Conflict of Laws

• Date: 01 December 2008
• Published date: 01 December 2008
• Author: Joel LEE Tye Beng LLB (Hons) (Wellington), LLM (Harvard), DCH (AIH); Barrister and Solicitor (New Zealand), Advocate and Solicitor (Singapore); Associate Professor, Faculty of Law, National University of Singapore.

Introduction

9.1 For 2008, there are 12 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 2008 have already been reviewed last year. These cases are Pacific Recreation Pte Ltd v S Y Technology Inc[2008] 2 SLR 491 and VH v VI[2008] 1 SLR 742.

Jurisdiction

9.4 There was one case relating to the jurisdiction of the courts: Murakami Takako v Wiryadi Louise Maria[2008] 3 SLR 198 (HC), [2009] 1 SLR 508 (CA).

9.5 The facts can be simply stated. The plaintiff was the executor for the deceased person”s estate and sought to amend her statement of claim against the defendants over the deceased person”s assets to include, inter alia, moneys in two Australian bank accounts and foreign immovables.

9.6 At the High Court, Andrew Ang J allowed the amendments relating to the bank accounts, concluding that the plaintiff was neither issue estopped nor cause of action estopped. However, the learned judge did not allow those amendments relating to foreign immovables on the basis that the personal equities exception to the Moçambique rule (The British South Africa Co v The Companhia de Moçambique[1893] AC 602) did not apply because the dispute was not sufficiently connected to the forum to warrant the intervention of equity. Andrew Ang J further held that even if the personal equities exception applied and the court did have jurisdiction, he would decline to exercise

jurisdiction on the ground of forum non conveniens. The appellant appealed against the decision to disallow these amendments.

9.7 Apart from jurisdiction, this case also dealt with matters of stay of proceedings (considered at paras 9.51—9.53), choice of law (considered at paras 9.69—9.71) and foreign judgments (considered at paras 9.83—9.87). Each of these matters will be dealt with in the respective sections of this chapter.

9.8 On jurisdiction, the Court of Appeal first stated that the Moçambique rule (The British South Africa Co v The Companhia de Moçambique[1893] AC 602) and the personal equities exception was part of Singapore law. Put another way, the court will generally have no jurisdiction over claims to foreign immovable properties except for, inter alia, claims with respect to equitable obligations. The court then noted that the trust claims in this case fell into this category. Andrew Ang J had held that there was a requirement for the dispute to be sufficiently connected to the forum before the personal equities exception could apply. The Court of Appeal disagreed. The court considered the authorities and concluded that while this may have been the legal position pre-1873, there was no longer any such requirement. Presence, submission or service of a writ or other originating process out of jurisdiction in accordance with the prevailing civil procedure rules was sufficient for the courts to assume jurisdiction. In delivering its decision, the Court of Appeal also helpfully clarified that the personal equities exception to the Moçambique rule is one which relates to jurisdiction instead of choice of law (as suggested by English authorities).

Stay of proceedings

9.9 There were seven cases relating to stay of proceedings. The first case was Carona Holdings Pte Ltd v Go Go Delicacy Pte Ltd[2008] 1 SLR 161 (HC), [2008] 4 SLR 460 (CA).

9.10 The first appellant and the respondent entered into an exclusive franchise agreement containing an arbitration clause. The respondent commenced proceedings against the appellants when differences arose and the appellants applied for a stay based on the arbitration clause and declined and failed to file their defence by the stated deadline. The respondent applied for and obtained a default judgement which on appeal was upheld. It was not clear why counsel had agreed to have the application for the default judgment heard before the stay application.

9.11 On further appeal, the appellants argued that once an application for a stay has been filed, all timelines should automatically

come to a standstill. They also argued that a stay application should be heard before any application for summary or default judgment.

9.12 On the first argument, the Court of Appeal considered the proposition too extravagant. It noted that the Rules of Court (Cap 322, R 5, 2006 Rev Ed) were silent on this matter and accepting this proposition would encourage the filing of frivolous stay applications to stall for time.

9.13 On the second argument, the court broadly agreed with the appellants and provided guidance on the correct procedure to follow when parties sought to stay proceedings based on an arbitration clause. The application should be filed within the time limit for filing of the defence and include a prayer asking, inter alia, for the filing of the defence to be stayed until the stay application had been determined. Pending a stay application, even though the court timelines still ran, a defendant should not be asked or compelled to file its defence. The rationale was to allow the defendant to concentrate on the stay application and not be distracted by running two contradictory courses of action at the same time. When appropriate, the court could exercise its discretion to vary the timelines. Concurrently pending applications for a stay and a default judgment application should be heard together and the merits of the stay heard first to avoid duplication of arguments and to minimise costs. Finally, in situations where counsel sought to abuse the process or behave unreasonably, the court may impose appropriate costs sanctions.

9.14 It is submitted that the reasoning of the court is both sound and pragmatic. It is also assumed that the rationale and guidelines provided by the court are equally applicable in applications based on forum non conveniens and jurisdiction clauses.

9.15 The second case was CIMB Bank Bhd v Dresdner Kleinwort Ltd[2008] 3 SLR 761 (HC), [2008] 4 SLR 543 (CA). Apart from stay of proceedings, this case also dealt with choice of law (considered at paras 9.60—9.64)

9.16 The facts of this case can be stated simply. The respondent, a foreign company with a registered office in England offering banking services, entered into an agreement for the purchase of promissory notes and paid the appellant, a Malaysian bank, US$8.2m. The agreement was brokered by an English company BPAL and provided for the law of England to apply and for the parties to submit to the non-exclusive jurisdiction of the English courts. The promissory notes were dishonoured upon presentation, and the respondent commenced proceedings against the appellant on the ground of unjust enrichment, or alternatively, on the basis of total failure of consideration.

9.17 The appellant alleged that its employee had executed the contract without authority thereby perpetrating a fraud on both parties. This was accepted by the respondent who undertook not to assert that the agreement was valid. The respondent applied for its action to be temporarily stayed pending the outcome of certain proceedings in Germany by other parties in connection with the promissory notes. The appellant applied for a permanent stay on the ground of forum non conveniens arguing that England was the more appropriate forum.

9.18 Assistant Registrar Wong heard the respondent”s application first and allowed the action to be temporarily stayed pending the conclusion of the German proceedings. The assistant registrar also refused to hear the appellant”s application and adjourned it to a date after the lifting of the temporary stay. On appeal to the High Court, Chan Seng Onn J heard both applications together and dismissed the application for a permanent stay and varied the temporary stay granted by the assistant registrar for the appellant to take all essential steps for it to commence any intended third-party proceedings. A further appeal by the appellant was dismissed by the Court of Appeal.

9.19 A number of observations can be made about this case. First, it is interesting to note that the appellant applied for a stay of proceedings based upon the doctrine of forum non conveniens and not on the non-exclusive foreign jurisdiction clause. Perhaps this is because the parties had proceeded on the assumption that the agreement and, therefore, the jurisdiction clause was void. However, there is authority to suggest that at least with regard to exclusive jurisdiction clauses, in situations where the validity of the agreement is in question, courts have been willing to refer the matter to the chosen forum to make the determination of whether the agreement was valid. This would have been an opportunity to see if the court would take a similar approach with regard to non-exclusive jurisdiction clauses. Of course, if the court applied the forum non conveniens analysis to dealing with non-exclusive jurisdiction clauses, then the jurisdiction clause would be taken as a strong but non-conclusive factor pointing towards England.

9.20 Secondly, at the High Court, the appellant argued that the permanent stay application should be heard before the temporary stay application and that the assistant registrar had erred by listening to the temporary stay application first. Chan Seng Onn J was persuaded by this and opined that the forum non conveniens question should be accorded priority so that the action might properly be brought as soon as possible in the appropriate forum. Until the appropriate forum is determined, there is no justification for any court in any forum to either leave this issue in limbo or proceed on the assumption that it has undisputed jurisdiction to decide whether or not there is sufficient basis shown for a temporary stay of the main...