Allianz Capital Partners GmbH, Singapore Branch v Goh Andress

• Jurisdiction: Singapore
• Judge: Kannan Ramesh JAD
• Judgment Date: 08 May 2023
• Neutral Citation: [2023] SGHC(A) 18
• Court: High Court Appellate Division (Singapore)
• Docket Number: Civil Appeal No 75 of 2022
• Hearing Date: 10 November 2022
• Citation: [2023] SGHC(A) 18
• Year: 2023
• Plaintiff Counsel: Tan Tee Jim SC, Christopher James De Souza, Yan Chongshuo, Lee Junting Basil and Darius Tan En Han (Lee & Lee)
• Defendant Counsel: Pradeep Pillai, Simren Kaur Sandhu, Wong Shi Rui Jonas and Wong Yong Min (PRP Law LLC)
• Subject Matter: Conflict of Laws,Choice of jurisdiction,Exclusive,Natural forum
• Published date: 08 May 2023

Kannan Ramesh JAD (delivering the judgment of the court): Introduction

When would a jurisdiction clause in one contract, as a matter of construction, apply to disputes arising out of another contract? This is the key question in the present appeal and gives us the opportunity to consider what has been termed the “Extended Fiona Trust Principle” (the “Principle”).

We are of the view that the Principle ought to be accepted as a matter of Singapore law. Applying the Principle to the present appeal, we find that the dispute between the parties is subject to an exclusive jurisdiction clause in favour of Singapore. We therefore allow the appeal and set aside the Judge’s order below in HC/OS 1215/2021 (“OS 1215”) granting a stay of the proceedings.

Facts The parties

The factual background to the present appeal can be found in the grounds of decision of the Judge in Allianz Capital Partners GmbH, Singapore Branch v Goh Andress [2022] SGHC 266 (the “GD”) at [1]–[14]. We highlight the salient aspects below.

The appellant (“ACP-S”) is the Singapore branch of a German company, Allianz Capital Partners GmbH (“ACP”). ACP is a member of the Allianz Group and is an asset manager for alternative equity investments. The respondent, Ms Andress Goh (“Ms Goh”), is a Singaporean citizen who was based in Singapore at all material times. Ms Goh was previously employed by ACP-S (and its predecessor entity) from May 2006 to December 2021.

The terms of Ms Goh’s employment with ACP-S were contained in two documents, as follows: an employment contract between Ms Goh and ACP-S, dated 19 October 2009 (the “Employment Contract”); and the “Allianz Global Investors – Employee Handbook for Singapore” (version 1.0) (the “Employee Handbook”), which was incorporated by reference into the Employment Contract by cl 2.9 of the Employment Contract.

We set out the relevant provisions of the Employment Contract below. First, cl 2.5 of the Employment Contract provides that Ms Goh “may” participate in carried interest programmes, as follows: 2.5 Carried Interest

The EMPLOYEE may participate in the carried interest program of ACP subject to the details to be provided in separate agreements and notices by ACP with regard to such carried interest program.

Further, cl 7.3 provides that the Employment Contract is governed by Singapore law, and that the Singapore courts have exclusive jurisdiction over “any dispute”: 7.3 Singapore law shall be the sole and applicable law of this Agreement and any dispute arising from it. The Courts in Singapore shall be the sole forum to which any dispute shall be referred to and Singapore shall be the sole jurisdiction for such determination.

[emphasis added]

We refer to the exclusive jurisdiction clause in cl 7.3 as the “EJC”.

The Employment Contract also contains an entire agreement clause, as follows: 7.5 This Agreement supersedes any prior agreements, representations and promises, whether written, oral, express or implied between the parties on specific points explicitly mentioned in this agreement and constitutes the full and exclusive agreement between the EMPLOYEE and the COMPANY with respect to the employment.

The Incentive Plan and the LTIP

During her employment with ACP-S, Ms Goh was selected to participate in the Allianz Capital Partners Incentive Plan for Indirect Private Equity Investments (the “Incentive Plan”) from 2018 to 2020. The Incentive Plan was administered by ACP, subject to terms and conditions contained in a document titled “Allianz Capital Partners Incentive Plan for Indirect Private Equity Investments” (the “Plan Terms”). It is common ground between the parties that Ms Goh’s participation in the Incentive Plan was pursuant to cl 2.5 of the Employment Contract, and that the Incentive Plan was a “carried interest program” within the meaning of cl 2.5. The Judge also proceeded on this basis: GD at [37]. Thus, cl 2.5 of the Employment Contract provided for Ms Goh’s participation in carried interest programmes such as the Incentive Plan, the details of which were to be encapsulated in separate agreements and notices issued by ACP.

The purpose of the Incentive Plan was to provide eligible directors and/or employees of ACP and Allianz Capital Partners of America Inc (“Plan Participants”) with the opportunity to participate in the returns generated by investments made by ACP in the private equity sector. Under the Incentive Plan, certain investments made by ACP within a calendar year (a “Vintage Year”) were pooled and aggregated. Based on the performance fees received by ACP in respect of those investments, ACP had the discretion to allocate to each Plan Participant a certain percentage of the performance fees for that Vintage Year (the “Incentive Award”). Each Plan Participant would be notified by, inter alios, ACP of an Incentive Award through an allocation letter (an “Award Notice”) in accordance with the template set out in Schedule 2 of the Plan Terms. To acquire the Incentive Award, the Plan Participant had to sign the Award Notice acknowledging that he/she agreed to be bound by the Plan Terms and that he/she accepted the Incentive Award.

Ms Goh was offered Incentive Awards in 2018, 2019 and 2020. Notably, while cl 2.5 of the Employment Contract and cl 3.2 of the Plan Terms provide for the Award Notice to be issued by ACP, the Award Notices that were issued to Ms Goh were on ACP-S’s letterhead. Ms Goh duly signed the respective Award Notices, thereby agreeing to be bound by the Plan Terms. We refer to the agreements formed in relation to each Award Notice collectively as the “LTIP”.

Clause 5.1.2 of the Plan Terms provides that the Incentive Award for each Vintage Year vests annually in tranches of 25% over a period of four years. If a Plan Participant ceases employment before the vesting period ends, his/her entitlement to the unvested and vested Incentive Award(s) would depend on whether he/she is classified as a “Good Leaver”, “Normal Leaver” or “Bad Leaver”. In this regard, cl 5.2 of the Plan Terms is salient: 5.2 Leaver Treatment

If a Plan Participant Leaves Employment during the Vesting Period, the following shall apply: 5.2.1 If the Plan Participant Leaves Employment and is a Good Leaver by any other reason than death, the Plan Participant keeps all vested Incentive Awards with regard to a Vintage and all unvested Incentive Awards of such Leaver fully vest immediately. If a Plan Participant is a Good Leaver by reason of death, all her or his unvested Incentive Awards fully vest immediately, the vested Incentive Awards remain unaffected and Clause 3.5 applies. 5.2.2 If the Plan Participant Leaves Employment and is a Normal Leaver, the Plan Participant keeps all Incentive Awards with regard to a Vintage vested at the date the Plan Participant Leaves Employment, but loses all unvested Incentive Awards. 5.2.3 If the Plan Participant Leaves Employment and is a Bad Leaver, the Plan Participant (i) loses with effect from (and including) the occurrence of the Bad Conduct Event all Incentive Awards irrespective of whether they are vested or unvested and (ii) is obliged to repay to the Company the net amount of all Plan Payments (i.e. amount after any deduction of income tax and employee’s social security contributions required by law in accordance with Clause 4.3) she or he has received since the Bad Conduct Event because the Company was not aware of the Bad Conduct Event. However, such repayment obligation only exists for Plan Payments received by the Bad Leaver during the time period of five years from (and including) the Bad Conduct Event.

…

[emphasis added]

The terms “Good Leaver”, “Normal Leaver” and “Bad Leaver” are defined in cl 1.2 of the Plan Terms as follows:

‘Bad Leaver’ means any Plan Participant who (i) ceases to be employed with the Company or ACP US by reason of a Bad Conduct Event or (ii) Leaves Employment with the Company or ACP US and has committed a Bad Conduct Event, provided that the Company or ACP US discovers within five years from (and including) the day the Plan Participant Leaves Employment with the Company or ACP US, respectively, that such Plan Participant committed such Bad Conduct Event;

…

‘Good Leaver’ means any Plan Participant who Leaves Employment either (i) by reason of death, disability, retirement or termination by the employer because of downsizing, re-organization or termination of its business, or (ii) – in respect of any ACP Investment Professional – the ACP Management Board, in its discretion, deems the respective Plan Participant a Good Leaver, such discretion being subject to the approval of the ACP Compensation Committee, or (iii) – in respect of any Eligible ACP Board Member – both the ACP Competent Body and the AllianzGI Compensation Committee, in their discretion, deem the respective Plan Participant a Good Leaver. The ACP Competent Body may delegate the decision to the AllianzGI Compensation Committee that then decides – subject to the approval of the ACP Competent body – in its discretion;

…

‘Normal Leaver’ means any Plan Participant who Leaves Employment and is neither a Good Leaver nor a Bad Leaver;

…

[emphasis in bold in original]

Clause 8.8 of the Plan Terms is an entire agreement clause, while cl 8.9 provides that the LTIP is governed by German law, as follows: 8.8 Entire Agreement

This Plan constitutes the entire agreement and supersedes any previous agreement between the parties relating to the subject matter of this Plan.

8.9 Governing law

This Plan and all Incentive Awards granted under it shall be governed by and construed in accordance with the law of the Federal Republic of Germany, excluding the application of the UN Convention on Contracts for the International Sale of Goods (CISG) and the German conflicts of laws rules.

Ms Goh’s resignation

On 18 June 2021, Ms Goh informed her immediate superiors...