We have covered the Hague Convention on Choice of Court Agreements on several occasions (see, most recently, here and here). Now, the Convention is about to get a new party, and Patrick Dahm, a partner in my firm’s Singapore office, has the details:
On April 14, 2016, the Singapore Parliament has passed the Choice of Court Agreements Bill, about a year after Singapore signed the Convention on March 2015. The Bill is pending presidential assent and publication in the Government Gazette, which will bring it into force.
With this, the number of Convention parties will increase to three nominally, but effectively to 28: prior to Singapore, the Convention had been signed and ratified by Mexico and the European Union (spanning the EU itself and its members except Denmark). Signatories which have yet to ratify the Convention are the USA and Ukraine.
The Convention requires its parties to procure that their courts uphold and recognise an exclusive agreement on a choice of court in another Convention state in an international civil or commercial matter. If a court not chosen in the agreement is called upon, it will have to stay all proceedings (unless the chosen court refuses to accept jurisdiction). Furthermore, the Convention requires its parties to procure that their courts enforce judgments of the courts of other Convention states designated in a choice of court agreement (unless one of the exceptions in the Convention applies).
Singapore’s Choice of Court Agreements Act implements the Convention regime. It acknowledges that where the parties to an international civil or commercial contract have chosen a Singapore court as the exclusive venue to settle a legal dispute, this Singapore court will have jurisdiction (unless the choice of court agreement is null and void under Singapore law). Conversely, where the parties to such a contract have chosen the court of another Convention state as the exclusive venue to settle a legal dispute, the Singapore court will stay or dismiss a matter brought before it in favour of the chosen court (unless the chosen court refuses to accept jurisdiction or where the choice of court agreement is null and void under the law of the state of the chosen court). A judgment of a chosen court in another Convention state will be recognised and enforced in Singapore so long as it is enforceable in that Convention state.
The usual exceptions apply, either mandatorily or at the discretion of the court. For example, the recognition and enforcement of a foreign judgment must be refused if the defendant was not notified in sufficient time to enable him to defend the proceedings; if the foreign judgment was obtained by fraud in connection with a matter of procedure; or if the recognition or enforcement of the foreign judgment would be manifestly incompatible with the public policy of Singapore. As a matter of discretion, recognition and enforcement may be refused if the exclusive choice of court agreement is null and void under the law of the state of the chosen court; if a party to the exclusive choice of court agreement lacked the capacity (under the law of Singapore) to enter into or conclude the agreement; if the defendant was notified in a manner incompatible with the fundamental principles in Singapore concerning the service of documents; or if the foreign judgment is inconsistent with a judgment given by a court in Singapore or in another Convention state in a dispute between the same parties.
The recognition or enforcement of a foreign judgment may also be refused in Singapore if it awards damages in excess of compensation for the actual loss or harm suffered by the awarded party – in other words, if a foreign judgment awards exemplary or punitive damages.
The Choice of Court Agreements Act establishes another regime of recognition and enforcement of foreign judgments in Singapore, alongside the statutory regimes of the Maintenance Orders (Reciprocal Enforcement) Act (limited, as the name implies, to maintenance orders), the Reciprocal Enforcement of Commonwealth Judgments Act (limited to judgments of the superior courts of the United Kingdom of Great Britain and Northern Ireland, Hong Kong, New Zealand, Sri Lanka, Malaysia, Windward Islands, Pakistan, Brunei Darussalam, Papua New Guinea and India (except the State of Jammu and Kashmir)) and the Reciprocal Enforcement of Foreign Judgments Act (limited to judgments of the superior courts of Hong Kong), and alongside the rules of the common law on the recognition and enforcement of foreign judgments. Unlike those, the regime of the Choice of Court Agreements Act is not limited to the superior courts of the Convention states but applies to any court in such a state chosen as the exclusive dispute resolution forum.
This plethora of recognition and enforcement regimes may cause overlaps, in which case the Choice of Court Agreements Act will trump any other regime applicable.
For Singapore, the increased significance of the Convention and the Choice of Court Agreements Act lies in its applicability, in principle, to judgments of the Singapore International Commercial Court. This new court, established in 2015, is designed to deal with transnational commercial disputes and was constituted as a division of the Singapore High Court. Accordingly, where the Singapore High Court is designated in an exclusive choice of court agreement, this designation is to be construed as including the Singapore International Commercial Court (unless a contrary intention appears in the agreement). This is in line with the official intention, as expressed in the parliamentary speech of Senior Minister of State for Law Indranee Rajah, to enhance the international enforceability of Singapore court judgments. It is an aspect of Singapore’s official policy to make the Singapore courts a more attractive forum for determining cross-border disputes and thus to boost Singapore’s position as a dispute resolution hub in Asia.
From a German perspective, each non-EU member state to the Convention adds real benefit to parties in international commerical transactions. And Singapore is a significant trading partner, ranked 34th in imports from Germany and 31th in exports to Germany overall, and ranked 18th and 15th, respectively, amongst non-EU trading partners.