R1 International Pte Ltd v Lonstroff AG

• Jurisdiction: Singapore
• Judgment Date: 14 April 2014
• Date: 14 April 2014
• Docket Number: Originating Summons No 704 of 2013; Summons No 5545 of 2013
• Court: High Court (Singapore)

R1 International Pte Ltd

Plaintiff

and

Lonstroff AG

Defendant

[2014] SGHC 69

Judith Prakash J

Originating Summons No 704 of 2013; Summons No 5545 of 2013

High Court

Arbitration—Agreement—Incorporation—Plaintiff sending pre-signed sales contract to defendant after contract was concluded earlier—Sales contract referring to standard terms—Buyer not signing sales contract—Whether arbitration clause incorporated into parties' contract by trade custom—Whether arbitration clause incorporated into parties' contract by previous course of dealing

Injunctions—Jurisdiction to award—Whether court had power to grant permanent anti-suit injunctions—Sections 12 (1) (i) and 12 A (2) International Arbitration Act (Cap 143 A, 2002 Rev Ed)

Statutory Interpretation—Whether International Arbitration Act (Cap 143 A, 2002 Rev Ed) abrogated court's general jurisdiction to grant anti-suit injunctions—Section 4 (10) Civil Law Act (Cap 43, 1999 Rev Ed) —Sections 12 (1) (i) and 12 A (2) International Arbitration Act (Cap 143 A, 2002 Rev Ed)

The plaintiff contracted with the defendant for the sale of rubber several times. On the first occasion, the plaintiff's agent, R1 Europe Gmb H (‘R1 Europe’) concluded the contract with the defendant and later sent the defendant a sales contract document that had been pre-signed by the plaintiff. The sales contract incorporated the International Rubber Association terms (‘the IRAC terms’) which stated that disputes were to be arbitrated in London. The sales contract was not signed by the defendant.

The dispute arose under the second transaction. On this occasion, the parties concluded the contract on 15 August 2012 via e-mail. After the order was delivered and accepted by the defendant on 27 August 2012, R1 Europe sent a pre-signed sales contract document to the defendant on 31 August 2012. This contract contained a clause referring to the International Rubber Association terms and also a clause stating that arbitration was to be conducted by the Singapore Commodity Exchange (‘the SICOM clause’). The defendant did not sign the sales contract.

The defendant later complained about the rubber's smell and alleged that the plaintiff had breached the contract. Legal proceedings in Switzerland were started on 28 March 2013. The plaintiff then requested SICOM to arbitrate the matter but SICOM refused to do so until the Swiss proceedings had been suspended and it was clear that the parties had agreed to refer the dispute to it.

To restrain the Swiss proceedings, the plaintiff applied for an interim anti-suit injunction from this court on the basis that the SICOM clause had been incorporated into the parties' contract by trade custom and/or by previous course of dealing. An interim anti-suit injunction was granted. Dissatisfied, the defendant appealed the decision. At the same time, the plaintiff sought to make the interim anti-suit injunction permanent. The issues the court had to determine were: (a) whether the arbitration clause was incorporated into the contract; (b) whether this court had jurisdiction under s 12 A (2) read with s 12 (1) (i) of the International Arbitration Act (Cap 143 A, 2002 Rev Ed) (‘the IAA’) to grant permanent anti-suit injunctions; and (c) whether a permanent anti-suit injunction ought to be granted to the plaintiff.

Held, allowing the appeal:

(1) The SICOM clause was not incorporated by trade custom. The court could only take judicial notice of facts which were beyond reasonable dispute or of specific facts which could be immediately and accurately shown to exist by authoritative sources. Practices in the rubber trade did not fall in this category. Therefore the plaintiff had to prove the existence of a trade practice in the rubber industry that the IRAC terms were prevalently used in the rubber trade and that the SICOM clause was part of the IRAC terms. It had not done so: at [23] and [24] .

(2) The SICOM clause was not incorporated by the parties' previous course of dealing. On a contextual approach, the parties had engaged in only one prior transaction. There was no continuity in the transactions and therefore no settled course of dealing. Even if there was, the SICOM clause had not been incorporated because the contract was concluded and performed before the defendant was notified of it. Therefore there was no basis for a permanent anti-suit injunction to be granted or for the interim anti-suit injunction to be sustained: at [28] , [32] , [34] and [35] .

(3) The power to grant permanent anti-suit injunctions in aid of arbitration could not be derived from s 12 A (2) read with s 12 (1) (i) of the IAA. The powers under the IAA were for interim orders only because they were to assist arbitration proceedings which would then permanently resolve the dispute: at [40] and [42] .

(4) The court's general injunctive jurisdiction stemmed from s 4 (10) of the Civil Law Act (Cap 43, 1999 Rev Ed) and permanent anti-suit injunctions in aid of local court proceedings were granted under this power. This jurisdiction was not abrogated by the IAA and there was no reason why it could not be exercised to make permanent any anti-suit injunctions issued under the IAA on an interim basis. Clear words would be needed to abrogate the court's general injunctive jurisdiction: at [43] and [44] .

(5) Where there was an arbitration clause providing for international arbitration in Singapore, the innocent party could seek a permanent anti-suit injunction under the court's general injunctive jurisdiction. However, strong cause ought to be shown before the court would grant permanent anti-suit injunctions to assist foreign international arbitration: at [50] , [54] and [55] .

AES Ust-Kamenogorsk Hydropower Plant LLP v UST-Kamenogorsk Hydropower Plant JSC [2013] 1 WLR1889 (refd)

Ajwa for Food Industries Co (MIGOP) , Egypt v Pacific Inter-Link Sdn Bhd [2013] 5 MLJ 625 (distd)

International Research Corp PLC v Lufthansa Systems Asia Pacific Pte Ltd [2014] 1 SLR130 (folld)

Louis Dreyfus Commodities Asia Pte Ltd v Govind Rubber Ltd (Arbitration Petition No 174 of 2012) (refd)

Maldives Airports Co Ltd v GMR Malé International Airport Pte Ltd [2013] 2 SLR 449 (folld)

People's Insurance Co Ltd v Akai Pty Ltd [1997] 2 SLR (R) 291; [1998] 1 SLR 206 (folld)

Societe Nationale Industrielle Aerospatiale v Lee Kui Jak [1987] AC 871 (refd)

Trans-Link Exhibition Forwarding Pte Ltd v Wadkin Robinson Asia Pte Ltd [1996] 1 SLR (R) 424; [1996] 1 SLR 713 (refd)

United Eng Contractors Pte Ltd v L & M Concrete Specialists Pte Ltd [1999] 2 SLR (R) 524; [2000] 2 SLR196 (folld)

WSG Nimbus Pte Ltd v Board of Control for Cricket in Sri Lanka [2002] 1 SLR (R) 1088; [2002] 3 SLR 603 (refd)

Zheng Yu Shan v Lian Beng Construction (1988) Pte Ltd [2009] 2 SLR (R) 587; [2009] 2 SLR 587 (distd)

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

International Arbitration Act (Cap 143 A, 2002 Rev Ed) ss 12 (1) (i) , 12 A (2) (consd) ;ss 12 (1) (c) - (i) , 12 (6) , 12 A, 12 A (1) (b) , 12 A (4)

Supreme Court of Judicature Act (Cap 322, 2007 Rev Ed) First Schedule

Arbitration Act 1996 (c 23) (UK) s 44

Senior Courts Act 1981 (c 54) (UK) s 37

Mohamed Ibrahim (Achievers LLC) for the plaintiff

Navin Joseph Lobo and Cassandra Ow (ATMD Bird & Bird LLP) for the defendant.

Judgment reserved.

Judith Prakash J

Introduction

1 The plaintiff and the defendant are both business entities and they dealt with each other on a number of transactions under which the plaintiff sold, and the defendant bought, consignments of rubber.

2 The plaintiff brought these proceedings to obtain a permanent injunction to restrain the defendant from continuing with a law suit filed in the courts of Switzerland. It was able to get an interim injunction to this effect. Having been notified of the interim order, the defendant applied for it to be discharged. The plaintiff then applied for the injunction to be made permanent. The applications were heard together since one was the obverse of the other.

3 What makes this anti-suit injunction different from the usual one of its kind is that it seeks to permanently restrain foreign court proceedings in favour of arbitration. This raises distinct jurisdictional considerations which are not typically encountered in situations where an anti-suit injunction is sought in support of foreign court proceedings.

4 While the question of the court's jurisdiction is intriguing, the defendant argues that it does not need to be considered at all because the contract between the plaintiff and the defendant did not contain any arbitration or jurisdiction clause and the defendant was therefore perfectly entitled to take action in the courts of Switzerland. This is a threshold issue which must be determined first.

Background facts

5 R1 International Pte Ltd (‘R1 International’), the plaintiff, is a Singapore company in the business of...