The International Enforceability Of A Singapore International Commercial Court (SICC) Judgement.
Legal News & Analysis - Asia Pacific - Singapore - Dispute Resolution
22 March, 2018
The Singapore International Commercial Court ("SICC") was brought into focus again earlier this year in January 2018, when the Singapore Parliament passed amendments to legislation to clarify that the SICC has jurisdiction to hear court proceedings relating to international commercial arbitration. The SICC has been gaining a steady stream of cases since its launch a few years ago, and has been gaining traction as a viable choice to consider for international dispute resolution.
Commercial parties have voiced queries on the international enforceability of an SICC Judgment, with some comparing it against the enforceability of an arbitral award worldwide. No doubt an arbitral award has the advantage. The global reach of the Recognition and Enforcement of Foreign Arbitral Awards (“New York Convention”) in more than 150 countries is unrivalled by any other international enforcement framework. International arbitration remains the leading choice for resolving cross-border disputes. Yet, commercial parties may still find themselves familiar with the practical difficulties of enforcing an award under the New York Convention in some jurisdictions (not least due to the tactical applications made in the country of enforcement). At the same time, major economies are beginning to sit up and take notice of the prospect of resolving disputes by way of international commercial litigation, as a viable alternative to international arbitration.
The EU member States (save for Denmark) have ratified the Hague Convention on Choice of Court Agreements ("Hague Convention"). An SICC Judgment is therefore enforceable in an EU member state under the framework of the Convention. More recently, the People's Republic of China's ("China") endorsed the Hague Convention. The US, Ukraine and China are signatories to the Hague Convention, but have not ratified it. At present, the Hague Convention is not in force in these countries. For China at least, the indications are that China will ratify the Convention soon.
China's Ministry of Foreign Affairs announced that it will "step up [the] study of the ratification of the Convention so that the Convention will come [in] force as soon as possible for China and provide a new legal basis for China to conduct foreign cooperation in [the] recognition and enforcement of civil and commercial judgments".
An SICC Judgment cannot be enforced under the Hague Convention in these places, although the relevant courts may make reference to it. Prior to the signing of the Convention, the Chinese courts have already adopted principles consistent with the Convention. In Nanjing Intermediate People’s Court (Kolmar Group A.G. v Jiangsu Textile Industry (Group) Import & Export Co., Ltd (9 December 2016) Su01 Assisting Foreign Recognition No. 3.), the Chinese court enforced a Singapore judgment on the basis of reciprocity, in view that an earlier Singapore decision (Giant Light Metal Technology (Kunshan) Co Ltd v Aksa Far East Pte Ltd  SGHC 16) had enforced a decision of the Suzhou Intermediate Court.
Enforcement under the Hague Convention
The Hague Convention enhances the international enforceability of an SICC Judgment, as it does not allow an unsuccessful party to re-litigate on the merits of the dispute in the country of enforcement, and requires the courts in the country of enforcement to enforce an SICC Judgment except in the following limited circumstances (primarily jurisdictional grounds):
a) the jurisdiction clause (conferring the SICC jurisdiction) was null and void under Singapore law, unless the Singapore courts have determined that the agreement is valid;
b) a party lacked the capacity to conclude the jurisdiction clause under the law of the country of enforcement;
c) the document which commenced the Singapore court proceedings or an equivalent document, including the essential elements of the claim, was not notified to the defendant in sufficient time and in such a way as to enable him to arrange for his defence, unless the defendant entered an appearance and presented his case without contesting notification before the Singapore courts; or was notified to the defendant in the country of enforcement in a manner that is incompatible with fundamental principles of the country of enforcement concerning service of documents;
d) the SICC judgment was obtained by fraud in connection with a matter of procedure;
e) recognition or enforcement would be manifestly incompatible with the public policy of the country of enforcement, including situations where the specific proceedings leading to the judgment were incompatible with fundamental principles of procedural fairness of that country;
f) the judgment is inconsistent with a judgment given in the country of enforcement in a dispute between the same parties; or
g) the judgment is inconsistent with an earlier judgment given in another state between the same parties on the same cause of action, provided that the earlier judgment fulfils the conditions necessary for its recognition in the country of enforcement.
Comparison with enforcement of arbitral awards under the New York Convention
The Hague Convention does present some apparent advantages over the New York Convention in giving an SICC Judgment arguably greater finality than an arbitral award:
|NEW YORK CONVENTION|
|Can an unsuccessful party to a judgment/award challenge jurisdiction in the foreign country of enforcement?||Yes. An award could be refused enforcement on jurisdictional grounds.|
|Can a judgment/award be refused enforcement on the basis that the choice of court/arbitration agreement was invalid?||No. The enforcement court has no discretion to refuse the enforcement of an SICC judgment on the basis that the choice of court agreement was invalid, where the SICC has already determined that the agreement was valid.|
|No. The validity of a choice of court agreement giving rise to an SICC judgment is determined in accordance with Singapore law.||Yes. The validity of an arbitration agreement could be determined by a number of laws, for example, the law of the arbitral seat, the law of the substantive contract, or the law of the forum seized of the dispute.|
|No. The enforcing court cannot enforce an SICC judgment if already set aside by the Singapore Court of Appeal.||Yes, possibly. An award set aside by the supervisory court of Singapore may still be enforced in some jurisdictions, depending on the international arbitration laws of the country of enforcement.|
|Can the composition or appointment of court/arbitral tribunal be Challenged?||No. Not under the Hague Convention at least. The Convention does not provide for this challenge.||Yes. The composition/appointment of an arbitral tribunal can be challenged if the composition/procedure was not in accordance with the agreement of the parties, or, failing such agreement, was not in accordance with the law of the country where the arbitration took place.|
Enforcement under the RECJA and REFJA
In addition to the countries mentioned above, an SICC Judgment can be enforced, save for limited jurisdictional, natural justice or public policy exceptions, without having to re-litigate the merits of the claim, under the Reciprocal Enforcement of Commonwealth Judgments Act ("RECJA"): Australia, Brunei Darussalam, India (except the states of Jammu and Kashmir), Malaysia, New Zealand, Papua New Guinea, Pakistan, Sri Lanka, the United Kingdom and Windward Islands; and in Hong Kong SAR under the Reciprocal Enforcement of Foreign Judgments Act ("REFJA"). Upon registration under these frameworks, an SICC Judgment can be given the same effect and directly enforced as if it was a judgment issued by a national court of the country of enforcement.
Enforcement under the general law / common law
An SICC Judgment can be enforced under the common law, or in civil law countries, the general law of the country of enforcement. The usual requirements would be to initiate a cause of action, and to exhibit the SICC Judgment in support of the cause of action. In some jurisdictions, a translated version of the SICC Judgment may be required to be exhibited. A summary process may be available in certain jurisdictions, where the judgment creditor may not be required to undergo a full trial or hearing process. Depending on the laws of the enforcement jurisdiction, the cause of action or enforcement application may be challenged by a re-litigation of the merits, or prescribed grounds such as jurisdictional, natural justice, or public policy grounds.
Most enforcement jurisdictions would require the SICC court to at least have a substantial connection with the claim, and would ordinarily not enforce a Judgment which is not for an ascertainable sum of money.
Parties may reinforce the finality of an SICC Judgment by adopting a jurisdiction clause in their contracts that expressly waives parties' right to refuse enforcement of the SICC Judgment. For parties who have consented in their contracts to refer disputes exclusively to the Singapore courts generally, or specifically (whether exclusively or not) to the SICC, Singapore law (under the Supreme Court of Judicature Act (Cap 322)) would deem parties to have agreed to enforce the SICC Judgement without undue delay, and waive any recourse to any court or tribunal outside Singapore against the enforcement of the SICC Judgement. It remains to be seen how the courts of different enforcement jurisdictions would respond to such a deeming provision.
In summary, an SICC judgment is enforceable under the following different frameworks depending on the particular country of enforcement:
|Enforcement under the Hague Convention||EU member States, except Denmark, Mexico|
|China, USA, Ukraine|
|Reciprocal Enforcement of Commonwealth Judgments Act (RECJA)||Australia, Brunei Darussalam, India (except the states of Jammu and Kashmir), Malaysia, New Zealand, Papua New Guinea, Pakistan, Sri Lanka, United Kingdom, Windward Islands|
|Hong Kong SAR|
|Rest of the world
International arbitration no doubt remains the pre-eminent choice of cross-border commercial dispute resolution, while China’s endorsement of the Convention sends an important message that international commercial litigation is increasingly recognised as a viable option for resolving cross border disputes. At the same time, commercial parties may increasingly have confidence that a SICC judgement e given effect to in common and civil law jurisdictions such as China. The significance of this cannot be understated, given the growing potential of the SICC as a neutral venue to resolve cross-border commercial disputes between Chinese and international parties, including those arising from China's Belt and Road Initiative.
For further information, please contact:
June (Junghye) Yeum, Partner, Clyde & Co