April 28, 2016
What is the Singapore Choice of Court Agreements Act (CCAA)?
The CCAA was enacted on 14 April 2016. It gives effect to Singapore’s treaty obligations under 2005 Hague Convention on Choice of Court Agreements (2005 Hague Convention) thereby allowing Singapore to ratify it.
What is the 2005 Hague Convention?
The 2005 Hague Convention obliges contracting states (such obligations of which will need to be passed into municipal law and Singapore has done so with the enactment of the CCAA) to:
(i) uphold exclusive choice of court agreements designating the courts of contracting states in international civil or commercial cases; and
(ii) recognise and enforce judgments of the courts of other contracting states designated in exclusive choice of court agreements without reviewing the underlying merits of the substantive claims,
subject to the exceptions in the convention and/or any reservations which a contracting state may have.
Currently, 28 countries are parties to the 2005 Hague Convention, i.e. Mexico and the European Union member states (except Denmark). The United States and Ukraine have signed the 2005 Hague Convention but have not yet ratified it.
What is the effect of the CCAA?
Where a Singapore court is the chosen court under an exclusive choice of court agreement, courts of other contracting states are obliged to suspend or dismiss parallel proceedings brought in their jurisdiction in favour of the Singapore court unless certain exceptions apply (e.g. where the agreement is null and void). Further, Singapore court judgments obtained in proceedings pursuant to such an exclusive choice of court agreement must be recognised and enforced by all the other contracting states unless certain exceptions apply (e.g. where the agreement is null and void).
Conversely, Singapore has reciprocal obligations to similarly deal with proceedings brought in Singapore where the parties have an exclusive choice of court agreement designating a foreign court of a contracting state to the 2005 Hague Convention to determine their disputes, unless certain exceptions apply (e.g. where the agreement is null and void under the law of the State of the chosen court, or the chosen court has decided not to hear the case).
Specifically on enforcement, the CCAA distinguishes between mandatory grounds and discretionary grounds when considering the issue of refusing recognition or enforceability of the foreign judgment issued from the court of a contracting state.
Mandatory grounds include the situations where the judgment was obtained by fraud in connection with a matter of procedure, and where recognition would be manifestly incompatible with Singapore public policy.
Discretionary grounds include situations where one of the parties lacked capacity to enter into the exclusive choice of court agreement, and where the foreign judgment is inconsistent with a Singapore court judgment in a dispute between the same parties.
Lastly, the CCAA provides that any Singapore judgment, even that issued by a lower court, e.g. the State Courts, can be enforced in a contracting state so long as the Singapore courts are chosen by the parties to be the exclusive choice of court.
What type of cases can the CCAA apply to?
The CCAA applies to international civil or commercial disputes but does not apply to exclusive choice of court agreements in personal, family or consumer matters, e.g. matrimonial matters, bankruptcy, insolvency, consumer claims, status and legal capacity of natural persons, wills and succession, anti-trust (competition law) matters, and claims for personal injuries.
What has the CCAA achieved for Singapore?
It enhances Singapore’s position as an international dispute resolution hub.
To some, the 2005 Hague Convention can be described as the court-cousin of the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958 New York Convention) and the CCAA does substantially reflect most of the principles that one would find when seeking to enforce an international arbitral award issued by a contracting state to the 1958 New York Convention in another contracting state.
Together with the Singapore International Commercial Court, it paves the way for commercial undertakings, particularly multinational and cross border ones, to resolve disputes in Singapore and have judgements enforced in a contracting state to the 2005 Hague Convention if Singapore is chosen by the parties to be the exclusive choice of court.
In effect, the CCAA, in line with the objectives of the 2005 Hague Convention, has given more teeth to the successful enforcement of judgment debts in this increasingly globalised world.