Ashlock William Grover v SetClear Pte Ltd and others

Chao Hick Tin JA (delivering the grounds of decision of the court):

[1] This was an appeal against the decision of the High Court judge (“the Judge”) in Originating Summons No 118 of 2011 (“the Singapore Action”): see SetClear Pte Ltd and others v Ashlock William Grover [2011] SGHC 130 (“the GD”) where he ruled in favour of the plaintiffs on the construction of an agreement and in consequence thereof he issued an anti-suit injunction against the defendant. In the Singapore Action, William Grover Ashlock (“the Appellant”) was the defendant while SetClear Pte Ltd, CLSA Limited, SetClear Inc, Credit Agricole Securities (USA) Inc (Formerly known as Caylon Securities (USA) Inc) and IX Net Holding Limited (individually the “1 Respondent”, “2 Respondent”, “3 Respondent”, “4 Respondent” and the “5 Respondent” respectively, and collectively “the Respondents”) were the plaintiffs.

[3] In August 2005, the Appellant, together with one Jonathan Slone (“Slone”), were the co-founders of a start-up business operated in New York by the 5 Respondent. Although Slone and the Appellant each initially held 50% of the equity shares in the 5 Respondent, their equity shareholding was, for reasons which were immaterial to this appeal, subsequently diluted and agreed to be not less than 4% each (“the Founder’s Equity” or, interchangeably, “the founder benefits”). The 2 Respondent subsequently invested in the 5 Respondent’s business on terms that Slone would be in the 2 Respondent’s employment while at the same time retaining his equity shares in the 5 Respondent.

[4] In March 2006, the Appellant was designated as Chief Operating Officer of the 5 Respondent and concurrently seconded to the 4 Respondent in New York. In a letter from the 1 Respondent dated 10 May 2007, the Appellant was offered to come under the employment of the 1 Respondent. The Appellant accepted the offer, as a result of which the Appellant re-located to Singapore but continued to shuttle between Singapore and New York from time to time. One of the provisions in the said letter stated:

[5] In his first affidavit filed in the Singapore Action, the Appellant averred that the provision for “Founder Status” in the letter served to reiterate his original entitlement to the Founder’s Equity. The Respondents, however, claimed that no agreement was reached or even alleged to be reached between the Appellant and the 1 Respondent as to the founder benefits.

[6] In or around late June 2008, the Appellant was put on a few weeks’ “leave” after a disagreement arose between him and Slone on certain plans regarding the 1 Respondent’s business. On 17 July 2008, while the Appellant was on “leave”, he was asked to meet one Mr Laurie James Young (“Young”) who was then Acting on behalf of the 1 Respondent. At the meeting, the Appellant and Young signed an agreement providing for the cessation of the Appellant’s employment with the 1 Respondent (“the 17 July 2008 Agreement”). Clause 14 of the 17 July 2008 Agreement (“cl 14”) provided as follows:

[7] Subsequent to the signing of the 17 July 2008 Agreement, the Appellant sent an email to Young on the same date stating:

To which Young replied:

[8] The Appellant subsequently reaffirmed the terms and conditions set out in the 17 July 2008 Agreement by signing two letters (dated 9 October 2008 and 28 February 2009) sent by the 1 Respondent. The letter dated 9 October 2008 stated:

[9] The letter dated 28 February 2009 stated:

[10] On 20 January 2010, the Appellant commenced proceedings (“the American Action”) against the Respondents and Slone in the United States District Court, Southern District of New York (“the New York court”) claiming “violations of New York State Labor Laws, breach of contract, breach of the implied covenant of good faith and fair dealing, unjust enrichment, quantum meruit, breach of fiduciary duty, promissory estoppel, constructive trust, and for an Accounting”. Essentially, the American Action was brought to seek relief in respect of the founder benefits.

[11] On 17 February 2011, the Respondents commenced the Singapore Action with the following prayers:

[13] In the GD, the Judge dealt mainly with the issue of whether cl 14 should be construed to mean that the Appellant had agreed thereunder not to pursue any claims in the future against the Respondents, including the Appellant’s claim for the founder benefits in the American Action. The Judge held that the terms of cl 14 were simple and clear and that under it the parties had effected a full and final settlement of all claims by the Appellant against the Respondents. As such, the former was not entitled to commence or continue with the American Action against the latter (see [36] of the GD). Following from the construction which the Judge had placed on cl 14, and as the Appellant had submitted to the jurisdiction of the Singapore courts, the Judge held that in those circumstances an anti-suit injunction should, generally speaking, be granted to enforce cl 14.

[14] The Appellant relied on two main grounds in his appeal. First, the Appellant contended that the Judge erred in his construction of cl 14. In particular, the Appellant argued that:

[15] Second, the Appellant argued that given that the ultimate relief sought by the Respondents in the Singapore Action was Actually an anti-suit injunction, the Judge was wrong to begin his analysis of the matter with a determination on the substantive reliefs prayed for by the Respondents in the Singapore Action (see [11] above). Instead, the Judge in his analysis ought to have first directed his mind to the private international law principles applicable in respect of interlocutory anti-suit injunctions in the present case. This, the Appellant contended, would lead to a result that is different from that arrived at by the Judge in his decision. He also asserted that besides cl 14, the Judge should also have considered other relevant factors, eg, the New York court was the natural forum for the dispute; while the Appellant’s employment contract provided for jurisdiction before the Singapore courts, it was expressly stated to be non-exclusive; the 3 and 4 Respondents had submitted to the jurisdiction of the New York court; and the delay in the institution of the Singapore Action and the failure of the Respondents to apply for a stay of the American Action, was contrary to international comity.

[16] In light of the arguments raised by the Appellant, the issues in the appeal were essentially twofold:

(a) Whether the Judge erred in his construction of cl 14; and

(b) Whether the Judge was wrong to determine the case before him on its merits first before concluding as a matter of consequence that an anti-suit injunction was justified.

[17] Mr Kelvin Tan (“Mr Tan”), Acting for the Appellant, raised a preliminary point in his written submissions that cl 14 was not apt for summary determination. In particular, he contended that cl 14:

[18] He further argued that cl 14 was not free of ambiguity such that it was apt for summary determination in the Singapore Action which was commenced by way of an originating summons. In that vein, Mr Tan also pointed out that the preamble of the 17 July 2008 Agreement referred to the cessation of the Appellant’s employment without any reference to the founder benefits. The preamble read:

[19] Mr Tan then drew our attention to the closing words of the 17 July 2008 Agreement which only referred to the termination of the Appellant’s employment and payments associated thereof, without reference to the founder benefits. This, he claimed, further demonstrated that the parties in signing the 17 July 2008 Agreement had not intended the scope of cl 14 to be as wide as the Respondents contended it to be. He underscored the following closing words:

[20] Mr Tan also alluded to the factual matrix leading up to, and subsequent to, the signing of the 17 July 2008 Agreement which he claimed rendered a summary determination of the construction of cl 14 in the Singapore Action inapt. Accordingly, he argued that cl 14 ought to be determined at a full trial in the American Action instead. In his written submissions he stated:

[21] On the other hand, counsel for the Respondents, Mr Alvin Yeo SC, argued that the Judge was correct in interpreting cl 14 in the way he did and in holding that it precluded the Appellant from continuing the American Action and/or commencing any further or other proceedings in the United States of America or elsewhere against the Respondents. The primary basis for Mr Yeo’s case for the Respondents lay in the words “full and final settlement of all and any claims” and “not to pursue any future claim against SetClear Pte Ltd and its affiliated companies” [emphasis added] in cl 14 which undoubtedly indicated that the Appellant’s alleged entitlement to the founder benefits was within the knowledge of the 1 Respondent when setting out cl 14. This, among other things, Mr Yeo reasoned, demonstrated that the parties had unambiguously contemplated and intended cl 14 of to “achieve finality in settling all claims which the Appellant had or may have against the Respondents” which would naturally include the Appellant’s claim for the founder benefits.

[22] We do not propose to belabour what is very much a straightforward point. Contrary to the Appellant’s submission, we agreed with the Respondents that cl 14 was not ambiguous. On a plain reading of cl 14, it could not have been clearer that it provided for the full and final settlement of all and any of the Appellant’s claims, future or existing, against the Respondents. This would include whatever claims the Appellant might have against each of the Respondents, irrespective of their nature. Another significant factor which was incompatible with the submission of the Appellant was that if it was indeed the case that cl 14 was concerned only with his entitlement or benefits in relation to his employment – and here we would note that his employment was with the 1 Respondent – why would it also cover “all and any claims” he might have against the other Respondents?

[23] It seemed to us clear that the “matrix of facts” which Mr Tan had sought to rely in support of the Appellant’s case principally pertained to the Appellant’s subjective belief as to the Actual ambit of cl 14 (see [20] above). As rightly pointed out by Mr Yeo, a court in undertaking a contextual approach in the construction of a contract “does not inquire into the parties’ subjective states of mind but makes an objective judgment based on the materials already identified”: see Bank of Credit and Commerce International SA v Ali and others [2002] 1 AC 251 at 258. The “matrix of facts” brought up by Mr Tan were, therefore, for the most part irrelevant. In the result, we did not see any merit in the Appellant’s contention that a summary determination on the ambit of cl 14 in the Singapore Action was inapt.

[24] Accordingly, we agreed with the Judge that this was a proper case for summary determination and that there was really nothing to go for trial. In passing, we would only add that, while generally subsequent conduct should not be relied upon to construe a document, in this case the Appellant’s acceptance of the two letters (see [8]-[9] above) certainly confirmed what, in our view, was the correct construction of cl 14.

[25] We now turn to consider the second issue. It was true that the Judge first determined the case before him on its merits before holding that, in consequence, an anti-suit injunction should be granted. To better appreciate the approach of the Judge, we set out his reasoning below (see [41]-[42] of the GD):

[26] Clearly, the Appellant had submitted to the jurisdiction of the Singapore courts. The Appellant could have, but did not make any application for a stay of the Singapore Action. Instead, he was content to enter his appearance unconditionally and defend the Singapore Action in the hearing before the Judge. Coupled with the fact that the Respondents did not make any application for an interlocutory anti-suit injunction pending the final determination of the substantive matters engendered by the Singapore Action, this showed that the Judge was merely dealing with the Singapore Action as per the manner it was pleaded and contended by the Respondents.

[27] Indeed, there would have been little difficulty for this court to accept the Appellant’s complaint if the Respondents had Actually applied for an interlocutory anti-suit injunction while the determination on the merits of the Singapore Action was still pending. This is illustrated by the Australian case of CSR Ltd v Cigna Insurance Australia Ltd (1997) 71 ALJR 1143 (HCA) (“CSR Ltd v Cigna Insurance Australia Ltd”), where the appellants had sued their insurers, the respondents, in the United States of America claiming indemnity in respect of certain third-party asbestos claims brought against the appellants in the United States of America. In response, the respondents commenced proceedings in New South Wales against the appellants seeking, inter alia, (a) negative substantive declarations to the effect that the respondents were not liable to indemnify the appellants, and (b) permanent anti-suit injunctions restraining the appellants from taking further steps in the American proceedings. However, the respondents later sought an interlocutory anti-suit injunction when the appellants applied for a stay of the New South Wales proceedings subsequently. It was against such a backdrop that the High Court of Australia decided the appeal applying the legal principles governing the grant of interlocutory anti-suit injunctions. However, in the present case, the Respondents had not applied for an interlocutory anti-suit injunction pending the determination of the Singapore Action.

[28] In this regard, we would cite the following two passages from Steven Gee QC, Commercial Injunctions (Sweet & Maxwell, 5Ed, 2004) at p 416 to show that the approach taken by the Judge is correct:

[29] It is also apposite to note that there is nothing irregular or improper in the Respondents commencing the Singapore Action seeking (as an alternative strategy to an outright anti-suit injunction application) a negative declaration of non-liability which in turn could lead to the grant of an anti-suit injunction in accordance with the views expressed in the passages quoted above. In Halsbury’s Laws of Singapore vol 6(2) (Butterworths Asia, 2009) at para 75.140, it is stated:

[30] In the present case, the Respondents commenced the Singapore Action after the Appellant instituted proceedings in the American Action which was still pending final determination in the United States (see [10]-[11] above). Despite this, not only did the Appellant fail to take steps to challenge the local court’s jurisdiction in the Singapore Action, he had made a conscious decision to participate in the hearing of the Singapore Action before the Judge. As observed earlier, the Appellant had chosen to resist the Singapore Action on the substantive and not the jurisdictional front despite the fact that he could have pursued the latter course (see [26] above). It was not in dispute that the Appellant had not taken out any stay of proceedings application in relation to the Singapore Action.

[31] In our judgment, parties to a dispute who have entered into parallel proceedings in more than one national court take the risk of being bound by the decision of the court which first renders its decision and, subject to the rules on the doctrine of res judicata, being barred by way of a permanent anti-suit injunction from prosecuting further any pending proceedings in the other national courts once that decision is rendered. This is so regardless of whether the decision of the deciding court is appealable under the laws of that country. In such a situation, the parties can only either seek recourse via appellate review of the deciding court’s decision in that country or continue to be bound by the deciding court’s ruling on the dispute. It would be highly unsatisfactory if the position were to be otherwise as that would effectively spell no conclusive end to the resolution of disputes between parties embroiled in parallel proceedings in more than one national court.

[32] Following from the above, it seemed to us entirely logical for the Judge, after holding that cl 14 did preclude the Appellant from claiming against the Respondents for the founder benefits, to proceed to grant the anti-suit injunction in the present case.

[33] At [40] of the GD, the Judge applied his mind to the principles applicable to the grant of anti-suit injunctions, having regard to the case of John Reginald Stott Kirkham and others v Trane US Inc and others [2009] 4 SLR(R) 428 (“John Reginald Stott Kirkham”) and other cases cited therein. The fact that the Judge was conscious of those principles can be found in [42] of the GD where some considerations, reminiscent of those highlighted in what may be considered the locus classicus on anti-suit injunctions (ie, Société Nationale Industrielle Aérospatiale v Lee Kui Jak [1987] AC 871), could be detected:

[34] The question that remained was therefore whether there were any other reasons or grounds upon which the Judge should, nevertheless, not have exercised his discretion to grant the anti-suit injunction after deciding on the merits in respect of cl 14.

[35] One of the trite principles as regards interlocutory anti-suit injunction is that the court’s jurisdiction in respect of such remedies should only be exercised sparingly and with great caution: see Halsbury’s Laws of England vol 2 (LexisNexis, 5 Ed, 2008) p 938 at para 1224; Dicey, Morris and Collins on the Conflict of Laws vol 1 (Sweet & Maxwell, 14 Ed, 2006) at pp 502-7. However, the principles governing interlocutory anti-suit injunctions do not apply unmodified to cases where a permanent injunction is sought after a judgment on the merits. In National Westminster Bank plc v Utrecht-America Finance Co [2001] CLC 1372, the plaintiff in an Action in England complained, inter alia, that the defendant had initiated proceedings in California in breach of a contract (ie, there was no alleged breach of an arbitration agreement or any jurisdiction clause). The judge at first instance made an order restraining the proceedings brought by the defendant in California. The defendant’s appeal to the English Court of Appeal was dismissed. In dismissing the appeal, Clarke LJ (with whom Laws and Aldous LJJ agreed) stated (at [29]-[35]) the following which is necessary to be quoted at length:

[36] Having regard to the foregoing and the reasons given by the Judge at [41]-[42] of the GD, we did not see anything to suggest that the Judge had erred in his decision to grant the anti-suit injunction after deciding on the underlying merits of the Singapore Action.

[37] For completeness, we wish to add that even assuming that the principles governing the grant of interlocutory anti-suit injunctions were to be applied unmodified in the present case, the grant of the anti-suit injunction would be justified. The general principles governing the grant of interlocutory anti-suit injunctions are set out at [35] above and will not be repeated here. As far as local authorities are concerned, the position has been established by this Court in John Reginald Stott Kirkham at [28]-[29] where the approach taken by the High Court in Evergreen International SA v Volkswagen Group Singapore Pte Ltd [2004] 2 SLR(R) 457 at [16] (“Evergreen International SA”) was approved:

[38] In line with the approach elaborated in John Reginald Stott Kirkham quoted above, we also saw a preponderance of factors which weighed in favour of granting an anti-suit injunction in our present case. These factors were:

(a) The Appellant was at the material time amenable to the jurisdiction of the local courts because he was working in Singapore at the time the Singapore Action was commenced. Further, the Appellant had submitted to the jurisdiction of the Singapore courts by not making any application for a stay of that Action;

(b) There were strong reasons to believe that the natural forum for the resolution of the underlying dispute between the Appellant and the Respondents was Singapore given that (i) the 1 Respondent was a company incorporated in Singapore and the Appellant was stationed in Singapore while he was employed by the 1 Respondent; (ii) the 17 July 2008 Agreement was discussed and signed in Singapore; (iii) the Appellant was residing in Singapore; (iv) there was a non-exclusive jurisdiction clause in favour of the Singapore courts under the letter from the 1 Respondent dated 10 May 2007 which was linked to the 17 July 2008 Agreement; and (v) the governing law in respect of the matters covered in the letter dated 10 May 2007 was expressed to be Singapore law (see [33] of the GD);

(c) There would be vexation or oppression to the Respondents if the American Action were to continue because the American Action would, for the reasons stated at [17]-[24] above indicating that the Appellant had breached cl 14 by commencing the American Action, likely be “bound to fail”: see Dicey, Morris and Collins on the Conflict of Laws vol 1 (Sweet & Maxwell, 14 Ed, 2006) at pp 504-5;

(d) The Appellant had not pointed out any potential advantage sought in the American Action which he would be deprived of if the anti-suit injunction were to be granted;

(e) Contrary to what the Appellant submitted, the American Action was not at an advanced stage. No doubt certain interlocutory motions arising from the American Action had already been argued before in the United States of America and discovery was already underway in the American Action, the trial had yet commenced. Furthermore, the Appellant had, so far, still not effected service of the legal documents on the 1 and 5 Respondent in respect of the American Action; and

(f) An anti-suit injunction in the present case would not, strictly-speaking, offend against the notion of international comity because the injunction would effectively be no more than an in personam order made against the Appellant following his breach of a specific contractual promise encapsulated in cl 14: see Bank of America National Trust and Savings Association v Djoni Widjaja [1994] 2 SLR(R) 898 at [11] and [24] and The Angelic Grace [1995] 1 Ll Rep 87 quoted in [35] above.

[39] For all the reasons given above, the appeal was dismissed.