Civelli, Carlo Giuseppe v Mulacek, Philippe Emanuel and another matter

• Jurisdiction: Singapore
• Judge: Valerie Thean J
• Judgment Date: 14 August 2019
• Neutral Citation: [2019] SGHC 182
• Court: High Court (Singapore)
• Docket Number: Suit Nos 676 of 2017 (Summons Nos 2384 of 2018 and 2622 of 2019) and 1159 of 2017 (Summons No 2036 of 2018)
• Year: 2019
• Published date: 20 August 2019
• Hearing Date: 27 May 2019,29 May 2019,28 May 2019
• Plaintiff Counsel: Cavinder Bull, SC, Woo Shu Yan, Tay Hong Zhi, Gerald and Ho Wei Wen, Daryl (Drew & Napier LLC)
• Defendant Counsel: Toby Landau, QC, Calvin Liang (Essex Court Chambers Duxton) (Instructed), Salem Ibrahim, Ashwin Singh Riar and Charlene Wee Swee Ting (Salem Ibrahim LLC)
• Subject Matter: Civil Procedure,Extension of Time,Conflict of Laws,Natural Forum,Restraint of Foreign Proceedings,Comity
• Citation: [2019] SGHC 182

Valerie Thean J: Introduction

The plaintiff, Carlo Giuseppe Civelli, first brought Suit No 676 of 2017 (“Suit 676/2017”) against the defendant, Philippe Emanuel Mulacek, for the return of a sum of money loaned. Five months later, he commenced Suit 1159 of 2017 (“Suit 1159/2017”) against Mr Mulacek which claimed relief for a loan of shares. Both these suits were commenced in Singapore. He followed on three days later with a claim against Mr Mulacek in Texas, for breach of contract, breach of trust, breach of fiduciary duty, negligence, and conspiracy. He then served the Writ of Summons and Statement of Claim relating to the Singapore proceedings by way of substituted service on Mr Mulacek in Texas, and followed on, subsequently, to serve the papers relating to the Texas proceedings, again by substituted service in Texas.¹

In response to being served with the Texas writ, Mr Mulacek, who had earlier filed a Defence and Counterclaim in Suit 676/2017, filed an application for an anti-suit injunction (“ASI”) in Suit 1159/2017 to restrain Mr Civelli from pursuing his action in Texas (“the ASI application”). Mr Civelli then applied to seek a stay of Mr Mulacek’s counterclaim in Suit 676/2017, on the basis of forum non conveniens (“the FNC application”), with an undertaking that he would discontinue both suits should Mr Mulacek’s ASI application be dismissed. After Mr Mulacek pointed out that the application for stay was not filed within time, Mr Civelli applied for an extension of time to apply for a stay.

For reasons that follow, I dismiss Mr Mulacek’s application for an ASI to restrain the Texas proceedings. Subject to Mr Civelli fulfilling his undertaking to discontinue both suits, I grant Mr Civelli’s applications for an extension of time to apply for a stay of Mr Mulacek’s counterclaim, and for a stay of the same.

Background Parties and relevant transactions

Mr Civelli is a Swiss citizen. Notwithstanding prior averment of residence in Singapore, he more recently describes himself as resident in Monaco.² Mr Mulacek is a US citizen and considers himself a resident of Singapore.³ The two men began their business relationship sometime in or around 2002.⁴ Mr Civelli was at the time the founder of Clarion Finanz AG (“Clarion Finanz”), a Swiss incorporated company providing asset management services.⁵ Mr Mulacek was then the Chief Executive Officer of InterOil Corporation (“InterOil”),⁶ a Canada incorporated fossil fuel company with a primary focus on the gas fields of Papua New Guinea.⁷

According to Mr Civelli, Mr Mulacek approached him in the hope of garnering his support in providing funds to finance InterOil drilling operations.⁸ Mr Civelli subsequently invested in equity, debt and drilling funds raised by InterOil.⁹

Mr Mulacek denies that he had first approached Mr Civelli, and says instead that in 2002, Mr Civelli had suggested to him an arrangement (“the Asset Management Agreement”) under which Mr Civelli would manage the assets of Mr Mulacek and his family members (“the Beneficiaries”),¹⁰ comprising InterOil shares and cash in various currencies (“the Assets”).¹¹ There were a total of nine beneficiaries (including Mr Mulacek himself). After agreeing to this arrangement, the Beneficiaries wired various shares in InterOil and cash over the course of 2002 to 2014 for Mr Civelli to manage.¹²

Mr Civelli denies the existence of the Asset Management Agreement,¹³ and further denies that the Beneficiaries wired any monies and InterOil shares between 2002 and 2014 pursuant to the purported Asset Management Agreement.¹⁴ Rather, he contends that Mr Mulacek’s cousin, Mr Gerard Jacquin, was introduced to him by Mr Mulacek and became a client of Clarion Finanz. Mr Jacquin was the beneficial owner of Puzemi Properties Inc (“Puzemi”), a Panama company; Mr Jacquin also held assets in the accounts of Aton Select Fund Ltd (“Aton”), incorporated in Mauritius.¹⁵ Mr Civelli’s case is that instructions for Puzemi and Aton came from Mr Mulacek, whose directions he simply followed. It is common ground that Aton and Puzemi held cash and InterOil stock belonging to the Beneficiaries, although Mr Civelli contends that he only discovered the identity of the Beneficiaries after the commencement of proceedings against Mr Mulacek. ¹⁶

In 2003 and 2005, InterOil entered into two Indirect Participating Interest (“IPI”) Agreements (collectively “the IPI Agreements”). The first was with PNG Drilling Ventures Limited (“PNGDV”) (“PNGDV IPI Agreement”), while the second was with various investors (“the 2005 IPI Agreement”).¹⁷ The purpose of the IPI agreements was to fund InterOil’s drilling operations in Papua New Guinea.¹⁸ Subsequently, Mr Civelli used some of the Assets to purchase IPIs in InterOil.¹⁹ Mr Civelli contends that this was done pursuant to Mr Mulacek’s instructions.²⁰

In or around 2006, Mr Civelli incorporated Pacific LNG Operations Limited (“Pac BVI”) in the British Virgin Islands. Mr Civelli was the substantial shareholder and controller of Pac BVI. Subsequently, in or around 2007, Pac BVI invested in a company called PNG LNG, Inc (“PNG LNG”). Mr Civelli and Mr Mulacek agreed that the costs incurred by Pac BVI and profits made in connection with PNG LNG were to be split equally between them.²¹

Several events took place in Singapore in 2009. Mr Civelli incorporated Clarion Finance Pte Ltd (“Clarion SG”) in Singapore.²² In or around August 2009, Mr Civelli incorporated Pacific LNG Operations Pte Ltd (“Pac SG”) in order to hire staff in Singapore for a joint venture in Papua New Guinea between InterOil and Pac BVI.²³ Mr Mulacek proceeded to interview and hire staff for Pac SG.²⁴ Further, two additional companies, in the form of AirLNG (S) Pte Ltd in Singapore, and AirLNG Ltd in Malaysia (collectively, “AirLNG”) was incorporated by Mr Civelli in 2011 for the purchase and use of an aircraft.²⁵ This aircraft was used to ferry employees and potential investors to Papua New Guinea in the pursuit of their joint venture.²⁶ The office expenses of Pac SG and the aircraft expenses of AirLNG were to be borne equally by Mr Civelli and Mr Mulacek.²⁷

Suit 676/2017 arises from, Mr Civelli contends, Mr Mulacek’s request around September 2009 in Singapore for a cash loan (“the Cash Loan”) in order to pay his legal fees arising from a lawsuit against him, Todd Peters et al v Phil Mulacek et al (the “Texas Lawsuit”).²⁸ In total, Mr Civelli claims to have lent Mr Mulacek a total of US$3,691,250, with US$1,691,250 being disbursed to a Bank of New York, New York, USA bank account (“BNY Bank Account”) and US$2m to a Wells Fargo, California, USA bank account belonging to a company controlled by Mr Mulacek, Petroleum Independent & Exploration Corporation (“PIE Corp”).²⁹

Mr Mulacek, while admitting that Mr Civelli did effect two transfers that amounted to a total of US$3,691,250, disagrees with Mr Civelli’s account of events. Mr Mulacek contends that the first loan of US$1,691,250 was a loan of a portion of the Assets that rightfully belonged to the Beneficiaries, rather than Mr Civelli’s own funds.³⁰ In any event, on 30 December 2009, concurrently with the disbursement of US$1,691,250, Mr Mulacek asserts that PIE Corp had transferred 226,361 InterOil shares to Pac BVI (“the Dec 2009 Stock Transfer”).³¹ This was effected to refund in full the disbursement of US$1,691,250 , and to cover any additional cash advances from the Assets that Mr Mulacek may request Mr Civelli to provide.³² The Dec 2009 Stock Transfer also fully covered the second disbursement of US$2m by Mr Civelli.³³

Suit 1159/2017 arises, Mr Civelli contends, from Mr Mulacek’s request in Singapore for a loan of InterOil shares that were beneficially owned by Mr Civelli in order to resolve the Texas lawsuit.³⁴ Mr Civelli further asserts that the parties orally agreed that the shares would be kept in the trust account of a law firm based in Texas, namely Dale A Dossey & Associates, and that the shares could be used or liquidated if required for the Texas Lawsuit, with the shares or their equivalent value being returned on demand once the lawsuit was concluded (“the Share Loan Agreement”).³⁵ This is denied by Mr Mulacek.³⁶

On 3 September 2009, Mr Dale A Dossey (“Mr Dossey”) emailed Mr Civelli, asking for 700,000 InterOil shares to be transferred to a JPMorgan Chase Bank, N.A. (the “Chase Bank”) account. The Chase Bank account was located in The Woodlands, Texas.³⁷ On 4 September 2009 and 27 October 2009, Mr Mulacek caused Aster Capital S.A. (LTD) Panama (“Aster Panama”) to transfer 600,000 and 45,000 InterOil shares to the Chase Bank account.³⁸ While Mr Mulacek admits that he did receive 645,000 shares for the purposes of settling the Texas Lawsuit, he claims that he had requested that Mr Civelli loan shares from the Assets and not shares personally belonging to Mr Civelli in order to settle the Texas Lawsuit.³⁹

It is common ground that the surplus of 105,899 InterOil shares was returned to Mr Civelli on or around 15 August 2011.⁴⁰ Mr Civelli claims that between 18 November 2009 and 10 December 2013, Mr Mulacek instructed Mr Dossey, without Mr Civelli’s knowledge, to carry out a series of transfers. Mr Civelli avers there were at least five transfers, four of which resulted in 527,396 Shares being transferred to Aster Capital Inc, a company incorporated in Brunei (“Aster Brunei”). While the Aster Brunei name bore a close resemblance to that of Mr Civelli’s Aster Panama, this company was controlled by Mr Mulacek or his family members. The five transactions are as follows: ⁴¹ On or about 18 November 2009, 45,000 InterOil shares were transferred from the Chase Bank account to another Chase Bank account. On or about 24 December 2009, 900,000 InterOil shares were transferred from the first Chase Bank account to a Deutsche Bank Account (“the Deutsche Account”), located in Los Angeles, California. Of these 900,000 shares, 527,396 purportedly...