Abdul Rashid bin Abdul Manaf v Hii Yii Ann

• Jurisdiction: Singapore
• Judge: Zhuang WenXiong AR
• Judgment Date: 28 January 2015
• Neutral Citation: [2016] SGHCR 1
• Court: High Court (Singapore)
• Docket Number: Suit No 930 of 2015 (Summons No 5058 of 2015)
• Year: 2015
• Published date: 29 January 2016
• Hearing Date: 08 December 2015
• Plaintiff Counsel: Francis Xavier SC and Ang Tze Phern (Rajah & Tann Singapore LLP)
• Defendant Counsel: Hri Kumar SC, Tham Feei Sy and Ms Charmaine Chew (Drew & Napier LLC) (instructed),Ms Haridas Vasantha Devi and Shaun Marc Liew (Samuel Seow Law Corporation)
• Subject Matter: Conflict of Laws,Natural Forum
• Citation: [2016] SGHCR 1

Zhuang WenXiong AR:

There remain few unresolved issues in the law of forum non conveniens; this judgment deals with two of them. Should compellability be a significant factor if a witness is willing to testify outside of the place of his or her residence? Are the merits relevant to a forum non conveniens application?

Facts

A detailed recital of the facts is necessary because forum non conveniens is determined with respect to the particular issues that are likely to be in dispute (Yeoh Poh San & Anor v Won Siok Wan [2002] SGHC 196 at [18]).

The plaintiff and defendant are Malaysian citizens. The plaintiff is a lawyer; the defendant, through his companies, harvests raw timber in Papua New Guinea. The plaintiff does not dispute that he is ordinarily resident in Malaysia; the defendant has an office in Singapore and resides in Sentosa Cove when in the country.

The plaintiff invested in two of the defendant’s timber concessions. The plaintiff and defendant asked one Alvin John, a Malaysian lawyer, to draft agreements for both. These comprised the sale and purchase of shares, profit guarantees, a declaration of trust, and a joint venture agreement. Alvin probably drafted these in Malaysia. The parties signed these agreements in Malaysia.

In September 2009, some time after the investments in the two timber concessions, the parties entered into a “settlement agreement”, which the cover expresses to be

in respect of the outstanding debt due and owing to [the plaintiff] pursuant to his divestment of shares and interest in the [two timber concessions], all situated in Papua New Guinea.

The preamble goes on to state that

(B) The parties by mutual agreement have agreed to amicably terminate their joint collaboration in the aforesaid Investment upon and subject to the terms and conditions herein contained.

Clause 2.1 of the settlement agreement in turn stipulates that the parties agreed to amicably terminate their joint collaboration with the defendant to pay the plaintiff a sum of USD 15 million in full and final settlement of the investments in the two timber concessions. Under clause 3.1, payment was to be made by 31 December 2014 (this was amended in handwriting from 2013). Under clause 7.1, the agreement was to be governed by English law; under clause 7.2, the parties submitted to the non-exclusive jurisdiction of the courts of Queensland, Australia. Clause 10, an entire agreement clause, is worded thus

This Agreement constitutes the entire agreement between the Parties with respect to the subject matter hereof, supersedes any previous agreements and understandings between the Parties with respect thereto and may not be modified except by an instrument in writing singed [sic] by the duly authorized representatives of the Parties. Any notification of or alteration to the part to this Agreement shall be conferred upon and determined in writing by mutual consultation.

The money was not paid and the plaintiff filed suit in September 2015. In response, the defendant took out this summons to stay proceedings on the grounds of forum non conveniens. The defendant filed an affidavit in support. The defendant had recommended the plaintiff a USD 12 million investment related to international bonds and other tradable instruments. The investment lost money and the defendant made good these losses at the plaintiff’s request, despite the fact that he was not legally obliged to do so because he felt personally responsible and did not want his relationship with the plaintiff to sour. After this, Alvin informed the defendant that the plaintiff wanted to be bought out of the concession investments. The parties separately instructed Alvin on the terms of the plaintiff’s exit. Alvin told the defendant that the plaintiff wanted payment of USD 15 million, as that was the amount invested in the two concessions. The defendant told Alvin on several occasions that he would only do so if his finances permitted. In particular the defendant also told Alvin that if the plaintiff found a buyer for the defendant’s iron ore mining business in the Philippines for not less than USD 100 million, the defendant would pay the plaintiff the USD 15 million (hereinafter referred to as “the Condition”). The defendant thought it was only fair that the plaintiff put in some effort if the plaintiff wanted to exit unscathed. On 30 September 2009, the plaintiff, the defendant and Alvin met at the defendant’s office in Singapore, where the defendant reiterated the Condition. The defendant avers that the plaintiff understood the Condition and did not object. The parties thereafter signed the settlement agreement. The plaintiff, in his affidavit in reply, denies that the parties had ever agreed to such an oral Condition. The defendant had indeed said that he was in some financial difficulty, which explains why the initial deadline for payment was four years later in December 2013. This was subsequently changed to December 2014 at the defendant’s request. The defendant ensured that the deadline was formally changed, but did not bother to formally document the alleged oral Condition.

Arguments

The defendant argued that he should be allowed to lead evidence on the Condition despite the entire agreement clause, because extrinsic evidence will always be admitted to invalidate a written contract on the ground of fraud or mistake. The parties in any case did not intend for the entire agreement clause to apply to exclude the Condition. Malaysia is clearly a more appropriate forum for the adjudication of the dispute. The parties have significantly more connections to Malaysia and the defendant has also undertaken to appoint solicitors in Malaysia to accept service of process. Alvin, whose evidence is crucial, cannot be compelled to testify in Singapore. Alvin has also changed his position with respect to whether he would be willing to testify in Singapore, with his latest stance being that he would be making himself available in Singapore, by appointment, to accept service of a subpoena. Critical documents are also in Malaysia. The jurisdiction and governing law clauses are also not in favour of Singapore. It was fortuitous that the settlement agreement was signed in Singapore, and mode of payment is irrelevant. The plaintiff will also not be denied substantial justice if the dispute is heard in Malaysia.

The plaintiff argues that Malaysia is not the distinctly more appropriate forum. Little weight should be placed on the parties being Malaysian citizens. Alvin has clearly indicated that he would be willing to be subpoenaed to testify in Singapore. The documents relevant to the suit are not voluminous and are already in the possession of the plaintiff’s solicitors, and Alvin has also confirmed that he will make available to the parties all relevant documents. The settlement agreement was signed in Singapore, and it was in Singapore where the defendant allegedly informed the plaintiff about the Condition. Singapore was the place the parties operated from, and the parties used Singapore companies and bank accounts. The settlement sum of USD 15 million was to be paid to Singapore bank accounts. The defendant also has companies and assets in Singapore such as a property in Sentosa Cove and a Rolls Royce car. The governing law and jurisdiction clauses do not point to Malaysia. A previous suit between the same parties was not stayed in favour of Australia.

My decision Preliminary propositions

The Singapore courts apply Spiliada Maritime Corp v Cansulex Ltd [1987] AC 460 (“Spiliada”) to determine if proceedings should be stayed on the grounds of forum non conveniens (see eg, JIO Minerals FZC and others v Mineral Enterprises Ltd [2011] 1 SLR 391 at [28]). These principles are extremely well-established. A stay will only be granted where the court is satisfied that there is some other available and more appropriate forum for the trial of the action. The natural forum is the forum that has the most real and substantial connection to the action. The burden of establishing this rests on the defendant; the court takes into consideration factors not just affecting convenience or expense, such as the availability of witnesses, but also factors such as the law governing the transaction and the places where the parties reside or carry on business. If the court concludes, at this first stage, that there is some other available forum which is clearly more appropriate, a stay will ordinarily be granted. But there may be circumstances by reason of which justice requires that a stay should nevertheless be refused. For this second stage, the burden is on the plaintiff to establish these circumstances.

I pause to note that, despite the presence of a non-exclusive jurisdiction clause in favour of Queensland, Australia, it was common ground between the parties that Spiliada Maritime Corp v Cansulex Ltd [1987] AC 460 would apply; and correctly so, because the defendant sought to stay proceedings on the ground that Malaysia is a more convenient forum. Orchard Capital I Ltd v Ravindra Kumar Jhunjhunwala [2012] 2 SLR 519 (“Orchard Capital”) is not applicable, because in that case the defendant was seeking a stay on the ground that the contractually designated non-exclusive forum was more appropriate.

Despite the label “non conveniens”, the doctrine is not concerned with the inappropriateness per se of Singapore as a forum. The doctrine is concerned with appropriateness in a relative sense – there must be another available and more appropriate forum. There are conceivable cases where no forum can be described as the natural forum and Lord Goff of Chieveley could “see no reason why the English court should not refuse to grant a stay in such a case, where jurisdiction has been founded as of right” (Spiliada at 477D). Thus an action will not be stayed if it is merely shown that connecting factors are interspersed across various jurisdictions...