Josias Van Zyl v Kingdom of Lesotho

• Jurisdiction: Singapore
• Judge: Kannan Ramesh J
• Judgment Date: 08 May 2017
• Neutral Citation: [2017] SGHC 104
• Published date: 13 May 2017
• Date: 08 May 2017
• Year: 2017
• Hearing Date: 24 April 2017,10 April 2017
• Subject Matter: Arbitration,Enforcement against a State,Enforcement
• Plaintiff Counsel: Alvin Yeo SC, Mak Shin Yi, Oh Sheng Loong and Tara Radakrishnan (WongPartnership LLP)
• Defendant Counsel: Paul Tan Beng Hwee and Alessa Pang Yi Ching (Rajah & Tann Singapore LLP)
• Court: High Court (Singapore)
• Citation: [2017] SGHC 104
• Docket Number: Originating Summons No 95 of 2017 (Registrar's Appeal No 91 of 2017)

Kannan Ramesh J: Introduction

Must an order granting leave to enforce an arbitral award (a “leave order”) be served in accordance with s 14 of the State Immunity Act (Cap 313, 2014 Rev Ed) (“the Act”)? This was the central question in Registrar’s Appeal 91 of 2017 (“RA 91”), an appeal by Josias Van Zyl and the trustees of the Josias Van Zyl Family Trust and the Burmilla Trust against the decision of the Assistant Registrar (“the AR”) in ex parte Summons No 924 of 2017 (“SUM 924”) in Originating Summons No 95 of 2017 (“OS 95”). The AR, in a judgment reported at [2017] SGHCR 2 (“the AR’s GD”), refused the appellants leave to serve a leave order granted in OS 95 (“the Order”) on the Kingdom of Lesotho (“the Kingdom”) by means of substituted service on Rajah & Tann Singapore LLP (“Rajah & Tann”). His principal reason for doing so was that service had to be effected through the Ministry of Foreign Affairs, pursuant to and in accordance with s 14 of the Act.

Was the AR correct in concluding that s 14 of the Act applies to a leave order? Having carefully considered the submissions of the appellants and their authorities, I was of the view that the answer must be in the affirmative and therefore dismissed RA 91. The issue took the appellants and the court into uncharted waters as far as Singapore jurisprudence was concerned. The case for a written judgment was therefore compelling, prompting an invitation from the appellants for one. I acceded to their invitation.

Facts The arbitration

In the arbitration from which these proceedings arose, the appellants were amongst the claimants and the Kingdom was the respondent. This was an investor-state arbitration commenced pursuant to Annex 1 to the Protocol on Finance and Investment of the South African Development Community (“SADC”), concerning the Kingdom’s alleged breaches of obligations under the Treaty of the SADC and related protocols. The arbitration was administered by the Permanent Court of Arbitration, which was established by the Convention for the Pacific Settlement of International Disputes 1899, and the arbitration was determined by the tribunal presiding over it to be seated in Singapore. It was an “international arbitration” within the meaning of s 5 of the International Arbitration Act (Cap 143A, 2002 Rev Ed) (“the IAA”). The tribunal rendered two awards: a partial final award on jurisdiction and merits on 18 April 2016 and a final award on costs on 20 October 2016. It was the final award on costs that was the subject of the Order.

The proceedings in Singapore

The partial final award on jurisdiction and merits is the subject of proceedings in Originating Summons No 492 of 2016 (“OS 492”). Rajah & Tann represents the Kingdom in those proceedings. The Kingdom applied to set aside the partial final award on the basis, inter alia, that the tribunal did not have jurisdiction over the claims in the arbitration. I have heard oral arguments and have reserved judgment.

Shortly after oral arguments had been heard and judgment reserved in OS 492, the appellants filed OS 95 ex parte to enforce the final award on costs. The appellants obtained the Order pursuant to O 69A r 6 of the Rules of Court (Cap 322, R 5, 2014 Rev Ed) (“the Rules of Court”) on 26 January 2017. The appellants’ solicitors then attempted to serve the Order on the Kingdom, as required by O 69A r 6(2).

The attempts at service

The appellants’ solicitors first wrote to Rajah & Tann on 27 January 2017 enclosing the Order. Rajah & Tann stated in a reply on 9 February 2017 that it had no instructions from the Kingdom to accept service of the Order.

The appellants’ solicitors then attempted to serve the Order on Webber Newdigate, by email and fax on 16 and 17 February 2017 respectively, and by post on 21 February 2017. Webber Newdigate had acted for the Kingdom in the arbitration and was authorised to act for the Kingdom in OS 492. Webber Newdigate rejected the appellants’ attempted service on the basis that it had no instructions to accept service of the Order and that in any event, such service did not comply with the procedure for effecting service on a sovereign State.

Frustrated, the appellants vainly through their solicitors then attempted to serve the Order on the Attorney-General of Lesotho by email and by courier to the Attorney-General’s Chambers in the Kingdom on 17 February 2017. This was clearly incorrect. Unsurprisingly, on 24 February 2017, Webber Newdigate, on the instructions of the Attorney-General of Lesotho, replied rejecting service of the Order on the basis that such service was invalid for non-compliance with s 14(1) of the Act.

On 1 March 2017, the appellants filed SUM 924 ex parte for permission to serve the Order through substituted means on Rajah & Tann in Singapore. The AR dismissed SUM 924 on 14 March 2017 and the appellants appealed his decision in RA 91.

On 9 March 2017, the Kingdom filed Summons No 1118 of 2017 (“SUM 1118”) for a declaration that, inter alia, the appellants’ purported service of the Order was invalid and ineffective. SUM 1118 was scheduled for hearing before me at the same time as RA 91, on 10 April 2017. Counsel for both parties accepted that if I were to dismiss RA 91, it would follow that SUM 1118 ought to be allowed. I therefore heard RA 91 first. I invited Rajah & Tann, who were before me for the purpose of SUM 1118, to participate in RA 91 and make it inter partes. However, they declined my invitation. As such, the appeal proceeded ex parte. I dismissed RA 91 on 24 April 2017 with detailed oral grounds.

Decision below

The AR found that s 14 of the Act applied to service of the Order. Section 14 of the Act states:

Service of process and judgments in default of appearance

14.—(1) Any writ or other document required to be served for instituting proceedings against a State shall be served by being transmitted through the Ministry of Foreign Affairs, Singapore, to the ministry of foreign affairs of that State, and service shall be deemed to have been effected when the writ or document is received at that ministry.

(2) Any time for entering an appearance (whether prescribed by Rules of Court or otherwise) shall begin to run 2 months after the date on which the writ or document is so received.

(3) A State which appears in proceedings cannot thereafter object that subsection (1) has not been complied with in the case of those proceedings.

…

(6) Subsection (1) does not prevent the service of a writ or other document in any manner to which the State has agreed and subsections (2) and (4) do not apply where service is effected in any such manner.

(7) This section shall not be construed as applying to proceedings against a State by way of counterclaim or to an action in rem; and subsection (1) shall not be construed as affecting any Rules of Court whereby leave is required for the service of process outside the jurisdiction.

[emphasis added]

The AR offered five reasons in support of his decision: First, the phrase “writ or other document” was capacious and capable of including documents other than originating processes, such as a leave order (the AR’s GD at [14]). Second, a leave order was required to be served under O 69A r 6(2), and that service had the effect of instituting proceedings in relation to the enforcement of the award against the party served (the AR’s GD at [15]). In this regard the AR relied principally on Norsk Hydro ASA v State Property Fund of Ukraine and others [2002] EWHC 2120 (Comm) (“Norsk Hydro”), which was approved in PCL and others v Y Regional Government of X [2015] EWHC 68 (Comm) (“PCL”), both being decisions of the English High Court. Third, the reference to an entry of “appearance” in ss 14(2) and 14(3) of the Act did not necessarily mean that s 14 as a whole only applied to documents in response to which an appearance must be entered (the AR’s GD at [18]). The AR referred to s 2(2)(b) of the Act, which he regarded as including an application to set aside a leave order. Fourth, as a matter of principle, there should be no reason to exclude enforcement proceedings from the procedural requirements of service under s 14 of the Act (the AR’s GD at [19]). Fifth, while it might be true that the Kingdom had eclipsed the need for notice and time to respond by first commencing OS 492 of 2016, this was procedurally distinct from OS 95 (the AR’s GD at [24]).

Analysis

It was the second of the AR’s reasons which had the most significance to RA 91, ie, whether a leave order is a “writ or other document required to be served for instituting proceedings against a State” within the meaning of s 14(1) of the Act. This was ultimately a question of construction of the statutory provision, making it useful if not necessary to explore the parentage of the Act. But statutory construction aside, it seemed instinctively incorrect that service of a leave order on a sovereign State could be effected in some other manner than that provided in s 14(1) of the Act. The inherent difficulties with adopting any other mode seemed to make the point obvious. It raised the question what could possibly be the manner in which service of a leave order would be effected as a general rule, bearing in mind that we were here not speaking of a lay party but a sovereign State. A sovereign State does not have a place of abode or registered place of business. I address this in detail later in these grounds.

Section 14 of the Act is in pari materia with s 12 of the UK State Immunity Act 1978 (“the UK Act”), on which it was modelled (see Singapore Parliamentary Debates, Official Report (7 September 1979) vol 39 at col 409 (Mr E W Barker, then Minister for Law and Science and Technology)). The position in the UK, as shown by the authorities, is that an order granting permission to enforce an arbitral award (“a permission order”) must comply with the procedure in s 12 of the UK Act. The appellants...