Rappo, Tania v Accent Delight International Ltd

• Jurisdiction: Singapore
• Judge: Sundaresh Menon CJ,Chao Hick Tin JA,Andrew Phang Boon Leong JA
• Judgment Date: 18 April 2017
• Court: Court of Appeal (Singapore)
• Docket Number: Civil Appeals Nos 110 and 113 of 2016; Summonses Nos 96 and 97 of 2016 and 19 of 2017
• Date: 18 April 2017

Rappo, Tania

and

Accent Delight International Ltd and another and another appeal

[2017] SGCA 27

Sundaresh Menon CJ, Chao Hick Tin JA and Andrew Phang Boon Leong JA

Civil Appeals Nos 110 and 113 of 2016; Summonses Nos 96 and 97 of 2016 and 19 of 2017

Court of Appeal

Conflict of Laws — Forum election — Respondents undertaking to discontinue civil proceedings in Monaco if stay refused — Whether respondents complied with undertaking — Whether appellants entitled to run cumulative arguments on forum election and forum non conveniens

Conflict of Laws — Natural forum — Stay of proceedings — Arrangement between parties to create art collection — Written agreements for first four transactions — Parties relocating artworks from Geneva to Singapore — Breakdown of parties' relationship — Commencement of proceedings by respondents in Monaco and Singapore — Whether Switzerland and/or Monaco were available and appropriate fora for determination of dispute — Whether Swiss law applied to respondents' claims — Whether respondents deprived of legitimate juridical advantage if stay granted — Whether possibility of transfer to Singapore International Commercial Court relevant consideration in determining appropriate forum — Order 110 r 12(4) Rules of Court (Cap 322, R 5, 2014 Rev Ed)

Mr Dmitry Rybolovlev, a Russian magnate, was introduced to Mr Yves Charles Edgar Bouvier, a businessman in the international art scene, by Ms Tania Rappo in Geneva. Over the next decade, with Mr Bouvier's assistance, Mr Rybolovlev came to amass a significant art collection containing various masterpieces by renowned artists.

Mr Bouvier and Mr Rybolovlev communicated through an intermediary who was a representative of two companies held by the Rybolovlev family trusts (“the Respondents”). For the first four art transactions, written agreements were entered into between one of the Respondents, as purchaser, and various companies in which Mr Bouvier was a shareholder, as sellers. These agreements contained choice of law and exclusive jurisdiction clauses in favour of Swiss law and the Swiss courts. Thereafter, the parties transacted only on the basis of invoices. Mr Bouvier subsequently moved from Geneva to Singapore and Mr Rybolovlev to Monaco. Following the commencement of divorce proceedings by Mr Rybolovlev's wife in Switzerland and government investigations in Russia against Mr Rybolovlev, most of the artworks purchased by Mr Rybolovlev were shipped from Geneva to Singapore.

The relationship between Mr Rybolovlev and Mr Bouvier deteriorated sharply. Mr Bouvier claimed that the reason for the falling out was Mr Rybolovlev's failure to make full payment for one of the paintings. According to Mr Rybolovlev, the relationship broke down when he discovered that Mr Bouvier had dishonestly inflated the sale prices of the artworks purchased by the Respondents. Mr Bouvier and Ms Rappo were arrested in Monaco and made “inculpé” for fraudulent acts and money laundering. The Respondents and Mr Rybolovlev's daughter then joined the Monegasque criminal proceedings against them as civil parties.

The Respondents commenced proceedings in Singapore against Mr Bouvier, one of his companies and Ms Rappo (collectively, “the Appellants”) for breach of fiduciary duties, dishonest assistance and/or knowing receipt. The Appellants filed applications for a stay of proceedings on two grounds: first, that there was a lis alibi pendens in Monaco; and second, that Switzerland and/or Monaco rather than Singapore was the appropriate forum for the determination of the dispute. A High Court judge (“the Judge”) dismissed both stay applications on the condition that the Respondents and Mr Rybolovlev's daughter “discontinue their civil proceedings in Monaco”. She found that it was unnecessary to determine whether the Monegasque proceedings were lis alibi pendens because the Respondents had given an undertaking to discontinue those proceedings if the court ruled in their favour. She decided that Singapore was the appropriate forum for the determination of the dispute and ordered the parties to present arguments, if they wished, as to why the matter should not be transferred to the Singapore International Commercial Court (“the SICC”).

On appeal, the Appellants contended that the Respondents should have been put to forum election as the Monegasque proceedings were lis alibi pendens and the Respondents had continued to pursue those proceedings in violation of the Judge's condition on her refusal to grant a stay. They further submitted that Switzerland and/or Monaco were more appropriate fora and that the Judge erred in taking into account the possibility of a transfer of the action to the SICC in reaching her decision on forum non conveniens.

The Respondents denied that they had continued to pursue claims in Monaco. They relied on a letter they had sent to the Monegasque investigating judge, confirming that they would not proceed with any such claims in Monaco, as well as the view expressed by the Judge during the hearing for leave to appeal that the Respondents' letter satisfied the condition she imposed. They also submitted that the Appellants could not rely cumulatively on the doctrines of forum election and forum non conveniens because a defendant could compel a plaintiff to make an election between two forums and then argue that the forum the plaintiff had not selected was the more appropriate forum. This would lead to potential injustice for the plaintiff.

Held, allowing both appeals and granting a stay of proceedings:

(1) It was difficult to accept the Appellants' contention that the condition imposed by the Judge on her refusal to order a stay meant something other than what the Judge herself thought it to mean. The Judge was evidently satisfied that the Respondents had complied with the condition. Therefore it could not be said that the condition had not in fact been met. In the premises, no order would be made on the Appellants' applications for leave to adduce further evidence to show that the Respondents had continued to participate in the Monegasque proceedings: at [56] and [58].

(2) It was open to a defendant, after the plaintiff had been put to an election and decided to proceed only in Singapore, to submit that the action in Singapore should be stayed on the basis that the overseas forum was clearly or distinctly the more appropriate forum. Conversely, if a plaintiff chose, after having been put to an election, to proceed abroad, it was permissible for the defendant to apply for an anti-suit injunction to restrain the plaintiff from pursuing the foreign action. This was so as long as the scenario before the court was not one where the defendant, having made a representation, then sought to resile from that representation after the plaintiff had relied on it: at [62] to [64].

(3) When a defendant advanced cumulative arguments that (a) the plaintiff should be put to forum election; and (b) if the plaintiff decided to proceed in Singapore, any proceedings here should be stayed in favour of a foreign forum, it was prudent, as a matter of general practice, for the court to first decide whether Singapore was forum non conveniens. If the court considered that Singapore was not the appropriate forum, it should order a stay and there would be no need to further enquire as to whether the foreign proceedings were lis alibi pendens. It was only if the court found that the alternative forum was not clearly or distinctly more appropriate than Singapore for the determination of the dispute that it would then have to put the plaintiff to an election between forums: at [66] and [67].

(4) In determining whether a foreign forum was clearly or distinctly more appropriate than Singapore for the trial of the substantive dispute, it was the quality rather than the quantity of the connecting factors that was crucial. The court's task was to search for those incidences or connections that had the most relevant and substantial associations with the dispute. Ultimately, the lodestar for a court tasked with identifying the natural forum was whether any of the connections pointed towards a jurisdiction in which the case might be tried more suitably in the interests of all the parties and for the ends of justice: at [69], [70] and [72].

(5) The most significant connecting factor in the present appeals was the governing law of the relationship between Mr Bouvier and the Respondents. For the purposes of determining the governing law of the parties' relationship, the relevant course of dealing was that which began at the outset of the dealings between Mr Bouvier and Mr Rybolovlev/the Respondents. This course of dealing pointed to Swiss law as the law governing the parties' relationship. Express provision was made for Swiss law (as well as exclusive Swiss jurisdiction) in the written agreements governing the first four contracts. Even if the governing law of the contract between the parties fell to be determined according to the system of law with which the contract had its closest and most real connection, this again pointed to Swiss law as the governing law: at [74] and [80] to [82].

(6) The Respondents' contention that the parties intended to and did change material aspects of their relationship was based only on events that concerned the relationship between Mr Rybolovlev and third parties, and not between Mr Rybolovlev and Mr Bouvier. The intention of Mr Rybolovlev to protect his assets from third parties did not lead properly to the conclusion that Mr Rybolovlev and Mr Bouvier also therefore contemplated a change in the nature or the governing law of their relationship: at [83] and [85].

(7) The personal connections of the witnesses to the dispute similarly pointed towards Switzerland as the forum with the closest and most real connection with the dispute: at [89].

(8) Article 6 of the Swiss Federal Act on Private International Law conferred jurisdiction on a Swiss court at first...