How Can MLSP Argue for Arbitration and Injunction Against Forfeiture?

Question from siya, How Can MLSP Argue for Arbitration and Injunction Against Forfeiture?

Answer from AI:

To argue on behalf of MLSP that disputes must be settled through arbitration and an injunction against forfeiture should be given, the following points and legal citations can be made:

1. Arbitration Clause Enforcement

Argument: The shareholder agreement (SHA) explicitly states that any disputes should be resolved through the Singapore Arbitration Centre. This clause is binding on all parties involved.

Legal Citation: Refer to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, which mandates that arbitration agreements must be recognized and enforced by the courts of contracting states.

• The New York Convention ensures that arbitration agreements are respected internationally.
• Courts in contracting states are required to enforce arbitration agreements and arbitral awards.

For more information, you can refer to the [New York Convention](https://www.newyorkconvention.org/).

2. Improper Share Call Notice

Argument: The managing director issued the share call notice without the consent of the other two directors, which is a violation of the SHA. The SHA requires affirmative consent from all founding shareholders for such decisions.

Legal Citation: Cite the specific clause in the SHA that requires affirmative consent from all founding shareholders for major decisions, including share call notices.

• Review the SHA to identify the clause that mandates unanimous consent for major decisions.
• Highlight the breach of this clause by the managing director’s unilateral action.

3. Impact of COVID-19 on EBITDA Target

Argument: The EBITDA target was narrowly missed due to the unforeseen impact of COVID-19. This should be considered a force majeure event, which typically excuses parties from performing contractual obligations due to circumstances beyond their control.

Legal Citation: Refer to the force majeure clause in the SHA, if available, or general principles of contract law that recognize force majeure events.

• Force majeure clauses typically cover events like pandemics that prevent parties from fulfilling contractual obligations.
• Even if the SHA does not have a specific force majeure clause, general contract law principles may apply.

For more information on force majeure, you can refer to [Force Majeure Clauses](https://www.law.cornell.edu/wex/force_majeure).

4. Unilateral Forfeiture of Shares

Argument: The managing director’s unilateral decision to forfeit MLSP’s shares without the consent of the other two directors is invalid. The SHA requires a special resolution with the affirmative consent of all founding shareholders for such actions.

• Identify the clause in the SHA that requires a special resolution for share forfeiture.
• Emphasize that the managing director’s action is invalid without the required consent.

When Legal Advice is Necessary

While the above points provide a general framework for arguing on behalf of MLSP, it is crucial to consult with a legal professional for personalized advice. A lawyer can:

1. Review the specific terms of the SHA.
2. Provide tailored legal strategies based on the unique circumstances of the case.
3. Represent MLSP in arbitration proceedings or court, if necessary.

For personalized legal advice, it is recommended to consult with a qualified attorney who specializes in corporate law and arbitration.