG). While such evidence can sometimes illuminate whether an expert’s approach is inconsistent with instructions or reveals manifest error, the court’s reasoning suggests that the existence of a different expert opinion is not, by itself, a basis to set aside an expert determination. The question remains whether the original expert materially departed from instructions or made a manifest error, not whether another expert would have valued differently.
Finally, the court considered the procedural context of the enforcement application. Viking Engineering sought an order under O 45 r 6 of the Rules of Court compelling payment of the valuation-based purchase price. The defendants resisted enforcement by challenging the report’s binding effect. The court’s conclusion that the report was neither departed-from-instructions nor manifestly erroneous meant that the enforcement application could proceed.
What Was the Outcome?
The High Court dismissed OS 1324/2019. It held that Mr Hayler had not materially departed from his instructions and that there was no manifest error in the valuation report. The court therefore fixed the purchase price for Viking Engineering’s shares in VIG at S$13.2 million, as stated in the report.
As a practical effect, the buy-out mechanism ordered in the minority oppression proceedings was implemented through the valuation figure. The decision reinforced that, once parties have agreed an expert valuation process and the court has ordered a buy-out based on that valuation, challenges to the report face a high threshold and will not succeed absent clear grounds.
Why Does This Case Matter?
This case is significant for practitioners because it illustrates the disciplined approach Singapore courts take when supervising expert determinations in corporate disputes, particularly those arising from minority oppression remedies. The decision confirms that expert reports used to quantify buy-out prices are not treated as ordinary evidence to be weighed afresh. Instead, they are binding unless the narrow grounds for setting aside are made out.
For lawyers advising on minority oppression buy-outs, Viking Engineering v Feen highlights the importance of (i) clearly defining the valuer’s mandate in the Buyout Order and the LOE/terms of reference, and (ii) ensuring that the valuation process remains within that mandate. If parties want particular valuation adjustments or methodologies, those should be expressly captured in the instructions. Otherwise, later attempts to characterise methodological choices as “departures” may fail.
For valuers and expert witnesses, the case underscores that courts will generally respect the expert’s technical judgment, especially where the expert has acted consistently with the agreed framework. It also signals that competing expert reports are unlikely to overturn an expert determination unless they demonstrate a manifest error or a material departure from instructions.
Legislation Referenced
- Companies Act (Cap 50) — minority oppression remedy under s 216 (as referenced in the judgment extract)
- Rules of Court (Cap 322, R 5, 2014 Rev Ed) — O 45 r 6 (as referenced in the judgment extract)
Cases Cited
- [2009] 2 SLR(R) 385 — The Oriental Insurance Co Ltd v Reliance National Asia Re Pte Ltd
- [2014] 2 SLR 573 — Poh Cheng Chew v K P Koh & Partners Pte Ltd and another
- [1992] 1 WLR 277 — Jones v Sherwood Computer Services Plc
- [2006] 1 SLR(R) 634 — Evergreat Construction Co Pte Ltd v Presscrete Engineer Pte Ltd
- [2018] SGHC 54 — (cited in the judgment extract)
- [2019] SGCA 78 — (cited in the judgment extract)
- [2019] SGHC 158 — Viking Engineering Pte Ltd v Feen, Bjornar and others [2019] SGHC 158 (Viking Engineering v Feen (No 1))
- [2019] SGHC 84 — (cited in the judgment extract)
- [2020] SGHC 78 — Viking Engineering Pte Ltd v Feen, Bjornar and others and another matter
Source Documents
This article analyses [2020] SGHC 78 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the full judgment for the Court's complete reasoning.