Bambang Sutrisno v Bali International Finance Ltd and Others

• Jurisdiction: Singapore
• Judgment Date: 01 June 1999
• Date: 01 June 1999
• Docket Number: Civil Appeal No 7 of 1999
• Court: Court of Appeal (Singapore)

Bambang Sutrisno

Plaintiff

and

Bali International Finance Ltd and others

Defendant

[1999] SGCA 92

M Karthigesu JA

and

L P Thean JA

Civil Appeal No 7 of 1999

Court of Appeal

Conflict of Laws–Choice of jurisdiction–Breach of agreement to waive objection to exercise of jurisdiction–Stay of proceedings–Applicable principles

In mid-1997, an Indonesian company (“SSF”) approached the first respondent, Bali International Finance Ltd (“BIF”), to arrange a syndicated loan to refinance an existing term loan facility of US$16m, which SSF had been using as working capital for its business. Several of the respondents were participants in this facility. BIF's role was to act as the agent in the negotiation and arrangement of the loan which was eventually concluded and the amount of the loan was raised to US$16.5m. On 20 August 1997, a syndicated loan agreement was executed where the appellant executed a personal indemnity and guarantee (“the personal guarantee”). PT Dwi Golden Graha (“DGG”) also executed a corporate indemnity and guarantee (“the corporate guarantee”) dated 25 August 1997. DGG was incorporated in Indonesia and the appellant was DGG's group's (“Golden Truly Group”) president commissioner.

In 1998, BIF received a fax from SSF which raised the possibility of SSF being unable to pay the quarterly interest due on 9 March 1998. As BIF did not have any presence in Indonesia, it sought the assistance of its holding company, PT Bank Bali in Jakarta to find out the position. A meeting was later convened at Bank Bali's office in Jakarta between the representatives of the respondents and Golden Truly Group. No agreement was reached with respect to payment of loan and interest. The respondents hence brought this action against the appellant, his wife and others.

At the time of commencement of the action, the respondents applied ex parte and obtained a worldwide Mareva injunction against the appellant. After service of the Mareva injunction and the writ, the appellant applied to a judge in chambers for a discharge of the worldwide Mareva injunction or alternatively, a stay of the action under the inherent jurisdiction of the court.

The application was dismissed by the High Court and the appellant appealed on the grounds that the action should be stayed. The respondents on the other hand, argued that the appellant had by Art 23 of the personal guarantee, effectively waived his right to raise any objections to the forum on the ground of forum non conveniens or on any similar ground and was therefore precluded from asking for a stay of the proceedings. Further, the respondents contended that parties should be bound by the agreement that they had entered into freely and the court should uphold the agreement.

Held, allowing the appeal:

(1) The court had a discretion to decide whether to refuse a stay or not, where a defendant in breach of an agreement applied for a stay of proceedings on the ground of forum non conveniens or other similar ground. In exercising its discretion, the court should refuse a stay and give effect to the agreement between the parties unless strong cause was shown by the defendant for a stay. The defendant had to show exceptional circumstances amounting to strong cause for him to succeed in support of the application for a stay: at [9].

(2) There was a serious dispute on the validity of the instrument on which the respondents founded the action and that issue was to be determined by Indonesian law. This issue could only be effectively tried and determined by the Indonesian courts: at [13] and [14].

(3) The appellant had shown exceptional circumstances amounting to strong cause for a stay of this action and the Indonesian court was clearly and distinctly more appropriate than the Singapore forum for the trial of the matter in dispute. Complex issues of Indonesian law were involved including those going to the validity of the personal guarantee on which this action was based: at [18].

(4) The appellant was prepared to accept the continuation of the Mareva injunction affecting his assets in Singapore. There was no need for a worldwide Mareva injunction. The Mareva injunction was hence varied by confining its operation to the assets of the appellant in Singapore, pending resolution of the dispute in Indonesia: at [19].

Amerco Timbers Pte Ltd v Chatsworth Timber Corp Pte Ltd [1977-1978] SLR (R) 112; [1975-1977] SLR 258 (folld)

Asian Plutus, The [1990] 1 SLR (R) 504; [1990] SLR 543 (refd)

Eastern Trust, The [1994] 2 SLR (R) 511; [1994] 2 SLR 526 (refd)

Eleftheria, The [1970] P 94; [1969] 1 Lloyd's Rep 237 (refd)

PT Jaya Putra Kundur Indah v Guthrie Overseas Investments Pte Ltd [1996] SGHC 285 (refd)

S & W Berisford plc v New Hampshire Insurance Co [1990] 2 QB 631 (refd)

Vishva Apurva, The [1992] 1 SLR (R) 912; [1992] 2 SLR 175 (refd)

Chapter VII Law No 1 of 1974 (Indonesia) ss 35 (1), 36 (1), Art 29 (1)

Government Regulation No 9 of 1975 (Indonesia) Art 12 (h)

Kenneth Tan SC and Ronnie Wai Chee Leong (Phua Wai Partnership) for the appellant

M Sivakumar and Prakash P Mulani (Azman Soh & Murugaiyan) for the respondents.

L P Thean JA

(delivering the grounds of judgment of the court):

1 This was an appeal against the decision of the High Court dismissing the application by the appellant for a stay of the proceedings and discharge of the worldwide Mareva injunction. We allowed the appeal, granted a stay and varied the injunction by confining it to the assets...