Drolia Mineral Industries Pte Ltd v Natural Resources Pte Ltd

JurisdictionSingapore
CourtHigh Court (Singapore)
JudgeLee Seiu Kin JC
Judgment Date29 April 2002
Neutral Citation[2002] SGHC 90
Citation[2002] SGHC 90
Docket NumberSuit No 1532 of 2001 (Registrar's
Plaintiff CounselDavinder Singh SC and Advani Ajay Jiwat (Drew & Napier LLC) (Dixon Ng instructing solicitor)
Date29 April 2002
Published date19 September 2003
Defendant CounselJames Chai (James Chai & Partners)

Judgment

GROUNDS OF DECISION

1 The Plaintiffs’ claim in this suit is in damages for breach of contract by the Defendants in respect of a contract ("the Contract") in which the Defendants sold to the Plaintiffs about 15,000 tonnes of low ash metallurgical coke. Delivery was to be made in two shipments at the port of Kandla, India. The Plaintiffs claimed that both shipments of coke did not comply with the specifications in the Contract. In their Defence, the Defendants pleaded that it was a term of the Contract that SGS-CSTC Standards Technical Services Co. Ltd. China ("SGS-China") would certify whether the coke was up to specification. The Defendants claimed that they had obtained certificates from SGS-China in respect of the two shipments for that purpose. However the Plaintiffs claimed that one of those certificates was inadequate in that they did not provide an analysis of the sulphur content of the second shipment. The Plaintiffs engaged their own surveyors, SGS India Ltd ("SGS-India") to analyse the shipments. SGS-India produced certificates in respect of the sulphur and ash contents as well as quantities of the two shipments. Based on these certificates the Plaintiffs claimed liquidated damages as provided under the Contract.

2 The matter before me does not directly concern the Plaintiffs’ claim. It relates to one of two causes of action in the counterclaim filed by the Defendants. The first cause of action in the counterclaim concerns a separate contract entered into by the parties in the course of the transaction which the Defendants allege the Plaintiffs had breached. The second cause of action is in libel and is subject of the present application. The Defendants allege that the Plaintiffs had published three letters to SGS-China and to SGS Geneva, all containing statements defamatory of the Defendants. The relevant contents of those letters are as follows:

(i) The first letter dated 15 January 2001, addressed and sent to SGS-China, contains the following words:

"… The analysis report issued by SGS India Ltd clearly chows the huge difference in the quality & size of the cargo with the report issued by SGS, China. We have never expected that SGS, China report will differ from SGS, India report to such an extent pertaining to analysis of same cargo. The difference clearly shows that either exporter of cargo have issued fake report or managed SGS, China to issue manipulated report …"

(ii) The second letter dated 22 January 2001, addressed and sent to SGS-China and copied and sent to SGS Geneva, contains the following words:

"… We feel very sorry to state the intentions of issuing such certificate is not fair and we are cheated by issuing such manipulated certificates."

(iii) The third letter dated 6 February 2001, addressed and sent to SGS Geneva and copied and sent to SGS-China, contains the following words:

"… But this was done purposely by SGS-CSTC people on instruction from their principal M/s Natural Resources Pte Ltd, Singapore to hide the actual size determination of cargo and issued falsified certificate which has resulted in severe losses to our company. We held both Natural Resources Pte Ltd, Singapore & SGS-CSTC Beijing, China responsible for the losses incurred by us in the referred shipment. … We request our goodselves to do justice with us and being the parent company, punish the person found guilty of issuing such false certificate. The certificate was influenced by the principal of SGS-CSTC and we could not treat such certificate as true & fair as it was issued with wrong intentions & ignoring the actual size and quality determination …"

3 The Plaintiffs applied in SIC 24/2001 for the counterclaim in libel to be struck out under O 18 r 19 of the Rules of Court. On 11 January 2002 the Senior Assistant Registrar who heard the application struck out the Defendants’ counterclaim in libel. The Defendants appealed and on 6 February 2002, after hearing counsel for the parties, I allowed the appeal and set aside the order below. The Plaintiffs have since appealed and I now give my written grounds of decision.

4 Before the Senior Assistant Registrar, the Plaintiffs based their application on the following grounds:

(i) There is no allegation in the counterclaim that any of the defamatory statements was published in Singapore; and

(ii) The Plaintiffs had submitted to the jurisdiction on contract but not on defamation as the actions are totally independent.

In respect of the first ground, counsel for the Defendants said that he was able to amend the pleadings to state that the defamatory letters were received by the Defendants in Singapore. In the event, on 18 March 2002 the Defendants applied for and obtained leave to make those amendments. The amended counterclaim alleged that a copy of the third letter was sent by SGS-China to SGS Singapore around 9 February 2001. This would constitute publication in Singapore. In any event, once jurisdiction is established pursuant to s 16 of the Supreme Court of Judicature Act ("SCJA"), the fact that publication did not take place in Singapore is irrelevant.

5 In respect of the second ground, counsel for the Plaintiffs, Mr Chai, submitted that the Plaintiffs, being a foreign company, had only submitted to the jurisdiction in respect of the matters relating to the contractual claim. Section 16(1) of the SCJA provides for the general jurisdiction of the High Court to hear and try an action in personam. It states as follows:

The High Court shall have jurisdiction to hear and try any action in personam where -

(a) the defendant is served with a writ or other originating process —

(i) in Singapore in the manner prescribed by Rules of Court; or

(ii) outside Singapore in the circumstances authorised by and in the manner prescribed by Rules of Court; or

(b) the defendant submits to the jurisdiction of the High Court.

The question is whether by commencing this present action, the Plaintiffs have submitted to the jurisdiction of the Court within limb (b) of the provision.

6 Mr Chai argued that the Plaintiffs have not submitted to the jurisdiction in respect of the defamation action as it was not properly connected and did not appertain to the main action. He relied on the following passage from Conflict of Laws in Malaysia by Hickling and Wu (1995) at p 67:

"(e) Submission by institution of proceedings. A person who is abroad or not otherwise subject to the jurisdiction of the court, who takes on the role of plaintiff thereby gives the court jurisdiction over a counterclaim by the defendant on any matter related to the plaintiff’s claim, but this does not extend to a counterclaim on an independent matter. …"

The footnote to the last sentence cites two authorities to support the proposition, viz.: i) Union Bank of the Middle East Ltd v Clapham (The Times Law Report, 20 July 1981); and (ii) Factories Insurance Co (Ltd) v Anglo-Scottish General Commercial Insurance Co (Ltd) (1913) TLR 312.

7 The Union Bank case establishes the first limb of the proposition, i.e. that a foreign plaintiff submits to the jurisdiction in respect of a valid counterclaim. This was a decision of the English Court of Appeal in which the plaintiffs, a bank resident in the United Arab Emirates, sued the defendants, who were directors of an Emirates company, on personal guarantees they had given to secure the company’s debts. The defendants applied to join the company as a party in order to counterclaim against the plaintiffs for wrongful possession of the assets of the company. The following passage from the report paraphrases the judgment of Lord Denning MR in the following manner:

" His Lordship’s answer to that was that by coming here to sue, the bank had submitted to the jurisdiction of the Court, which could deal with any counterclaim connected with the bank’s claim: see Derby & Co Ltd v Larsson ([1976] 1 WLR 202, 205)."

The Master of the Rolls cited a passage from Dicey and Morris’ The Conflict of Laws (Vol 1, 10th Ed) which states as follows (at p 164):

"A submission in respect of any proceedings extends to any appeal, but not to a counterclaim unless it arises out of the same legal relationship or facts as the claim."

Lord Denning MR held that the counterclaim clearly arose out of the same transaction.

8 Lord Denning MR based his proposition on the authority of the decision of the House of Lords in Derby & Co Ltd v Larsson [1976] 1 WLR 202. One of the issues there turned on whether the counterclaim was properly brought against the foreign plaintiffs when it was served on their solicitors in England. Lord Russell, with whom the other members of the House concurred, held that a person who chooses to take out proceedings in England exposes himself to any counterclaim that may be made under the rules of court. He said as follows (at p 205):

"If a person chooses to commence proceedings in this jurisdiction he lays himself open to the possibility of a counterclaim by the defendant as well as to a defence. The rules of court permit it subject to compliance with time...

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    ...to case law on O 15 r 5(2), a provision that mirrors O 28 r 7(3). In Drolia Mineral Industries Pte Ltd v Natural Resources Pte Ltd [2002] 1 SLR(R) 880 for example, the High Court (at [24]–[25]) applied a two stage test involving, first, a balancing of the considerations of procedural conven......
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    ...and choose the issues for determination by the Singapore Court. 28 In Drolia Mineral Industries Pte Ltd v National Resources Pte Ltd [2002] 3 SLR 163, 175, Lee Sieu Kin JC, as he then was, rightly To hold that a foreign plaintiff commencing an action in Singapore would be deemed to have sub......

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