PT Hutan Domas Raya v Yue Xiu Enterprises (Holdings) Ltd and Another

• Jurisdiction: Singapore
• Judgment Date: 20 January 2001
• Date: 20 January 2001
• Docket Number: Civil Appeal No 64 of 2000
• Court: Court of Appeal (Singapore)

PT Hutan Domas Raya

Plaintiff

and

Yue Xiu Enterprises (Holdings) Ltd and another

Defendant

[2001] SGCA 4

L P Thean JA

and

Chao Hick Tin JA

Civil Appeal No 64 of 2000

Court of Appeal

Conflict of Laws–Natural forum–Stay of proceedings–Applicable principles–Whether party having a personal or juridical advantage in Singapore a decisive factor–Whether prospect of conflicting decisions in different jurisdictions decisive–Question of convenience and expense

The respondents (“R”) were related companies incorporated in Hong Kong. The appellant company (“PTH”) was incorporated in Indonesia. One Kho, an Indonesian citizen and a Singapore permanent resident, was the president and chief executive of PTH. R sued PTH and Kho in relation to some personal guarantees and two memoranda. The guarantees were expressed to be governed by Indonesian law. The writ was served on Kho in Singapore. Kho did not apply to stay the proceedings against him.

Leave was obtained to serve the writ on PTH in Indonesia. R finally served the writ on PTH who applied inter alia for a stay on the ground of forum non conveniens, arguing that the two memoranda were governed by Indonesian law and were illegal and unenforceable under that law. PTH's indebtedness to the R was not denied. Kho adopted a similar position on the substantive issues.

A stay was granted by the assistant registrar but this was later reversed when R appealed. The judge thought that even though Indonesia was the more appropriate forum, it would be wrong to stay the action against PTH. PTH appealed.

Held, dismissing the appeal:

(1) In deciding whether to grant a stay on the ground of forum non conveniens,the court had to, first, determine whether prima facie there was some other available forum having competent jurisdiction, which was more appropriate for the trial of the action. The legal burden of showing that lay on the defendant: at [15] and [16].

(2) If there was such a more appropriate forum, the court would ordinarily grant a stay unless justice required that a stay be not granted. The court would consider all the circumstances of the case, including circumstances which went beyond those taken into account of when considering connecting factors with other jurisdictions: at [16].

(3) The mere fact that the plaintiff had a personal or juridical advantage in proceedings in Singapore was not decisive. The court had also to consider the interests of all the parties and the ends of justice. At this stage, the legal burden shifted to the plaintiff: at [16].

(4) The main reason for refusing to stay the action against PTH in Singapore was the prospect of conflicting decisions on the main issue of whether the two memoranda were valid and enforceable under Indonesian law. The same witnesses would be called to testify in both proceedings for Kho and PTH, resulting in convenience and savings if both actions were tried in Singapore: at [22], [23] and [24].

Brinkerhoff Maritime Drilling Corp v PT Airfast Services Indonesia [1992] 2 SLR (R) 345; [1992] 2 SLR 776 (folld)

Charm Maritime Inc v Kyriakou [1987] 1 Lloyd's Rep 433 (refd)

El Ameria, The [1981] 2 Lloyd's Rep 119 (folld)

Eng Liat Kiang v Eng Bak Hern [1995] 2 SLR (R) 851; [1995] 3 SLR 97 (folld)

Itochu Steel Asia Pte Ltd v CV Wira Mustika Indah [1999] SGHC 321 (distd)

Oriental Insurance Co Ltd v Bhavani Stores Pte Ltd [1997] 3 SLR (R) 363; [1998] 1 SLR 253 (folld)

Spiliada Maritime Corporation v Cansulex Ltd [1987] 1 AC 460 (folld)

Lai Tze Chang Stanley and Koh Oi Leen Melissa (Lee & Lee) for the appellant

Koh Kok Wah and Chua Ju Lee Felicia (Wong & Leow) for the respondents.

Judgment reserved.

Chao Hick Tin JA

(delivering the judgment of the court):

1 The present appeal raises the question of forum non conveniens and, in particular, as to the circumstances where the court, having determined that there is prima facie another forum which is more appropriate to hear the case, could nevertheless grant a stay of the action.

The facts

2 By Suit No 1459 of 1998, Yue Xiu Enterprises (“Yue Xiu”) and Linkeen Industries Ltd (“Linkeen”) brought an action against PT Hutan Domas Raya (“PT Hutan”) and Kho Teng Kwee alias Alex Korompis (“Kho”) in relation to the recovery of certain debts.

3 Yue Xiu and Linkeen are related companies, both incorporated in Hong Kong. PT Hutan is a company incorporated in Indonesia and is involved in the timber industry. Kho, an Indonesian citizen with Singapore permanent resident status, is the president and chief executive of PT Hutan. Kho is not involved in this appeal.

4 The facts giving rise to the action are largely not in dispute. By a memorandum dated 27 August 1992 and executed in Indonesia, PT Hutan acknowledged its indebtedness to Yue Xiu in the sum of US$9.23m and agreed to pay the same, plus interest, in monthly instalments stretching over some seven years from January 1993 to December 1999. By another memorandum of the same date, PT Hutan agreed to pay Linkeen the sum of US$68,750 per month for 84 months, commencing April 1989 in consideration of the continuing supply of logging equipment by Linkeen to PT Hutan. Both memoranda were signed by Kho on behalf of PT Hutan.

5 Furthermore, on the same day, as part of the same understanding, Kho executed two personal guarantees in favour of the respondents in respect of the sums which PT Hutan undertook to pay Yue Xiu and Linkeen under the two memoranda. The guarantees were expressed to be governed by Indonesian law.

6 Yue Xiu and Linkeen instituted the action on 26 August 1998 because they claimed that PT Hutan only made partial payments under the two memoranda and were thus in breach. They stated that, as of 1 August 1998, US$15,300,000 was outstanding from PT Hutan to Yue Xiu and US$2,976,623.52 to Linkeen. Kho is being sued as a guarantor.

7 Yue Xiu and Linkeen had no difficulty in serving the writ on Kho in Singapore. An appearance was duly entered by him. He did not apply for a stay of the action, which is now at the post-discovery stage, pending trial. However, service on PT Hutan was more problematic. Leave was obtained to serve the writ out of jurisdiction. The service was, however, set aside because it was not done through the Indonesian judicial authorities. A default judgment was also set aside.

8 On 21 February 2000, Yue Xiu and Linkeen re-served the writ on PT Hutan in Indonesia. The latter subsequently applied to...