Omae Capital Management Pte Ltd v Tetsuya Motomura

• Jurisdiction: Singapore
• Judge: Justin Yeo AR
• Judgment Date: 08 April 2015
• Neutral Citation: [2015] SGHCR 8
• Court: High Court (Singapore)
• Docket Number: Suit No 1053 of 2014 (Summons No 5893 of 2014)
• Year: 2015
• Published date: 10 April 2015
• Hearing Date: 12 March 2015,09 January 2015
• Plaintiff Counsel: Mr Arvind Daas Naaidu (Arvind Law LLC)
• Defendant Counsel: Mr Walter Ferix Silvester (Joseph Tan Jude Benny LLP)
• Subject Matter: Civil Procedure,Service
• Citation: [2015] SGHCR 8

Justin Yeo AR:

This is an application by Mr Tetsuya Motomura (“the Defendant”) to set aside the Writ of Summons (“the Writ”) or the service of the Writ on him by Omae Capital Management Pte Ltd (“the Plaintiff”).

Background facts

The Plaintiff procured the issuance of the Writ on 2 October 2014, claiming substantial loss and damage against the Defendant on account of the Defendant’s alleged fraudulent misrepresentations and/or deceit during the latter’s brief tenure as the Plaintiff’s Chief Investment Officer. The Plaintiff alleged that the Defendant had deliberately concealed investigations by the Department of Justice, United States of America, into the Defendant’s participation in London Interbank Offered Rate (“LIBOR”) manipulation. The Plaintiff further alleged, inter alia, that in employing the Defendant as the Plaintiff’s Chief Investment Officer, it had relied on the Defendant’s representation that he was not subject to any proceedings of a disciplinary or criminal nature.

Pursuant to an ex parte Order of Court dated 16 October 2014, the Plaintiff obtained leave to serve the Writ on the Defendant out of jurisdiction at the Defendant’s residence in Tokyo. The Writ was served on 23 October 2014 by registered mail.

On 26 November 2014, the Defendant filed the present summons challenging the jurisdiction of the High Court of Singapore. On 11 December 2014, the Plaintiff’s Japanese solicitor served the Writ and a Japanese translation thereof on the Defendant via registered mail.

At the hearing on 9 January 2015, counsel for the Defendant, Mr Walter Ferix (“Mr Ferix”) withdrew the prayer for an order to set aside the Writ, but maintained that service of the Writ ought to be set aside due to irregularity in service.

Issues

It was undisputed that there was no Civil Procedure Convention providing for service of court processes between Singapore and Japan. As such, the parties agreed that the Writ may be served on the Defendant in accordance with O 11 r 4(2)(c) of the Rules of Court (Cap 322, R 5, 2014 Rev Ed) (“Rules of Court”).

4. Service of originating process abroad through foreign governments, judicial authorities and Singapore consuls or by other method of service (O. 11, r. 4) …

(2) Where in accordance with these Rules an originating process is to be served on a defendant in any country with respect to which there does not subsist a Civil Procedure Convention providing for service in that country of process of the High Court, the originating process may be served — … (c) by a method of service authorised by the law of that country for service of any originating process issued by that country.

…

The Plaintiff additionally relied on O 11 r 3(3) of the Rules of Court, which provides:

3. Service of originating process abroad: Alternative modes (O. 11, r. 3) …

(3) An originating process which is to be served out of Singapore need not be served personally on the person required to be served so long as it is served on him in accordance with the law of the country in which service is effected.

…

The parties also recognised that pursuant to O 11 r 3(2) of the Rules of Court, the court may not make any order or direction which “shall authorise or require the doing of anything in a country in which service is to be effected which is contrary to the law of that country”.

Two issues arose for consideration in the present application: First, whether the Plaintiff’s service of the Writ was irregular; and Second, if so, whether this court should exercise its discretion to cure the irregularity.

The first issue: Whether the Plaintiff’s service of the Writ was irregular

Mr Ferix argued that service of the Writ was irregular. He raised three arguments in this regard: First, he pointed out that service in Japan had to be effected by a competent district court of Japan, through a “special delivery”, with a Japanese translation of the Writ. According to the Defendant’s expert, Mr Genta Irie (“Mr Irie”):

A foreign complaint shall be sent by a competent court, central authority or designated authority. Page 233 of International Judicial Cooperation Manual regarding a Civil Case (Hosokai, Minjijiken ni kansuru Kokusaishihohujo Manual 233) (1999), the authoritative book in Japan under the supervision of the Supreme Court of the Administration Office of a Civil Case, has clearly stated the way of the service of process regarding an international civil case. Accordingly, a defendant shall receive a foreign complaint by a competent district court of Japan (Id, at 233) through a special delivery (Tokuybetsusotatsu). In addition, the complaint shall be sent with a translation of the complaint. [emphasis added in bold italics]

The method of service of a Singapore writ in Japan was also very recently considered in SRS Commerce Ltd and another v Yuji Imabeppu and others [2015] 1 SLR 1 (“SRS Commerce”) at [6] where Choo Han Teck J noted that:

There is little doubt that the service was not properly effected. Under Japanese law, the writ (and accompanying documents) must be served through Japan’s Ministry of Foreign Affairs and then through court clerks authorised by the Japanese courts. The writ (and its accompanying documents) in the present case was not served by a court clerk authorised by the Japanese court. [emphasis added in bold italics]

Second, Mr Ferix argued that delivery by mail is an “unlawful” method of service in Japan. In support of this argument, Mr Irie cited a Japanese textbook titled International Civil Procedure Law (2005) (“International Civil Procedure Law”), which stated (as translated into English) at p 119:

If service of process is made to a country with which no treaty exists or bilateral judicial assistance agreement has been executed, the service lacks legal foundation under international laws. As such, personal delivery and personal delivery by mail as previously described are clearly unlawful methods of service under Japanese law. [emphasis added]

Another passage found in International Civil Procedure Law stated:

3. Services by Direct Delivery and Direct Mailing

What becomes the most significant issue in services performed in Japan for foreign cases is the legality of services by direct delivery and direct mailing to the recipient of the service, which often occurs in the services from common law nations, where the method of service is different from that of Japan.

As described above, for services for countries with which Japan has no treaty or arrangement for bilateral judicial assistance, since there are no grounds related to international law, such direct delivery and direct mailing are clearly an illegal service under Japanese law. …

[emphasis added]

Third, Mr Ferix contended that the Plaintiff’s reliance on the decision of the Supreme Court of Japan in Kishinchando Naridas Sadhwani Sadhwanis Japan v Sadhwani, Gobindram Sadhwani (Case No 1838(O) of 1994 dated 28 April 1998) (“Sadhwani”) was misplaced, as Sadhwani was a case relating to the enforcement of foreign judgments rather than to the service of originating processes. Mr Irie agreed that in the context of enforcement of a foreign judgment, irregularities in service could be cured if the defendant knew about the proceedings and had an unobstructed right to defend. However, he opined that there were “very different considerations when examining irregular service at the enforcement stage as opposed to commencement of action”.¹ This was because, at the enforcement stage, refusing enforcement on the ground of an irregularity in service would involve substantial prejudice to the plaintiff since the plaintiff had already obtained a judgment and had (it is presumed) gone through the legal process. In contrast, at the commencement stage, the defendant has not yet substantively contested the proceedings. Irregularities at the commencement stage should therefore “be more closely scrutinised so as to allow the Defendant his full due process”.²

Counsel for the Plaintiff, Mr Arvind Daas Naaidu (“Mr Naaidu”) raised three arguments to support his contention that service of the Writ was regular. First, he argued that Mr Irie’s reliance on the International Judicial Cooperation Manual (see [10(a)] above) was misplaced, because according to the Plaintiff’s expert, Mr Iida Toyohiro (“Mr Toyohiro”), the manual applied only to instances of service of a foreign originating process in Japan “if and only if there subsists a Civil Procedure Convention and/or exists a concluded or executed bilateral judicial assistance agreement between that foreign country and Japan” [emphasis in original].³ However, it should be noted that Mr Irie conceded that the manual was not strictly applicable in situations where there is no Civil Procedure Convention between the foreign country and Japan, but emphasised that the point he was trying to make was that regular service in Japan can only be achieved by a central authority, a designated authority or by a court with jurisdiction.⁴ Second, Mr Toyohiro interpreted the Sadhwani decision to mean that in the absence of a Civil Procedure Convention subsisting between an originating country and Japan, the service of a foreign process from the originating country need not comply with the requirements of the Japanese Code of Civil Procedure (“CCP”) so long as the defendant knew about the commencement of the foreign proceedings and his right of defence was not obstructed.⁵ Mr Naaidu emphasised that similar observations had been made by Professor Nozomi Tada (in an article titled “Recognition and Enforcement of Foreign Judgments” (2003) 46 Japanese Annual of International Law 75 (“Professor Tada’s article”)) and Mr Masahiro Nakatsukasa (for the “Japan” entry in Mark Moedritzer & Kay C Whittaker, gen ed, Enforcement of Foreign Judgments in 28 jurisdictions worldwide 2013 at p 71).⁶ While Sadhwani was a case...