Lakshmi Anil Salgaocar v Jhaveri Darsan Jitendra and another

• Jurisdiction: Singapore
• Judge: Kannan Ramesh J
• Judgment Date: 18 April 2018
• Neutral Citation: [2018] SGHC 90
• Citation: [2018] SGHC 90
• Court: High Court (Singapore)
• Published date: 31 July 2019
• Docket Number: Originating Summons No 627 of 2017 (Summons No 2674 of 2017)
• Plaintiff Counsel: Kanapathi Pillai Nirumalan, Liew Teck Huat, Achala Menon and Sean Lee (Niru & Co LLC)
• Defendant Counsel: Ang Cheng Hock SC, Ramesh Kumar s/o Ramasamy and Koh Zhen-Xi Benjamin and Jerald Soon (Allen & Gledhill LLP)
• Subject Matter: Civil procedure,Injunctions,Anti-suit injunction,Conflict of laws,Natural forum
• Hearing Date: 25 January 2018,17 October 2017,07 September 2017,27 July 2017,26 September 2017,18 January 2018,26 July 2017,01 December 2017,18 September 2017,08 February 2018

Kannan Ramesh J:

On 16 May 2017, the first defendant (“Darsan”) instituted proceedings against the estate of Anil Vassudeva Salgaocar (“Salgaocar”) and the second defendant, Million Dragon Wealth Ltd (“MDWL”), in the Eastern Caribbean Supreme Court of the British Virgin Islands (“the BVI”). I shall refer to those proceedings as “BVI 83”. By Originating Summons No 627 of 2017 (“OS 627”), the plaintiff, Lakshmi Anil Salgaocar (“Lakshmi”), Salgaocar’s widow and the administratrix of his estate, applied, inter alia, for an anti-suit injunction to restrain Darsan from continuing proceedings in BVI 83. Having heard the parties’ submissions, I dismissed OS 627 and provided detailed oral grounds. As Lakshmi has appealed against my decision, I now give my full reasons.

The facts Background to the dispute

MDWL is a BVI-incorporated company and the sole shareholder of 22 other BVI-incorporated companies (“the Subsidiaries”). The Subsidiaries each own one unit in Newton Imperial, a condominium development in Singapore. I shall refer to the 22 units in Newton Imperial as “the 22 Units”. The 22 Units are rented out. The rents are collected by Messrs Haridass Ho & Partners, a Singapore law firm, under an escrow agreement.

On 8 July 2014, Ms Pooja Darsan Jhaveri (“Pooja”), Darsan’s daughter, executed a memorandum (“the Memorandum”) in her capacity as the sole director of MDWL. At the material time, Pooja was the sole shareholder of MDWL as she held the single share in MDWL (“the Share”). The Memorandum provided for Pooja (as transferor) to transfer the Share to Salgaocar (as transferee), for the consideration of US$1. It would appear that the Memorandum itself effected the transfer and the Share was therefore transferred to Salgaocar on 8 July 2014. The transfer was registered with MDWL’s register of members.

On 2 July 2015, Salgaocar lodged caveats against several properties in Singapore: six units in Newton Imperial (the same condominium development referred to above at [2]), 11 units in Waterford Residence, a condominium development, and 12 units in WCEGA Tower, a commercial property development. The Newton Imperial units are registered in the names of Darsan and his wife while the Waterford Residence and the WCEGA Tower units are registered in the names of three companies that Darsan controls. On 5 August and 12 October 2015, the registered proprietors of these properties filed Originating Summons No 727 of 2015 (“OS 727”) and Originating Summons No 945 of 2015 (“OS 945”) respectively, seeking orders for the removal of the caveats. I allowed OS 727 and OS 945 on 16 October 2017 and the defendants in those applications have appealed against my decision. For the avoidance of doubt, the properties that formed the subject matter of OS 727 and OS 945 do not include any of the 22 Units.

On 11 August 2015, Salgaocar commenced Suit No 821 of 2015 (“Suit 821”) against Darsan in Singapore. In Suit 821, Salgaocar sought, inter alia, a declaration that Darsan held assets, including the six units in Newton Imperial that are registered in the names of Darsan and his wife, on trust for him and an order that Darsan convey the assets to him. The basis of Suit 821 is Salgaocar’s claim that the parties entered into an oral agreement in Hong Kong in 2003 (“the 2003 Agreement”) for Darsan to hold shares in various special purpose vehicles to be incorporated, including companies in the BVI, on trust for him. These companies in turn owned the assets that Salgaocar laid claim to in Suit 821. Salgaocar alleged that Darsan had breached the 2003 Agreement by transferring various assets, including the properties that were the subject matter of OS 727 and OS 945, to himself or entities controlled by him. On 28 December 2015, Darsan applied to strike out Suit 821.

It is crucial to note that the assets claimed by Salgaocar in Suit 821 included neither the Share nor the 22 Units. In fact, Salgaocar’s allegation in Suit 821 was that Pooja held the Share as nominee of Darsan and had transferred it to Salgaocar as a “part-settlement” of the alleged breach of trust by Darsan. Seen from this perspective, it would make no sense for Salgaocar to have also claimed for the Share and/or the 22 Units in Suit 821 since, on his own case, he was already the legal and beneficial owner of the Share and the ultimate indirect owner, through MDWL and the Subsidiaries, of the 22 Units.

On 20 March 2017, Darsan’s BVI solicitors filed a stop notice in relation to the Share to prevent registration of any transfer of the Share without Darsan’s solicitors being given notice of such transfer.

On 16 May 2017, Darsan commenced BVI 83. In BVI 83, Darsan claims that he is the sole beneficial owner of the Share for the following reasons: In April 2014, each Subsidiary purchased one unit in Newton Imperial. According to Darsan, he funded these purchases by extending an interest-free loan to MDWL (“the Loan”) which was recorded in MDWL’s accounts as a shareholder’s loan in Pooja’s name. Pooja held the Share in MDWL as Darsan’s nominee. In June 2014, an oral agreement was reached between Darsan and Salgaocar (“the 2014 Agreement”) over the telephone while Darsan was in Hong Kong and Salgaocar was in India. The parties agreed that Salgaocar would pay Darsan an amount equal to the outstanding balance of the Loan after deducting certain sums. On payment of this sum, the beneficial interest in the Share would pass from Darsan to Salgaocar. On 1 January 2016, Salgaocar passed away before paying Darsan what was due to him under the 2014 Agreement.

Accordingly, Darsan avers in BVI 83 that he remains the sole beneficial owner of the Share. He seeks a declaration to that effect, and an order that he be entered as the sole registered shareholder in MDWL’s register of members. It is apparent therefore that the core issue in BVI 83 is whether there was in fact the 2014 Agreement.

Procedural history

On 7 June 2017, Lakshmi filed OS 627 (see above at [1]). On 12 June 2017, Lakshmi filed Summons No 2674 of 2017 (“Summons 2674”) for an interim anti-suit injunction to restrain Darsan from continuing proceedings in BVI 83 pending the determination of OS 627. On the same day, Lakshmi appeared before the Duty Registrar and sought an urgent hearing date on an ex parte basis for her application in Summons 2674.

Subsequently, the hearing for Summons 2674 was fixed before Kan Ting Chiu SJ on 13 June 2017. Counsel for Darsan, Mr Ramesh Kumar, appeared at the hearing. Mr Kumar requested for the matter to be heard on an inter partes basis and confirmed that he had instructions to accept service while reserving Darsan’s right to challenge the jurisdiction of the court to hear the application. After hearing the parties, Kan SJ directed that the application proceed on an inter partes basis.

At a pre-trial conference (“PTC”) on 29 June 2017, the Assistant Registrar fixed OS 627 and Summons 2674 to be heard together, given that OS 627 would dispose of Summons 2674. Consequently, I heard Lakshmi’s applications in OS 627 and Summons 2674 together.

It should be noted that MDWL did not defend these proceedings. Specifically, MDWL was not present at the hearings and did not file any affidavits or submissions in its defence. This was understandable given that MDWL was not served with the relevant papers.

The parties’ cases

In support of her application for an anti-suit injunction, Lakshmi made the following submissions: Darsan is amenable to the jurisdiction of the Singapore court. However, Lakshmi appeared to accept that MDWL is not amenable to the jurisdiction of the Singapore court. Singapore is the natural forum, ie, the forum with the “most real and substantial connection with the dispute”. By contrast, there are no factors which pointed to the BVI as the natural forum except for the fact that MDWL and the Subsidiaries were incorporated in the BVI. Salgaocar’s estate would be oppressed in the BVI if an anti-suit injunction was not granted. Darsan would not be prejudiced from proceeding in Singapore. This, it was said, casts doubt on Darsan’s bona fides in commencing BVI 83.

In response, Darsan made the following submissions: While it was accepted that Darsan is amenable to the jurisdiction of the Singapore court, the same could not be said about MDWL. Singapore is not the natural forum. Instead, the natural forum is the BVI. It would not be vexatious or oppressive for Darsan to pursue his claims in the BVI under BVI 83. The anti-suit injunction would deprive Darsan of legitimate advantages in the BVI. Lakshmi had not come to the court with clean hands. Specifically, it was argued that Lakshmi had sought to abuse the court’s processes and materially mislead the court in order to obtain ex parte relief by failing to make full and frank disclosure of material facts.

General principles relating to anti-suit injunctions

An anti-suit injunction may be granted to protect (1) substantive rights under a jurisdiction or arbitration agreement or (2) procedural rights from an abuse of process, or vexatious or oppressive conduct (see BC Andaman Co Ltd and others v Xie Ning Yun and another [2017] SGHC 64 (“BC Andaman”) at [53]; Richard Fentiman, International Commercial Litigation (Oxford, 2nd Ed, 2015) (“Fentiman”) at [16.39]).

It is settled law that, in a Category (1) case, the general rule is that an anti-suit injunction will be granted unless there are “strong reasons” not to do so (see Morgan Stanley Asia (Singapore) Pte (formerly known as Morgan Stanley Dean Witter Asia (Singapore) Pte) and others v Hong Leong Finance Ltd [2013] 3 SLR 409 (“Morgan Stanley”) at [29]). This was not a Category (1) case, as there was no jurisdiction or arbitration agreement between the parties that had allegedly been breached by virtue of Darsan commencing BVI 83.

The general principles governing the grant of an anti-suit injunction are...