Why where you park your joint venture matters: Lessons from a US$689 million shareholder dispute

Indian conglomerate Kiri Industries received US$689 million as the clock ticked down to 2026, in a full settlement of its minority stake in DyStar Global Holdings, concluding what is believed to be the largest shareholder oppression case adjudicated in Singapore’s courts.

The decade-long dispute, fought through Singapore’s courts, offers a practical lesson for companies structuring cross-border ventures: the choice of where to domicile a joint venture is not merely a tax decision, but a dispute resolution and asset protection decision.

In an interview with The Business Times, Allen & Gledhill partner Dinesh Dhillon, who led the legal team representing Kiri, said the fact that his client received payment – rather than being left with an unenforceable paper judgment – was directly attributable to Singapore’s legal infrastructure and the joint venture being domiciled here.

“If you put your joint venture vehicle elsewhere, I don’t see other jurisdictions providing the same result,” said Dhillon, who also co-heads the firm’s arbitration practice.

Joint venture turned sour

DyStar, one of the world’s largest textile dye manufacturers supplying major global fashion brands, was originally a German company that ran into financial distress around 2008 to 2009.

Kiri, which was then a supplier to DyStar, partnered China’s Longsheng Group to acquire and restructure the business. Operations were relocated to Singapore which had a favourable tax environment.

The joint venture turned contentious after Longsheng, acting through its Hong Kong holding vehicle Senda International Capital, began extracting value through related party transactions, cash pooling arrangements and the transfer of a key black dye patent to its Chinese parent.

Despite DyStar generating total profits of more than US$380 million between 2013 and 2017, no dividends were declared.

Kiri filed a minority oppression suit in 2015, arguing that Longsheng had systematically exploited its majority position to extract value from DyStar at Kiri’s expense.

In 2018, the Singapore International Commercial Court (SICC) found Senda liable to minority oppression under Section 216 of the Companies Act, and ordered it to buy out Kiri’s 37.57 per cent stake at a price to be determined by the court. 

After a further valuation battle lasting several years, the stake was valued at US$603 million. But Senda, whose Hong Kong holding vehicle had no substantial assets, claimed it could not raise the funds to comply.

Kiri secured full payment through what Dhillon described as a “novel remedy”. His team obtained a court order appointing Deloitte as receiver – but only over DyStar’s shares, not its management. The company continued to operate as normal while Deloitte conducted an en bloc sale.

Such an order was unprecedented in Singapore, where the standard remedy in oppression cases is a straightforward buyout, said Dhillon.

The court also ruled that Kiri would receive no less than US$603 million regardless of the sale price, with the gap between that figure and the final US$689 million reflecting court-ordered interest to account for years of delay.

A vehicle linked to Longsheng emerged as the highest bidder, and full payment was made on Dec 30, 2025.

Implications for businesses

Dhillon said the outcome for Kiri was possible because DyStar was headquartered in Singapore, giving parties access to the SICC, the division of the High Court established in 2015 to hear international commercial disputes.

The case was heard by a panel of three judges drawn from Singapore, Australia and Hong Kong. Appeals were heard by panels that included former chief justice of Australia Robert French and former senior English judges Lord Mance and Sir Bernard Rix.

Companies that domicile joint ventures in Singapore have an automatic right to the SICC for disputes that are international and commercial in nature, even without a specific SICC clause in their agreements. 

Dhillon said corporates should weigh this when choosing where to site their holding structures.

“Singapore truly is a very reliable jurisdiction to site your joint venture... knowing that you have an infrastructure that is diverse, offering you numerous options to manage your risk,” he said.

The DyStar case is also among one of the many growing cases of international cross-border disputes that are being heard in Singapore, said Dhillon.

The scale of cross-border commercial disputes seated in Singapore has grown significantly. Dhillon, who has practised since 1995, said cases worth US$10 million were once considered large. He now handles matters involving assets valued at more than S$1 billion, including a recent attempt to set aside a US$5 billion arbitration award.

He attributed this to the legal infrastructure that Singapore has built, pointing to the role of the EDB, the Ministry of Law and the ecosystem of international law firms and accounting practices now operating here.

“I think it’s a reflection of the infrastructure Singapore has built that attracts foreign confidence,” he said.

Source: The Business Times © SPH Media Limited. Permission required for reproduction.

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