Conflict of Laws

Citation(2007) 8 SAL Ann Rev 133
Published date01 December 2007
Date01 December 2007

9.1 For 2007, there are nine cases which will be examined in this review.

9.2 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.

9.3 For the sake of completion, it is appropriate to mention that two cases reported in 2007 have already been reviewed last year. These cases are Westacre Investments Inc v State-Owned Co Yugoimport SDPR[2007] 1 SLR 501 and Swift-Fortune Ltd v Magnifica Marine SA[2007] 1 SLR 629.

Stay of proceedings —Forum non conveniens

9.4 There were four cases relating to stay of proceedings. The first was Datacraft Asia Ltd v Kaufman, Gregory Laurence[2007] SGHC 111.

9.5 The first plaintiff, a Singapore company, was the 100% shareholder of the second plaintiff, a majority shareholder in DCJ. The defendants were minority shareholders in DCJ. DCJ was formed as a result of a series of mergers of Japanese companies. It was discovered by the defendants that the value of one of the predecessor companies was inflated and that the plaintiffs had overpaid for their shares in that company. In exchange for evidence of this, the plaintiffs, in a letter agreement, agreed to pay the defendants 30% of any sum recovered from the perpetrators. Subsequently, the plaintiffs informed the defendants of the amount they were entitled to and when asked for a breakdown, the plaintiffs refused to provide any details on the basis that there was a confidentiality clause in the settlement agreement with the perpetrators.

9.6 The defendants commenced proceedings in the High Court claiming that the plaintiffs owed a fiduciary duty to account for the

moneys due. The court held, and this was subsequently affirmed by the Court of Appeal, that the defendants were not entitled to seek a disclosure of information and documents relating to the settlement from the plaintiffs.

9.7 The defendants subsequently commenced proceedings in Japan against the perpetrators and DCJ for damages in relation to the inflated valuation of the predecessor company. The plaintiffs responded by commencing these proceedings in Singapore alleging that the Japanese proceedings breached cl 8 of the letter agreement. The defendants applied for a stay based on the arguments of forum non conveniens, lis alibi pendens and issue estoppel.

9.8 With regards to forum non conveniens, the court considered stage 1 of the test from Spiliada Maritime Corp v Cansulex Ltd[1987] AC 460 (‘The Spiliada’) and concluded that Japan was the more appropriate forum. The writer agrees with the court”s analysis of the connecting factors. This was in and of itself sufficient to dispose of the matter.

9.9 It is appropriate to make two comments at this point. First, it is interesting that the court came to this conclusion after a lengthy discussion of lis alibi pendens, issue estoppel and stage 2 of the test from The Spiliada. It is submitted that it would have been far more efficient to consider this matter first before looking at all the other issues. This is especially so in relation to stage 2 of the test in The Spiliada.

9.10 Secondly, the court engaged in an extensive discussion of the doctrine of lis alibi pendens. At certain points in the judgment, it was not clear if the court was discussing lis alibi pendens as a separate doctrine or as part of the doctrine of forum non conveniens. In fairness, lis alibi pendens used to be a separate ground for the staying of proceedings. With the development of forum non conveniens, lis alibi pendens became subsumed under the two-stage test from The Spiliada. This distinction is significant because if lis alibi pendens is a separate ground for a stay, then meeting its requirements is sufficient. If it is part of forum non conveniens, then meeting its requirements only establishes it as a factor to be considered in the two-stage test. It can be inferred that the court took the latter view and it is submitted that this is correct. The existence of multiple proceedings is only a factor in the two-stage test and is a relevant consideration in both the stages.

9.11 Finally, and this does not relate to forum non conveniens, the court considered the defendants” arguments that there might be the operation of issue estoppel. It is interesting to note that there was no need for the court to consider this since there did not exist a final and conclusive judgment for an issue estoppel in the first place. Be that as it

may, the court opined that the requirement of identity of parties was not met even though the Japanese courts were likely to deal with the same subject matter. As such, issue estoppel had not been established.

9.12 At the end of the day, while the court took a somewhat circuitous route, it is submitted that it came to the correct conclusion.

9.13 The second case was Exxonmobil Asia Pacific Pte Ltd v Bombay Dyeing & Manufacturing Co Ltd[2007] SGHC 137. In this case, the parties entered into a contract for the purchase of paraxylene, a raw material used in the manufacture of polyester. The plaintiff was to ship and deliver the paraxylene to Mumbai. The defendant subsequently claimed that it was unable to take delivery, invoking the force majeure provision in the contract. It also claimed that it was entitled to repudiate the contract based on fraud and misrepresentation. The plaintiff rejected these claims and, upon the defendant refusing to take delivery, sold the paraxylene to another party at a loss. It then commenced proceedings against the defendant for the loss arising from the breach of contract.

9.14 The defendant applied for a stay of proceedings based on forum non conveniens alleging that India was the more appropriate forum for the resolution of the dispute. The assistant registrar dismissed the application. On appeal to the High Court, the appeal was dismissed. While the decision of Tan Lee Meng J did not advance the law with regards to forum non conveniens, it is useful to make two observations.

9.15 First, the main argument for the defendant in favour of a stay concerned the location and compellability of witnesses. It was claimed that a key issue in this matter was the breakdown of its plant in India and as such the defendant needed to call a number of Indian witnesses to testify as to the breakdown. On this argument, Tan J considered the point made in Rickshaw Investments Ltd v Nicolai Baron von Uexkull[2007] 1 SLR 377 where the Court of Appeal opined that, unlike in the past, the location and the compellability of witnesses is no longer as compelling a factor. The importance of this factor depends on whether, inter alia, the issues in question revolve around issues of fact. The writer submits that in an increasingly global and technologically-enabled world, taking a more nuanced approach to the factors enunciated in The Spiliada is a step in the right direction.

9.16 Secondly and by way of obiter, Tan J noted that the defendant had applied in India for a declaration that the contract was not binding. While the defendant did not argue this as a ground for a stay, the court opined that even if they had, the existence of competing foreign proceedings did not automatically warrant a stay. This is especially where the proceedings were commenced for the purpose of

demonstrating the existence of a competing jurisdiction or were at a preliminary stage. On the facts, the court held that the proceedings in Bombay were not a sufficient reason for a stay of the proceedings in Singapore.

9.17 The third case was Murakami Takako v Wiryadi Louise Maria[2007] 1 SLR 1119 (HC), [2007] 4 SLR 565 (CA).

9.18 The appellant was the executrix of her father”s estate in Indonesia. Prior to his death, he had divorced the first respondent and commenced ancillary proceedings in Indonesia for the division of their matrimonial assets. These proceedings culminated in a judgment of the Supreme Court of Indonesia (‘Judgment 203’) declaring, inter alia, that all assets that had been acquired during the marriage were joint assets and these included moveable and immoveable assets outside Indonesia. The court also ordered the first respondent to deliver, inter alia, half of all the joint assets to the appellant. The Supreme Court of Indonesia also delivered Judgment 1265 which ruled that the second to fourth respondents were heirs of the testator and Judgment 2696 which ruled that the second to fourth respondents were entitled to a one-quarter share of the testator”s estate under Indonesian law.

9.19 The appellant commenced proceedings in Singapore for recovery of the Singapore properties as well as properties not adjudicated in Indonesia. Before the trial, the Senior Assistant Registrar granted applications by the first, second and third respondents to withdraw certain counterclaims subject to the condition that they were not to bring in Singapore any action for the same, or substantially the same, causes of action as those made in their original counterclaims. Subsequently at trial, the respondents sought to amend their pleadings including a set of counterclaims. The appellant objected to the application and the trial judge, Andrew Ang J, dismissed these objections. This was appealed to the Court of Appeal.

9.20 For our purposes, the parts of the judgment relevant to the conflict of laws relate to the issues of forum non conveniens and the impact of the foreign...

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