Conflict of Laws

AuthorJoel LEE Tye Beng LLB (Hons) (Wellington), LLM (Harvard), DCH (AIH); Barrister and Solicitor (New Zealand); Advocate and Solicitor (Singapore); Associate Professor, Faculty of Law, National University of Singapore.
Date01 December 2016
Published date01 December 2016
Publication year2016

11.1 For 2016, there are 13 cases that will be examined in this review.

11.2 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.


11.3 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 and there are certain circumstances in which the jurisdiction of the court can be challenged.

Impact of application of foreign law
Foreign immovables

11.4 L Manimuthu v L Shanmuganathan1 (“L Manimuthu”) involved a long-running dispute between siblings over the assets of their deceased parents. The plaintiffs entered into a compromise agreement with the defendant in 2010 intended to be a comprehensive disposal of their father's assets in Singapore and India. Under the agreement, the defendant agreed to pay S$1.05m in instalments and to divide one-ninth of the sale proceeds of the Singapore property among the parties equally. In return, the defendant would acquire sole interest in the moneylending business. These obligations were not fulfilled. The plaintiffs sued for the S$1.05m under the compromise agreement as well as claiming, inter alia, that the defendant was a trustee of the father's estate in Singapore and had breached fiduciary duties in relation to running the father's moneylending business in Singapore. The

defendant's position was that the compromise agreement was unenforceable as it was signed under duress or illegal. The defendant also counterclaimed under the compromise agreement (presumably in the alternative) for his share of his parents' estate in India.

11.5 This case revolves around the validity of the compromise agreement. As Edmund Leow JC noted:2

The very purpose and effect of a compromise agreement is to extinguish all prior disputes, functioning as a complete settlement of differences between parties; a party reneging on the mutual compromise would be in breach of contract. The issues between parties, having been resolved by a compromise agreement, cannot be litigated so as to ensure commercial certainty and efficacy of the administration of justice …

He went on to note that a compromise agreement “can only be impugned on limited grounds by which normal contracts are usually challenged, such as illegality, fraud, duress and undue influence, etc”.

11.6 Before the court could consider the issue of the validity of the compromise agreement, it had to deal with the jurisdictional challenges that the defendant had mounted which were that foreign law was applied in this case and that the Singapore court had no jurisdiction over issues of title to the foreign immovable properties. These were dealt with quickly by the court.

11.7 On the first challenge relating to the application of foreign law, just because a matter before the court would see the application of foreign law did not deprive it of jurisdiction. To argue this would be to go against the very basis of private international law. To be fair, perhaps this challenge was incorrectly framed and should better be described as an invitation to the court to decline to exercise jurisdiction because of forum non conveniens where the application of foreign law is a relevant connecting factor. This would be consistent with one of the defendant's other arguments that there were parallel proceedings occurring in India.

11.8 On the second challenge, the court accepted that under the rule in The British South Africa Co v The Companhia de Moçambique3 (viz, Moçambique rule), the Singapore court had no jurisdiction over issues of title to the foreign immovable properties. However, the court elegantly noted that this did not preclude the court from making a judgment, in personam, by declaring the relative interests of the parties to the properties under the compromise agreement.

11.9 With the jurisdictional challenges out of the way, the matter was fairly easily disposed of by the court of which two aspects relating to conflict of laws can be noted. First, in order to determine the validity of the compromise agreement, one had to identify and then apply the governing law of the agreement. The court noted that the applicable test in determining the governing law for the dispute would be the three-stage test set out in Overseas Union Insurance Ltd v Turegum Insurance Co4 (“Overseas Union”) but did not have to go through the analysis as the defendant did not specifically plead the content of Indian law (presumably as a possible competing governing law to Singapore law). As such, and this is the second point to note, absent such proof of Indian law, the presumption of similarity operates and the court would assume that Indian law is the same as the law of the forum which would then be applied.

11.10 On this basis, the court held that the compromise agreement was validly entered into and that the vitiating factors of duress or illegality were not made out. As such, the court found in favour of the plaintiffs. With respect to the counterclaim, the court found in favour of the defendant and because of the lack of jurisdiction to make orders against foreign immovables, ordered, in personam, the plaintiffs to transfer to the defendant the outstanding assets owing to the defendant pursuant to the compromise agreement. For completeness, one should note that the parties have appealed to the Court of Appeal.

In rem – Admiralty jurisdiction of the High Court – Lex fori – Consideration of foreign law

11.11 The Min Rui5 involved a claim for loss and damage to a consignment of steel structures shipped on board the Min Rui, a Hong Kong registered vessel, from China to Brazil. The in rem writ was issued against the defendant on 16 December 2014; the Min Rui (by this time renamed Qi Dong) was arrested in February 2015 and which was subsequently lifted after security was provided on behalf of the defendant. At the time of the issuance of the writ, although the defendant was still the registered owner on the Hong Kong Shipping Register, he had sold the Min Rui in October 2014. The argument, therefore, was that the arrest of the Min Rui was not proper as the defendant was no longer the beneficial owner of the Min Rui.

11.12 On this, Belinda Ang Saw Ean J held that at the time of the issuing of the writ, beneficial title to the ship had passed to the

purchaser and as such, the plaintiff could only proceed against the defendant in personam. In coming to this conclusion, the court applied the lex fori, that is, Singapore law to the determination of who held beneficial ownership. Under this, the ship's register served as a record upon which a prima facie inference of ownership was made. This inference could be rebutted by evidence of someone else being the beneficial owner.

11.13 While it is trite that matters of procedure are governed by the lex fori, it is not entirely clear the relevance of foreign law to determining jurisdictional matters. It was clear that the court held that matters of jurisdiction and, in this case, the question of beneficial ownership are to be determined by the lex fori and this is both sensible and defensible. However, the court left open the possibility of foreign law informing the court's decision.

11.14 While there is some practical sense to looking at relevant foreign laws in making a jurisdictional determination, this suggests that the reference to the lex fori is not only to the forum's domestic laws but also to its conflict of laws rules.6 This is unusual because it goes against the usual understanding that reference to the lex fori governing matters of procedure and jurisdiction refers to the forum's domestic rules. This new formulation also opens the Pandora's box of renvoi, which perhaps is a box best left closed.

11.15 This formulation did not create problems in this case as the foreign laws which were possibly relevant, the law governing the sale of the ship (English law), and the law of the place of the register (Hong Kong) did not seem to have been pleaded separately. As such, Singapore law applied by default on the assumption that the foreign laws were similar to Singapore law. However, it would be interesting to speculate what would happen if either English or Hong Kong law had provided for a different conclusion.

11.16 This decision has been appealed and it would be helpful for the Court of Appeal to provide more, if not definitive, clarity on this.

Forum non conveniens
Stay of proceedings

11.17 A mainstay in international commercial litigation is an application for a stay of proceedings based on the doctrine of forum

non conveniens. It is well-accepted that the doctrine of forum non conveniens consists of two stages, as established in Spiliada Maritime Corp v Cansulex Ltd7 (“Spiliada”). The first stage seeks to see whether there exists a more appropriate forum than Singapore and this burden falls on the defendant who is applying for the stay. If it is shown that there is a more appropriate forum, then the burden shifts to the plaintiff in Stage 2 to show that the action should, nonetheless, not be stayed because it would deprive the plaintiff of a legitimate juridical or personal advantage. At the end of the day, the doctrine of forum non conveniens seeks to identify the best location to hear the matter in the interests of justice. The next two cases are a relatively straightforward application of this doctrine.
Lex causae – Actions in equity
Foreign public policy

11.18 Southern Realty (Malaya) Sdn Bhd v Chen Jia Fu Darren8 (“Southern Realty”) involved shares in a Singapore company (held by the first and third defendants) which was a special purpose vehicle for, in turn, holding shares in two Indonesian companies. The plaintiff had transferred shares in the Indonesian companies to the Singapore company and claimed, based...

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