NK Mulsan Co Ltd v INTL Asia Pte Ltd

JudgeWoo Bih Li J
Judgment Date08 November 2018
Neutral Citation[2018] SGHC 242
Citation[2018] SGHC 242
Defendant CounselTan Thye Hoe Timothy and Shakti Sadashiv (AsiaLegal LLC)
Published date13 November 2018
Hearing Date15 October 2018
Plaintiff CounselSuresh Divyanathan and Leong Yu Chong Aaron (Oon & Bazul LLP)
Date08 November 2018
CourtHigh Court (Singapore)
Docket NumberSuit No 139 of 2018 (Summons No 4417 of 2018)
Subject MatterStay of Execution,Civil Procedure
Woo Bih Li J: Introduction

The main action is by the plaintiff, NK Mulsan Co Ltd (“NKM”), against the defendant, INTL Asia Pte Ltd (“INTL”), for the return of US$3 million (“the Deposit”) under a Deposit Agreement dated 19 August 2016 (“the Deposit Agreement”) between the parties. NKM is a company registered in the Republic of Korea and its shares are publicly traded on the Korea Stock Exchange. INTL is a private company incorporated in the Republic of Singapore.

INTL resisted the claim on the basis that the Deposit was to be returned to NKM only if NKM performed all its obligations to INTL in respect of certain contracts. It alleged that NKM had not performed all its obligations and sought to retain the Deposit based on an intended counterclaim against NKM which was for an estimated sum of US$1,353,140 (“the Disputed Sum”).

On 4 September 2018, I granted summary judgment in favour of NKM against INTL for US$1,646,860 (“the Judgment Sum”) and made various orders. The Judgment Sum was the difference between the Deposit and the Disputed Sum. I am delivering my grounds of decision in respect of that decision (“the Substantive Decision”) separately.

The present grounds of decision pertain to INTL’s application in Summons No 4417 of 2018 for a stay of execution pending INTL’s appeal to the Court of Appeal against my decision granting the summary judgment. I dismissed the stay application on 15 October 2018 and set out my reasons below.

The arguments and the court’s reasons

The reasons for INTL’s application for a stay of execution were: its appeal to the Court of Appeal had merits; a stay of execution of the orders would not deprive NKM of the fruits of litigation pending the appeal; there was a significant risk that INTL’s appeal to the Court of Appeal would be rendered nugatory; and there were special circumstances that warranted the granting of a stay of execution.

The parties agreed that the principles applicable to an application for a stay of execution were stated in Lian Soon Construction Pte Ltd v Guan Qian Realty Pte Ltd [1999] 1 SLR(R) 1053 as cited in Strandore Invest A/S and others v Soh Kim Wat [2010] SGHC 174 (“Strandore”) at [7]: While the court has the power to grant a stay, and this is entirely at the discretion of the court, the discretion must be exercised judicially, ie, in accordance with well-established principles. The first principle is that, as a general proposition, the court does not deprive a successful litigant of the fruits of his litigation, and lock up funds to which he is prima facie entitled, pending an appeal. There is no difference whether the judgment appealed against was made on a summary basis or after a full trial. This is balanced by the second principle. When a party is exercising his undoubted right of appeal, the court ought to see that the appeal, if successful, is not nugatory. Thus a stay will be granted if it can be shown by affidavit that, if the damages and costs are paid, there is no reasonable probability of getting them back if the appeal succeeds. The third principle follows, and is an elaboration of the second principle, that an appellant must show special circumstances before the court will grant a stay.

The parties also raised the case of Denis Matthew Harte v Dr Tan Hun Hoe & Another [2001] SGHC 19 (“Harte”) during the hearing. There, the court took into account the fact that judgment was not a summary one. It had been granted after a trial of 31 days. On the other hand, the first principle reiterated in Strandore is that there is no difference between a judgment granted on a summary basis or after a full trial for the purposes of an application for a stay of execution. I was also of the view that there should be no difference.

Two other points were also mentioned in Harte and Strandore.

First, the merits of the appeal are not material. This is because the special circumstances which entitle the court to order a stay of execution are circumstances which go to the enforcement of the judgment and not those which go to its correctness (see Harte at [63]).

In Strandore, the court also said, at [7], that a bald assertion of the likelihood of success is inadequate. Every appellant must expect that his appeal will succeed. On the other hand, the court also said, at [10], that if there is, objectively, little merit in the appeal that must be a relevant consideration.

I was of the view that the alleged merits of an appeal do not usually constitute a relevant factor for the purpose of a stay application unless it can be easily gleaned, without a minute examination of the merits, that the appeal will be likely to fail or succeed. In other words, if it appears obvious that the appeal is likely to fail or succeed, that will be a relevant factor.

The second other point from the two cases is that the fact that a successful litigant is outside Singapore, and it would be inconvenient or expensive to seek recovery outside Singapore is not, of itself, a special circumstance warranting a stay (see Harte at [64]–[65] and Strandore at [13]) although in Strandore, the court did also say, at [12], that this is a factor that has to be taken into consideration.

In Viet Hai Petroleum Corp v Ng Jun Quan [2016] 3 SLR 887 (“Viet Hai Petroleum”), the High Court again endorsed the principle in Harte and Strandore that the fact that a judgment creditor is a foreign entity is not a special...

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1 books & journal articles
  • Civil Procedure
    • Singapore
    • Singapore Academy of Law Annual Review No. 2018, December 2018
    • 1 December 2018
    ...[2018] SGHCR 8. 145 30 June 2005; entry into force 1 October 2015. 146 Choice of Court Agreements Act (Cap 39A, 2017 Rev Ed) s 2(1). 147 [2019] 3 SLR 453. 148 [2010] SGHC 174 at [7]. 149 NK Mulsan Co Ltd v INTL Asia Pte Ltd [2019] 3 SLR 453 at [6]. 150 [2018] 5 SLR 349. See also BQP v BQQ [......

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