I OVERVIEW

Singapore’s legal system is based on the English common law system. While rooted in English jurisprudence, the laws of Singapore have since developed into their own robust and unique framework to accommodate the commercial needs and business interests of the region.

II LEGAL RIGHTS AND REMEDIES

i Civil and criminal remedies
Civil remedies

Similar to other common law jurisdictions, Singapore offers both legal and equitable remedies to victims of fraud.

To establish actual fraud (both in law and in equity), a plaintiff must show:

  • a a representation of fact made by words or conduct;
  • b the representation must be made with the knowledge that it is false – this will require a plaintiff to plead a specific fact or facts, or the existence of some specific fact or circumstances that were clearly contradictory and inconsistent with the representations made to them;2
  • c the representation must be made with the intention that it should be acted upon by the plaintiff, or by a class of persons that includes the plaintiff;
  • d the plaintiff had acted upon the false statement; and
  • e the plaintiff suffered damage in so doing.

There is no requirement for the plaintiff to establish the motive of the wrongdoer.3

Singapore legislation also recognises and provides for certain statutory causes of action. For example, Part XII of the Security and Futures Act4 (SFA) prohibits certain courses of conduct in the dealing of securities.5 Apart from imposing criminal penalties for breaches of these prohibitions, the Act also offers claimants a civil cause of action.6 Such statutory causes of action may in certain circumstances be easier to prosecute than a tortious claim, as the statutory causes of action remove the need to prove certain elements of the tort of deceit. However, potential claimants should take note of the restrictions under Section 235 of the SFA, which require that leave of the court be obtained in certain circumstances prior to commencing a civil action under the SFA.

As with all civil claims, the standard of proof applicable is that fraud must be established on a balance of probabilities. However, as fraud is a grave allegation, the Singapore courts require a high degree of proof to make good an allegation of fraud; the more serious the allegation, the more the claimant will have to do and show to establish his or her case.7 Given the evidential challenges in establishing fraud, a potential claimant should consider whether alternative causes of action are available that may afford the same relief (e.g., breach of fiduciary duties).

A successful plaintiff would be entitled to damages as compensation for all losses flowing directly from the plaintiff’s reliance on the defendant’s fraudulent misrepresentation, whether or not such loss was foreseeable. This may include consequential losses such as loss of profits.8

Equity imposes a constructive trust upon a person who acquires property belonging to another where he or she is aware that the property was obtained or procured pursuant to fraud.9 Equitable claims are also available against parties who have dishonestly assisted in or knowingly received property (or its traceable proceeds) as a result of a breach of the constructive trust. In these claims, remedies include rescission orders,10 an order for an account, tracing orders and equitable damages.11

In a recent case,12 the Singapore High Court undertook a detailed analysis of the law on claims for equitable damages, and widened the classes and extent of losses by relaxing the rules of causation, foreseeability and remoteness.13 While the order for equitable damages was reversed on appeal, the Court of Appeal did so on technical grounds and did not disturb the High Court’s statement of the law on equitable damages.14

Time frame for civil actions

A typical civil suit in the High Court of Singapore takes, on average, between 12 and 24 months from the filing of a writ to the delivery of a judgment depending on the complexity of the matter and the number of interlocutory applications filed.15 However, complex cases of fraud usually require more time to conclude as they frequently involve applications for freezing or search orders (which are discussed below), or both, and almost invariably entail applications for specific disclosure.

An action in tort must generally be brought within six years from the date on which the cause of action accrued. Similarly, an action for an account shall not be brought in respect of any matter that arose more than six years before the commencement of the action.16 While there are exceptions to this general rule,17 this is still subject to a long-stop period of 15 years (i.e., no action for damages for negligence, nuisance or breach of duty can be brought after the expiration of 15 years from the time the alleged fraudulent act that caused harm was committed).18 However, in the case of fraud, the said six-year limitation period does not begin to run until the principal has discovered the fraud, or could with reasonable diligence have discovered it.19

Criminal remedies

Criminal law in Singapore is statute-based. Fraud-related offences are primarily set out in Chapter XVII of the Singapore Penal Code.20 These include criminal breach of trust,21 cheating22 and fraudulent dispositions of property.23

There are also fraud-related offences set out in sector-specific statutes. For example, the SFA makes it a criminal offence to fraudulently induce others to purchase securities or futures contracts;24 or to manipulate or attempt to manipulate a securities or futures contract market or trade in futures contracts.25 Similarly, the Financial Advisers Act (FAA)26 provides that any agent or employee of a recognised financial adviser who wilfully makes false entries or otherwise tampers with the entries of any record or document relating to that financial adviser is guilty of an offence.27

A victim of a suspected fraud-related offence may make a complaint to the Commercial Affairs Department (CAD), a branch of the Singapore police force dedicated to investigating white-collar crime, including corporate fraud and money laundering. The Criminal Procedure Code (CPC)28 bestows upon the police force various powers to search for and seize evidence. However, there is no obligation upon the investigating officers to recover and return stolen assets. Further, it is up to the discretion of the investigating officers whether evidence seized pursuant to investigations may be shared with interested parties, including the complainant.

The criminal courts of Singapore are empowered to order that a convicted offender pay compensation to the victim. Such an order does not affect any civil remedy for the recovery of property or damages beyond the compensation ordered by the court, but any claim made by the victim shall be deemed to have been satisfied to the extent of the amount paid to him or her under an order for compensation.29

The criminal standard of proof is that of proof beyond reasonable doubt.

ii Defences to fraud claims

A claim for fraud can be defeated if the defendant can establish that one or more of the elements of fraud have not been made out. It is fairly common for a defendant to argue that the alleged act of deceit did not induce the claimant to act in a manner that resulted in the claimant’s loss. However, it is not a defence to say that the claimant should have taken reasonable steps to verify the truth of the fraudulent representations.30 Further, contributory negligence is not a defence to a claim in deceit.31

The knowledge of an employee or agent who is the ‘directing mind and will’ of the company can be attributed to the company.32 However, where a company, as a victim, makes a claim against a director or employee premised on the latter’s fraudulent acts against the company, no special rule of attribution would apply such that the company could be said to know or have committed the wrongful acts for the purpose of the errant director establishing an ex turpi causa defence.33

III SEIZURE AND EVIDENCE

i Freezing orders to secure assets and proceeds

To secure assets prior to the obtaining of a judgment or arbitral award, an applicant can apply for a freezing order (commonly known as a Mareva injunction) to prevent dissipation of the respondent’s assets. Generally, to obtain a freezing order, the following requirements must be met:34

  • a the applicant has a valid cause of action over which the court has jurisdiction;
  • b the applicant has a ‘good arguable case’;
  • c the respondent has assets within the jurisdiction; and
  • d there is a real risk that the assets may be disposed of or dissipated so that any judgment that may be obtained cannot be enforced.

The procedural aspects of obtaining a freezing order are similar to the requirements for search orders. This is discussed in further detail in Section III.iii (‘Ex parte applications’), infra.

Relevance of allegations of dishonesty to the inference of real risk of dissipation

Allegations of dishonesty against a defendant are relevant to the issue of whether there is a real risk that the defendant would dissipate his or her assets. The extent to which these allegations are relevant depends on whether the alleged dishonesty has a real and material bearing on the risk of dissipation.35

Until recently, there were two lines of authority on how much weight a Singapore court should place on the defendant’s alleged dishonest behaviour in considering whether the defendant would dissipate his assets.

In Spectramed Pte Ltd v. Lek Puay Puay & others (Spectramed),36 the High Court of Singapore held that:

[I]n a good arguable case in support of an allegation that the defendant has acted fraudulently, dishonestly or unconscionably, it is unnecessary for there to be any further specific evidence on risk of dissipation for the court to be entitled to take the view that there is sufficient risk to justify granting Mareva relief.

The decision in Spectramed is inconsistent with an earlier decision of the same Court in European Grain & Shipping Ltd v. Compania Naviera Euro-Asia SA and others (European Grain).37

In European Grain, allegations of ‘all kinds of dishonest acts and activities’ were made against the defendant and its parent company. It was undisputed that the plaintiffs had established a good arguable case. However, in discharging the freezing order, the Court took the view that, even where the requirement of a good arguable case was met, it would not be right to take the plaintiff’s allegations (of fraud) as though they had been proved.38

Unfortunately, European Grain was not cited to the Court in Spectramed, which instead relied upon an earlier edition of Steven Gee QC, Mareva Injunctions and Anton Piller Relief39 in support of the proposition that evidence of risk of dissipation is unnecessary where there is a good arguable case of dishonesty. By the time Spectramed was litigated, this proposition had already been qualified somewhat at Paragraph [12.040] of the fifth edition of the book. This qualified view suggested that while want of probity is a factor to be considered, it is not determinative of whether there is a real risk of dissipation by the defendant.40

This qualified approach was accepted in PT Sariwiguna Binasentosa v. Sindo Damai Shipping Ltd (PT Sariwiguna),41 where the High Court opined that the proposition from Spectramed was ‘stated too broadly’. While dishonesty was a relevant consideration, it did not always sufficiently lead to the conclusion that a real risk of dissipation existed.42 The High Court also endorsed the approach taken in European Grain that it was not right to take a view on allegations of dishonesty as though they had been proved when they were denied and pending trial.43

The position has now been clarified by the Court of Appeal of Singapore in the case of Bouvier, Yves Charles Edgar v. Accent Delight International Ltd (Accent Delight).44 In reaching its decision to set aside a worldwide freezing order against the defendants, the Court of Appeal rejected the proviso from Spectramed, and endorsed the position set down by the High Court in PT Sariwiguna.45 Thus, while allegations of a defendant’s dishonesty can and will be relevant, whether such allegations have a bearing on the risk of dissipation will depend on the nature and characteristics of these allegations.46

Asset disclosure orders ancillary to freezing orders

It is common practice47 for plaintiffs applying for a freezing order to also seek an order that the defendant disclose in writing all his or her assets to the plaintiff (an asset disclosure order). The rationale underpinning an asset disclosure order is to give the plaintiff visibility over the defendant’s current assets to discourage further dissipation and to police the freezing order.

Such asset disclosure orders may be of assistance where the proceeds of the defendant’s fraudulent conduct have been transferred to a third party, as they may provide relevant information to the claimant to decide whether to broaden the scope of the freezing order to include this third party where the assets of the third party are also in the jurisdiction.

Where a plaintiff establishes a proprietary claim over assets (e.g., assets that are subject to a constructive trust arising due to fraud on the part of the recipient of said assets), the plaintiff may at an interlocutory stage apply for a proprietary injunction to preserve those assets.

A proprietary injunction may be obtained together with an ancillary order requiring the defendant to disclose information about the whereabouts, value and status of both current and past assets, even if these assets are no longer in the possession of the defendant. Subsequent to the information disclosure, the plaintiff may then apply to freeze the assets, which are recoverable should he or she ultimately be successful in his or her claim.

The proprietary injunction has been recognised in fraud claims in the United Kingdom and Hong Kong courts,48 and has been acknowledged in at least one reported decision in Singapore.49

As a proprietary injunction is not a freezing order but falls within the genus of general interlocutory injunctions, the plaintiff need only fulfil the conventional American Cyanamid test to show that there is a serious issue to be tried, the balance of convenience is in favour of granting an injunction, and it is just and convenient to grant the injunction.50 This issue was also recently canvassed before the Court of Appeal of Singapore in the case of Accent Delight, in which the Court of Appeal set aside the ex parte proprietary injunction obtained by the plaintiffs. The Court of Appeal also remarked that a proprietary injunction might not be appropriate if such an injunction was sought over a diffuse and unascertained pool of funds.51

ii A potential alternative to Mareva injunctions – the Holyoake injunction

A potential alternative to Mareva injunctions may be found in the decision of the English High Court in Holyoake v. Candy (Holyoake),52 where the Court granted a ‘notification injunction’ requiring the defendant to give the plaintiff prior notice of any intended dealings in his assets. To be entitled to the notification injunction, the plaintiff had to show the same elements as in a Mareva injunction, save that a lower threshold of proof for dissipation of assets was required. This decision was recently reversed by the English Court of Appeal, which held that the threshold of proof required for a notification injunction is the same as a Mareva injunction.53

In view of the decision in Accent Delight, which in effect raises the bar for showing a risk of dissipation of assets, the Holyoake notification injunction would have been welcome respite for plaintiffs, and it remains to be seen whether future cases (English or Singaporean) will revive it.

iii Obtaining evidence through search orders

To obtain evidence for fraud, an applicant can apply for a search order (also known as an Anton Piller order) to prevent disposal of incriminating evidence by the respondent. Generally, to obtain a search order, the following requirements must be met:54

  • a the applicant has an extremely strong prima facie case against the respondent in the main claim;
  • b the damage suffered by the applicant would have been very serious if the search order was not granted;
  • c there is a real possibility that the respondent would destroy relevant documents; and
  • d the effect of the search order must not be out of proportion to the legitimate object of a search order.
iv Procedural aspects concerning freezing orders and search orders
Ex parte applications

Generally, the application for a freezing order or a search order is filed together with, or as soon as possible after, the originating process is filed. If there has been a delay in making the application, the reasons for the delay should be set out in the supporting affidavit.

A party applying ex parte for a freezing or search order must give notice of the application to the other concerned parties prior to the hearing, unless the giving of said notice would or might defeat the purpose of the application. In such cases, the reasons for not giving notice should be clearly set out in the supporting affidavit.55

Applicants for freezing orders and search orders are required to prepare their orders in accordance with the forms provided by the Practice Directions.56

When making an ex parte application, the applicant must make full and frank disclosure of all material facts, even those facts that may be adverse to the application. Otherwise, this may be a basis for the order to be set aside if the non-disclosure was material.57 Applicants should also take note of the supporting documents and information required to be provided under the Practice Directions.58

Contempt

A defendant who fails to comply with or deliberately breaches a court order (including freezing orders and search orders) is liable for contempt of court, and may be sanctioned with a monetary fine or imprisonment. In Maruti Shipping Pte Ltd v. Tay Sien Djim,59 the managing director of a company was sentenced to six months’ imprisonment for breaching various orders of court, including the breach of a freezing order by withdrawing monies from his bank account despite receiving notice that he was prohibited to do so by the said order. This was one of the highest ever sentences imposed for civil contempt.

Similarly, a third party who assists or abets the breach of a court order may also be held to be in contempt of court.60

The severity of the sanctions imposed for breaches of court orders offers a strong disincentive for defendants to flout the orders.

As contempt proceedings are quasi-criminal in nature, the standard of proof is that of beyond reasonable doubt. However, the threshold to establish the guilty intention necessary for a finding of civil contempt is low. The alleged contemner must have intended to do the acts that would be in breach of a coercive court order; there is no need to show any specific or deliberate intention to flout the court orders.61

IV FRAUD IN SPECIFIC CONTEXTS

i Banking and money laundering

Singapore is ranked by the International Monetary Fund as one of the 25 systemically important financial centres in the world.62 With substantial funds flowing through the Singapore banking system, money laundering is a serious concern. Singapore is therefore an active member of the Financial Action Task Force – a global body setting standards and promoting effective implementation of anti-money laundering and terrorist financing measures.63

Locally, money laundering is a crime under the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act64 (CDTA), and is punishable with imprisonment of up to 10 years and a fine of up to S$500,000 for natural persons, and a fine of up to S$1 million for corporations.65

Money laundering is an accessory offence, and it is necessary to show that it was accessory to a predicate offence. The predicate offences upon which money laundering may be established (‘drug dealing offences’66 and ‘serious offences’67) are exhaustively set out in the First and Second Schedules to the CDTA. These Schedules are reviewed periodically and new predicate offences introduced when necessary. The latest revisions to the Schedules on 3 June 2015 saw the addition of 36 predicate offences.

In addition to the criminalisation of money laundering, regulators have issued sector-specific anti-money laundering regulations (e.g., the Monetary Authority of Singapore (MAS) Notice 626 on Prevention of Money Laundering and Countering the Financing of Terrorism, the MAS Private Banking Code of Conduct and the Legal Profession (Prevention of Money Laundering and Financing of Terrorism) Rules 2015).68

The Suspicious Transactions Reporting Office is a branch of the CAD that was established in January 2010, and it is the government agency responsible for receiving and analysing suspicious transaction reports, and disseminating the results of the analyses to relevant law enforcement agencies.

ii Insolvency

It may sometimes be necessary to commence insolvency proceedings against an individual or a corporate entity.

In Singapore, personal bankruptcy and corporate insolvency are dealt with separately, with the former being governed by the Bankruptcy Act69 and the latter being provided for in the Companies Act.70 There is, however, some commonality in the two regimes. Notably, the provisions relating to unfair preference and transactions at undervalue are set out in the Bankruptcy Act,71 and the Companies Act simply references the same.72 These provisions exist to prohibit irresponsible behaviour by debtors on the brink of insolvency.

In addition, under Section 340(1) of the Companies Act, any person who is knowingly a party to the carrying on of a business with the intent to defraud creditors of the company may be held personally liable, without any limitation of liability, for all or any of the debts or other liabilities of the company. This is also a crime under Section 340(5) with the offender liable on conviction to a fine up to S$15,000 or imprisonment of up to seven years, or both.

The Bankruptcy Act was recently amended73 (the changes came into force on 1 August 2016),74 and now requires institutional creditors to appoint a private trustee in bankruptcy when making a bankruptcy application.75 Coupled with recent pronouncements by the Singapore High Court76 that have paved the way for third-party funding of insolvency claims, the increased incidence of private trustees is likely to see claims for unfair preference and undervalue transactions being pursued with more vigour.

iii Arbitration

Singapore is a popular arbitration venue. The caseload for arbitrations handled by the Singapore International Arbitration Centre alone has increased from 64 cases in 2003 to 259 in 2013.77

Singapore’s arbitration regime adopts the framework and principles of the United Nations Commission on International Trade Law (UNCITRAL) Model Law.

International arbitrations are governed by the International Arbitration Act78 (IAA), which also confers upon the UNCITRAL Model Law, with the exception of Chapter VIII thereof, the force of law.79 Although the UNCITRAL Model Law does not apply to the same extent, the Arbitration Act80 (AA) governing local arbitrations is largely consonant with the framework and principles of the UNCITRAL Model Law, save that a slightly higher level of curial intervention is permitted.81

Arbitration is not the typical forum for fraud claims or claims for breach of trust. Because of the nature of such claims, and owing to the confidential nature of arbitration proceedings, an aggrieved victim of fraud may choose to resort to court litigation so that it may fully ventilate its claims.

An important aspect of arbitration proceedings that differs from court litigation is the scope and extent of disclosure. The general attitude towards disclosure in arbitration is that it should be much more limited.82 Certain arbitral evidential rules may provide for disclosure that is more limited in scope compared to what might otherwise be available in court discovery. For example, the International Bar Association (IBA) Rules of Evidence provide that one party may request the production of documents that are relevant, material and which it reasonably believes to be in the possession of the other party.83 This should be contrasted with the wider-ranging court discovery available under Order 24 of the Rules of Court,84 which provides that relevant and material documents that are in the possession, custody and power of the opposing party must be disclosed. This might prove to be a critical difference in fraud claims, where the claimant is unlikely to have a clear picture of what documents have been generated by the alleged fraudster.

Where fraud is perpetrated by two or more parties – of whom only some are parties to an arbitration agreement – separate and parallel arbitral and court proceedings may have to take place. Arbitral proceedings would proceed against the parties to the arbitration agreement, while court proceedings would proceed against the parties who cannot be said to have assented to arbitration.85

Where the subject matter of these parallel proceedings concerns the same or similar facts, the court proceedings may potentially be faced with an application that they be stayed pending the outcome of the arbitration. Previously, the Singapore courts recognised that the power to stay the court proceedings (when there is a pending arbitration concerning the same or similar subject matter) is a residual one and should be exercised only rarely in exceptional circumstances.86 However, this position appears to have changed following the recent Court of Appeal decision in Tomolugen Holdings Ltd v. Silica Investors Ltd.87 In this case, the Court of Appeal surveyed the positions taken in the various Commonwealth jurisdictions, and held that the bar for granting a stay of court proceedings (when there is a pending arbitration concerning the same or similar subject matter) should not be set at the ‘rare and compelling’ threshold.88 Instead, the court, as the final arbiter, should take the lead in ensuring the efficient and fair resolution of the dispute as a whole.89 The Court of Appeal also recognised three ‘higher-order concerns’ – namely, the plaintiff’s right to choose whom he or she wants to sue and where; the court’s desire to prevent the plaintiff from circumventing an arbitration clause; and the court’s inherent power to manage its processes to prevent an abuse of process and ensure the efficient and fair resolution of disputes – and held that any decision must strike a balance among them that ultimately serves the ends of justice.90

iv Fraud’s effect on evidentiary rules and legal privilege

Solicitor–client privilege applies to protect from disclosure all communications and documents between a solicitor and his or her client, and between internal legal counsel and the employer.91 Such privilege is, however, specifically inapplicable in relation to any fact observed by a solicitor or legal counsel in the course of his or her employment that shows the commission of any crime or fraud taking place from the commencement of the solicitor or legal counsel’s employment.92

V INTERNATIONAL ASPECTS

i Conflict of law and choice of law in fraud claims

As with most other common law jurisdictions, in personam jurisdiction over a defendant is established in Singapore by proper service of an originating process upon him or her (whether within or without Singapore) or by voluntary submission to the jurisdiction of the Singapore courts.93

For the Singapore courts to establish in personam jurisdiction over a defendant served with an originating process outside of Singapore, leave of court must be sought prior to service. When seeking leave of court, the applicant will have to ensure that the provisions of Order 11 of the Rules of Court are satisfied. The requirements are, briefly, that94 one of the heads of jurisdiction specified under Order 11, Rule 1 is satisfied;95 there must be a serious issue to be tried on the merits of the case; and Singapore is clearly shown to be the appropriate forum for the dispute to be heard.

The applicable test for the appropriate forum is the locus classicus adopted by the UK court in The Spiliada (Spiliada).96

The Spiliada test was recently applied by the Court of Appeal in the context of cross-border fraud claims in Rappo, Tania v. Accent Delight International Ltd and another and another appeal.97 In deciding that Singapore was the most appropriate forum for the hearing of the claims, the judge considered the availability of the Singapore International Commercial Court (SICC) as a Spiliada factor in favour of having the case heard in Singapore.98 On appeal, the Court of Appeal agreed, but cautioned against reliance on the SICC for ‘an unprincipled jurisdictional grab resulting in the Singapore courts’ refusal to grant a stay in all cross-border commercial cases’.99

Where parties have agreed in a contract to submit to the exclusive jurisdiction of a particular forum (through an exclusive jurisdiction clause), the Singapore courts will almost always give effect to parties’ contractual intentions.100 Even where parties have only indicated that a particular forum will have non-exclusive jurisdiction, this will be a persuasive factor to the Singapore courts.101

Where the existence or validity of an agreement (including the choice-of-law clause) is in dispute, the Singapore courts will look at the putative law of the contract to determine the existence or the validity of the contract (i.e., that a presumption arises that the law of the jurisdiction specified by a choice-of-law clause is the most appropriate).102 However, where an agreement is invalidated by duress or fraud, the circumstances of the operative fraud or duress have to be examined to see whether they had invalidated parties’ meeting of minds to agree on the choice of law.103

This principle has also been applied to exclusive jurisdiction clauses by the High Court of Singapore.104 Thus, whether an exclusive jurisdiction clause is vitiated by allegations of duress or fraud also depends on whether the duress or fraud had invalidated the parties’ meeting of minds on the choice of jurisdiction.

ii Collection of evidence in support of proceedings abroad

In view of the in personam nature of a search order, courts only have the power to issue search orders against persons within their jurisdiction, and such jurisdiction ought not to be assumed on an ex parte application.105

It is currently unclear whether search orders may be issued for the sole purpose of giving support to foreign proceedings. Singapore has seen two conflicting lines of authority on whether such support is available for freezing orders (see below), and a similar approach is likely to be taken in relation to search orders.

Singapore courts are empowered to issue search orders in support of arbitrations. This is expressly provided for under the AA106 and the IAA.107

iii Seizure of assets or proceeds of fraud in support of the victim of fraud

In Petroval SA v. Stainby Overseas Ltd108(Petroval), the High Court of Singapore concluded that the Singapore courts have no jurisdiction to issue freezing orders in aid of foreign court proceedings.

Petroval was, however, doubted in Multi-Code Electronics Industries (M) Bhd and another v. Toh Chun Toh Gordon and others109 (Multi-Code), where the High Court instead held that the grant of freezing orders in aid of foreign court proceedings was possible if in personam jurisdiction is established.110

Interestingly, Multi-Code was subsequently cited by the Court of Appeal in Virsagi Management (S) Pte Ltd v. Welltech Construction Pte Ltd111 (Virsagi) for a different proposition. The Court of Appeal in Virsagi made no comment on the proposition advanced in Multi-Code concerning freezing orders in aid of foreign proceedings.

iv Enforcement of judgments granted abroad in relation to fraud claims

Monetary judgments made by foreign courts can be enforced in Singapore in three principal ways:

  • a where a judgment in a civil matter is obtained in a superior court in a stipulated Commonwealth jurisdiction,112 the creditor may apply to have the judgment registered in the courts of Singapore under the Reciprocal Enforcement of Commonwealth Judgments Act (RECJA), where it will be recognised and enforced as though it were a Singapore judgment;113
  • b where a judgment in a civil matter is obtained in a superior court in Hong Kong, the creditor may apply to have the judgment registered in the courts of Singapore under the Reciprocal Enforcement of Foreign Judgments Act (REFJA);114 or
  • c the creditor may commence fresh legal proceedings in the Singapore court and sue on the foreign judgment as a debt.

The registration of judgments through the RECJA or the REFJA represents a quicker avenue for enforcement than suing on the foreign judgment. The creditor must, however, bear in mind that registration under the RECJA or the REFJA requires that the judgment be issued by a superior court of one of the jurisdictions recognised by the statutes. There may therefore be judgments that fall outside the scope of the RECJA and the REFJA even if the jurisdiction where the judgment was issued is one covered by the RECJA or the REFJA.

Singapore, a signatory to the Hague Convention on Choice of Court Agreements (HCCCA) since 25 March 2015, ratified the HCCCA on 2 June 2016.115 Under the HCCCA, the existing framework for a party to have a foreign judgment recognised and enforced in Singapore is expanded. Notably, Article 8 of the Convention provides that where parties have designated a court of a Member State to hear their dispute, the judgment of said court shall be recognised and enforced in other Member States. The Choice of Court Agreements Act 2016116 (CCAA), which implements the HCCCA, was enacted on 28 April 2016 and will come into force on a date to be gazetted.

v Fraud as a defence to enforcement of judgments granted abroad

Where a foreign judgment is registered in Singapore pursuant to the REFJA, the registration may be set aside if it can be shown that the judgment was procured by fraud.117

Similarly, an arbitral award may be set aside for, inter alia, corruption, bribery or fraud. An application to set aside will be successful if it can be shown that the award was obtained by such corruption, bribery or fraud.118

VI CURRENT DEVELOPMENTS

One development in Singapore has been the establishing of the SICC on 5 January 2015. The SICC was established to provide an alternative, neutral venue for the determination and resolution of claims that might have an international element.119 The SICC provides an alternative forum for the adjudication of multi-jurisdictional fraud claims. The coming into force in Singapore of the CCAA will provide a boost to the enforceability of judgments of the SICC outside Singapore.120 This could have a significant impact on cross-border asset recovery.

The SICC is a division of the Singapore High Court and is part of the Singapore Supreme Court.121 All appeals from the SICC are heard by the Court of Appeal of Singapore. Disputes before the SICC (or on appeal therefrom) may be heard at first instance by judges from Singapore, or by international judges designated by the Chief Justice of Singapore.

The SICC has the jurisdiction to hear and try actions:122

  • a that involve a claim of an international and commercial nature;123
  • b where the parties to the action submit to the jurisdiction of the SICC under a written jurisdiction agreement. The SICC will also assume jurisdiction over matters that are unconnected to Singapore (i.e., ‘offshore cases’) as long as parties agree under the written jurisdiction agreement to submit the dispute to the SICC;124 and
  • c where the reliefs sought by the parties are not in the form of, or connected with, a prerogative order (including a mandatory order, a prohibiting order, a quashing order or an order for review of detention).

Alternatively, the SICC may also assume jurisdiction over a case that was begun in the Singapore High Court if the High Court orders that the case be transferred to the SICC. The matter must be of an international and commercial nature, and the relief sought must not be in the form of, or connected with, a prerogative order.125 The High Court must also consider that the SICC has and would assume jurisdiction in the case, and that the matter is more appropriate to be heard in the SICC.126

Notably, leave is not required for the service of an SICC originating process outside Singapore on a party to a written jurisdiction agreement.127 This contrasts with other proceedings commenced in the Singapore courts where the claimant must apply for leave to serve the originating process out of jurisdiction.

It is therefore open to parties who have submitted to the SICC’s jurisdiction to join another person who is connected to the dispute but has not otherwise submitted to the SICC’s jurisdiction. This may be of particular significance in cases involving the knowing receipt of assets by third parties, where these assets can be traced into the hands of these third parties.

1 Ng Ka Luon Eddee is joint managing partner at Tan Kok Quan Partnership. The author wishes to thank Keith Tnee Zixian, Geraint Edward Kang Weisheng and Eugene Jedidiah Low Yeow Chin for their extensive contributions to this chapter.

2 Kim Hok Yung v. Cooperatieve Centrale Raiffeisen-Boerenleenbank BA (t/a Rabobank) [2000] 2 SLR(R) 455; Antariksa Logistics Pte Ltd and others v. Nurdian Cuaca and others [2017] SGHC 60.

3 DBS Bank Ltd v. Carrier Singapore (Pte) Ltd [2008] 3 SLR(R) 261.

4 Cap 289, 2006 Rev Ed.

5 Examples include false trading and market rigging (Section 197), market manipulation (Section 198) and insider trading (Division 3).

6 Part XII of the SFA read with Section 234.

7 Interschiff Schiffahrtsagentur GmbH v. Southern Star Shipping & Trading Pte Ltd [1981-1982] SLR(R) 601; Tang Yoke Kheng (trading as Niklex Supply Co) v. Lek Benedict [2005] 3 SLR(R) 263; Alwie Handoyo v. Tjong Very Sumito [2013] 4 SLR 308; Gimpex Ltd v. Unity Holdings Business Ltd [2015] 2 SLR 686, which was recently applied in Parakou Shipping Pte Ltd (in liquidation) v. Liu Cheng Chan and others [2017] SGHC 15 and iTronic Holdings Pte Ltd v. Tan Swee Leon and another suit [2016] 3 SLR 663.

8 Wishing Star Ltd v. Jurong Town Corp [2008] 2 SLR(R) 909.

9 Rajabali Jumabhoy v. Ameerali R Jumabhoy [1998] 2 SLR(R) 434; Ching Mun Fong (executrix of the estate of Tan Geok Tee, deceased) v. Liu Cho Chit [2001] 1 SLR(R) 856.

10 Forum Development Pte Ltd v. Global Accent Trading Pte Ltd [1994] 3 SLR(R) 1097.

11 Caltong (Australia) Pty Ltd v. Tong Tien See Construction Pte Ltd [2002] 2 SLR(R) 94; Parakou Shipping Pte Ltd (in liquidation) v. Liu Cheng Chan and others [2017] SGHC 15.

12 My firm acted for the plaintiffs in this matter.

13 Beyonics Technology Ltd and anor v. Goh Chan Peng and ors [2016] SGHC 120 at [129]-[137], which was followed in Higgins, Danial Patrick v. Mulacek, Philippe Emanuel and others and another suit [2016] 5 SLR 848.

14 Goh Chan Peng and others v. Beyonics Technology Ltd and another and another appeal [2017] SGCA 40.

15 The Annual Report 2012 produced by the Supreme Court of Singapore (www.supremecourt.gov.sg) shows that a trial of a civil matter can be fixed in as little as two to three weeks from the date of set down. However, this does not take into account a number of possible interlocutory applications that can be filed, heard and resolved.

16 Section 6 of the Limitation Act (Cap 163, 1996 Rev Ed).

17 Section 24A of the Limitation Act.

18 Section 24B of the Limitation Act.

19 Section 29 of the Limitation Act.

20 Cap 224, 2008 Rev Ed.

21 Section 405 of the Penal Code.

22 Section 415 of the Penal Code.

23 Section 421 of the Penal Code.

24 Sections 200 and 209 of the SFA.

25 Sections 197, 198, 207 and 208 of the SFA.

26 Cap 110, 2007 Rev Ed.

27 Sections 84, 85 and 86 of the FAA.

28 Cap 68, 2012 Rev Ed.

29 Section 359 of the CPC.

30 Panatron Pte Ltd v. Lee Cheow Lee [2001] 2 SLR(R) 435.

31 United Overseas Bank Ltd v. Lippo Marina Collection Pte Ltd and others [2016] 2 SLR 597. My firm acts for the plaintiff in this matter.

32 Meridian Global Funds Management Asia Ltd v. Securities Commission [1995] 2 AC 500. See also The Dolphina [2012] 1 SLR 992.

33 Ho Kang Peng v. Scintronix Corp Ltd (formerly known as TTL Holdings Ltd) [2014] 3 SLR 329; see also Jetivia SA v. Bilta (UK) Limited (in liq) [2015] UKSC 23.

34 Singapore Court Practice 2014, Volume II (Jeffrey Pinsler, SC, Gen. Ed.) (LexisNexis, 2014) at [29/1/39].

35 Bouvier, Yves Charles Edgar v. Accent Delight International Ltd [2015] 5 SLR 558.

36 Spectramed Pte Ltd v. Lek Puay Puay & others [2010] SGHC 112.

37 European Grain & Shipping Ltd v. Compania Naviera Euro-Asia SA and others (CN Jaya SA, intervener) [1989] 2 SLR(R) 445.

38 The position taken by the Court in European Grain is in line with the current position in England in the UK Court of Appeal case of Thane Investments Ltd & Ors v. Tomlinson & Ors [2003] EWCA Civ 1272 (Thane Investments).

39 4th edition, Sweet & Maxwell, 1998.

40 This appears to have been the result of the Thane Investments decision, which was written after the fourth edition of Steven Gee’s book and prior to the fifth edition.

41 [2015] SGHC 195.

42 PT Sariwiguna at [10]-[13].

43 PT Sariwiguna at [17].

44 [2015] 5 SLR 558. My firm acted for one of the defendants in this matter.

45 Accent Delight at [94].

46 Ibid.

47 A clause to this effect is included as Paragraph 2 of the draft freezing order appended as Form 7 to the Supreme Court Practice Directions.

48 Madoff Securities International Ltd and another v. Raven and others [2012] 2 All ER (Comm) 634; Zimmer Sweden AB v. KPN Hong Kong Ltd and another [2014] HKCFI 769.

49 Choy Chee Keen Collin v. Public Utilities Board [1996] 3 SLR(R) 812.

50 Madoff Securities International v. Raven [2012] 2 All ER (Comm) 634.

51 Accent Delight at [163].

52 Holyoake v. Candy [2016] EWHC 970 (Ch).

53 Candy and others v. Holyoake and another [2017] EWCA Civ 92.

54 Asian Corporate Services (SEA) Pte Ltd v. Eastwest Management Ltd (Singapore Branch) [2006] 1 SLR(R) 901.

55 Paragraph 41 of the Supreme Court Practice Directions.

56 Paragraph 42 of the Supreme Court Practice Directions.

57 Pac Asian Services Pte Ltd v. European Asian Bank AG [1987] SLR(R) 6.

58 Paragraph 42A of the Supreme Court Practice Directions.

59 Maruti Shipping Pte Ltd v. Tay Sien Djim [2014] SGHC 227. My firm acted for the plaintiff in this matter.

60 See Maruti Shipping Pte Ltd v. Tay Sien Djim [2014] SGHC 227, where the first defendant’s son (who was not a party to the main proceedings) was found liable and fined for not complying with the freezing order and search order.

61 Tan Beow Hiong v. Tan Boon Aik [2010] 4 SLR 870.

62 www.imf.org/external/pubs/ft/scr/2013/cr13325.pdf.

63 www.fatf-gafi.org/pages.

64 Cap 65A, 2000 Rev Ed.

65 See Sections 46 and 47 of the CDTA.

66 See the definition of ‘drug dealing offence’ in Section 2 of the CDTA and the First Schedule thereto.

67 See the definition of ‘criminal conduct’ in Section 2 of the CDTA and the Second Schedule thereto.

68 Cap 161, No. S 307.

69 Cap 20, 2009 Rev Ed.

70 Cap 50, 2006 Rev Ed.

71 Sections 98 and 99 of the Bankruptcy Act.

72 Section 329 of the Companies Act.

73 Bankruptcy (Amendment) Act 2015, Act No. 21 of 2015.

74 Bankruptcy (Amendment) Act 2015 (Commencement) Notification 2016, No. S 358/2016

75 ‘Institutional creditors’ include banks or finance companies regulated by the MAS, or business undertakings with more than S$100 million annual sales turnover and more than 200 employees: see Section 33(3) of the Bankruptcy Act.

76 See Re Vanguard Energy Pte Ltd [2015] SGHC 156.

77 www.siac.org.sg/2014-11-03-13-33-43/facts-figures/statistics.

78 Cap 143A, 2002 Rev Ed.

79 Section 3(1) of the IAA.

80 Cap 10, 2002 Rev Ed.

81 See the Sub-Committee of the Law Reform Committee of the Singapore Academy of Law: ‘it is considered that the adoption of a unified arbitration that resulted in a lesser degree of curial intervention would be unacceptably radical for the local legal profession and local businessmen.’

82 Nathan D O’Malley, Rules of Evidence in International Arbitration at [3.29] and [3.30]; Russell on Arbitration (Sweet & Maxwell 23rd ed) at [5-134].

83 Article 3 of the IBA Rules of Evidence.

84 Cap 322, R 5, 2014 Rev Ed.

85 It should be noted, however, that the Singapore courts appear to recognise the possibility that an arbitration agreement can be extended to non-parties where the signatories to the arbitration agreement consent to this extension: The Titan Unity [2014] SGHCR 4.

86 Four Pillars Enterprises Co Ltd v. Beiersdorf Aktiengesellschaft [1999] 1 SLR(R) 382; Lanna Resources Public Co Ltd v. Tan Beng Phiau Dick and another [2011] 1 SLR 543.

87 [2016] 1 SLR 373.

88 Tomolugen Holdings Ltd v. Silica Investors Ltd [2016] 1 SLR 373 (Tomolugen) at [187]. See also Maybank Kim Eng Securities Pte Ltd v. Lim Keng Yong [2016] 3 SLR 431.

89 Tomolugen at [186].

90 Tomolugen at [188].

91 Sections 128(1) and 128A(1) of the Evidence Act (Cap 97, 1997 Rev Ed).

92 Sections 128(2) and 128A(2) of the Evidence Act.

93 For the High Court, see Section 16(1) of the Supreme Court of Judicature Act (Cap 322, 2007 Rev Ed); For the District Court and Magistrate’s Court respectively, see Sections 19(2) and 52(1) of the State Courts Act (Cap 321, 2007 Rev Ed).

94 PT Garuda Indonesia v. Birgen Air [2001] SGHC 262 (upheld on appeal [2002] 1 SLR(R) 401).

95 Some of the relevant heads of jurisdiction set out in Order 11 Rule 1 include where the relief is sought against a person domiciled, ordinarily resident, carrying on business or having property in Singapore (Order 11 Rule 1(a)); where the claim concerns a contract made in Singapore or governed by Singapore law (Order 11 Rule 1(d)); where the claim is a restitutionary one or for an account or other relief against the defendant as a trustee or fiduciary where the alleged liability arises out of an act done in Singapore (Order 11 Rule 1(o)); and where the claim is founded on a cause of action arising in Singapore (Order 11, Rule 1(p)).

96 [1987] AC 460.

97 [2017] SGCA 27. My firm acted for one of the defendants in this matter.

98 Accent Delight International Ltd and anor v. Bouvier, Yves Charles Edgar and ors [2016] 2 SLR 841 at [111]-[116].

99 Rappo, Tania v. Accent Delight International Ltd and another and another appeal [2017] SGCA 27 at [123].

100 The Jian He [1999] 3 SLR(R) 432.

101 Bambang Sutrisno v. Bali International Finance Ltd [1999] 2 SLR(R) 632.

102 CIMB Bank Bhd v. Dresdner Kleinwort Ltd [2008] 4 SLR(R) 543 (CIMB Bank).

103 CIMB Bank at [49]-[50].

104 PT Selecta Bestama v. Sin Huat Marine Transportation Pte Ltd [2016] 1 SLR 729.

105 Altertext Inc v. Advanced Data Communications Ltd and others [1985] 1 All ER 395.

106 Section 31(1)(a) read with Section 28(2)(e) of the AA.

107 Section 12A(2) read with Section 12(1)(f) of the IAA. See also Arbitration in Singapore: A Practical Guide (Dennis Brock, Gen. Ed.) (Sweet & Maxwell, 2014) at p. 308.

108 Petroval SA v. Stainby Overseas Ltd [2008] 3 SLR(R) 856.

109 Multi-Code Electronics Industries (M) Bhd and another v. Toh Chun Toh Gordon and others [2009] 1 SLR(R) 1000.

110 Multi-Code Electronics Industries (M) Bhd and another v. Toh Chun Toh Gordon and others [2009] 1 SLR(R) 1000.

111 Virsagi Management (S) Pte Ltd v. Welltech Construction Pte Ltd [2013] SGCA 50.

112 Apart from the United Kingdom, the RECJA also applies to judgments obtained in the superior courts of Australia, New Zealand, Sri Lanka, Malaysia, Windward Islands, Pakistan, Brunei Darussalam, Papua New Guinea and India (save for the state of Jammu and Kashmir).

113 Cap 264, 1995 Rev Ed.

114 Cap 265, 2001 Rev Ed.

115 www.mlaw.gov.sg/content/minlaw/en/news/press-releases/singapore-ratifies-hague-convention-on-choice-of-court-agreement.html.

116 Act No. 14 of 2016.

117 Section 5, REFJA and Section 3(2), RECJA. It is observed that the language of the relevant provisions in the REFJA and the RECJA differ. However, this difference is unlikely to affect the right of an applicant to apply to set aside the judgment obtained by fraud.

118 Article 34(1) read with Article 6 of the UNCITRAL Model Law; and Section 24 of the IAA. See also Sui Southern Gas Co Ltd v. Habibullah Coastal Power Co (Pte) Ltd [2010] 3 SLR 3.

119 A brief description of the SICC and key features can be found on its website: www.sicc.gov.sg.

120 In a Note issued by the Second Minister of State for Law, Ms Indranee Rajah, SC, on 26 April 2016, it was stated that Singapore aims to bring the CCAA into force during 2016.

121 See the Rules of Court (Amendment No. 6) Rules 2014 that came into operation on 1 January 2015, which amended the existing Rules of Court to include a new Order 110 dealing with the SICC.

122 Order 110 Rule 7.

123 Order 110 Rule 1(2).

124 Order 110 Rule 8(2) read with Order 110 Rule 1(2).

125 Order 110 Rule 7.

126 Order 110 Rules 12 and 13.

127 Order 110 Rule 6.