Mizuho Corporate Bank Ltd v Cho Hung Bank

• Jurisdiction: Singapore
• Judge: Tan Lee Meng J
• Judgment Date: 31 July 2004
• Neutral Citation: [2004] SGHC 159
• Docket Number: Suit No 66 of 2004 (Registrar's
• Date: 31 July 2004
• Published date: 04 August 2004
• Year: 2004
• Plaintiff Counsel: Chou Sean Yu (Wong Partnership)
• Citation: [2004] SGHC 159
• Defendant Counsel: Toh Kian Sing and Ian Teo (Rajah and Tann)
• Court: High Court (Singapore)
• Subject Matter: Application by issuing bank for stay of Singapore proceedings on ground that South Korea more appropriate forum,Whether stay of action should be granted,Conflict of Laws,Natural forum

31 July 2004

Tan Lee Meng J:

1 The appellant, Cho Hung Bank (“CHB”), who applied for a stay of the action against them by the respondent, the Mizuho Corporate Bank Limited’s Singapore branch (“MCB”), on the ground that South Korea is a more appropriate forum than Singapore, appealed against the assistant registrar’s dismissal of its application. I dismissed the appeal and now give the reasons for my decision.

Background

2 On 14 August 2003, CHB issued a letter of credit no M1655308NS00057 (the “letter of credit”), which was amended on or about 28 August 2003, for the purchase of a cargo of gas oil. The confirming bank was MCB and the beneficiary of the letter of credit was Nissho Iwai Petroleum (Singapore) Pte Ltd (“Nissho”).

3 The letter of credit was subject to the provisions of the Uniform Customs and Practice for Documentary Credit (International Chamber of Commerce Publication No 500, 1993 Revision), which is commonly known as “UCP 500”. It called for the presentation of two documents, namely a full set of clean on-board bills of lading and the seller’s commercial invoice. The beneficiary, Nissho, presented to MCB in Singapore the requisite commercial invoice and a full set of the bills of lading. MCB negotiated and/or purchased and/or gave value for the same.

4 On 11 November 2003, MCB despatched the documents required by the letter of credit to CHB for the purpose of obtaining payment of US$1,715,699.15. These documents were received by CHB on the following day. On 18 November 2003, CHB rejected the documents and cited the following discrepancies:

(a) overdrawn

(b) no on-board date on B/L.

5 MCB took the view that there were no discrepancies. CHB commenced proceedings in South Korea for a declaration that it was not liable to MCB under the letter of credit while MCB instituted legal proceedings in Singapore against it. CHB applied for a stay of the Singapore proceedings on the ground that South Korea is, when compared to Singapore, clearly the more appropriate forum for the determination of its rights and liabilities under the letter of credit. The assistant registrar, Mr Vincent Leow, dismissed CHB’s application on 8 April 2004. CHB appealed against his decision.

The appeal

6 That the court has a discretion in deciding whether to grant a stay of proceedings on the ground that there is a more appropriate forum elsewhere has been reiterated on innumerable occasions. The approach of the courts with respect to applications for such a stay of proceedings was elucidated by Yong Pung How CJ in Oriental Insurance Co Ltd v Bhavani Stores Pte Ltd [1998] 1 SLR 253 at 257, [10] in the following terms:

The principles governing this matter are clear and established. The approach suggested by Lord Goff in The Spiliada [1987] 1 Lloyd’s Rep 1 has since been approved and applied by the Court of Appeal in Brinkerhoff Maritime Drilling Corp & Anor v PT Airfast Services Indonesia and another appeal [1992] 2 SLR 776. We set out the relevant passages from the judgment of Lord Goff:

In my opinion, the burden resting on the defendant is not just to show that England is not the natural or appropriate forum for the trial, but to establish that there is another available forum which is clearly or distinctly more appropriate than the English forum. In this way, proper regard is paid to the fact that jurisdiction has been founded as of right …

…

Since the question is whether there exists some other forum which is clearly more appropriate for the trial of the action, the court will look first to see what factors there are which points in the direction of another forum … and these will include not only factors affecting convenience or expense (such as availability of witnesses), but also other factors such as the law governing the relevant transaction … and the places where the parties respectively reside or carry on business.

…

If the court concludes at that stage that there is no other available forum which is clearly more appropriate for the trial of the action, it will ordinarily refuse a stay …

…

If however the court concludes at that stage that there is some other available forum which prima facie is clearly more appropriate for the trial of the action, it will ordinarily grant a stay unless there are circumstances by reason of which justice requires that a stay should nevertheless not be granted.

7 At the hearing of the appeal, CHB failed to establish that Singapore is not the appropriate forum and that South Korea is, when compared to Singapore, clearly the more appropriate forum. For a start, as far as the governing law of the contract is concerned, under English and Singapore law the governing law of a contract between an issuing bank and a confirming bank is, without more, that of the place where the confirming bank carries on its business: see European Asian Bank AG v Punjab and Sind Bank Ltd ...