Four Seas Communication Bank Ltd v Sim See Kee

• Jurisdiction: Singapore
• Judgment Date: 22 March 1989
• Date: 22 March 1989
• Docket Number: Appeal In Suit No 86 of 1987
• Court: High Court (Singapore)

Four Seas Communication Bank Ltd

Plaintiff

and

Sim See Kee

Defendant

[1989] SGHC 26

A P Rajah J

Appeal In Suit No 86 of 1987

High Court

Conflict of Laws–Choice of law–Contract–Breach of Exchange Control Act 1953 (No 17 of 1953) (Revised-1969) (M'sia)–Whether contract unenforceable–Article VIII s 2 (b) Bretton Woods Agreements Order 1966 (GN No S 158/1966)–Words and Phrases–“Exchange contract”–Article VIII s 2 (b) Bretton Woods Agreements Order 1966 (GN No S 158/1966)

The plaintiff, a bank, advanced money and extended credit facilities to the defendant in Singapore. The plaintiff subsequently claimed these moneys against the defendant and obtained summary judgment. The defendant appealed and contended that (a) he was a Malaysian citizen and was at all material times resident in Malaysia; and (b) the loan was unenforceable as it was in breach of Malaysian foreign exchange regulations and the Bretton Woods Agreements Order 1966 (GN No S 158/1966).

Held, dismissing the appeal:

(1) If the contract is lawful by the proper law and lawful at the place of performance, then it is immaterial that the party liable to perform would by doing so violate the laws of the foreign country in which he is resident or carries on business or of which he is a national. The result is that a borrower or lender could be committed to perform a contract even though performance of the contract violated the laws of the country of its incorporation, provided that there is an external proper law and the illegality does not arise where payments have to be made: at [7].

(2) The term “exchange contracts” in s 2 (b) of Art VIII of the Bretton Woods Agreements Order 1966 should be interpreted narrowly and confined to contracts to exchange the currency of one country for that of another: at [8] and [9].

(3) In the instant case, there was no contract to exchange the currency of one country for another. Hence, the fact that the defendant was a Malaysian citizen residing in Malaysia was not pertinent to the issue of his liability to the bank: at [10].

Bank of India v Trans Continental Commodity Merchants Ltd [1985-1986] SLR (R) 608; [1986] SLR 212 (refd)

Bretton Woods Agreement Act (Cap 27, 1985Rev Ed)

Bretton Woods Agreement Order 1966 (GN No S 158/1966)Art VIIIs 2 (b) (consd)

Exchange Control Act 1953 (No 17 of 1953) (Revised-1969) (M'sia) s 4 (1) (consd)

Tan Hin Tat (Sim Hill Tan & Wong) for the plaintiff

Genevieve Tan Mei Wan (Allen & Gledhill) for...