Petroval SA v Stainby Overseas Ltd and Others

• Jurisdiction: Singapore
• Judgment Date: 02 May 2008
• Date: 02 May 2008
• Docket Number: Suit No 103 of 2008 (Summonses Nos 1016 and 1341 of 2008)
• Court: High Court (Singapore)

Petroval SA

Plaintiff

and

Stainby Overseas Ltd and others

Defendant

[2008] SGHC 64

Tay Yong Kwang J

Suit No 103 of 2008 (Summonses Nos 1016 and 1341 of 2008)

High Court

Civil Procedure–Jurisdiction–Mareva injunctions–Court's jurisdiction to grant Mareva injunction–Whether Mareva injunction must be ancillary to claim for relief that would be granted by Singapore court–Section 4 (10) Civil Law Act (Cap 43, 1999 Rev Ed)–Civil Procedure–Service–Service out of jurisdiction–Whether leave to serve out of jurisdiction should be set aside–Affidavit in support of application to serve out of jurisdiction failing to state which ground in O 11 r 1 Rules of Court (Cap 322, R 5, 2006 Rev Ed) being relied on–Whether there was breach of O 11 r 2 Rules of Court (Cap 322, R 5, 2006 Rev Ed)–Civil Procedure–Service–Substituted service–Substituted service on defendants who have their addresses in Switzerland–Whether leave for substituted service should be set aside–Presence of evidence of impracticability to effect personal service–Order 11 r 3 (1), O 62 r 5 Rules of Court (Cap 322, R 5, 2006 Rev Ed)–Courts and Jurisdiction–Jurisdiction–Interlocutory–Mareva injunctions–Court's jurisdiction to grant Mareva injunction–Whether Mareva injunction must be ancillary to claim for relief that would be granted by Singapore court–Section 4 (10) Civil Law Act (Cap 43, 1999 Rev Ed)

On 15 February 2008, the plaintiff, which had its address in France, commenced an action (“the Singapore action”) against the defendants, who had their addresses in either the British Virgin Islands or Switzerland. The sole ground upon which the plaintiff based its jurisdiction for the Singapore action was O 11 r 1 of the Rules of Court (Cap 322, R 5, 2006 Rev Ed), viz, that the defendants had assets in Singapore. It was clear, however, that the merits of the claim would not be determined in Singapore but in the British Virgin Islands. The plaintiff's sole purpose for commencing the Singapore action was the obtaining of interim relief.

On 18 February 2008, the High Court granted the plaintiff several orders, viz: (a) a Mareva injunction restraining the disposal of assets by the defendants and an order appointing receivers over all the assets of several of the defendants; (b) orders for service out of jurisdiction on the defendants and for substituted service on three of the defendants who had their addresses in Switzerland (“the three defendants”); and (c) a stay of the Singapore action until the final disposal of the British Virgin Islands action. The orders were granted on the basis that it mirrored orders made by the High Court of the British Virgin Islands and were to stand only as long as the orders made by the High Court of the British Virgin Islands were in force.

The defendants subsequently took out two summonses seeking, inter alia: (a) a declaration that the court had no jurisdiction pursuant to s 4 (10) of the Civil Law Act (Cap 43, 1999 Rev Ed) to grant the Mareva injunction (on the basis that it would be a necessary condition for the granting of interlocutory relief that it should be ancillary to a claim for relief that would be granted by a Singapore court); (b) the setting aside of leave to serve the writ of summons out of jurisdiction on the defendants (on the basis that the plaintiff was in breach of O 11 r 2 of the Rules of Court which required an application for leave to serve an originating process out of jurisdiction to be supported by an affidavit stating the grounds on which the application was made (the plaintiff had disclosed orally to the court at the first hearing the relevant ground in O 11 r 1 of the Rules of Court which was being relied on and had set out the supporting facts in their affidavits)); (c) the setting aside of leave for substituted service of the writ of summons (on the basis that the requirement of impracticability of personal service prescribed by O 11 r 3 (1) read with O 62 r 5 of the Rules of Court was not satisfied (even though the plaintiff had adduced evidence that it would have been impracticable to effect personal service of the writ of summons on the three defendants)); and (d) the setting aside of the writ of summons, the service of the writ of summons, and all subsequent proceedings.

Held, granting the application in part:

(1) The Mareva injunction was set aside, as it could be concluded from the Court of Appeal's decision in Swift-Fortune Ltd v Magnifica Marine SA [2007] 1 SLR (R) 629 that it would be a necessary condition for the court's exercise of jurisdiction pursuant to s 4 (10) of the Civil Law Act (Cap 43, 1999 Rev Ed) to grant an interlocutory injunction that it should be ancillary to a claim for relief that would be granted by a Singapore court. It would be insufficient to have a cause of action that was potentially justiciable in Singapore if the adjudication was to take place elsewhere. As interlocutory relief was the only relief that the plaintiff wanted in the Singapore action, the writ of summons, the service thereof, and all subsequent proceedings thereto were consequently also set aside: at [13], [16] and [18].

(2) Leave to serve the writ of summons out of jurisdiction was not set aside as it would be sufficient for the purposes of O 11 r 2 of the Rules of Court for the defendants to have disclosed clearly to the court at the first hearing the relevant ground in O 11 r 1 of the Rules of Court which was being relied upon and ensured that the supporting facts were set out in the affidavit (s): at [21] and [22].

(3) Leave for substituted service was not set aside as the evidence of the plaintiff that it would be impracticable to effect personal service of the writ of summons on the three defendants would be sufficient to satisfy the requirement of impracticability of personal service prescribed by O 11 r 3 (1) read with O 62 r 5 of the Rules of Court: at [26].

Channel Tunnel Group Ltd v Balfour Beatty Construction Ltd [1993] AC 334 (not folld)

Front Carriers Ltd v Atlantic & Orient Shipping Corp [2006] 3 SLR (R) 854; [2006] 3 SLR 854 (refd)

Siskina v Distos Compania Naviera SA [1979] AC 210 (refd)

Swift-Fortune Ltd v Magnifica Marine SA [2007] 1 SLR (R) 629; [2007] 1 SLR 629 (refd)

Civil Law Act (Cap 43,1999 Rev Ed)s 4 (10) (consd)

International Arbitration Act (Cap 143A, 2002 Rev Ed)s 12 (7)

Rules of Court (Cap 322,R 5, 2006 Rev Ed)O 11rr 1, 2, 3 (1), O 62r 5 (consd);O 11rr 1 (a), (b), (f) (i), (f) (ii), (i), (o), O 11r 2 (2), O 11r 3 (2), O 62rr 5 (1),5 (3)

Vinodh Coomaraswamy SC, Marcus Yip and Georgina Lum (Shook Lin & Bok LLP) for the plaintiff

Alvin Yeo SC, Jenny Tsin and Koh Swee Yen (WongPartnership LLP) for the first to fifth, seventh, ninth and tenth defendants

Deborah Liew (Rajah & Tann LLP) holding watching brief for Petroval Pte Ltd (non–party).

Tay Yong Kwang J

1 On Friday, 15 February 2008, the plaintiff, which has its address in France, commenced this action (“the Singapore action”) against the ten defendants. The addresses of the defendants were stated in the writ of summons to be in the British Virgin Islands (“BVI”) in respect of the first, second and sixth to tenth defendants and in Switzerland where the third to fifth defendants were concerned. The “endorsement of claim” in the writ of summons reads as follows:

1. I The Plaintiff, Petroval SA, claims:

   1. 1 As against the First Defendant, a declaration that it holds the shares in Petroval Singapore and any dividends received or due from Petroval Singapore on trust for the Plaintiff;

   2. 2 As against the Second Defendant, an account of all and any profits it has made as a result of the bunker oil transactions concluded between itself, the Plaintiff and the Second Defendant;

   3. 3 As against the Third and Fourth Defendants, damages for fraudulent misrepresentation;

   4. 4 As against all the Defendants:

      1. a To the extent not provided for by paragraphs 1 and 2 above, declarations that each Defendant holds on trust for the Plaintiff the Singapore Specific Assets enumerated against that Defendant's name in Column B of Schedule 1 to this endorsement of claim;

      2. b An account of all monies knowingly received at the Plaintiff's expense;

      3. c Tracing relief;

      4. d Interest (to the extent not already included in paragraphs 4 (a) and 4 (c) above);

      5. e Such further or other relief as the Court in its discretion thinks fit;

      6. f Costs.

1. II The claim against the Defendants is based on the fact that during and after the time that the Third and Fourth Defendants were engaged as managers of the Plaintiff, they personally, and through corporate entities controlled and/or owned by them (namely the First, Second, Fifth, Sixth and Seventh Defendants), engaged in activities which caused loss and damage to the Plaintiff. Specifically, such conduct included:

   1. 1 transferring their shares in Petroval Pte Ltd to the Third and Fourth Defendants in breach of trust;

   2. 2 diverting business opportunities properly belonging to the Plaintiff to Petroval Pte Ltd;

   3. 3 making fraudulent representations to the Plaintiff regarding the Plaintiff's bunkering business and thereafter taking over those bunkering activities for their own benefit; and

   4. 4 causing the Plaintiff to repurchase fuel oil from the Second Defendant at greatly inflated prices.

1. III The full facts and matters relied upon by the Plaintiff will be contained in a Statement of Claim which will be filed in the event that it is necessary.

2 Schedule 1 in the writ of summons sets out the “Singapore Specific Assets” in respect of each defendant. These assets include private apartments and accounts in banks in Singapore.

3 The plaintiff...