The effect of the dramatic restatement of the law by the Singapore Court of Appeal in the Vinmar case is beginning to be felt in related areas in Singapore. To read more about Dentons Rodyk's involvement in Vinmar, see Breaking News and Exclusive means Exclusive. The Vinmar case concerned the law on exclusive jurisdiction clauses, where the parties agree that all disputes are to be referred to one and only one court for resolution. It decided that great weight was to be placed on the parties’ agreement to select only one court to resolve all disputes. If proceedings were commenced in Singapore in breach of the exclusive jurisdiction clause, the Singapore court would ordinarily respect the choice made by the parties and refer the dispute to the contractual court. A party who wished to break from the exclusive jurisdiction clause must show “strong cause” to the Singapore court for doing so and “strong cause” was not to be assessed by reference to the merits of the case.

Now, in the case of Shanghai Turbo Enterprises Ltd v. Liu Ming [2019] SGCA 11, the Singapore Court of Appeal has decided that the “strong cause” test as explained in the Vinmar case is to apply also to cases involving non-exclusive jurisdiction clauses, where the parties agree two or more courts as courts that are capable of hearing and determining their disputes. The Singapore Court of Appeal arrived at this conclusion because a non-exclusive jurisdiction clause is regarded as an agreement between the parties that if one party (the claimant) was to commence proceedings in a court that was named in the clause, the other (the respondent) was obliged to submit to the jurisdiction of that court. It followed that if the claimant commenced proceedings in a named court and the respondent applied to stay those proceedings in favour of another court, the respondent would be regarded as asking the named court to release it from its contractual obligation to submit to jurisdiction. This is so even if the stay is in favour of another court named in the non-exclusive jurisdiction clause.

The Singapore Court of Appeal re-deployed the principles in the Vinmar case. It reiterated that the “strong cause” test as explained in Vinmar reflected the philosophy that the court should generally give effect to the parties’ agreement on the court that would resolve their disputes. Foreseeable considerations of litigation convenience and case connection to the chosen court were to be given little weight. It also said that factors such as abusive behaviour by one party and concerns about denial of justice by the contractual court could be taken into consideration in non-exclusive jurisdiction cases, as they are in exclusive jurisdiction cases.

The Singapore Court of Appeal did caution, though, that its extension of the Vinmar principle of “strong cause” to non-exclusive jurisdiction cases was limited to paradigm non-exclusive jurisdiction clause cases. A paradigm non-exclusive jurisdiction clause would contain two essential elements. First, the clause would identify a specific court to which the parties would be obliged to submit for the resolution of their disputes. Second, the clause allows parties to commence proceedings in other jurisdictions, which may or may not be identified. Jurisdiction clauses that do not possess these essential elements may not be subject to the “strong cause” test and may instead give rise to discussion whether Singapore is the most appropriate forum under the forum non conveniens doctrine. For a discussion on forum non conveniens principles, read the article Where is justice best served?

Forum selection and commencement of proceedings in particular courts can sometimes involve very technical considerations. Challenges to the jurisdiction of courts also require great legal and strategic thinking. Parties with jurisdiction clauses are best served by taking legal advice on how best to minimise the time and expense of litigating and where to litigate.

Cases:

Shanghai Turbo Enterprises Ltd v. Liu Ming [2019] SGCA 11

Shanghai Turbo Enterprises Ltd v. Liu Ming [2018] SGHC 172

Vinmar Overseas (Singapore) Pte Ltd v PTT International Trading Pte Ltd [2018] 2 SLR 1271

IM Skaugen SE v. MAN Diesel & Turbo SE [2018] SGHC 123

IM Skaugen SE v. MAN Diesel & Turbo SE [2018] SGHCR 6