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IM Skaugen SE v MAN Diesel & Turbo SE [2018] SGHC 123
In IM Skaugen SE v MAN Diesel & Turbo SE [2018] SGHC 123, the Singapore High Court had the occasion to discuss and resolve various meaty private international law issues. The facts concerned the alleged negligent or fraudulent misrepresentation by the defendants on the fuel consumption of a specific model of engine that was sold and installed into ships owned by the plaintiffs. The issue before the court was whether the Singapore courts had jurisdiction over the misrepresentation claim. The defendants were German and Norwegian incorporated companies so the plaintiffs applied for leave to serve the writ out of Singapore. This entailed fulfilling a 3 stage process, following English common law rules: (1) a good arguable case that the case falls within one of the heads set out in the Rules of Court, Order 11, (2) a serious issue to be tried on the merits, and (3) Singapore is forum conveniens on applying the test set out in The Spiliada [1987] AC 460. Stages (1) and (3) were at issue in the case.
The judgment, by Coomaraswamy J, merits close reading. The main private international law issues can be summarised as follows:
(a) Choice of law is relevant when assessing the heads of Order 11 of the Rules of Court.
The plaintiffs had relied on Order 11 rule 1(f) and rule 1(p). Rule 1(f) deals with tortious claims and the court proceeded by ascertaining where the tort was committed. According to the court, this question was to be answered by the lex fori. If the tort was committed abroad, the court held that choice of law for tort then came into play: the court must then determine if the tort satisfied Singapore’s tort choice of law rule, ie the double actionability rule. It should be noted that the Court of Appeal in Rickshaw Investments Ltd v Nicolai Baron von Uexkull [2007] 1 SLR(R) 377 had held that the double actionability rule will apply even in relation to local torts (as the flexible exception may displace Singapore law to point to the law of a third jurisdiction). The double actionability rule thus remains relevant when assessing Order rule 1(f) whether the tort is committed abroad or in Singapore.
(b) ‘damage’ for the purposes of Order 11 rule 1(f)(ii) is not limited to direct damage.
Order 11 rule 1(f)(ii) is in these terms: ‘the claim is wholly or partly founded on, or is for the recovery of damages in respect of, damage suffered in Singapore caused by a tortious act or omission wherever occurring.’ The court held that ‘damage’ for the purposes of rule 1(f)(ii) included the increased fuel expenditure and reduction in capital value of the ships due to the fuel inefficient engines suffered not just by the original owners of the ships at the time of the misrepresentation, but also the subsequent purchasers of the ships. On the facts, the court held that the damage suffered by the subsequent purchasers arose directly from the misrepresentation as the misrepresentation was also intended to be relied upon by them. Further, the court held that, even if that had not been the case, direct damage is not required under rule 1(f)(ii). The difference in wording between Order 11 rule 1(f) and the UK CPR equivalent (CPR PD6B para 3.1(9)) makes the decision on this point less controversial than the reasoning in Four Seasons v Brownlie [2017] UKSC 80, [2018] 1 WLR 192.
(c) The test used to ascertain whether ‘the claim is founded on a cause of action arising in Singapore’ for the purposes of Order 11 rule 1(p) differs from the substance test which applies to determine the loci delicti in a multi-jurisdictional tort situation for the purposes of the double actionability rule.
The former test derives from Distillers Co (Biochemicals) Ltd v Thompson [1971] AC 458. The court observed that the Distiller’s test is more plaintiff-centric compared to the substance test used for the purposes of the double actionability rule because Order 11 rule 1(p) ‘requires the court to view the facts of the case through the cause of action which the plaintiff has sought to invoke.’ Whereas, the latter test is ‘the more general and more factual question “where in substance did the tort take place.”’ (para [166], emphasis in original). This point will likely be revisited by the Court of Appeal, not least because it had, as the court itself acknowledged, cited the Distillers test as authority for the substance test in JIO Minerals FZC v Mineral Enterprises [2011] 1 SLR 391.
(d) Whether Singapore is forum conveniens for the purposes of a setting aside application and whether Singapore is forum non conveniens for the purposes of a stay application should be assessed with reference to current facts.
Norway and Germany were potential alternative fora for the action. After leave had been given to serve out of jurisdiction in the ex parte hearing, the plaintiffs commenced proceedings in Norway as a protective measure. No proceedings were commenced in Germany. This meant that, under the Lugano Convention, the Norwegian courts had priority over the German courts. The court treated this as indicating that the courts of Germany ceased to be an available forum to the parties. This was significant, given that the court had earlier held that the loci delicti was Germany. The defendants argued that the commencement of Norwegian proceedings was to be ignored and the application to set aside service out of jurisdiction was to be assessed solely with reference to the facts which existed at the time when leave to serve out of jurisdiction was granted. The effect of the defendants’ argument would be that the setting aside application would be determined on the basis that Germany was an available forum, while their alternative prayer for a stay would be determined on the basis that Germany was an unavailable forum. The potential for wastage in time and costs is clear on this argument and the court rightly took a common sense and practical approach on this issue.
(e) The possibility of a transfer of the case from the Singapore High Court (excluding the SICC) to the Singapore International Commercial Court (SICC) is a relevant factor in the Spiliada analysis.
This had previously been confirmed by the Court of Appeal in Rappo, Tania v Accent Delight International Ltd [2017] 2 SLR 265. The SICC is a division of the Singapore High Court which specialises in international commercial litigation. Its rules allow for a question of foreign law to be determined on the basis of submissions instead of proof. Further, the bench includes International Judges from not only common law but also civil law jurisdictions. The court held that the specific features of the SICC and the possibility of the transfer of the case to the SICC weighed in favour of Singapore being forum conveniens compared to Norway and Germany.
(f) In a setting-aside application, where the plaintiffs have succeeded in showing that Singapore is the prima facie natural forum in the first stage of the Spiliada test, the burden of proof shifts to the defendants to show why they would suffer substantial injustice if the action were to proceed in Singapore.
In an Order 11 case, the second stage of the Spiliada test usually operates to give the plaintiffs a second bite of the cherry should they fail to establish Singapore is the natural forum under the first stage of the test. The plaintiffs are allowed to put forward reasons why they would suffer substantial injustice if trial takes place in the natural forum abroad. Very interestingly, the court held that where, as on the facts of the case, the plaintiff had already satisfied the burden of showing that Singapore is the natural forum under the first stage of the Spiliada test, the burden then shifts to the defendants to show why they would suffer substantial injustice if trial took place in Singapore.
The case is on appeal to the Court of Appeal. Its judgment is eagerly anticipated.
The Russian Supreme Court’s guidelines on private international law
The Russian Supreme Court has published the English translation of the guidelines on Russian private international law, issued in Russian on 27 June 2017 (ruling No 23 ‘On Consideration by Commercial Courts of Economic Disputes Involving Cross-Border Relations’).
The ruling is binding on all the lower courts in Russia: from time to time the Russian Supreme Court gathers in a plenary session to discuss the case law approaches to controversial matters in a particular field of law. It then adopts binding guidelines to ensure a uniform application of law in the future (this role of the Supreme Court is based on art. 126 of the Constitution and arts. 2 and 5 of the law on the Supreme Court of the Russian Federation of 2 February 2014). Read more
Towards a European Commercial Court?
The prospect of Brexit has led a number of countries on the European continent to take measures designed to make their civil justice systems more attractive for international litigants: In Germany, the so-called “Justice Initiative Frankfurt”, consisting of lawyers, judges, politicians and academics, has resulted in the creation of a special chamber for commercial matters at the District Court in Frankfurt which will, if both parties agree, conduct the proceedings largely in English (see here). In France, an English-language chamber for international commercial matters was established at the Cour d’appel in Paris, adding a second instance to the English-speaking chamber of commerce at the Tribunal de commerce in Paris (see here). In the Netherlands, the Netherlands Commercial Court and the Netherlands Commercial Court of Appeal will soon begin their work as special chambers of the Rechtbank and the Gerechtshof Amsterdam (see here). And in Belgium, the government plans to establish a Brussels International Business Court (see here). Clearly: the prospect of Brexit has stirred up the European market for international litigation.
News
AMEDIP’s upcoming webinar: Family law in England and Wales and cross-border problems – 30 March 2023 (at 14:30 Mexico City time) (in Spanish)
The Mexican Academy of Private International and Comparative Law (AMEDIP) is holding a webinar on Thursday 30 March 2023 at 14:30 (Mexico City time – CST), 22:30 (CEST time). The topic of the webinar is Family law in England and Wales and cross-border problems and will be presented by Carolina Marín Pedreño, specialist in Family law and former president of the Westminster & Holborn Law Society (in Spanish).
The details of the webinar are:
Link: https://us02web.zoom.us/j/82391552268?pwd=dSt5K2V1elNvSURyVE1nOTB6M2p3dz09
Meeting ID: 823 9155 2268
Password: AMEDIP
Participation is free of charge.
This event will also be streamed live: https://www.facebook.com/AmedipMX
International succession and the lex rei sitae: book by Naivi Chikoc Barreda
This summary was provided by the author, Naivi Chikoc Barreda, Assistant Professor at the Faculty of Law of the University of Ottawa.
The book Succession internationale et dispositions spéciales de la lex rei sitae. Contribution à l’étude de l’impérativité internationale en matière successorale by Naivi Chikoc Barreda (L’Harmattan, Paris, December 2022) offers an in-depth reflection on the subject of overriding mandatory provisions in matters of succession, through an analysis of the clause allowing the application of the special provisions of the lex rei sitae which derogate from the unitary law of succession.
In Part I, the author traces the historical origins of the “territorial exception” to the unitary system in German legal literature and studies its subsequent development in the Introductory Act to the German Civil Code and in the convention drafts drawn up by the Hague Convention between 1900 and 1928. Theorized by Savigny under the concept of “Gesetze von zwingender, streng positiver Natur“, these special rules were associated with the public policy clause by the Hague drafts, under the influence of the Mancinian doctrine. To explain this convergence, the author analyzes the relationship between public policy and territoriality in the period in which these projects were conceived. The clause concerning the special regimes of the situs was finally detached from the public policy exception in the 1989 Convention. However, the methodological transformations in the field of Private international law during the second half of the XXth century left the phenomenon in a shadowy area. Unable to fit into the “new” approaches to public policy and overriding mandatory provisions, the derogatory application of the lex rei sitae took the form of a substantially oriented conflict rule. When the European legislator decided to insert the clause in Article 30 of Regulation 650/2012, it discarded the conflictual model and adopted the method of “lois de police”, thus restoring the Savignian understanding of this exception. The author discusses the reasons for this methodological choice, by exploring the family, economic and social purposes of these rules in accordance with the principles underlying the autonomous interpretation of the regulation.
Part II addresses the complex issues arising out of the interaction between succession and other choice-of-law categories involved in the transfer of certain assets upon death. Most of the special provisions examined are at the intersection of several categories, their goal being precisely to ensure the stability of the function that the assets have been serving before the opening of the succession. Thus, it appeared important to distinguish between the ways in which property can be transferred otherwise than by succession, the rules for the distribution of particular assets of the estate, and the rules “affecting” the succession on such property. In the light of the CJEU case law, the author examined the treatment of the constitution of rights in rem by way of succession, the restriction on the acquisition of property by foreigners or non-residents, the transmission of the tenant’s rights after his death, the transfer of company shares, and the succession of the author’s droit de suite. An analytical framework is then proposed to delineate the respective scopes of the lex successionis, the lex rei sitae, the law governing matrimonial property regimes, the law applicable to maintenance obligations, the lex contractus, the lex societatis and the lex loci protectionis.
An extensive analysis is devoted to the compatibility between the clause on the special rules of the lex rei sitae and the concept of overriding mandatory provisions, as formulated in various regulations and interpreted by the CJEU. Two fundamental obstacles seem to prevent such integration: the absence of any reference to the protection of public interests and to the mandatory nature of the rules. Indeed, many of the special rules dealing with the transfer of particular assets for socio-economic purposes are either limited to enabling the owner to allocate the property according to some criteria or are default rules that apply absent a contrary disposition by the deceased. Despite the wording of the clause, the author argues for a shared intertextual interpretation of lois de police that brings the succession regulation in line with the position of other regulations on this issue. The traditional distinction between lois de police and the rules which are only mandatory at a domestic level is subject to a critical analysis from a new angle. The comparative study of the special rules of the lex rei sitae that intervene in succession matters leads the author to deconstruct the concentric circles theory that explain the convergence of both concepts on a core of super-imperative rules. Based on the interaction between the nature of the rule and its purpose in the law of succession, she explains the differences in the relationship of these special rules with party autonomy on a substantive and a PIL level. From this perspective, some permissive and default rules of the situs are consistent with a functional conception of lois de police, freed from a concrete regulatory technique that is supposedly the only one suited to the pursuit of a public interest policy, and therefore deserve to be recognized as potentially having an overriding effect on the lex causae.
New Private International Law Article in Current Legal Problems
The journal, Current Legal Problems yesterday, inter alia, published an open access article on private international law:
Alex Mills, “The Privatisation of Private (and) International Law”
Privatisation is much studied and debated as a general phenomenon, including in relation to its legal effects and the challenges it presents to the boundaries of public and private law. Outside the criminal context there has however been relatively limited focus on privatisation of the governmental functions which are perhaps of most interest to lawyers—law making, law enforcement and dispute resolution—or on the international legal implications of privatisation. This article argues that modern legal developments in the context of private law and cross-border private legal relations—generally known as party autonomy in private international law—can be usefully analysed as two distinct forms of privatisation. First, privatisation of certain allocative functions of public and private international law, in respect of both institutional and substantive aspects of private law regulation, through the legal effect given to choice of court and choice of law agreements. Second, privatisation of the institutional and substantive regulation of private legal relationships themselves, through arbitration and the recognition of non-state law. Together, these developments have established a global marketplace of state and non-state dispute resolution institutions and private laws, which detaches private law authority from its traditional jurisdictional anchors. Analysing these developments through the lens of privatisation highlights a number of important critical questions which deserve greater consideration—this article further examines in particular whether this form of privatisation in fact increases efficiency in either private international law decision-making or private law dispute resolution, as well as its distributive and regulatory effects.