Why Singapore’s Supreme Court has refused to admit Harish Salve to argue a case

Senior Advocate Harish Salve has been barred from appearing before the Supreme Court of Singapore in order to argue a case before it, as first reported by ET.

Harish Salve had applied to represent the sellers of Ranbaxy in its arbitration dispute with Daiichi in Singapore’s apex court, making it the first time a Senior Advocate from India has ever done so. The senior counsel had appeared for the sellers of Ranbaxy in the same case at the Delhi High Court.

The dispute stems from a Share Purchase and Share Subscription Agreement signed in June 2008, under which the Daiichi purchased the shares held by the sellers of Ranbaxy. The Indian pharma company fell under the scanner of US regulators, after which it was directed by Daiichi to sign a consent decree with one of these regulators.

The cost of compliance with this consent decree was estimated at US$35m to US$50m per year. Ranbaxy also had to shell out a further US$500m as a penalty in a settlement agreement with a US government department in May 2013.

Daiichi then initiated arbitration proceedings against Ranbaxy, alleging, among other things, that it “suppressed key reports evidencing widespread and intentional breaches”. The Japanese company sought damages under Section 19 of the Indian Contract Act. The Tribunal held in favour of Daiichi, saying that the damages payable would be similar to those recoverable for fraudulent misrepresentation under general tort principles. To be more specific, the damages awarded were in excess of $500 million.

The sellers sought to set aside the award before Singapore’s Supreme Court on the grounds that the award passed by the Tribunal was in excess of its jurisdiction. It was contended that the Tribunal had awarded “punitive, exemplary, multiple and/or consequential damages”, which were expressly prohibited by the Arbitration Agreement.

Which is where Harish Salve comes in.

In his application for permission to represent the sellers of Ranbaxy in the Supreme Court of Singapore, Harish Salve claimed that the matter involved issues of Indian law that were “unsettled, complex and difficult”. He also pointed to the fact that the Tribunal had erroneously relied on the Gujarat High Court’s decision in R C Thakkar v Gujarat Housing Board [AIR 1973 Guj 34], which had been overruled by the Supreme Court of India at the appeal stage. In fact, he had appeared for one of the parties in that very case.

Harish Salve also described himself as “an authority in the fields of Constitutional, Commercial, Contractual, Arbitration and Tax Laws” and submitted that he was formerly Solicitor General of India. Smitha Menon, Partner at Wong Partnership LLP, made these submissions before the court on behalf of Salve.

However, judge Steven Chong did not deem it fit to admit an Indian lawyer to argue the case.

For a better understanding of the court’s decision, one needs to look at Section 15 of the Legal Profession Act of Singapore, which contains the conditions that need to be fulfilled before a foreign lawyer is admitted to argue. Among those conditions is that the applicant should be a Queen’s Counsel, or have an equivalent distinction. “Special qualifications or experience for the purpose of the case” also needs to be established. In view of this provision, the court held,

“The overarching principle guiding the exercise of the court’s discretion is that foreign senior counsel should only be admitted on the basis of “need”. “Need” should be assessed not only from the perspective of the litigant but also with regard to the court’s need for assistance with the issues in contention.”

The court also pointed to the fact that the parties had relied on the advice of Indian law experts for the purpose of this case. Former Supreme Court judges BN Srikrishna and Vikramajit Sen JJ were consulted by Ranbaxy and Daiichi respectively, with the two retired judges giving diametrically opposite opinions. The court had also allowed the parties to apply for cross-examination of the two experts.

Also involved were Former Chief Justice of the High Courts of Madras and Delhi, AP Shah J, who was the expert for the minor sellers, and former Chief Justice of the Punjab and Haryana High Court, Mukul Mudgal J, who was the expert for the other side. It is also pertinent to note that the Attorney General of Singapore supported Salve’s application, while the Law Society opposed it.

In light of this fact, the court held,

“Since foreign law needs to be “proved”, what then is the role of the Applicant, particularly when the parties have each retained two experts on Indian law, all of whom are either retired judges of the Indian Supreme Court or former Chief Justices of Indian State Courts?”

Therefore, the court held that Harish Salve did not meet the qualifications as required under Section 15 of the Legal Profession Act.

“There is no material on the face of the RC Thakkar Supreme Court Decision to support the Applicant’s expertise as regards the appropriate measure of damages for fraudulent misrepresentation in India. The Applicant has not referred to any other case to support his expertise on this issue…The case might be more compelling if the Applicant had been the lead counsel in the arbitration proceedings…

Applicant was formerly the Solicitor General of India and hence would be familiar with Indian public policy, I should state that his general familiarity with Indian public policy does not satisfy the requirement of “special qualifications or experience”…

…Therefore, I concluded that the Applicant had failed to show that apart from his general expertise in Indian law, he had the requisite “special qualifications or experience” for the purposes of the specific issues in this case under s 15(1)(c).”

The judge also held that the evidence on Indian law was not unusually complex or difficult “so as to be beyond the competence of local counsel”, and that allowing foreign counsel to argue in cases where foreign law was to be proved would set an “undesirable precedent”. And the fact that the sellers did not engage an Indian lawyer at the arbitration stage weighed heavily against Salve’s case.

“My view is bolstered by the Sellers’ own conduct of the arbitration proceedings. The Sellers did not engage Indian lead counsel for the arbitration even though that was the proper forum for the full ventilation of the merits of all these issues of Indian law.

Instead, Mr Davinder Singh SC was instructed as lead counsel on behalf of all the Sellers. If the matter appeared to be within the competence of Singapore Senior Counsel at the arbitration, it is baffling how the presence of Indian lead counsel can be said to be necessary in the OSes where the Indian Law Issues feature only as anterior facts to be proven.”

Hence, the court dismissed Salve’s application and imposed costs of $8,000, to be borne by the sellers, and not Salve.

Read the judgment:

Image taken from here.