Jurisdiction - Singapore
Reports and Analysis
Singapore – Foreign Judgments: Recognition And Enforcement.

3 March, 2014

 

Legal News & Analysis – Asia Pacific – Singapore – Dispute Resolution

 

In the recent case of Giant Light Metal Technology (Kunshan) Co Ltd v Aksa Far East Pte Ltd [2014] SGHC 16, the High Court of Singapore had the opportunity to provide guidance on the applicable principles relating to the recognition and enforcement (by the forum court) of judgments obtained from a foreign court.


The brief facts of the matter are:-


(a) The Plaintiff was a company incorporated in the People’s Republic of China (“China“) whilst the Defendant was a company incorporated in Singapore.


(b) The Parties entered into a contract for the Plaintiff to purchase 2 new generator sets from the Defendant for which the Defendant partially paid the Plaintiff USD190, 000.00.


(c) The Plaintiff was dissatisfied with the quality of the generators purchased and thereafter instituted proceedings against the Defendant in a China Court in 2005 (“the 2005 Action“). In response the Defendant filed a defence in the 2005 Action and attended various China Court hearings. The 2005 Proceedings were discontinued in 2007 to enable parties to resolve the matter out of court.


(d) Settlement negotiations failed and in 2008 the Plaintiff recommenced proceedings against the Defendant in the same China Court in 2008 for the same claim (“the 2008 Action“). Although the Defendant did not dispute that it was properly served in the 2008 Action, it did not participate in any manner in the 2008 Action.


(e) The Plaintiff then obtained judgment in the 2008 Action (“Judgment“) in which the China ourt ordered:-

  • The contract between the parties be rescinded;
  • The Plaintiff to return the generators to the Defendant;
  • The Defendant to refund USD190,000 to the Plaintiff; and
  • The Defendant to compensate the Plaintiff in the sum of RMB7,088.
  • The China Court costs of RMB14,626 shall be paid by the Defendant.
 

(f) The China Court Judgment was served on the Defendant in Singapore. There was no further appeal against the China Court’s decision.


(g) The Plaintiff then commenced action in Singapore the sums of USD190,000 and RMB7,088 as well as the Defendant’s China Court costs of RMB14,626 which had been paid by the Defendant.


The Singapore Court noted that there was a paucity of Singapore case law in this area and embarked on an analysis of the relevant conflict of laws principles.


As a starting point the Singapore Court highlighted the important distinction between the recognition of a foreign judgment and its enforcement. Recognition of a foreign judgment means treating the claim which was adjudicated as having been determined once and for all. The validity of a foreign judgment will not be scrutinised by the forum court once it meets the legal requirements for recognition by the forum court and the forum court would not re-examine the merits of the underlying claim giving rise to the foreign judgment. Not every foreign judgment entitled to recognition may be enforced but to be enforced a foreign judgment must first be recognised.


There are essentially 3 elements for a foreign judgment to be recognised in Singapore. First the foreign judgment must be ‘final and conclusive‘. Second, the foreign judgment must be by a court with ‘international jurisdiction‘. Third, must be ‘no defence‘ to the recognition of the foreign judgment.


On the facts of the case, the only issue that fell to be determined was whether the China Court had ‘international jurisdiction‘ over the Defendant. The Singapore Court made clear that the common law is generally not concerned with how the China Court assumed jurisdiction over the Defendant under its own Chinese laws. In the context of recognition of the China Court Judgment in Singapore, the determination of whether the China Court had ‘international jurisdiction‘ over the Defendant was to be determined by Singapore private international law. This can be satisfied in one of 4 ways, where the person against whom the China Court Judgment was given (i.e. the Defendant):-


(a) Was present in China at the time the 2008 Action was initiated; or
(b) Was a claimant or a counterclaimant in the 2008 Action; or
(c) Submitted to the jurisdiction of the China Court by voluntarily appearing in 2008 Action; or
(d) Had before the commencement of the 2008 Action agreed to submit to the jurisdiction of the China Court.


The Plaintiff relied on the third ground and submitted that it was clear that the Defendant had voluntarily submitted to the jurisdiction of the China Court in the 2005 Action and since the 2008 Action was commenced in the same China Court on the same issues and against the same parties, the Defendant had nevertheless voluntarily submitted to the jurisdiction of the China Court in the later 2008 Action. The Plaintiff’s case was that the fact that there were 2 different proceedings was a ‘mere technicality‘ as the 2005 Action was discontinued to explore settlement. The Defendant’s conduct clearly showed that they consented to the jurisdiction of the China Court and allowing the Defendant to deny its obligations under the China Court Judgment obtained in the 2008 Action would go against any reasonable conception of fairness. The Defendant disagreed and submitted that the 2005 Action and 2008 Action were different proceedings and they had never taken any part in the 2008 Action.


The issue that fell to be determined was whether the 2005 Action and the 2008 Action could be seen as “one unit of litigation” or a “contiguous whole“, so that the consent of the Defendant to the jurisdiction of the China Court in the 2005 Action could be ‘imputed‘ to the 2008 Action.


After examining case law in other jurisdictions, the Singapore Court held that it would be possible for the Defendant’s consent (to the jurisdiction of the China Court in the 2005 Action) to be imputed to the later 2008 Action. For the purposes of determinin ‘international jurisdiction‘, a party’s consent to the jurisdiction of a foreign court in relation to certain claims may be imputed to further claims. This ‘inchoate submission‘ to the jurisdiction of the foreign court in subsequent proceedings could exist where the subsequent action involved the same parties and also when the subsequent claims were ‘reasonably close related‘ to the original claims.


Whether the subsequent claims could fall within such categories giving rise to an imputed or inchoate submission would be a matter based on the circumstances of the case and in making this assessment the forum court would consider the concerns of fairness to both parties. The Singapore Court adopted this approach and also noted that technical impediments created by the procedural rules under the forum and foreign law should be disregarded.


On the facts before the Singapore Court, the learned Justice Andrew Ang, held that the imputed or inchoate submission existed and the 2005 Action and the 2008 Action could be seen as only one unit of litigation or a contiguous whole. In making this finding the Singapore Court found that the Defendant had ignored the 2008 Action based on legal advice they received that any Judgment awarded in the 2008 Action would not be enforceable in Singapore and had chosen to exploit this technicality. The Singapore Court further held that it would unfair to the Plaintiff if the Defendant was allowed to take advantage of its abortive out-of-court negotiations to escape liability for its wrongdoing.


Having found that the China Court Judgment could be recognised in Singapore, the Singapore Court then considered whether all the legal requirements to enforce such a Judgment in Singapore could be met, namely the China Court Judgment was “final and conclusive” and was a “pure money” judgment, i.e. that it was for a fixed definite sum.


The issue in contention here stemmed from the Defendant’s position that the China Court Judgment contained other orders which were not for a fixed definite sum (i.e. the orders requiring the Plaintiff to return the generators). As such the Defendant submitted that the China Court Judgment was not a “pure money” judgment only and was thus incapable of being enforced.


However, after examining the relevant authorities, the Singapore Court accepted the Plaintiff’s position that a foreign judgment is enforceable as long as it orders the payment of a definite sum of money – and it was beside the point if the said judgment made orders which with otherwise.


Accordingly the Singapore Court allowed the Plaintiff’s action and awarded it a Singapore Court judgment ordering the Defendant to make payment to the Defendant as per the China Court Judgment in the 2008 Action.

 

 ATMD Bird & Bird

 

For further information, please contact:

 

Navin Joseph Lobo, Partner, ATMD Bird & Bird

navinjoseph.lobo@twobirds.com

 

ATMND Bird & Bird Dispute Resolution Practice Profile in Singapore

 

Homegrown Dispute Resolution Law Firms in Singapore

 

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