WestLB AG v Philippine National Bank and others

• Judge: Andrew Ang J
• Judgment Date: 10 August 2012
• Neutral Citation: [2012] SGHC 162
• Citation: [2012] SGHC 162
• Court: High Court (Singapore)
• Published date: 22 August 2012
• Docket Number: Originating Summons No 134 of 2004
• Plaintiff Counsel: Harry Elias SC, S Suressh, Andy Lem, Sharmini Selvaratnam, Sunil Nair and Daphne Jansz (Harry Elias Partnership LLP)
• Defendant Counsel: Rethnam Chandra Mohan and Mabelle Tay (Rajah & Tann LLP),Kenneth Tan SC and Soh Wei Chi (Kenneth Tan Partnership)
• Subject Matter: Civil procedure,Interpleader,Conflict of laws,Choice of law,Foreign judgments
• Hearing Date: 16 November 2011,22 November 2011,10 November 2011,25 November 2011,16 January 2012,21 November 2011,23 November 2011,14 November 2011,11 November 2011,15 November 2011,24 November 2011,18 November 2011

Andrew Ang J: Introduction

The present case arises from interpleader relief sought by the plaintiff, the Singapore branch of the German bank, West Landesbank (“WestLB”). The subject of dispute are certain sums of money totalling US$16.8m and £4.2m (“the Funds”) which are presently held by Harry Elias Partnership LLP (“HEP”), the current solicitors for the first and tenth defendants, viz, Philippine National Bank (“PNB”) and the Republic of the Philippines (“the Republic”), in an escrow account with WestLB.

The Funds were originally part of a pool of assets held in various Swiss bank accounts (“the Swiss Deposits”) by the family and close aides of Ferdinand E Marcos (“the Marcoses”). Ferdinand E Marcos was the President of the Republic of the Philippines from 1965 until 1986 when he was overthrown in a bloodless revolution and exiled from the country. It is common knowledge that during his tenure the Marcoses illicitly looted from public coffers to amass a huge personal fortune. These looted assets, valued at approximately US$567m, were parked in various Swiss bank accounts.

In 1998, following a chain of events involving the Swiss and Philippines authorities (see [13]–[19] below), the Swiss Deposits were released by the Swiss authorities to PNB, to hold as escrow agent. PNB then deposited the Swiss Deposits in various banks in Singapore. These included the Funds which were deposited with WestLB.

Pursuant to an order of court dated 24 March 2004, made after the commencement of the interpleader proceedings, WestLB was ordered to pay the Funds into an escrow account established by PNB’s then solicitors, Drew & Napier LLC (“D&N”), for the credit of these proceedings. Following a further order of court dated 22 February 2006, the Funds were transferred to an escrow account held in the name of HEP for the credit of these proceedings. This remains the current state of affairs, pending the court’s determination of the question of entitlement to the Funds.

The parties claiming entitlement to the Funds

PNB is a bank incorporated in the Republic of the Philippines with its principal office in Manila and branches in various cities including Los Angeles, New York, Honolulu and Singapore. It is jointly represented together with the Republic, which was joined as a defendant in May 2006. The claims by the Republic and PNB rest upon proceedings involving the Swiss authorities, the Republic and PNB concerning the release of the Funds from the Swiss bank accounts (see [24]–[28] below). The Republic and PNB refer to this chain of events as “the Green Line”, which will be described in greater detail at [13]–[19] below.

The seventh defendants (Plaintiffs in the Estate of Ferdinand E Marcos Human Rights Litigation in Case No MDL840-R in the United States District Court for the District of Hawaii) were the plaintiffs in a class action human rights litigation which was adjudicated in the United States in In re The Estate of Ferdinand E Marcos Human Rights Litigation, MDL No 840 (D Hawaii) (“the US Human Rights Litigation”). These human rights victims (“the HRVs”) comprise 9,539 civilian citizens of the Republic, their heirs and beneficiaries, who had, between September 1972 and February 1986, suffered human rights abuses, including torture and summary executions, during the rule of Ferdinand E Marcos. The HRVs’ claim to the Funds arises out of enforcement proceedings in the US in relation to the US Human Rights Litigation (see [9]–[12] and [29] below).

The second to sixth defendants, viz, Maler Foundation, Avertina Foundation, Palmy Foundation, Vibur Foundation and Aguamina Corporation (collectively “the Foundations”), are the named holders of the Swiss bank accounts which originally held the Swiss Deposits before they were released by the Swiss authorities. The second to fifth defendants were foundations established in Vaduz, Liechtenstein, while the sixth defendant was a corporation incorporated in Panama. The Foundations’ claim to the Funds is premised on their status as the original legal owners of the same; they seek to impeach the other parties’ claims and argue that, in the event, the Funds must revert back to them as original owners (see [31]–[35] below).

There were originally two other defendants to these proceedings – the eighth defendant, the Estate of Roger Roxas; and the ninth defendant, The Golden Budha Corporation. However, they discontinued their claims in March 2006 and are no longer relevant to these proceedings.

Background facts The US proceedings

Following the impeachment of Ferdinand E Marcos, the US Human Rights Litigation was initiated against Ferdinand E Marcos in April 1986 by one Robert A Swift for and on behalf of the HRVs. After Ferdinand E Marcos’ death in September 1989, the Marcos Estate was substituted as the defendant, with Ferdinand E Marcos’ widow and son, ie, Imelda Marcos Ferdinand R Marcos (“Marcos Junior”), as its legal representatives.

In early 1995, the US District Court of Hawaii ruled in favour of the HRVs and entered judgment for in excess of US$1.9b against the Marcos Estate (“the US Final Judgment”) (Celsa Hilao et al v Estate of Ferdinand E Marcos, 910 F Supp 1460 (D Haw 1995) (No 86-0390). These sums were to be paid out of the Foundations’ respective Swiss bank accounts, which the court found to be the property of the Marcos Estate. The court further imposed a preliminary injunction on the Swiss Deposits to prevent the Marcos Estate and its agents from transferring or secreting these away. The US Final Judgment was affirmed in its entirety by the US Court of Appeal in Maximo Hilao v Estate of Ferdinand Marcos, 103 F 3d 767 (9th Cir 1996).

Contempt proceedings were subsequently initiated against Imelda Marcos and Marcos Junior for violating the above-mentioned injunction. By an Order Granting Additional Relief for Contempt dated 13 July 1995 (“the US Contempt Order”), the US District Court of Hawaii ordered the assignment, for the benefit of the HRVs, of all rights, title and interest in the Swiss bank accounts maintained in the names of various members of the Marcos family and their instrumentalities, which included the Foundations. It directed Imelda Marcos and Marcos Junior to, inter alia, execute an assignment of the relevant Swiss Bank accounts to Robert A Swift for the HRVs’ benefit, failing which the Clerk of the US Court would be directed to execute the same on behalf of Imelda Marcos and Marcos Junior. Judge Manuel L Real ordered that: 2. All funds on deposit with banks in Switzerland in accounts under [inter alia, the Foundations] were deposited by or on behalf of Ferdinand E. Marcos, are the property of his Estate, and available to pay [the HRVs] as judgment creditors ... 3. ... 4. On or before July 10, 1995 Imelda R. Marcos and [Marcos Junior] shall execute an assignment of these bank accounts ... in favour of [the HRVs] for deposit in accordance with paragraph 10 of the [US Final Judgment] dated February 3, 1995, and deliver the same to [Robert A Swift]. 5. ... 6. In the event Imelda R. Marcos and [Marcos Junior] 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 [Robert A Swift].

[emphasis added]

The assignment was not executed by the legal representatives of the Marcos Estate. Consequently, on 14 July 1995, a deed of assignment of “all right, title and interest in and to bank accounts maintained in Switzerland in the names of”, inter alia, the Foundations, was executed by the Clerk of the United States District Court for the District of Hawaii (“Hawaii District Court”), Walter A Y Chinn, on behalf of the Marcos Estate (“the Chinn Assignment”). The Chinn Assignment read as follows:

Assignment made this 14th day of July, 1995 on behalf of [the Marcos Estate] to [Robert A Swift] in the Estate of Ferdinand E. Marcos Human Rights Litigation, MDL No. 840.

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 ... for the benefit of [the HRVs] 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.

This Chinn Assignment forms the chief basis of the HRVs’ claimed entitlement to the Funds (see [29]–[30] below). The Swiss proceedings The first request for international mutual assistance

After Ferdinand E Marcos’ impeachment, the Republic had slowly begun its efforts to recover the Swiss Deposits. On 7 April 1986, it lodged a formal request for assistance from the Swiss authorities to locate and identify the ill-gotten assets of the Marcoses which had been deposited in Switzerland. The request was made pursuant to the Swiss Federal Act on International Mutual Assistance in Criminal Matters (20 March 1981) (“IMAC”) which empowers the Swiss authorities to seize and forfeit the proceeds of criminal acts which are within Switzerland.

Pursuant to the procedures under IMAC, the Republic’s request was processed by the Swiss Federal Office for Police Matters and forwarded to the competent cantonal judicial authorities for execution. After investigations, the magistrates of the Swiss cantons issued freezing orders against the Swiss Deposits (“the Swiss freeze orders”). By a decision dated 21 December 1990, Swiss Federal Court Decision, IA 77, 79-84, 1990, the Swiss Federal Supreme Court upheld these freezing orders and gave directions for the in-principle transmission of the Swiss Deposits to the Republic. The Swiss Federal Supreme Court held that the actual transfer would be deferred until presentation of a decision by a...