Abdul Rashid bin Abdul Manaf v Hii Yii Ann

• Jurisdiction: Singapore
• Judge: Woo Bih Li J
• Judgment Date: 03 October 2014
• Neutral Citation: [2014] SGHC 194
• Date: 03 October 2014
• Docket Number: Suit No 197 of 2014 (Registrar’s Appeal No 202 of 2014 and Summons No 3268 of 2014)
• Published date: 09 October 2014
• Plaintiff Counsel: Francis Xavier, SC and Ang Tze Phern (Rajah & Tann LLP)
• Hearing Date: 17 July 2014
• Defendant Counsel: Tan Tee Jim, SC (Instructed Counsel), Sharon Chong and Devi Haridas (Sim Law Practice LLC)
• Court: High Court (Singapore)
• Subject Matter: Civil Procedure,Stay of proceedings,Choice of jurisdiction,Conflict of Laws,Non-exclusive

Woo Bih Li J: Introduction

In this action, the plaintiff, Abdul Rashid bin Abdul Manaf (“Rashid”), is suing the defendant, Hii Yii Ann (“Hii”), for breach of a settlement agreement dated 24 May 2012 (“the 2012 SA”) between the parties. Hii then applied to stay this action on the ground of forum non conveniens. His application was dismissed by an Assistant Registrar. He appealed against the decision of the Assistant Registrar, and I dismissed his appeal. Hii has filed an appeal against my decision. I state below my reasons.

The principles governing a stay application are not in dispute. However, because cl 6.2 of the 2012 SA stipulated that “the Parties hereby irrevocably submit to the non-exclusive jurisdiction of the courts of the State of Queensland, Australia” and because cl 6.1 of the 2012 SA provided that the 2012 SA was “governed by and… to be construed in accordance with the laws of England”, Mr Tan Tee Jim, SC (“Mr Tan”), counsel for Hii, submitted that this court should apply English law for the stay application and that under English law, the burden was on Rashid to show a strong case why a stay should not be granted in favour of Australia in view of the fact that the non-exclusive jurisdiction (“NEJ”) clause points to Queensland, Australia.

Mr Francis Xavier, SC (“Mr Xavier”), counsel for Rashid, disagreed and submitted that the court should simply apply the principles in Spiliada Maritime Corporation v Cansulex Ltd [1987] AC 460 (“Spiliada”) as Singapore courts have often done as in Orchard Capital I Ltd v Ravindra Kumar Jhunjhunwala [2012] 2 SLR 519 (“Orchard Capital”) at [12] and [32]. Under those principles, it was for the applicant to show that another jurisdiction was clearly the more appropriate forum for the action by establishing, through various factors, that the other jurisdiction had a more real and substantial connection with the dispute to be heard.

The issues

Therefore, Hii’s stay application raised the following issues: What was the correct approach to be adopted for a stay application of a Singapore action in the face of an NEJ clause that pointed to a foreign country, and a governing law clause that pointed to the law of another foreign country? If the foreign governing law was relevant, how was it to be proved in a Singapore court and what was the correct construction of cl 6.2? Depending on the correct construction of cl 6.2, how were the Spiliada principles to be applied?

The correct approach

Mr Xavier proceeded on the basis that although English law was the governing law, it was irrelevant to the stay application and a Singapore court would simply apply domestic Singapore law to determine the stay application. Hence, he did not cite English cases to construe cl 6.2. Instead, he appeared content to rely on the decision of the Singapore Court of Appeal in Orchard Capital to construe cl 6.2 and to resist Hii’s appeal.

In Orchard Capital, cl 23 of the settlement agreement was the relevant provision. It provided for the agreement to be “governed by and construed in accordance with the laws of Hong Kong, SAR” and that “[t]he Parties submit to the non-exclusive jurisdiction of the courts of Hong Kong, SAR”. There was also a waiver by the parties to a trial by jury, but that is not relevant for present purposes.

Notwithstanding cl 23, the plaintiff commenced an action against the defendant in Singapore for an alleged failure by the defendant to pay a certain sum by a certain date. The defendant then applied to stay the Singapore action in favour of Hong Kong.

The Court of Appeal therefore had to construe the legal effect of an NEJ clause, in particular, cl 23. In so doing, the Court of Appeal appeared to apply Singapore domestic law to construe cl 23 (see Orchard Capital at [27]–[29]). However, there was no suggestion in that case that Hong Kong law was different from Singapore law on the construction of an NEJ clause. In fact, the Court of Appeal in Orchard Capital stated, at [27], that the law of the forum would generally apply to questions of interpretation by default, because of the presumption of similarity. Hence, I was of the view that Orchard Capital did not stand for the proposition that a Singapore court would disregard the foreign governing law in construing an NEJ clause and apply Singapore domestic law only.

I refer to an article by Yeo Tiong Min, SC, “The Contractual Basis of the Enforcement of Exclusive and Non-Exclusive Choice of Court Agreements” (2005) 17 SAcLJ 306 (“Yeo’s article”).

Para 17 of Yeo’s article states:

… The common law draws a distinction between the jurisdiction agreement as a contract, which is a matter of substance, and the effect of the contract on the jurisdiction of the forum, which is a matter of procedure. Thus, questions relating to the validity and interpretation of the jurisdiction agreement are subject to choice of law rules governing contracts. …

Para 19 of Yeo’s article states:

The effect of a jurisdiction agreement on the jurisdiction of the forum is a matter of procedure,34 and is purely within the control of the law of the forum. Effectively, this means that the forum determines for itself how to give effect to the agreement of the parties (as interpreted in accordance with its governing law) in the light of its own rules of jurisdiction and judicial policies.

I was of the view that a stay application on the ground of forum non conveniens was an application to ask the court not to exercise its jurisdiction and was an issue of procedure and not substantive law. Hence the correct approach was that Singapore law, as the law of the forum, applied. However, this did not mean that English law was irrelevant. Under Singapore law, the Spiliada principles were applicable and under such principles, the governing law of the agreement in question would be applied to construe the agreement or clause in question.

As English law was the governing law of the 2012 SA, it was English law that determined how cl 6.2 was to be construed, eg, whether cl 6.2 was in substance an NEJ clause, an exclusive jurisdiction (“EJ”) clause, or something in between which I will refer to more conveniently as a most appropriate jurisdiction (“MAJ”) clause. After the construction was determined, Singapore law would determine the effect of the construction, for example, who should bear the burden of proving the appropriate jurisdiction.

How foreign law was to be proved in a Singapore court and how cl 6.2 was to be construed

Mr Tan did not produce an opinion of an English law expert to establish English law on the construction of cl 6.2. Instead, Mr Tan simply referred to a few English cases from English law reports to establish such English law. I need mention only the following English cases: S & W Berisford Plc and NGI International Precious Metals Inc v New Hamphire Insurance Co [1990] 2 QB 631 (“Berisford”); British Aerospace Plc v Dee Howard Co [1993] 1 Lloyd’s Rep 368 (“British Aerospace”) at p 376; Antec International Ltd v Biosafety USA Inc [2006] EWHC 47 (Comm) (“Antec”); Qioptiq Ltd v Teledyne Scientific & Imaging LLC [2011] EWHC 229 (Ch) (“Qioptiq”) at [38] and also at [41] and [42]; and E D & F Man Ship Ltd v Kvaerner Gibraltar Ltd (The Rothnie) [1996] 2 Lloyd’s Rep 206.

In Pacific Recreation Pte Ltd v S Y Technology Inc and another appeal [2008] 2 SLR(R) 491 (“Pacific Recreation”), the Court of Appeal addressed the question as to how foreign law was to be proved at [54]–[60]. The Court of Appeal observed that foreign law was an issue of fact which must be proved. Such proof could be adduced in two ways: by directly adducing raw sources of foreign law as evidence; or by adducing the opinion of an expert in foreign law.

In England, raw sources of foreign law can generally be adduced only as part of an expert’s evidence and not on their own. However, the position in Singapore, Malaysia and India is very different because in these jurisdictions, certain raw sources of foreign law can be adduced despite not being part of a foreign law expert’s evidence. Such raw sources include “any report of a ruling of the courts of the [foreign] country contained in a book purporting to be a report of the rulings …” (see s 40 of the Evidence Act (Cap 97, 1997 Rev Ed) (“the Evidence Act”)). The Court of Appeal also referred to other provisions in the Evidence Act, including s 86. However, the Court of Appeal cautioned, at [60], that even if raw sources of foreign law are admissible without the need for an expert opinion, it does not mean that our courts are obliged to accord such sources any evidentiary weight. Therefore, it is preferable that expert opinions on foreign law are provided whenever possible.

In Swiss Singapore Overseas Enterprises Pte Ltd v Navalmar UK Ltd [2003] 1 SLR(R) 688, the High Court was of the view (at [6]) that where it came to English law (European Union law excepted) it was unnecessary to require evidence from an expert. Nevertheless, my view was that the caution administered in Pacific Recreation should not be forgotten.

I will now elaborate on the English cases. In Berisford, Hobhouse J was of the view, at p 638, that even though the contractual jurisdiction of English law was non-exclusive, “it requires a strong case for the Courts of this country to say that that right shall not be recognised and that he must sue elsewhere”. At p 646, Hobhouse J said that “the fact that the parties have agreed in their contract that the English courts shall have jurisdiction (albeit a non-exclusive jurisdiction) creates a strong prima facie case that that jurisdiction is an appropriate one; it should in principle be a jurisdiction to which neither party to the contract can object as inappropriate; they have both implicitly agreed that it is appropriate”.

In British Aerospace, Waller J noted that the NEJ clause in question had been freely negotiated. It was not...