BREACH OF AGREEMENT VERSUS VEXATIOUS, OPPRESSIVE AND UNCONSCIONABLE CONDUCT

• Citation: (2015) 27 SAcLJ 340
• Published date: 01 December 2015
• Date: 01 December 2015
• Author: CHNG Wei Yao Kenny LLB (Summa Cum Laude) (Singapore Management University); Naval Officer, Republic of Singapore Navy.

Clarifying their Relationship in the Law of Anti-suit Injunctions

Cases warranting the grant of an anti-suit injunction can be divided into three main categories: breach of agreement, vexatious, oppressive, or unconscionable conduct, and abuse of process. A series of Singapore cases have demonstrated that the boundaries between the first two categories are ambiguous in Singapore law. This ambiguity reflects a lack of clarity about the principles underlying anti-suit injunctions and creates uncertainty as to the applicable analysis for each category. This article argues that the two categories should be distinct in kind, with both categories remaining part of the court's equitable jurisdiction. Such an approach will provide a good foundation in principle for the applicable rules of law and provide a principled foundation for the “strong reasons” standard.

I. Introduction

1 Anti-suit injunctions are an important feature of private international law. When faced with an application for an anti-suit injunction, the fundamental principles that govern the Singapore court's decision are well settled.1 These principles were set out in the dicta of the Privy Council's decision in Société Nationale Industrielle Aerospatiale v Lee Kui Jak2 (“Société Nationale”), which were also accepted in Singapore in Evergreen International SA v Volkswagen Group Singapore Pte Ltd3 (“Evergreen International SA”).

2 Cases warranting the grant of an anti-suit injunction can be divided into three main categories. The first category of cases involves the breach of an agreement. Where there is such a breach, the court will be inclined to enforce the agreement. The party in breach has to show “strong reasons” as to why the court should allow his breach of the agreement.4 The second category of cases bases the grant of an anti-suit injunction on the vexatious, oppressive or unconscionable conduct of the defendant. In such cases, the party seeking an anti-suit injunction must show the vexatious, oppressive or unconscionable conduct of the other party in commencing foreign proceedings. The third category of cases justifies the grant of an anti-suit injunction on the prevention of abuse of process and protection of the court's jurisdiction.

3 A series of Singapore cases have demonstrated that the boundaries between the first two categories are ambiguous in Singapore law. At times, the courts suggest that breach of an agreement is mere evidence of vexatious and oppressive conduct. At other times, they affirm that breach of an agreement is an independent ground for the grant of an anti-suit injunction. This ambiguity regarding the boundaries between the categories is undesirable — it reflects a lack of clarity about the principles underlying anti-suit injunctions, and creates uncertainty as to the applicable analysis for each category. This article argues that the category of vexatious, oppressive, and unconscionable conduct should be distinct in kind from the category of breach of agreement, with both categories remaining part of the court's equitable jurisdiction. Such an approach will provide a good foundation in principle for the applicable rules of law, and will prevent confusion as to when the “strong reasons” standard will apply.

4 This article will first elucidate the principles underlying the grant of anti-suit injunctions with a view to clarifying the relationship between them. Second, it will critique a series of contemporary Singaporean cases that have developed the law with regard to the boundaries between the two categories. Third, this article will propose three approaches for formulating the boundaries between the two categories, consider the implications of each approach, and recommend a way ahead for the development of the law.

II. Principles underlying the grant of anti-suit injunctions

5 This part will highlight the key principles underlying the grant of an anti-suit injunction, as articulated by commentators and judges across the common law jurisdictions.5

A. Equity

6 At the most fundamental level, anti-suit injunctions are grounded in equity. This equitable foundation can be attributed to the origin of the remedy in the English Court of Chancery's equitable jurisdiction. The ancestor of the anti-suit injunction was the “common injunction”, developed in the 15th century to prevent a party from suing in English common law courts if such action was against good conscience.6 The reach of these injunctions eventually extended beyond English shores to proceedings in foreign countries also, resulting in the anti-suit injunction we are familiar with today.7 This foundation in equity generally means that considerations of natural justice, unconscionability and inequitable conduct are key to justifying the grant of an anti-suit injunction. As stated by Lord Goff in Société Nationale, the courts will exercise their jurisdiction to grant anti-suit injunctions only when the ends of justice require.8

7 The equitable nature of the remedy lends itself against the formulation of fixed categories dictating when the court will intervene.9 This sentiment has been echoed by both the Australian and US courts.10 Nevertheless, for clarity of analysis, judges and commentators alike have

sought to identify categories of cases which warrant the grant of an anti-suit injunction. A survey of the case law and commentary across the common law jurisdictions reveals three main categories: vexatious, oppressive or unconscionable conduct, breach of agreement, and abuse of process or protection of the court's jurisdiction. The third category is distinct from the first two.11 As described by the Australian High Court,12 the first two categories of cases are founded in the court's equitable jurisdiction. In contrast, the third category is founded upon the court's inherent jurisdiction to prevent its own processes from being used unjustly and to protect the integrity of its own processes.13 In view of the issue being discussed, the focus of this article will be on the relationship between the first two categories of cases.

(1) Vexatious, oppressive or unconscionable conduct

8 The first category is where the defendant has acted in a vexatious, oppressive or unconscionable manner in his commencement of proceedings in a foreign court, in view of the local court being the natural forum.14 A typical scenario illustrating this category of cases is where B brings proceedings in Jurisdiction X against A, and A seeks an anti-suit injunction in the local forum against B's proceedings in Jurisdiction X due to B's vexatious, oppressive or unconscionable conduct.

9 To determine whether an anti-suit injunction should be granted in this category of cases, the English courts will consider the vexation and oppression of the foreign proceedings to the plaintiffs and injustice to the defendant if he is deprived of advantages in the foreign forum.15

Singapore law broadly follows English law in this regard.16 The analogous stage of the Canadian court's analysis, as stated in Amchem Products Inc v British Columbia (Workers' Compensation Board),17 is largely similar to English law as well.18 In Australia, the Australian High Court in CSR Ltd v Cigna Insurance Australia Ltd19 also applied the Société Nationale test, but focused on the unconscionability of the plaintiff's conduct in bringing the foreign proceedings.

10 What amounts to vexatious, oppressive or unconscionable conduct cannot be and should not be defined exhaustively — rather, it depends on the facts of each case.20 Some situations where the courts have found such conduct involved a party bringing proceedings in bad faith with intention to harass, bringing proceedings that are bound to fail or are brought to achieve illegitimate purpose, causing extreme inconvenience through the foreign proceedings, and subjecting the other party to oppressive procedures in the foreign court.21

(2) Breach of agreement

11 The second category is where the court acts to prevent the breach of an agreement by granting an anti-suit injunction. Three different types of agreements will be discussed under this category.

12 The first type of agreement, which forms the main bulk of cases in this category, is a jurisdiction agreement.22 A typical scenario in this category of cases would be where A sues B in Jurisdiction X, in breach of a jurisdiction agreement in favour of the local forum.23B then seeks an

anti-suit injunction in the local forum against A's proceedings in Jurisdiction X.

13 At this point, a distinction must be drawn between exclusive and non-exclusive jurisdiction agreements. The intention expressed by each of these agreements is different. A non-exclusive jurisdiction clause evinces an intention of the parties to confer jurisdiction on one or more courts. An exclusive jurisdiction clause, on top of an intention to confer such jurisdiction, also includes an agreement not to bring proceedings to any other courts.

14 In Singapore law, the lines are blurred with respect to the intention evinced by each jurisdiction clause.24 The classification of each clause as non-exclusive or exclusive is an exercise in contractual construction, whether it is exclusive or non-exclusive on its face.25 A jurisdiction clause that appears to be non-exclusive on its face can be interpreted as carrying with it intentions similar to that of an exclusive jurisdiction clause, if an analysis of contractual intention points in that direction.26 Should this be the case, the non-exclusive jurisdiction clause will be treated, for all intents and purposes, as an exclusive jurisdiction clause. Similarly, as was held in Abdul Rashid bin Abdul Manaf v Hii Yii Ann27 (“Abdul Rashid”), a non-exclusive jurisdiction clause can be construed as a “most appropriate jurisdiction clause”, should the context point in that direction.28 Such a clause would effectively have the same effect as an exclusive jurisdiction clause.29 A non-exclusive...