UBS AG v Telesto Investments Ltd

• Jurisdiction: Singapore
• Court: High Court (Singapore)
• Judgment Date: 14 July 2011
• Date: 14 July 2011
• Docket Number: Originating Summons No 1160 of 2010 (Registrar's Appeal No 59 of 2011) and Suit No 801 of

[2011] SGHC 170

High Court

Steven Chong J

Originating Summons No 1160 of 2010 (Registrar's Appeal No 59 of 2011) and Suit No 801 of 2010 (Registrar's Appeal No 58 of 2011)

UBS AG

Plaintiff

and

Telesto Investments Ltd and others and another matter

Defendant

Hri Kumar SC, Shivani Retnam, James Low and Charmaine Chiu (Drew and Napier LLC) for the plaintiff

Eddee Ng (Tan Kok Quan Partnership) for the defendant.

Airbus Industrie GIE v Patel [1999] 1 AC 119; [1998] CLC 702 (refd)

Akron Securities Ltd v Iliffe (1997) 41 NSWLR 353 (refd)

Bank of America National Trust and Savings Association v Djoni Widjaja [1994] 2 SLR (R) 898; [1994] 2 SLR 816 (refd)

British Aerospace plc v Dee Howard Co [1993] 1 Lloyd's Rep 368 (refd)

Cadre SA v Astra Asigurari SA [2006] 1 Lloyd's Rep 560 (refd)

Cohen v Rothfield [1919] 1 KB 410 (refd)

Cordoba Shipping Co Ltd v National State Bank, Elizabeth, New Jersey (The Albaforth) [1984] 2 Lloyd's Rep 91 (refd)

Credit Suisse First Boston (Europe) Ltd v MLC (Bermuda) Ltd [1999] CLC 579 (refd)

Derry v Peek (1889) 14 App Cas 337; [1886-1890] All ER Rep 1 (refd)

Deutsche Bank AG v Highland Crusader Offshore Partners LP [2010] 1 WLR 1023 (refd)

Diamond v Bank of London and Montreal Ltd [1979] QB 333 (refd)

Distillers Co (Biochemicals) Ltd v Laura Anne Thompson [1971] AC 458 (refd)

Donohue v Armco Inc [2002] 1 All ER 749 (refd)

EI Du Pont de Nemours & Co v IC Agnew [1987] 2 Lloyd's Rep 585 (folld)

Evergreen International SA v Volkswagen Group Singapore Pte Ltd [2004] 2 SLR (R) 457; [2004] 2 SLR 457 (refd)

Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] AC 465 (refd)

JIO Minerals FZC v Mineral Enterprises Ltd [2011] 1 SLR 391 (folld)

John Reginald Stott Kirkham v Trane US Inc [2009] 4 SLR (R) 428; [2009] 4 SLR 428 (refd)

Kishinchand Tiloomal Bhojwani v Sunil Kishinchand Bhojwani [1996] 1 SLR (R) 861; [1996] 2 SLR 686 (refd)

Koh Kay Yew v Inno-Pacific Holdings Ltd [1997] 2 SLR (R) 148; [1997] 3 SLR 121 (refd)

Kuwait Oil Co (KSC) v Idemitsu Tankers KK (The Hida Maru) [1981] 2 Lloyd's Rep 510 (refd)

Ming Galaxy, The Owners of the Ship or Vessel v The Owners of the Ship or Vessel or Property Herceg Novi [1998] SGHC 303 (refd)

Peruvian Guano Co v Bockwoldt (1883) 23 Ch D 225 (refd)

RBS Coutts Bank Ltd v Shishir Tarachand Kothari [2009] SGHC 273 (refd)

Regalindo Resources Pte Ltd v Seatrek Trans Pte Ltd [2008] 3 SLR (R) 930; [2008] 3 SLR 930 (refd)

Rickshaw Investments Ltd v Nicolai Baron von Uexkull [2007] 1 SLR (R) 377; [2007] 1 SLR 377 (folld)

Royal Bank of Canada v Cooperatieve Centrale Raiffeisen-Boerenleenbank BA [2004] 1 CLC 170 (refd)

Sabah Shipyard (Pakistan) Ltd v Islamic Republic of Pakistan [2003] 2 Lloyd's Rep 571 (refd)

Seismic Shipping Inc v Total E&P UK plc [2005] EWCA Civ 985 (refd)

Société Nationale Industrielle Aerospatiale v Lee Kui Jak [1987] AC 871 (refd)

Spiliada Maritme Corp v Cansulex Ltd [1987] AC 460 (folld)

Trans-World (Aluminium) Ltd v Cornelder China (Singapore) [2003] 3 SLR (R) 501; [2003] 3 SLR 501 (refd)

Turner v Grovit [2002] 1 WLR 107 (refd)

Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538 (refd)

Yeoh Poh San v Won Siok Wan [2002] SGHC 196 (refd)

Misrepresentation Act (Cap 390, 1994 Rev Ed) s 2 (1)

Australian Securities and Investments Commission Act 2001 (Cth)

Fair Trading Act 1987 (NSW) ss 68, 72

Fair Trading Act 1989 (Qld) ss 99-100

Conflict of Laws—Choice of jurisdiction—Contractual documents containing non-exclusive jurisdiction clauses in favour of Singapore

Conflict of Laws—Natural forum—Contractual documents containing governing law clauses in favour of Singapore

Conflict of Laws—Natural forum—Place of tort prima facie natural forum—Determination of place of tort—Where misrepresentation occurred

Conflict of Laws—Natural forum—Whether natural forum for contractual claim could be displaced by place of tort of misrepresentation

Conflict of Laws—Restraint of foreign proceedings—Non-exclusive jurisdiction clauses—Legal effect of non-exclusive jurisdiction clause—Whether commencement of Australian proceedings was breach of non-exclusive jurisdiction clause in favour of Singapore

Conflict of Laws—Restraint of foreign proceedings—Vexatious and oppressive conduct—Multiplicity of proceedings and possibility of conflicting judgments

Conflict of Laws—Restraint of foreign proceedings—Vexatious and oppressive conduct—Timing of commencement of proceedings in different jurisdictions—Singapore proceedings were commenced prior to that of Australian proceedings

Conflict of Laws—Restraint of foreign proceedings—Vexatious and oppressive conduct—Where key witness was not compellable in foreign jurisdiction

Conflict of Laws—Restraint of foreign proceedings—Vexatious and oppressive conduct—Where there was no difference of sufficient materiality under Australian and Singapore regimes in respect of issue in dispute

The plaintiff, UBS AG, commenced an action in Singapore by way of Suit 801 of 2010 on 15 October 2010 against Telesto Investments Limited (‘Telesto’) and Scott Francis Tyne (‘Mr Tyne’) for the Total Liabilities (as at 14 October 2010) under Telesto's account with UBS AG and Mr Tyne's guarantee executed thereunder in favour UBS AG (‘the Singapore Proceedings’) .

On 2 November 2010, Telesto, Mr Tyne and ACB 074 971 109 Pty Ltd (trustee of the Argot Unit Trust) (‘Argot’) (collectively ‘the defendants’) commenced proceedings in Australia against UBS AG for, inter alia, unauthorised transactions in respect of Telesto's account and misrepresentation by UBS AG's officers (‘the Australian Proceedings’) .

On 11 November 2010, UBS AG filed an application for an anti-suit injunction in OS 1160 of 2010 against the defendants from maintaining the Australian Proceedings. On 21 December 2010, Telesto filed Summons No 5910 of 2010 to stay the Singapore Proceedings in favour of the Australian Proceedings. On 10 January 2011, Mr Tyne filed Summons No 83 of 2011 to stay the Singapore Proceedings in favour of the Australian Proceedings (collectively ‘the stay applications’) .

All three applications were heard by the assistant registrar (‘the AR’) on 21 February 2011. The AR dismissed the stay applications by Telesto and Mr Tyne and granted an anti-suit injunction against the defendants from continuing the Australian Proceedings. The defendants appealed against the AR's refusal to grant the stay applications and also the anti-suit injunction.

Held, dismissing the appeals:

(1) In determining whether a stay of proceedings should be granted on the basis of forum non conveniens, the principles laid down in Spiliada Maritme Corporation v Cansulex Ltd [1987] AC 460 (‘Spiliada’) had to be considered. Under stage one of theSpiliada test, the defendants bore the burden of proving that Australia was clearly or distinctly the more appropriate forum to try the dispute between the parties. In this regard, the court would examine the connecting factors which the dispute bore to each of the two competing jurisdictions: at [50] and [52].

(2) There were factors which pointed towards Singapore being the natural forum, eg, the causes of action against Telesto and Mr Tyne were accrued in Singapore by virtue of the contractual documents which governed their respective relationship with UBS AG and the bulk of the contractual documents contained governing law clauses in favour of Singapore: at [56] to [58] and [62] to [66].

(3) In addition to that, although Mr Betsalel (one of the officers of UBS AG) might give evidence by way of deposition (should the matter be tried in Australia) , this was unsatisfactory as his evidence was crucial in respect of the defendants' claim in misrepresentation. Given so, it was important that he was compellable as a witness such that his credibility could be assessed before the judge trying the matter: at [68] to [70].

(4) In determining the place of tort, one should not focus solely on the place of receipt of the alleged misrepresentation, but also on the place of reliance thereof. If one looked at the continuum of the events: having received the misrepresentation in Australia, Mr Tyne acted upon those misrepresentations by communicating his instructions to the officers in Singapore which then manifested itself in the form of his instructions being carried out by the officers of UBS AG in Singapore. In other words, reliance was crystallised when the officers of UBS AG (Singapore) operated Telesto's account in accordance with Mr Tyne's instruction. This view accorded with business efficacy as in a scenario where UBS AG (Singapore) transacted with, for and on behalf of international clients, to say that the place of the tort was where their client was located(barring any fortuitous happenstance) would be to hold UBS AG (Singapore) to a choice of law to which it had not agreed: at [71], [75] and [80].

(5) There was a very good reason why the natural forum in a dispute involving a contractual claim could not be displaced simply because the defence sought to avoid liability by raising a counterclaim or set-off premised on a tort which, viewed in isolation as an independent claim, might provide for a different natural forum. Commercial entities, in particular banks and financial institutions, strove for certainty of their contractual rights and obligations by choosing appropriately drafted governing law or jurisdiction clauses. It was not uncommon for parties to allege misrepresentation as a defence to a contractual claim. In this regard, it could not have been in the contemplation of the parties that a contractual claim, once properly instituted before a court of competent jurisdiction, could then be displaced by a foreign court merely because the place of the alleged misrepresentation (which constituted a defence to the contractual claim) was a foreign country: at [86].

(6) Although the tort of misrepresentation might be a separate and...