Over $3.1m awarded to finance veteran for wrongful dismissal, likely a Singapore record

A High Court judge has ruled that the 2022 dismissal of a German cryptocurrency executive by his then employer was wrongful, awarding him a seven-figure payout after a legal tussle of almost two years.

Justice Chua Lee Ming awarded damages of over US$2.4 million (S$3.1 million) in Mr Alexander Hoeptner’s favour on Sept 23 for the suit brought against Three Fins.

Mr Hoeptner received just over US$2.6 million after factoring in interest, compensation for his legal costs and deducting a small counterclaim.

His lawyer, Mr Suresh Divyanathan, partner and head of international arbitration at Oon & Bazul, told The Straits Times the amount could be the largest awarded here for wrongful dismissal of an employee.

Mr Hoeptner was employed by Three Fins to serve as chief executive of the HDR Group, comprising companies associated with the BitMEX cryptocurrency exchange, including Three Fins.

He was appointed to the role after BitMEX’s co-founders had to step down amid investigations by market regulators in the US.

In explaining the large sum awarded, Mr Divyanathan noted that Mr Hoeptner’s salary was “considerably high” given his seniority.

The finance veteran had previously served as chief executive of the stock exchange in Stuttgart, Germany.

In addition, his contract stated that he would be entitled to a large lump sum payment if his services were terminated before the end of two years’ employment, for any reason other than for cause.

Three Fins was also contractually obliged to pay Mr Hoeptner a bonus of about US$2 million at the end of two years of work, except if his services were terminated for cause, Mr Divyanathan noted.

Mr Divyanathan said: “Since the judge ruled that the decision to terminate Mr Hoeptner for cause was wrong, the defendant had no proper basis to deny Mr Hoeptner the lump sum payment.

“Therefore, the damages award was exceptionally large due to the contractually obligated lump sum payment plus six months’ salary in lieu of notice and housing and education allowances (as per his contract) that the judge awarded to Mr Hoeptner.”

Mr Hoeptner’s services were terminated less than three months before the end of his second year on the job.

The company justified the termination on the grounds of misconduct, which would render him ineligible for the bonus.

It claimed that Mr Hoeptner failed to obtain approval for relocation from Hong Kong to Singapore and then to Germany, as well as failed to repay the company for relocation expenses that were unauthorised and charged to the company improperly.

However, Justice Chua found that Mr Hoeptner’s job termination was decided by the board chairman of HDR Group, instead of the directors of Three Fins in a board resolution as required by the employment agreement.

Justice Chua also drew adverse inferences from Three Fins’ failure to call two critical witnesses.

Mr Divyanathan said: “Apart from the very large damages award, I believe this case shows the dangers to companies of carrying out summary dismissal of employees for misconduct without proper procedures and (with) an ulterior motive, such as avoiding paying contractual bonuses.”

Asked when an employee who thinks he has been unfairly dismissed should consider filing suit, Mr Divyanathan said that the first stop for most of these cases is typically the Tripartite Alliance for Dispute Management (TADM). If the dispute cannot be resolved in mediation, it will be heard by the Employment Claims Tribunals (ECT).

However, he noted that claims under TADM are subject to a limit of $20,000, or $30,000 if a union files the claim on the employee’s behalf.

If the employee’s claim exceeds the applicable limit fixed by TADM, he may consider filing a suit in the District Court or the High Court, depending on the amount being claimed, Mr Divyanathan said.

A claim commenced in the High Court must be for more than $250,000, Mr Divyanathan added.

“Of course, filing claims in the courts would be far more costly for employees because they have to engage a lawyer.

“By contrast, no lawyers are allowed at the TADM or Employment Claims Tribunals.”

Mr Hoeptner told ST via e-mail he was happy to close the chapter, and added he was grateful to Mr Divyanathan’s team.

“The High Court’s ruling vindicates my position and restores my professional reputation,” he said.

Mr Hoeptner said he aims to help increase mass market adoption of digital tokens, including via building a new euro-denominated stablecoin, in his current role as chief executive of digital assets firm AllUnity.

Other lawyers ST spoke to said the payout is likely to be the highest yet, though this cannot be conclusively determined as not all decisions are published.

Mr Jason Chua, a former ECT assistant registrar, told ST the existence of TADM and ECT limits the scope and volume of wrongful dismissal cases that end up being litigated in Singapore.

“Before filing a claim with ECT, one must go for compulsory mediation with TADM first,” he said.

“In my observation, mediation is highly effective in reducing the number of wrongful dismissal claims before it goes to ECT,” said Mr Chua, who is now a lecturer of law at Temasek Polytechnic.

Moreover, mediation is attempted again in the first case conference for cases that reach the ECT, he noted.

“Barring an egregious situation, the amount rarely hits $20,000 or $30,000,” he added, referring to the threshold for claims that can be brought before TADM and the ECT.

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

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