BNP Paribas Wealth Management v Jacob Agam

JurisdictionSingapore
JudgeSteven Chong J,Roger Giles IJ,Dominique Hascher IJ
Judgment Date28 October 2016
Date28 October 2016
CourtHigh Court (Singapore)
Docket NumberSuit No 2 of 2016 (Summons No 4 of 2016)

[2016] SGHC(I) 5

Singapore International Commercial Court

Steven Chong J, Roger Giles IJ and Dominique Hascher IJ

Suit No 2 of 2016 (Summons No 4 of 2016)

BNP Paribas Wealth Management
and
Jacob Agam and another

K Muralidharan Pillai, Luo QinghuiandAndrea Tan (Rajah & Tann Singapore LLP) for the plaintiff;

Sivakumar Murugaiyan and Kyle Gabriel Peters (Straits Law Practice LLC) for the defendants.

Case(s) referred to

American Home Assurance Co v Hong Lam Marine Pte Ltd [1999] 2 SLR(R) 992; [1999] 3 SLR 682 (refd)

Chan Chin Cheung v Chan Fatt Cheung [2010] 1 SLR 1192 (folld)

Maybank Kim Eng Securities Pte Ltd v Lim Keng Yong [2016] 3 SLR 431 (refd)

Peh Teck Quee v Bayerische Landesbank Girozentrale [1999] 3 SLR(R) 842; [2000] 1 SLR 148 (refd)

Ram Parshotam Mittal v Portcullis Trustnet (Singapore) Pte Ltd [2014] 3 SLR 1337 (refd)

RBS Coutts Bank Ltd v Brunner Hans-Peter [2010] SGHC 342 (refd)

Sterling Pharmaceuticals Pty Ltd v The Boots Company (Australia) Pty LtdUNK (1992) 34 FCR 287 (refd)

Tomolugen Holdings Ltd v Silica Investors Ltd [2016] 1 SLR 373 (refd)

Yap Shirley Kathreyn v Tan Peng Quee [2011] SGHC 5 (refd)

Legislation referred to

Supreme Court of Judicature Act (Cap 322, 2007 Rev Ed) s 18, s 18(2), First Schedule para 9

Civil Code (as amended by Ordinance No 2016-131) (France) Art 1352-9

Code of Civil Procedure (France) Art 145

Civil Procedure — Stay of proceedings — Limited stay pending outcome of foreign proceedings — Bona fides of application for limited stay — Whether limited stay ought to be granted

The defendants owned four properties in France and Monaco through companies which were incorporated in France, Denmark and Panama (“the Agam companies”). In 2010, the Agam companies entered into four facility agreements with the plaintiff, a multi-national private bank incorporated in France, under which a total amount of €61.7m was loaned to the Agam companies. These monies were disbursed through the plaintiff's local branch in Singapore. Each facility agreement was for a term of five years. They were secured by various securities including mortgages over the four properties and joint personal guarantees executed by the defendants in favour of the plaintiff. Both the facility agreements and the personal guarantees contained clauses stating that they were governed by Singapore law and that the defendants and the Agam companies agreed to submit to the jurisdiction of the Singapore courts.

In 2014, the Tribunal de Grande Instance of Paris (“the Paris Court”) ordered the criminal seizure of one of the properties in France following a request by the authorities of the United States of America as part of their money laundering investigations. This led to a dispute between the parties as to whether the Agam companies were in breach of their obligations under the facility agreements. The parties subsequently entered into discussions to settle the outstanding monies which the Agam companies owed to the plaintiff. But they were not able to reach a compromise on the facility agreements with two of the Agam companies – SCI Ruth Agam and Det Internationale Ejendoms-OG Udviklingsselskab ApS (“Det Internationale”). Following the contractual maturity date for these two facility agreements, the plaintiff issued formal notices of demand to SCI Ruth Agam and Det Internationale for repayment of the loans. SCI Ruth Agam and Det Internationale failed to make repayment. Hence BNP Paribas demanded payment of the outstanding sum of approximately €30.1m from the defendants under the personal guarantees. The plaintiff then commenced the present action in Singapore in November 2015 against the defendants on the same basis. In January 2016, the plaintiff also brought foreclosure proceedings in France to enforce the mortgages over the properties belonging to SCI Ruth Agam and Det Internationale.

In response, the defendants and the Agam companies brought a counter-action in the Paris Court seeking a declaration that the facility agreements and personal guarantees were invalid and “non-existent” under French law (“the French counter-action”). They claimed that the entire transaction was illegal and contrary to the laws of France. The French counter-action was commenced in May 2016, about six months after the plaintiff commenced the present action in Singapore. Shortly after, the defendants made this application for a limited (ie, temporary) stay of the Singapore proceedings pending the determination of the foreclosure proceedings and the French counter-action. The defendants argued that the grant of a limited stay would avoid the risk of conflicting judgments from the overlapping proceedings in Singapore and France.

Held, dismissing the application:

(1) The grant of a limited stay of proceedings was a discretionary exercise of the court's case management powers. This discretion was triggered when there was a multiplicity of proceedings; and in exercising these powers, the court was entitled to consider all the circumstances of the case. The underlying concern was the need to ensure the efficient and fair resolution of the dispute as a whole. Also, a consideration of private international law factors such as the principles of forum non conveniens and international comity was germane, although the former doctrine did not strictly need to be applied due to the temporary nature of the stay which preserved the plaintiff's right to prosecute his claim in Singapore: at [35] and [36].

(2) In the present case, the French foreclosure proceedings commenced by the plaintiff were not likely to have a material impact on the Singapore suit. The validity of the personal guarantees was not directly in issue in the foreclosure proceedings. It was also undisputed the personal guarantees could be enforced as indemnities by virtue of their terms and that, in so far as they could be enforced as indemnities, the defendants' liabilities under Singapore law were primary and would survive even if the underlying facility agreements were found to be void or unenforceable in the French foreclosure proceedings. This was subject to the defendants' argument that the parties' choice of Singapore law was not bona fide. But there was no material before the court to support a finding, at this interlocutory stage, that the plaintiff had deliberately chosen Singapore law as the governing law of the personal guarantees for the sole purpose of evading the operation of French law: at [39] to [41].

(3) As the choice of Singapore law was prima facie valid, there was no need for the court to make any finding on the position under French law. However, even if Singapore law was found to be inapplicable, the evidence of the plaintiff's expert that, under French law, the Personal Guarantees were not likely to be affected by the purported illegality of the facility agreements was to be preferred. His evidence was both cogent and well supported by French legal sources: at [42] and [43].

(4) By contrast with the foreclosure proceedings brought by the plaintiff, there was a clear overlap between the present suit and the defendants' French counter-action. The personal guarantees were directly in issue in the French counter-action before the Paris Court, and the principal remedy sought by the defendants was a declaration from the Paris Court confirming the non-existence of, inter alia, the Personal Guarantees. The French counter-action was therefore a mirror of this current suit and there was a multiplicity of proceedings, with the attendant risk of conflicting judgments, if both this suit and the French counter-action were to proceed concurrently: at [45].

(5) However, the risk of conflicting judgments was not by itself a sufficient reason for the grant of a limited stay of proceedings and the court, in exercising its discretion, needed to consider all the circumstances of the case: at [46].

  • (a) First, the defendants' submission that the Singapore court would benefit from the findings of the French court as the lex contractus was French law fell away in light of the finding that the personal guarantees were prima facie governed by Singapore law. Even if the court were to find otherwise at trial, this factor could not be determinative since the court was an international commercial court which could apply the laws of France to decide the dispute. The remaining evidence tendered by the parties on the merits of the case under the laws of France was not useful or relevant for the determination of the stay application; once it was determined that there was a risk of conflicting judgments, there was no further need, at this stage, for the court to make any findings on the merits of the case: at [47] and [48].

  • (b) The bona fides of this stay application and the defendants' French counter-action was highly relevant. The multiplicity of proceedings in this case was entirely a result of the defendants' commencement of the French counter-action. The French counter-action, however, appeared to have been commenced to deliberately stifle the current action. This was borne out by the timing of this application and the scope of the French counter-action. The limited stay application was brought shortly after the French counter-action was commenced by the defendants. Further, due to the complete overlap between both proceedings, if this suit was stayed pending the determination of the French proceedings, then this action would effectively be rendered otiose, particularly if the Paris Court found in favour of the defendants. In other words, although the defendants' application was, on its face, for a limited case management stay, the stay of proceedings granted would in substance be permanent. Therefore, the defendants' motivation in bringing this application appeared to be to derail these proceedings in Singapore in order to embroil the plaintiff in a much wider and protracted dispute in France. Such a limited stay application filed for the extraneous purpose of...

To continue reading

Request your trial
3 cases
  • Teguh Majuria Sdn Bhd and Others v Atsa Architects Sdn Bhd and Others
    • Malaysia
    • High Court (Malaysia)
    • 1 January 2022
  • Re the Attorney-General
    • Singapore
    • High Court (Singapore)
    • 5 March 2018
    ...Cheung and ors [2010] 1 SLR 1192 at [15] in support. He then drew my attention to BNP Paribas Wealth Management v Jacob Agam and anor [2016] SGHC(I) 5, where the court took into account the bona fides of the stay application (or the lack thereof) and the need to balance the advantages and d......
  • BNP Paribas Wealth Management v Jacob Agam and another
    • Singapore
    • International Commercial Court (Singapore)
    • 5 March 2018
    ...in favour of France was dismissed by this court on 28 October 2016 – see BNP Paribas Wealth Management v Jacob Agam and another [2016] SGHC(I) 5. The The merger between BNPWM and BNPSA was effected pursuant to the French Commercial Code (“the Code”),1 relevantly reading (in translation): Ar......
1 books & journal articles
  • Civil Procedure
    • Singapore
    • Singapore Academy of Law Annual Review No. 2016, December 2016
    • 1 December 2016
    ...International Commercial Court website (accessed 8 February 2017). 91 [2016] 4 SLR 75. 92 [2016] SGHCR 6. 93 [2016] 2 SLR 841. 94 [2016] SGHC(I) 5. 95 [2017] 3 SLR 47. 96 [2016] 5 SLR 1....

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT