Giant Light Metal Technology (Kunshan) Co Ltd v Aksa Far East Pte Ltd [2014] SGHC 16

The Singapore High Court in Giant Light Metal Technology (Kunshan) Co Ltd v Aksa Far East Pte Ltd allowed an application for the recognition and enforcement of a judgment rendered by a court in the People's Republic of China (the "PRC Court") against a Singapore defendant. The matter raised novel issues as to when a foreign court is said to have "international jurisdiction".

Facts

Giant Light Metal Technology (Kunshan) Co Ltd (the "plaintiff") was a company incorporated in the People's Republic of China (the "PRC").Aksa Far East Pte Ltd (the "defendant") was a company incorporated in Singapore.

In 2003, the parties entered into a contract for the plaintiff to purchase from the defendant two new generator sets with new engines (the "Contract"). However, the plaintiff was dissatisfied with the generator sets received from the defendant as they could not be used.

The plaintiff instituted a civil claim in the PRC Court for breach of contract in 2005 (the "2005 Proceedings"). The defendant responded by filing a "Statement of Defence" and also sending a representative to attend court hearings. The 2005 Proceedings were discontinued in 2007 to allow the parties to resolve the matter. However, settlement negotiations failed and the plaintiff re-commenced proceedings in respect of the same claims in 2008 (the "2008 Proceedings"). The relevant court documents were served on the defendant in Singapore. However, the defendant chose to ignore the 2008 Proceedings and did not enter an appearance.

In the circumstances, the PRC Court awarded judgment in favour of the plaintiff (the "PRC Judgment"). Under the PRC Judgment, the defendant was ordered to pay to the plaintiff various sums of money. The PRC Judgment also contained orders to the effect that the Contract be rescinded and that the plaintiff was to return the generators to the defendant.

The plaintiff then commenced an action in Singapore to enforce the PRC Judgment for the payment of the various sums of money.

The PRC Judgment was served on the defendant. There was no further appeal against the PRC Judgment.

Issues

As a starting point, the Singapore High Court noted that there are essentially three elements for a foreign judgment to be recognised and enforced in Singapore. First, the foreign judgment must be "final and conclusive." Second, the foreign judgment must be by a court with "international jurisdiction". Third, there must be "no defence" to the recognition of the foreign judgment.

In light of the above, the Singapore High Court identified the issues in determining whether the PRC Judgment should be recognised and enforced as follows: (1) whether the PRC Court had "international jurisdiction" over the defendant; and (2) whether the plaintiff's claim satisfied the requirement that only foreign judgments for a definite sum of money were enforceable.

Findings on Issue 1

The Singapore court observed that the determination of whether the PRC Court had "international jurisdiction" over the defendant was to be determined by Singapore private international law.

In this regard, the plaintiff submitted that the defendant had voluntarily submitted to the jurisdiction of the PRC Court in the 2005 Proceedings and, since the 2008 Proceedings were commenced in the same PRC Court on the same issues and against the same parties, the defendant's voluntary submission to jurisdiction also extended to the 2008 Proceedings.

The Singapore court accepted the plaintiff's submission and concluded that, for the purposes of determining "international jurisdiction", a party's consent to the jurisdiction of a foreign court in relation to certain claims may be imputed to further claims in certain circumstances. Such "inchoate submission" to the jurisdiction of the foreign court in subsequent proceedings could arise in cases where the subsequent action concerned the same parties and also when the subsequent claims were "reasonably closely related" to the original claims. The Singapore court also observed that whether an imputed submission could exist will turn on the facts of the case and, in making this determination, the court would consider the concerns of fairness to both parties.

On the facts, the Singapore court held that the imputed or inchoate submission existed and the 2005 Proceedings and the 2008 Proceedings could be seen as only one unit of litigation or a contiguous whole. The Singapore court also held that it would be unfair to the plaintiff if the defendant was allowed to take advantage of its abortive settlement negotiations to escape liability.

On that basis, it was held that the defendant had voluntarily submitted to the jurisdiction of the PRC Court for the purposes of the 2008 Proceedings and thus the PRC Court had "international jurisdiction" over the defendant for the purposes of recognition and enforcement of the PRC Judgment.

Findings on Issue 2

In respect of Issue 2, the defendant submitted, amongst other things, that because the PRC Judgment contained other orders which were not for the payment of a fixed definite sum (i.e. the orders requiring the plaintiff to return the generators to the defendant), the PRC Judgment was not a "pure money" judgment and was therefore incapable of being enforced.

The Singapore court rejected the defendant's submission and concluded that where a foreign court makes an order for payment of a definite sum of money, amongst other orders which do not require the payment of definite sums of moneys, the order for payment of a definite sum of money should be capable of founding an action in debt and is therefore enforceable.

Judgment

In view of the foregoing, the Singapore court recognised the PRC Judgment and ordered the defendant to make the relevant payments to the plaintiff in accordance with the PRC Judgment.

Comment

This judgment clarifies the approach which the Singapore courts should take, and the principles which ought to be applied, in determining whether a foreign judgment should be recognised and enforced in Singapore. In particular, in finding that it would be possible for a party's consent to the jurisdiction of a foreign court in relation to certain claims to be imputed to further claims brought in a separate but closely related action (depending on the circumstances of the case), the Singapore court has shown that it is prepared to eschew an overly technical analysis of the relevant issues in favour of fairness and achieving substantive justice in the determination of whether a foreign court has "international jurisdiction" over a defendant.