The Republic of the Philippines v Maler Foundation and others and other appeals

• Jurisdiction: Singapore
• Judge: Chao Hick Tin JA
• Judgment Date: 30 December 2013
• Neutral Citation: [2013] SGCA 66
• Court: Court of Appeal (Singapore)
• Hearing Date: 20 February 2013,07 February 2013,05 July 2013
• Docket Number: Civil Appeals No 109, 110 and 111 of 2012 (Originating Summons No 134 of 2004)
• Plaintiff Counsel: Harry Elias SC, S Suressh, Andy Lem, Sharmini Selvaratnam and Sunil Nair (Harry Elias Partnership LLP),Kenneth Tan SC and Soh Wei Chi (Kenneth Tan Partnership),Chandra Mohan, Mabelle Tay and Natalie Balakrishnan (Rajah & Tann LLP)
• Defendant Counsel: Professor Yeo Tiong Min SC as amicus curiae.
• Subject Matter: Conflict of Laws,Characterisation,Foreign judgments,Recognition,Property
• Published date: 10 January 2014

Chao Hick Tin JA (delivering the judgment of the court): Introduction

These are three appeals against the decision of a High Court Judge (“the Judge”) in WestLB AG v Philippine National Bank and others [2012] 4 SLR 894 (“the Judgment”) determining entitlement to the sums of US$16.8m and £4.2m (“the Funds”) held in an account with the Singapore branch of WestLB AG (“WestLB”). The appeals presented the court with a novel factual scenario which did not appear to be readily susceptible to the mechanistic application of established conflict of laws rules. A sui generis situation cannot, however, justify a radical departure from settled law. The issues before this court should still be approached on the basis of principle.

The appellant in Civil Appeal No 109 of 2012 (“CA 109/2012”) is the Republic of the Philippines (“the Republic”).

The appellants in Civil Appeal No 110 of 2012 (“CA 110/2012”) are the plaintiffs in a human rights class action suit (“the Human Rights Victims”) brought against the deposed President of the Philippines, Ferdinand E Marcos (“Mr Marcos”), in the United States District Court for the District of Hawaii. The Human Rights Victims are also the sixth respondents in CA 109/2012. The Human Rights Victims form a class comprising 9,539 civilian citizens of the Philippines, their heirs and beneficiaries, who had in December 1995 obtained final judgment in the sum of US$1,964,005,859.90 against Mr Marcos’ estate (“the Marcos Estate”) after Mr Marcos passed away while the litigation was pending.

The appellants in Civil Appeal No 111 of 2012 (“CA 111/2012”) are the Maler Foundation, Avertina Foundation, Palmy Foundation, Vibur Foundation and Aguamina Corporation (hereafter collectively described as “the Foundations”). The Foundations are also named as the first to fifth respondents in CA 109/2012. The Maler Foundation, Avertina Foundation, Palmy Foundation and Vibur Foundation are foundations established in Vaduz, Liechtenstein, and the Aguamina Corporation is a Panama-incorporated corporation. The Foundations were the purported original named account holders of certain sums of money that were previously held in various bank accounts in Switzerland. The Funds in dispute are derived from these sums.

The Philippine National Bank (“PNB”) is the respondent in both CA 110/2012 and CA 111/2012. PNB is a bank incorporated in the Philippines with its principal office in Manila.

After the first hearing on 7 February 2013, we appointed Prof Yeo Tiong Min SC (“Prof Yeo”), Dean of the Faculty of Law of the Singapore Management University, as amicus curiae. The parties subsequently made submissions on Prof Yeo’s opinion.

Facts Background to the dispute

In February 1986, Mr Marcos was overthrown by a non-violent coup that was later popularised as the People Power Revolution, and was exiled to Hawaii with his wife Imelda Marcos (“Mrs Marcos”). On 28 February 1986, Mr Marcos’ successor President Corazon C Aquino issued Executive Order Nos 1 and 2 creating the Presidential Commission on Good Government (“PCGG”), which was given the mandate of recovering the ill-gotten wealth accumulated by Mr Marcos, his family and associates.¹ Article XI Section 4 of the 1987 Constitution of the Republic of the Philippines granted the anti-graft court known as the Sandiganbayan – constituted under Article XIII of the 1973 Constitution of the Republic of the Philippines – continued jurisdiction over criminal and civil cases involving graft and corrupt practices by public officers and employees in relation to their offices, and by Executive Order Nos 14 and 14A, the jurisdiction of the Sandiganbayan was extended to include cases investigated by the PCGG.²

On 7 April 1986, the Solicitor General of the Philippines sought formal assistance from the Swiss authorities pursuant to the Switzerland Federal Act on International Mutual Assistance in Criminal Matters (20 March 1981) (“IMAC”). The Republic requested the Swiss authorities to provide information on assets belonging to Mr and Mrs Marcos that had been deposited in Switzerland, and to take the necessary precautionary measures to freeze such assets.³

The Swiss authorities in the cantons of Zurich, Fribourg and Geneva gave in-principle acceptance to the Republic’s requests for legal assistance and, between April 1986 and January 1990, issued freezing orders against various bank accounts held in the names of the Foundations (“the Swiss Deposits”). In the meantime, Mr Marcos passed away on 28 September 1989. The orders were subject to multiple appeals by the Foundations, Mrs Marcos and the Marcos Estate; this culminated in two concurrent decisions of the Federal Supreme Court of Switzerland, both dated 21 December 1990, which upheld the freezing orders in Fribourg and Zurich with slight modifications and gave directions for the in-principle transmission of the Swiss Deposits to the Republic. In the judgment relating to the assets located in Zurich, the Supreme Court ordered that the actual remittance of the Swiss Deposits would be deferred:

… until an executory decision of the Sandiganbayan or another Philippine Court legally competent in criminal matters concerning their restitution to those entitled or their confiscation is presented.⁴

A similar order was given for the appeal against the orders authorising transmission of the assets in Fribourg.⁵ The proceedings before the Philippine court or tribunal had to be instituted within a year of the decision and comply with minimal guarantees of due process under the Federal Constitution of the Swiss Confederation and the European Convention for the Protection of Human Rights and Fundamental Freedoms (Rome, 4 XI 1950).⁶

The Republic filed a petition to the Sandiganbayan on 17 December 1991, seeking forfeiture of the assets held by Mrs Marcos and the Marcos Estate, including the Swiss Deposits in the name of the Foundations (“the Forfeiture Proceedings”). This petition was made under the provisions of Republic Act No 1379 (“RA 1379”), a statute governing the forfeiture of property that is unlawfully acquired by public officials and employees.⁷

In the meantime, in April 1986, soon after the People Power Revolution, a human rights class action suit on behalf of over 10,000 putative class members was initiated by one Robert A Swift (“Mr Swift”) against Mr Marcos in the United States District Court for the District of Hawaii (“the District Court of Hawaii”). Following Mr Marcos’ death, the Marcos Estate was substituted as the defendant and his personal representatives continued to contest the litigation. On 3 February 1995, judgment for the sum of US$1,964,005,859.90 was entered against the Marcos Estate in favour of the Human Rights Victims, together with a preliminary injunction enjoining, inter alia, any transfer, conveyance or disposal of the Swiss Deposits.⁸ The judgment was appealed to the United States Ninth Circuit Court of Appeal and affirmed in Maximo Hilao v Estate of Ferdinand Marcos 103 F 3d 767 (9th Cir 1996).⁹

On 10 July 1995¹⁰, an Order Granting Additional Relief for Contempt was issued against the representatives of the Marcos Estate which stated: ¹¹ 4. On or before July 10, 1995 Imelda R. Marcos and Ferdinand R. Marcos shall execute an assignment of these bank accounts…in favor of the [Human Rights Victims] for deposit…and deliver the same to [the Human Rights Victims’] Lead Counsel.

…

6. In the event Imelda R. Marcos and Ferdinand R. Marcos fail or refuse to execute the attached assignment, the Clerk of the Court is directed to execute the same on their behalf and deliver the same to [the Human Rights Victims’] Lead Counsel.

Following the failure of the legal representatives of the Marcos Estate to execute the assignment ordered above, a deed of assignment dated 14 July 1995 was executed by one Walter AY Chinn – a Clerk of the District Court of Hawaii – on behalf of the said legal representatives (hereafter referred to as “the Chinn Assignment”). The terms of the Chinn Assignment were as follows:¹²

The undersigned assign all right, title and interest in and to bank accounts maintained in Switzerland in the names of:

[inter alia, the Foundations]

to Robert A. Swift, [the Human Rights Victims’] Lead Counsel for the benefit of the [Human Rights Victims] in the Estate of Ferdinand E. Marcos Human Rights Litigation, MDL No. 840 (D. Hawaii). All persons acting in the capacity or title of custodians, officers, directors or trustees of entities having authority over the above bank accounts are directed to perform all necessary acts to effect the transfer of the above bank accounts forthwith.

[emphasis added]

The Republic made a second request for assistance from the Zurich District Attorney in August 1995 (“the Second Request”), seeking the immediate transfer of the Swiss Deposits into escrow accounts held by PNB in the names of each of the Foundations.¹³ A number of escrow agreements dated 14 August 1995 (“the Escrow Agreements”) were also entered into between the PNB and the PCGG on behalf of the Republic. The material clauses are as follows:¹⁴

WHEREAS, the [PCGG] is entrusted with the recovery of the ill gotten wealth amassed by Ferdinand E. Marcos, his family and the cronies, and

WHEREAS, a number of actions against the Estate of Ferdinand E. Marcos and his heirs are pending in the Sandiganbayan (the “ACTIONS”); and

WHEREAS, the Actions name certain assets actually held in accounts with certain Swiss Banks as ill gotten wealth claimed to be the property of the Republic of the Philippines; and

WHEREAS, such assets are currently frozen under a mutual assistance procedure instigated by the [PCGG];

WHEREAS, the Swiss authorities may be prepared to order the transfer of such assets to the Philippines to be held in escrow pending the resolution of the Actions, provided however that no dissipation of the assets take place other than in accordance with a...