In Beckkett v. Deutsche Bank,1 the Singapore Court of Appeal had to consider two main issues. The first related to the duties owed by a mortgagee in exercising its power of sale of the mortgaged property, which comprised shareholdings in various companies within a group. The second was whether a shareholder-mortgagor can claim for losses arising from the sale of its shareholding in the company at an undervalue where the very reason for the undervalue is the wrong done by the mortgagee to the company.

In brief, Beckkett, a Singapore company, was a 74.2% shareholder of SME, which in turn held a 99.9% shareholding in Asminco. Prior to 1997, Asminco held 15% and 20% shareholdings in Adaro and IBT respectively. Adaro owned a substantial coal mine in Indonesia and IBT owned and operated a bulk terminal for Adaro’s coal mine. SME, Asminco, Adaro and IBT were Indonesian companies and, together with Beckkett, formed the “Swabara Group”.