Forum Election, Forum Non Conveniens and the Singapore International Commercial Courts

In its recent decision in Rappo v. Accent Delight International Ltd and another [2017] SGCA 27, the Singapore Court of Appeal considered the distinction and relationship between the doctrines of forum election and forum non conveniens.  Notably, the Court also considered whether the potential availability of the Singapore International Commercial Court ("SICC") represents a relevant consideration in determining whether Singapore is an appropriate forum.

Background to the dispute

The Appellants were Tania Rappo ("Ms Rappo"), Yves Charles Edgar Bouvier ("Mr Bouvier") and MEI Invest Limited ("MEI"), a company controlled by Mr Bouvier. The Respondents were two companies owned by the family trust of Dimitry Rybolovlev, a Russian magnate ("Mr Rybolovlev").

Mr Bouvier, a businessman in the international art scene, was introduced to the Rybolovlev family by Ms Rappo.  Mr Bouvier was subsequently engaged to source and assist in procuring artworks for Rybolovlev, who purchased the artworks through the Respondents.

In 2014, Mr Rybolovlev accused Mr Bouvier of dishonestly inflating sale prices of the artworks purchased. This led to the a criminal complaint being made in Monaco which resulted in the arrest of Ms Rappo and Mr Bouvier who were charged with fraud and money laundering offences.  The Respondents subsequently applied to join the criminal proceedings as civil claimants ("Monaco Civil Proceedings").  The Respondents also commenced civil proceedings against the Appellants in Singapore claiming, amongst other things, that Mr Bouvier had breached his fiduciary duties and had perpetrated fraudulent misrepresentation, and that MEI and Rappo were liable for dishonest assistance and/or knowing receipt.

The Appellants sought a stay of the proceedings in Singapore on the basis that Switzerland (and, in Ms Rappo's view, Monaco) was the more appropriate forum for the dispute.  The Singapore High Court dismissed the stay applications on the condition that the Respondents discontinue the Monaco Civil Proceedings.  It also urged the parties to agree to a transfer to the SICC and held that failing such agreement, the Appellants would be given an opportunity to present arguments against the transfer.

The Court of Appeal's judgment

The Court of Appeal overturned the High Court judge's decision and granted the stay sought. In particular, the Court considered (i) whether it was permissible for the Appellants to argue concurrently that the Respondents should be put to forum election and that Singapore is forum non conveniens, and (ii) whether Switzerland and/or Monaco represented more appropriate fora than Singapore.

Forum election and forum non conveniens: cumulative or alternative remedies?

The Appellants argued that the Respondents ought to have been put to forum election (i.e. to compel the Respondents to choose between pursing the claims in Singapore or another jurisdiction) because the Monaco Civil Proceedings were lis alibi pendens. At the same time, it was also argued that Switzerland or (according to Ms Rappo) Monaco represented more appropriate fora, given the applicability of Swiss law to the claims, and that proceedings had already commenced in Monaco.  The Respondents argued that it was not open to the Appellants to rely cumulatively on both the doctrines of forum election and forum non conveniens as the two represent "alternative" and not "cumulative" remedies.

The Court of Appeal found for the Appellants. The two doctrines have different conceptual bases. A claimant should be compelled to elect between different fora in order to prevent the risk of conflicting findings by different courts and to prevent abuse of judicial systems. On the other hand, the doctrine of forum non conveniens involves the court "deciding the appropriateness of exercising its jurisdiction over the dispute". It is therefore open to the defendant, after the plaintiff has been put to an election and decides to proceed only in Singapore, to submit that the action in Singapore should be stayed on the basis that the overseas forum is the more appropriate forum. Conversely, if the plaintiff chooses to proceed abroad, it is permissible for the defendant to apply for an anti-suit injunction to restrain the plaintiff from pursuing the foreign action on the basis, for instance, that Singapore is the natural forum.

Having said that, the Court held that it would be "resource-saving (and) consonant with logic and principle" for the courts, as a matter of general practice, first to decide whether Singapore is forum non conveniens. If it considers that Singapore is not the appropriate forum, the court should order a stay and that would be the end of the inquiry. It is only if the court finds that the alternative forum is not clearly or distinctly more appropriate that the plaintiff should be put to an election between fora.

Switzerland, Monaco or Singapore?

The Court of Appeal confirmed that, in deciding whether Singapore is forum non conveniens, the applicable test continues to be that laid out by the English House of Lords in Spiliada Maritime Corporation v Cansulex Ltd [1987] AC 460 ("Spiliada Test"). This requires the court to consider whether there is some other available forum in which it is more appropriate for the case to be tried, and involves an analysis of all factors that connect the dispute with the various competing jurisdictions. The Court of Appeal emphasised that the quality of the connecting factors, rather than quantity, would be crucial in the analysis. The search is for those incidences (or connections) that have the most relevant and substantial associations with the dispute. If the connections point to an alternative forum, the court will ordinarily grant a stay unless justice requires that a stay should nonetheless not be granted.

On the facts, the Court of Appeal agreed that Switzerland was prima facie a more appropriate forum than Singapore. In its view, the most significant connecting factor was the governing law of the relationship between Mr Bouvier and the Respondents, which the Court held was Swiss law as prescribed under the four written agreements for the supply and purchase of the artworks. The fact that Mr Rybolovlev moved the artworks to Singapore in 2009 did not change the legal character of the dealings between the parties and was unrelated to his relationship with Mr Bouvier.  The personal connections of the witnesses also pointed towards Switzerland as the forum with the closest and most real connection with the dispute.

Having reached this conclusion, the Court considered if there were reasons of justice which mitigated against a stay of proceedings. The Respondents argued that they would be deprived of legitimate juridical advantages if the matter were heard in Switzerland, as Swiss law does not provide the remedies of constructive trusts and tracing.  The Court rejected this view in light of its finding that Swiss law applied to the dispute, which meant that the Respondents would not have been able to obtain those remedies even if the dispute were heard in Singapore. Notably, it also took the view that the non-availability of a "legitimate juridical advantage" would not generally constitute a decisive factor, and that the courts would be very slow to pass judgment on the quality of justice obtainable in an available and appropriate foreign forum.

The relevance of the SICC in determining whether Singapore is forum non conveniens

Finally, the Court considered whether the High Court judge had taken into account the possibility of a transfer of the action to the SICC in determining whether Singapore was forum non conveniens, and if so whether she was correct to take that possibility into account. According to the Court, this was an issue to which the parties paid considerable attention.

On the facts, the Court of Appeal accepted that the judge had not taken the possibility of a transfer into account in determining whether Singapore was forum non conveniens, although she would have been entitled to do so as a matter of principle. The Spiliada Test requires the court to take all factors into consideration in identifying the appropriate forum in which the case may be tried, taking the interests of parties and ends of justice into account. It would therefore be "wrong in principle" for the court to shut its eyes to a plainly relevant consideration such as the capabilities of the SICC.

Having said that, the Court agreed with the Appellant that the presence of the SICC would not in and of itself provide a reason for all cross-border cases to be tried in Singapore. The factors that are normally considered under the Spiliada Test continue to apply, with the possibility of a transfer to the SICC being an additional factor within the broader forum non conveniens analysis. The burden rests on the party relying on the SICC factor to specify the particular feature or quality of the SICC that would make it more appropriate for the dispute to be heard in Singapore by the SICC.  By way of illustration, the Court stated that the fact that a foreign law applies to the dispute should carry less weight in the forum non conveniens analysis if the Singapore courts, through their International Judges in the SICC, are familiar with and adept at applying that foreign law.

Comment

The Court's guidance on how Singapore courts will deal with jurisdictional challenges premised on the doctrines of forum election and forum non conveniens is welcome, particularly in light of Singapore's aim of becoming a regional and global hub for cross-border disputes. The international nature of business and disputes means that fights over jurisdiction will be increasingly common, and the decision provides a helpful measure of certainty for parties litigating in Singapore.

The decision also confirms that the establishment of the SICC does not represent a shortcut or "free pass" to parties, who must continue to justify Singapore as an appropriate forum. Parties continue to be bound by the Spiliada Test and must point to the specific feature(s) of the SICC which make it an appropriate forum to determine the dispute  The continued applicability of the Spiliada Test  ensures that the courts will continue to give effect to the underlying rationale of the doctrine of forum non conveniens and to "find the forum which is the more suitable for the ends of justice, and is preferable because pursuit of the litigation in that forum is more likely to secure those ends".

Finally, the decision makes it necessary for parties to consider whether, under the applicable rules, it is possible for the dispute to be transferred to the SICC (the threshold being whether prima facie "a transfer to the SICC should succeed").  If so, parties should look to address the court on the relevance of the SICC to the Spiliada Test.