ST Group Company Ltd v Sanum Investments Ltd

• Jurisdiction: Singapore
• Judge: Sundaresh Menon CJ,Judith Prakash JCA,Quentin Loh JAD
• Judgment Date: 14 January 2022
• Court: Court of Appeal (Singapore)
• Docket Number: Civil Appeal No 113 of 2018 (Summons No 44 of 2021)

ST Group Co Ltd and others

and

Sanum Investments Ltd

[2022] SGCA 2

Sundaresh Menon CJ, Judith Prakash JCA and Quentin Loh JAD

Civil Appeal No 113 of 2018 (Summons No 44 of 2021)

Court of Appeal

Civil Procedure — Inherent powers — Setting aside of judgments and court orders — Garnishee seeking to set aside final garnishee order on ground that underlying debt had been extinguished — Whether court had inherent power to set aside judgments and court orders to prevent injustice

Civil Procedure — Judgments and orders — Setting aside of judgments and court orders — Garnishee seeking interest on sums which were garnished — Whether interest should be paid on sums returned where final garnishee order had been set aside

Civil Procedure — Judgments and orders — Setting aside of judgments and court orders — Party seeking to resist return of garnished sums on ground that it would be prejudiced — Whether there were reasons for court not to exercise its powers to set aside judgments and court orders made in error

Held, allowing the application:

(1) The court had the power to set aside a garnishee order, and where the substratum of a court order had been destroyed, it would be unjust not to do so as it would leave invalid court orders formally operative: at [43] and [47].

(2) The respondent's complaint of delay was unjustified, and it was unclear how such allegations could outweigh the inherent need to set aside judgments and court orders that should not have been made: at [48] and [49].

(3) An appellate court had the inherent power to order a return of sums paid under a judgment or order that had been reversed on appeal. The basis for this was one based on restitution and policy, which was the unravelling of the orders made by the court whose decision was reversed, in order to give effect to the decision on appeal: at [52] to [58].

(4) The garnished sums should be returned as a matter of justice, as a party should not be deprived of moneys because of a court order that was found to be wrong on appeal. A party should not be allowed to take advantage of a court's prior error, and any injustice caused to the respondent would be adequately met by the escrow arrangement ordered by the tribunal in Macau: at [61] and [66] to [68].

(5) The respondent's argument that it had already spent the garnished moneys on legal costs and claims and would be prejudiced by having to raise the sum to be placed in escrow was not persuasive. The respondent undertook the risk that the Leave Order, and hence, any consequential enforcement orders, could be set aside, when it decided to use the moneys obtained under the FGOs for its own purposes: at [68].

(6) In general, where sums paid under a judgment or order that was reversed, or made in error, were ordered to be returned, interest on the sum should be paid. However, this was ultimately a question of fact, and where there were pending proceedings, the question of whether interest should be paid could be left to the tribunal which had yet to decide the substantive issue: at [72] to [76].

(7) There were no reasons why any orders made in the present application should be stayed pending arbitration in Macau. However, parties were given time to seek directions from the tribunal in Macau regarding the escrow arrangement: at [77] and [78].

Case(s) referred to

Citiwall Safety Glass Pte Ltd v Mansource Interior Pte Ltd [2015] 5 SLR 482 (refd)

Commonwealth v McCormack (1984) 55 ALR 185 (refd)

Crédit Agricole Indosuez v Banque Nationale de Paris [2001] 1 SLR(R) 609; [2001] 2 SLR 301 (refd)

Crest Capital Asia Pte Ltd v OUE Lippo Healthcare Ltd [2021] 2 SLR 424 (refd)

Harmonious Coretrades Pte Ltd v United Integrated Services Pte Ltd [2020] 1 SLR 206 (distd)

Iris McLaren (No 2), Re [2019] NSWSC 1894 (distd)

Meerkin v Rossett Pty Ltd [1999] 2 VR 31 (refd)

Nykredit Mortgage Bank plc v Edward Erdman Group Ltd [1997] 1 WLR 1627 (refd)

Production Spray Painting and Panel Beating Pty Ltd v Newnham (No 2) (1992) 27 NSWLR 659 (refd)

R v Jones (1722) 1 Str 474; 93 ER 643 (refd)

R v Wilson (1836) 3 Ad and E 830; 111 ER 629 (refd)

Rodger v Comptoir D'Escompte de Paris [1871] LR 3 PC 465 (refd)

Sanum Investments Ltd v ST Group Co, Ltd [2020] 3 SLR 225 (refd)

Singapore Airlines Ltd v Fujitsu Microelectronics (Malaysia) Sdn Bhd [2001] 1 SLR(R) 38; [2001] 1 SLR 532 (refd)

ST Group Co Ltd v Sanum Investments Ltd [2020] 1 SLR 1 (refd)

Tan Ng Kuang Nicky v Metax Eco Solutions Pte Ltd [2021] 1 SLR 1135 (refd)

Facts

The respondent had commenced arbitral proceedings under the Singapore International Arbitration Centre (“SIAC”), and had obtained an arbitral award (“the SIAC Award”) against the appellants on 23 September 2015. The respondent proceeded to obtain leave to enforce the SIAC Award (“the Leave Order”) which was granted on 7 September 2016. On 23 November 2016, the respondent obtained judgment for the relief stated in the SIAC Award (“the Judgment”), and proceeded to obtain three final garnishee orders (“the FGOs”) to enforce the Judgment.

On 26 October 2017, the appellants applied to set aside the Leave Order, which was dismissed in SUM 4933/2017. The appellants appealed to this court in CA 113, which allowed the appeal having found that Macau was the right seat of arbitration. The issue of consequential matters relating to the Judgment and FGOs was not addressed before this court.

After the appeal in CA 113, the appellant sought the return of the sums garnished under the FGOs, which the respondent refused. The appellants filed SUM 3785/2020, seeking the return of the garnished sums, but this was dismissed. In concurrent arbitration proceedings commenced in Macau, the tribunal there granted an interim order ordering that should the garnished sums be returned, the moneys would be placed in escrow (“the Interim Order”). The present SUM 44 was the appellants' application seeking various consequential orders from the Court of Appeal.

In these proceedings, the appellants took the position that this court had the inherent jurisdiction to set aside the FGOs, as the setting aside of the Leave Order in CA 113 had extinguished the underlying debt and there was no longer any basis for the FGOs. Further, the appellants also sought interest on the sums garnished under the FGOs.

The respondent took the position that while this court had the jurisdiction to set aside the Judgment and the FGOs, and that the debt arising from the SIAC Award was extinguished, it argued that this court should not exercise its powers as it would not do justice between the parties. Further, the return of the garnished sums would be the subject of a substantive claim, and did not fall within the court's inherent powers given that it could raise a defence of set-off. Additionally, if the sums were to be ordered to returned, it would be prejudiced by having to raise the sums, and the sums would be at risk of dissipation by the appellants.

Legislation referred to

Building and Construction Industry Security of Payment Act (Cap 30B, 2006 Rev Ed)

International Arbitration Act (Cap 143A, 2002 Rev Ed) s 19

Rules of Court (1997 Rev Ed) O 42 r 12

Rules of Court (2014 Rev Ed) O 69A r 6, O 69A r 6(4), O 92 r 4, O 92 r 5

Francis Xavier s/o Subramaniam Xavier Augustine SC, Tan Hua Chong Edwin (Chen Huacong), Kristin Ng Wei Ting, Tay Bok Chong Alvin (Rajah & Tann Singapore LLP) (instructed), Tan Boon Yong Thomas (Haridass Ho & Partners) for the applicants;

Yeo Khirn Hai Alvin SC, Lin Weiqi Wendy, Chong Wan Yee Monica (Zhang Wanyu) andTeh Zi Ling Stephanie (Zheng Ziling) (WongPartnership LLP) for the respondent.

14 January 2022

Quentin Loh JAD (delivering the judgment of the court):

Introduction

1 In ST Group Co Ltd and others v Sanum Investments Ltd and another appeal[2020] 1 SLR 1 (“ST Group (CA)”), this court allowed the appeal in CA/CA 113/2018 (“CA 113”) and set aside an order granting leave for an arbitral award issued under the auspices of the Singapore International Arbitration Centre (“the SIAC Award”) to be enforced in Singapore as a judgment of the High Court. We issued our judgment on 18 November 2019. In CA/SUM 44/2021 (“SUM 44”), the appellants in CA 113, namely ST Group Co Ltd (“ST Group”), Mr Sithat Xaysoulivong (“Mr Sithat”) and ST Vegas Co Ltd (“ST Vegas”) (collectively, “the Lao Appellants”), now seek various consequential orders following our judgment.

Facts

The parties

2 The respondent in CA 113 and SUM 44, Sanum Investments Ltd (“Sanum”), is a company incorporated in Macau, and was the claimant in arbitration proceedings brought under the rules of the Singapore International Arbitration Centre (“the SIAC Arbitration”). The respondents to the SIAC Arbitration were the three Lao Appellants and ST Vegas Enterprise Ltd (“STV Enterprise”). Where necessary, we refer to all four respondents in the SIAC Arbitration as the “Lao Parties”. ST Group owned various business industries in Laos, while ST Vegas and STV Enterprise were affiliated with ST Group. Mr Sithat was the president of both ST Group and STV Enterprise.

The substantive dispute and SIAC Arbitration

3 The substantive dispute between the parties concerns arrangements relating to a slot machine club in Laos. In a bid to obtain relief against the Lao Parties for what it claimed were breaches of contract, Sanum commenced the SIAC Arbitration on 23 September 2015. For present purposes, it is sufficient to note here that a three-member tribunal was appointed, and that the tribunal determined that the seat of arbitration was Singapore. On 22 August 2016, Sanum obtained the SIAC Award against the Lao Parties.

Procedural history

Enforcement proceedings

4 On 1 September 2016, Sanum commenced HC/OS 890/2016 (“OS 890/2016”) seeking leave to enforce the SIAC Award in the same manner as a judgment of the High Court or an order to that effect, pursuant to s 19 of the International Arbitration Act (Cap 143A, 2002 Rev Ed) and O 69A r 6 of the Rules of Court (2014 Rev...