UCO Bank v. Golden Shore Transportation
Ang and Partners, International Correspondents to the Website for Singapore have reported that, on 23 October 2003, the Singapore Court of Appeal (Chao Hick Tin, JA and Teng Lee Meng, J) dismissed Golden Shore's appeal. They report that the Court of Appeal agreed with Woo J that, although clause 17 was an exclusive jurisdiction clause, there was strong cause for not staying the Singapore action. The lack of an arguable defence demonstrating a genuine desire on the part of Golden Shore for a trial in India was decisive. Other factors like connection with Singapore, the governing law and location of evidence were given limited weight as these factors would be known to the parties at the time of contract. The Court of Appeal also agreed that the failure of UCO to protect time in India was a neutral factor.
DMC Rating Category: Confirmed
This Case Note was contributed by Ang & Partners, the Website’s International Contributors for Singapore
Golden Shore applied to stay the Singapore action on the basis of clause 17 of the original bills of lading, and also on the ground that India was the more appropriate forum. The two main issues before the Court were:
(1) Whether clause 17 was an exclusive jurisdiction clause. The opening line of clause 17 read: "Any claims that may arise hereunder must be made at the port of delivery for determination and settlement at that port only." UCO’s counsel argued that "claims" meant written demands but not suits.
(2) If clause 17 were indeed an exclusive jurisdiction clause, whether there was strong cause not to stay the action.
2. Although clause 17 was an exclusive jurisdiction clause in favour of India, there was strong cause why UCO should not be required to commence action in India. Furthermore, India was not the more appropriate forum. The reasons are set out below.
3. The parties were more closely connected with Singapore. Although UCO was an Indian bank, it was its Singapore branch that was involved in the transaction. Golden Shore and SOM were both Singapore companies.
4. The governing law under the original bills of lading was Singapore law.
5. While the judge could not conclude at this stage that Golden Shore had no defence, it seemed to the Court that Golden Shore was hanging onto a thin thread to weave its only potential defence, i.e. whether UCO had somehow consented to or acquiesced in the switched bills such that UCO would no longer be entitled to rely on or claim under the original bills. The evidence on this issue was primarily in Singapore.
6. Golden Shore did not genuinely desire trial in India. Although it commenced an Indian action against the receivers, it was not clear to the Court how Golden Shore could maintain a genuine claim against the receivers as all the receivers did was to present the very bills (i.e. the switched bills) that Golden Shore had issued.
7. UCO’s action against Golden Shore was time-barred in India. UCO did not have a good explanation for why it failed to file a protective writ in India but the time-bar was a neutral factor. If a plaintiff wished to take a gamble that the Singapore court would not stay his action, then the dice should not be loaded against him.
Golden Shore appealed to the Court of Appeal. On appeal, the judgment at first instance was upheld, as explained in the introduction to this case note.
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