Eleven Gesellschaft Zur Entwicklung Und Vermarktung Von Netzwerktechonologien MBH v Boxsentry Pte Ltd

JurisdictionSingapore
JudgeTan Siong Thye J
Judgment Date20 October 2014
Neutral Citation[2014] SGHC 210
CourtHigh Court (Singapore)
Docket NumberSuit No 677 of 2012 (Registrar’s Appeal Nos 292 and 293 of 2013)
Published date31 October 2014
Year2014
Hearing Date17 October 2013,22 August 2014,22 April 2014,22 May 2014,29 November 2013
Plaintiff CounselSarbit Singh Chopra and Nur Rafizah bte Mohamed Abdul Gaffoor (Selvam LLC)
Defendant CounselPateloo Eruthiyanathan Ashokan and Sheryl Cher (KhattarWong LLP)
Subject MatterConflict of laws,foreign judgments,enforcement,defences,Civil procedure,jurisdiction,inherent
Citation[2014] SGHC 210
Tan Siong Thye J: Introduction

The appellant was Boxsentry Pte Ltd (“Boxsentry”), a Singapore-incorporated company, while the respondent was Eleven Gesellschaft Zur Entwicklung Und Vermarktung Von Netzwerktechonologien MBH (“Eleven”). They had entered into a Partner Agreement (“the PA”) to integrate Eleven’s “eXpurgate” spam filter and email categorisation service (collectively referred to as the “eXpurgate service”) into Boxsentry’s “RealMail” application. Under the PA, Boxsentry had guaranteed quarterly revenue payments for the first three years to Eleven for the use of the eXpurgate service.

Boxsentry made payment to Eleven for the first and second quarters of the first year. However, it failed to make payment for the third and fourth quarters of that year. Subsequently, Eleven sued Boxsentry in Berlin, Germany, and obtained a default judgment (“the Berlin default judgment”) against Boxsentry as it had failed to respond to Eleven’s claim. Subsequent events led Eleven to take out a Writ of Summons in Singapore so as to enforce the Berlin default judgment. In the meantime, Boxsentry took out a summons to stay the enforcement proceedings.

At the hearing below, the Assistant Registrar (“AR”) granted Eleven’s summary judgment application which would allow the enforcement of the Berlin default judgment in Singapore. The latter’s stay application was dismissed. Boxsentry appealed against both the decisions.

I heard both Registrar’s Appeal No 292 of 2013 (“RA 292”) and Registrar’s Appeal No 293 of 2013 (“RA 293”). In RA 292, Boxsentry appealed against the dismissal of the stay application by the AR. In RA 293, it appealed against the grant of summary judgment by the same AR. I dismissed both the appeals.1 Boxsentry is dissatisfied with my decisions and has appealed against them. I now give my reasons for my decisions.

The facts

Boxsentry and Eleven were involved in the supply of information technology services. Central to this dispute was the PA entered into by them on 27 November 2007.

Under the terms of the PA, Boxsentry agreed to integrate Eleven’s eXpurgate service into its “RealMail” application. The bundled application would then be sold to certain specified territories where Boxsentry operated in.2 Those territories were the Asia Pacific region and the Middle East.3 For the provision of its services, Eleven was guaranteed revenue payments under cl 5 of the PA for the first year, second year and third year. Clause 5 read as follows:4 5. Guaranteed revenue / Committed Payments The Partner [Boxsentry] guarantees the following revenue to the Supplier [Eleven]:

First year (Nov 2007-Oct 2008)

220k€

Second year (Nov 2008-Oct 2009)

300k€

Third year (Nov 2009-Oct 2010)

360k€

The terms of payment were contained in cl 6 of the PA which read as follows: 6. Terms of Payment Quarterly payment at the end of the quarter For the first year the guaranteed revenue is paid as follows:

First quarter

15k€ (5k€ in advance at the beginning of the quarter upon signing agreement)

Second quarter

25k€

Third quarter

70k€

Fourth quarter

110k€

Starting with the second year of business the guaranteed revenue is paid quarterly in equal shares. As can be seen, the total sum payable to Eleven for the first year was €220,000.5 Boxsentry’s breach of the PA

Boxsentry had paid Eleven for the first and second quarters of the first year under the PA. Those payments were €15,000 and €25,000 respectively.6 However, Boxsentry failed to make payment for the third and fourth quarters. The facts below illustrate the sequence of events that took place between Boxsentry and Eleven after the first and second quarter payments.

On 6 August 2008, Eleven sent an invoice for the third quarter payment to Boxsentry. The latter did not reply.7 Eleven subsequently sent an email to Boxsentry on 29 October 2008 to remind Boxsentry of its obligations to make payment for the third quarter within the next 14 days.8 Boxsentry eventually replied Eleven, stating that the eXpurgate service had not performed up to expectations. Boxsentry also alleged that this problem had been raised to Eleven on several occasions but to no avail. This had caused damage to Boxsentry’s reputation.9 For that reason, Boxsentry rescinded the PA on the ground of misrepresentation.10

On 20 November 2008, Eleven sent an email to Boxsentry, stating that there was no legal basis for a premature termination of the PA or a cessation of the business relationship between them.11 Eleven also demanded Boxsentry to make the payments for the third and fourth quarters. Boxsentry replied in its email dated 15 December 2008 that it would not make any further payment.12

Under the PA, German law governed the PA and the parties had agreed to submit to the Berlin court’s exclusive jurisdiction.13 On that basis, Eleven commenced legal action again Boxsentry in Berlin on 19 February 2009. Subsequently, German court documents were served on Boxsentry in Singapore informing it that legal proceedings had been commenced by Eleven against it.

Boxsentry ignored the Berlin legal proceedings. Accordingly, Berlin Regional Court issued the default judgment against Boxsentry. That judgment was served on Boxsentry but it continued to ignore the Berlin legal proceedings. When Eleven issued a letter of demand to enforce the default judgment in Singapore, Boxsentry again failed to respond.

The present proceedings

Exasperated, Eleven commenced the present proceedings in Singapore to enforce the Berlin default judgment under the common law. The Writ of Summons, together with the endorsed Statement of Claim, was served on Boxsentry, which finally entered its appearance on 24 August 2012. It filed its defence and counterclaim against Eleven on 12 September 2012.14 On 27 September 2012, Eleven filed an application for a stay of proceedings in relation to Boxsentry’s counterclaim. The parties agreed to this application. Accordingly, the court granted the stay in relation to Boxsentry’s counterclaim by consent on 22 October 2012.15

On 23 November 2012, Eleven applied for summary judgment under O 14 r 1 of the Rules of Court (Cap 322, R 5, 2006 Rev Ed) (“ROC”) in Summons No 6024 of 2012 (“SUM 6024”) against Boxsentry. This was to enforce the Berlin default judgment.16 Boxsentry retaliated by commencing Civil Action Case No 98 O9/13 in Berlin to set aside the Berlin default judgment and to restrain Eleven from enforcing the Berlin default judgment (“the Berlin restrain action”).17 It also filed an application to stay the present action in Summons No 3974 of 2013 (“SUM 3974”) pending the outcome of the Berlin proceedings. The AR granted Eleven its application for summary judgment and dismissed Boxsentry’s application for a stay of proceedings. Boxsentry appealed against both his orders.18

Boxsentry’s restrain action in Berlin to prevent Eleven from enforcing the Berlin’s default judgment in Singapore

Subsequently, the Berlin restrain action was heard in the Berlin High Court on 1 April 2014. The Berlin High Court ruled against Boxsentry on 13 May 2014.19 Boxsentry filed an appeal on 13 June 2014 (“the Berlin appeal”). In its appeal, Boxsentry sought to set aside the Berlin judgment as well as another default judgment (see [28(i)] and [43]) issued against it and also to transfer the case to be heard before the Senate. If it again failed in its action, Boxsentry then would ask for its case to be transferred to the Federal Supreme Court of Germany.20 Boxsentry informed me that the appeal would be heard in Berlin at the end of October 2014 or in early November 2014.21

The issues before me

The issues on appeal were thus twofold: whether the present action should be stayed in the light of the concurrent Berlin proceedings; and whether I should grant summary judgment on the strength of the Berlin default judgment.

The application to stay enforcement of the Berlin default judgment The AR’s reasons for dismissing the stay application

At the hearing below, the AR dismissed Boxsentry’s stay application. He held that while international comity was an important consideration, he had to consider two issues. First, whether Boxsentry’s application to restrain Eleven from enforcing the Berlin default judgment in Singapore was bona fide and second, whether Eleven would be put through further delay and expense in recovering what it was rightfully entitled to. The AR was of the view that Boxsentry’s actions appeared to be calculated to delay the current proceedings. Thus he did not grant a stay.22

Boxsentry’s submissions

Boxsentry’s appeal was founded on two grounds. The first was based on s 18 of the Supreme Court of Judicature Act (Cap 322, 2007 Rev Ed) (“SCJA”) read with para 9 of the First Schedule. The second was premised on the inherent jurisdiction of the court under O 92 r 4 of the ROC.23

Boxsentry’s case premised on the Supreme Court of Judicature Act

On its first submission, Boxsentry’s case was that a stay of the present proceedings should be granted as:24 there would be a multiplicity of proceedings if the present proceedings were not stayed; there would be a risk of conflicting judgments if the present proceedings were not stayed as the Berlin appeal and the present proceedings involved the interpretation and enforceability of the Berlin default judgment; justice and fairness required that Eleven’s cases be heard by the same forum; and Eleven had not adduced any evidence to show that it would suffer substantial justice if the action was stayed pending the outcome of the Berlin appeal.25

Boxsentry submitted that a limited stay had been granted before, for example, in Chan Chin Cheung v Chan Fatt Cheung and others [2010] 1 SLR 1192 (“Chan Chin Cheung”). In Chan Chin Cheung...

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