Bulthaup GMBH & Co KG v KHL Marketing Asia-Pacific Pte Ltd

• Judge: Aedit Abdullah
• Judgment Date: 05 March 2007
• Neutral Citation: [2007] SGDC 64
• Citation: [2007] SGDC 64
• Court: District Court (Singapore)
• Plaintiff Counsel: Kesavan Nair
• Defendant Counsel: Gavin Goh
• Published date: 11 April 2007

5 March 2007

District Judge Aedit Abdullah:

1. The Defendants appealed in RA 236 against the decision of the learned Deputy Registrar declining to order a stay of the proceedings in DC Suit No. 3568 of 2006. I allowed the appeal, and ordered a stay. The Plaintiffs have now appealed against my decision.

2. The Plaintiffs and Defendants had entered into an agreement, the Trade Partnership Agreement, in 1996. In 2005, a dispute, which apparently had been simmering for sometime, came to a head, and the Plaintiffs gave notice that they were terminating the Agreement. The Plaintiff subsequently claimed for various sums due on a number of production orders. The Defendants then sought to apply under O 12 r 7 to set aside the writ and service under the writ, and also under O 12 r 8 for a stay on grounds, among others, that there was a foreign jurisdiction clause and Singapore was not the appropriate forum.

3. The matter was heard by the learned Deputy Registrar, who dismissed the application. On the Defendants’ appeal before me, I allowed the appeal; they now appeal from my decision.

4. The issues that arose in the appeal before me were:

(1) Whether the Trading Partner Agreement, specifically in clause 12, applied to the dispute between the parties, binding them to a jurisdiction clause in favour of Munich, Germany;

(2) Whether the Defendants nonetheless accepted Singapore jurisdiction; and

(3) Whether strong cause had been made out that the parties should or should not be held to that clause.

The jurisdiction clause

5. The Trading Partner Agreement is in German, but a translation was provided. The Agreement itself specifies that the German version is the controlling document. Clause 9 reads:

Contract Language

The binding contract language is German.

The English translation is non-binding.

There was however nothing before me to show that there was any conflict between the German and English versions in respect of this particular issue.

6. Clause 11 of the Trading Partner Agreement reads”

The partners of the contract undertake to solve all differences of opinion and possible disputes in partnership through negotiations.

If this should not be possible in exceptional cases, then Munchen Germany is agreed on as the location of the court having jurisdiction. German law applies.

This translated clause (by a translator registered with the German Embassy in Singapore) differs a little from another translation which was apparently made in 1996, and is found the affidavit of the Defendants’ Director Lim Wee Li, dated 27 October 2006:

The partners to the Agreement are obliged to resolve all differences of opinion and disputes of the partnership by negotiation.

Should this in exceptional circumstances not be possible, Munich Germany is agreed as venue. German Law is applicable.

The slight differences were not to my mind material, and argument was in any event not taken on these. I shall for the purposes of these grounds refer largely to translation of the registered interpreter, as that what was relied on before me.

7. There were no issues taken before me as to the formation of the agreement between the parties; the applicability of German Law to the contract was not in question. In construing the ambit of clause 11, then, the court would apply the agreed governing law of the contract, i.e. German Law (The Jian He [2000] 1 SLR 8), but in the absence of any proof to the contrary, I had to proceed on the basis that German law was identical to Singapore law.

8. Given that the German version was authoritative, and that the governing law is German, it is no surprise that clause 11 is phrased rather differently than most common-law jurisdiction clauses.

9. In interpreting that clause, the initial focus would be on what was covered by ‘differences of opinion and possible disputes in partnership’, since, assuming negotiation was not fruitful, these would have to be resolved at the agreed venue, Munich. And indeed this was the primary point of contention between the parties.

10. Disputes of the partnership was argued by the plaintiffs to be limited to matters under the Trading Partner Agreement only; as I understood it, the contention was that it covered maters of the structure of the relationship between the parties. It did not, according to them, cover matters such as the block orders that gave rise to the claim against the defendants. The Defendants on the other hand contended that the phrase was wide enough to cover all matters, and not just those relating to the structure or scheme of the relationship between the parties.

11. Although Clause 11 refers to disputes in partnership, I could not in the context of the Trading Agreement, construe that as limiting the jurisdiction clause to cover only partnership, relationship or structural matters. In particular, the Trading Agreement in Cl 5 goes to invoicing, payment (though individual payment terms for ‘objects’ would be taken separately) and delivery. That indicates to my mind that the Trading Agreement does purport to go to govern matters of orders and supply.

12. There is that reference in clause 5 to the individual settlement of ‘objects’. Whatever these may be, I had to conclude, in the absence of any other evidence and in light of the different usage of terms, that such ‘objects’ had to be differentiated from products , which are expressly referred to in the agreement. In addition, in the earlier translation, the term 'objects' was not used, and instead we have the phrase ‘project orders’. Both of these points seem to indicate that separate payment...