East Asia Company Ltd (Respondent) v PT Satria Tiratama Energindo (Appellant) (Bermuda)
Case ID: JCPC 2018/0023
Jurisdiction: The Court of Appeal of Bermuda
- Was an agreement for the transfer of shares validly entered into?
- If so, was the transaction nevertheless avoided?
The dispute concerns shares in Bali Energy Limited ("BEL"), a Bermuda company that has rights to develop a geothermal energy site in Bali. On 27 February 2015, Mr Suhardono, on behalf of PT Satria Tiratama Energindo ("Satria"), and Mr Joenoes, in his capacity as director of East Asia Company Ltd ("EACL") entered into Heads of Agreement, witnessed by Mr Hata, as BEL’s CEO, for the sale of EACL’s shareholding in BEL. At the time, EACL was BEL’s sole shareholder. It is common ground that Mr Joenoes lacked actual authority. The first main issue on appeal is thus whether he had apparent authority to enter into this agreement. However, even if so, the transaction can, on the Respondent’s case, be avoided because
- Satria was put on inquiry about Mr Joenoes’ lack of authority and conflict of interest,
- the share transfer agreement dated 1 March 2015 was not a proper instrument of transfer and
- was ineffective because of the failure to obtain the Bermuda Monetary Authority’s consent prior to the resolution passed by BEL on 1 March 2015,
- BEL’s Board rejected the transaction by resolution dated 7 May 2015, and (e) this was within the statutorily prescribed three-month period.
- On 7 April 2015, Satria sought an order for rectification of the register of BEL to record that the shares are no longer held by EACL but by Satria itself. Hellman J ordered rectification. This was set aside on appeal. Satria now appeals.
PT Satria Tiratama Energindo
East Asia Company Ltd
Lord Reed, Lord Carnwath, Lady Arden, Lord Kitchin, Lord Sales
Hearing start date
16 Jan 2019
Hearing finish date
17 Jan 2019