The Reciprocal Enforcement of Foreign Judgments Act, 1959 (“REFJA”) is the legislation in Singapore which provides for the enforcement in Singapore of judgments given in foreign countries which afford reciprocal treatment to judgments given in Singapore. Since March 1, 2023, India is also a gazetted country for the purposes of reciprocal enforcement under the REFJA.
In the recent judgment of Indian Overseas Bank v Seabulk Inc (formerly known as Seabulk Systems Inc) and others [2023] SGHC 42, the Singapore High Court (“HC”) identified applicable factors that may inform the Court’s discretion under Section 6(1) of the REFJA to either set aside the registration of a foreign judgment or adjourn the setting aside application for a reasonable period when the foreign judgment is pending appeal.
The factors identified by the HC has since been endorsed and supplemented by the Appellate Division of the High Court of the Republic of Singapore (the “AD”) in Ramesh Vangal v Indian Overseas Bank and another matter [2023] SGHC(A) 25.
The decisions of the HC and the AD arose from Mr. Ramesh Vangal’s application (the “Setting Aside Application”) to set aside a registration order obtained by the Indian Overseas Bank (“IOB”) registering a judgment from the Hong Kong SAR (the “HK Judgment”) in Singapore on, amongst other things, the grounds that there was a pending application to stay the HK Judgment (the “First HK Stay Application”) and a pending appeal against the HK Judgment (the “HK Appeal”) in Hong Kong.
Under Section 3(5) of the REFJA, a foreign judgment is taken to be final and conclusive and may be registered even if it is subject to appeal or an appeal is pending in the foreign court. Nevertheless, Section 6(1) of the REFJA provides that the Court may, if it thinks fit, set aside the registration, or adjourn the application to set aside the registration for a reasonable period.
The Setting Aside Application was eventually placed before a Judge who adjourned the Setting Aside Application. The Setting Aside Application was to be heard or adjourned until the determination of the HK Appeal depending on the outcome of the First HK Stay Application. Notably, while the Judge gave Mr. Vangal liberty to file a fresh application to stay the Setting Aside Application if the First HK Stay Application was dismissed, the Judge stated:
“of considerable relevance to the outcome of such a fresh application would be consideration of terms, including partial security for the judgment sum.”
Upon the dismissal of the First HK Stay Application, Mr. Vangal filed a fresh application to the Hong Kong Courts to stay the HK Judgment (the “Second HK Stay Application”) and applied to adjourn the hearing of the Setting Aside Application and stay the execution of the registration order (the “Adjournment and Stay Application”).
The Adjournment and Stay Application and the Setting Aside Application were heard and dismissed in Indian Overseas Bank v Seabulk Inc (formerly known as Seabulk Systems Inc) and others [2023] SGHC 42. Mr. Vangal appealed the dismissals.
In Ramesh Vangal v Indian Overseas Bank and another matter [2023] SGHC(A) 25, the AD supplemented the principles set out by the HC on the exercise of its discretion under Section 6(1), REFJA:
a. The Court must have regard to the interests of the judgment creditor in the fruits of its success, balanced against the interests of the judgment debtor that the foreign appeal is not rendered nugatory. The proper approach is to make the order which best accords with the interests of justice.
b. The Court should examine whether there would be excessive delays occasioned to the judgment creditor in enforcement and obtaining the fruits of litigation if an adjournment were granted. The time taken for foreign proceedings to conclude is relevant.
c. The Court should factor in any offer of security, as a term of any adjournment sought.
d. The Court should consider the ease of recovery of the judgment sums paid if the registered judgment is enforced and the foreign appeal is subsequently allowed. The Court should consider if there is some form of irremediable harm caused if the registration is not set aside or an adjournment is not granted.
e. The Court should be satisfied that the foreign appeal is bona fide and will be prosecuted with due diligence.
f. It is inappropriate for the Singapore court to assess the merits of the foreign appeal, especially when foreign law or complex issues of law and fact are involved.
The AD applied these principles and rejected Mr. Vangal’s application for leave to appeal the dismissal of the Adjournment and Stay Application and further held that it was not established that the Judge had erred in dismissing the Setting Aside Application because:
a. The Judge was justified in giving weight to the Hong Kong Courts’ dismissal of the First HK Stay Application. As the Judge had already permitted one prior adjournment of the Setting Aside Application, there was no good reason to allow another adjournment when no new reasons were provided apart from the mere existence of the renewed application.
b. The AD rejected the suggestion that the Judge was imposing “Singapore-type timelines on a foreign court” or that the Judge had criticised the efficiency of the Hong Kong Judiciary. The AD reiterated that consideration of the duration of the foreign proceedings is a legitimate consideration that every judgment debtor who seeks an adjournment or setting aside must address, even if he had not caused any delay in the hearing of the foreign appeal.
c. It was Mr. Vangal’s responsibility to make an offer of security if he was sincere about it. The burden of proof is on the party seeking a stay of execution to show evidence of his financial means and impecuniosity. As no such evidence was adduced, Mr. Vangal’s allegation of irremediable harm was dismissed.
The Court’s clarification of the factors relevant to the exercise of its discretion under Section 6(1) of the REFJA is particularly welcomed considering recent developments.
While previously, only Hong Kong SAR was gazetted under REFJA, from March1, 2023, REFJA is now applicable to judgements from India, Australia, Brunei Darussalam, Malaysia, New Zealand, Pakistan, Papua New Guinea, Sri Lanka and the United Kingdom of Great Britain and Northern Ireland.
The principles identified in Ramesh Vangal v Indian Overseas Bank and another matter [2023] SGHC(A) 25 points towards the fact that the registration of a foreign judgment under REFJA will not be easily set aside by the Singapore Courts, who will consider the interest of the judgment creditors in obtaining the well-earned fruits of litigation. Even in exercising its discretion to adjourn a setting aside application, the Singapore Courts will have regard to the prejudice to judgment creditors occasioned by delays in enforcement of the foreign judgment.
The decisions of the Singapore Courts will be welcomed by judgment creditors seeking to enforce foreign judgments in Singapore notwithstanding the existence of possible or ongoing appeals in foreign courts.
Disclaimer - Oon & Bazul LLP represented Indian Overseas Bank's Hong Kong branch, one of the parties, in the above-discussed case.
About the authors: Prakaash Silvam is a Partner - Litigation & Dispute Resolution, India Practice; Lionel Chan is a Partner - Litigation and Dispute Resolution; Caleb Tan is a Senior Associate - Litigation and Dispute Resolution at Oon & Bazul LLP.