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

• Jurisdiction: Singapore
• Court: International Commercial Court (Singapore)
• Judge: Henry Bernard Eder IJ
• Judgment Date: 22 June 2016
• Neutral Citation: [2016] SGHC(I) 2
• Citation: [2016] SGHC(I) 2
• Subject Matter: Summary judgment,Offshore case,Singapore International Commercial Court,Civil procedure,Rules of Court
• Docket Number: Suit No 1 of 2016 (HC/Summons No 1542 of 2016 and SIC/Summons No 3 of 2016)
• Defendant Counsel: Chew Kei-Jin and Tham Lijing (Tan, Rajah & Cheah)
• Hearing Date: 07 June 2016
• Date: 22 June 2016
• Plaintiff Counsel: Peter Doraisamy, Andrew Lee & Joan Xue (Selvam LLC)
• Published date: 28 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...