Singapore’s Choice of Court Agreements Bill was recently introduced in Parliament on 4 April 2016 (“Bill”), to enable Singapore to give effect to the Hague Convention, which will enhance cross-border recognition and enforceability of Singapore court judgments.

The Hague Convention and the Bill – where we are.

We have previously written an article on the Hague Convention, which was published in the February 2016 issue of the Singapore Law Society’s Law Gazette. That article explored the implications of Singapore’s signing and proposed implementation of the Hague Convention, which is viewed as the litigation equivalent of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (“New York Convention”).

The Hague Convention is a significant judgment-recognition convention which strengthens the enforceability of Singapore court judgments abroad (in particular the EU) and facilitates a more conducive legal environment for cross-border business. The EU and Mexico have already ratified the Hague Convention and so commercial parties operating in or trading between the EU (excluding Denmark), Singapore and Mexico will be the major beneficiaries of the Hague Convention.

The Hague Convention also provides an opportunity to bolster the ASEAN Economic Community which was established in 2015, and provides a convenient ready-made vehicle for harmonisation of dispute resolution rules within the ASEAN member states.

Apart from giving effect to the Hague Convention, the Bill is also important as it clarifies certain issues which had been raised in our article and contains provisions which will interest commercial parties and legal practitioners alike.

Access to the Singapore International Commercial Court

Clause 3 read with Clause 2 of the Bill expressly provides that where the Singapore High Court is the designated court in an exclusive choice of court agreement (“ECC”), it would also include the Singapore International Commercial Court (“SICC”) unless a contrary intention appears in the agreement.

Parties may therefore have the benefit of having their cases heard in the SICC, and enforcing their SICC judgment pursuant to the Hague Convention, without having to specify in the ECC that the SICC is the designated court. Even if the designated court in the ECC is the Singapore court, the case could still be transferred to the SICC in accordance with the relevant rules.

This has the benefit of making the SICC a more attractive forum for commercial parties to settle their international disputes.

Excluded subject-matters

Clause 9 of the Bill sets out the list of matters which are excluded from the Bill’s ambit, and essentially recapitulates Article 2 of the Hague Convention.

However, clause 9(4) of the Bill allows the Minister to make regulations under clause 22 of the same, to exclude from the application of the Bill, or to modify the application of the Bill or any provision of the Bill in relation to, any specific matter, or any specific matter in relation to any Contracting State.

It will be interesting to see if the Minister will exercise this power to exclude any additional matters from the ambit of the Act or perhaps even to bring certain matters excluded by the Hague Convention within the scope of the Act.  Insofar as the Hague Convention is the litigation parallel to the New York Convention, it is noteworthy that Singapore permits consumer contracts and employment contracts to be arbitrated and enforced pursuant to the New York Convention.

Interim Measures

In our Law Gazette article, we had noted that an interim measure of protection cannot be enforced pursuant to the Hague Convention (see Article 7) but that this was akin to the position in international arbitration.

The Singapore courts’ power to enforce a foreign arbitral award does not include an interim measure of protection issued by a foreign arbitral tribunal, see section 2(1) of the International Arbitration Act (Cap. 143A). Nonetheless, we also noted that the Singapore courts have the power to issue such interim measures in aid of a foreign arbitration, see section 12A(1) and (2) of the International Arbitration Act (Cap. 143A).   

Helpfully, the Bill provides that the Singapore courts are not precluded from granting interim measures in any case or proceeding involving an ECC. While clause 10(1) of the Bill excludes interim measures of protection from its ambit, clause 10(2) clarifies that the Bill is not meant to prevent a party from applying for, and the Singapore courts granting, any interim measure of protection under Singapore law.

From a practitioner’s point of view, it is hoped that the Rules of Court will clarify that a party may directly apply for an interim measure pursuant to the implementing legislation (assuming that the Bill is passed) without the sorts of restrictions identified in local cases like Multi-Code Electronics Industries (M) Bhd and Another v Toh Chun Toh Gordon and Others [2009] 1 SLR 1000.

No superior court restriction

Under the Reciprocal Enforcement of Commonwealth Judgments Act (Cap. 264) (“RECJA”) and the Reciprocal Enforcement of Foreign Judgments Act (Cap. 265) (“REFJA”), only the judgments of the superior courts of the relevant jurisdictions can be enforced in Singapore.

What this meant was that a judgment of a subordinate court in the UK (or any of the other relevant jurisdictions) would not have been enforceable in Singapore under RECJA or REFJA.

The Bill does not have any such restriction. All it requires is that the judgment is rendered by a court designated in an ECC. In turn, an ECC does not have to designate a superior court of one of the Contracting States to the Hague Convention. It suffices under Clause 3(b) that the ECC “designates...the courts, or one or more specific courts, of one Contracting State to the exclusion of the jurisdiction of any other courts”.

Discretionary v Non-Discretionary refusal to recognise or enforce foreign judgment

The Bill provides for both discretionary and non-discretionary refusal on the part of the Singapore courts to recognise or enforce a foreign judgment.

Clause 14 specifies the circumstances in which a Singapore court must refuse the recognition or enforcement of a foreign judgment. These include circumstances in which the defendant was not notified of the claim (or not provided sufficient time to defend/respond to the same), where the foreign judgment was obtained by fraud or on public policy grounds (including a breach of natural justice).

In contrast, clause 15 provides for the circumstances in which the Singapore courts have a discretionary power to refuse to recognise or enforce a foreign judgment. It includes a situation in which service of the claim documents on the defendant was “in a manner incompatible with the fundamental principles in Singapore concerning the service of documents” or where there is an earlier inconsistent judgment, whether by a Singapore or a foreign court.

Most relevant and pertinent, recognition or enforcement may be refused if the foreign judgment is being reviewed or appealed against or the time limited for such review or appeal has not expired, see clause 15(2).

Discretionary refusal to recognise or enforce non-compensatory damages

Clause 16 of the Bill stipulates that the Singapore court may refuse to recognise or enforce a foreign judgment if, and to the extent that, the foreign judgment awards damages (including exemplary or punitive damages) in excess of compensation for the actual loss or harm suffered by the party awarded the damages.

However, clause 16(2) appears to provide for a savings clause in that such exemplary or punitive damages (or a portion thereof) could be justified as being awarded to cover the costs and expenses relating to the foreign court proceedings in which the judgment was obtained.

Presumably, this provision was drafted in contemplation that the USA, which is a signatory state to the Hague Convention, eventually ratifies the same. While the USA is the most prominent jurisdiction which awards exemplary or punitive damages, it is also one of the few (if not sole) common law jurisdictions in which costs do not follow the event, i.e. the losing party does not pay the winning party’s legal cost. It is theoretically possible that clause 16(2) be applied to enforce a US court’s award of exemplary or punitive damages.

Parties should also note that clause 19 of the Bill permits the recognition and enforcement of the severable parts of the foreign judgment.

No retroactive effect for Singapore ECCs

The Bill does not have retroactive effect and will not apply to an ECC which designates the Singapore courts as the designated court on a date which is before the Bill comes into force. However, clause 24(b) provides that the Singapore courts will give effect to an ECC which designates a court of another Contracting State if that ECC is concluded after the Hague Convention enters into force in that Contracting State. A party can therefore enforce an ECC to have a dispute heard in the designated court as well as enforce foreign judgments rendered pursuant to such ECCs

What this means is that once the Bill comes into force, ECCs which designate the courts of the member states of the EU (excluding Denmark) or Mexico can already be enforced in the Singapore courts, even if such ECCs were entered into prior to the Bill being passed

Comment

It is likely that the Bill will be passed in the coming months and legal practitioners and legal parties should use the interim to consider whether to incorporate ECCs or to convert boilerplate non-exclusive jurisdiction clauses to ECCs instead in order to avail themselves of the benefit of the Hague Convention.