MCI Worldcom Asia Pte Ltd v Chembell Technology Sdn Bhd

• Jurisdiction: Singapore
• Judgment Date: 20 October 2003
• Date: 20 October 2003
• Docket Number: Suit No 819 of 2002
• Court: High Court (Singapore)

MCI Worldcom Asia Pte Ltd

Plaintiff

and

Chembell Technology Sdn Bhd

Defendant

[2003] SGHC 251

S Rajendran J

Suit No 819 of 2002

High Court

Civil Procedure–Stay of proceedings–Whether application for stay can be made at trial–Civil Procedure–Summary judgment–Disposal on point of law–Determination of questions of law or construction of documents under O 14 r 12 of the Rules of Court (Cap 322, R 5, 1997 Rev Ed)–Whether provisions of a foreign statute breached–Commercial Transactions–Sale of services–Breach of contract–Claim for price of services rendered and loss of profit–Contract–Illegality and public policy–Whether provision of services illegal under Malaysian law

The plaintiffs (“MCI”) contracted to provide certain international communication services to the defendants (“Chembell”) to and from Malaysia. The contract was governed by Singapore law and the parties agreed to the exclusive jurisdiction of the Singapore courts.

MCI provided the requisite services, for which Chembell paid for up to November 2001. Chembell did not make any payment thereafter, causing MCI to terminate their services, and to sue for unpaid services and damages for loss of profit.

Chembell alleged that the provision of the services was illegal under the Communications and Multimedia Act 1998 (“CMA 1998”) of Malaysia and, prior to the CMA 1998 coming into force, under the Telecommunications Act 1950 (“TA 1950”) of Malaysia. Chembell argued that MCI did not have the requisite licences under the Acts to provide the services. Chembell further contended that it would be contrary to public policy in Malaysia and Singapore to enforce the contract. Accordingly, Chembell prayed for MCI's claim to be dismissed and for judgment to be given for their Counterclaim for amounts they previously paid to MCI. On the other hand, MCI averred that the Malaysian component of the services was made available through Vads Sdn Bhd (“Vads”), which was duly licensed to provide the services in Malaysia by the Malaysian Communications and Multimedia Commission (“Commission”).

In the course of the trial, Chembell made an application for the determination of a question of construction under O 14 r 12 of the Rules of Court, namely, whether MCI breached the provisions of the CMA 1998 and TA 1950. When this was dismissed, Chembell applied for a stay of the proceedings to enable the parties to apply to the Malaysian courts to determine that preliminary issue of law.

Held, allowing the plaintiffs' claim with costs and dismissing the defendants' Counterclaim:

(1) As the construction of a Malaysian statute was a matter of foreign law, and foreign law had to be proved as a question of fact, the O 14 r 12 application was not appropriately brought and was dismissed: at [6].

(2) The stay application was not granted as Chembell should have made it at about the time when the writ was served. To do so at the trial, without good reason for the delay, was an abuse of process: at [7] to [8].

(3) There was evidence that Vads was licensed to provide the services in Malaysia under a Value Added Data Network Licence issued under the TA 1950 and by an Applications Service Provider Individual Licence issued by the Commission under the CMA 1998. The plaintiffs' expert witness also confirmed that Vads was authorised to provide the services in question in Malaysia under the terms of the two licences: at [8] and [15].

(4) Chembell, however, failed to satisfy the court - either by adducing evidence from the Malaysian regulatory body or from the testimony of the expert witnesses they called - that the services that MCI, through Vads, had provided were in contravention of the provisions of the TA 1950 and CMA 1998. Accordingly, their defence of illegality failed: at [18] to [20].

Rules of...