Azt v Azv

• Jurisdiction: Singapore
• Judge: Andrew Ang J
• Judgment Date: 24 May 2012
• Neutral Citation: [2012] SGHC 116
• Published date: 10 July 2012
• Date: 24 May 2012
• Year: 2012
• Hearing Date: 17 May 2012,03 May 2012,24 May 2012
• Plaintiff Counsel: Kristy Tan and Margaret Ling (Allen & Gledhill LLP)
• Citation: [2012] SGHC 116
• Defendant Counsel: Wendy Lin (WongPartnership LLP)
• Court: High Court (Singapore)
• Docket Number: Originating Summons No 153 of 2012 (Summons No 2037 of 2012)

Andrew Ang J: Introduction

The parties to the present application were co-respondents in a Singapore arbitration. The claimant in the arbitration, [C], belongs to a group of private equity funds. The arbitration concerned a dispute surrounding a shareholders’ agreement between AZV and [C], entered into in 1999, in respect of their shareholding in a company in Korea, [D].

In October 2003, one of the companies in the AZT group (collectively “AZT”) acquired a 51% stake in AZV. Subsequently, in November 2003, AZV and [C] entered into a share purchase agreement whereby AZV bought out [C]’s stake in [D].

In 2008, [C] commenced the Singapore arbitration claiming breach of both the 1999 shareholders’ agreement and the 2003 share purchase agreement, and seeking to void the sale of its shares to AZV. While AZT (as majority shareholder of AZV) was not party to the arbitration agreement between [C] and AZV, it agreed to be joined as co-respondents.

The arbitral award found in favour of [C], with AZT and AZV being jointly and severally liable for damages and costs. The award, however, did not apportion liability as between AZT and AZV, as it was not part of the Terms of Reference of the arbitration. On 20 February 2012, AZT, by an Accord Agreement with [C], agreed to pay [C] $65m in full satisfaction of the arbitral award. AZT now seeks contribution from AZV in the present Originating Summons (“OS”) action.

Present application

AZT is seeking to seal the court documents in the present OS action, the affidavit in support of which has not been filed in light of the present application. It points out that the following matters canvassed in the Singapore arbitration will have to be ventilated in the OS action: The arbitration award; The transcripts of the arbitration hearing; Written submissions tendered in the arbitration; The Terms of Reference; and The 1999 shareholders’ agreement and the 2003 share purchase agreement. The Accord Agreement would also have to be disclosed.

Accordingly, AZT argues that the court documents should be sealed in order to preserve the confidentiality of the arbitration proceedings.

Issue

This judgment addresses the following issue: whether AZT’s application for the sealing of court documents, so as to preserve the confidentiality of the arbitration proceedings the parties were involved in, should be granted?

The law The need for open justice must be weighed against the need to preserve the confidentiality of the arbitration

The principle that the courts must administer justice publicly is well settled in the common law: Scott v Scott [1913] 1 AC 417 (“Scott”). In Jeremy Bentham’s words (quoted by Lord Shaw of Dunfermline in Scott at 477): “Publicity is the very soul of justice. ... It keeps the judge himself while trying under trial”.

This principle, however, is subject to exceptions. The exceptions reflect the “yet more fundamental principle that the chief object of Courts of justice must be to secure that justice is done” (see judgment of Viscount Haldane LC in Scott at 437–438). Consistently with this view that there is a more fundamental principle that prevails over that of open justice, ie, that the chief object of courts of justice is to ensure that justice is done, the principle of publicity must yield in the appropriate cases where to sit in public would destroy the subject matter of the dispute (see Re JN Taylor Holdings Ltd (in liquidation) [2007] SASC 193 at [6], applying numerous English decisions).

Department of Economics, Policy and Development of the City of Moscow v Bankers Trust Co [2005] QB 207 (“Moscow”) was a case in which the defendant (London Bankers Trust Co) succeeded in arbitration against another claimant but failed against the plaintiff (the Moscow government). The arbitral award was published only to the parties. London Bankers Trust Co’s application to the English court to set aside the arbitral award was dismissed. In light of the dismissal by the English court of the application to set aside the arbitral award, the Moscow government sought publication of the judgment to demonstrate to the international financial community that the arbitral award, holding that it had not committed any financial default, had been the subject of detailed scrutiny by the English courts.

Mance LJ said, at [32] of his judgment, in relation to the English position: 32 The rule makers...