Singapore court clarifies the law relating to service of process on foreign parties

In Humpuss Sea Transport Pte Ltd (in compulsory liquidation) v PT Humpuss Intermoda Transportasi TBK and another [2015] SGHC 144, the Singapore High Court has clarified the law in relation to service of court process on a foreign party to Singapore proceedings.

While it has always been clear that foreign service of process may be effected via "official" means under the Rules of Court (the "Rules"), the position in relation to foreign service via private means has been far less straightforward. Indeed, it was widely doubted that foreign service via private means was permissible in light of the High Court's decision to this effect in Ong & Co. v Chow YL Carl [1987] SLR(R) 281.

The High Court finally tackled this issue in Humpuss, finding that Ong & Co. is outdated and does not represent the modern approach.

In a comprehensive judgment, Steven Chong J also took the opportunity to definitively clarify the position in relation to foreign service of process, and his judgment in Humpuss leaves the state of the law in no doubt: not only does Singapore permit service overseas through private means, private service is the “default” position. The judgment also confirms that the Court has discretion to cure invalid service in limited circumstances.

The High Court set out in detail the various methods available to a plaintiff for foreign service (depending on where the defendant is domiciled), the circumstances in which service will be valid or invalid, and when it might be appropriate for the court to exercise its discretion to cure invalid service. The judgment is summarised below, along with practical advice on how to avoid the pitfalls of overseas service when dealing with a foreign-domiciled party.

Background

The Plaintiff and Defendants were part of the Humpuss group of companies, an international conglomerate. The Plaintiff was incorporated in Singapore, while both Defendants were incorporated in Indonesia.

In January 2014, the Plaintiff was placed into compulsory liquidation. The Plaintiff filed claims against the Defendants in August 2014 in respect of $110 million of unpaid loans (amongst others), and in September 2014 obtained leave to serve its summons and statement of claim in Indonesia.

In October 2014, an Indonesian lawyer engaged by the Plaintiff effected service of original and translated copies of the writ at the Defendants’ registered address by personal delivery and courier.

The Defendants subsequently filed a Summons in Singapore November 2014 seeking a declaration that the documents had not been duly served on them in Indonesia (although they did not deny that they had, in fact, received the documents). Relying on the decision in Ong & Co (discussed below), the Defendants argued that because the documents were served through a private agent (which, they contended, is not an authorised means of serving an originating process in Indonesia), the service was not valid.

Three issues fell to be determined by the court:

1. a) Was service effected in a manner provided for under the Rules?
2. b) Was service, even though effected in a manner provided for under the Rules, nevertheless invalid because it was contrary to the law of Indonesia?
3. c)    If service was invalid, can and should it be cured by the court?

Decision

The Court found that the service in question was valid, on the basis that:

1. a) the method of service employed by the Plaintiff, i.e. personal service, is clearly permitted by the Rules; and
2. b) the Defendants failed to demonstrate that the method of service employed was contrary to Indonesian law.

As such, there was no need for the Court to consider whether non-compliance with the Rules was curable, but Chong J considered this obiter.

Revisiting Ong & Co.

Chong J undertook an in-depth analysis of the legislative history of the Rules and relevant case law, and used the opportunity to clarify the position in Singapore. Importantly, he found that the restrictive approach set out in Ong & Co. (that service of a Singapore writ overseas may only be effected through official channels) “runs against the grain of legislative history”, and that this restrictive approach had been superseded and contradicted by various amendments to the Rules and should therefore no longer be followed.

Chong J considered this approach to be consistent with case law over the past 15 years, and concluded that “service through official channels was meant to supplement, but not supplant, private service”.

As such, it is clear that service of process on foreign parties is not confined to the methods prescribed under O11 r4(2) of the Rules.

Methods of effecting service

The Court considered O11 and undertook a survey of the number of methods of service can properly be said to exist under the statutory scheme, taking into account the legislative history and relevant case law.

Chong J found that "O 11 rr 3 and 4 of [the] Rules provide alternative and complementary methods of effecting service out of jurisdiction", and that the number of ways of serving a writ outside of jurisdiction depends on whether the defendant resides in:

1. a) Malaysia and Brunei (seven methods);
2. b) A Civil Procedure Convention country (five methods); or
3. c) A non-Civil Procedure Convention country (six methods).

The four common methods of service which are available irrespective of where the defendant resides are:

1. a) Personal service, as long as it does not contravene the law of the foreign jurisdiction (r 3(1) r/w r 3(2)).
2. b) Substituted service with leave of court provided it does not contravene the law of the foreign jurisdiction (r 3(1) r/w r 3(2)).
3. c) Service by a method specifically authorised by the law of the foreign jurisdiction for the service of foreign process (r 3(3)).
4. d) Service through a Singapore consular authority, as long as it does not contravene the law of the foreign jurisdiction (r 4(1)(b) and r 4(2)(b)).

If the defendant resides in Malaysia or Brunei, there are three additional methods which are applicable:

1. a) Service through the government of Malaysia or Brunei (r 3(8)(a) r/w r 4(2)(a)).
2. b) Service by a method recognised in either Malaysia or Brunei for the service of domestic process issued by the Malaysian and Bruneian courts, provided such service is not contrary to Malaysian or Bruneian law (r 3(8)(a) r/w r 4(2)(c)).
3. c) By post from the Registrar of the Singapore court to the judicial officer exercising civil jurisdiction in the territory in which the defendant resides (r 3(8)(b)).

If the defendant resides in a country with which Singapore has a Civil Procedure Convention, one additional method is available:

1. a) Service through the judicial authorities of the foreign jurisdiction (r 4(1)(a)).

If the defendant resides in a country with which Singapore does not have a Civil Procedure Convention, two additional methods are available:

1. a) Service through the government of the foreign jurisdiction (r 4(2)(a)).
2. b) Service by a method recognised by the law of the foreign jurisdiction for the service of domestic process issued by the courts of that country, provided such service is not contrary to the law of that country (r 4(2)(c)).

Are errors of service curable?

Chong J also considered the circumstances in which errors of service out of jurisdiction may be cured. He observed obiter that where service (i) fails to actually notify the defendant of the claim; or (ii) is contrary to the law of the foreign jurisdiction, it is not curable. However, where service is invalid merely because the method fails to comply with a procedural requirement of the Rules, courts should "look at the issue in the round" and "make the order which best does justice".

A restatement of the law on service outside jurisdiction

Chong J took the opportunity to comprehensively restate the law on service outside jurisdiction, paying particular attention to the manner of service. In summary:

The importance of proper service

The validity of service falls to be determined by reference to Singapore law (specifically, O 11). The burden of proof is on the plaintiff to establish that the method of service employed complies with O 11.

The relevance of foreign law

The provisions of foreign law are only relevant insofar as the laws of Singapore make compliance with foreign laws relevant.

Foreign law on service may be relevant in either a restrictive or permissive capacity under the Rules. Rule 3(2) will not permit service - official or private - in a foreign country where service is contrary to the law of that country (restrictive).Rule 3(3) permits service (other than personal service) via methods specifically provided for by the foreign jurisdiction for the service of foreign process (permissive).

Roadmap for O 11 litigation

As the Plaintiff always bears the burden of proving that service has been validly effected, they must establish:

-   which method of service they are relying on;

-   that service has been validly effected via the identified method; and

-   if the service were proven to be invalid, that non-compliance with the Rules can and should be cured by the court.

Defendants challenging the validity of service may do so through three principal routes:

-   by demonstrating that service had not, despite the attempt, been effected;

-   by demonstrating that the method of service employed was not one that is provided for under the law of the foreign jurisdiction;

-   by demonstrating that service was contrary to the law of the jurisdiction in question; and

-   finally, in response to a plaintiff’s attempt to cure an invalid service, a defendant can show that it is either not curable under O 2 r (1) of the Rules, or that the court’s discretion should not be exercised in any event.

Conclusion:

The decision in Humpuss brings clarity and certainty to a previously unsettled area of Singapore law. It is now clear when and how a party to Singapore proceedings may effect valid service of process on a party domiciled in a foreign jurisdiction.

Moreover, it is now clear that courts are able and prepared to exercise their discretion in order to cure procedural irregularities which may otherwise render service invalid, overlooking technical requirements in favour of doing justice.

Overall, it is clear that there are now fewer avenues for foreign parties to challenge or attempt to avoid service.

The High Court's judgment in Humpuss is an important step in the development of Singapore as an international hub for the resolution of cross-border disputes. 

Practical tips:

When negotiating agreements, specifically appointing an agent for service in a foreign jurisdiction may help avoid future difficulties with service overseas. This applies equally to a non-Singaporean party involved in a Singapore-seated arbitration; appointing an agent for service in the jurisdiction will help avoid issues in relation to related court applications and enforcement.

Should it become necessary to serve overseas, it is important to check that country's rules for service first, and ensure compliance as far as possible.

For more information, please contact Daniel Waldek, Senior Associate, Daniel Mills, Associate, Emmanuel Chua, Associate or your usual Herbert Smith Freehills contact.