Virsagi Management (S) Pte Ltd v Welltech Construction Pte Ltd

• Jurisdiction: Singapore
• Judgment Date: 25 September 2013
• Date: 25 September 2013
• Docket Number: Civil Appeals Nos 90 and 91 of 2012
• Court: Court of Appeal (Singapore)

Virsagi Management (S) Pte Ltd

Plaintiff

and

Welltech Construction Pte Ltd and another appeal

Defendant

[2013] SGCA 50

Sundaresh Menon CJ

,

Chao Hick Tin JA

and

Andrew Phang Boon Leong JA

Civil Appeals Nos 90 and 91 of 2012

Court of Appeal

Conflict of Laws—Forum election—Lis alibi pendens—Related proceedings in local and foreign forums—Same plaintiff suing same defendant in multiple jurisdictions—Whether doctrine of forum election applied such that proceedings in Singapore should be stayed

Conflict of Laws—Forum election—Lis alibi pendens—Related proceedings in local and foreign forums—Seeking similar reliefs—Different causes of action—Whether there was lis alibi pendens

These appeals concerned applications made by the defendants (‘the Defendants’) in Suit No 63 of 2012 (‘Suit 63’) and Suit No 64 of 2012 (‘Suit 64’) for a stay of proceedings, which were allowed by the High Court judge (‘the Judge’). The Judge stayed the proceedings on the alternate grounds of forum non conveniens and lis alibi pendens.The plaintiff (‘the Plaintiff’) in both suits appealed against the Judge's decision.

The Plaintiff and the Defendants were involved in operating an overseas training centre (‘OTC’) in Bangladesh which trained, tested and certified workers for employment in the construction industry in Singapore. The operation of this OTC required a licence from the Building and Construction Authority of Singapore (‘the BCA’), which the Defendant in Suit 63, Welltech Construction Pte Ltd (‘Welltech’) applied for and subsequently obtained in 2006. Welltech applied for this licence on the behest of a director and shareholder of the Plaintiff company, Mr Lee Siong Kee (‘Victor’), who suggested that the two companies cooperate; the Plaintiff had the expertise to operate OTCs but did not meet the BCA requirements necessary to obtain the licence whereas Welltech did. The BCA further required the OTC to be managed by a Bangladesh incorporated company. A joint venture company, Welltech Test Pvt Ltd (‘WTPL’), was set up in November 2006 for this purpose by Victor and a director of Welltech, Mr Woon Wee Phong (‘Woon’), together with a third Bangladesh partner. The Bangladesh partner was eventually replaced by the Defendant in Suit 64, Mr Ferdous Ahmed Badel trading as Gazipur Air Express International (‘Gazipur/Badel’) sometime in 2009. Two agreements governed this business relationship: the first, was an agreement between Virsagi and Welltech (‘the Principal Agreement’), and the second, was an agreement between Virsagi and Badel/Gazipur (‘the Gazipur Agreement’).

Woon and Badel met in Singapore in 2010 where they agreed to operate the OTC to the exclusion of Virsagi. Victor found out about this, informed the parties that he intended to retire from the OTC business and invited them to buy him out instead. Throughout 2010 to 2011, the parties tried to work out a scheme pursuant to which Victor would pass on his shares in WTPL over to Woon and Badel. In the event, the buyout negotiations failed. By this time, the Principal Agreement was terminated. On 5 January 2012, Victor proceeded to commence legal action in the Supreme Court of Bangaldesh, High Court Division (Statutory Original Jurisdiction) in Dhaka (‘the Dhaka High Court’) seeking orders concerning WTPL. The action was one based on minority oppression under s 233 of the Companies Act (Bangladesh) 1994 (Act No 18 of 1994). This application made by Victor in the Dhaka High Court was dismissed, and was pending appeal at the time the present appeals were heard.

On 26 January 2012, Virsagi commenced Suit 63 and Suit 64 in the Singapore courts. Suit 63 was an action by Virsagi against Welltech for inducing Badel to breach the Gazipur Agreement and for unlawful interference with the Gazipur Agreement. Suit 64 was an action by Virsagi against Badel for breach of contract.

Held, dismissing the appeal:

(1) Applying the doctrine of forum non conveniens, Bangladesh was the more appropriate forum for the disputes to be heard: at [24] .

(2) The proceedings should not have been stayed on the grounds of ‘the doctrine of lis alibi pendens’: at [24] .

(3) A lis alibi pendens operated as a fact to which our common law rules on private international law accorded legal significance by reference to two (and only two) separate legal doctrines. The first was the doctrine of forum election. The second was the doctrine of forum non conveniens: at [29] .

(4) The doctrine of forum election had been referred to as ‘the doctrine of lis alibi pendens’ in previous cases, but this terminology was confusing, and might lead to confusion and conflation of substantive legal principles. This doctrine should now be properly referred to as the doctrine of forum election: at [41] .

(5) A lis alibi pendens might arise in two types of factual situations: first, where the same plaintiff sued the same defendant in Singapore and abroad (‘common plaintiff situations’); and secondly, where the plaintiff sued the defendant in Singapore and the defendant sued the plaintiff abroad, or vice versa(‘reversed parties situations’): at [27] .

(6) The doctrine of forum election would apply only in common plaintiff situations: at [30] .

(7) Where the defendant was able to show that there was a lis alibi pendens, the defendant could take up an application to compel the plaintiff to make an election as to which set of proceedings it wished to pursue. The burden of proof then shifted to the plaintiff to justify the continuance of the concurrent proceedings by showing ‘very unusual circumstances’. If the plaintiff failed to demonstrate such unusual circumstances, it would have to make an election: at [30] .

(8) The doctrine of forum election in common plaintiff situations of lis alibi pendens and the doctrine of forum non conveniens did not overlap in any way on a conceptual level, but, in practice, interfaced with one another in various situations: at [34] to [36] .

(9) The doctrine of forum election, as a mechanism of case management, was never finally dispositive of where the dispute would be heard unless the defendant had no objections to the plaintiff's election: at [37] .

(10) When a lis alibi pendens operated within the doctrine of forum non conveniens, it had to be considered in light of the general principles applicable to the forum non conveniens analysis. The lis alibi pendens would feature as one of the factors in deciding whether it was appropriate for the Singapore court to hear the dispute, regardless of whether it was a common plaintiff situation or reversed parties situation, and nothing more: at [38] and [39] .

(11) For the purposes of the doctrine of forum non conveniens,it was sufficient for there to be related (or parallel) proceedings (as compared to a strict lis alibi pendens) in order for the foreign proceedings to weigh into the analysis of appropriateness: at [40] .

(12) The Judge did not raise the issue of the plaintiff making an election, which was probably appropriate in the circumstances of the present case. However, he was mistaken in observing that he would have stayed the proceedings based on the doctrine of forum election: at [44] .

(13) In deciding whether there was a lis alibi pendens, the first legal port of call ought to be the identity of the parties and the causes of action concerned. This would enable to court to identify whether there were same or similar issues arising from the same factual matrix which were before both the local and foreign court (s), and, if so, the extent of these similarities: at [47] .

(14) The party seeking to demonstrate that there was a lis alibi pendens need not show a total correspondence of issues, but the court would be more likely to find a lis alibi pendens where the issues were of a greater degree of similarity: at [47] .

(15) The causes of action in Suit 63 and Suit 64 on the one hand and the proceedings in the Dhaka High Court on the other were entirely different, and did not give rise to the same issues: at [49] to [52] .

(16) There was insufficient similarity between the Singapore and the Bangladesh proceedings and, therefore, no lis alibi pendens(even though the reliefs sought were similar): at [54] .

AG v Arthur Andersen&Co The Independent (31 March 1988) (refd)

Ang Ming Chuang v Singapore Airlines Ltd [2005] 1 SLR (R) 409; [2005] 1 SLR 409 (refd)

Australian Commercial Research and Development Ltd v ANZ Mc Caughan Merchant Bank Ltd [1989] 3 All ER 65 (refd)

Beckkett Pte Ltd v Deutsche Bank AG [2011] 1 SLR 524 (refd)

CIMB Bank Bhd v Dresdner Kleinwort Ltd [2008] 4 SLR (R) 543; [2008] 4 SLR 543 (refd)

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

Lanna Resources Public Co Ltd v Tan Beng Phiau Dick [2011] 1 SLR 543 (refd)

Multi-Code Electronics Industries (M) Bhd v Toh Chun Toh Gordon [2009] 1 SLR (R) 1000; [2009] 1 SLR 1000 (refd)

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

Spiliada Maritime Corp v Cansulex Ltd [1987] AC 460 (refd)

Tan Kah Hock v Chou Li Chen [2008] SGHC 82 (refd)

Transtech Electronics Pte Ltd v Choe Jerry [1998] 1 SLR (R) 1014; [1998] 3 SLR 272 (refd)

Yusen Air&Sea Service (S) Pte Ltd v KLM Royal Dutch Airlines [1999] 2 SLR (R) 955; [1999] 4 SLR 21 (refd)

Companies Act (Bangladesh) 1994 (Act No 18 of 1994) s 233

Andrew JHanam (Andrew LLC) for the appellant in Civil Appeals Nos 90 and 91 of 2012

Ramalingam Kasi (Raj Kumar & Rama) for the respondent in Civil Appeal No 90 of 2012

Cheah Kok Lim (Cheah Associates LLC) for the respondent in Civil Appeal No 91 of 2012.

Andrew Phang Boon Leong JA

(delivering the grounds of decision of thecourt):

Introduction

1 Civil Appeal No 90 of 2012 (‘CA 90’) and Civil Appeal No 91 of 2012 (‘CA 91’) were appeals against the decision by the judge (‘the Judge’) in Virsagi Management (S) Pte Ltd v Welltech...