Trinity Construction Development Pte Ltd v Sinohydro Corp Ltd (Singapore Branch)

• Jurisdiction: Singapore
• Judge: Lee Seiu Kin J
• Judgment Date: 07 October 2020
• Neutral Citation: [2020] SGHC 215
• Court: High Court (Singapore)
• Docket Number: Suit No 239 of 2020 (Registrar’s Appeal No 122 of 2020)
• Year: 2020
• Published date: 10 October 2020
• Hearing Date: 17 August 2020
• Plaintiff Counsel: Lim Dao Kai, Ee Jia Min and Tiong Yung Suh Edward (Allen & Gledhill LLP)
• Defendant Counsel: Pillay Mohan Reviendran and Tay Kai Yi Wynne (MPillay)
• Subject Matter: Arbitration,Striking out,Stay of court proceedings,Arbitral tribunal,Jurisdiction,Civil Procedure,Pleadings,Inherent,Rules of court,Courts And Jurisdiction,High court
• Citation: [2020] SGHC 215

Lee Seiu Kin J: Introduction

When a plaintiff commences an action in court and there is a parallel arbitration commenced on the same claim, the court will, on the defendant’s application, ordinarily order the suit to be stayed. In the present case, the Defendant initially applied for striking out of the action rather than a stay. This raised the interesting and unique question of whether, under O 18 r 19(1) of the Rules of Court (Cap 332, R 5, 2006 Rev Ed) (“ROC”), or in the exercise of my inherent jurisdiction pursuant to s 18(2) read with paragraph 9 of the First Schedule of the Supreme Court of Judicature Act (Cap 322, 2007 Rev Ed) (“SCJA”) and/or O 92 r 4 of the ROC, an order to strike out the Plaintiff’s Statement of Claim (“SOC”) ought to be made.

Background to the application

On 7 March 2019, the Defendant received a statutory letter of demand from the Plaintiff for $9,718,759.71. This sum was purportedly due pursuant to two invoices, issued in relation to a “Consulting Service Agreement” (the “Agreement”). The Defendant responded on 15 March 2019, requesting for documents referred to in the statutory letter of demand. Having received no reply, the Defendant again wrote to the Plaintiff on 26 March 2019 (“26 March 2019 Letter”), reiterating the request for documents. In this further letter, the Defendant also disputed the Plaintiff’s statutory letter of demand on the basis that, inter alia, it was unclear who the proper parties to the Agreement were. On 2 April 2019, the Plaintiff wrote to the Defendant, rejecting the request for documents and refusing to withdraw the statutory letter of demand. The Plaintiff repeated its demand for payment on 9 May 2019. The Defendant then responded on 23 May 2019, reiterating its position that it disputed the Plaintiff’s entitlement to payment under the statutory demand.

There was no further correspondence between the parties up until 1 November 2019, when the Defendant received a letter from the Plaintiff, enclosing a Notice of Arbitration. Following this, the Defendant filed a response to the Notice of Arbitration and both parties proceeded to nominate their respective arbitrators. Throughout this, however, the Defendant consistently maintained its objection to jurisdiction of the arbitral tribunal. These objections were first raised on 13 November 2019, in the Defendant’s letter to the Singapore International Arbitration Centre (the “SIAC”). Further examples included the Defendant’s Response to Notice of Arbitration and Challenge to Jurisdiction on 26 November 2019, its 9 December 2019 letter to the SIAC, and its Amendments to Response to Notice of Arbitration on 30 December 2019. These jurisdictional objections were made on the basis that: (1) there was no arbitration agreement between the parties; and (2) even if such an agreement did exist, the arbitral procedure and composition of the tribunal was not in accordance with that agreement. It should be noted that the Defendant maintained this position on the jurisdictional objections at the hearing before me.

In the face of such objections and amidst concerns of issues of the limitation period for the claim, the Plaintiff wrote to the Defendant on 13 January 2020, indicating that it was “compelled to commence proceedings in the Singapore High Court”. In the same letter, the Plaintiff stated that its position was for the substantive dispute between the parties to “properly be brought to determination”, requesting the Defendant to elect between arbitration or court proceedings. The Defendant, while maintaining its jurisdictional objections to the arbitration, refused to make such an election, deeming in its letter dated 17 January 2020 that the Plaintiff’s position “to be entirely misconceived”. This culminated in the Plaintiff commencing the present Suit against the Defendant on 16 March 2020. It is not disputed that the issues raised within the Suit overlap with those that the arbitral proceedings are concerned with.

On 6 April 2020, the Defendant applied to court seeking, inter alia, an order that the Plaintiff’s SOC be struck out and the Suit be dismissed. This application was heard by the Assistant Registrar (the “AR”) on 22 June 2020. At that hearing, the Defendant argued that the Plaintiff’s SOC should be struck out as it was frivolous and vexatious and/or an abuse of the process of the court. In the alternative, it argued that the Suit should be dismissed for multiplicity of proceedings.

The AR disagreed with the Defendant, finding that there was no basis to hold that the Suit was frivolous and vexatious, or an abuse of process. The AR also held that by commencing the arbitration proceedings, the Plaintiff had not waived its right to commence the present Suit. Crucially, in the AR’s view, a stay of proceedings would have been the appropriate course of action, but was not granted as that had not been the Defendant’s application before the AR. In the circumstances, the Defendant’s application was dismissed.

The Defendant then appealed against the AR’s decision. At the hearing before me, the Defendants relied on substantially the same arguments they had raised before the AR, with the additional alternative argument that the court could stay the present proceedings in favour of arbitration.

Issues

Two issues thus arise to be determined in this application, which I will deal with in turn: whether the Plaintiff’s SOC should be struck out and proceedings dismissed; and in the alternative, whether a stay of proceedings should be granted.

Whether the Plaintiff’s SOC should be struck out and proceedings dismissed

The Defendant relies on three broad grounds in this issue: First, that the Plaintiff’s SOC and the Suit should be struck out for being frivolous or vexatious, under O 18 r 19(1)(b) and O 18 r 19(1)(d) of the ROC; Secondly, that the Suit should be dismissed as it is an abuse of court process, pursuant to O 92 r 4 of the ROC; and Thirdly, that the Suit should be dismissed for multiplicity of proceedings, under pursuant to s 18(2) read with paragraph 9 of the First Schedule of the SCJA.

It is apparent, however, that these grounds are not distinct and do share a degree of overlap. In fact, both parties proceeded on the basis that there was no distinction between the grounds of “frivolous or vexatious” and an “abuse of process”. Naturally, a finding in each of the grounds raised above will have a further effect on the subsequent grounds.

The law

Order 18 Rule 19(1) of the ROC provides that:

Striking out pleadings and endorsements (O. 18, r. 19)

19.—(1) The Court may at any stage of the proceedings order to be struck out or amended any pleading or the endorsement of any writ in the action, or anything in any pleading or in the endorsement, on the ground that – (a) it discloses no reasonable cause of action or defence, as the case may be; (b) it is scandalous, frivolous or vexatious; (c) it may prejudice, embarrass or delay the fair trial of the action; or (d) it is otherwise an abuse of the process of the Court.

and may order the action to be stayed or dismissed or judgment to be entered accordingly, as the case may be.

…

This power of striking out should only be invoked where it is plain and obvious that the plaintiff does not have a cause of action: Gabriel Peter & Partners (suing as a firm) v Wee Chong Jin and others [1997] 3 SLR(R) 649 (“Gabriel Peter”) at [18]; The Osprey [1999] 3 SLR(R) 1099 at [6]. It is clear that this is a high threshold to meet, to the extent that the claim must be “obviously unsustainable, the pleadings unarguably bad and it must be impossible, not just improbable, for the claim to succeed”: Singapore Civil Procedure 2020 vol 1 (Chua Lee Ming gen ed) (Sweet & Maxwell, 2020) (“Singapore Civil Procedure”) at para 18/19/6, citing Ha Francesca v Tsai Kut Kan (No. 1) [1982] H.K.C. 328; see also Chee Siok Chin and other v Minister for Home Affairs and another [2006] 1 SLR(R) 582 (“Chee Siok Chin”). In this vein, the practice of courts has generally been to decline to proceed with the argument where an application for striking out involves lengthy and serious argument: Gabriel Peter at [18].

The specific ground under O 18 r 19(1)(b) of the ROC refers to cases that are obviously frivolous or vexatious or obviously unsustainable: Singapore Civil Procedure at para 18/19/12. As to the definition of what frivolous or vexatious means, this has been pithily summarised in Chee Siok Chin at [33] as follows:

Proceedings are frivolous when they are deemed to waste the court’s time, and are determined to be incapable of legally sustainable and reasoned argument. Proceedings are vexatious when they are shown to be without foundation and/or where they cannot possibly succeed and/or where an action is brought only for annoyance or to gain some fanciful advantage.

[emphasis in original]

In considering this ground, the court can have regard to the history of the matter and relevant correspondence exchanged between parties in addition to the pleadings (see Active Timber Agencies Pte Ltd v Allen & Gledhill [1995] 3 SLR(R) 334 at [21]–[22], citing Goh Koon Suan v Heng Gek Kiau [1990] 2 SLR(R) 705 (“Goh Koon Suan”)).

Turning then O 18 r 19(1)(d) of the ROC, an abuse of process largely refers to instances where the court’s machinery is used improperly or not bona fide: Gabriel Peter at [22]. The High Court in Chee Siok Chin again helpfully identified four categories of an abuse of process, at [34]:

The instances of abuse of process can therefore be systematically classified into four categories, viz: (a) proceedings which involve a deception on the court, or are fictitious or constitute a mere sham; (b) proceedings where the process of the court is not being fairly or honestly used but is employed for some ulterior or improper purpose or in an improper way; (c) proceedings which...