Unilateral Mistake, Fraudulent Misrepresentation, Rescission, and Restitutio in Integrum: A Deep Dive into Axis Megalink Sdn Bhd v Far East Mining Pte Ltd [2024] SGHC(A) 15

Unilateral Mistake, Fraudulent Misrepresentation, Rescission, and Restitutio in Integrum: A Deep Dive into Axis Megalink Sdn Bhd v Far East Mining Pte Ltd [2024] SGHC(A) 15


In a landmark ruling by the Appellate Division of the High Court in Axis Megalink Sdn Bhd v Far East Mining Pte Ltd [2024] SGHC(A) 15, critical issues surrounding unilateral mistake, fraudulent misrepresentation, and the remedy of rescission were thoroughly dissected. This case offers profound insights into how Singapore courts navigate complex commercial disputes involving intricate aspects of contract law and misrepresentation. The judgment is a significant reference point for legal professionals and businesses engaged in high-stakes transactions.

Case Background

Parties Involved:

  • Axis Megalink Sdn Bhd (“Axis”): A Malaysian company engaged as an introducer and arranger for a reverse takeover (RTO) of a listed Singaporean company.
  • Far East Mining Pte Ltd (“FEM”): A private Singapore company, represented by its directors and shareholders, Mr. Syed Abdel Nasser bin Syed Hassan Aljunied and Mr. Hong Kah Ing.

Contractual Agreement: On 16 August 2016, FEM engaged Axis to facilitate the RTO transaction involving China Bearing (Singapore) Ltd (later renamed Silkroad Nickel Ltd). Axis was to receive a fee of US$2 million in shares of the listed company upon successful asset injection by FEM​​.

Key Issues and Court Findings

Issue 1: Voidability of the Engagement Letter due to Unilateral Mistake

The High Court initially found that FEM was unilaterally mistaken about the beneficial ownership of Axis, thinking Mr. Lee Kien Han was solely a representative of the counterparty, which led to the Engagement Letter being void ab initio​​. However, upon appeal, it was held that such a mistake did not concern a fundamental term of the contract but rather an attribute of the counterparty. The appellate court concluded that a unilateral mistake regarding the beneficial ownership of Axis did not negate the contract’s formation​​.

The doctrine of unilateral mistake was examined in detail, drawing from precedents such as Cundy v Lindsay [1874–80] All ER Rep 1149 and Shogun Finance Limited v Hudson [2003] UKHL 62. These cases illustrated that a mistake regarding the identity of the contracting party could void a contract, but a mistake about an attribute of the party, such as ownership, would not.

Issue 2: Performance and Consideration

The court examined whether Axis had fulfilled its contractual obligations under the Engagement Letter. It was determined that Axis had indeed performed the services despite the dispute over Mr. Lee’s dual roles. Consequently, Axis was entitled to the agreed consideration, provided the contract was not rescinded​​.

The scope of work under the Engagement Letter included introducing FEM to CBL, acting as a liaison, assisting in preparation and presentation of the RTO transaction, and aiding in the negotiation and finalization of terms. The court found substantial evidence that Axis had performed these duties, especially considering the timely execution of the Term Sheet and the SPA​​.

Issue 3: Rescission and Restitutio in Integrum

A significant portion of the judgment dealt with whether rescission of the Engagement Letter was possible, given the principle of restitutio in integrum. The court found it impossible to restore the parties to their pre-contractual positions because Axis had already rendered services under the contract​​. Therefore, rescission was not an available remedy for FEM.

The court cited CDX and another v CDZ and another [2021] 5 SLR 405, which emphasized that substantial restitution must be possible for rescission to be granted. Given the services already rendered by Axis, it was concluded that exact restitutio in integrum was unattainable​​.

Further elaborating on the principles of rescission and restitutio in integrum, the court referenced several key precedents:

  • Dunbar Bank plc v Nadeem [1998] 3 All ER 876: Emphasized that a party seeking rescission must offer to restore the benefits received​​.
  • Salt v Stratstone Specialist Ltd [2015] EWCA Civ 745: Highlighted the injustice of a party seeking rescission without accounting for benefits derived from the contract​​.
  • Boyd & Forrest v Glasgow and South-Western Railway Co [1915] SC (HL) 20: Noted that once services are rendered, they cannot be undone, making restitutio in integrum impracticable​​.
  • O’Sullivan v Management Agency and Music Ltd [1985] QB 428: Reaffirmed that rescission is impossible once services have been fully executed​​.

Issue 4: Damages for Fraudulent Misrepresentation

FEM sought damages for fraudulent misrepresentation, arguing that Axis and Mr. Lee concealed critical information regarding the ownership, which induced FEM into the contract. The High Court had awarded FEM S$10,210 in investigation expenses as damages. On appeal, the court reaffirmed this award, emphasizing that FEM had failed to demonstrate that the terms of the RTO transaction would have differed had the true ownership been disclosed​​.

The principle of awarding damages for fraudulent misrepresentation was upheld, consistent with Doyle v Olby (Ironmongers) Ltd [1969] 2 QB 158, which established that damages in fraud should put the claimant in the position they would have been if the misrepresentation had not been made​​.

Issue 5: Inducement by Fraudulent Misrepresentation

For fraudulent misrepresentation to be actionable, it must be shown that the representee was induced by the false representation. The appellate court upheld that Mr. Lee’s representation significantly influenced FEM’s decision to enter into the Engagement Letter. However, it was crucial to establish that this misrepresentation operated on FEM’s mind at the time of contracting​​.

The court referred to Smith v Chadwick (1884) 9 App Cas 187, which outlined that the representee must prove the misrepresentation was a material inducement to enter the contract, thereby reinforcing the necessity of establishing inducement in fraudulent misrepresentation claims​​.


The appellate court’s decision in Axis Megalink Sdn Bhd v Far East Mining Pte Ltd provides a comprehensive analysis of contract law principles, particularly in the context of unilateral mistake and fraudulent misrepresentation. The court meticulously dissected the issues of performance, inducement, and restitution, setting a significant precedent for future cases involving complex commercial agreements.

This case underscores the importance of full disclosure and transparency in contractual negotiations and highlights the stringent requirements for rescission based on fraudulent misrepresentation. Legal practitioners and businesses must take heed of these principles to navigate and structure their commercial transactions effectively.

Call Now Button
× How can I help you?