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    04:07 PM Tan Ruo Yu (Rajah & Tann Singapore LLP)

    Enforcement of Foreign Judgments: Giant Light Metal Technology (Kunshan) Co Ltd v Aksa Far East Pte Ltd [2014] 2 SLR 545

        

    In Giant Light Metal Technology (Kunshan) Co Ltd v Aksa Far East Pte Ltd [2014] 2 SLR 545, the plaintiff successfully brought an action for the enforcement of a foreign judgment at common law. The decision provides important guidance on (1) when consent to a foreign court’s jurisdiction will be imputed to a defendant, and (2) for purposes of enforcement, when does a foreign judgment satisfy the requirement to be for a fixed sum of money.

    Facts and decision 

    The plaintiff (a company incorporated in the People’s Republic of China) paid the defendant (a Singapore company) US$190,000 under a contract for two new generator sets, but the delivered goods were defective. In 2005, the plaintiff sued the defendant in a PRC intermediate court for breach of contract, and the defendant duly filed its defence. In 2007, however, the plaintiff discontinued the 2005 proceedings to resolve the dispute out-of-court. As the negotiations failed, the plaintiff recommenced the same claim in the PRC court against the defendant in 2008, but this time the defendant ignored the proceedings. The PRC court found in favour of the plaintiff and ordered, inter alia, the plaintiff to return the two generator sets to the defendant, and the defendant to refund the contract price to the plaintiff. Owing to the defendant’s non-compliance, the plaintiff commenced an action in the Singapore High Court to enforce the PRC judgment.  

    In the course of his judgment, Andrew Ang J clarified that the recognition of a foreign judgment is distinct from its enforcement: recognition treats the underlying claim as res judicata, whereas enforcement refers to the execution of a Singapore court’s judgment that is premised on the foreign judgment. At common law, a foreign judgment is entitled to recognition if it is the final and conclusive judgment of a court which had international jurisdiction over the defendant according to Singapore private international law. For the foreign judgment to be enforceable, it must furthermore be a final judgment for a fixed sum of money. Central to the plaintiff’s action for enforcement in this case were the requirements of international jurisdiction and the foreign judgment to be for a fixed sum of money, raising two novel points of law to be considered by a Singapore court: (a) imputation of consent for purposes of establishing international jurisdiction; and (b) the enforceability of a foreign judgment where it includes a non-monetary order.

    Ang J ruled in favour of the plaintiff for both issues, and the PRC judgment was accordingly enforced. 

    International jurisdiction: imputation of consent 

    The plaintiff made four alternative submissions on the question of international jurisdiction, but Ang J only had to consider the plaintiff’s first argument, which successfully established that the defendant had voluntarily submitted to the PRC court. In particular, Ang J accepted that the defendant had consented to the PRC court’s jurisdiction by filing its defence in the 2005 proceedings, and this consent could be imputed to the defendant for the 2008 proceedings notwithstanding that the two proceedings were technically separate. The English cases of Murthy v Sivajothi [1999] 1 WLR 467, Whyte v Whyte [2005] EWCA Civ 858, and Joint Stock Company v Berezovsky [2012] EWHC 3017 (Ch) stand for the principle that “a party’s consent to the jurisdiction of a foreign court in relation to certain claims may be imputed to further claims in some circumstances”, in which case “inchoate submission” is said to arise (Giant Light Metal Technology (Kunshan) Co Ltd v Aksa Far East Pte Ltd [2014] 2 SLR 545 at [48]). Such further claims may be brought in the same proceedings or separately, so long as they concern the same subject matter as, or relate to, the original claim. Whether a further claim is sufficiently related to the original claim is a matter of degree, and considerations of fairness outweigh technicalities in determining whether consent ought to be imputed.

    In this case, a finding of inchoate submission was justified: the 2005 and 2008 proceedings essentially constituted “one unit of litigation or a contiguous whole” (Giant Light Metal Technology (Kunshan) Co Ltd v Aksa Far East Pte Ltd [2014] 2 SLR 545 at [43]), and it would be unfair if the defendant could take advantage of the abortive out-of-court negotiations to avoid answering to the PRC judgment. Accordingly, Ang J found that the defendant had voluntarily submitted to the PRC court’s jurisdiction in the 2008 proceedings by way of imputation of consent, thereby satisfying the requirement of international jurisdiction.

    For purposes of imputation of consent, the crux lies in determining when a subsequent claim is sufficiently connected to the original claim. The present case did not appear to present much difficulty for Ang J, as the two PRC proceedings were practically indistinguishable and the interruption arose out of the plaintiff’s endeavour to resolve the matter amicably. Conceivably, it will be harder to determine if consent to a foreign court’s jurisdiction ought to be imputed to a defendant in more nuanced cases, such as where the causes of action and parties in the two proceedings are different, or where the second set of proceedings was occasioned by the plaintiff’s negligent or opportunistic conduct. That said, the English Court of Appeal has indicated that the evidence of foreign law about the “incidents” of the second set of proceedings will be relevant in determining whether such proceedings constitute fresh proceedings so as to controvert a finding of international jurisdiction (see Joint Stock Company v Berezovsky [2014] EWCA Civ 20 at [72]).

    Enforcement: judgment for a fixed sum of money

    The defendant also contended that the plaintiff was precluded from enforcing the PRC judgment, since it included the order for the plaintiff to return the generator sets to the defendant. Ang J accepted that he was bound by the Court of Appeal’s decision in Poh Soon Kiat v Desert Palace Inc [2010] 1 SLR 1129, which endorsed the requirement for enforceable foreign judgments to be for fixed sums of money. Nevertheless, it was necessary to consider two issues in this case: first, whether the defendant’s obligation to repay the plaintiff US$190,000 could be enforced, given that the generator sets were still in the plaintiff’s possession, and second, whether the plaintiff’s claim was precluded because the PRC judgment comprised other obligations which were not for a definite sum of money.  

    On the former issue, Ang J heard the evidence of PRC legal experts and found that the PRC judgment merely required the plaintiff to make the generator sets available for the defendant’s collection. Since this was what the plaintiff did, and it was the defendant who was not interested in collecting the goods, the defendant could not argue that it did not have to perform its obligation to pay the plaintiff because it did not collect the generator sets. On the latter issue, Ang J held that the PRC judgment could found the plaintiff’s debt claim against the defendant in Singapore, as “where a foreign court makes an order for payment of a definite sum of money (other than for costs) amongst other orders, the order for payment of a definite sum of money should be capable of founding an action in debt” (Giant Light Metal Technology (Kunshan) Co Ltd v Aksa Far East Pte Ltd [2014] 2 SLR 545 at [75]).

    On closer analysis, it may be necessary to qualify the observation that any order for payment of a definite sum of money under a foreign judgment – even if non-monetary orders were also made – can found an action in debt, since Ang J’s decision was narrowed down by the finding that the PRC judgment did not oblige the plaintiff to redeliver the generator sets to the defendant. Be that as it may, as a matter of practice, the requirement for enforceable foreign judgments to be for fixed sums of money is likely to present fewer problems than it appears at first blush. As Ang J confirmed, when a Singapore court recognises and enforces a foreign judgment, it is merely “holding the parties to their obligations to abide by the foreign judgment, and nothing more” (Giant Light Metal Technology (Kunshan) Co Ltd v Aksa Far East Pte Ltd [2014] 2 SLR 545  at [61]). Where the foreign judgment is one for a fixed sum of money, a plaintiff is, conceptually speaking, “enforcing” the foreign judgment by claiming the foreign judgment sum as a debt against the defendant in Singapore. No debt action is available if the foreign judgment is not one for a fixed sum of money, but so long as it fulfils the conditions for recognition, it can still render the matter res judicata in a claim for non-monetary reliefs before a Singapore court. The same procedure applies in any event: the plaintiff is required to bring original proceedings in Singapore to give effect to the foreign judgment.

    * This blog entry may be cited as: Tan Ruo Yu, "Enforcement of Foreign Judgments: Giant Light Metal Technology (Kunshan) Co Ltd v Aksa Far East Pte Ltd [2014] 2 SLR 545" Singapore Law Blog (25 May 2014)

    ** A PDF version of this entry may be downloaded here

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