Global Distressed Alpha Fund I Limited Partnership v PT Bakrie Investindo

• Jurisdiction: Singapore
• Judge: Woo Bih Li J
• Judgment Date: 16 January 2013
• Neutral Citation: [2013] SGHC 12
• Court: High Court (Singapore)
• Docket Number: Originating Summons No 595 of 2011/C (Registrar’s Appeal Nos 392 of 2012/L and 393 of 2012/Q)
• Year: 2013
• Published date: 04 February 2013
• Hearing Date: 11 October 2012,31 October 2012
• Plaintiff Counsel: Hri Kumar Nair SC and Emmanuel Chua (Drew & Napier LLP)
• Defendant Counsel: Suresh Damodara (Damodara Hazra LLP)
• Citation: [2013] SGHC 12

Woo Bih Li J: Introduction

In Originating Summons No 595 of 2011/C (“OS 595”), Global Distressed Alpha Funds I Limited Partnership (“GDAF”) obtained an order under the Reciprocal Enforcement of Commonwealth Judgments Act (Cap 264, 1985 Rev Ed) (“RECJA”) to register a judgment that it obtained in its favour in the United Kingdom against PT Bakrie Investindo (“PT Bakrie”). GDAF also applied via Summons No 2944 of 2012/J (“SUM 2944”) to examine one Robertus Bismarka Kurniawan (“Kurniawan”), a former President Commissioner of PT Bakrie. PT Bakrie subsequently applied via Summons No 4443 of 2012/M (“SUM 4443”), seeking, inter alia, to set aside the order for the registration of the judgment. PT Bakrie also applied via Summons No 4682 of 2012/S (“SUM 4682”), seeking, inter alia, to set aside the order to examine Kurniawan. An assistant registrar (“the AR”) heard both parties and dismissed SUM 4443 and SUM 4682. PT Bakrie appealed against the AR’s dismissal of SUM 4443 and SUM 4682 in Registrar’s Appeal Nos 392 and 393 of 2012 (“RA 392” and “RA 393”) respectively. Both RA 392 and RA 393 were heard by me. After hearing both parties’ submissions, I dismissed both appeals. PT Bakrie has appealed against my decision. I now give the grounds of my decision.

Facts

GDAF is a company that is part of a group which invests in different types of private distressed commercial and sovereign debt claims around the world. PT Bakrie is a company incorporated in the Republic of Indonesia. It was established in July 1991 to act as an investment holding company for investments made by a prominent merchant family in Indonesia.

In 1996, one of PT Bakrie’s subsidiaries, Bakrie Indonesia BV (“the Issuer”), issued US$50 million worth of loan notes. PT Bakrie guaranteed the payment of sums due under the notes through a guarantee dated 9 December 1996 (“the Guarantee”) which was governed by English law. In 1999, the Issuer defaulted on the payment of the sums due under the notes.

Following the Issuer’s default, PT Bakrie became liable under the Guarantee. In addition, PT Bakrie also faced mounting debts from other sources. PT Bakrie’s debts, including its liability under the Guarantee, amounted to over US$500 million.

Pursuant to Indonesian bankruptcy law, PT Bakrie entered into an arrangement (“the Composition Plan”) with some but not all of its creditors. Under the Composition Plan, participating creditors swapped their claims against PT Bakrie for shares in two creditor special purpose vehicles to which PT Bakrie transferred its assets. On 6 March 2002, the Commercial Court of the Central Jakarta District Court (“the Jakarta Court”) ratified the Composition Plan (“the Jakarta Court Order”) such that thereupon, under Indonesian law, creditor claims against PT Bakrie, including those under the Guarantee, were discharged.

In 2009, GDAF bought US$2 million worth of the notes that were issued by the Issuer. GDAF sued PT Bakrie on the Guarantee in the United Kingdom of Great Britain in Claim No 2009 Folio 1623 (“the UK Proceedings”). A trial was conducted in the High Court of Justice, Queen’s Bench Division, Commercial Court before Teare J.

On 17 February 2011, Teare J released his written judgment in Global Distressed Alpha Fund 1 Limited Partnership v PT Bakrie Investindo [2011] EWHC 256 (Comm) (“Global”). Teare J gave final judgment in favour of GDAF (“the UK Final Judgment”) and ordered PT Bakrie to pay the following sums to GDAF: (a) US$2,000,000; (b) US$1,283,333.32 by way of interest accrued; and (c) interest continuing to accrue on the total amount of US$3,282,333.32 or such lesser amount as may from time to time be outstanding, at a rate of 9.625% per annum from 17 February 2011. Teare J also ordered PT Bakrie to pay GDAF’s costs on the standard basis to be the subject of detailed assessment if not agreed. Pursuant to the UK Final Judgment, GDAF submitted its bill of costs, which was not contested by PT Bakrie. On 10 June 2011, the High Court of Justice issued a Default Costs Certificate in the same action (“the UK Default Costs Certificate”), which required PT Bakrie to pay the following sums to GDAF: (a) costs of £205,327.98 with interest at the rate of 8% per annum from 17 February 2011; and (b) costs of assessment £140 with interest at the rate of 8% per annum from 10 June 2011. No appeal was filed against the UK Final Judgment or the UK Default Costs Certificate (collectively, “the Entire UK Judgment”) and the time for appeal has expired.

PT Bakrie failed to satisfy any part of the Entire UK Judgment. On 18 July 2011, GDAF filed OS 595, seeking, inter alia, an order that the Entire UK Judgment be registered as a judgment of the High Court of Singapore pursuant to s 3 of the RECJA and an order that PT Bakrie be at liberty to apply to set aside the said registration within 14 days after service upon it (within the jurisdiction of Indonesia) of notice of such registration pursuant to O 67 r 7 of the Rules of Court (Cap 322, R 5, 2006 Rev Ed) if it has any grounds for so doing, and execution upon the Entire UK Judgment will not issue until after the expiration of that period or any extension of that period granted by the court or, if an application be made to set aside the registration, until such application has been disposed of.

On 18 July 2011, an assistant registrar granted an order in terms of OS 595 (“the Registration Order”). The Registration Order was served on PT Bakrie in Indonesia on 4 August 2011. No application to set aside the Registration Order was made within 14 days after service of the Registration Order.

On 24 October 2011, GDAF applied to the High Court of Justice for an order against PT Bakrie to identify the third party who funded PT Bakrie’s defence in the UK Proceedings. Teare J granted the application on 14 December 2011, ordering PT Bakrie to provide, inter alia, information as to the person or persons who had in fact controlled the defence, as well as to provide various documents, including all documents containing information about the funding or payment of PT Bakrie’s legal costs in the UK Proceedings. PT Bakrie ignored the order. However, the order granted by Teare J also provided that should PT Bakrie default, PT Bakrie’s solicitors in the UK Proceedings should provide GDAF’s solicitors with such information and documents as it was able to. Thus, PT Bakrie’s solicitors informed GDAF that a company named Integrated Financial Advisory Limited (“IFAL”) was funding the defence. GDAF subsequently applied for and obtained an order dated 23 April 2012 (“the UK IFAL Costs Order”) from the High Court of Justice that IFAL pay GDAF the legal costs of the UK Proceedings.

On 28 May 2012, GDAF applied in Originating Summons 506 of 2012/J (“OS 506”) to register the UK IFAL Costs Order in the High Court of Singapore under s 3 of the RECJA. Philip Pillai J heard OS 506 on 31 May and 1 June 2012. He dismissed it on 1 June 2012. He issued his written grounds of decision in Global Distressed Alpha Fund I Ltd Partnership v Integrated Financial Advisory Ltd [2012] SGHC 152 (“the Singapore IFAL GD”) on 25 July 2012. According to Mr Hri Kumar Nair SC (“Mr Nair”), counsel for GDAF, the issue then was whether IFAL had submitted to the jurisdiction of the court in the United Kingdom. He also submitted before me that there was evidence that the money used to fund PT Bakrie’s defence in the UK Proceedings came from an account held in Singapore. He further said that GDAF had obtained a Mareva Injunction to freeze that account and an affidavit from IFAL disclosed a credit balance of $130,000 in the account. IFAL also said in that affidavit that it was holding the funds on behalf of an unnamed third party.

On 14 June 2012, GDAF applied via SUM 2944 seeking orders to, inter alia, examine Kurniawan as to PT Bakrie’s assets and for Kurniawan to produce all books or documents in his possession, custody or power relevant to PT Bakrie’s assets, as well as to compel Kurniawan to provide all the answers and documents sought by GDAF in a questionnaire for the examination, a copy of which was appended to SUM 2944. An Order in terms of SUM 2944 (“the EJD Order”) was granted on 14 June 2012. On 16 June 2012, Kurniawan was personally served with the EJD Order at a taxi-stand at Changi International Airport.

The examination of Kurniawan was fixed for 3 July 2012 and 14 August 2012 but it was adjourned both times as PT Bakrie indicated that it would file the application to set aside the Registration Order and the EJD Order.

On 31 August 2012, PT Bakrie filed SUM 4443. The intended examination of Kurniawan on 4 September 2012 was adjourned to 16 October 2012 pending the outcome of the application. On 14 September 2012, PT Bakrie filed SUM 4682 to apply to set aside the EJD Order. Both SUM 4443 and 4682 were heard and dismissed by the AR on 24 September 2012.

PT Bakrie filed RA 392 and RA 393 on 25 September 2012. I heard both appeals on 11 October 2012. I dismissed them on 31 October 2012. I assume that in the meantime, the examination of Kurniawan was deferred pending the outcome of the appeals before me. As mentioned above, PT Bakrie has appealed against my decision.

Decision The Registration Order

Mr Suresh Damodara (“Mr Damodara”), counsel for PT Bakrie submitted that the Registration Order should be set aside on three grounds, viz that (a) registration of the Entire UK Judgment was not “just and convenient” under s 3(1) of the RECJA; (b) the Entire UK Judgment was “in respect of a cause of action which for reasons of public policy ... could not have been entertained by the registering court” under s 3(2)(f) of the RECJA; and (c) GDAF had failed to meet its obligation to give full and frank disclosure in its ex parte application in OS 595 before the court. These three grounds will be addressed seriatim below.

Whether the registration of the Entire UK Judgment was just and...