THE RELEVANCE OF FOREIGN LAW TO THE EXTRA-TERRITORIAL JURISDICTION OF LOCAL COURTS: METALL UND ROHSTOFF AND THE TS HAVPRINS REVISITED

• Citation: (2000) 12 SAcLJ 412
• Published date: 01 December 2000
• Date: 01 December 2000

I. INTRODUCTION

Order 11 r 1 of the Rules of Court,1 which has been described as representing the ‘exorbitant’ extra-territorial jurisdiction of the courts,2 comprises some 19 sub-rules which lay down the various instances in which such jurisdiction may be exercised. It stands in stark contrast with the traditional territorial jurisdiction exercised by the common law courts.3 Yet the development of such extra-territorial jurisdiction was clearly inevitable given developments in communications and transport technologies. In more ways than one, the law has had to catch up with science. The bestowal of such a jurisdiction clearly allows the courts to reach out to adjudicate disputes involving foreign parties. What is less clear is how does foreign law feature in the courts’ exercise of such jurisdiction, if at all.

The cases of Metall und Rohstoff AG v Donaldson, Lufkin & Jenrette Inc4 and The TS Havprins5 appear to highlight the differing approaches that the English courts have adopted in the interpretation of the English equivalent of Ord 11 r 1. Various commentators have described the issue at the heart of the matter as whether the choice of law rules of the forum can legitimately be considered at the jurisdiction stage.6 Strictly speaking,

such a characterisation is incorrect, or at least insufficiently specific. This is because there are at least two ways in which the choice of law rules of the forum can feature at the jurisdiction stage. Firstly, it is possible for the choice of law rules themselves to form the basis of jurisdiction. Secondly, it is possible for the choice of law rules to operate and in so doing demand the application of a foreign law (as the lex causae) to determine if the court has jurisdiction over the dispute. There can hardly be any dispute that the first manner of intrusion is wholly legitimate given that it is explicitly mandated by Ord 11 r 1 itself.7 It is the second that is in dispute. Thus, the issue might be better characterised as whether the lex causae can legitimately be applied at the jurisdiction stage. However, in deference to the earlier commentators and for ease of reference, the issue will henceforth be referred to as that of the legitimacy of the intrusion of the choice of law rules of the forum in a question of jurisdiction.

It is convenient at this stage to mention that the burden on the plaintiff seeking leave for service outside Singapore includes, inter alia, first, the burden of satisfying the court that there is a good arguable case that the claim was one which fell within the letter and spirit of one of the sub-rules of Ord 11 r 1 and second, the burden of satisfying the court that there was a serious question to be tried on the merits of the claim.8 These are therefore two separate avenues for the choice of law rules of the forum to apply.

II. MERITS OF THE CASE: THE STATE OF THE AUTHORITIES

So far as the merits of the case are concerned, no view is expressed by the English High Court in The TS Havprins, Staughton J having directed his attention to the interpretation of the English equivalent of Ord 11 r 1(d). In Metall und Rohstoff AG v Donaldson, Lufkin & Jenrette Inc, however, the English Court of Appeal appeared to apply the tort choice

of law rules embodied in Chaplin v Boys9 to determine if the plaintiff had discharged the requisite burden of proof for the merits of the case. The decision itself is somewhat confusing and as Yeo Tiong Min points out,10‘Slade LJ appeared to consider choice of law relevant to the question of whether there was a good arguable case that the case fell within Order 11 as well as whether there was a good arguable case on the merits’. The editors of Dicey and Morris11 favour the view that Slade LJ applied Chaplin v Boys both to the merits of the case as well as to whether there was a tort within the meaning of the English equivalent of Ord 11 r 1(f). The editors of Cheshire and North,12 however, interpret the intrusion of choice of law considerations in the case as arising not in the issue of whether the claim fell within the head of jurisdiction, but in the question of whether the plaintiff has satisfied the court as to the merits of the claim. Fentiman13 and Carter,14 in criticising the approach adopted by Slade LJ, seemingly accept that his Lordship’s approach was directed to the question of whether or not the case fell within the English equivalent of Ord 11 r 1(f) but are silent on whether the approach applied at the same time to the question of merits.

On close examination, it is clear that, regardless of what can be said with respect to Slade LJ’s approach to the interpretation of Ord 11 r 1, his Lordship applied English choice of law rules to the question of merits. In considering the claim of inducing a breach of contract, his Lordship first concluded that ‘the defendants cannot rely on the [the choice of law rules] as barring [the plaintiff’s] claim for inducing breaches of contract.’15 His Lordship then immediately proceeded to opine that the plaintiff is ‘also able, under this head, to satisfy the requirements of Ord 11 r 1(1)(f).’ [Emphasis added]16 From the foregoing, it is clear that Slade LJ applied the choice of law rules to the question of merits.

III. MERITS OF THE CASE: A CONSIDERATION OF THE ARGUMENTS

It is interesting to note that whilst there have been several criticisms of Metall und Rohstoff AG v Donaldson, Lufkin & Jenrette Inc, these critiques appear to be directed towards what is viewed as Slade LJ’s application of the choice of law rules to the interpretation of Ord 11 r 1 rather than his application of the same towards the question of merits.17 From this, it can be surmised that whatever may be said of the application of choice of law rules to the interpretation of Ord 11 r 1, the general consensus is that the choice of law rules must be applied in determining the merits of the case. This must of course be the case for otherwise, the requirement of proof of the merits of the case would be irrational and unsupportable.

As mentioned above, Ord 11 r 1 represents the ‘exorbitant’ jurisdiction of the courts and as a result, Ord 11 r 2(2) provides that ‘[n]o … leave shall be granted unless it shall be made sufficiently to appear to the Court that the case is a proper one for service out of Singapore’. It is from Ord 11 r 2(2) that the requirement that the plaintiff prove the merits of his case is judicially implied.18 As Lord Goff explained in Seaconsar, ‘it is very difficult to conceive how a judge could, in the proper exercise of his discretion, give leave where there is no serious issue to be tried.’19 If the case is bound to fail, upon the application of the appropriate lex causae (determined in accordance with the choice of law rules of the forum), it seems difficult to justify an exercise of this ‘exorbitant’ jurisdiction of the courts.

A decision to apply the lex fori at this stage would result in two anomalies. First, assuming that the cause of action would succeed according to the lex fori but not the lex causae, the court would essentially be exercising its discretion to grant leave on the basis that there is a chance that the case could succeed when none exists. Second, assuming that the cause of action would succeed according to the lex causae but not the lex fori, the court would be denying leave on the basis that the case must fail when it patently would not. As such, it is clear that an application of the lex fori to determine the merits of the case is unsupportable and would lead to

absurdity. Even where the lex fori and the lex causae coincide, it is difficult in principle to justify the application of the lex fori, other than on the basis that it is also the lex causae. To suggest otherwise would be akin to supporting the use of a ruler to measure the weight of an object or a weighing scale to measure its length.20

IV. INTERPRETATION OF ORDER 11: THE STATE OF THE AUTHORITIES

The more controversial aspect of the discretionary jurisdiction of the courts, however, concerns the interpretation of Ord 11 r 1 itself. In The TS Havprins, the English High Court was concerned with the contractual head of jurisdiction or the English equivalent of limb (d) of Ord 11 r 1. Staughton J held:21

English law must be applied in this case for the purpose of deciding … (i) whether there was a contract between the parties, (ii) whether it was governed by English law, and (iii) whether it contained a term that the parties agreed to submit to the jurisdiction of the English Courts. [Emphasis added.]

However, the contrary approach was taken by the English Court of Appeal in Metall und Rohstoff AG v Donaldson, Lufkin & Jenrette Inc. In that case, the Court of Appeal was concerned with the tortious head of jurisdiction or the English equivalent of limb (f) of Ord 11 r 1. Slade LJ observed:22

[T]he crucial question which falls to be answered is not: where was the tort committed? but: under English law was a tort committed at all? To answer this question … inevitably involves reference to the [forum’s tort choice of law rule] in Chaplin v Boys. [Emphasis added.]

As mentioned above, there is some dispute as to whether Slade LJ’s application of the English choice of law rules were directed towards the merits of the case, the interpretation of Order 11, or both. The foregoing passage certainly seems to suggest that it was directed towards the interpretation of Ord 11 r 1(1)(f) as does another passage by his Lordship:23

As the rule [presumably O 11 r 1(1)(f)] now stands it is plain that jurisdiction may be assumed only where (a) the claim is founded on a tort and either (b) the damage was sustained within the jurisdiction or (c) the damage resulted from an act committed within the jurisdiction. Condition (a) poses a question which we consider below: what law is to be applied in resolving whether the claim is‘founded on a tort’? [Emphasis added]

Accordingly, there should be...