Tay Way Bock v Yeunh Oi Siong

JurisdictionSingapore
JudgeChristopher de Souza AR
Judgment Date02 February 2006
Neutral Citation[2006] SGHC 21
Citation[2006] SGHC 21
CourtHigh Court (Singapore)
Plaintiff CounselTito Isaac and Niko Isaac (Tito Isaac and Co)
Defendant CounselManoj Sandrasegara, Dayne Ho and Shirani Alfreds (Drew and Napier LLC)
Published date29 April 2008

2 February 2006

AR Christopher de Souza:

Facts

This application was taken out by the Defendant for an order that the Suit be stayed on the grounds of forum non conveniens pursuant to paragraph nine of Schedule One to the Supreme Court Judicature Act (Chapter 322, 1999 Edn). The Defendant contends that the appropriate forum of adjudication is a court in Malaysia.

2 The Defendant is a Malaysian citizen who is the majority shareholder of Kumpulan City Axis Sdn Bhd (“Kumpulan”). Kumpulan is an investment holding company that presently holds, inter alia, 49,500,000 shares in ISG Asia Ltd (“Kumpulan’s investment”), a listed company in Singapore. The Defendant’s position is that the Plaintiff’s business interests are mainly outside Singapore, with a sizeable portion in Malaysia.

3 Sometime in 2001, the Plaintiff, together with one Chung Wai Meng (“Chung”), provided funding to Kumpulan to assist in the listing exercise for Kumpulan’s investment. The Defendant contends that at this time, it was agreed that Kumpulan would transfer 21,000,000 shares in Kumpulan’s investment to the Plaintiff and Chung after the successful completion of the listing exercise. Approval for this transaction was sought from the Malaysian central bank, Bank Negara Malaysia. The requisite approval was granted on 17 April 2002.

4 The Listing exercise was completed in July 2002. Thereafter, as maintained by the Defendant, 15,000,000 shares in Kumpulan’s investment were transferred from Kumpulan to Sanzio Ltd, the latter being a company jointly owned by the Plaintiff and Chung.

5 Following this, the Defendant became open to the idea of providing a further entitlement of assets in Kumpulan to both the Plaintiff and Chung on condition that Kumpulan’s business operations performed well in the future. Nevertheless, as emphasised by the Defendant, this openness was merely a gesture of good will in the form of a ‘gentlemen’s arrangement.’ The Defendant argued that it was understood at that time that the further entitlement would be amicably discussed and agreed to by parties concerned before any payments were executed. It must be stressed that the question as to whether this was indeed more than just a ‘gentlemen’s arrangement’ is not for this Court to answer since answering such a question would require the Court to analyse the merits of the case, which, as will be shown later, is not the role of this Court.

6 It is the Defendant’s argument that the Plaintiff asked for written assurance of this “gentleman’s arrangement” and the Defendant, out of goodwill, agreed to provide him with a comfort letter in this regard. Thereafter, the parties entered into negotiations in respect of the terms of the arrangement which negotiations the Defendant insists took place in Kuala Lumpur, Malaysia.

7 The fruit of the negotiations was a document signed by both parties on 3 January 2004 in Kuala Lumpur. This document was drafted by Mr Wong Swee Min, a Malaysian-based solicitor. The document provided for a transfer of shares from Kumpulan to the Plaintiff along with the re-purchase of said shares from the Plaintiff by the Defendant. This document forms, for all intents and purposes, the backbone in the argument between the two parties and therefore merits full reproduction in the judgment text:

MEMORANDUM OF AGREEMENT

Made between Yeunh Oi Siong (‘Yeunh’) and Tay Way Bock (‘Tay’) on this 3rd day of January 2004.

The Parties hereto understand and agree with each other as follows:

1. Yeunh confirms and acknowledges that Tay is the beneficial owner of 13,000,000 ordinary shares of SGD 0.05 in ISG (formerly known as City Axis Holdings Ltd) (‘ISGA’)(‘the Sale Shares’) [Note that ISGA is referred to as “Kumpulan’s investment” in the judgment].

2. The Sale Shares are registered through Kumpulan City Axis Sdn Bhd.

3. Yeunh has agreed to buy and Tay has agreed to sell his interest in the Sales Shares at the purchase price of SGD 0.125 per share (‘Purchase Consideration’) in accordance with the terms recorded herein this Memorandum of Agreement.

4. The sale of the Shares shall be made in 2 tranches and the Purchase Consideration payable in respect thereto shall be paid by Yeunh to Tay in the following manner: -

(a) the first tranche of 6,500,000 Sale Shares and a sum of SGD 812,500.00 (equivalent to 50% of the Purchase Consideration) shall be completed and paid on or before 14 February 2004 (‘First Payment’); and

(b) the second tranche of 6,500,000 Sale Shares and the balance purchase consideration of SGD 812,500.00 shall be completed and paid on or before 30 July 2004 (‘Second Payment’).

5. At the request of Yeunh, the Purchase Consideration shall be paid in Ringgit Malaysia at a conversion rate of SGD 1.70 to RM3.80, to solicitors in Malaysia appointed by Tay, namely Messrs. Megat Najmuddin Leong & Co. of 102 Jalan Bangsar, 59200 Kuala Lumpur.

CONFIRMED BY:

Signed by )

YEUNH OI SIONG ) SIGNED

in the presence of: )

Signed by )

TAY WAY BOCK ) SIGNED

in the presence of: )

8 On 13 October 2005, the Plaintiff commenced these proceedings in the Singapore High Court, alleging that the Defendant had breached the agreement above. The Plaintiff, on his part, took issue with the Defendant’s account of the facts and argued as follows:

(a) The agreement reached on 3 January 2004 was not merely a ‘comfort letter’;

(b) The Bank Negara document exhibited by the Defendant did not state that the Defendant could avoid payment of the agreed S$0.12 per share to the Plaintiff;

(c) The Bank Negara document predates the agreement and even the listing and is therefore irrelevant;

(d) The share transfer provided by the Defendant and stamp duty for 10,000,000 shares due to the Plaintiff were lodged and paid in Singapore;

(e) The Plaintiff’s claim is for payment of those shares in the listed company in Singapore.

9 In addition, the Plaintiff argues that the Defendant had foiled a nearly successful transfer of 10,000,000 shares to the Plaintiff’s wife. According to the Plaintiff, the Defendant did so by faxing a letter from Singapore disclaiming any knowledge of the Plaintiff’s wife. In the words of Counsel for the Plaintiff, “this was the straw that broke the camel’s back” and the suit commenced.

The law

(A) Merits Irrelevant

10 It is clear that where the Court is dealing with an application to stay proceedings on the grounds of forum non conveniens, it is not to apply its mind to the merits of the case. In the case of The Rainbow Joy [2005] SGCA 36, Chao Hick Tin JA ruled:

“In weighing the balance of convenience under the doctrine of forum non conveniens, the issue of whether there is a defence to the claim is not a relevant consideration as the court should not be required to go into the merits.”

11 To use an analogy, the pre-occupation of a Court hearing a forum non conveniens application should be to ascertain where the ‘shell’ of the case should be heard – in Singapore or in a more appropriate court overseas. Only after this has been ascertained and the ‘shell’ lands in the appropriate jurisdiction, does the Court of that jurisdiction go into the substance within that ‘shell.’ It is therefore not for this Court to decide whether the ‘gentlemen’s arrangement’ was indeed a binding agreement since the Court is not interested in the issue of liability here.

(B) The Dual Limb Test

12 The judicial test to be applied in cases involving stays on the grounds of forum non conveniens is found in the authoritative case of Spiliada Maritime Corporation v Cansulex Ltd [1987] AC 460 where Lord Goff Of Chievely held:

(a) The basic principle is that a stay will only be granted on the ground of forum non conveniens where the court is satisfied that there is some other available forum, having competent jurisdiction, which is the appropriate forum for the trial of the action, i.e. in which the case may be tried more suitably for the interests of all the parties and the ends of justice.

(b) [I]n general the burden of proof rests on the defendant to persuade the court to exercise its discretion to grant a stay … It is however of importance to remember that each party will seek to establish the existence of certain matters which will assist him in persuading the court to exercise its discretion in his favour, and that in respect of any such matter the evidential burden will rest on the party who asserts its existence. Furthermore, if the court is satisfied that there is another available forum which is prima facie the appropriate forum for the trial of the action, the burden will then shift to the plaintiff to show that there are special circumstances by reason of which justice requires that the trial should nevertheless take place in this country. [My emphasis].

13 The Spiliada case was cited with approval by Chao Hick Tin J (as he then was) in the case of Brinkerhoff Maritime Drilling Corp & Anor v PT Airfast Services Indonesia [1992] 2 SLR 776. In the Brinkerhoff case, Chao J stated that the following rubric, taken from Dicey & Morris’s Conflict of Laws (11th Edn) should apply in cases where stays are argued for on grounds of forum non conveniens:

“The court will look to see what factors there are which point to the direction of another forum, as being the forum with which the action has the most real and substantial connection, eg factors affecting convenience or expense (such as availability of witnesses), the law governing the transaction, and the places where the parties reside or carry on business.

If at that stage the court concludes that there is no other available forum which is clearly more appropriate it will ordinarily refuse a stay.

If there is another forum which prima facie is clearly more appropriate the court will ordinarily grant a stay unless there are circumstances by reason of which justice requires that a stay should not be granted, and, in this inquiry the court will consider all the circumstances of the case. But the mere fact that the plaintiff has a legitimate personal or...

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