Modern day commercial transactions are typically executed by agents (usually, directors) on behalf of their principals. Where an agent’s act is not authorised by the principal, a valid ratification retrospectively authorises the agent to enter into the transaction. Yet ratification is not always a magic bullet. There are parameters to a principal’s power to ratify. Among others, can a principal ratify a contract in which it is expressly named as a party, even though it did not know about the contract at the time a litigation on the contract started?
The team of Gregory Vijayendran SC, Lester Chua and Tomoyuki Lewis Ban from Rajah & Tann Singapore LLP’s Commercial Litigation Practice Group successfully represented the respondents in resisting an appeal before Singapore’s apex court in Alternative Advisors Investments Pte Ltd v. Asidokona Mining Resources Pte Ltd anor [2024] SGCA 3. In this recent case, the dispute involved the issue of whether certain loan documents and deeds of assignment were valid, in circumstances where the purported principal was not aware of the agreements at the time the claim was initiated, and where the agent had not purported to act on the purported principal’s behalf when executing the agreements. The Court of Appeal held that the alleged ratification of the agreements was invalid.
The team from Rajah & Tann was instructed by M&A Law Corporation. This Update elucidates the key considerations that the Court of Appeal took into account in dismissing the appeal.
For more information, click here to read the full Legal Update.
