Conflict of Laws

Citation(2005) 6 SAL Ann Rev 144
Date01 December 2005
Published date01 December 2005
Introduction

8.1 For 2005, there are six cases which will be examined in this review.

8.2 As in previous years, it is useful to note that conflict of laws cases sometimes relate to other areas of law. In these situations, this review will only examine those parts of the case that are relevant to the field of conflict of laws.

8.3 For the sake of completeness, it is appropriate to mention that two cases reported in 2005 have already been reviewed last year. These cases are Ang Ming Chuang v Singapore Airlines Ltd[2005] 1 SLR 409 and Herbst Ehud v Sampoerna Putera[2005] 1 SLR 82.

Jurisdiction

8.4 There is one case relating to questions of jurisdiction in the context of conflict of laws. This case primarily raises issues of procedure but also addresses the question of which jurisdiction”s laws govern the validity of service of process under O 11 of the Rules of Court (Cap 322, R 5, 2004 Rev Ed).

8.5 In Pacific Assets Management Ltd v Chen Lip Keong[2006] 1 SLR 658, the plaintiffs and the defendant entered into a convertible loan agreement. The defendant was subsequently in breach for failing to redeem the conversion shares and the plaintiffs instituted action in Singapore and obtained permission to serve the writ on the defendant in Malaysia. The defendant”s Malaysian solicitors wrote confirming their authority to accept service, and service pursuant to this agreement was duly effected through a private agent. Such service was acknowledged by the defendant”s solicitors.

8.6 The defendant”s solicitors subsequently returned the documents served and cancelled the acknowledgement stamp at the back of the documents. The defendant went on to obtain an ex parte declaration from the Malaysian courts that the service of the writ was irregular. The defendant

then applied in the Singapore courts to set aside service and the defendant”s contention was that the method of service used in this case was not in accordance with Malaysian law.

8.7 The court identified the main issue as whether a writ served pursuant to an ad hoc agreement to accept service was sufficient to invoke the court”s jurisdiction under O 11 of the Rules of Court. To this, the court opined that parties in a case could reach an ad hoc agreement as to the terms of valid service, and service according to these terms would be sufficient to invoke the jurisdiction of the Singapore courts under O 11.

8.8 On the facts, the court found that the defendant”s Malaysian solicitors” letter confirming their authority to accept service qualified as an ad hoc agreement to accept service and also specified the manner of service. Therefore, service according to its terms was sufficient to invoke the jurisdiction of the Singapore courts. This finding was sufficient to dispose of the defendant”s application.

8.9 However, the court went on to consider the alternative argument that the ad hoc agreement did not constitute an agreement as to the manner of service. As such, service had to be conducted in accordance with Malaysian law in order to be valid. The defendant”s argument was that service of foreign processes in Malaysia had to be done in accordance with O 65 of the Malaysian Rules of the High Court 1980 (PU(A) 50/1980) (‘RHC’) and that service through a private agent was not prescribed by O 65 and therefore not in accordance with Malaysian law. For support, the defendant relied upon a Malaysian Court of Appeal decision, Ngan Chin Wen v Panin International Credit (S) Pte Ltd[2003] 3 MLJ 279. For a brief commentary on this case, see Azmi Sharom, ‘Private International Law in the Malaysian Courts’(2005) 9 SYBIL 253 at 254. The Singapore court considered this and related cases and concluded that the Malaysian decisions were not consistent on this point.

8.10 One of the key arguments against the validity of service through a private agent was that it was an exercise of the judicial powers of a foreign court beyond its territorial limits and an encroachment on the sovereignty of Malaysia. To this, the Singapore court disagreed and opined that the writ served outside Singapore is more a notification to the defendant that an action has been commenced against him in Singapore than an exercise of judicial powers of the court. Further, there are safeguards in the form of O 11 of the Rules of Court to control service of process that may encroach upon the sovereign rights of a foreign country.

8.11 The Singapore court also drew support from Malayan Banking Berhad v Ng Man Heng[2005] 1 MLJ 470 where Syed Ahmad Helmy J opined that O 65 of the RHC only operated when a request was received from a foreign tribunal requesting assistance to effect service. It did not, however, prohibit service of foreign process by a private agent. As such, the Singapore court concluded that service of a writ in Malaysia through a private agent was in accordance with Malaysian law and therefore valid.

8.12 It is useful to make a few observations about this case. First, it is submitted that the approach of the Singapore court in determining this issue is correct. The question of validity of service is a matter of evidence and procedure and the Singapore court as the forum would apply the lex fori, ie, Singapore law in answering this question. This is clear from the judgment. Any consideration the Singapore court had of Malaysian law was in so far as the Singapore Rules of Court providing that service had to be in accordance with Malaysian law.

8.13 What is less clear and is useful to make explicit is that the question of validity of service is a question that can and has to be asked in both Singapore and Malaysia. The judgment of the Singapore court essentially dealt with the validity of service from the Singapore perspective. Since the conclusion of the Singapore court in this case was that service was valid, this clears the way for the plaintiffs to continue their action in the Singapore courts. Presumably, in the absence of any response on the part of the defendant, the plaintiffs would seek and obtain a default judgment. This is, however, when the problem occurs. Often, as in the facts of this case, the Malaysian defendant does not have assets in Singapore which means that in order to enforce the judgment obtained in the Singapore courts, the plaintiffs would have to seek enforcement in Malaysia, either by way of common law enforcement or by registering the judgment under the Malaysian Reciprocal Enforcement of Judgements Act 1958 (Act 99). It is at this point that the validity of service will be called into question by the Malaysian court, whether as part of the requirements of common law enforcement or the public policy objection.

8.14 This means that where a Malaysian defendant only has assets in Malaysia, ie, enforcement of any judgment obtained in Singapore has to be in Malaysia, having the Singapore court finding that service was valid is a Pyrrhic one if the Malaysian courts will not find the same way. Of course, this is not something that is within the control of the Singapore courts. It is hoped that with the dissenting judgment of Abdul Aziz JCA in Ngan Chin Wen v Panin International Credit (S) Pte Ltd (supra para 8.9) and the decision

of Syed Ahmad Helmy J in Malayan Banking Berhad v Ng Man Heng (supra para 8.11), the Malaysian courts will adopt a similar analysis and bring resolution to this issue.

Stay of proceedings: Forum non conveniens

8.15 There were two cases relating to stay of proceedings. The first was The Rainbow Joy[2005] 1 SLR 589 (HC), [2005] 3 SLR 719 (CA). In this case, the appellant plaintiff was a Filipino engineer employed on board the Rainbow Joy which flew the flag of Hong Kong and was owned by the respondent defendant. The appellant signed two employment contracts. The first was in the Philippines Overseas Employment Administration (‘POEA’) standard form which provided for the choice of Philippine law and the exclusive referral of all disputes to the National Labour Relations Commission (‘NLRC’) or arbitration in the Philippines for determination. The second was to comply with the laws of Hong Kong.

8.16 In the course of his work, the appellant suffered an injury to his right eye. He initially commenced arbitral proceedings before the NLRC against the respondent for US$80,000. The appellant subsequently commenced proceedings against the respondent in the Singapore courts for US$460,000 and withdrew the initial arbitral proceedings.

8.17 The respondent applied for a stay of proceedings on three grounds. The first was that the appellant was required to resolve the dispute through arbitration in the Philippines. The second was that there was an exclusive jurisdiction clause in favour of the Philippines and the appellant was required to proceed there. Finally, the third ground was that the action should be stayed in favour of the Philippines on the ground of forum non conveniens.

8.18 The assistant registrar granted the respondent”s application on the third ground, ie, that Philippines was the natural...

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