The Hooghy Mills Co Ltd v Seltron Pte Ltd

JudgeJudith Prakash JC
Judgment Date31 October 1994
Neutral Citation[1994] SGHC 272
Citation[1994] SGHC 272
Defendant CounselAsogan (R Raman & Co)
Published date19 September 2003
Plaintiff CounselTeo Weng Kie (Khattar Wong & Partners)
Date31 October 1994
Docket NumberSuit No 2056 of 1993
CourtHigh Court (Singapore)
Subject MatterContract,Conflict of Laws,Stay of proceedings,Meaning of appropriate,Real and substantial connection,ss 21(1) & 72(b) Bills of Exchange Act (Cap 23),Place of acceptance and delivery,Law with closest and most real connection,Proper law,Bills of exchange,Choice of law,Forum non conveniens,Relevant considerations,Acceptance contract,Choice of jurisdiction,Whether another forum is the appropriate forum for trial of the action

In April this year, the learned assistant registrar, on the application of the defendants, made an order that all further proceedings in this action against the defendants be stayed. He also gave the parties liberty to apply for the stay to be lifted in the event that the defendants` action against the plaintiffs in the High Court of Calcutta, India, was discontinued without determination of the merits of the case or if a permanent stay of that action was granted by the High Court of Calcutta. The plaintiffs appealed against that decision and, on 21 July 1994, I allowed the appeal. The defendants are dissatisfied and have appealed to the Court of Appeal.

Background

The plaintiffs are a company incorporated in India and carrying on business in Calcutta. The defendants are a company incorporated in Singapore. In September 1992, the plaintiffs agreed to sell the defendants two million hessian sugar bags at a price of US$32.50 per 100 bags cif Odessa, Russia. The agreed terms of payment were 60 days after acceptance of documents drawn on the defendants and sent to them through their bankers in Singapore. The goods were duly shipped in October 1992.

In January 1993, the plaintiffs forwarded to the defendants a bill of exchange dated 31 October 1992 for US$650,000 drawn by the plaintiffs upon the defendants and payable to The Vysya Bank Ltd (`Vysya Bank`) accompanied by the invoice and the bills of lading and other documents relating to the shipment.
The defendants duly accepted the bill of exchange. However, the bill was dishonoured by non-payment when the same was presented by the plaintiffs for payment on or about 23 June 1993. The defendants have not since then made any payment to the plaintiffs in or towards settlement of the amount due for the goods. They contend that the goods delivered did not conform to specifications and were unmerchantable and that they are entitled to damages for breach of contract on the part of the plaintiffs.

The plaintiffs commenced this action on 16 October 1993.
Their claim in the action is based on alternative grounds. On the one hand, having paid Vysya Bank on the bill of exchange after it was dishonoured by the defendants, they claim under that bill. On the other hand, they claim the price of goods sold and delivered pursuant to the sale contract with the defendants.

The writ of summons herein was served on 19 October 1993, the defendants entered an appearance on 25 October 1993 and the statement of claim was served on 26 November 1993.
The defendants did not file a defence. Instead, on 11 January 1994, they took out an application for stay of the proceedings.

The defendants had, however, in the meantime, taken steps in India.
In June 1993, they had commenced a suit against the plaintiffs as the first defendants and Vysya Bank as second defendants in the High Court of Calcutta, India. In those proceedings, the defendants alleged that they had lost the benefit of a sub-sale of the goods by reason of the plaintiffs` breach of contract and they claimed damages for loss of profit and an indemnity against the claim of their sub-purchaser. The defendants also sought to avoid the bill of exchange on the grounds of total failure of consideration and fraud. The writ in the Indian action was not, however, served on the plaintiffs until 10 January 1994, ie three months after the writ herein was issued and served on the defendants in Singapore.

The application

There was no dispute as to the law applicable to this application. It was accepted that the governing principles were those laid down in as adopted by the Court of Appeal in . The basic principle is that a stay will only be granted on the ground of forum non conveniens where the court is satisfied that another forum is the appropriate forum for the trial of the action. In this context `appropriate` means that a trial in that forum will be more suitable for the interests of all the parties and the interests of justice.

Whilst initially the defendants have the burden of persuading the court to grant a stay, once 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 shifts to the plaintiff to show the existence of special circumstances justifying a trial here.
However, where the plaintiffs have, as in this case, founded jurisdiction here as of right in accordance with Singapore law, the defendants` burden is not just to show that Singapore is not the natural or appropriate forum for the trial but to establish that there is another available forum which is clearly or distinctly more appropriate than the Singapore court. In this connection, it is relevant to note that in the case Lord Goff regarded the `natural forum` as being that with which the action had the most real and substantial connection.

In their first affidavit in support of the application, the defendants put forward three factors as indicating that India was the forum conveniens.
First, they said that the law applicable to the transaction was the law of India. Their second contention was that the transaction took place in India and the main witnesses were in India. Thirdly, they had already commenced legal proceedings in India against the plaintiffs by the time this action had started and the issues in both actions were identical. Accordingly, the Singapore action was an abuse of the process of the court and ought to be stayed. I will deal with each of these points in turn.

(1) The governing law

The defendants contended that the law of India was the governing law of the transaction. In this contention, they did not differentiate between the contract of sale and the separate (though derivative) contract constituted by the acceptance of the bill of exchange. The plaintiffs on the other hand did distinguish between the two but contended that both contracts were governed by Singapore law. The assistant registrar found the contract of sale to be governed by Indian law and assumed, in the absence of proper arguments from the defendants, that the acceptance contract was governed by Singapore law though he had some doubts as to whether this was in fact the case.

The basis of the defendants` contention that the contract of sale was governed by Indian law was that they had sent a fax to the plaintiffs on 30 September 1992 expressly making the law of India the governing law.
The plaintiffs denied ever having received this fax. The assistant registrar, quite correctly, perceived this dispute as a dispute of fact which he was not in a position to decide in view of the paucity of the evidence before him. Instead he proceeded as if there had been no express choice of law clause and made an objective determination of the proper law of the sale contract. He came to the conclusion that Indian law was the proper law of the sale contract because it had the most real and substantial connection with it. The factors which he took in to consideration were fully dealt with in his grounds of decision and I accepted both his reasoning and his conclusion.

In relation to the law governing the acceptance contract, as stated above the assistant registrar assumed that Singapore law applied.
In my opinion, Singapore law was clearly the governing law of this contract. Here the acceptor was a Singapore company, the acceptor signed the bill of exchange in Singapore, and the bill of exchange was presented for payment and dishonoured in Singapore. Under s 72(b) of the Bills of Exchange Act (Cap 23), it is provided that the interpretation of the acceptance of a bill of exchange is determined by the law of the place where such contract is made. Counsel for the plaintiffs submitted that the word `interpretation` in the statute referred not...

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    ... ... to stay the local proceedings ( De Dampierre v De Dampierre [1988] AC 92 ; The Hooghly Mills Co Ltd v Seltron Pte Ltd [1995] 1 SLR 773 ). However, in the former situation, the English ... ...
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1 books & journal articles
  • FOREIGN LAW IN DOMESTIC COURTS
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    • Singapore Academy of Law Journal No. 2017, December 2017
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