Bank of India v Trans Continental Commodity Merchants Ltd

• Jurisdiction: Singapore
• Judgment Date: 24 March 1986
• Date: 24 March 1986
• Docket Number: Originating Summons No 765 of 1983
• Court: High Court (Singapore)

Bank of India

Plaintiff

and

Trans Continental Commodity Merchants Ltd and another

Defendant

[1986] SGHC 10

A Wahab Ghows J

Originating Summons No 765 of 1983

High Court

Civil Procedure–Foreign judgments–Registration–Applicant seeking to set aside registration of judgment and order obtained in England–Applicant alleging that agreements upon which cause of action based illegal and contrary to Singapore's public policy–Whether just and convenient to enforce foreign judgment in Singapore–Section 3 Reciprocal Enforcement of Commonwealth Judgments Act (Cap 24, 1970 Rev Ed) and O 67 r 9 The Rules of the Supreme Court 1970

This was an application by a judgment debtor (“Patel”) to set aside the registration of a judgment of the English High Court of Justice, Queen's Bench Division (“the Judgment”) and an order of the English Court of Appeal (“the Order”) under the Reciprocal Enforcement of Commonwealth Judgments Act (Cap 24, 1970 Rev Ed).

The judgment creditor (“the Bank”) was an Indian bank with a London branch. The first judgment debtor (“TCCM”) had sought banking facilities in London with the Bank, and Patel, the second judgment debtor, had guaranteed TCCM's liabilities to the Bank. When TCCM did not satisfactorily perform some of its foreign exchange transactions, the Bank sued TCCM and Patel, claiming damages from TCCM for breach of contract and from Patel under his guarantee. As part of the Judgment, Bingham J found TCCM liable to the Bank with damages to be assessed, and found Patel liable under the guarantee. The English Court of Appeal subsequently dismissed Patel's appeal by way of the Order.

In these proceedings, Patel argued that the Bank's cause of action upon which the Judgment and the Order were given and the agreement (s) from which the Bank's cause of action arose were corrupted by illegality and contrary to Singapore's public policy because they infringed the Bretton Woods Agreement and the Exchange Control Act 1953 (No 57 of 1953) (Malaya) (“the Malaysian Act”). Counsel for Patel contended that the actual parties to the foreign exchange contracts in question were the Bank and Patel, rather than TCCM, because TCCM was a creature of Patel created to enable Patel to enter into forward foreign exchange contracts without overtly contravening the Malaysian Act.

Held, dismissing the application:

(1) There was no evidence that any of the foreign exchange contracts between the Bank and TCCM made any reference to Malaysian currency. The contracts were to be wholly performed in England. That being so, they could not, as a result of the Bretton Woods Agreement, be affected by foreign exchange regulations. In addition, the contention of Patel's counsel that Patel was the true party to the foreign exchange contracts with the Bank contradicted what his own client Patel had always maintained: at [8] to [10].

(2) In the circumstances of this case the court could not give judgment upon the contentious questions of fact Patel presently raised. None of the submissions or evidence now adduced on affidavit were made or adduced in the course of the Bank's action before the English courts. These points now canvassed and the evidence necessary to support them could have been raised even in the proceedings before the English Court of Appeal. Furthermore, the defence of the English action was conducted by or on behalf of Patel on a basis fundamentally contradictory to or inconsistent with the evidence now adduced and the contentions now raised: at [15] and [24].

(3) Patel had failed to prove on a balance of probabilities that TCCM was a sham, cloak, device, stratagem, puppet, creature of Patel created to enable Patel to enter into forward foreign exchange contracts. There was very little evidence to support this allegation. In addition, it would be futile to order a new trial between the Bank and Patel or to order an issue to be tried because the Bank's original cause of action was now statute-barred. In any event, if Patel had in fact created TCCM for the purpose of circumventing the Bretton Woods Agreement and the Malaysian Exchange Control Act, as alleged by Mr Selvadurai, he must not be allowed to profit from his own wrongdoing at the expense of an innocent party: at [24] and 26].

(4) In the circumstances, it was just and convenient that the Judgment and the Order be enforced in Singapore. It had not been sufficiently proved that the aforesaid Judgment and Order were in respect of a cause of action which for reasons of public policy or for some other similar reason could not have been entertained in a Singapore court: at [27].

Bank of India v Trans Continental Commodity Merchants Ltd [1982] 1 Lloyd's Rep 427 (refd)

Batra v Ebrahim [1982] 2 Lloyd's Rep 11 (refd)

Connolly v Consumers Cordage Co89 LTR 347 (distd)

Lam Soon Cannery Co v Hooper & Co [1965-1967] SLR (R) 149; [1965-1968] SLR 76 (refd)

Ralli v Angullia (1917) 15 SSLR 33 (distd)

Sharif v Azad [1967] 1 QB 605 (refd)

United City Merchants (Investments) v Royal Bank of Canada [1983] 1 AC 168 (folld)

Civil Law Ordinance 1909 (SS Ord No VIII of 1909)s 7

Reciprocal Enforcement of Commonwealth Judgments Act (Cap 24, 1970Rev Ed)s 3 (consd)

Rules of the Supreme Court 1970, TheO 67r 9 (consd)

Civil Procedure Code (India)s 327

Exchange Control Act1953 (No 57 of 1953) (Malaya)ss 4 (2),9 (1),36 (1)

Exchange Control Act1947 (c 14) (UK)s 30 (3)

S Selvadurai (Selvadurai Pala Krishnan & Partners) for the applicant/second judgment debtor

R Raj Singam (Drew & Napier) for the respondent/judgment creditor.

A Wahab Ghows J

1 This is an application to set aside the registration under the Reciprocal Enforcement of Commonwealth Judgments Act (Cap 24, 1970 Rev Ed) of a judgment of the High Court of Justice, Queen's Bench Division dated 22 October 1981 and an order of the Court of Appeal dated 24 May 1983. The judgment creditors in this case are the Bank of India which I shall refer to as the Bank and the first judgment debtors are the Trans Continental Commodity Merchants (hereinafter referred to as “TCCM”) and the second judgment debtor is Jashbai Nagjibhai Patel (hereinafter referred to as “Patel”).

2 The facts are briefly as follows. The Bank is an Indian bank with a branch in the city of London. It carried on the business of an international bank including the handling of documentary credits and the provision of finance for exports. It also had a foreign exchange department. TCCM was one of the Bank's customers. TCCM carried on the business of trading in edible oils and other commodities. TCCM sought banking facilities in London with the Bank and these facilities included the handling of documentary credits and all the company's foreign exchange deals. These deals took the form of forward contracts for the sale or purchase of foreign exchange, under which the amount, the currency, the rate, and the date of delivery were agreed.

3 When TCCM became the Bank's customer a form of guarantee of TCCM's liabilities to the Bank was entered into by Patel. The guarantee was dated 13 March 1975. Thereafter the Bank handled a number of foreign exchange transactions described aforesaid. There were about 30 of such transactions in all, some of sale, some of purchase, entered into between 11 March and 3 July 1975. Of these contracts, 18 were...