VKC (2021) 2 SLR 0753
VKC (2021) 2 SLR 0753
VKC (2021) 2 SLR 0753
VKC
v
VJZ and another
[2021] SGCA 72
Facts
The appellant was one of 15 beneficiaries of an estate (“Estate”) pursuant to the
last will of the deceased testator (“1995 Will”). For ease of reference, the High
Court judge (“Judge”) categorised the beneficiaries (apart from the 15th
beneficiary which was a Singapore-incorporated company wholly owned by the
deceased prior to his death) into three groups: five of them including the
appellant belonged to “Family [A]”; another five belonged to “Family [B]”, and
the rest were “unrepresented beneficiaries”. The respondents were appointed as
the joint and several administrators of the Estate (later varied to joint
administrators). The beneficiaries participated in mediation and duly executed a
settlement agreement dated 18 April 2018 (“2018 SA”). Clause 19 of the 2018 SA
provided for Singapore as the exclusive jurisdiction. Shortly after the 2018 SA
was entered into, the respondents applied to court seeking several orders to give
effect to their appointment and indemnification in relation to their
administration of the Estate in accordance with the terms of the 2018 SA. On
13 June 2019, the respondents published two notices in two newspapers in
Indonesia (“Notices”), which, inter alia, invited all creditors or next-of-kin
interested in or having claims against the Estate to contact the respondents.
The appellant commenced proceedings in Indonesia in respect of these Notices
(“Indonesian Proceedings”), claiming that the respondents’ act of publishing the
Notices directly affected the appellant’s rights as a beneficiary of the Estate. The
Indonesian Proceedings appeared to have been commenced on 15 August 2019.
At some point in 2019, the beneficiaries undertook further negotiations as to
their rights and entitlements under the 2018 SA, culminating in their entering
into a new “Inheritance Right Settlement Agreement” (“IRSA”). By a subsequent
order of court, the IRSA replaced the 2018 SA and new administrators were
appointed.
On 7 February 2020, the respondents were provided with a letter of request for
international judicial assistance from the registrar for the Central Jakarta
District Court, through which the respondents found out about the Indonesian
[2021] 2 SLR 0753.fm Page 754 Monday, September 27, 2021 10:57 AM
appellant. The appellant had entered into the IRSA after the commencement of
the Indonesian Proceedings, at which point the 2018 SA was in force. Under the
2018 SA, Family [A] was to be paid a lump sum from the Estate first before
Family [B] would be paid. The IRSA reversed the arrangement under the IRSA,
such that Family [B] amongst the beneficiaries would be first entitled to a payout
before Family [A] (of which the appellant was part) would receive the remainder
of the Estate in accordance with the 1995 Will. If the Indonesian Proceedings
were bona fide and for her claim to have any basis, she had to herself have
suffered loss. The logical implication would be that she believed claims arising
from the publication of the Notices would result in there being insufficient
moneys to satisfy Family [A]’s entitlement under the 2018 SA. That apparent
belief was entirely inconsistent with her act of negotiating with the other
beneficiaries to enter into the terms of the IRSA: at [43], [45], [46] and [48].
(5) In light of the change in Family [A]’s entitlement under the IRSA, her
conduct in insisting on the continuation of the Indonesian Proceedings was
unconscionable. Separately, as the Judge noted, the appellant did not disclose to
the Indonesian court that she had entered into the 2018 SA, much less file a copy
of the 2018 SA; but had instead proceeded on the basis of her entitlement under
the 1995 Will. Her failure to do so further suggested that the Indonesian
Proceedings had not been pursued in good faith and were vexatious and
oppressive. Given the material flaws in the appellant’s case, she would not suffer
material injustice if the anti-suit injunction were granted. The appellant also did
not have any legitimate juridical advantage in the Indonesian court: at [49] to
[51].
(6) The court did not agree with the Judge’s reasoning in relation to the issue
of whether the respondents could enforce cl 19 by virtue of s 2 of the CRTPA.
The dispute as framed by the parties turned on whether cl 19 was a term of the
2018 SA which purported to confer a benefit on the respondents within the
meaning of s 2(1)(b) of the CRTPA. However, both parties had omitted to
address the court on the anterior question of whether cl 19 as an exclusive
jurisdiction clause even came within the remit of the CRTPA. The CRTPA did
not permit a non-party to a contract to avail itself of the benefit of an exclusive
jurisdiction clause in that contract, unless the contract itself expressly provided
to the contrary: at [53] and [54].
(7) The aim of the CRTPA was to enable the carrying out of the intention of
contracting parties to confer benefits on third parties. The CRTPA was silent on
whether the statute would apply to exclusive jurisdiction clauses. In contrast, s 9
of the CRTPA expressly applied where a third party sought to enforce a
contractual term and the contracting parties had agreed that disputes in relation
to that term were subject to an arbitration agreement. The statutory silence was
deliberate because Parliament made a conscious determination to exclude
exclusive jurisdiction clauses from the ambit of s 2(1)(b) of the CRTPA: at [58]
and [59].
(8) The genesis of ss 2(1)(b) and 2(2) of the CRTPA was found in ss 1(1)(b)
and 1(2) of the Contracts (Rights of Third Parties) Act 1999 (c 31) (UK)
(“UK Act”). A review of the legislative history of the UK Act showed that
exclusive jurisdiction clauses and arbitration agreements differed from the usual
category of terms that fell under s 1(1)(b) of the UK Act. An arbitration clause in
[2021] 2 SLR 0753.fm Page 756 Monday, September 27, 2021 10:57 AM
s 8 of the UK Act was a procedural right; it was not a substantive right that fell
under s 1(1)(b). By the same token, an exclusive jurisdiction clause was not
a substantive right within the meaning of s 2(1)(b) of the CRTPA: at [60].
Case(s) referred to
CLAAS Medical Centre Pte Ltd v Ng Boon Ching [2010] 2 SLR 386 (refd)
Elektrim SA v Vivendi Holdings 1 Corp [2009] 2 All ER (Comm) 213 (refd)
Fortress Value Recovery Fund I LLC v Blue Skye Special Opportunities Fund LP
[2013] 1 WLR 3466 (refd)
Hai Jiang 1401 Pte Ltd v Singapore Technologies Marine Ltd [2020] 4 SLR 1014
(refd)
John Reginald Stott Kirkham v Trane US Inc [2009] 4 SLR(R) 428;
[2009] 4 SLR 428 (refd)
Koh Kay Yew v Inno-Pacific Holdings Ltd [1997] 2 SLR(R) 148; [1997] 3 SLR 121
(folld)
Nisshin Shipping Co Ltd v Cleaves & Co Ltd [2003] EWHC 2602 (Comm) (refd)
Sun Travels & Tours Pvt Ltd v Hilton International Manage (Maldives) Pvt Ltd
[2019] 1 SLR 732 (folld)
Legislation referred to
Arbitration Act (Cap 10, 2002 Rev Ed)
Contracts (Rights of Third Parties) Act (Cap 53B, 2002 Rev Ed) ss 2(1)(b), 2(2),
9 (consd);
ss 2, 2(1), 2(1)(a), 2(3), 9(1)
International Arbitration Act (Cap 143A, 2002 Rev Ed)
Contracts (Rights of Third Parties) Act 1999 (c 31) (UK) ss 1(1)(b), 1(2), 8
(consd);
ss 1(1), 8(1), 8(2)
Contracts (Rights of Third Parties) Ordinance (Cap 623) (Hong Kong) s 13
Devinder Kumar s/o Ram Sakal Rai and Leong Wen Jia Nicholas (ACIES Law
Corporation) for the appellant;
Ong Min-Tse Paul, Afzal Ali and Marrissa Miralini Karuna (Allen & Gledhill LLP)
for the respondents.
[Editorial note: This was an appeal from the decision of the High Court in
[2020] SGHCF 11.]
29 July 2021
Belinda Ang Saw Ean JAD (delivering the grounds of decision of the
court):
Introduction
1 Civil Appeal No 102/2020 (“CA 102/2020”) was an appeal against the
High Court judge’s (the “Judge”) decision in VJZ & another v VKB & others
[2021] 2 SLR 0753.fm Page 757 Monday, September 27, 2021 10:57 AM
8 Shortly after the 2018 SA was entered into, the respondents applied to
court on 23 April 2019 vide Originating Summons Probate No 3 of 2019
(“OSP 3/2019”) seeking several orders to give effect to their appointment
and indemnification in relation to their administration of the Estate in
accordance with the terms of the 2018 SA, and in respect of various terms in
the 2018 SA to be performed and discharged by the respondents. On
13 August 2019, various orders of court which we identify as
HCF/ORC 253/2019 (“ORC 253”) were granted to the respondents. As the
Judge rightly observed, as the respondents were non-parties to the 2018 SA,
ORC 253 was the means by which they were able, and became compelled, to
implement the 2018 SA. To illustrate, we set out a selection of orders
covered by ORC 253 (for the avoidance of doubt, references to the
“Administrators” in ORC 253 pertain to the respondents in this appeal,
while references to the “respondents” in ORC 253 pertain to the
beneficiaries of the Estate):
1. The [Administrators] shall as far as reasonably practicable administer
the estate of [the Deceased] (the ‘Estate’), including any distributions of assets
of the Estate to the beneficiaries of the Estate in all jurisdictions, including
but not limited to Singapore, Malaysia, Indonesia, Hong Kong and the
People’s Republic of China (in a manner consistent with the laws of the
[2021] 2 SLR 0753.fm Page 759 Monday, September 27, 2021 10:57 AM
NOTICE
[The Deceased] passed away on 31 October 2012. Pursuant to orders made by
the High Court of the Republic of Singapore on 1 February 2018 and
19 March 2018, [VJZ] and [VKA], all care of [Firm and Firm’s address] (the
‘Administrators’) were appointed as the joint administrators of the Estate of
[the Deceased] (‘the Estate’).
[2021] 2 SLR 0753.fm Page 760 Monday, September 27, 2021 10:57 AM
TAKE NOTICE that assets of the Estate should not be dealt with in any
manner whatsoever without proper sanction from the Administrators. If any
person is aware of any dealings or have information in respect of assets
belonging to the Estate, please inform the Administrators of the same at
[e-mail address] immediately.
All creditors or next-of-kin interested in or having claims against the Estate
should give particulars in writing their claims or interest to the above contact
details.
Joint Administrators
[emphasis in original]
10 The appellant commenced proceedings in Indonesia (“Indonesian
Proceedings”) in respect of these Notices. Based on documents annexed to
the first respondent’s affidavit filed in Summons 96 of 2020
(“SUM 96/2020”), the Indonesian Proceedings appear to have been
commenced on 15 August 2019. The appellant’s counsel having conduct of
the proceedings in Indonesia, Ms Sarmauli Simangunsong
(“Ms Sarmauli”), affirmed in her affidavit filed in SUM 96/2020 that the
appellant had a claim based on tort law as it applies in Indonesia. The basis
for this claim was that the respondents’ act of publishing the Notices was
“not only false and misleading”, but also “directly affected [the appellant’s]
rights as a beneficiary of the Estate in Indonesia”. According to the
appellant’s counsel, the respondents by inviting next-of-kin interested in or
having claims against the Estate to contact the respondents could
“potentially [open] the floodgates for more claimants who could possibly
make a claim against the Estate under forced heirship laws in Indonesia”.
11 It transpired that at some point in 2019 the beneficiaries undertook
further negotiations as to their rights and entitlements under the 2018 SA.
These negotiations culminated in the beneficiaries entering into a new
“Inheritance Right Settlement Agreement” (“IRSA”) dated 13 December
2019. Counsel for the appellant, Mr Devinder Kumar s/o Ram Sakal Rai
(“Mr Rai”), confirmed that he had not been instructed on the
re-negotiations and that he was only notified of the IRSA a few days before
it was entered into.
12 We pause here to observe that a chronology of the events that had
occurred from the time the appellant started the Indonesian Proceedings up
to the time of execution of the IRSA would have been useful, seeing that the
outcome of the re-negotiations materially changed what had been agreed to
in the 2018 SA. Be that as it may, we note the existence of same and/or
closely connected facts in the 2018 SA and the IRSA that would bear on the
credibility of the appellant’s claim in the Indonesian Proceedings, and her
[2021] 2 SLR 0753.fm Page 761 Monday, September 27, 2021 10:57 AM
17 An aspect of the first ground that was before the Judge was the extent
to which a non-party to an agreement may claim the benefit of an exclusive
jurisdiction clause to obtain an anti-suit injunction against a contracting
party. Ordinarily, absent plain language to the contrary, the contracting
parties are likely not to have intended to benefit nor prejudice non-
contracting third parties by their contractual arrangements. In the Judge’s
view, however, the respondents were entitled to rely on cl 19 of the 2018 SA
by virtue of s 2(1)(b) of the Contracts (Rights of Third Parties) Act
(Cap 53B, 2002 Rev Ed) (“CRTPA”). We comment on the Judge’s ruling
below.
18 The second main ground is that the foreign proceedings are otherwise
vexatious or oppressive. As summarised by the court in Sun Travels &
Tours Pvt Ltd v Hilton International Manage (Maldives) Pvt Ltd [2019]
1 SLR 732, the factors to be considered by the court in deciding whether to
grant an anti-suit injunction on this ground are (at [66]–[67]):
(a) whether the defendant is amenable to the jurisdiction of the
Singapore court;
(b) whether Singapore is the natural forum for resolution of the
dispute between the parties;
(c) whether the foreign proceedings would be vexatious or
oppressive to the plaintiff if allowed to continue; and
(d) whether the anti-suit injunction would cause any injustice to the
defendant by depriving the defendant of legitimate juridical
advantages sought in the foreign proceedings.
As stressed in Koh Kay Yew v Inno-Pacific Holdings Ltd [1997]
2 SLR(R) 148 at [19], that Singapore is the natural and proper forum is a
necessary condition that must be satisfied before an anti-suit injunction can
be granted under this ground.
19 Whether there has been vexatious conduct involves an assessment
and evaluation of a number of factors. The list of factors is not closed. To
illustrate, the inherent weakness of a claim sought to be pursued in the
foreign proceedings when taken together with other factors may be a
relevant factor in considering whether the foreign proceedings are
vexatious (see Elektrim SA v Vivendi Holdings 1 Corporation [2009] 2 All
ER (Comm) 213 at [84] and [121]; John Reginald Stott Kirkham and others v
Trane US Inc and others [2009] 4 SLR(R) 428 (“Trane”) at [47]).
20 Related to the question of whether or not the foreign proceedings are
vexatious or oppressive would be the injustice that each party might suffer
if the injunction were or were not granted. Consideration of a juridical
advantage in the foreign forum would include the kind of remedy and its
availability to the party bringing proceedings in the foreign jurisdiction
[2021] 2 SLR 0753.fm Page 763 Monday, September 27, 2021 10:57 AM
Preliminary comments
21 Having set out the relevant principles, we first explain why we decided
that the Indonesian Proceedings were vexatious and oppressive and
justified the grant of an anti-suit injunction. Thereafter we deal briefly with
the question of whether the respondents could enforce cl 19 of the 2018 SA.
22 It is convenient to mention here that it was not disputed and, indeed,
Mr Rai confirmed during the hearing, that the appellant is amenable to the
jurisdiction of the Singapore court. This confirmation was rightly given
seeing that the appellant had given her Singapore address as her place of
residence in her affidavit filed to oppose the respondents’ application even
though the affidavit was affirmed in Indonesia. Further, the appellant is a
Singapore citizen. Her Singapore National Registration Identity Card
number is shown in the 2018 SA. We note that the respondents applied for
an anti-suit injunction promptly and there was no suggestion that the
Indonesian Proceedings had progressed beyond an early stage. The only
document evidencing the commencement of the Indonesian Proceedings
was a letter from Ms Sarmauli to the District Court of Jakarta dated
15 August 2019 informing the latter of the filing of the lawsuit against the
respondents. On 7 February 2020, the respondents were provided with a
letter from the Embassy of the Republic of Indonesia in Singapore enclosing
a letter of request for international judicial assistance, summoning the
respondents to attend a hearing scheduled for 19 March 2020 (see
[14] above). On 24 March 2020, the respondents filed the application for an
anti-suit injunction. As neither party raised delay and comity, these matters
did not feature in arguments before the Judge or in this appeal.
23 In the interest of expediency and to avoid repetition, we will refer to
the arguments of the respective parties and the relevant points in the course
of addressing the issues in this appeal.
Natural forum
(a) First, the shape of the litigation pointed to Singapore being the
more appropriate forum. There were already ongoing proceedings in
OSP 3/2019 which related to the respondents’ administration of the
Estate, and the Indonesian Proceedings could not be considered
separately from it. ORC 253 which was granted in OSP 3/2019
contained an order indemnifying the respondents from losses
incurred by reason of their administration of the Estate in accordance
with the 2018 SA. The Judge found the indemnity order to be
a relevant consideration as the respondents had published the Notices
due to their appointment as administrators in Singapore and as part
of their obligation to implement the 2018 SA. In addition, if the
respondents’ publication of the Notice had reduced the value of the
Estate, all the beneficiaries should have been joined to the
proceedings, but any joinder would have run into the problem of
cl 19, in which the beneficiaries had agreed to submit their disputes to
mediation and otherwise to legal proceedings in Singapore.
Furthermore, the appellant’s claims in the Indonesian Proceedings
also touched on the 2018 SA since her argument was that her
entitlement was affected by the publication of the Notices. The scope
of her entitlement would entail an examination of the 1995 Will and
the 2018 SA and how they interacted.
(b) Second, even though the publication and therefore the alleged
tort occurred in Indonesia, the relevant events and transactions had a
closer connection to Singapore. The respondents published the
Notices in Indonesia because of their obligations under the 2018 SA,
and the entire factual background of the Notices was derived from
prior proceedings in Singapore and the 2018 SA.
agreeing to the 2018 SA, all 15 beneficiaries had agreed that the respondents
should have the authority to administer the Estate in “all jurisdictions”
where the Estate’s assets were located, but curiously, in this regard,
Family [A] was said to be unco-operative and the respondents’ efforts to
seek formal appointment in Indonesia “did not go smoothly”. The formal
mechanics of seeking court appointment as administrators to enable the
respondents to administer the Estate in any particular jurisdiction was a
separate matter from the authority conferred on them by the 2018 SA.
Thus, the lack of appointment of the respondents as administrators in
Indonesia at the time the Notices were published was not critical. The
respondents did not appear to be at a stage of the administration of the
Estate that required them to be duly appointed by the Indonesian courts
before taking the next step in the administration of the Estate in Indonesia.
The respondents’ responsibilities included marshalling the Estate’s assets
with a view to distributing the agreed sum of US$87,175,000 to Family [A].
It was in that context that the respondents published the Notices. In the
Respondents’ Case, the respondents explained that the Notices were
published in good faith to prevent any dissipation of assets. Further, the
timing of the publication could not be faulted seeing that it was then close
to seven years since the death of the testator.
29 As pointed out by the Judge and by the respondents, based on the first
respondent’s explanation, Family [B] had, through their solicitors, urged
the respondents to:
… make a public announcement that the [respondents] are the lawful
administrators/ executors of the Estate in Singapore, Indonesia and all other
jurisdictions such that all dealings in respect of the assets of the Estate must
go through [the respondents] and not the beneficiaries of the Estate.
This suggestion was made by Family [B] out of concern that members of
Family [A] might have been dissipating assets. There was no hint that in
taking up the suggestion and in publishing the Notices, the respondents
were siding with one family. We also note the first respondent’s affidavit
evidence that the respondents had published substantially the same notices
in Singapore without any objection from the appellant. We accept the
respondents’ explanation that the publication of the Notices in Indonesia
was in performance of the respondents’ obligations as agreed to by the
beneficiaries in the 2018 SA. All in all, it is undeniable that the subject
matter of the alleged tort has strong links to the 2018 SA and the
entitlement of the other beneficiaries like Family [B]. The subject matter of
the Indonesian Proceedings cannot be treated independently from
OSP 3/2019 and ORC 253.
agree with the Judge and the respondents that for the reasons stated above,
the relevant events and transactions had a closer connection to Singapore.
In our view, the evidence presented was of sufficient weight to render the
place of the tort a neutral factor. From another perspective, it could be
concluded that the circumstances in the present case reduced the
significance of the place of the tort in the determination of the natural
forum.
not provided any basis for her calculation of the immaterial losses. More
importantly, her alleged loss would not qualify as immaterial damages as
the same could “only be granted in certain unlawful/tort claims which
result in death, serious injury, or humiliation”. Taking the appellant’s
contention of immaterial loss on its face, it is clear that the Indonesian
Proceedings did not fall into any of those categories. We noted that there
was nothing in Ms Sarmauli’s affidavit which contradicted this statement of
law on the recognised heads of immaterial loss under Indonesian law.
45 In any case, Ms Sarmauli’s assertion did not make sense in light of the
evidence before this court. What was being threatened and how would her
rights be diminished? At the time the Indonesian Proceedings were
commenced, the appellant’s right was to a share of a sum of US$87,175,000
under the 2018 SA and there was no evidence that any prospective
beneficiary had come forward to make claims against the Estate, or that her
share would be threatened or diminished by the Notices. Under the
2018 SA, Family [A] was to be paid a lump sum of US$87,175,000 from the
Estate first before Family [B] would be paid. Thus, it would be Family [B]
and not Family [A] who would more likely be exposed to the losses
occasioned by the publication of the Notices, assuming that it was wrongful.
Be that as it may, for the sake of argument, if the Indonesian Proceedings
were brought on the basis that the appellant considered that there was a risk
to the distribution of her share of the US$87,175,000, in that she would
receive less as the settlement amount might be reduced, it is crucial to note
that she then went on to renegotiate her entitlement under the 2018 SA of
her own volition.
47 As Mr Ong pointed out, the appellant had not provided any evidence
whatsoever that resembles loss occasioned to her as a result of the
publication of the Notices. It appears that in switching her agreed rights
under the 2018 SA by entering into the IRSA, she did not anticipate that
any significant depletion of moneys from the Estate would arise from such
publication. Based on the evidence before this court and the allegations that
she herself had made, it appeared that there was no basis for her claim in
[2021] 2 SLR 0753.fm Page 772 Monday, September 27, 2021 10:57 AM
Indonesia even if it was the appropriate forum on the basis that her tortious
claim was grounded in Indonesian law.
48 The appellant’s conduct in entering into the IRSA would be
inexplicable if she had genuinely believed that the publication of the
Notices had resulted in the surfacing of claims against the Estate by
prospective beneficiaries that would affect her entitlement under the
1995 Will. If the Indonesian Proceedings were bona fide and for her claim
to have any basis, she must herself have suffered loss, in that her entitlement
to the Estate would have been or could be impacted. The logical implication
would be that she believed claims arising from the publication of the
Notices would result in there being insufficient moneys to satisfy
Family [A]’s entitlement to US$87,175,000 under the 2018 SA. That
apparent belief is entirely inconsistent with her act of negotiating with the
other beneficiaries to enter into the terms of the IRSA, superseding those of
the 2018 SA, which required Family [B] to be paid out from the Estate
before Family [A] would receive any moneys at all from the Estate. Further,
the amount to be paid to Family [B] was very much more than
US$87,175,000. The fact that the appellant agreed to the IRSA suggested
that she believed that she would still be able to get moneys from the Estate
after Family [B] had received its share. This in turn reveals that her claim in
the Indonesian Proceedings was fanciful; it was cynically created and
pursued. The appellant is one of several beneficiaries under Family [A]. It is
telling that none of the other beneficiaries, whether belonging to Family [A]
or Family [B] or the unrepresented beneficiaries, had taken issue with the
publication of the Notices or brought suit against the respondents.
particularly following the grant of ORC 212 that gave effect to the
substitution of the IRSA for the 2018 SA and the appointment of new
administrators to replace the respondents, all in all pointed to bad faith on
the part of the appellant.
50 Separately, as the Judge noted, the appellant did not disclose to the
Indonesian court that she had entered into the 2018 SA, much less file
a copy of the 2018 SA. She merely proceeded on the basis of her entitlement
under the 1995 Will. The appellant’s representation to the Indonesian court
gave the impression that she was entitled to 5% of the Estate under the
1995 Will. By doing so, the appellant was circumventing the substantive
agreement reached in the 2018 SA (and later, the IRSA) by claiming for her
initial entitlement under the 1995 Will. The assertion in her letter to the
District Court of Jakarta that the respondents had violated her subjective
rights as the legal beneficiary named in the 1995 Will was untrue in light of
the facts as this court knows them and of which the appellant was fully
aware. It cannot be disputed that the letter gave the misleading impression
that she was still entitled to those rights under the 1995 Will. The
appellant’s submission that this issue is for the Indonesian court to decide
misses the point, and more so given that the true state of affairs was not
even before the Indonesian court as a direct result of the appellant’s lack of
disclosure. Given that her rights under the 1995 Will had been altered by
the 2018 SA, it was incumbent on the appellant to place these facts before
the Indonesian court. Her failure to do so further suggested that the
Indonesian Proceedings had not been pursued in good faith and were
vexatious and oppressive.
57 The genesis of ss 2(1)(b) and 2(2) is found in ss 1(1)(b) and 1(2) of the
Contracts (Rights of Third Parties) Act 1999 (c 31) (UK) (the “UK Act”)
(see CLAAS Medical Centre Pte Ltd v Ng Boon Ching [2010] 2 SLR 386
at [30]; Singapore Parliamentary Debates, Official Report (5 October 2001)
vol 73 at col 2186 (S Jayakumar, Minister for Law)); as such, UK authorities
are relevant to the interpretation of s 2(1)(b) of the CRTPA. Sections 2(1)
and 2(2) of the CRTPA are in pari materia with ss 1(1) and 1(2) of the
UK Act. For reference, ss 2(1) and 2(2) of the CRTPA provide:
2.—(1) Subject to the provisions of this Act, a person who is not a party to a
contract (referred to in this Act as a third party) may, in his own right,
enforce a term of the contract if —
(2) Subsection (1)(b) shall not apply if, on a proper construction of the
contract, it appears that the parties did not intend the term to be enforceable
by the third party.
58 The aim of the CRTPA is to enable the carrying out of the intention of
contracting parties to confer benefits on third parties (Singapore
Parliamentary Debates, Official Report (5 October 2001) vol 73 at col 2186
(S Jayakumar, Minister for Law)). This can also be seen clearly from
s 2(1)(b) of the CRTPA, which refers to the conferring of a benefit upon
a third party.
8 Arbitration provisions.
(1) Where—
(a) a right under section 1 to enforce a term (‘the substantive term’)
is subject to a term providing for the submission of disputes to
arbitration (‘the arbitration agreement’), and
(b) the arbitration agreement is an agreement in writing for the
purposes of Part I of the Arbitration Act 1996,
the third party shall be treated for the purposes of that Act as a party to the
arbitration agreement as regards disputes between himself and the promisor
relating to the enforcement of the substantive term by the third party.
(2) Where—
(a) a third party has a right under section 1 to enforce a term
providing for one or more descriptions of dispute between the third
party and the promisor to be submitted to arbitration (‘the arbitration
agreement’),
(b) the arbitration agreement is an agreement in writing for the
purposes of Part I of the Arbitration Act 1996, and
(c) the third party does not fall to be treated under subsection (1) as
a party to the arbitration agreement,
the third party shall, if he exercises the right, be treated for the purposes of
that Act as a party to the arbitration agreement in relation to the matter with
respect to which the right is exercised, and be treated as having been so
immediately before the exercise of the right.
65 Thus, even if jurisdiction clauses had been provided for in the manner
that arbitration clauses are, the CRTPA would nevertheless not assist the
respondents. There is no substantive right to speak of here. Like C and D in
Fortress seeking a stay of proceedings against them on the basis of the
arbitration clause in the partnership deed, the respondents in this case,
having been sued in Indonesia, seek an injunction against the appellant in
relation to the Indonesian Proceedings by relying on cl 19. We assume, for
the sake of argument, that the 2018 SA could be said to have conferred a
substantive right on the respondents subject to the requirements stipulated
under cl 19. However, even then in a situation where proceedings were
brought against them, they would not have had a right to insist on the
claims being brought in a particular jurisdiction. Allowing them to do so
would be enabling them to enforce a procedural right, which would only be
[2021] 2 SLR 0753.fm Page 779 Monday, September 27, 2021 10:57 AM
substantive term by the third party’ is intended to have a wide ambit and to
include disputes between the third party (who wishes to enforce the term)
and the promisor as to the validity, interpretation, existence or performance
of the term; the third party’s entitlement to enforce the term; the jurisdiction
of the arbitral tribunal; or the recognition and enforcement of an arbitration
award. But to avoid imposing a ‘pure’ burden on the third party, it does not
cover, for example, a separate dispute in relation to a tort claim by the
promisor against the third party for damages.
35. Subsection (2) is likely to be of rarer application. It deals with
situations where the third party is given a right to arbitrate under section 1
but the ‘conditional benefit’ approach underpinning subsection (1) is
inapplicable. For example, where the contracting parties give the third party
a unilateral right to arbitrate or a right to arbitrate a dispute other than one
concerning a right conferred on the third party under section (1). To avoid
imposing a pure burden on the third party (in a situation where, for example,
the contracting parties give the third party a right to arbitrate a tort claim
made by the promisor against the third party) the subsection requires the third
party to have chosen to exercise the right. The timing point at the end of the
subsection is designed to ensure that a third party who chooses to exercise his
right to go to arbitration by, for example, applying for a stay of proceedings
under section 9 of the Arbitration Act 1996, can do so. Under section 9 of the
Arbitration Act 1996, the right to apply for a stay of proceedings can only be
exercised by someone who is already a party to the arbitration agreement.
[emphasis added]
70 Section 9 of the CRTPA is materially similar to s 8 of the UK Act, and
the explanatory notes would therefore also be helpful as a reference point.
Unlike in respect of arbitration agreements, there is no subsection
conferring the benefit of exclusive jurisdiction clauses on third parties. As
alluded to above in our discussion of Fortress, s 8(1) relates to a situation
where the benefit of a contractual term is conferred on a third party to the
contract, the exercise of which benefit is subject to a procedural
qualification to do so by arbitration. Section 8(2) relates to a different
situation in which the right to arbitrate is conferred on the third party. The
explanatory notes thus make it clear as to how arbitration clauses are meant
to fall within the scope of the UK Act, but make no mention of jurisdiction
clauses. The same analysis would apply to the CRTPA. More crucially, the
legislative history of the UK Act (upon which the CRTPA was modelled)
shows a specific omission to address the issue of exclusive jurisdiction
clauses, following extensive discussion of the difficulties surrounding it. In
contrast, provisions were specifically drafted in the UK Act and the CRTPA
to address the issue of arbitration clauses.
71 Finally, we considered the Hong Kong Contracts (Rights of Third
Parties) Ordinance (Cap 623) (Hong Kong) (“Hong Kong Ordinance”). In
the consultation paper (September 2005) prepared by the Law Reform
Commission of Hong Kong, the Commission considered the positions
taken by the UK and Singapore in relation to arbitration agreements and
[2021] 2 SLR 0753.fm Page 781 Monday, September 27, 2021 10:57 AM
Conclusion
74 We dismissed the appeal on 11 March 2021 for the reasons set out in
detail above. At the conclusion of the hearing, we ordered costs fixed at
$25,000 to be paid by the appellant to the respondents. The usual
consequential orders applied.