9 May, 2018
The Singapore Court of Appeal provides guidance on the cumulative application of the doctrines of forum election and forum non conveniens in the exercise of its discretion to assume jurisdiction
In the recent case of Rappo, Tania v Accent Delight International Ltd [2017] 2 SLR 265, the Singapore Court of Appeal granted a stay of proceedings on the basis of forum non conveniens. In its decision, the Court of Appeal provided guidance on the cumulative application of the doctrines of forum election and forum non conveniens in a situation where foreign proceedings had already been initiated by the Plaintiff ie. lis alibi pendens.
Background
The proceedings emanated from a dispute between Russian magnate Mr Dmitry Rybolovlev and Mr Yves Charles Edgar Bouvier, a business man in the international arts scene. Rybolovlev had desired to create a private art collection and was introduced to Bouvier through a close friend, Tania Rappo, sometime around 2002. Through Bouvier, Rybolovlev had over the course of a decade come to amass a significant art collection containing various masterpieces by renowned artists, including Picasso, Monet, Klimt, Da Vinci and Rothko.
The dispute that arose between Rybolovlev and Bouvier centered on the precise nature of their relationship. Rybolovlev alleged that Bouvier was engaged as his agent to acquire the artworks, while Bouvier alleged that he was an independent seller of artworks, with parties dealing with each other as principals.
In around 2014, Rybolovlev came to the knowledge that Bouvier had made significant profits from each transaction and that Rappo was being paid a finder's fee for each transaction. In early 2015, Rybolovlev lodged a criminal complaint and civil proceedings in Monaco against Bouvier for fraudulently keeping for himself a portion of the sales price that Rybolovlev had paid for the artworks.
Shortly after, Rybolovlev, through the Companies which he used to purchase the artworks (the "Respondents"), initiated proceedings in Singapore against Bouvier, for the tort of deceit and breach of fiduciary duty, and against Rappo, for knowing receipt and dishonest assistance (collectively, the "Appellants").
The Appellants filed an application for a stay of the Singapore proceedings on two grounds, first, that Switzerland or Monaco were both more appropriate fora then Singapore ie. forum non conveniens; and second, that there were already ongoing civil proceedings against them in Monaco ie. lis alibi pendens, and that as a consequence, the Respondents should be put to forum election.
The stay application was dismissed on the basis that the Appellants had failed to show that Switzerland or Monaco was clearly a more appropriate forum than Singapore for the determination of the dispute. Second, as the Respondents had undertaken to discontinue the Monaco civil proceedings if the Court were to rule in their favour, the Court found that the issue of lis alibi pendens had been rendered academic.
The Cumulative Application of the Doctrines of Forum Election and Forum Non Conveniens
The Appellants proceeded to file an appeal against the decision of the Court. On appeal, the Respondents raised the argument that the Appellants, as a matter of law, were not entitled to rely on both the doctrines of forum election and forum non conveniens as the two doctrines represented "alternative" and not "cumulative" remedies.
The Respondents argued that the cumulative application of the said doctrines would potentially lead to anomalous situations. By way of illustration, they argued that if a plaintiff were compelled to elect between forums, and accordingly terminated the foreign proceedings, it remained open to the defendant to subsequently successfully argue that the foreign forum and not Singapore, was the most natural forum. This would place the plaintiff in a difficult situation, already having put to an end the foreign proceedings. Such an approach would be "unjust and would allow a defendant to trick the other side."
The Court of Appeal took the view that there was no unfairness to the plaintiff in the above scenario as long as the defendant had not made any representation on forum submission and subsequently sought to resile from that representation after the plaintiff had relied on it. The doctrines of forum election and forum non conveniens are based on differing concepts. Forum election enables the Court to manage its own process, preventing a multiplicity of proceedings and the risk of conflicting decisions. On the other hand, through the doctrine of forum non conveniens, the Court is considering the appropriateness of the exercise of its jurisdiction in light of the existence of other potentially more appropriate fora.
In the present situation, the Court of Appeal formed the view that the issue of forum non conveniens should be decided before the issue of lis alibi pendens (and forum election). If the Court found that Singapore was not the most natural forum, then a stay of proceedings could be granted, thus obviating the need to put the Plaintiff to forum election.
The Court of Appeal proceeded to apply the test set out in Spiliada Maritime Corporation v Cansulex Ltd [1987] AC 460 to find that Switzerland was the most appropriate forum, thereby overturning the decision of the Court at first instance. In the circumstances, the Court of Appeal found that it was empowered to grant a stay of proceedings without having to determine the issue of lis alibi pendens and having to put the Plaintiff to forum election.
Significance of This Case
This case is significant due to the practical guidance given by the Singapore Court in relation to proceedings that are lis alibi pendens. Where a plaintiff is confronted with an application compelling him to elect forum, the plaintiff may want to concurrently seek a declaration that Singapore is the most natural forum. In doing so, the plaintiff can elect forum in the knowledge that the Singapore Court will assume jurisdiction in the matter.
For further information, please contact:
Jonathan Choo, Partner, ATMD Bird & Bird
jonathan.choo@twobirds.com
