Conflict of Laws

Date01 December 2018
Published date01 December 2018
Publication year2018
Citation(2018) 19 SAL Ann Rev 273
AuthorJoel LEE Tye Beng LLB (Hons) (Wellington), LLM (Harvard), DCH (AIH); Barrister and Solicitor (New Zealand); Advocate and Solicitor (Singapore); Professor, Faculty of Law, National University of Singapore. LEOW Wei Xiang Joel* Dip (Law and Management) (Temasek Polytechnic), LLB (Hons) (National University of Singapore); Practice Trainee, Dentons Rodyk & Davidson LLP.
Introduction

11.1 For 2018, there are nine cases that will be examined in this review. As in previous years, it is useful to note that conflict of laws cases sometimes relate to other areas of law. In these situations, this review will only examine those parts of the case that are relevant to the field of conflict of laws.

11.2 It is trite that before a court can hear a matter, it must be seized of jurisdiction. Jurisdiction can be in personam or in rem. In personam jurisdiction can be established via presence, submission and the court's long-arm discretionary jurisdiction under O 11 r 1 of the Rules of Court1 (“ROC”). Implicit in all of these is that service of papers on the defendant is required.

11.3 On discretionary jurisdiction, there are three requirements before leave to serve out of jurisdiction is granted. First, the plaintiff's claim must come within one of the heads of claim in O 11 r 1 of ROC. Second, the plaintiff's claim must have a sufficient degree of merit. Third, Singapore must be the forum conveniens for the dispute. Furthermore, as the application for leave for service out is usually done ex parte, the plaintiff is required to make full and frank disclosure of all the material facts.2 In cases where leave is granted, parties can challenge the existence of the court's jurisdiction and apply to set aside the writ.

11.4 On the third requirement, that of forum conveniens, it is useful to point out that apart from being considered as part of the discretionary jurisdiction analysis (where the existence of jurisdiction is being challenged), a defendant can also apply to the court to stay proceedings on the basis of forum non conveniens, essentially asking the court to not exercise its jurisdiction because there is a more appropriate forum elsewhere.

Jurisdiction – Discretionary jurisdiction – Foreign defendant – Mareva injunctions

11.5 PT Gunung Madu Plantations v Muhammad Jimmy Goh Mashun3 illustrates the dynamic between discretionary jurisdiction and forum conveniens nicely, and also in the context of an application for a Mareva injunction. In this case, the defendant, Muhammad Jimmy Goh Mashun (“Jimmy”), a citizen and resident of Indonesia, was an employee and director of the plaintiff, PT Gunung Madu Plantations (“PT”), a Jakarta-domiciled company. PT commenced proceedings in Singapore against Jimmy for various breaches of employment and director's duties and applied for leave to serve out of the jurisdiction, which was granted. Jimmy was purportedly served, and a default judgment issued, upon which PT obtained garnishee orders. On learning of these orders, Jimmy applied for, inter alia, an order to set aside the writ and service. PT in turn applied for a Mareva injunction against Jimmy in respect of his assets in Singapore.4 The court held that as Singapore was not the natural forum, it did not have in personam jurisdiction. As such, it set aside service and denied PT's application for a Mareva injunction.

11.6 The court made a number of helpful comments. First, it reiterated the position that it was insufficient to found discretionary jurisdiction simply because one could meet one of the heads of jurisdiction under O 11 r 1. In this case, PT relied on O 11 r 1(a) which permitted service out of the jurisdiction if relief is sought against a person who has property in Singapore. This by itself was insufficient. A plaintiff also needed to show that the claim had a sufficient degree of merit and that Singapore was the forum conveniens.5 On the facts,

Singapore had nothing to do with the causes of action. As such, the orders for service out were wrongly made and had to be set aside.6

11.7 Second, the court also reiterated that to successfully rely on O 11 r 1(b) of the ROC for service out of jurisdiction, the injunction must be part of the substantive relief of the plaintiff's cause of action against the defendant. By itself, an application for an interlocutory injunction will not suffice as it is not a cause of action; it cannot stand on its own but is dependent on a pre-existing cause of action.7 Since PT did not apply for a Mareva injunction as part of its substantive relief, they would not have been able to rely on r 1(b).8

11.8 Third, the court highlighted that in order for a Singapore court to grant a Mareva injunction, it must not only satisfy the requirements of a Mareva injunction but also keep in mind the requirement of forum conveniens, especially when the application for the Mareva injunction is not combined with an application for service out of jurisdiction.9

11.9 Fourth, PT had argued that s 4(10) of the Civil Law Act10 (“CLA”) read with s 16(2) of the Supreme Court of Judicature Act11 (“SCJA”) gave the court jurisdiction and power to grant a Mareva injunction against a foreign defendant in aid of foreign court proceedings.12 In response, the court clarified that when considering whether to grant a Mareva injunction, there were two questions. The first was whether the court had in personam jurisdiction over the defendant. If this was answered in the affirmative, then the second question was whether the court had the power to grant the Mareva injunction. Section 4(10) of the CLA dealt with the second question. By itself, s 4(10) of the CLA did not confer jurisdiction on the court.13 This must, of course, be correct and since the court had decided that Singapore was forum non conveniens, the second question need not be considered. As such, the court left the question of whether a Singapore

court could issue a Mareva injunction in support of foreign proceedings unanswered.14

11.10 Fifth, the court noted that there would be instances where an urgent application for a Mareva injunction might be made before the originating process is served on the defendant and acknowledged that this might give rise to the argument that the court did not have power to grant a Mareva injunction before service had been made. The court opted not to come to a definite conclusion but indicated that it thought that the court would have jurisdiction if the facts supported the assumption that service of the originating process would eventually be effected.15

11.11 From the above, it is clear that service is needed, or the assumption that service would be effected, before a Mareva injunction can be granted. This suggests that, moving forward, applicants seeking a Mareva injunction before service of the originating process should, in the supporting affidavit for the Mareva injunction, undertake to seek leave for service of the originating process out of jurisdiction or risk having their application dismissed for want of in personam jurisdiction.

11.12 As a final point and for completion, it is curious to note that the court made a passing observation that primary or secondary legislation might be amended in the future to remove the requirement for service to found jurisdiction or for Singapore to be forum conveniens for leave to serve out of the jurisdiction.16 It is unclear what this might mean except that such an occurrence might be possible. However, taking into account Sundaresh Menon JC's (as he then was) observations in Lee Hsien Loong v Review Publishing Co Ltd17 of the need for stringent satisfaction of the requirements before a court will hold that it has in personam jurisdiction over foreign defendants,18 it is submitted that the probability of this occurrence is low.

Jurisdiction – Discretionary jurisdiction – Order 11 rule 1

11.13 Nippon Catalyst Pte Ltd v PT Trans-Pacific Petrochemical Indotama19 elaborated on and provided clarity to some of the heads under O 11 r 1 of the ROC. The facts can be stated simply. The Singapore-incorporated plaintiff, Nippon Catalyst Pte Ltd (“Nippon”), leased to the first defendant, Indonesian-incorporated PT Trans-Pacific Petrochemical Indotama (“TPPI”), various catalysts to be installed in TPPI's Indonesian refinery. The refinery ceased operations and TPPI defaulted on the rent due for the catalysts. The parties negotiated an extension of lease with a reduction of sums owing from TPPI and a new schedule of payments.20 Unfortunately, the refinery ceased operations again and TPPI entered into a composition agreement with its debtors, including Nippon.21 This saw Nippon owning 4.46% of TPPI's shares, and Pertamina, the second defendant (and also TPPI's largest single shareholder), owning 48.59% of TPPI.22 Despite the parties failing to conclude an agreement on TPPI's continued use of the catalysts, TPPI resumed operations and continued to use the catalysts without consent.23

11.14 Nippon commenced legal proceedings for, inter alia, tort of conversion and detinue, and unlawful conspiracy with the second defendant.24 As both defendants were foreign, Nippon applied for leave to serve outside the jurisdiction. This failed at first instance and Nippon appealed.25 For completion, it should be noted that the court found that the conversion claim, prima facie, fell within the scope of a valid arbitration agreement between the parties.26 This is, however, outside the scope of this review.

11.15 On appeal, the High Court held that Nippon's claims could not succeed because they did not fall within O 11 rr 1(f)(ii) and 1(p), and

also did not meet the requirement that Singapore was the forum conveniens.27 There are a number of noteworthy points to consider.

11.16 First, Nippon relied on O 11 r 1(f)(ii) which provided for service out of jurisdiction where “the claim is wholly or partly founded on, or is for the recovery of damages in respect of, damage suffered in Singapore caused by a tortious act or omission wherever occurring”. It argued that because payments due to it by TPPI were not paid into their Singapore bank account, this constituted damage suffered in Singapore thereby satisfying O 11 r 1(f)(ii). The court opined that this was insufficient. A plaintiff having a bank account in Singapore that it uses to transact with a defendant does...

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