Praptono Honggopati Tjitrohupojo and Others v His Royal Highness Tunku Ibrahim Ismail Ibni Sultan Iskandar Al-Haj

• Jurisdiction: Singapore
• Judge: MPH Rubin J
• Judgment Date: 28 December 2001
• Neutral Citation: [2001] SGHC 377
• Docket Number: Suit No 217 of 2001 (Registrar's
• Date: 28 December 2001
• Published date: 19 September 2003
• Year: 2001
• Plaintiff Counsel: Suresh Damodara and K Sureshan (Colin Ng & Partners)
• Citation: [2001] SGHC 377
• Defendant Counsel: Raj Singam and Gopinath Pillai (Drew & Napier LLC)
• Court: High Court (Singapore)
• Subject Matter: Natural forum,International Law,Relevant considerations,Legal burden on defendant to show existence of another more appropriate forum,Evidential burden on plaintiff to show that Singapore more appropriate forum,Sch 1 para 9 Supreme Court of Judicature Act (Cap 322, 1999 Ed),Conflict of Laws,Whether Singapore court has jurisdiction over independent foreign sovereign,Defendant applying for stay of proceedings on grounds of forum non conveniens,s 17 State Immunity Act (Cap 313),Sovereign immunity

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Introduction

The first plaintiff, Praptono Honggopati Tjitruhopojo (`Praptono`), a principal figure in these proceedings, is an Indonesian entrepreneur, particularly in the Indonesian petroleum exploration sector. The other four plaintiffs are companies incorporated in the Republic of Indonesia and under his control. The defendant is the Crown Prince (`Tunku Mahkota`) of the State of Johor in Malaysia. None of the parties to the proceedings is resident in Singapore.

The claim, the court was told, was based on two oral agreements entered into, in the main, between the first plaintiff and the defendant on 27 November 1994 and 31 May to 1 June 1995, respectively in connection with a petroleum project in Indonesia in which the plaintiffs and the defendant were intending to participate. It was alleged that under these agreements, the defendant undertook to provide the entire financing for the said petroleum project in consideration for a substantial equity in the proposed project.

Alleging breach of the said oral agreements on the part of the defendant, which I shall amplify later the plaintiffs have commenced this action in Singapore on the basis that these two oral agreements emanated in Singapore.

The defendant, after entering appearance, applied to the court to stay proceedings on grounds of forum non conveniens under para 9 of the First Schedule to the Supreme Court of Judicature Act (Cap 322, 1999 Ed). He was unsuccessful before the learned assistant registrar. He appealed and after hearing arguments, I allowed the appeal and granted the stay requested. My reasons now follow.

Pleadings and averments

The background facts, insofar as they are material and as could be gathered from the statement of claim, affidavits filed and arguments presented, are as follows.

The first plaintiff is an Indonesian businessman, residing in Indonesia. He is the president director of the second defendants. The third, fourth and fifth defendants are the subsidiaries of the second defendants. The second to the fifth defendants are generally known as the `UPG` group of companies. The first plaintiff is said to be the authorised representative of the said UPG group.

The defendant as mentioned earlier, is the Crown Prince of Johor. Besides being a prince, he is also involved in many commercial ventures.

It would seem that in the course of 1992 and 1993, the UPG group entered into four Technical Assistance Contracts (`TAC`s`) with Indonesia`s national petroleum enterprise known as Perusahaan Pertambangan Minyak dan Gas Bumi Negara (`Pertamina`) by which the UPG group secured some exclusive concession rights to explore, develop, produce and sell oil and gas from different oil and gas concession areas for gain. Under the contracts, the UPG group also had the right to divest up to 49% of their rights to any third party.

The first plaintiff alleged that the defendant, having knowledge of the said impending petroleum venture, showed a keen interest to invest in the project. Consequently, the defendant, through his agent, one Datuk Hamzah bin Mohd Noor, obtained various due diligence reports and information on the concession areas from the chief executive officer of the UPG group. The upshot was that the first plaintiff was invited to attend the defendant`s birthday party at the Raffles Marina in Singapore on 26 September 1994.

First oral agreement

The first plaintiff`s averment was that on 27 September 1994, whilst at the Raffles Marina in Singapore, both he and the defendants entered into an oral agreement in relation to the said petroleum venture. The terms of that agreement according to the first plaintiff were as follows:

(a) that in consideration of the plaintiffs agreeing to sell to the defendant forty-nine per cent (49%) of the rights and interests in the TACs from the second to the fifth plaintiffs (hereinafter referred to as the `farm-out rights`) the defendant agreed to expeditiously arrange for the entire financing of and technical assistance for the petroleum operations ; and

(b) further in consideration of the first plaintiff procuring for the defendant, from the second to the fifth plaintiffs, an exclusive option (for a period of time to be agreed upon) to purchase the said farm-out rights, the defendant agreed to pay to the benefit of the second to the fifth plaintiffs initial working capital for the petroleum operations; and

(c) to execute, at a later stage, a formal written agreement for the purchase from the plaintiffs of the farm-out rights upon, inter alia, the aforesaid terms.

[Emphasis is added.]

According to the first plaintiff, following the said first oral agreement, parties entered into a series of agreements, one oral and the rest written. From particulars provided, the following chronology appears to emerge:

Chronology

27 November 1994	:	(1)	between the defendant and the first plaintiff (for and on behalf of UPG Group) under which:
			-	the defendant reportedly promised to provide the entire financing of the project and in return the first plaintiff promised 49% concession rights to the defendant.
27 November 1994	:	(2)	First Loan Agreement between the defendant, UPG Group and the first plaintiff.
24 December 1994	:		Second Loan Agreement between the defendant, UPG Group and the plaintiff.
25 February 1995	:		Confidentiality Agreement between the defendant and one Canadian Occidental Petroleum Ltd (COPL).
17 March 1995	:		Third Loan Agreement between the defendant, UPG Group and the first plaintiff.
30 April 1995	:		Fourth Loan Agreement between the defendant, UPG Group and the first plaintiff.
31 May 1995	:		between the first plaintiff together with UPG Group, COPL and the defendant (unsigned).
1 June 1995	:		between the defendant and the first plaintiff under which
			-	the defendant reportedly again promised to procure the entire financing for the impending project from a third party, ie Prince Jefri of Brunei and in return, the first plaintiff promised
				(a)	not to sign the Master Agreement; and
				(b)	to give the defendant 100% concession rights.

The first alleged oral agreement Master Agreement The second alleged oral agreement Digressing a little for the time being from the alleged oral agreements - which are in any event being denied by the defendant - the court`s attention was drawn by counsel for the contestants to the four written loan agreements entered into between the parties. It would appear from these agreements that they were in relation to the provision of interim working capital for the UPG Group. Under these four agreements, the defendant undertook to provide interim working capital to the UPG Group in the form of loans. Altogether four loans were admittedly provided: US$6m under the first loan agreement; US$9m (in two tranches of US$4m and US$5m respectively) under the second loan agreement; US$4m under the third loan agreement; and US$7.5m under the fourth loan agreement. The total sum of the loans granted was US$26.5m and the loan undertakings by the defendant had apparently been fulfilled by the defendant before the alleged second oral agreement.

Counsel for the defendant invited the court`s attention to a significant feature in those four written loan agreements entered into between the defendant of the first part, the UPG Group (the second to fifth plaintiffs in these proceedings) of the second part, collectively described as the borrowers and the first plaintiff as being the guarantor for the said loans of the third part. The said agreements included a dispute resolution provision. Clause 14 of each agreement provided that the:

agreement[ s] entered into between the parties shall be governed and construed in all respects in accordance with the laws of Malaysia and the parties hereto shall submit to the jurisdiction of the courts of the States of Malaysia in all matters connected with the obligation and liabilities of the parties. [Emphasis is added.]

Then came this master agreement dated 31 May 1995. The proposed parties to this agreement were the defendant, the Canadian Occidential Petroleum Ltd and the first plaintiff along with his UPG Group of Companies. In brief, the purport of this proposed master agreement was to bring in the said Canadian Occidential Petroleum Ltd as a joint venture partner in the contemplated petroleum project. Admittedly, this agreement had not been fully executed by the parties. The reason, according to the first plaintiff, was that the defendant persuaded him not to sign the agreement in consideration of the terms of the second oral agreement.

The court was informed by the plaintiffs` counsel that the significance of this yet to be executed master agreement lay in the clause relating to arbitration proceedings. In this regard, the relevant part of art XXI reads as follows:

21.01 Any dispute, controversy or claim arising out of or relating to this Agreement, or the breach, termination or invalidity thereof, shall be settled by arbitration in accordance with the UNCITRAL Arbitration Rules as at present in force. The number of arbitrators shall be three. The place of arbitration shall be Singapore. The arbitration shall be administered by The Singapore International Arbitration Centre (`SIAC`) and the appointing authority shall be the Chairman of SIAC. The language to be used in...