Source: http://archive-sg.com/sg/s/singaporelaw.sg/2016-01-30_7413359_68/Pacific_Electric_Wire_amp_amp_Cable_Co_Ltd_and_Another_v_Neptune_Orient_Lines_Ltd_Toko_Kaiun_Kaisha_Ltd_Third_Party_1993_3_SLR_60_1993_SGHC_122/
Timestamp: 2017-09-19 13:26:47
Document Index: 34187103

Matched Legal Cases: ['arts 81', 'art 93', 'art 84', 'art 84', 'Art 12', 'art 24']

archive-sg.com: singaporelaw.sg - Pacific Electric Wire &amp; Cable Co Ltd and Another v Neptune Orient Lines Ltd (Toko Kaiun Kaisha Ltd, Third Party)[1993] 3 SLR 60; [1993] SGHC 122
Pacific Electric Wire &amp; Cable Co Ltd and Another v Neptune Orient Lines Ltd (Toko Kaiun Kaisha Ltd, Third Party)[1993] 3 SLR 60; [1993] SGHC 122
of courts in different jurisdictions reaching opposing conclusions in the realm of conflict of laws And the decision of the Court of Appeal has endured as authority for the following propositions When a contract is made in one country to be performed wholly or partially in another prima facie the contract is to be construed and enforced according to the lex loci contractus But the court will look at all the circumstances to ascertain by the law of which country the parties intended the contract to be governed and will enforce the contract accordingly unless it should contain stipulations contrary to morality or expressly forbidden by positive law Lord Halsbury LC who presided said in his judgment at p 336 there may be stipulations in a contract which one country may enforce and which another country may not enforce and that in order to determine whether they are enforceable or not you must have regard to the law of the contract by which I mean the law which the contract itself imports is to be the law governing the contract Lord Halsbury LC then added the following to emphasize the supremacy of the chosen law Where a contract is void on the ground of immorality or is contrary to such positive law as would prohibit the making of such a contract at all then the contract would be void all over the world and no civilized country would be called on to enforce it Nor does Sir Walter Phillimore contend that the contract now in dispute is a contract coming within that category But assuming for the moment that the law which the parties contemplated as the law of the contract is one which can prevail and for that not only is there a very considerable body of English authority but the very judgment which is invoked here as the judgment to which we are to bow recognizes the fact that the validity of this contract if the law of the contract is to be the law of England may be affected by the intention of the parties or more strictly speaking the intention of the parties as seen through the contract it would seem to leave the only question to be determined the question what was the law which the parties contemplated as being the law governing this contract 1932 the Torni case 20 In The Torni bills of lading issued at Jaffa Palestine in respect of cargo carried from there to England contained the following clause This bill of lading wherever signed is to be construed in accordance with English law 21 The Palestine Carriage of Goods by Sea Ordinance 1926 adopted the Hague Rules Clause 4 of the Ordinance was in the following terms Every bill of lading issued in Palestine which contains or is evidence of any contract to which the Rules apply shall contain an express statement that it is to have effect subject to the provision of the said Rules as supplied by this Ordinance and shall be deemed to have effect subject thereto notwithstanding the omission of such express statement 22 The bills of lading contained no reference to the Hague Rules In an action against the shipowners in respect of damage and or short delivery the defendants set up various exceptions in the bills of lading which were in derogation of the Hague Rules The cargo owners pleaded in reply that the contracts were governed by the Palestine Ordinance and accordingly notwithstanding the omission of a statement to that effect the Hague Rules should be deemed to be written into contracts and therefore the exceptions relied on were of no avail The question whether the bills of lading were subject to the provisions of the Ordinance was set down for trial as a preliminary issue as was done in this case 23 Langton J and the Court of Appeal held that the law of Palestine should be applied for the intention of the shippers must have been that the shipments were subject to Palestine law under which the goods obtained the protection of the Hague Rules The shipowners had no right to exclude the Hague Rules The proviso that the bill of lading was to be construed in accordance with English law merely meant that the court would apply English rules of construction and not English substantive law 24 The central plank on which the decision rested was that the Hague Rules were enacted in Palestine and in England pursuant to an international convention the Brussels Convention and it was not open to shipowners to defeat the purpose of the convention by the insertion of a clause in the bills of lading that they were to be construed according to English law 25 Slesser LJ viewed the relevance of the Brussels Convention as follows I would therefore add the observation which has been cited to us from Salmond on Contracts that the matter may be regarded as a question whether the exclusion or insertion of a particular obligation is or is not contrary to the comity of nations I find it very difficult to think that where there has been an international Convention to which various nations have agreed it would not be contrary to the comity of nations not to give force to these provisions and allow particular individuals to make a special provision for themselves and contract out of the international obligation and agreement 26 According to The Torni therefore parties are not entitled to contract out of the Hague Rules which must be read into the contract and the attempt to contract out of them would by the law of Palestine have been illegal 1937 Lord Atkin s dictum in the International Trustee case 27 Then came R v International Trustee for the Protection of Bondholders AG in which the question for determination was the proper law for the discharge of liability under bonds issued by the British government in the United States The House of Lords ruled that
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The Indonesian courts it would appear have also not had occasion to deal with a case where the contract at issue was subject to the Hague Rules On the other hand the Hague Rules form part of the laws of Singapore and cases concerning the interpretation of the Hague Rules have been dealt with before by the courts here Besides English decisions on various issues involving the interpretation of the Hague Rules can be relied on in proceedings before the courts here Therefore they say this is another reason why the court in Singapore rather than the court in Djakarta would be a more appropriate forum to hear this action 19 Thirdly they referred to the circumstances of the casualty out of which this action stems It would be convenient to set out here what Mr Chew Charm Pan had to say in his affidavit on this aspect of the case because this is practically all the information that is available to this court regarding it besides the Singapore Salvage Engineers report and the annexures to it which have also been exhibited to his affidavit He says From investigations carried out on behalf of my company by two marine surveyors based in Singapore it appears that the tug and tow left Bandjarmasin Indonesia at about 00 30 hours on 19 September 1974 At about 06 00 hours on 20 September 1974 the tug and tow were diverted to Sampit Bay and the tug and tow arrived at Sampit Bay at about 02 00 hours on 21 September 1974 at which time the barge was heavily listing to port and a few hours thereafter the barge was grounded Singapore Salvage Engineers a Singapore firm were engaged by or on behalf of the third defendants to salvage the barge and now produced shown to me and marked CCP1 is a copy of their report 20 The report from the Singapore Salvage Engineers also revealed that there were four holes at the bottom of the barge which had to be repaired before the barge was able to resume its voyage to Singapore 21 From these circumstances the respondents allege what would be most relevant and in issue regarding the appellants liability on the claim here would be the seaworthiness of the barge Apparently they would be contending that as a result of the unseaworthiness of the barge water got in and damaged the cargo 22 They submit that all the evidence concerning the issue of seaworthiness of the barge would come from the experts mentioned here who had investigated and inspected the barge and from the maintenance records of the barge All the witnesses who can speak on this issue are in Singapore or readily available in Singapore 23 The only other important issue in this claim would be the extent of the damage and loss to the respondents cargo Messrs Bork Singapore Pte Ltd who belong to an International Group and who are experts in timber were asked soon after the casualty to inspect the state of the logs in question and their evidence would be very relevant to establish the extent of damage and loss to the respondents cargo 24 The respondents assert that as practically all if not all the witnesses and other evidence on the likely issues involved in this claim are in Singapore for both the respondents and the appellants the court in Singapore rather than the one in Djakarta would be the more appropriate one to hear this action It will mean less costs and less trouble to all the parties and the appellants will in no way be prejudiced by it 25 The final point the respondents urge in their favour why this application should be refused is because they are time barred to commence proceedings in Indonesia Under the Hague Rules which apply to this contract of carriage they should have brought this action within one year and they were out of time at the time appellants made their application here 26 Those are the respective stands of the appellants and the respondents regarding this application both in the High Court before Mr Chua J and also before this court but with this qualification that the appellants through their counsel Mr Grimberg made three slight modifications to their original stand during the course of the hearing before us We have already referred to one of these modifications as the fresh additional point to support their application We shall refer to the other two modifications in due course 27 We now state our views on the arguments put forward by the parties 28 The respondents first point was that as the appellants are a Singapore incorporated company if they proceeded in the Djakarta court and obtained judgment against them on their claim they may still not see the fruits of the judgment and may have to further proceed against them in Singapore To our mind this is a factor which merits some consideration in their favour though the weight to be attached to it would be slight This was one of the points where counsel for the appellants at the hearing before us modified his stand and said that in the event of this court granting the application the appellants would undertake to furnish sufficient security in Indonesia to meet the respondents claim should they succeed in their action here This modification though late negatives any advantage the respondents would have had earlier from it 29 We next considered the point that as their contract was subject to the Hague Rules the Singapore court would be the more appropriate one to hear such a matter Both parties in their affidavits had referred to legal opinions they had respectively obtained from lawyers practising in Indonesia concerning the reception and the application of the Hague Rules by the courts at Djakarta From these opinions we have no reason whatever to conclude that though Indonesia had not adopted the Hague Rules and there have been no cases before the
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The &quot;Hung Vuong-2&quot;[2001] 3 SLR 146; [2000] SGCA 25
even where counter signing square remains blank emphasis is added According to Mr Cuong in order for the respondents to be the legal cargo receivers their names had to be written on the back of the B L In the present instance this was not done as Pacific Sugar had only indorsed their own name on the back of the B L and not the name of the respondents 13 For a more complete picture it is necessary for us to also set out the provisions of arts 81 2 and 93 of the same Code Article 81 2 The original B L is a document of title for disposing of the cargo and for taking delivery thereof Article 93 When the vessel arrives at the port of destination the carrier is obliged to deliver the cargo to the legal cargo receiver who has at least one original bill of lading or forwarding document or similar way bill as referred to at paragraph 2 of Article 80 of this Code After the cargo has been delivered all other copies of the bill of lading stand void for receiving the cargo 14 First we would observe that the opinion of Mr Cuong seemed somewhat tentative as he stated that the defendants the owners may not be liable to the plaintiffs cargo owners Furthermore his conclusion was that the defendants may have a defence to the claim 15 On the other hand the legal expert of the respondents Mr Nguyen Manh Dung Mr Dung deposed that in accordance with art 93 the shipowners should only deliver the cargo against the production of the B L at least one original copy and if they did otherwise they would be acting at their own risk He said the Vietnamese Maritime Code allowed the transfer of a to order B L by indorsement and upon such transfer the consequential rights and interest in the cargo were similarly transferred It was adequate that the B L was indorsed in blank Mr Dung opined that in the light of the blank indorsement of the B L effected by Pacific Sugar together with the actual transfer of the B L to the respondents the latter had acquired title to the cargo The respondents were entitled therefore to sue the appellants who were liable to the respondents for the misdelivery of the cargo to Guangxi without the production of any of the original copies of the B L All the three original copies of the B L were at all material times in the possession of the respondents 16 We recognised that questions of foreign law are questions of fact and where the opinions of experts conflict on such foreign law the court should as a general rule refrain from making a determination on the basis of affidavit evidence Furthermore there is much to be said for the proposition that disputes about foreign law should more appropriately be resolved by the courts of that foreign country see The Asian Plutus 1990 2 MLJ 449 But it does not follow that in every instance where there is a conflict of opinions the Singapore courts should always shy away from examining the opinions given Counsel for the appellants conceded that this court was entitled to consider the opinions 17 Upon a prima facie examination of Mr Cuong s opinion and the relevant provisions of the Vietnamese Maritime Code it was clear to us that there was no basis for his opinion that art 84 b required the specific indorsement of the transferee s name ie the respondents on the reverse side of the B L It was common ground between the parties that the B L here was an order B L It would be useful for us to set out again the relevant portion of art 84 b An order bill of lading is transferred by writing in its counter signing square on the back of the bill of lading the name of the person who has the right to issue an order for delivery of the cargo 18 The critical words in this provision are the person who has the right to issue an order The question to ask is who at that point in time immediately before the execution of the transfer has the right to issue an order for delivery of the cargo It cannot be the transferee It has to be the transferor who is the person who has the right Until the transfer is completed and effected the transferee would have no right to issue any order for delivery Therefore in this case the party whose name that must be indorsed on the reverse side of the B L was that of Pacific Sugar This was what was done here Thus the rights to receive the cargo had effectively been transferred to the respondents upon the B L being delivered to the latter We found the following opinion of Mr Dung wholly logical and sensible Such an Order Bill of Lading is transferred in writing It is transferred in writing when the name of the person who has the right to issue an order for delivery of the cargo countersigns his name on the back of the Bill of Lading The person who has that right on this Bill of Lading is Pacific Sugar Corporation Ltd the shipper The Bill of Lading is marked To Order which means it is to the order of Pacific Sugar Corporation Ltd Pacific Sugar Corporation Ltd is the last person who has the right to issue an order for delivery of the cargo They can transfer this right by countersigning their name in the counter signing square on the back of the Bill of Lading In this case there is no square on the back of the Bill of Lading providing for this Pacific Sugar Corporation Ltd therefore can sign their name on the reverse side of the Bill of Lading By doing so they transfer in writing the
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Golden Shore Transportation Pte Ltd v UCO Bank and Another Appeal[2004] 1 SLR 6; [2003] SGCA 43
UCO also referred to cl 6 to argue that cl 17 does not relate to the institution of proceedings Clause 6 provides that claims for services by other vessels belonging to the carrier wherever rendered may be adjudicated upon in the Singapore court whose decisions shall bind the owners of the goods In contrast cl 17 does not mention courts or adjudication Thus cl 17 could not be a jurisdiction clause Claims means nothing more than notification of loss or damage and the entire clause deals with notification and consideration of claims It has nothing to do with the institution of legal proceedings In any event if there is any ambiguity as to the scope of cl 17 the contra proferentum rule should apply Arguments of shipowners 18 Golden Shore adopted the interpretation accepted by the judge below that the word claims in the first sentence of cl 17 includes suits But it explained that not every reference to claim in cl 17 would necessarily include a suit much would depend on the context Golden Shore referred to the sentence no claims for shortage or damage will be considered by the carrier The word claims in that context could not mean suits 19 Golden Shore argued that sufficient regard must be given to the two key words in the first sentence of cl 17 claims and determination The word determination means adjudication That sentence required all suits under the B L to be determined at the port of delivery only The authorities 20 Golden Shore relied upon the case of Maharani Woollen Mills Co v Anchor Line 1927 29 Ll L Rep 169 Maharani in support of its construction of cl 17 There the clause in question provided that a ll claims arising shall be determined at the port of destination according to British laws The goods were carried from Liverpool to Bombay The plaintiff brought an action in England But the shipowners asserted that the action must be instituted in Bombay and sought a stay The High Court ordered a stay which order was affirmed by the Court of Appeal Scrutton LJ the illustrious shipping law judge in a short judgment construed this clause to mean that disputes as to the condition of the goods and the damage done to them shall be settled where the goods are He said that he did not see any difficulty with the jurisdiction clause and it was reasonable to hold the plaintiff to his contractual term He construed the word claims to include disputes 21 In contrast UCO relied upon the Malaysian case of The Sinar Mas 1982 1 MLJ 279 for the construction of cl 17 There the clause was very similar to the present cl 17 and it read Claims Any claims that may arise hereunder must be made at the port of delivery for determination and settlement at that port only The Kuala Lumpur High Court construed this clause to have nothing to do with jurisdiction and its reasoning at 279 was as follows In Shorter Oxford Dictionary claims means a demand for something as due an assertion of a right to something In my view a claim in the context of Clause 17 does not amount to a litigation which according to the same dictionary means the action of carrying on a suit in law or equity legal proceedings and disputation Having regard to the judgments in The Fehmarn and The Adolf Warski I think there is a distinction between claims and disputes Clause 17 does not envisage any dispute on litigation It is confined to claims pure and simple as for example where a consignee wishes to claim for the goods under the Bill of Lading then it must be done only in Kuching which is the port of delivery I am therefore of the view that Clause 17 is not a jurisdiction clause or even a forum clause The court should not import extra words into Clause 17 so as to give it new meaning with regard to the intention of the contracting parties 22 As pointed out by the Judge the court in The Sinar Mas did not give consideration to the word determination in that clause Furthermore it is not clear why the court in The Sinar Mas relied upon The Fehmarn 1958 1 All ER 333 and The Adolf Warski 1976 1 Lloyd s Rep 107 and the Sniadecki In The Fehmarn the relevant condition was All claims and disputes arising under and in connexion with the bills of exchange shall be judged in the USSR The dispute was in relation to short delivery and contamination The Court of Appeal there did not examine the two words claims and disputes What can be said about that clause is that the parties there had expressly used both terms 23 Similarly in The Adolf Warski Brandon J was in no sense construing the two words claim and dispute The case concerned two jurisdiction clauses in two different bills of lading The first provided that Any claim shall at the option of the Carriers be settled direct with the Carriers in Poland according to the Polish law to the exclusion of proceedings in the Courts of any other country The second provided that a ny dispute shall be decided in Poland according to Polish law except as provided elsewhere There was no doubt that these two clauses were jurisdiction clauses 24 We are unable to see how these two cases The Fehmarn and The Adolf Warski were germane to the interpretation of the jurisdiction clause in The Sinar Mas While it is clear that the word claim and the word dispute are different what each word means must depend on its context For example in the clause any claim shall be settled direct with the carriers in Poland according to the Polish law to the exclusion of proceedings in the courts of any other country in The Adolf Warski the word claim would surely include dispute 25 We would observe that the result reached in The Sinar Mas would also have been the same even if the court were to have held that the clause was an exclusive jurisdiction clause This is because as the judge there noted the clause could not be invoked in the circumstances of the case The contention there was that the action should have been filed in the Kuching High Court instead of the Kuala Lumpur High Court The judge effectively ruled there was no difference He said at 279 The carriage by sea was from Penang to Kuching Both ports are in Malaysia The High Courts in Borneo and States of Malaya have similar jurisdiction and adopt the same admiralty practice I am inclined to the view that a jurisdiction or forum clause does not apply to a litigation commenced in another court of similar jurisdiction and situated in the same country as the court envisaged by the parties to the contract 26 Another case which has been referred to by the parties is Oriental Insurance Co Ltd v Bhavani Stores Pte Ltd 1998 1 SLR 253 a decision of this court We do not think this case is helpful either There two adjacent clauses in an insurance policy read Claims are payable in India or Singapore in US dollars and In the event of loss or damages which may involve a claim under this insurance immediate notice thereof and application for survey should be given to agents in India The court rejected the suggestion that the first clause amounted to a jurisdiction clause The wording there is clearly different from that in the first sentence of our cl 17 Moreover in relation to an insurance claim notification to the insurer is a standard feature to enable the insurer to conduct investigations While we recognise that it is just as important for a carrier to conduct investigation into a claim for loss or damage to cargo there is no compelling reason why the carrier must be notified at the port of delivery 27 Another case Golden Shore relied upon is The Media 1931 41 Ll L Rep 80 where the clause read All claims arising under this bill of lading shall be determined at the port of destination of the goods according to British law or at the shipowners option they shall be determined in the UK and to the exclusion of the jurisdiction of any other country There was no dispute in the case that that was an exclusive jurisdiction clause with only one exception that the shipowner would have the option to have any dispute determined in the UK What is of interest about the clause is that its first half is similar to the first sentence of cl 17 in the present case However we recognise the last limb of the clause in The Media removed any possible doubt that it was a jurisdiction clause Our opinion 28 Though the clauses in Maharani and The Media are not identical with cl 17 as there is no reference in cl 17 itself to governing law or the exclusion of the jurisdiction of another country they are similar in significant respects In both Maharani and The Media the word claims was effectively held to encompass suits or disputes A claim means a demand for something as due or an assertion of a right to something A claim can be manifested in various forms It can take the form of a letter or an action There is no reason why a claim in the form of an action or suit could not come within the meaning of the first sentence 29 Another word of importance in the first sentence is determination To suggest that the sentence only imports the concepts of notification and investigation is to ignore the plain words there and give no sense at all to it 30 Turning to the argument on the last sentence of the first paragraph of cl 17 where the word suit appeared we would say it reinforces the view that the scope of the first sentence is much wider than just notification and investigation At this juncture it may be instructive to see what the second and third sentences in the paragraph say The second sentence puts a cap as to the carrier s liability for loss or damage The third sentence deems the goods delivered in proper condition unless notification was given at the time of delivery or within three days if the loss or damage be not apparent We should think that with this sentence there would have been no need to have the first sentence if all that the first sentence means is to give notification The fourth sentence which is also the last sentence of the paragraph prescribes a limitation period of one year As the Judge rightly found the word suit was more appropriate in the context of that last sentence Indeed the second third and fourth sentences were adopted from cl 6 of the Hague Rules The three sentences either cap or qualify the liability of the carrier 31 As for cl 6 of the B L while it is true that there there is an express reference to adjudication by the Singapore courts what is of interest to note is that the clause also uses the word claims and in the context the word claims would encompass actions or disputes precisely the sort of meaning which UCO sought to place on the word claims in cl 17 32 Thus we agree with the trial judge that the word claims in the first sentence should be construed to include suits and in our opinion even disputes A claim which is not met becomes a dispute which would require determination We would reiterate that if the first sentence is only meant to provide for notification as contended by UCO why have it at all when the third sentence clearly provides for notification Moreover that contention would have disregarded the word determination Accordingly we hold that the first sentence is an exclusive jurisdiction clause Whether a stay should be ordered 33 It is settled law that where a party seeks to bring an action in a Singapore court in breach of an exclusive jurisdiction clause he must show exceptional circumstances amounting to strong cause why the court should exercise its discretion in his favour and assist him in breaching his promise to bring the action in the contractual forum see The Jian He 2000 1 SLR 8 The burden to show such strong cause obviously rests with the plaintiff because prima facie he should be held to his contractual commitment The factors which a court will take into account in determining whether there is a strong cause were elaborated in The El Amria 1981 2 Lloyd s Rep 119 and adopted by this court in Amerco Timbers Pte Ltd v Chatsworth Timber Corporation Pte Ltd 1975 1977 SLR 258 They are a In what country the evidence on the issues of fact is situated or more readily available and the effect of that on the relative convenience and expense of trial as between the Singapore and foreign courts b Whether the law of the foreign court applies and if so whether it differs from Singapore law in any material respects c With what country either party is connected and if so how closely d Whether the defendants genuinely desire trial in the foreign country or are only seeking procedural advantages e Whether the plaintiffs would be prejudiced by having to sue in the foreign court because they would i be deprived of security for their claim ii be unable to enforce any judgment obtained iii be faced with a time bar not applicable here or iv for political racial religious or other reasons be unlikely to get a fair trial 34 The burden here is more than just establishing that Singapore is the more convenient forum to hear the case The principles applicable to a case involving an exclusive jurisdiction clause are different from those applicable to determining forum non conveniens see Citi March Ltd v Neptune Orient Lines Ltd 1997 1 Lloyd s Rep 72 at 76 per Colman J As this court noted in The Vishva Apurva 1992 2 SLR 175 at 182 In a case involving an exclusive jurisdiction clause the discretion of the court should not be exercised just by balancing the conveniences 35 In this case the factors which the judge took into account in coming to his conclusion that there is strong cause for refusing a stay are a that both parties were more closely connected with Singapore b that Singapore law is the governing law under the B L c that in respect of the main issue as to whether UCO had consented or acquiesced in the switching of the B L such as to preclude them from relying on the original bills the evidence is primarily to be found in Singapore and d that Golden Shore did not genuinely desire trial in India We should add that another factor which the judge had considered but ruled that it is neutral is the fact that the action has become time barred in India 36 Golden Shore in reliance on inter alia British Aerospace plc v Dee Howard Co 1993 1 Lloyd s Rep 368 Import Export Metro Ltd v Compania Sud Americana de Vapores SA 2003 1 Lloyd s Rep 405 and Ace v Zurich Insurance 2001 1 Lloyd s Rep 618 argued that many of the factors considered by the judge relating to matters of convenience should not carry much weight as they are not exceptional indeed they were all foreseeable Here counsel for Golden Shore relied upon the words of Rix LJ in Ace at 630 If a party agrees to submit to the jurisdiction of the courts of a state it does not easily lie in its mouth to complain that it is inconvenient to conduct its litigation there 37 Golden Shore also submitted that there was no basis for the judge to hold that it has no genuine desire for a trial in India It has raised several defences to UCO s claim among which is the Defence that UCO consented or acquiesced to the switching of the original bills Our analysis 38 As far as the first and second factors mentioned in 35 above are concerned namely that the parties are more connected with Singapore and the governing law of the B L was Singapore law while these two factors would favour a trial in Singapore we recognise that they are not exceptional matters Accordingly the weight to be given to these two factors would have to be limited as they were known to the parties at the time of the contract and notwithstanding such knowledge they had nevertheless provided in the B L that the contractual forum should be India 39 As regards the third factor it is on balance true that the evidence relating to the main Defence of consent is to be found more in Singapore We note that physically two witnesses will be in India One is Mr S Srinivasan UCO s then Manager for Credit Sanction who is now there But UCO have undertaken to bring him to Singapore for the trial So Mr Srinivasan must effectively be treated as being in Singapore The other is the Managing Director of SOM Sood who is now residing in India He dealt with UCO Golden Shore submitted that if the trial were to be held in Singapore it would not be able to compel Sood to attend the trial here But his evidence may still be obtainable in India pursuant to O 39 of the Rules of Court Cap 322 R 5 Of course the Judge did not think much of the importance of Sood as Golden Shore is not even able to indicate what evidence Sood will be able to give It
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having to sue in the foreign court because they would i be deprived of security for their claim ii be unable to enforce any judgment obtained iii be faced with a time bar not applicable here or iv for political racial religious or other reasons be unlikely to get a fair trial 17 These principles were approved and adopted by numerous subsequent English cases eg The El Amria 1981 2 Lloyd s Rep 119 as well as by this court in Amerco Timbers Pte Ltd v Chatsworth Timber Corp Pte Ltd 1975 1977 SLR 258 and other later cases In The Vishva Apurva 1992 2 SLR 175 this court further reiterated the point that where the case involved an exclusive jurisdiction clause the discretion of the court should not be exercised just by balancing the conveniences Thus in dealing with this question the court should not approach it as if it were dealing with a case of forum non conveniens 18 In more recent years this court had in a trilogy of cases namely The Jian He 2000 1 SLR 8 The Hung Vuong 2 2001 3 SLR 146 and Golden Shore Transportation Pte Ltd v UCO Bank 2004 1 SLR 6 the occasion to determine how the test for a stay should be applied where there was effectively no defence to the claim 19 In The Jian He goods carried on board the vessel were wrongly delivered against a false bill of lading On 24 July 1996 the carrier was unable to deliver the goods to the rightful consignee There was an exclusive jurisdiction clause in favour of China in the bill of lading On 14 June 1997 the plaintiff instituted an action in rem It was amended on 17 July 1997 and the amended writ was served on the defendant owner on 28 August 1997 Appearance was filed the next day A year later the plaintiff applied for summary judgment The hearing of the application was twice postponed The defendant had yet to file their show cause affidavits It was only on 4 November 1998 that the defendant applied to stay all further proceedings in Singapore on the ground that there was an exclusive jurisdiction clause China had a limitation period of one year and it was then too late for the plaintiff to commence any action there The critical point which made this court decide to refuse a stay was that the defendant had no real defence to the claim and there was nothing to proceed to trial in China Following from that it held that the defendant was not really interested in a trial but was only seeking a procedural advantage as limitation had set in in China 20 In The Hung Vuong 2 a cargo of raw sugar was shipped on board The Hung Vuong 3 from Bangkok to be discharged at the main port of South China The carrier eventually delivered the cargo to a party who did not present the bill of lading The holder of the bill sued in Singapore The carrier applied to have the proceedings stayed on the ground of an exclusive jurisdiction clause It would appear that at the time limitation had not yet set in in Vietnam Again this court having ruled that there was no defence to the claim refused a stay which would only result in unnecessary delay 21 In Golden Shore Transportation Pte Ltd v UCO Bank see 18 supra it was a case of the shipowner issuing a second set of bills of lading without ensuring that the original set of bills of lading was returned The person holding the second set of bills of lading used it to obtain the cargo The original set was with the plaintiff which sued in Singapore for its loss The plaintiff did not issue a protective writ in the contractual forum ie India and the time bar had set in in that forum This notwithstanding as there was no real defence to the claim and all factors favoured an action in Singapore except for the time bar defence which had arisen in India the High Court refused a stay of the Singapore proceedings This decision was upheld on appeal by this court With reference to the time bar defence having arisen in the contractual forum it said at 52 In a case where the plaintiff could satisfactorily explain why he did not institute a protective writ in the contractual forum this factor would assist the plaintiff in establishing strong cause But if he could not this factor would not assist him However this did not mean that the plaintiff could not rely on other factors to show strong cause As for the defendant where the plaintiff could not explain the failure to institute a protective writ within time in the contractual forum the benefit to the defendant would be that the plaintiff could not rely on it Our consideration 22 It was settled law that in refusing a stay of proceedings the judge was exercising a discretion and unless it was shown that the judge had wrongly applied the law or had wrongly appreciated the facts or that her decision was plainly wrong the appellate court should not interfere in the exercise of his or her discretion see The Vishva Apurva see 17 supra at 16 23 It was clear to us that the judge had not erred in any manner She correctly set out the principle which should apply in a case of this nature ie exceptional circumstances amounting to strong cause She also held that the burden of showing such strong cause rested with the party who sought to have the action continued in Singapore Having considered the facts which I have outlined above including the following a the fact that the reefer container was not maintained at the prescribed temperature of 3 C during the journey from Shenzhen to Hong Kong as shown by the Partlow chart b the fact that on the documents
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Tjong Very Sumito and Others v Antig Investments Pte Ltd[2009] 4 SLR 732; [2009] SGCA 41
not to displace the arbitral process 30 As an aside it should be remembered that the domestic arbitration regime in Singapore is premised on somewhat different policy considerations from that currently applicable in the United Kingdom Redfern and Hunter at para 1 51 commenting on the position in the United Kingdom note In purely domestic disputes the question of whether to arbitrate or to litigate may be finely balanced In the final analysis much may depend upon the circumstances of each particular case and the reputation and procedures of the local courts However where the question arises in an international transaction the balance comes down very firmly in favour of arbitration In a domestic context parties who are looking for a binding decision on a dispute will usually have an effective choice between a national court and national arbitration 31 In England however there is no distinction between international and domestic arbitrations a stay is mandatory in both instances Merkin 24 supra explains at para 8 3 that this distinction was abolished as a dramatic solution to the problem raised by Art 12 of the European Community Treaty which outlaws any conduct by a member state which discriminates between nationals of member states on the ground of their nationality There is no such prohibition in Singapore and the regimes for international and domestic arbitrations remain bifurcated and are governed by distinct statutory regimes Given the different underlying philosophies between the domestic and international statutory frameworks in Singapore the courts here do have a somewhat wider role and broader judicial latitude in domestic arbitration though even this is to be exercised in a guarded manner see Soh Beng Tee Co Pte Ltd v Fairmount Development Pte Ltd 2007 3 SLR 86 32 Having sketched the contextual background in which the present appeal must be viewed we now turn to examine more closely the law on what constitutes a dispute for the purposes of arbitration agreements in relation to s 6 of the IAA What constitutes a dispute 33 We have found one of the most helpful suggested approaches in construing how the word dispute and its legal cousins ought to be interpreted in Michael J Mustill and Stewart C Boyd The Law and Practice of Commercial Arbitration in England Butterworths 2nd Ed 1989 Mustill and Boyd at p 118 119 General words such as these confer the widest possible jurisdiction They must however be construed by reference to the subject matter of the contract in which they are included Thus the inclusion in a mercantile contract of an arbitration clause in general terms would not endow the arbitrator with jurisdiction over disputes between the parties concerning say personal injuries caused by one to the other or over allegations of libel Nor would a clause in a partnership agreement referring differences or disputes to arbitration cover a quarrel about a horse race But it would for example if included in a contract of carriage embrace claims for damage to the goods even if framed in tort It would also embrace all contractual remedies apart from those which sought to impeach the initial existence of the contract so that it would cover claims for damages arising from a repudiation or a deviation claims for rectification or avoidance on the ground of misrepresentation It would of course include issues of law as well as fact emphasis added 34 In a similar vein the learned author of Gary B Born International Commercial Arbitration Kluwer Law International 2009 Born notes at p 1093 that most national courts have in recent years sensibly adopted broad interpretations of the terms dispute difference and controversy emphasis added Merkin and Hjalmarsson 21 supra summarise the current position in Singapore as follows at pp 21 22 The general definition of dispute requires the making of a claim by one party and its rejection by the other Whether this has occurred in the course of lengthy correspondence and negotiation between the parties is not always immediately obvious The making of a formal claim with a time limit for response is perhaps the simplest method of requiring the other party to define his position but even if this approach is not used a failure by the other party to respond to a claim does not necessarily deny the existence of a dispute particularly where there are clear unresolved disagreements following the conclusion of negotiations A dispute may also be found to arise even though negotiations are still in progress at least where it is clear that these are being protracted in an attempt to forestall proceedings By contrast there is no dispute if a response to the claim is under consideration if the issues are purely hypothetical or arise between the parties and a third party who is not subject to the arbitration clause In Dalian Hualiang Enterprise Group Co Ltd v Louis Dreyfus Asia Pte Ltd it was said that where a defendant refuses to pay or to admit a debt or remains silent because he has no money to pay or simply because he is intransigent there would be no dispute although it would be different if the defendant made a positive assertion that he was disputing the claim in which case there would be a dispute even though it could be easily demonstrated that he was wrong The quality of the defence is not therefore an issue which can be assessed by a court where there is an arbitration clause and accordingly the court cannot give summary judgment even though the outcome of the case is all but inevitable but must stay its proceedings where the matter is arguable so that the arbitrators can resolve the issue between the parties 35 Citing inter alia The Dai Yun Shan 1992 2 SLR 508 Dai Yun Shan Coop International Pte Ltd v Ebel SA 1998 3 SLR 670 and Dalian Merkin and Hjalmarsson conclude at p 21 that The position in both England and Singapore is that a stay must be ordered unless the arbitration agreement is null and void inoperative or incapable of being performed the question of whether there is a dispute being redundant emphasis added At p 22 they add that an admission by a defendant would generally speaking be contrary to a finding of a dispute but not every admission would necessarily avoid a stay order We agree with the contents of this useful summary and shall elaborate on our reasons for this below Further we shall also attempt to iron over some creases that have now become apparent 36 Woo J in Dalian 15 supra at 39 40 helpfully quoted at length the judgment of Swinton Thomas LJ in Halki 17 supra at 754 756 and 761 763 which had set out the legislative history leading to s 9 4 of the English Arbitration Act 1996 c 23 which we will not reproduce here see also Merkin 24 supra at paras 8 35 8 42 2 It would suffice for the present discussion for us to point out that the English Arbitration Acts of 1950 c 27 and 1975 c 3 directed the court to stay proceedings unless satisfied that the arbitration agreement is null and void inoperable or incapable of being performed or that there is not in fact any dispute between the parties with regard to the matter agreed to be referred emphasis added The phrase or that there is not in fact any dispute between the parties with regard to the matter agreed to be referred was deliberately omitted from s 9 4 of the English Arbitration Act 1996 c 23 with the result being that the grounds for refusing a stay under this section are identical to those in s 6 2 of the IAA Merkin summarises the effect of Halki thus 24 supra at para 8 42 1 The effect of Halki Shipping Corporation v Sopex Oils Ltd is to give the term dispute a wide meaning Assuming that there has been a proper claim Halki Shipping decides that if the defendant contests liability then whether or not he has an arguable case on the merits for doing so there is a dispute and the court must stay its own proceedings as the existence or otherwise of a valid defence is a matter for the arbitrators More complex is the question whether there can be a dispute where there is an admission of liability by the defendant and the defendant has simply refused to make payment Prior to the passing of the Arbitration Act 1996 it had been held that where there had been such an admission the claimant was entitled to summary judgment under what is now Part 24 of the CPR 1998 irrespective of the existence of the arbitration clause However it was unclear whether this was so because there was no dispute between the parties and thus nothing to refer to arbitration or because an admission of liability did not prevent a dispute between the parties from arising but in the circumstances the court would refuse to stay its proceedings There is a conflict of authority on the question whether an admission of liability removes the possibility of a dispute and thereby entitles the claimant to summary judgment or whether the claimant is required to enforce the claim through arbitration In some cases the view was taken that an arbitrable dispute remained whereas in others a distinction was drawn between the case in which the defendant contested the correctness of a proposition even though he was objectively wrong and the case in which a person accepted that he was wrong but refused to accept the consequences Post 1996 authority is however more clearly in favour of the need to arbitrate where liability is admitted At first instance in Halki Shipping Clarke LJ stated that even in the case of admitted liability there should be reference to arbitration I can see an argument for saying that the claimant would be entitled to an award if the respondent then refused to pay The Court of Appeal in Halki Shipping did not comment specifically on this view Clarke LJ further noted at first instance in Halki that the argument that if there is no dispute then the arbitrators have no jurisdiction over the matter so that only the court could deal with this situation was an approach inconsistent with long established arbitration practice It might also be commented that in cases decided under the Model Law it has been assumed that an admission of liability prevents any dispute from arising emphasis added 37 Merkin cites at para 8 42 1 inter alia Getwick Engineers Limited v Pilecon Engineering Limited 2002 1020 HKCU 1 Getwick as an example of cases decided under the Model Law where it has been assumed that an admission of liability prevents any dispute from arising We will address this case as well as the significance and effect of an admission at 56 59 below Before we do so we shall examine more closely Woo J s opinion in Dalian 38 In Dalian the first plaintiff DHE entered into a contract the Armonikos contract with the defendant LD DHE then assigned it to the second plaintiff DJOM DHE and DJOM sued LD for sums payable under the Armonikos contract pointing to an admission by a member of LD s China office LD had also admitted in its own statement of account that the sums claimed were payable see Dalian 15 supra at 14 LD applied for a stay of proceedings in favour of arbitration relying on the arbitration agreement in the Armonikos contract LD also argued that it had a right of set off against another company Fuhong under a different contract the Hanjin Tacoma contract alleging that Fuhong had a running account with DHE and DJOM Woo J s decision to refuse a stay boiled down to his finding at 30 that T here was an admission that the sums claimed under the Armonikos contract would be due and payable but for the claim under the Hanjin Tacoma contract The disputes under the Hanjin Tacoma contract were separate and distinct from the Armonikos contract Furthermore neither DHE nor DJOM was a party to the Hanjin Tacoma contract While it was true that the sums claimed by the plaintiffs were payable under the Armonikos contract the allegation about the running account arose only because of LD s claim under the Hanjin Tacoma contract Furthermore the issue as to whether there was a running account or not was in my view unrelated to the very transaction under the Armonikos contract Indeed LD s submission was simply that the defence of a running account undoubtedly falls within the scope of the arbitration agreement This was a bald argument In my view it was clear that the set off issue was not the subject of the arbitration agreement In the circumstances I allowed the appeal The appeal against Woo J s decision was heard and dismissed by the Court of Appeal on 27 January 2006 However no grounds of decision were given by this court 39 Woo J in allowing the appeal made to him observed that the jurisdiction of the court under s 6 2 IAA became academic Dalian at 31 Nevertheless Woo J in an in depth forensic analysis carefully examined the jurisprudence on the circumstances in which the court must order a stay of proceedings in favour of arbitration He first noted that the mandatory stay under s 6 2 of the IAA was different from its discretionary counterpart also numbered s 6 2 in the domestic Arbitration Act Cap 10 2002 Rev Ed AA and made the following important observations Dalian at 75 77 As regards s 6 2 IAA I am of the view that once there is a dispute a stay must be ordered unless the arbitration agreement is null and void inoperative or incapable of being performed The court is not to consider if there is in fact a dispute or whether there is a genuine dispute The more difficult question is when it can be said that a dispute exists For example is there a dispute when the defendant simply refuses to pay or to admit the claim or remains silent Although there have been statements that suggest that such conduct is sufficient to constitute a dispute I do not share that view A defendant may refuse to pay or to admit a debt or remain silent because he has no money to pay or simply because he is intransigent To my mind that is not a dispute It is different if the defendant at least makes a positive assertion that he is disputing the claim If he is prepared to and does assert that then there is a dispute even though it can be easily demonstrated that he is wrong However an admission by a defendant will generally speaking be contrary to a dispute but not every admission will necessarily avoid a stay order The above approach is not inconsistent with the concept of minimal court involvement which is the regime under the IAA and the Model Law It also seems to me that s 6 2 IAA could have been drafted in terms adopting the previous s 7 2 of the domestic arbitration legislation before s 6 2 of the Singapore domestic Arbitration Act was enacted if the intention was to allow the court to consider whether there is in fact a dispute In my view the difference in the wording of s 6 2 IAA and the previous s 7 2 of the domestic arbitration legislation is meant to reflect the difference as enunciated by Swinton Thomas LJ in Halki although the legislative history behind the enactment of s 9 4 of the English Arbitration Act 1996 is not exactly the same as that behind the enactment of s 6 2 IAA emphasis added 40 It is clear that the positions in Dalian and Halki are in accord in so far as the merits of the dispute are irrelevant to the existence of a dispute Where these two cases diverge is in relation to the effect of a defendant s admission or silence and whether the former should be inferred from the latter 41 Before we address this legal fork it would be helpful to consider the rationale for the common holding in Dalian and Halki bearing in mind that counsel for the appellants would have this court revert to the pre 1996 English position of considering whether there was in fact a dispute or a bona fide or genuine dispute This brief overview will also equip us to address the current live controversy in relation to the significance of a defendant s admission or silence 42 The common holding in Dalian and Halki is best explained with reference to the conceptual basis of judicial non intervention in arbitration stemming from the principle of party autonomy over dispute resolution particularly in commercial contracts see 30 above Redfern and Hunter 29 supra at para 1 36 concisely sum up the tension between the efficient disposal of seemingly indefensible claims and the rigorous and scrupulous enforcement of agreements to arbitrate The problem arises when one party has what it regards as an open and shut case to which there is no real defence For example a party who is faced with an unpaid cheque or bill of exchange may take the view that there cannot be any genuine dispute about liability and that if legal action has to be taken to collect the money which is due he or she should be entitled to go to court and ask for summary judgment Such a claim may be met however by the argument that there was an arbitration clause in the underlying agreement with the debtor and that the remedy is accordingly to go to arbitration rather than to the courts The problem is that in the time it may take to establish an arbitral tribunal a judge with summary powers could well have disposed of the case The expedient adopted in certain countries including England when legislating for the enactment of the New York Convention was to add words that were not in that Convention so as to allow the court to deal with the case if the judge was satisfied that there is not in fact any dispute between the parties with regard to the matter agreed to be referred Thus it was possible to avoid a reference to arbitration and to obtain summary judgment if the court was satisfied that there was no arguable defence English law has now followed the strict wording of the New York Convention It can no longer be argued in England that there is not a genuine dispute so that the matter should not be referred to arbitration but such an argument may still remain sustainable in other countries emphasis in original in italics emphasis added in bold italics 43 One ready and persuasive reply to those inclined to press for concurrent court jurisdiction may be found in Lord Saville s The Denning Lecture 1995 Arbitration and the Courts at p 13 quoted in Redfern and Hunter at p 20 note 97 The action of the Courts in refusing to stay proceedings where the defendant has no defence is understandable It is however an encroachment on the principle of party autonomy which I find difficult to justify If the parties have agreed to arbitrate their disputes why should a Court ignore that bargain merely because with hindsight one party realises that he might be able to enforce his rights faster if he goes to Court 44 This extract echoed the essence of Lord Saville s earlier more comprehensive but no less forceful reasoning sitting as a High Court judge in Hayter v Nelson Home Insurance Co 1990 2 Lloyd s Rep 265 Hayter cited in Dalian 15 supra at 64 Hayter should however be read with the caveat highlighted by Woo J in Dalian at 61 that the decision was made under the pre 1996 English Arbitration Act It was observed at 267 269 In some cases the suggestion seems to be made that if it can be shown that a claim under a contract is indisputable i e a claim that simply cannot be resisted on either the facts or the law then there is no dispute or difference within the meaning of the arbitration clause in that contract To the extent that such observations are intended to define what is or is not a dispute or difference within the meaning of an arbitration clause of the kind under consideration I am respectfully unable to agree with them more importantly they seem to me to be in conflict with the decision of the Court of Appeal in Ellerine Brothers Pty Ltd v Klinger 1982 1 W L R 1375 In my view to treat the word disputes or the word differences in the context of an ordinary arbitration clause as bearing such a meaning leads not only to absurdity but also involves giving those words a meaning which though doubtless one the words are capable of bearing in context is difficult to support The proposition must be that if a claim is indisputable then it cannot form the subject of a dispute or difference within the meaning of an arbitration clause If this is so then it must follow that a claimant cannot refer an indisputable claim to arbitration under such a clause and that an arbitrator purporting to make an award in favour of a claimant advancing an indisputable claim would have no jurisdiction to do so It must further follow that a claim to which there is an indisputably good defence cannot be validly referred to arbitration since on the same reasoning there would again be no issue or difference referable to arbitration To my mind such propositions have only to be stated to be rejected as indeed they were rejected by Mr Justice Kerr as he then was in The M Eregli 1981 2 Lloyd s Rep 169 in terms approved by Lord Justices Templeman and Fox in Ellerine v Klinger sup As Lord Justice Templeman put it at p 1383 There is a dispute until the defendant admits that the sum is due and payable In my judgment in this context neither the word disputes nor the word differences is confined to cases where it cannot then and there be determined whether one party or the other is in the right Two men have an argument over who won the University Boat Race in a particular year In ordinary language they have a dispute over whether it was Oxford or Cambridge The fact that it can be easily and immediately demonstrated beyond any doubt that the one is right and the other is wrong does not and cannot mean that that dispute did not in fact exist Because one man can be said to be indisputably right and the other indisputably wrong does not in my view entail that there was therefore never any dispute between them In my view this ordinary meaning of the word dispute or the word differences should be given to those words in arbitration clauses It is sometimes suggested that since arbitrations provide great scope for a defendant to delay paying sums which are indisputably due the Court should endeavour to avoid that consequence by construing these words in arbitration clauses so as to exclude all such cases but to my mind there are at least three answers to such suggestions In the first place the assumption is made that arbitrations are necessarily slow processes but whatever the position in the past I cannot accept that as a general or universal truth today As Mr Justice Robert Goff as he then was pointed out in The Kostas Melas 1981 1 Lloyds s Rep 18 arbitrators have ways and means in particular by making interim awards of proceeding as quickly as the Courts indeed in that particular case quicker than any Court could have acted If a claimant can persuade the arbitral tribunal that in truth there is no defence to his claim ex hypothesi not on the face of it a difficult task if the claim is truly indisputable then there is no good reason why that tribunal cannot resolve the dispute in his favour without any delay at all In the second place and perhaps more importantly it must not be forgotten that by their arbitration clause the parties have made an agreement that in place of the Courts their disputes should be resolved by a private tribunal Even assuming that this tribunal is likely to be slower or otherwise less efficient than the Courts that bargain remains and I know of no general principle of English law to suggest that because a bargain afterwards appears to provide a less satisfactory outcome to one party than would have been the case had it not been made or had it been made differently that bargain can be simply put on one side and ignored In the third place if the Courts are to decide whether or not a claim is disputable they are doing precisely what the parties have agreed should be done by the private tribunal An arbitrator s very function is to decide whether or not there is a good defence to the claimant s claims in other words whether or not the claim is in truth indisputable Again to my mind whatever the position in the past when the Courts tended to view arbitration clauses as tending to oust their jurisdiction the modern view in line with the basic principles of the English law of freedom of contract and indeed International Conventions is that there is no good reason why the Courts should strive to take matters out of the hands of the tribunal into which the parties have by agreement undertaken to place them emphasis added 45 While in an open and shut case the first of Saville J s answers might not invariably hold true especially where as here three arbitrators must first be appointed to constitute the tribunal the second and third answers present a principled sound basis which require parties to be firmly held to their arbitration agreement despite any practical difficulties or possibly the higher expenses of instituting an arbitral tribunal even where the arbitration agreement calls for more than one arbitrator or arbitrator s with particular expertise The parties must be held to their original bargain in the absence of a compelling legal basis allowing one of them to unilaterally rewrite their agreement to arbitrate We do not therefore share Hirst LJ s scepticism as articulated in his dissenting opinion in Halki 17 supra at 742 743 with regard to the second and third reasons T he fact that by their arbitration clause the parties have made an agreement that their dispute should be resolved by a private tribunal is manifestly a very important consideration and was echoed by Lord Mustill in Channel Tunnel Group Ltd v Balfour Beatty Construction Ltd 1993 A C 334 356 but that did not prevent him from endorsing the value of the Order 14 procedure while saying that it should be limited to cases where the defendant is not really raising a dispute at all emphasis added to a word which I interpret as equivalent to seriously or genuinely Saville J s third answer was that the court should not be doing what the parties have agreed should be done by the private tribunal in deciding whether or not the claim is disputable That is another way of saying that there should not be parallel jurisdictions which as I have already noted has been hitherto regarded as permissible and indeed valuable emphasis in original 46 We need only say that these inchoate responses to Saville J s reasons undermine parties freely agreed arbitration clauses and are contrary to established and fundamental principles of contract law as well as the practice of international commercial arbitration Having considered the development of the post 1996 position that a merely asserted dispute suffices to warrant a stay of court proceedings without any inquiry into the genuineness or merits of the defence we unhesitatingly endorse the judge s application of this approach from Dalian and Halki However it must be noted that the question of whether there is a dispute is not entirely redundant even when it can be shown that there has been an admission We will examine this issue after disposing of the appellants arguments on the first point Whether there was a dispute controversy or conflict 47 The error of the appellants characterisation of the issue and the applicable legal principles should now be patently obvious The appellants had boldly framed the issue and the applicable principles in their case in the following way There is only one issue and it is this is there a dispute at law arising from the SPA referable to arbitration There can be no dispute to the principle of law that the Court decides whether there is a dispute in fact arising The adjudication process is judicial in the sense that the Court reviews the material and decides whether there is a bona fide dispute or the invocation is one raised to avoid a clear case for judgment The appellants sheet anchor was that a mere positive assertion by a defendant denying the claim was insufficient to give rise to a dispute According to the appellants there was a distinction between a defendant merely asserting a dispute and the court adjudicating as to whether there was in fact a dispute To take disputes at face value based on the conduct of the defendant would be to allow any defendant to obtain a stay simply by saying baldly I dispute the claim The appellants submitted instead that The principle of law is that there must be a dispute Asserting a dispute and the adjudication by the Court as to whether there is in fact a dispute are not synonymous Further the appellants submitted there was no dispute in the present case because the respondent had accepted a the validity of the SPA b that payment of the US 3 7m was due on 13 June 2008 c that there could be no variation of the SPA without the written consent of the parties and d that Aventi was not a party to the SPA 48 The appellants variously referred to a dispute in fact or at law or a bona fide dispute citing dated cases such as Baltimar Aps Ltd v Nalder Biddle Ltd 1994 3 NZLR 129 Baltimar Aps Dalian 15 supra Uni Navigation Pte Ltd v Wei Loong Shipping Pte Ltd 1993 1 SLR 876 Uni Navigation Kwan Im Tong Chinese Temple v Fong Choon Hung Construction Pte Ltd 1998 2 SLR 137 Kwan Im Tong and The Jian He 2000 1 SLR 8 Jian He as authority for what is considered a dispute at law and how the Court sifts the material to ensure that a Defendant who has no bona fide dispute does not abuse the process of Court to stay proceedings when he is aware that he has no defence to the claim However the appellants could not when pressed credibly explain how even these cases supported their assertion We noted that Uni Navigation and Kwan Im Tong were cases falling within the ambit of the AA not the IAA while Jian He involved a stay of proceedings on the ground of an exclusive jurisdiction clause not a stay in favour of arbitration As such these cases were of limited relevance to the present appeal The appellants placed particular reliance on the following passage from the case of Baltimar Aps at 135 There may be a case for intervention if the party seeking the arbitration is acting in bad faith and thereby abusing the Court s process by applying for a stay but there is no suggestion of that here Resort to arbitration in respect of a mere refusal to pay an amount indisputably due can amount to such an abuse However as the respondent rightly pointed out in Baltimar Aps summary judgment was set aside and a stay of court proceedings was granted More importantly the New Zealand court declined to adopt the pre 1996 English position and instead endorsed Mustill and Boyd s 33 supra strong criticism of the English courts delving into the reality of the dispute as a result of the Report of the Committee on the Law of Arbitration Cmd 2817 1927 MacKinnon Report Like Woo J who euphemistically described the cited paragraph from Baltimar Aps as rather interesting see Dalian at 59 we too would not set too much store by this reference to bad faith 49 The short answer to these arguments and to the crux of the present appeal is that it is sufficient for a defendant to simply assert that he disputes or denies the claim in order to obtain a stay of proceedings in favour of arbitration This much is amply clear from Woo J s decision in Dalian where he undertook a thorough survey of the English cases including the case of Halki 17 supra where it was held that at least after the amendments to s 9 of the English Arbitration Act 1996 c 23 the court is not to examine whether there is in fact a dispute or a genuine dispute This point is well illustrated by Saville J s famous example of the argument over who won the University Boat Race see above at 44 A dispute that a claimant was always likely to succeed in remains until adjudicated on none the less a dispute 50 Furthermore the language of the arbitration agreement in the SPA extended beyond disputes to include controversies and conflicts While controversies may be practically synonymous with disputes the addition of these two terms in the arbitration agreement obviously affirms a broad intention to refer all manner of contentious matters to arbitration The ordinary meaning of both dispute and conflict overlap here and must include any sort of disagreement We should also add for completeness that the phrase arsing out of or in connection with that appears in the subject clause has a wide ambit that extends to all manner of issues that have a relationship with the SPA A generous interpretation should be given to such a phrase see Mustill and Boyd 33 supra at p 119 and Sabah Shipyard Pakistan Ltd v Government of the Islamic Republic of Pakistan 2004 3 SLR 184 at 14 As a matter of principle general words such as those mentioned above should be generously interpreted when they appear in arbitration agreements In this regard Born 34 supra notes at p 1092 Most arbitration clauses provide for arbitration of all disputes or differences while some clauses also or instead refer to claims or controversies These formulations encompass any sort of disagreement dispute difference or claim that may be asserted in arbitral proceedings emphasis added 51 The issues that were being contested in the present case were plain to us We agreed with the judge that there was a dispute indeed likely several disputes and that the respondent s positive assertion challenging the appellants claim warranted a stay of proceedings in favour of arbitration While the respondent s silence prior to the issuance of the writ might have been equivocal the matter clearly morphed into a dispute when DLA Piper wrote to the appellants averring that their suit was without merit and misconceived The AR s decision was erroneous in that the fact alone that the respondent was making assertions to the effect that it had discharged its obligations was a dispute controversy or conflict which should properly be resolved by arbitration When a stay of court proceedings will not be granted 52 Before we examine the significance of
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Kuo Fen Ching and Another v Dauphin Offshore Engineering &amp; Trading Pte Ltd[1999] 3 SLR 721; [1999] SGCA 95
present in court 8 However the judge decided to proceed as if Valour NV had indeed been dissolved on 20 September 1995 As the law of the Netherland Antilles was not pleaded before him S Rajendran J assumed that the foreign law was the same as the local law relating to the position of proceedings against a company in the process of being wound up or which had been wound up The learned judge found as a fact that in the present case the respondents as repairers had a possessory lien over the vessel for their unpaid charges In addition the arrest of the vessel which was done before Valour NV was wound up created a statutory lien in favour of the respondents on the vessel This meant that the respondents could assert against all the world that the vessel was a security for their claim As such this was a case which was suitable for leave for the proceedings to continue under s 262 3 of the Companies Act Cap 50 to be granted 9 In coming to his decision S Rajendran J relied largely on Lim Bok Lai v Selco Singapore Pte Ltd 1987 SLR 423 1987 2 MLJ 688 Lai Kew Chai J granted the plaintiffs in this case the requisite leave to continue proceedings under s 262 3 of the Companies Act He said that the issue of a writ in rem in exercise of the statutory right of action had crucial consequences which enured to the benefit of the plaintiffs and made them secured creditors This was a substantial factor influencing him to exercise his discretion to allow them to proceed with their claim against the defendants Similar comments in The Hull 308 1991 SLR 304 1991 3 MLJ 393 and Re Aro Co Ltd 1980 Ch 196 also led the judge to reach his decision to allow the continuation of the present proceedings 10 The judge was of the view that Lazard Brothers Co v Midland Bank Ltd 1933 AC 289 was not applicable to the facts of the present case as it did not concern an admiralty action in rem Furthermore it was a case where at the time the writ was issued the defendant was already non existent In this case Valour NV was in existence at the time of issue of the writ As such the judge granted the respondents their claim for the amount due for the repairs done on the vessel The appeal 11 The appellants submitted that the learned judge erred in allowing judgment in rem to be entered for the respondents claim for four reasons Their main ground of appeal was that the judge had erred in concluding that judgments in rem could be entered notwithstanding the fact that the defendant company had been dissolved This was based on the authorities of Lazard Brothers Co v Midland Bank Ltd The appellants argued that once a company is dissolved no judgment can be entered against it and the dissolution must be first set aside in order for proceedings to continue 12 The appellants further submitted that the judge had no jurisdiction to exercise his discretion under s 262 3 of the Companies Act as the defendant company was a company incorporated in the Netherlands Antilles and was dissolved there As such the Singapore court has no jurisdiction under Part X of the Companies Act in which s 262 3 is found in respect of it as the corporation was not wound up under Part X 13 Finally the appellants argued that the judge was not correct in holding that there was insufficient evidence that Valour NV had been dissolved in the Netherlands Antilles in spite of the declaration from the Curacao Commercial Registry Preliminary issue 14 Before discussing the main crux of the appeal the appellants contentions regarding the judge s finding that there was insufficient evidence to suggest that the defendants had been dissolved must be dealt with This contention was easily rejected by the fact that the judge while making the above comment did not actually base his decision on it In fact he proceeded on the basis that Valour NV had indeed been dissolved In this event the notice of motion filed by the appellants to adduce as fresh evidence an affidavit purporting to prove that Valour NV had indeed been wound up was dismissed as this fact had not affected the judge s decision in any way The nature of an admiralty action in rem 15 We now turn to the appellants main ground of appeal They asserted that in in rem proceedings the defendants are the shipowners whether an appearance is entered by them or not As such where no appearance is entered the enforcement of the judgment would be restricted to the res only However the person against whom judgment is entered still remains the owners of the res and not the res itself 16 There have been many cases in which both the nature of the in rem claim and what happens subsequently when the defendant enters an appearance to the action which turns it into an in personam claim as well have been discussed The most relevant comments can be found in The Kusu Island The Fierbinti 1994 3 SLR 864 The Dictator 1892 P 304 The Tervaete 1922 P 259 and the recent House of Lords case of The Indian Grace which reviewed most of the English authorities on this issue As such it would be appropriate to discuss the principles of law laid down in these cases 17 In The Kusu Island the issue of whether the owner of the res was the party to the action in rem arose Here there had been an unconditional appearance to the action by the defendant company yet there were submissions that in an action in rem the actual defendant is the res Wee Chong Jin CJ delivering the judgment on behalf of the Court of Appeal found that the authorities suggested that where a defendant enters an unconditional appearance to an admiralty action in rem he submits to the jurisdiction of the court personally and from then onwards the action continues as an action in rem and in personam That is if judgment is entered for the plaintiff and is not fully satisfied by the enforcement thereof against the res execution proceedings for the balance may be instituted against the defendant personally On the other hand Wee Chong Jin CJ went on to consider the English cases of The Parlement Belge 1880 5 PD 197 and The Cristina 1938 AC 485 which showed that while a defendant in an action in rem is as much impleaded as by an action in personam and the actual defendant is not the res but the owner of the res an action in rem is in its true sense against the res although the actual defendant is the owner of the vessel This principle was based on the decision of Fletcher Moulton LJ in The Burns Therefore where no appearance is entered by the defendant to such an action judgment when entered is enforceable only against the res and no more 18 In another local case of The Fierbinti 1994 3 SLR 864 the principles in The Kusu Island were reiterated At p 870 of the judgement LP Thean JA stated that An action in rem once commenced against the ship is an action against the ship itself and continues as such even though it may also be an action in personam against the owner thereof If the owner does not enter an appearance and the judgment is obtained the judgment is enforceable only against the ship and to the extent of the value of the ship If however the owner enters an appearance the action will continue as an action in rem against the ship and an action in personam against the owner and if judgment is obtained it is enforceable against the ship and also against the owner to the full extent of the judgment The tone of these two local cases seems to suggest that the appearance of the defendant does no more than to provide another source against whom the judgment can be satisfied in the case where the value of the ship is not sufficient to meet the plaintiff s claim The nature of the in rem action remains as one which is against the ship even though the defendants are the owners of the ship 19 We now turn to the English cases The Indian Grace being the most recent considered most of the older authorities on this issue This case concerned an action in rem and personam against the owners of the vessel for damage to cargo carried on board the vessel An in personam action was taken out against the defendants in India Subsequently an action in rem was brought in England Judgment was then entered against the defendants in India The defendants sought to strike out the proceedings on the ground that the action in England was barred by res judicata under s 34 of the Civil Jurisdictions and Judgments Act 1982 The House of Lords ordered the in rem proceedings in England to be struck out as the rationale of s 34 was that it was unjust to permit the same issue to be litigated afresh between the same parties As such it would be wrong to permit the action in rem to proceed despite a foreign judgment in personam obtained in the same cause of action 20 In this case the judge at first instance had concluded that the authorities showed that although an action in personam and an action in rem may involve the same cause of action historically they have been regarded as being between different parties The House of Lords thus found it necessary to examine the nature of the action in rem In doing so they relied heavily on the judgment in The Dictator which was followed and endorsed in another English Court of Appeal case of The Gemma 1899 P 285 They also remarked that Fletcher Moulton LJ s statement in The Burns did not reflect the reasoning of the other cases and the reasoning of the majority in that case As such following The Dictator and The Tervaete the House of Lords stated that the procedural theory of admiralty actions prevailed and revealed that in substance the owners of the vessels were the parties to an action in rem and exchewed the mystique of the personification theory which had previously regarded the ship as the wrongdoer The Law Lords chose not to comment on maritime liens which seemed to accrue independently of personal liability of the shipowner as the case at hand did not concern this subject 21 The House of Lords also discussed The Parlement Belge 1880 5 PD 197 and The Cristina 1938 AC 485 which were approved of in The Kusu Island They felt that as the sovereign whose ship was served in an action in rem was directly impleaded as a defendant this had to carry with it the legal consequence that the sovereign in the party to the action in rem Furthermore the Law Lords quoted a passage from the judgment of Lord Brandon in The August 8th 1982 1983 SLR 32 1983 2 AC 450 1983 1 Lloyd s Rep 351 a case also discussed in The Kusu Island which said that where the defendant entered an appearance to an action in rem the action continues against him not only as an action in rem but also an action in personam Emphasis added 22 The main crux of the matter is the status of the admiralty in rem action after the defendant has entered an appearance This question was considered by this court in The Kusu Island where this court rejected the argument that the defendant to an admiralty action in rem is the res even where the defendant has not entered an appearance and held that the defendant is the owner of the res see The Kusu Island 1989 SLR 119 at pp 127 and 128 1989 3 MLJ 257 at pp 261 and 262 23 If one were to follow the reasoning of the House of Lords in The Indian Grace the result would be that the defendant to the action in rem is not the ship but the shipowners whether or not the shipowners had entered an appearance in the in rem action as the owner is in fact directly impleaded as a defendant once the ship has been served with the writ However the factual situation in The Indian Grace must be recalled There the plaintiffs were in fact seeking to institute two actions one in personam action in India and the action in rem in England The decision to strike out the proceedings in England was based on the doctrine of res judicata and s 34 of the Civil Jurisdictions and Judgments Act For these reasons The Indian Grace is clearly distinguishable from this appeal It must be reiterated at this juncture that this does not mean that where the shipowner has not entered an appearance in the action he is liable personally This view is shared by the judges in The Kusu Island and The August 8th S Rajendran J in the present case also felt the same way 24 We were however of the view that S Rajendran J was correct in stating that the in rem action continues to proceed against the res even though the real party to the action is the shipowner as was indicated in The Indian Grace That is how Lord Brandon s otherwise apparently contradictory statements in The August 8th can be interpreted and thus reconciled Otherwise the whole purpose of the in rem action would be defeated in cases where the defendants turn out to be insolvent or if it proves difficult to enforce the judgment The ship or the subsequent security provided is the res against which the judgment can be enforced in favour of the claimants even if the defendants to the action in the sense that an inanimate object cannot be a defendant are the shipowners The portions of the House of Lords judgment relied on by the appellants were theoretical expositions on the nature of in rem actions and did not constitute the ratio Moreover the comments were due to the specific context of the facts in the case 25 We were therefore of the view that the general perception accepted by the local cases that an admiralty action in rem is an action against the res remains intact despite the comments by the House of Lords in The Indian Grace The decision in J Gadsden Pty Ltd v Australian Coastal Shipping Commission 1977 131 FLR 157 1977 1 NSWLR 575 makes this clear while at the same time holding that the shipowner is the defendant in an action in rem It would be preposterous for this court to hold otherwise as this would mean that a perfectly good action in rem would be defeated in this manner as soon as the defendant company was dissolved after having entered an appearance The admiralty action in rem in the present case therefore could proceed against the Capricon or the security which represented it Whether judgement can be entered even though the defendant company has been dissolved 26 One of the main advantages of an admiralty action in rem is that the plaintiff s claim is secured before judgment is obtained in an action in rem Toh Kian Sing in his book Admiralty Law and Practice 1998 comments that when a ship is arrested and judicially sold the proceeds are used to pay off the claimants If security is provided for the ship s release the security provided can be looked to for satisfaction of any judgment subsequently obtained More importantly with security obtained before judgment satisfaction of the plaintiff s claim will not be hampered by any intervening financial impecuniosity which may embarrass the shipowner 27 The dictum of Hewson J in The Zafiro John Carlbom Co v Zafiro SS Owners of 1960 P 1 1959 2 All ER 537 also indicates that the nature of the pre judgment security provided by the arrest of a ship in an in rem action is special In this case a writ in rem was issued against the owners of the Zafiro and the plaintiffs arrested her The owners a company then passed a resolution for voluntary winding up and the Zafiro was subsequently sold under an order of court made at the instance of the liquidator of the company The plaintiffs moved for judgment in default and for payment out of court of the sum due for necessaries The judge held that there should be judgment for the plaintiffs as they were secured creditors 28 What is clear is that once a vessel is arrested the ship or the security provided in lieu of it represents pre judgment security It also turned the respondents in this case into secured creditors of the owners of the Capricon As such it was held by the English Court of Appeal in Re Aro Co Ltd that a plaintiff who issued a writ against the ship before the owners were wound up becomes a secured creditor and that when the writ in rem is issued the statutory lien accrues in favour of the plaintiff This entitles the plaintiff to arrest and detain the ship and if the court adjudicates in his favour to a judicial sale and satisfaction of his claim out of the proceeds of sale The plaintiff s statutory lien is not defeated by any transfer of property apart from one effected by a judicial sale The court in this case was exercising its discretion under s 262 3 of the Companies Act to allow the action to proceed against the company despite the winding up order being
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The "Engedi"
intervener participate in the London arbitration The plaintiff s respondent s case 11 The plaintiff s case was that the appeal ought to be dismissed because s 6 of the IAA provided for a mandatory stay except where the arbitration agreement was null and void inoperative or incapable of being performed Since the assistant registrar had not found any of those exceptions to exist on the facts the court could not refuse to grant the stay It submitted that it did not require leave of court under s 299 of the Companies Act and in any event the necessary leave of court had already been obtained when the court allowed it to proceed with the Action even after the defendant went into provisional liquidation Furthermore as the plaintiff s claim was against the defendant and not the interveners the intervener had no locus standi to defend the claim at arbitration In any case the parties to the action were not different from the parties to the arbitration as the intervener s defences were limited to those available to the defendant My decision 12 After hearing the parties arguments I decided that the appeal ought to be allowed in so far as the proceedings had been stayed The stay order granted below was set aside I now state my reasons Section 6 of the IAA 13 Section 6 of the IAA provides 6 1 Notwithstanding Article 8 of the Model Law where any party to an arbitration agreement to which this Act applies institutes any proceedings in any court against any other party to the agreement in respect of any matter which is the subject of the agreement any party to the agreement may at any time after appearance and before delivering any pleading or taking any other step in the proceedings apply to that court to stay the proceedings so far as the proceedings relate to that matter 2 The court to which an application has been made in accordance with subsection 1 shall make an order upon such terms or conditions as it may think fit staying the proceedings so far as the proceedings relate to the matter unless it is satisfied that the arbitration agreement is null and void inoperative or incapable of being performed 3 Where a court makes an order under subsection 2 the court may for the purpose of preserving the rights of parties make such interim or supplementary orders as it may think fit in relation to any property which is the subject of the dispute to which the order under that subsection relates 4 Where no party to the proceedings has taken any further step in the proceedings for a period of not less than 2 years after an order staying the proceedings has been made the court may on its own motion make an order discontinuing the proceedings without prejudice to the right of any of the parties to apply for the discontinued proceedings to be reinstated 5 For the purposes of this section and sections 7 and 11A a a reference to a party shall include a reference to any person claiming through or under such party b court means the High Court District Court Magistrate s Court or any other court in which proceedings are instituted 14 Subsection 1 sets out the threshold requirements that need to be met before the court is bound to grant a stay of legal proceedings in favour of international arbitration First an international arbitration agreement must exist Second a party to that agreement must institute court proceedings against another party to the same agreement Third the proceedings must be in respect of a matter which is the subject of the agreement Fourth the party seeking a stay must have entered appearance in the court proceedings Fifth the party seeking a stay must do so before delivering any pleading or taking any other step in the proceedings 15 Once these requirements are met the court will be obliged to grant a stay of court proceedings unless it can be shown that the arbitration agreement is a null and void b inoperative or c incapable of being performed While the stay is mandatory the court may grant the stay on such terms or conditions as it thinks fit Importantly however the court s power to stay the proceedings only extends so far as the proceedings relate to matters which are the subject of the arbitration agreement between parties It has no power under s 6 of the IAA to stay proceedings that fall outside that ambit Whether actions in rem fall within the ambit of s 6 of the IAA 16 Under this head the intervener submitted that the in rem claim was not a matter that was the subject of the arbitration agreement between the plaintiff and the defendant and as such the court was not obliged to grant a stay of the in rem claim pursuant to s 6 of the IAA even if the in personam claim against the defendant ought to be arbitrated in London In response the plaintiff submitted that it was artificial to maintain a distinction between the in rem claim and the in personam claim when doing so would lead to a multiplicity of proceedings in regard to what was essentially the same claim Counsel for the plaintiff argued that as the threshold requirements under s 6 of the IAA had been proved and none of the exceptions applied a stay of further proceedings in the Action ought to be granted 17 In coming to my decision on this issue I was conscious of the traditional distinction maintained between an admiralty action in rem and an action in personam The action in rem operates only against the res but once the defendant enters an appearance he submits to the jurisdiction of the court and from then onwards the action continues as an action in rem against the res and in personam against the shipowner defendant see The Damavand 1993 2 SLR R 136 at 18 The Fierbinti 1993 SGHC 319 The August 8 1983 2 AC 450 While an action in personam and an action in rem may involve the same cause of action it must be stressed that the defendants of the respective actions are regarded as different parties In Kuo Fen Ching and Another v Dauphin Offshore Engineering Trading Pte Ltd 1999 2 SLR R 793 at 23 the Court of Appeal specifically rejected the proposition of the House of Lord in Republic of India and another v India Steamship Co Ltd No 2 1998 1 AC 878 that in substance the owner of the res and not the res itself was the defendant to an action in rem 18 Having determined this I turned to consider whether the threshold requirements in s 6 1 of the IAA had been fulfilled in respect of the action in rem In this evaluation I took cognisance of s 7 of the IAA which provides Court s powers on stay of proceedings 7 1 Where a court stays proceedings under section 6 the court may if in those proceedings property has been arrested or bail or other security has been given to prevent or obtain release from arrest order a that the property arrested be retained as security for the satisfaction of any award made on the arbitration or b that the stay be conditional on the provision of equivalent security for the satisfaction of any such award 19 Pursuant to the above provision upon the grant of a stay of proceedings the court has power to order that property previously arrested be retained as security for the satisfaction of an arbitral award In other words the commencement of an action in rem in Singapore to arrest a ship would not necessarily constitute a waiver or repudiation of the right to arbitrate Nonetheless I was of the view that I was not obliged to grant a stay of the action in rem pursuant to s 6 of the IAA because there was no arbitration agreement between the plaintiff and the notional defendant of the in rem action which was the res Of course in most instances this distinction has no practical effect Upon the stay of the in personam aspect of the proceedings in court parties practically always decide to proceed to arbitration without pressing the in rem claim concurrently in court so as to avoid the spectre of a multiplicity of costs and decisions This is a sensible decision since where the owner of the res and the defendant to the in personam claim are one and the same the theory of res judicata and issue estoppel will also operate to prevent parties from mounting different arguments in relation to the in rem claim and the in personam claim In such cases too the court if requested to would almost inevitably grant a stay of the in rem action under its discretionary powers so as to prevent a multiplicity of proceedings 20 In the present instance however I regarded the distinction to be of the utmost importance because the owner of the res was no longer the defendant but the intervener In other words the in rem claim was not identical to the in personam claim If the plaintiff and defendant were to proceed to arbitration and the in rem action in Singapore were to be stayed the intervener would not be able to protect its interest The intervener would not have any rights in the arbitral process except those voluntarily conferred on it by the plaintiff and the defendant ie the parties to the arbitration agreement This was important particularly since the defendant was insolvent and was unlikely to defend the arbitration in London At the time parties appeared before me the defendant had not participated in the arbitration proceedings Also although the plaintiff indicated at a late stage of the proceedings only on the adjourned hearing that it was willing to let the intervener participate in the arbitration the process of arbitration is a consensual one and a party may not be forced to arbitrate against its will The intervener had indicated that it wanted to proceed with litigation in Singapore not arbitration in London In any event the arbitral tribunal would have no jurisdiction to hear the in rem claim In my view therefore the in rem claim could not be a matter that was a subject of the arbitration agreement between the plaintiff and the defendant falling within the ambit of s 6 of the IAA 21 On another note as summarised in Singapore Court Practice 2009 Jeffrey Pinsler gen ed Singapore LexisNexis 2009 at para 70 16 2 the purpose of the procedure for intervention is to enable a party who is not already a party to the in rem action but with an interest either in the property under arrest or the sale proceedings in court representing the property arrested or whose interest may be affected by any order made in the in rem action to intervene in the action for the purpose of protecting his own interest An intervener does not prosecute his own claim in an action in which he intervenes but protects his interest in the property by defending the action in rem The intervener is permitted to set up such defences as the owner of the ship could have set up had it defended the action The Sin Chuen No 112 Union Bank of Taiwan and others interveners 2007 SGHC 72 at 6 The purpose of the procedure for intervention would not be achieved if the plaintiff here was able to exclude the intervener from participating in the defence by removing the dispute to arbitration despite arresting property owned by the intervener or in which it had an interest capable of permitting an intervention 22 The overarching purpose of the IAA is to promote Singapore s role as a growing centre for international legal services and international arbitration see Singapore Parliamentary Debates Official Report 31 October 1994 vol 63 at col 627 Associate Professor Ho Peng Kee Parliamentary Secretary to the Minister for Law I did not think that the drafters of s 6 of the IAA intended for that provision to be used as a means of depriving third parties of their right to protect their interests The plaintiff was always free to commence arbitration proceedings in London against the defendant However having acted to arrest the Vessel which was owned by the intervener it could not in my view then turn around and tell the intervener or for that matter any other party who intervened that it had no right to participate in the defence because the plaintiff and defendant had an arbitration agreement which provided for arbitration in London In some sense if there is a risk of a multiplicity of proceedings that has been created by the plaintiff s choice to commence an action in rem against a res which may be subject to the rights of others In other words the plaintiff cannot eat its cake and have it too 23 As an aside I would note that before me the option of the intervener funding the defendant s defence in the arbitration in London was explored I was given to understand however that that was not the practical solution it would otherwise have been because the liquidators of the defendant had indicated to the intervener that they would require to be secured with costs up front should this route be taken and the intervener had difficulty in meeting that condition 24 The intervener drew my attention to the case of The Soeraya Emas 1991 2 SLR R 479 to support the proposition that the in rem claim could be heard separately from the in personam claim In that case the defendant shipowners had consented to a judgment being entered against them After the consent order was obtained an interested party obtained leave to intervene The intervener then applied to set aside the consent order and in the alternative it asked for a declaration that the order was not binding on it Karthigesu J held that the intervener could not be bound by the consent order as at the time the order was made it had not entered appearance and did not give its consent to the judgment 25 In response the plaintiff cited the case of Pemunya Kapal MV Brihope Others v Emmanuel E Okwuosa Others 1997 1 MLJ 453 Shankar JCA delivering the judgment of the court rejected the decision in The Soeraya Emas He dismissed the intervener s appeal to set aside a judgment passed against the defendant on the ground that the intervener could have intervened before the application for summary judgment was heard but elected not to do so He held that if the intervener had come in good time he could have defended the action in place of the shipowner should the shipowner himself fail to appear However as the intervener was attempting to set aside a final judgment to which he was not a party he could not take defences which the owner had not taken because he was no longer defending the claim in place of the shipowner He could only assert his interest and the judgment in rem had to stand 26 I did not have to reconcile the above decisions as neither dealt directly with the issue before me Instead both cases dealt with the situation where the intervener was attempting to set aside a judgment after it had been entered The issue in the case before me was entirely different The intervener was asserting his right to defend the in rem action despite an agreement between the plaintiff and defendant to arbitrate an in personam claim based on the same facts At the time of the hearing no judgment had been passed on either claim whether in the Singapore courts or by the arbitral tribunal in London There are however some passages from the judgment of Karthigesu J himself a very experienced admiralty lawyer which I found fortified the view I had taken At 29 and 31 of his judgment Karthigesu J stated 29 The principle has been clearly established but it will be noted that Lord Brandon in The August 8 19 supra was concerned to emphasise by stating it more than once in the passage I have quoted above that the action continues against him the shipowner who has entered an appearance not only as an action in rem but also as an action in personam I apprehend that what Lord Brandon was careful to preserve was that an admiralty action in rem did not cease to be an admiralty action in rem simply because the defendant shipowner had entered an appearance The following words of his judgment bear repeating to which I give emphasis the action continued not only in rem against the property proceeded against namely the ship but also in personam against the shipowners themselves 31 In my view the learned assistant registrar failed to appreciate this important principle and the refinement given to it by Lord Brandon in The August 8 Had he appreciated it he would not have fallen into the error of applying the principles applicable solely to the setting aside of consent judgments in non admiralty civil actions and confusing the standing of Inter Maritime as intervener in these proceedings In so far as Inter Maritime were concerned these proceedings were and still are an admiralty action in rem but in so far as the defendants are concerned by reason of their appearance and albeit by their consent a judgment has been entered against them for which they Perkapalan Emas are also personally liable original emphasis in italics emphasis added in bold italics The foregoing passage serves to underscore my view that s 6 of the IAA can have no application to the present situation because vis à vis the intervener the Action was
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