Xitrans Finance Ltd v Rappo, Tania and another matter

• Jurisdiction: Singapore
• Judge: Sundaresh Menon CJ
• Judgment Date: 13 July 2023
• Neutral Citation: [2023] SGCA 22
• Court: Court of Appeal (Singapore)
• Docket Number: Civil Appeals Nos 110 and 113 of 2016 (Summonses Nos 2 and 3 of 2023)
• Hearing Date: 29 May 2023
• Citation: [2023] SGCA 22
• Year: 2023
• Plaintiff Counsel: Cavinder Bull SC, Lim Gerui and Lea Woon Yee (Drew & Napier LLC)
• Defendant Counsel: Pek Aik Hin, Leong Yi-Ming, Chua Xinying and Abigail Anousha Fernandez (Allen & Gledhill LLP),Kenneth Michael Tan SC (instructed), Seah Zhen Wei Paul, Alcina Lynn Chew Aiping and Mohamed Shafie bin Allameen (Tan Kok Quan Partnership)
• Published date: 13 July 2023

Sundaresh Menon CJ (delivering the judgment of the court):Introduction

These are two applications which seek the partial lifting of the forum non conveniens stay that was ordered by this Court in Rappo, Tania v Accent Delight International Ltd and another and another appeal[2017] 2 SLR 265 (“the Stay Judgment”). For the reasons that follow, we dismiss the applications.

FactsThe parties

Accent Delight International Ltd (“Accent”) and Xitrans Finance Ltd (“Xitrans”) are companies incorporated in the British Virgin Islands. They are owned by the family trusts of Mr Dmitry Rybolovlev (“Mr Rybolovlev”). Mr Rybolovlev is a Russian magnate who was, until 2010, the chairman of the Board of the Uralkali group in Russia. Xitrans is the applicant in both CA/SUM 2/2023 (“SUM 2”) and CA/SUM 3/2023 (“SUM 3”) (collectively, the “Applications”).

The respondents in SUM 3 are Mr Yves Charles Edgar Bouvier (“Mr Bouvier”) and MEI Invest Limited (“MEI Invest”). We will refer to them collectively as the “Bouvier parties”. Mr Bouvier is a businessman in the international art scene. MEI Invest is a Hong Kong incorporated company that Mr Bouvier controls and uses for his business purposes. From around 2002 or 2003, Mr Bouvier and Mr Rybolovlev had a course of dealing that stretched over a decade in the course of which Mr Rybolovlev amassed a significant art collection which includes masterpieces by highly renowned artists such as Vincent van Gogh, Pablo Picasso, Henri Matisse, Claude Monet and Leonardo da Vinci. The underlying dispute between the parties concerns Mr Bouvier’s role in those dealings.

The respondent in SUM 2 is Ms Tania Rappo (“Ms Rappo”). Ms Rappo was close to the Rybolovlev family (though the extent of this closeness is the subject of dispute). She met Mr Rybolovlev in Geneva in either 1995 or 2000. She struck up a close friendship with Mr Rybolovlev’s wife, and later became godmother to one of Mr Rybolovlev’s children who was born in 2001. Ms Rappo was the one who introduced Mr Bouvier to Mr Rybolovlev.

Because Xitrans and Accent are the respondents in the underlying appeals from which the Applications arise (see [14] below), we will refer to them collectively as the “respondents” (even though Xitrans is the applicant in the Applications). Mr Bouvier, MEI Invest and Ms Rappo will be referred to collectively as the “appellants” (even though they are the respondents in the Applications).

Events leading up to the Stay Judgment

The events leading up to the Stay Judgment are set out in detail at [10]–[39] of the Stay Judgment. Here, we summarise the key facts that are relevant to the Applications.

As we have mentioned, Mr Bouvier was involved in Mr Rybolovlev’s acquisition of artwork for over a decade starting in 2002 or 2003. The parties disagree as to the nature of each individual’s respective role in the acquisition process. According to Mr Bouvier, Mr Rybolovlev had a clear idea of which art pieces he wished to acquire and was knowledgeable about the art market. He would therefore express interest in specific pieces of art, after which Mr Bouvier would locate the piece and acquire it from its owner. Mr Rybolovlev, through one of the respondents, would then purchase the piece from Mr Bouvier. Mr Bouvier’s position is that he was at liberty to “on-sell” the artwork to Mr Rybolovlev at a profit, with the profit margin being determined by what he considered to be the value of the art piece. To Mr Bouvier, the “value” of the art piece was essentially the price that Mr Rybolovlev was willing to pay.

According to the respondents, however, Mr Bouvier was meant to act as Mr Rybolovlev’s agent in sourcing and acquiring artwork. Mr Bouvier was believed to be able to acquire artwork at better prices given his expert knowledge and contacts from his business. The respondents claim that Mr Bouvier would first inform Mr Rybolovlev of an opportunity to purchase a particular artwork and provide advice on the price at which it could be obtained. Mr Rybolovlev and his representative would then give instructions as to the terms they found acceptable, and Mr Bouvier was then to negotiate the purchase with the owner in accordance with those terms. For his services, Mr Bouvier was only entitled to charge a commission calculated at 2% of the sale price.

Over their long relationship, Mr Bouvier was involved in Mr Rybolovlev’s acquisition of 38 pieces of art. For the purposes of the Applications, what is important is that six pieces of art were acquired between August 2003 and July 2007 (the “Category 1 Transactions”), two were acquired between July 2007 and December 2007 (the “Category 2 Transactions”), and 30 were acquired between February 2008 and September 2014 (the “Category 3 Transactions”). The Applications concern only the Category 1 and Category 2 Transactions. For all of these transactions, Xitrans was the purchaser. This is why Accent is not involved in the Applications.

Sometime towards the end of 2014, the relationship between Mr Bouvier and Mr Rybolovlev broke down. In December 2014, Mr Rybolovlev claims to have learned that the seller of one of the paintings that he had purchased had received US$93.5m by way of sales proceeds. Accent, however, had paid Mr Bouvier US$118m for that same painting. Mr Rybolovlev also discovered that another painting which he had purchased through Mr Bouvier for US$127.5m had been sold by its previous owner for between US$75m and US$80m. This led Mr Rybolovlev to believe that Mr Bouvier had been dishonestly inflating sale prices for much, or even all, of the artwork that he had purchased.

On 9 January 2015, Swiss counsel for the respondents at the time (“Ms Bersheda”) made a criminal complaint in Monaco against “[Mr Bouvier] and any participant” in the purchases. On 25 February 2015, when Mr Bouvier went to Mr Rybolovlev’s residence in Monaco purportedly to discuss an outstanding payment, he was arrested. Ms Rappo was arrested on the same day. On 27 February 2015, Ms Bersheda wrote to the investigating judge of the criminal complaint and informed him that the respondents and Mr Rybolovlev’s daughter, Ms Ekaterina Rybolovleva, wished to join the proceedings against Mr Bouvier and Ms Rappo as civil parties.

On 12 March 2015, the respondents commenced Suit No 236 of 2015 (the “Suit”) in Singapore. In the Suit, the respondents alleged that Mr Bouvier had breached his fiduciary duties as their agent and committed the tort of deceit. The respondents also alleged that MEI Invest and Ms Rappo were liable for dishonest assistance and knowing receipt. They alleged that all the appellants conspired to wrongfully cause loss to them.

On 15 April 2015, Mr Bouvier and MEI Invest applied for a stay of the proceedings in Singapore on two grounds: first, there was a lis alibi pendens in Monaco and second, Switzerland was the appropriate forum for the determination of the respondents’ claims. On 22 April 2015, Ms Rappo made a similar application, on the grounds that both Monaco and Switzerland were more appropriate fora than Singapore.

The appellants’ stay applications were dismissed by a High Court Judge on 17 March 2016 (see Accent Delight International Ltd and another v Bouvier, Yves Charles Edgar and others[2016] 2 SLR 841). The Bouvier parties filed an appeal in CA/CA 113/2016 and Ms Rappo filed an appeal in CA/CA 110/2016 (collectively, the “Appeals”). We heard the Appeals on 1 March 2017.

The Stay

On 18 April 2017, we allowed the Appeals for the reasons set out in the Stay Judgment. One key issue in the Appeals was whether Switzerland was a more appropriate forum than Singapore for the parties’ dispute. For a number of reasons, we decided that Switzerland was clearly the more appropriate forum for the parties’ dispute (see [68]–[91] of the Stay Judgment).

In response, the respondents argued that Switzerland was not available as a forum because, under the Swiss Federal Act on Private International Law of 18 December 1987 (the “PILA”), the Swiss courts did not have jurisdiction over the dispute. The parties called experts to testify on this issue. Ultimately, we preferred the view of the appellants’ expert which was that the Swiss courts would have jurisdiction over the parties’ dispute by virtue of the written undertakings of the appellants that they “recognise and accept the jurisdiction of the civil courts of Geneva, Switzerland, in respect of any dispute in connection with the sale of artworks to [the respondents] and/or any related transactions” (the “Written Undertakings”). We were satisfied that the Written Undertakings would “provide the Swiss courts with a firm footing on which to assume jurisdiction” and that the language of these undertakings was “broad enough to encompass the claims” brought by the respondents against the appellants (see [96] of the Stay Judgment). In response to a suggestion by the respondents’ counsel that the Written Undertakings were not “wide enough” and that further challenges to the Swiss courts’ jurisdiction could be expected, counsel for the Bouvier parties and counsel for Ms Rappo confirmed to the court that (see [97] of the Stay Judgment):

the Appellants’ written undertakings were intended to be expressed in the “widest possible sense”, and, specifically, that the Appellants would submit to the Swiss courts’ determination on the merits of any claims that the Respondents might bring against them in Switzerland in respect of the matters set out in [the Suit].

We will refer to these oral undertakings as the “Further Undertakings”. We will refer to the Written Undertakings and Further Undertakings collectively as “the Undertakings”.

Respondents’ counsel then expressed the concern that if, for some reason, the Swiss courts decided not to assume jurisdiction following a stay of the Suit in Singapore, the respondents would be effectively shut out from seeking any remedy for wrongs which they...