Verona Capital Pty Ltd v Ramba Energy West Jambi Ltd

Choo Han Teck J:

[2] The plaintiff is an investment company incorporated in Australia. The defendant is a company incorporated in the British Virgin Islands and is a member of the “Ramba” group of companies of which Ramba Energy Ltd (“Ramba”) is the parent company. The defendant had an agreement in June 2011 with the Indonesian company PT Pertamina EP under which the defendant has a 20-year right to conduct oil and gas exploration in an area known as the “West Jambi Block”, which is located in the northern part of South Sumatra.

[3] On 25 July 2011, the plaintiff and defendant entered into an agreement in which the plaintiff invested in, and advanced various amounts of money to, the defendant (“the Agreement”). In return, the defendant was to assist in the location of sources of oil and gas in the West Jambi Block (although the precise role of the defendant, pursuant to the agreement, was in dispute). The plaintiff claimed that it entered into the Agreement on the basis of a slide presentation by the defendant. It was only later that the plaintiff realised that the defendant had (allegedly) made important misrepresentations during this slide presentation. As such, the plaintiff filed a suit based on the defendant’s alleged misrepresentation and claimed, amongst other things, the amounts of money that had already been paid to the defendant, in the sum of US$1,498,598. The writ of summons was filed on 2 July 2012.

[4] In the main claim, the plaintiff averred that the defendant had shown a slide presentation to the plaintiff in April 2011 in order to induce the plaintiff to sign the Agreement. The presentation conveyed certain information about a Dutch well named “Tuba Obi-8”. Specifically, on one slide, it was stated that Tuba Obi-8 “penetrated fracture basement and encountered gas”, and on another slide, that Tuba Obi-8 has a 270 metre column of gas. These were attractive prospects. The plaintiff repeatedly asked the defendant for the original Tuba Obi-8 well reports to no avail. Nevertheless, as the Agreement provided (in clauses 9.1 and 9.3) that representations and warranties made by the defendant to the plaintiff in the defendant’s slide presentation were true, the plaintiff signed the Agreement.

[5] Since the defendant did not furnish the original well reports, the plaintiff went to the offices of the official petroleum data repository for Indonesia on 5 October 2011. There, the plaintiff discovered that there was a further well report on another well, “Tuba Obi-11”, also in the West Jambi Block. The plaintiff purchased both the Tuba Obi-8 and 11 reports. On examining the two reports, the plaintiff realised that – contrary to the defendant’s representations – the areas in question had poor or no prospects for gas. The plaintiff thus sued the defendant for misrepresentation.

[6] The defence was twofold. First, the defendant argued that the slides shown to the plaintiff carried various disclaimers, including the warning that the presentation could not be relied upon by the plaintiff in connection with its decision to enter into the Agreement.

[7] Second, the defendant averred that by a “Term Sheet” executed in May 2011, two months before the signing of the Agreement, the plaintiff was obliged to “carry out its own due diligence, and was not to rely on the [defendant’s] workings and assumptions”. Also, the defendant argued that, pursuant to clauses 9.6.4 and 9.6.5 of the Agreement, the plaintiff accepted that it “shall be solely responsible for making its own assessment and decision on [entering into the Agreement]” and that it “has not relied on or been induced [to enter into the Agreement] by any representation or warranty other than expressly set forth in [the Agreement]”.

[10] It seems that Mr Campos is intent on expanding the litigation beyond the pleadings (as amended). I say this because the case as it stands seems straightforward. The plaintiff’s case is simply that the defendant’s representations of gas in the West Jambi Block were untrue; and further, that the falsity was discovered when the plaintiff obtained the well reports on 5 October 2011. The defendant does not deny that it never had possession of those reports when it showed the slide presentation to the plaintiff.

[11] Simply put, the issues in the main claim can be settled by answering the following questions:

2. Did the defendant induce the plaintiff by referring to the well reports in support of the representation in Question 1?

The other issues related to the interpretation of the terms of the contract and oral evidence, and if needed, the oral evidence would have to come from the persons present at the said presentation and the execution of the investment agreement. In any case, these issues would not necessitate expert evidence or testimony.