Bulk Trading SA v Pevensey Pte Ltd and another

• Jurisdiction: Singapore
• Judge: Steven Chong J
• Judgment Date: 24 November 2014
• Neutral Citation: [2014] SGHC 236
• Court: High Court (Singapore)
• Docket Number: Suit No 571 of 2014 (Summons No 3899 of 2014)
• Published date: 26 November 2014
• Year: 2014
• Hearing Date: 16 September 2014,03 October 2014
• Plaintiff Counsel: Soh Wei Chi (Kenneth Tan Partnership)
• Defendant Counsel: The first and second defendants in person,Colin Liew (TSMP Law Corporation) as amicus curiae.
• Subject Matter: Civil Procedure,Representation of companies,Order 1 rule 9
• Citation: [2014] SGHC 236

Steven Chong J: Introduction

Until very recently, while any person (or defendant) could begin and carry on proceedings in court (or enter an appearance and defend) by a solicitor or in person, a body corporate could not do so otherwise than by a solicitor, except as expressly provided by any written law. This legal restriction was relaxed with the introduction of O 1 r 9(2) of the Rules of Court (Cap 322, R 5, 2014 Rev Ed) (“ROC”) in 2011 to permit body corporates to be represented by their authorised officers with leave of court.

In this case, a director of the first defendant, Pevensey Pte Ltd (“Pevensey Singapore”), Mr Agus Salim (“Mr Salim”), seeks leave of court under this new rule to represent Pevensey Singapore in the present proceedings. As this is the first occasion for the new rule to be considered by the court, this judgment will trace the historical justifications for the restriction, the experience of other jurisdictions in dealing with the issue, the development of O 1 r 9 which led to its current form, the proper judicial approach to such applications, the factors which the court should consider in the exercise of its discretion and, finally, whether conditions can be imposed in granting leave and if so what those conditions should be.

Given the novelty of the issue, the fact that Pevensey Singapore is not represented by counsel, and the fact that the plaintiff, Bulk Trading SA (“Bulk Trading”) is not objecting to the application in principle, I decided that the determination of this issue would benefit from the assistance of an amicus curiae. With these considerations in mind, the court appointed Mr Colin Liew as the amicus curiae for this case.

An appreciation of the background facts as well as an understanding of the underlying dispute between the parties out of which this application arises is essential for its proper determination.

Background facts

Pevensey Singapore was incorporated in Singapore on 29 August 2013. Its issued share capital comprises one share of S$1.00 which is held by Mr Salim, an Indonesian resident.¹ The second defendant, PT Pevensey Indonesia (“Pevensey Indonesia”), was incorporated in Indonesia on 23 March 2010. Mr Salim is also a director and shareholder of Pevensey Indonesia.

Bulk Trading alleged that Pevensey Singapore’s current registered address at 10 Anson Road, #06-17 International Plaza, Singapore 079903 is occupied by Rockwills International Group, a corporate secretarial firm, and that Pevensey Singapore is a shell company.²

Bulk Trading first commenced trading with Pevensey Indonesia in 2011. It dealt primarily with Mr Salim and Mr Carey Ticoalu, the principal trader of Pevensey Indonesia. Those transactions were relatively small. In mid-2013, Bulk Trading expressed interest to purchase coal on a larger scale from Pevensey Indonesia. However it was Bulk Trading’s preference that payment should be made through Singapore in line with its practice with other suppliers. Pevensey Indonesia agreed to the proposal and, shortly thereafter, Pevensey Singapore was incorporated in order that Pevensey Indonesia “can establish a presence in Singapore and use Singapore banking channels”.³ Accordingly, Bulk Trading asserts that Pevensey Singapore is nothing more than a front for Pevensey Indonesia.

Bulk Trading’s claims arise out of several agreements (“the Contracts”) entered into between Bulk Trading and Pevensey Singapore,⁴ including, inter alia: a Sale Purchase Agreement (Agreement Number BTPEV 5000 GAR 12/0913) (“the 1st SPA”) concluded in September 2013;⁵and a Sale Purchase Agreement (Agreement Number BTPEV 5000 GAR 13/2013) (“the 2nd SPA”) concluded in December 2013.⁶

Both the 1st SPA and the 2nd SPA are governed by English law and contain arbitration clauses stipulating that disputes thereunder are to be referred to arbitration in Singapore.

Bulk Trading filed its Statement of Claim on 25 July 2014, and this was served on Pevensey Singapore at its registered office on 29 July 2014.⁷ Its claims against Pevensey Singapore are essentially for short shipment, demurrage and failure to deliver the cargo of the contractual quality. As against Pevensey Indonesia, Bulk Trading’s case appears to be that Pevensey Indonesia is likewise liable to it on the basis that Pevensey Singapore is a “mere extension” of Pevensey Indonesia.⁸ In this connection, Bulk Trading has averred, inter alia, that: Pevensey Singapore does not have any employees or staff of its own and that all of Pevensey Singapore’s business dealings were in fact handled by Pevensey Indonesia; payments due to Pevensey Singapore were in fact remitted to Pevensey Indonesia’s account with Bank of Central Asia, Jakarta Branch; and in its dealings with Pevensey Singapore and Pevensey Indonesia, it dealt with, inter alia, Mr Salim.⁹

After disputes had arisen, the parties entered into settlement discussions. Bulk Trading raised several invoices to Pevensey Singapore and Pevensey Indonesia for payment of various settlement sums. This led to compensation being paid from Pevensey Singapore and/or Pevensey Indonesia to Bulk Trading in the sum of US$1,050,000. Bulk Trading’s claim is for the balance sum of US$1,873,850.11.¹⁰ Significantly, Bulk Trading alleged in the Statement of Claim that Pevensey Indonesia had admitted liability for the claims though it eventually refused to sign the settlement agreement. In its Defence filed on 8 August 2014 and signed by Mr Salim, Pevensey Singapore merely asserted that the dispute is required to be referred to arbitration in accordance with the provisions of the 1st SPA and the 2nd SPA and, accordingly, this court lacks jurisdiction. The Defence does not contain any substantive defence or denial to any of the averments asserted by Bulk Trading.

It is relevant to point out that prior to commencing the present proceedings, Bulk Trading did commence arbitration proceedings against Pevensey Singapore on or around 13 May 2014.¹¹ However Pevensey Singapore failed to take any steps to participate in the arbitration,¹² leading Bulk Trading to commence the present proceedings on or around 29 May 2014.

The Worldwide Freezing Order

On 29 May 2014, by Summons No 2653 of 2014, Bulk Trading applied for a Worldwide Freezing Order (“WFO”) against Pevensey Singapore and Pevensey Indonesia. The WFO was granted the next day by Lee Seiu Kin J:¹³ prohibiting Pevensey Singapore and Pevensey Indonesia from, inter alia, dealing with any assets in or outside Singapore up to the value of approximately US$2.5m; and permitting each of Pevensey Singapore and Pevensey Indonesia to spend US$50,000 on legal advice and representation, with liberty to agree with Bulk Trading’s solicitors that such spending limits should be increased.

Bulk Trading served the writ of summons and the WFO on Pevensey Singapore on 2 June 2014,¹⁴ followed by the service of an amended writ of summons¹⁵ on 4 June 2014.¹⁶ Pevensey Singapore entered an appearance on 9 June 2014 (represented by Kim & Co)¹⁷ and, on the same day, Mr Salim affirmed an affidavit (“Mr Salim’s 1st Affidavit”) in response to the WFO deposing that the only assets of Pevensey Singapore as at 31 May 2014 are the balances in the following two bank accounts:¹⁸ a debit balance of S$320 in OCBC Account No 6478-7123-5001; and a credit balance of US$2,107.59 in OCBC Account No 5031-7906-1301.

Service out of jurisdiction on Pevensey Indonesia

On or around 16 June 2014, Bulk Trading applied for leave under O 11, rr 1(a), (c) and (d) of the ROC to serve the amended writ of summons on Pevensey Indonesia out of jurisdiction.¹⁹ However, it is not at present clear whether the amended writ of summons has been successfully served on Pevensey Indonesia.

Summons No 3899 of 2014

On 8 August 2014, Pevensey Singapore filed the present application pursuant to O 1 r 9(2) of the ROC.²⁰ The application was supported by an affidavit affirmed by Mr Salim (“Mr Salim’s 2nd Affidavit”). Mr Salim’s 2nd Affidavit merely repeated the relief sought in the application, namely, that leave be granted for Mr Salim to represent Pevensey Singapore in these proceedings. It was otherwise bereft of any information or material as to why leave should be granted.²¹

At a directions hearing on 16 September 2014, I directed Mr Salim to file and serve a detailed supplemental affidavit by 26 September 2014²² to set out the reasons why he should be granted leave to represent Pevensey Singapore in the present proceedings. Mr Salim duly filed his supplemental affidavit (“Mr Salim’s 3rd Affidavit”) on 26 September 2014 which: deposed that Mr Salim is a director of Pevensey Singapore; referred to and exhibited a Warrant to Act dated 24 July 2014²³ addressed to the Registrar of the Supreme Court and signed by the directors of Pevensey Singapore, ie, Mr Salim and Ms Jaclyn Seow Choon Keng for and on behalf of Pevensey Singapore, authorising Mr Salim to act for Pevensey Singapore in the current proceedings; exhibited, inter alia, Pevensey Singapore’s Memorandum and Articles of Association; and asserted that the dispute should be referred to arbitration.

It is apparent that Mr Salim’s 3rd Affidavit, apart from exhibiting the formal documents authorising him to represent Pevensey Singapore and stating that the dispute should be referred to arbitration, does not explain why leave of court should be granted to authorise him to represent Pevensey Singapore. On the same day, Mr Salim also filed written submissions which to a large extent replicated the contents of Mr Salim’s 3rd Affidavit.

Default judgment

Though Pevensey Singapore filed its Defence on or about 8 August 2014, it omitted to serve it on Bulk Trading within the timeframe required under the ROC.²⁴ Consequently, on 14 August 2014, Bulk Trading applied for and obtained default judgment under O 19 r 3 of the ROC against Pevensey Singapore.²⁵

The present application

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