Bayerische Landesbank Girozentrale v Kong Kok Keong and another action

• Judge: Lee Seiu Kin JC
• Judgment Date: 19 March 2002
• Neutral Citation: [2002] SGHC 51
• Citation: [2002] SGHC 51
• Defendant Counsel: Lawrence Quahe (Harry Elias Partnership)
• Published date: 19 September 2003
• Plaintiff Counsel: Hri Kumar and Vinod Sabnani (Drew & Napier LLC)
• Date: 19 March 2002
• Docket Number: Suits Nos 948 and 947 of 2001
• Court: High Court (Singapore)
• Subject Matter: Conflict of Laws,Natural forum,Whether court has discretion to grant stay in such circumstances,Whether court has residual discretion to grant stay even where another forum more appropriate,Stay of proceedings on ground of forum non conveniens,Non-exclusive jurisdiction of Singapore courts,Circumstances where court will grant stay,Singapore law the governing law of agreement,Application for stay

: On 27 July 2001, the plaintiffs (`the bank`) commenced six actions against various defendants in Suits 942/2001, 943/2001, 944/2001, 946/2001, 947/2001 and 948/2001, claiming against each of them under loan contracts. Between 19 September and 29 October 2001, the six defendants in those suits filed applications to stay proceedings on the ground that the High Court of Malaysia sitting in Kota Kinabalu, Sabah, is the more appropriate forum to determine all issues between the parties.

All the parties involved in these six actions had agreed to be bound by the outcome of the application in Suit 948/2001. I shall hereafter concern myself with that suit, which pertains to the appeal in RA 250/2001. In that action the bank is claiming against the defendant (`Kong`) for the sum of US$4,301,135.74. This is the amount outstanding under a Multi-Currency Revolving Credit Facility (`the facility`) granted by the bank to Kong on or about 24 April 1997, together with all interest accrued thereon.

In SIC 2248/2001, Kong applied to stay the present proceedings on the ground of forum non conveniens. On 7 December 2001 the assistant registrar dismissed the application with costs fixed at $500 and Kong filed the present appeal. On 24 January 2002, I heard the appeal and dismissed it with costs. Kong has filed a notice of appeal to the Court of Appeal against the whole of my decision on 22 February 2002 and I now give my grounds of decision. The defendant in Suit 947/2001 has also filed a notice of appeal and the grounds in Kong`s appeal would apply, mutatis mutandis to that appeal.

Background

On 24 April 1997, Kong entered into a written agreement (`the agreement`) with the bank under which he was granted the facility, which was denominated in Malaysian Ringgit. On 27 October 1998 the facility was redenominated from Ringgit to US Dollar. On 8 January 1999, the bank`s solicitors wrote to Kong to say that the bank had decided to terminate the facility and demanded repayment by 22 January 1999 of the sum of US$3,525,602 outstanding on the facility as at 11 December 1998 plus interest and costs. No payment was made and on 3 July 2001 the bank`s solicitors wrote to Kong to demand payment of the sum of US$4,301,135,74 outstanding on the facility as at 30 April 2001, together with all interest accrued thereon. Again no payment was made and on 27 July 2001, the bank commenced this action.

In his defence, Kong pleaded that he had entered into the agreement as the agent or nominee of one Joseph Ambrose Lee (`Lee`). He said that the transaction was part of a scheme devised by Lee to raise cash from shares that he held in The North Borneo Timbers Bhd (`TNBT`). Under this scheme, Lee would sell 6m shares in TNBT to Kong at RM17 per share, amounting to RM103m. One condition of the sale was that Lee would grant Kong a put option over the shares, (ie an option to require Lee to purchase the shares from Kong) at RM21.25 within six months. Lee would be responsible for securing the funds for the transaction. Kong said that the agreement in respect of this scheme was governed by Malaysian law and the Malaysian courts have jurisdiction over all disputes that would arise.

In his affidavit, Kong said that one James Wong Teck Long (`Wong`), an employee of the bank at the material time, had assisted Lee in carrying out the scheme by arranging for Kong to obtain the facility from the bank. However, because the sum of RM103m was too large for a single borrower, Wong had suggested that Kong procure a number of persons who would enter into separate loan agreements with the bank. This would ensure that the bank`s exposure to each individual was...