Teras Offshore Pte Ltd v Teras Cargo Transport (America) LLC

JurisdictionSingapore
JudgeHenry Bernard Eder IJ
Judgment Date22 June 2016
Neutral Citation[2016] SGHC(I) 2
Plaintiff CounselPeter Doraisamy, Andrew Lee & Joan Xue (Selvam LLC)
Docket NumberSuit No 1 of 2016 (HC/Summons No 1542 of 2016 and SIC/Summons No 3 of 2016)
Date22 June 2016
Hearing Date07 June 2016
Subject MatterSummary judgment,Offshore case,Singapore International Commercial Court,Civil procedure,Rules of Court
Year2016
Citation[2016] SGHC(I) 2
Defendant CounselChew Kei-Jin and Tham Lijing (Tan, Rajah & Cheah)
CourtInternational Commercial Court (Singapore)
Published date28 June 2016
Henry Bernard Eder IJ:

These proceedings were recently transferred to the Singapore International Commercial Court (the “SICC”) on 29 March 2016. By way of background, the proceedings concern various claims and counterclaims arising in connection with three liquefied natural gas projects in or near Queensland, Australia. In summary, the Defendant entered into a series of contracts (the “Main Contracts”) with Bechtel Oil Gas and Chemicals Inc. and Bechtel International Inc. for the provision of various services and the supply of equipment in relation to these projects; and had then sub-contracted such work to the Plaintiff on what have been referred to as “back-to-back” terms (the “Sub-Contracts”). The Plaintiff’s claims total approximately US$29m. The Defendant denies liability and itself advances various counterclaims totalling approximately US$14m. In addition, both parties claim interest and costs.

On 7 June 2016, I heard two applications on behalf of the Defendant in this action: viz, (a) an application under O 110 r 36 of the Rules of Court (Cap 322, R 5, 2014 Rev Ed) (the “Rules of Court”) for a decision by the Court that the present action is an “offshore case” (and a related application for an extension of time to bring that application); and (b) an application for summary judgment under O 14 r 1 in respect of one of the Defendant’s counterclaims relating to the payment of freight tax. After hearing full argument, I informed the parties of my decisions: viz, (a) that this was an “offshore case”; and (b) that the Defendant’s application for summary judgment would be dismissed and that the Plaintiff would be granted unconditional leave to defend. These are my reasons.

Offshore Case (SIC/Summons No 3 of 2016)

It is common ground that the present application for a decision that the action is an “offshore case” is out of time; and the Defendant accordingly makes a separate application for an extension of time. These applications are supported by two affidavits of Sonny Joe Sanders, the Chief Executive Officer of the Defendant. The Plaintiff opposes the substantive application (but not the application for an extension of time) and relies upon the affidavit of Mark Benjamin Ortega, legal counsel to Ezion Holdings Limited, which is the parent company of the Plaintiff.

I can deal with the application for an extension of time quite shortly. O 110 r 36(2)(a) of the Rules of Court stipulates that where an action is commenced by writ (as it was in the present case), such an application shall be made within 28 days after the close of pleadings. In the present case, the close of pleadings was on 4 March 2016. On this basis, the 28 day period expired on 1 April 2016. However, the present application was only issued on 5 May 2016, ie, about 35 days late; hence, the present application for an extension of time.

By virtue of O 3 r 4 of the Rules of Court, I have no doubt that the Court has the power to extend time. As to discretion, it is sufficient to say that the matters referred to in the affidavits of Mr Sanders persuade me that this is a proper case to grant an extension of time; unsurprisingly, and as already noted, the Plaintiff did not object to this. On that basis, I granted the necessary extension of time.

I turn then to consider the substantive application for a decision that this action is an “offshore case”, which is defined in O 110 r 1(1) of the Rules of Court to mean “an action which has no substantial connection with Singapore”.

At the outset, I would make certain preliminary observations.

First, an “offshore case” is defined by a negative, ie, it is an action that has no substantial connection with Singapore. Thus, it is important to bear in mind that the question is not whether the action has a substantial connection with some place or places other than Singapore but whether the action has no substantial connection with Singapore. It follows that the mere fact that an action may have a substantial connection with one or more places other than Singapore does not necessarily mean that it may not also have a substantial connection with Singapore. It also follows that an action may have a substantial connection with Singapore as well as one or more other places. In other words, as submitted by the Defendant, it is not the presence of substantial connections with other jurisdictions that is important but the absence of a substantial connection with Singapore.

Second, the Rules of Court do not define or otherwise describe what is meant by “substantial connection”. Rather, O 110 r 1(2)(f) puts the matter negatively where it states:

for the purposes of the definition of “offshore case” in paragraph (1), an action has no substantial connection to Singapore where — (i) Singapore law is not the law applicable to the dispute and the subject-matter of the dispute is not regulated by or otherwise subject to Singapore law; or (ii) the only connections between the dispute and Singapore are the parties’ choice of Singapore law as the law applicable to the dispute and the parties’ submission to the jurisdiction of the Court.

[emphasis added]

Here, the Sub-Contracts were governed by Singapore law; and it was common ground that the present dispute does not fall within either of the categories set out in O 110 r 1(2)(f).

Third, on behalf of the Defendant, it was submitted that the purpose of an action being designated as an “offshore case” may help guide what was described as a “normative evaluation” of the various connections between an action and Singapore. In that context, it was further submitted that the subsidiary legislation and the Singapore International Commercial Court Practice Directions (“SICC Practice Directions”) indicate that the predominant purpose of a decision that the action is an “offshore case” is to allow foreign representation. In that connection, it was also submitted that in cases where there are only a handful of coincidental or procedural connections with Singapore, there is no need for parties to be represented by lawyers with an expertise in Singapore law; and that, conversely, given the role of the SICC to provide a dispute resolution framework for the resolution of international commercial disputes, a “parochial” insistence that parties appoint Singapore qualified lawyers (even when there are only a handful of coincidental or procedural connections with Singapore) would be anomalous and self-defeating. I bear these submissions well in mind. However, in my view, the question whether or not an action is an “offshore case” must be determined by reference to the particular action; and, at the risk of stating the obvious, the focus must be the “action” itself and whether it can properly be said that the action has no substantial connection with Singapore.

Fourth, on behalf of the Plaintiff, reliance was placed on paragraph 29(3) of the SICC Practice Directions (“paragraph 29(3)”), which provides as follows:

“Substantial connection to Singapore”

(3) For the purposes of Order 110, Rule 1(2)(f)(ii) of the Rules of Court, the existence of each of the following factors will not, by itself, constitute a substantial connection between the dispute and...

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