SINGAPORE - The backers of Hyflux’s lawsuit against the firm’s founder and former chief executive Olivia Lum are allowed to provide only an undertaking that they have $90,000 to pay for her legal costs, after the High Court allowed the plaintiffs’ appeal.
Omni Bridgeway and Omni Bridgeway (Singapore) were initially ordered by a senior assistant registrar to give the undertaking on terms that are accepted by Lum.
If not, Hyflux, Hydrochem and Tuaspring as well as Hyflux’s two liquidators will have to get the litigation funders to provide a banker’s guarantee or their lawyers to give an undertaking for the sum of $90,000 on Lum’s terms.
If neither could be agreed upon by the parties, Omni Bridgeway and Omni Bridgeway (Singapore) would have to pay the sum into the court to be held until the litigants have filed or exchanged their statements made under oath as evidence to be used in trial.
The plaintiffs and Lum had agreed on the quantum, $90,000, but not the form of the security.
However, Judicial Commissioner Goh Yihan said in a judgment published on Friday that he accepted that the two funders have sufficient assets to satisfy a costs order of up to $90,000, in the event that Lum is found not liable.
Lum was sued for at least $690.6 million over alleged negligence and breach of fiduciary duty when she helmed the listed water treatment firm, now in liquidation.
Omni Bridgeway (Singapore)’s audited accounts for financial year 2022 showed that it has net assets of about $2.2 million and pre-tax profit of about $533,739.
Meanwhile, Omni Bridgeway Limited’s latest financial statements for the financial year to December showed that the Australia-listed provider of dispute and litigation finance had “substantial” net assets of about $605 million, with cash and cash equivalents of about $101 million.
While Lum’s counsel noted the commercial risks that the two litigation funders are exposed to, the judicial commissioner pointed out that other commercial enterprises, including banks, likewise are subject to such risks.
The judicial commissioner also believes that there is “little to no risk” of the two funders not honouring the undertaking because of the substantial damage that they would suffer in not doing so.
“If they will not honour an undertaking in respect of an ongoing litigation, I can imagine that potential or current clients will not see them in a positive light,” he said. THE BUSINESS TIMES
