Singapore Courts Questionned

Does Singapore have a sound legal system or is Singapore just another autocracy with a leadership that subverts the law to preserve its own power?

Should its court orders relating to commercial and other matters be enforced in countries that do have excellent legal systems? These are matters over which a Canadian court has been asked to rule in a case that is potentially damaging to the Singapore Government, still smarting from the 66.1% results from the election of 7 May 2006.

Canadian oil and gas company EnerNorth Industries had been invited by Singapore's Oakwell Engineering to set up a joint venture in 1997 to finance, build and operate two mobile power plants in the Indian state of Andhra Pradesh. Oakwell had neither the financial or technical resources to complete the contract it had been awarded. The Indian federal and state governments and the Electricity Board refused to provide the licences and agreements and fulfil their other commitments, and by 2002 it was clear to EnerNorth that plans for the power plants would not be realised. EnerNorth did not secure the agreed financing and Oakwell subsequently sued it in a Singapore court in 2003, obtaining a favourable $US5.4 million judgement, amount being what EnerNorth agreed to in buying up Oakwell's share in the JV. In the Settlement Agreement under which Oakwell sold its interest in the project company, both parties agreed that their previous contracts were "terminated" and "discharged" and that Enernorth was "released" from any obligations under them. The key provision in the previous contracts that the Settlement Agreement discharged was the provision that obligated Enernorth to procure financial closure.

Under Singapore contract law it was not open to appeal judge Lai Kew Chai to imply into the Settlement an unconditional obligation to procure financial closure for the project within 6 months of the Settlement Agreement; in doing so, Lai Kew Chai committed a clear legal error under Singapore law. EnerNorth's appeal was not successful.

As EnerNorth has no assets in Singapore, Oakwell applied to Ontario's Superior Court of Justice in Canada for the Singapore judgement to be enforced there, so it could pursue EnerNorth's Canadian assets. The Canadian court ruled that the Singapore judgement should be enforced. EnerNorth appealed.

What was the basis for EnerNorth's appeal? In 2003, Canada's Supreme Court said Canadian courts can only recognise a foreign judgement if the legal system that produced the judgement meets Canada's constitutional standards. And so EnerNorth's lawyers, in their written submission, argued that Singapore's legal system is not on a par with Canada's and so the Singapore decision against their client should not be enforceable in Canada.

The submission says the Singapore judgement "was granted by a corrupt legal system before biased judges in a jurisdiction that operates outside the law".

It presents evidence that it says reveals "Singapore is ruled by a small oligarchy who controls all facets of the Singapore state, including the judiciary, which is utterly politicised. The judiciary bends over backwards to support the Government's and ruling elite's interests."

Dr Ross Worthington, an expert on governance who has written extensively about Singapore, and is employed by the World Bank, said in an affidavit on behalf of EnerNorth that "all aspects of the governance of Singapore, including the judiciary, are carefully manipulated and ultimately controlled by a core executive of individuals who use their powers to maintain their own power and further their own political, economic, social and familial interests".

EnerNorth's submission also cites the regular use of defamation actions by senior Government figures to bankrupt opposition politicians, thereby disqualifying them from sitting in Parliament. Mentioned is the case of J. B. Jeyaretnam, when as Singapore's only opposition member of Parliament, was sued for defamation by a Government minister and ultimately bankrupted. During the May elections, political party SDP was also slapped with a defamation lawsuit.

EnerNorth's submission also cites the Societies Act, which requires that organisations of more than 10 people must have a Government-appointed representative, and no public meeting can proceed unless the police first issue a permit that specifies the duration of the meeting, the names of the speakers, their topics and the length of time they will speak.

Also cited is the state of Singapore's media — all outlets of which are owned either directly or indirectly by Government-linked companies — as is the change to the constitution so that Singaporeans who remain outside the country for 10 or more years can be stripped of their citizenship. It is a move that takes aim at Government critics who have gone into self-imposed exile.

Judicial independence is questioned: it is pointed out, for instance, that up to half the Supreme Court judges at any time are under contract and do not have security of tenure, including the chief justice. They are appointed by the executive and beholden to it.

A further EnerNorth contention is that Oakwell is part of the Koh Brothers Group, which is heavily reliant on Singapore Government contracts. EnerNorth also says that at the time of the first judgement, directors in the group included a former member of the Government's Inland Revenue Authority, a senior parliamentary secretary, a senior minister of state and ambassador, and a former president of the Government-affiliated National Trade Unions Congress.

And then there is the matter of the first presiding judge, Lai Kew Chai. Before his appointment to the bench, he practised at the law firm Lee & Lee, the firm founded by former prime minister Lee Kuan Yew and later run by his wife. It was this same judge, who on J. B. Jeyaretnam's appeal from a lower court, increased the fine that he was required to pay that led to his expulsion from Parliament.

So does Singapore have a fair and independent judiciary on a par with Canada's or, for that matter, Australia's? Should its decisions against Canadian or Australian companies be enforced in their home countries?

The full submissions of Oakwell and EnerNorth are available at http://www.enernorth.com/litigation.html