Singapore Firms Collaborate to Vindicate Client’s Rights and Obtain Large Settlement Arising from a Coronavirus Defense in a Breach of M&A Contract Action1
By Olshan Frome Wolosky LLP
A client of Globalaw’s Taiwanese member, Shay & Partners, successfully negotiated the sale of a closely held business (the “Client”) for US$70 million to a publicly-traded European company (“Euro Corp.”). When Euro Corp. threatened to delay the final payment of US$13 million in March of 2020 citing the imperative need to preserve “liquidity” to protect its business, shareholders and workers as a result of the novel coronavirus pandemic, Shay & Partners brought in Olshan Frome Wolosky LLP, USA (NY) firm, to advise the Client on New York law, which governed the M&A contract and dispute. Olshan analyzed key provisions and attempted to resolve the matter. After multiple months of unsuccessful settlement discussions, Olshan contacted Globalaw Singapore member firm, Kelvin Chia Partnership, who served as Olshan’s co-counsel in preparing and filing a claim for arbitration with the Singapore International Arbitration Centre (“SAIC”) and naming its arbitrator (while New York law governed the M&A contract and dispute, the contract’s dispute resolution provisions placed venue and jurisdiction in Singapore with the SAIC).
The three Globalaw member firms drafted a claim emphasizing the forty years the Client’s family members spent building a successful industrial company, before selling it to Euro Corp. and allowing Euro Corp. to pay a portion of the purchase price post-closing. In the meantime, Euro Corp. reported in its public filings how additive the acquisition was to the company’s consolidated earnings and was among the most important operational entities of 100’s it described in its annual report. The case ultimately resolved so successfully that the Client obtained a settlement that included all delinquent M&A payments, damages and reimbursement of all legal expenses, which in total exceeded the maximum legal damages it would have been entitled to have it prevailed in the arbitration.
One novel issue counsel faced were client principals who rejected many good settlement offers because of their ultimate interest in vindication, unwillingness to allow Euro Corp. to control the outcome, and desire to go to arbitration to obtain a ruling no matter the outcome. This ultimately contributed to Euro Corp.’s willingness to overpay to settle in order to avoid proceeding to full hearing thus proving the axiom from the old Fram oil filter commercials from US television applies equally to deferred payments due under an M&A contract: “you can pay me now or you can pay me later” with interest and attorneys’ fees.
The attorneys involved were Kyle C. Bisceglie and Tara Richelo from Olshan Frome Wolosky LLP, Arthur Shay from Shay & Partners, and Jolyn Khoo and Bryan Chan from Kelvin Chia Partnership. A large international law firm represented Euro Corp.
1Note that to avoid issues under the SIAC Rules of Confidentiality, which are strict, we have anonymized the Client, Respondent (“Euro Corp.) and firm defending Euro Corp.