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Grounds publishedDecided 30 Dec 2019
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General Division of the High Court

Grains and Industrial Products Trading Pte Ltd and another v State Bank of India and others

[2019] SGHC 292Case no. Suit No 438 of 2018(Summons No 3235 of 2018) (Registrar’s Appeal No 227 of 2018)

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  1. Introduction

  2. [1] Suit No 438 of 2018 (“Suit 438”) is the plaintiffs’ action against the defendants in connection with merchanting trade transactions for the sale and purchase of agricultural commodities. The defendants mounted various jurisdictional challenges in respect of the claims.

  3. [3] By Summons No 2544 of 2018 (“SUM 2544”), the first defendant, State Bank of India (“SBI”), sought to have the proceedings brought against it stayed on grounds of forum non conveniens. SUM 2544 was dismissed by an assistant registrar, and Registrar’s Appeal No 227 of 2018 (“RA 227”) was SBI’s appeal against the decision. On 22 February 2019, I dismissed RA 227. Pursuant to leave granted on 10 July 2019, SBI has appealed against this outcome.

  4. [4] These are my full reasons in respect of SUM 3235 and RA 227.

  5. Facts

  6. The parties

  7. [5] The first plaintiff, Grains and Industrial Products Trading Pte Ltd (“GRIPT”), and the second plaintiff, Bunge SA (“BSA”), are both part of the Bunge group of companies (“Bunge”). Bunge is a global agribusiness company dealing in various agricultural commodities. GRIPT is a Singapore-incorporated company, and BSA is incorporated in Switzerland. David Alan Rigby (“Mr Rigby”) was a senior director of the Trade and Structured Finance (“TSF”) division of Bunge’s Financial Services Group (“FSG”). Tan Jwee Peng Calvin (“Mr Tan”) was an employee of GRIPT, and his role in the Bunge group was that of a manager in the same TSF division of Bunge’s FSG.

  8. [6] SBI is an Indian bank headquartered in Mumbai, India. SBI is licensed to operate in Singapore and has a Singapore branch (“SBI Singapore”). At the material time, Saurabh Srivastava (“Mr Srivastava”) was the branch manager of SBI’s Small and Medium Enterprises branch at Gwalior, Madhya Pradesh, India (“SBI Gwalior”).

  9. [7] AOPL is a company registered in India, and was involved in the various Indian merchanting trade transactions which comprised the backdrop to Suit 438. Maneesh Kumar Singh (“Mr Singh”) was AOPL’s managing director.

  10. [8] Mr Bhasi is an Indian national, and was a former agent of the Bunge TSF division. Mr Bhasi’s role as agent included originating and facilitating Indian merchanting trade transactions, dealings and relationships with various counterparties in India, including AOPL.

  11. [9] Bunge’s TSF division operated as a global business on a “hub and spoke” model. The “hubs” were the key centres where the majority of TSF division’s employees were located and from which commercial decisions were made. The “spokes” were where smaller numbers of TSF division staff were based to perform support functions. The “hubs” relevant to the transactions in question were located in Singapore and Geneva, and the former was where Mr Tan was based. The relevant “spoke” was located in India – the staff located there would report to Mr Tan. Mr Bhasi was also located in India at the material time.

  12. Background to the dispute

  13. Indian merchanting trade transactions

  14. [10] The plaintiffs’ claims against the various defendants arose in connection with various Indian merchanting trade transactions involving Bunge and AOPL. I briefly set out, in general terms, merchanting trade (as explained by the parties), before describing the specific arrangement between Bunge and AOPL.

  15. [11] Merchanting trade involves the sale and purchase of cargo by an Indian entity (ie, the merchanting trader). The Indian merchanting trader would purchase cargo from an offshore seller, before on-selling that same cargo to an offshore buyer. While such trades involve physical cargo (the Bunge merchanting trades utilised cargo in transit between the load port and discharge port), the cargo does not physically enter India. Instead, transfer of ownership is effected by exchanging photocopies of the bills of lading pertaining to the cargo. In this way, the Indian merchanting trader (ie, the intermediary) takes ownership of the cargo on paper, but never actually takes delivery of the physical cargo before it is on-sold to the offshore buyer.

  16. [12] This flow of goods comes accompanied by a flow of funds (the consideration for the cargo) in the opposite direction from the offshore buyer to the offshore seller, also routed through India. In the interim, the funds routed to India could be placed in interest-bearing Indian bank accounts. According to AOPL and Mr Bhasi, the true purpose of the Bunge-AOPL merchanting trade transactions was “interest arbitrage”. At the time, Indian banks were offering some of the highest interest rates. In other words, the putative trade flows were being used as a cover for routing and parking funds in Indian banks. On their part, the plaintiffs accepted that these arrangements meant that interest could be earned, but denied that the merchanting trades were entered into for purposes of interest arbitrage.

  17. The Bunge-AOPL merchanting trade structure

  18. Figure 1: Flow of goods and funds in the Bunge-AOPL merchanting trade structure

  19. [13] The merchanting trade between Bunge and AOPL involved flows of goods and funds between four entities. As was previously mentioned, GRIPT and BSA were both Bunge entities, and were the offshore seller and offshore buyer respectively. AOPL was the Indian merchanting trader and either Arabian Commodities FZE (“ACF”) or Tracon General Trading LLC (“Tracon”) would act as the offshore intermediary. ACF and Tracon were companies registered in the United Arab Emirates (“UAE”).

  20. [14] Under this merchanting trade structure (henceforth referred to as the “Bunge-AOPL merchanting trade structure”), the four entities would enter into a series of contracts with each other for the sale and purchase of cargo. These contracts would be: (a) between GRIPT and AOPL; (b) between AOPL and ACF; and (c) between ACF and BSA.

  21. [15] As was mentioned, the flow of goods was effected by exchanging photocopies of the relevant bills of lading. Title to the cargo therefore passed from GRIPT to AOPL, then to ACF, and finally to BSA.

  22. [16] As for the flow of funds, this was set in motion by BSA. BSA would make an advance payment against the cargo it was to receive from ACF. In practice, BSA would advance the funds directly to AOPL, instead of paying ACF.

  23. [17] As between AOPL and GRIPT, payment was made by letters of credit, with maturity of six months, issued by AOPL’s bank for the benefit of GRIPT. The aforementioned advance paid into AOPL’s bank account by BSA provided the margin for the issuance of the letter of credit in GRIPT’s favour. Upon issuance of the letter of credit, GRIPT could negotiate the letter of credit with a negotiating bank and thereby receive the funds immediately. However, AOPL’s bank would not have to make payment to the negotiating bank until the maturity of the letter of credit some six months after its issuance. In the meantime, the funds remained in AOPL’s account, and interest could be earned on this deposit.

  24. [19] In practice, AOPL was able to maintain sufficient funds by engaging in multiple trades at a time. In essence, so long as BSA advanced fresh funds (pursuant to a second or subsequent trade) to AOPL before the maturity of the first letter of credit, AOPL would be able to maintain its fixed deposit. AOPL refers to these subsequent trades as “roll-over trades”. Since the letters of credit issued by AOPL were kept open for six months, three roll-over trades would be engaged in in the course of maintaining a two-year fixed deposit.

  25. [20] Besides the use of letters of credit, another key feature of the payment arrangements between AOPL and GRIPT was the use of irrevocable payment undertakings (“IPU”). Pursuant to each AOPL-GRIPT contract, AOPL was obliged to procure from its bank an IPU in GRIPT’s favour. Essentially, the IPU was an undertaking given by AOPL’s bank that it would, upon receipt of the funds advanced by BSA, (a) issue a letter of credit to the benefit of GRIPT; and (b) failing which, remit the funds advanced by BSA to GRIPT. The IPUs were procured by AOPL by way of a “mandate letter” sent by AOPL to its bank, SBI, instructing it to issue the IPU.

  26. Deferred mandate trades

  27. [21] The foregoing description pertains to ordinary merchanting transactions between Bunge and AOPL. The transactions which formed the subject matter of the present proceedings were, by contrast, “deferred mandate trades”. Deferred mandate trades differed from ordinary trades in one main respect. In an ordinary trade, AOPL would be required to procure the issuance of a letter of credit within days (usually two days) of receipt of the advance from BSA. In deferred mandate trades, AOPL was given a much longer time to procure the issuance of the letter of credit. In the period between when the advance from BSA was received and when the letter of credit had to be issued, AOPL would have use of the funds advanced.

  28. [22] The parties disagree as to the purpose of these deferred trades. AOPL claims that the deferred mandate trades were a means of financing AOPL. According to AOPL, BSA had capital but was having trouble procuring trade flows to justify the injection of funds to AOPL. The deferred mandate trades thereby allowed AOPL to then enter into the necessary roll-over trades with third parties. There were two methods by which AOPL would repay Bunge:

  29. (a) Onshore repayment: the repayment of funds to Bunge would be received by GRIPT from AOPL. AOPL would procure a letter of credit issued in favour of GRIPT, and GRIPT (as a Bunge entity) would receive repayment through the letter of credit (much like in an ordinary merchanting trade).

  30. (b) Offshore repayment: the repayment of funds to Bunge would be effected by a payment from AOPL to ACF, and ACF would then make repayment to BSA.

  31. [23] On their part, the plaintiffs deny that they had a shortage of trade flows, and that the deferred mandate trades were a means of financing AOPL’s procurement of alternative trade flows from third parties. Rather, the deferred mandate trades were much like ordinary trades in that they were simply intended to be performed. There is therefore no issue of repayment; AOPL would receive title to the goods from GRIPT, and GRIPT would receive payment for the goods via the letter of credit issued by AOPL’s bank.

  32. The September 2015 Bunge-AOPL merchanting trades

  33. [24] I turn now to the specific trades which form the subject of Suit 438.

  34. [25] The key Bunge-AOPL deferred mandate trade was that entered into on 14 September 2015. It comprised three back-to-back contracts between GRIPT, AOPL, ACF and BSA, taking the contractual form as depicted above in Figure 1. I refer to these contracts collectively as “the September 2015 Bunge-AOPL String Sale contracts”, which pertain to the “17172A Trade”. These were:

  35. (a) The AOPL-GRIPT Contract: Contract No GRIP S15-17172A-1118 dated 14 September 2015 between AOPL as buyer and GRIPT as seller, for the sale and purchase of cargo for a total price of US$50m, as amended by an amendment agreement.

  36. (b) The ACF-AOPL Contract: Contract No AOPL/15-16/EXP/0132 dated 14 September 2015 between ACF as buyer and AOPL as seller, for the sale and purchase of cargo for a total price of US$50,025,000, as amended by an amendment agreement.

  37. (c) The BSA-ACF Contract: Contract No BSA P15-17172A-1797 dated 14 September 2015 between BSA as buyer and ACF as seller, for the sale and purchase of cargo for a total price of US$50m, as amended by an amendment agreement.

  38. [26] It should be noted that the 17172A Trade was executed alongside two other deferred mandate US$50m trades (which I refer to as the “17173A” and “17174A Trades”). For the 17172A, 17173A and 17174A Trades, a total of US$150m was therefore advanced by BSA to AOPL.

  39. [27] On 15 September 2015, AOPL wrote to its bank, SBI, by way of a letter in relation to the 17172A Trade (“15 September 2015 Mandate Letter”):

  40. (a) to inform SBI that export receivables in the amount of US$50m were payable to AOPL under the ACF-AOPL Contract, and that this amount should be credited into AOPL’s SBI bank account and earmarked for making payment to GRIPT under the AOPL-GRIPT Contract;

  41. (b) to authorise and instruct SBI, upon receiving the US$50m, to issue in favour of GRIPT letter(s) of credit in the amount of US$50m; and

  42. (c) to undertake to SBI that, if for whatever reason any letter(s) of credit were not issued by 15 December 2015, or if AOPL refused to accept the documents drawn under any of the letter(s) of credit, the full US$50m would immediately become due and payable to GRIPT, and SBI was authorised and instructed to remit the same to GRIPT.

  43. [28] Accordingly, on 18 September 2015, SBI issued an IPU to GRIPT (“the 18 September 2015 IPU”) by which it undertook, upon receipt of the US$50m in export receivables, to issue in GRIPT’s favour letter(s) of credit in the amount of US$50m by 15 December 2015, failing which it would pay the full amount of US$50m to GRIPT no later than five business days after 15 December 2015. The 18 September 2015 IPU was authenticated by way of a SWIFT message sent to GRIPT’s bank.

  44. [29] On that same day, BSA remitted the sum of US$50m directly to AOPL’s bank (ie, SBI), bypassing ACF, as was the usual practice, pursuant to a notice of assignment given by ACF to BSA, notifying BSA that the US$50m payable by BSA to ACF under the BSA-ACF Contract had been assigned by ACF to AOPL.

  45. [30] Subsequently, on 10 December 2015:

  46. (a) the AOPL-GRIPT Contract was amended to extend the date for the shipment by GRIPT of goods from 21 December 2015 to “[l]atest by 4th March 2016”, and the letter of credit issue date to “by 29th February 2016”; and

  47. (b) similar amendments were made to the other two September 2015 Bunge-AOPL String Sale contracts.

  48. [31] Consequential amendments were then made to the related Mandate Letter and IPU to extend the deadline for the issue of the letter(s) of credit for GRIPT’s benefit to 29 February 2016. Accordingly, a fresh Mandate Letter and IPU were issued by AOPL and SBI respectively on 15 December 2015 (“15 December 2015 Mandate Letter” and “15 December 2015 IPU” respectively). The 15 December 2015 IPU was authenticated via SWIFT message on 16 December 2015.

  49. [32] On 24 February 2016, Mr Singh (AOPL) wrote to Mr Tan (Bunge) in response to the latter’s request for AOPL to acknowledge certain sums as outstanding. Mr Singh confirmed that a total of US$66,402,483.59 remained outstanding, including the US$50m owing under the AOPL-GRIPT Contract.

  50. [33] On 25 February 2016, Mr Rigby personally attended at AOPL’s offices. Sometime between 1 and 3 March 2016, Mr Singh endorsed a letter (“the Admission Letter”) stating that US$65m remained outstanding, comprising US$50m under the AOPL-GRIPT Contract specifically (ie, pertaining to the 17172A Trade) and US$15m under a separate trade (the 17174A Trade).

  51. [34] On 29 February 2016, GRIPT sent a shipment confirmation in relation to the US$65m worth of cargo which GRIPT was to transfer to AOPL pursuant to the 17172A and 17174A Trades. This was sent via email from Mr Tan to Mr Singh and Murali Krishna (“Mr Krishna”).

  52. [35] However, SBI did not issue the requisite letter(s) of credit in GRIPT’s favour by 29 February 2016. SBI also did not pay the US$50m to GRIPT within five business days of 29 February 2016. According to the plaintiffs, the US$50m remains unaccounted for. According to AOPL, the US$50m was instead paid to Atlantic Industrial & Trading Pte Ltd (“AIT”), a Singapore-incorporated company, and then ultimately repaid to ACF. According to SBI, Bunge had released SBI of its obligations under the 15 December 2015 IPU.

  53. The agency relationship between GRIPT and Mr Bhasi

  54. [36] Mr Bhasi began his involvement with the Bunge group from around 2001. He was appointed as an agent in 2006 to originate deals for the TSF division in India, by introducing Indian merchanting trade counterparties to Bunge. A number of agency agreements were concluded between Mr Bhasi and various Bunge entities. For present purposes, I shall only set out the two pertinent ones:

  55. (a) The Agency Agreement between Mr Bhasi and GRIPT dated 1 January 2009, amended by Addendum Nos 1–6 (“1st GRIPT Agency Agreement”). This agreement expired on 31 December 2015.

  56. (b) The Agency Agreement between Mr Bhasi and GRIPT dated 1 January 2016, amended by Addendum No 1 dated 11 April 2017 (“2nd GRIPT Agency Agreement”).

  57. [37] The 2nd GRIPT Agency Agreement was terminated by way of a letter dated 8 November 2017, and Mr Bhasi’s relationship with Bunge therefore came to an end in November 2017.

  58. The relationship between AOPL and Mr Bhasi

  59. [38] One of the entities which Mr Bhasi procured, in his capacity as agent, as a counterparty for the purposes of Bunge’s merchanting trade transactions was AOPL. AOPL was incorporated in 2004. At the point of incorporation, Mr Bhasi was a 50% shareholder and director of AOPL. By late 2007, he had resigned from his directorship and relinquished his shareholding.

  60. [39] In 2011, a further shuffle in the ownership of AOPL took place, giving rise to the following shareholding: Asian Business Connections Private Limited (“ABC”), a company which is 99.9937% owned by Mr Bhasi (85%), Mr Singh (5%), Jijo John (5%) and Gagan Sharma (5%). ABC was also the holding company for several companies, which comprised most, if not all, of the group of companies known as the “Carnival Group”.

  61. [40] Following the transfer of AOPL shares to ABC, an agreement of share transfer dated 4 January 2012 (as amended by an addendum dated 20 June 2014) (“Agreement of Share Transfer”) was entered into between ABC, Mr Singh and Jijo John. The Agreement of Share Transfer provided that ABC would not exercise its rights as a shareholder of AOPL, and that those rights were to remain with Mr Singh and Jijo John. Further, management control of AOPL would remain with Mr Singh (as managing director). According to Mr Bhasi, the effect of the Agreement of Share Transfer was to ensure that the beneficial ownership of the AOPL shares remained with Mr Singh and Jijo John.

  62. The Kantawala Letter

  63. [41] BSA received a letter dated 16 March 2018 from one Sujay Kantawala, AOPL’s Indian counsel (“the Kantawala Letter”). In brief, the Kantawala Letter was a letter of demand made against Bunge for the sum of about US$277m (1800 crores in rupees) in damages. The key allegations were as follows:

  64. (a) Sometime around the first quarter of 2015, BSA insisted that AOPL maintain two-year fixed deposits with SBI.

  65. (b) BSA gave assurances to AOPL (and SBI) (“the Assurances”) that whenever BSA entered into a merchanting trade transaction with AOPL, BSA would subsequently enter into roll-over merchanting trade transactions with AOPL to ensure that AOPL’s fixed deposits with SBI would remain unbroken for the two-year periods. BSA had also represented that the contractual relationship between the parties would be “continuous and regular”.

  66. (c) These Assurances were said to have been given to AOPL and SBI in meetings with SBI officials in Mumbai and Geneva and also via letter from BSA to SBI.

  67. (d) BSA breached the Assurances by failing to enter into roll-over merchanting trade transactions with AOPL, thus forcing AOPL to reduce the sums held on deposit with SBI, with the result that AOPL has suffered loss and/or liabilities to SBI in the sum of approximately US$277m.

  68. (e) BSA was liable to compensate AOPL for the aforementioned losses suffered. AOPL demanded for such compensation within 15 days of receipt of the Kantawala Letter.

  69. (f) Should the demanded compensation not be paid by the 15-day deadline, AOPL intended to bring legal proceedings against BSA before the Indian civil and criminal courts in respect of the above.

  70. In this judgment, I refer to the threatened legal proceedings, which have yet to be brought, as the “Kantawala Claim”.

  71. [42] On 27 March 2018, Bunge responded with a holding reply. On 26 April 2018, the plaintiffs commenced Suit 438.

  72. The claims

  73. [43] In sum, the plaintiffs’ claims against the defendants are as follows:

  74. (a) by GRIPT against SBI: for the sum of US$50m or damages to be assessed in respect of SBI’s alleged breach of the 15 December 2015 IPU (“the SBI IPU Claim”);

  75. (b) by GRIPT against AOPL: the AOPL US$50m Claim, being the claim for the sum of US$50m due and payable under the AOPL-GRIPT Contract;

  76. (c) by the plaintiffs against AOPL: the Negative Declaration Claim for a declaration of non-liability in respect of the matters alleged in the Kantawala Letter; and

  77. (d) by the plaintiffs against Mr Bhasi:

  78. (i) the Agency Breach Claim for damages in respect of breaches of contractual and fiduciary duties allegedly owed to the plaintiffs, and or for an account and payment of any sums received or earned by Mr Bhasi by virtue of his breach of duties; and

  79. (ii) the Indemnity Claim for indemnity or a declaration of indemnity in respect of any liability flowing from the Kantawala Claim.

  80. [44] I now proceed to set out more details in respect of each of the claims, and the defendants’ responses to the allegations as contained in the affidavits filed for these applications.

  81. The claims against AOPL: the AOPL US$50m Claim and the Negative Declaration Claim

  82. (1) The AOPL US$50m Claim

  83. [45] According to the plaintiffs, AOPL was obliged under the AOPL-GRIPT Contract to arrange for SBI to issue letter(s) of credit for the sum of US$50m to GRIPT’s benefit or to pay the same to GRIPT by 29 February 2016. However, AOPL failed to discharge these obligations (see [35] above), and was therefore in breach of the AOPL-GRIPT Contract. The plaintiffs pointed to the Admission Letter as evidence of acknowledgment of the debt.

  84. [46] AOPL’s defence was that the US$50m allegedly outstanding under the AOPL-GRIPT Contract (ie, relating to the 17172A trade) had already been remitted by AOPL to ACF, and that the plaintiffs’ claim for the US$50m therefore lies against ACF, and not AOPL. To elaborate, AOPL alleged the following:

  85. (a) The US$50m was part of a larger tranche of deferred mandate trades entered into with the purpose of putting AOPL in funds so that it could continue to maintain its lucrative fixed deposits with SBI (see [21]–[23] above). This consisted of the 17172A Trade, 17173A Trade and 17174A Trade.

  86. (b) The entire sum of US$150m involved in the 17172A Trade, 17173A Trade and 17174A Trade was used to enter into merchanting trades with AIT to sustain roll-overs, in view of the alleged shortage of trade flows from Bunge. These transactions were structured such that the relevant funds were ultimately returned to ACF: see [25(b)] above.

  87. (2) The Negative Declaration Claim

  88. [47] The plaintiffs sought a declaration of non-liability in respect of the matters alleged in the Kantawala Letter, which centred around the Assurances allegedly made by BSA to the effect that the plaintiffs would continue with the Indian merchanting trade transactions on an ongoing basis. In brief, the plaintiffs denied having ever given the Assurances to AOPL (or SBI), and in any case denied that they were liable for any loss suffered by AOPL. As far as I am aware, no such proceedings have been commenced by AOPL against the plaintiffs in India.

  89. The claim against SBI: the SBI IPU Claim

  90. [48] GRIPT’s claim against SBI was based entirely on the 15 December 2015 IPU issued by SBI, in which the bank undertook to issue letter(s) of credit for the sum of US$50m to GRIPT’s benefit, or, failing that, to pay the same to AOPL within five working days of 29 February 2016. According to GRIPT, the US$50m that SBI was bound to pay to it under the 15 December 2015 IPU had been “earmarked” from the moment those funds were remitted into AOPL’s SBI account by BSA.

  91. [49] SBI did not dispute that it had received the 15 September 2015 Mandate Letter (as described at [27(a)]–[27(c)] above), that it had issued the 18 September 2015 IPU to GRIPT, that SWIFT authentications had been sent, and that BSA had remitted the sum of US$150m into AOPL’s bank account with SBI Gwalior on 18 September 2015. Rather, SBI’s position was that it was not liable because Bunge had released SBI from its obligations under the 15 December 2015 IPU.

  92. [50] According to SBI’s Mr Srivastava, he had on 21 September 2015 received a telephone call from AOPL’s Mr Singh, informing him that:

  93. (a) GRIPT was unable to sell the cargo to AOPL under the AOPL-GRIPT contracts in the 17172A, 17173A and 17174A Trades because GRIPT did not have the required cargo; and

  94. (b) GRIPT had instructed AOPL to source for the relevant cargo, and therefore AOPL had purchased cargo from AIT so that AOPL could continue to on-sell the cargo to ACF under the ACF-AOPL Contract.

  95. [51] That same day, AOPL issued three letters to SBI, authorising it to pay the aggregate sum of US$150m (in respect of all three trades) to AIT for the purchase of the cargo.

  96. [52] Importantly, Mr Srivastava claimed that he had, on that same day, verified that Bunge’s instructions were as per Mr Singh’s account (see [50(a)]–[50(b)] above) via a telephone call to either of two persons whom Mr Srivastava believed to be Bunge’s representatives – Trupti Jadhav (“Ms Jadhav”) or Sunil Ambujakshan (“Mr Ambujakshan”). There is no documentary evidence of this alleged confirmation. Having received the alleged confirmation, SBI accordingly remitted the sum of US$150,000,003.25 to AIT on 21 September 2015.

  97. [53] The same process was repeated when the amended 15 December 2015 IPU was issued (see [31] above): Mr Srivastava received instructions from Mr Singh that: (a) AOPL had purchased the cargo from AIT and had sold the cargo to ACF; (b) AOPL had yet to sell ACF all the required cargo to ACF under the AOPL-ACF Contract; and (c) AIT required more time to sell all the required cargo to AOPL. He then confirmed this via telephone call with either Ms Jadhav or Mr Ambujakshan, before issuing the amended 15 December 2015 IPU.

  98. [54] Following this, Mr Srivastava claimed that:

  99. (a) Sometime around February or March 2016, Mr Singh informed him over the phone that AOPL had performed its obligations under the September 2015 Bunge-AOPL String Sale contracts.

  100. (b) On 3 March 2016, AOPL issued a letter to SBI informing it to treat the 15 December 2015 Mandate Letter as “Null and Void”, given that GRIPT has not supplied the commodities as per their contract.

  101. (c) Mr Srivastava thereafter called either Ms Jadhav or Mr Ambujakshan, who confirmed Mr Singh’s and AOPL’s information (as at [(a)] and [(b)] above), and confirmed that SBI had fulfilled its obligations.

  102. The claims against Mr Bhasi: the Agency Breach Claim and the Indemnity Claim

  103. (1) The Agency Breach Claim

  104. [55] The plaintiffs claimed that Mr Bhasi had acted in breach of his express or implied contractual and fiduciary duties as agent not to be in any situation or engaged in any activity that might create a conflict of interest between himself and GRIPT and/or BSA (“the No Conflict Terms”) found within the GRIPT Agency Agreements. According to the plaintiffs, Mr Bhasi breached these duties because at the time he introduced AOPL to Bunge as a potential trade counterparty, he was interested in AOPL by virtue of his directorship and substantial shareholding in ABC. The plaintiffs claimed that Mr Bhasi even falsely represented to the plaintiffs that he had ceased to be involved with AOPL. The alleged false representations occurred by way of:

  105. (a) oral representations by Mr Bhasi in an interview on 3 December 2015 with Francis Soh, a senior manager at Bunge (the “3 December 2015 Interview”);

  106. (b) oral representations by Mr Bhasi to Mr Rigby and other members of Bunge at various unknown times during his agency; and

  107. (c) providing a copy of the Agreement of Share Transfer to Bunge on an unknown date, as evidence of Mr Bhasi’s divestment of any beneficial interest in AOPL.

  108. [56] Although not pleaded, the plaintiffs later further claimed that Mr Bhasi had been in a conflict of interest by virtue of his being a personal guarantor of AOPL, and by ABC being a corporate guarantor, in relation to AOPL’s obligations under a letter of arrangement from SBI dated 7 April 2016 (the “Letter of Arrangement”).

  109. [57] As against Mr Bhasi, the plaintiffs claimed damages for breach and an account of any profits Mr Bhasi received or earned by virtue of his interests and connections with AOPL and/or his directorship and shareholding of ABC.

  110. [58] Mr Bhasi made three points in reply:

  111. (a) Mr Bhasi did not have any interest in AOPL. Mr Bhasi did not deny his interest in ABC, but argued that ABC did not have any beneficial ownership of AOPL owing to the Agreement of Share Transfer (see [39] above), which left the beneficial interest with Mr Singh and Jijo John.

  112. (b) Even if he did have an interest in AOPL, Bunge knew of this, as early as 2013 or 2014, and must therefore be taken to have waived any breach in this regard:

  113. (i) The plaintiffs were in possession of the Agreement of Share Transfer which clearly sets out the relationship between ABC and AOPL.

  114. (ii) ABC’s ownership of AOPL would have been revealed through Bunge’s own “know your client” checks.

  115. (iii) AOPL sends its yearly audit reports to Bunge, which records ABC’s ownership of AOPL.

  116. (c) Mr Bhasi denies, to some extent, that he made the false representations with regard to his non-involvement with AOPL, as alleged.

  117. (2) The Indemnity Claim

  118. [59] As mentioned in relation to the Negative Declaration Claim, the plaintiffs denied having ever given the alleged Assurances to AOPL or SBI. However, if such Assurances were given, they must have been given by Mr Bhasi (without Bunge’s knowledge, consent or authority). This would have been in breach of cll 2, 3 and 11 of both GRIPT Agency Agreements, which provided that Mr Bhasi did not have the authority to make final decisions that would bind GRIPT and/or BSA (“the No Authority Terms”). Mr Bhasi was therefore liable to indemnify the plaintiffs against the Kantawala Claim, should it be brought.

  119. [60] Mr Bhasi’s response was threefold. First, the Indemnity Claim was entirely based on speculation because the basis for the Indemnity Claim – that Mr Bhasi was the one who had given the alleged Assurances to AOPL or SBI – ran counter to the plaintiffs’ primary position that the Assurances were never made. Second, Mr Bhasi was not liable to indemnify the plaintiffs because he had not breached the No Authority Terms. Third, the plaintiffs have not shown that they have suffered any losses as a result of the alleged breaches.

  120. SUM 3235, SUM 2544 and RA 227

  121. [61] As mentioned earlier, Suit 438 was commenced on 26 April 2018. On the same day, the plaintiffs sought leave to serve the writ out of jurisdiction on AOPL and Mr Bhasi under O 11 r 1 of the Rules of Court (Cap 322, R 5, 2014 Rev Ed) (“ROC”). The application was heard ex parte, and leave was granted on 3 May 2018.

  122. [63] On 13 July 2018, AOPL and Mr Bhasi applied vide SUM 3235 for the following:

  123. (b) Prayer 2: in the alternative, “without prejudice” to Prayer 1, a stay of proceedings in favour of Indian courts on the ground that Singapore was not the proper forum for the disputes; and

  124. (c) Prayer 3: further or alternatively, “without prejudice” to Prayer 1, a stay of proceedings in respect of the claims against Mr Bhasi in favour of arbitration.

  125. [64] As for SBI, it filed its application vide SUM 2544 for a stay of proceedings on 4 June 2018. This was on the basis that India was clearly or distinctly the more appropriate forum for the trial on the SBI IPU Claim. An assistant registrar heard and dismissed the application on 24 August 2018. On 5 September 2018, SBI appealed against the decision vide RA 227.

  126. [65] These jurisdictional challenges concerned a number of issues. I begin by setting out the various applicable legal frameworks.

  127. [66] Where a foreign defendant – who was served out of the jurisdiction in relation to a suit in Singapore – applies for a stay of proceedings under O 12 r 7(2) of the ROC, the issue is whether Singapore courts should decline to assume jurisdiction on the ground that Singapore is not the proper forum for the dispute. Generally, in such stay applications, the question is whether the foreign jurisdiction is clearly or distinctly more appropriate than Singapore for the determination of the claim. The applicable test is the two-stage analysis established in Spiliada Maritime Corporation v Cansulex Ltd [1987] AC 460 (“Spiliada”), as applied in Singapore in cases including Rickshaw Investments Ltd and another v Nicolai Baron von Uexkull [2007] 1 SLR(R) 377 (“Rickshaw Investments”) at [12].

  128. [67] At Stage 1 of the Spiliada test, the court determines if there is prima facie some other available forum that is more appropriate for the case to be tried. Relevant connecting factors include the following (JIO Minerals FZC and others v Mineral Enterprises Ltd [2011] 1 SLR 391 at [42]; Halsbury’s Laws of Singapore vol 6(2) (LexisNexis, 2016 Reissue) (“Halsbury’s Laws of Singapore”) at paras 75.090–75.095):

  129. (a) The personal connections of the parties and the witnesses. The compellability of the witnesses is also an important factor (Rickshaw Investments at [23] and [25]).

  130. (b) The connections to relevant events and transactions.

  131. (c) The law applicable to the dispute.

  132. (d) The existence of proceedings elsewhere. This raises potential issues of duplication of resources as well as the risk of conflicting judgments.

  133. (e) The overall “shape of the litigation”.

  134. It is the quality, not the quantity, of connecting factors that is crucial in the analysis. The search is for the connecting factors which have the “most relevant and substantial associations” with the dispute at hand (Rappo, Tania v Accent Delight International Ltd and another and another appeal [2017] 2 SLR 265 at [70]). The burden at Stage 1 lies on the defendant.

  135. [68] If the defendant succeeds at Stage 1, the burden shifts to the plaintiff at Stage 2 to satisfy the court that justice nonetheless requires that a stay should not be granted, even though the court is not prima facie the natural forum (Rickshaw Investments at [14]; Zoom Communications Ltd v Broadcast Solutions Pte Ltd [2014] 4 SLR 500 (“Zoom Communications”) at [75]). The court will consider whether substantial justice can be obtained by the plaintiff in the prima facie natural forum. Where having trial in the foreign forum will amount to a deprivation of substantial justice, then a stay may be denied.

  136. (a) the plaintiff’s claim does not come within one of the heads of claim in O 11 r 1 of the ROC;

  137. (b) the plaintiff’s claim does not have a sufficient degree of merit;

  138. (d) Singapore is not the proper forum for the trial of the action (as per the same Spiliada test above).

  139. The plaintiff must establish a “good arguable case” that the claim falls within one of the sub-paragraphs of O 11 r 1 of the ROC, and show sufficient degree of merit by demonstrating that there is a serious question to be tried on the merits of the case: Bradley Lomas Electrolok Ltd and another v Colt Ventilation East Asia Pte Ltd and others [1999] 3 SLR(R) 1156 at [18]–[19]. Here, the burden of proof remains on the plaintiff to demonstrate that Singapore is the proper forum (Zoom Communications at [72]–[75]).

  140. [70] However, the applicable test in relation to stay applications changes where there exists an agreement between parties to litigate in Singapore – whether by an exclusive jurisdiction clause or a non-exclusive jurisdiction clause (because in the latter case, the plaintiff is promised the defendant’s submission if the claim is brought in the named jurisdiction): Shanghai Turbo Enterprises Ltd v Liu Ming [2019] 1 SLR 779 (“Shanghai Turbo”) at [84]–[86]. In such a case, the test is not simply whether the foreign jurisdiction is the more appropriate forum. Rather, the court will generally hold parties to their contractual commitment to litigate in Singapore, unless there is “strong cause” amounting to exceptional circumstances why the proceedings brought in Singapore should be stayed. The burden lies with the party seeking the stay to show strong cause: Trisuryo Garuda Nusa Pte Ltd v SKP Pradiksi (North) Sdn Bhd and another and another appeal [2017] 2 SLR 814 (“Trisuryo”) at [84].

  141. [72] In determining whether a party has shown “strong cause”, the task for the court is not simply to undertake a balancing exercise to determine which forum is more convenient, but to ask why the party seeking the stay should be permitted to be relieved of its contractual obligation to sue (or be sued) in the agreed forum: Trisuryo at [84]. The factors which the court will take into account include (Shanghai Turbo at [94], citing Amerco Timbers Pte Ltd v Chatsworth Timber Corp Pte Ltd [1977–1978] SLR(R) 112 at [11]):

  142. [73] What amounts to exceptional circumstances depends on the facts, but generally, factors within the contemplation of the parties at the time of contracting should carry less weight than unforeseen factors: Shanghai Turbo at [88(a)]. Thus, although fragmentation of proceedings may amount to strong cause against enforcing a jurisdiction agreement, it may not if the fragmentation is foreseeable at the time the contract was formed: Halsbury’s Laws of Singapore at para 75.121.

  143. Preliminary Issue: Whether AOPL and/or Mr Bhasi accepted service of the amended writ

  144. [74] As a preliminary point, the plaintiffs argued that attempts by AOPL and Mr Bhasi to contest jurisdiction should be dismissed because they had already submitted to the jurisdiction of the Singapore courts as follows:

  145. (b) the amended writ and Statement of Claim (Amendment No 1) were served on SLB via e-Litigation on 29 June 2018, and this service was accepted without any reservation or qualification.

  146. [75] Having perused the record of SUM 2740, it was clear to me that neither AOPL nor Mr Bhasi had, by their conduct of the proceedings, evinced any unequivocal intention to submit to the jurisdiction of the Singapore courts. On the contrary, the notes of argument for SUM 2740 record that SLB had made it clear that they were attending only as observers, and that their attendance was not to be taken as a step in the proceedings or as submission to jurisdiction. In the circumstances, the fact that SLB did not object to SUM 2740 could not be taken to be a submission to jurisdiction. Notably, counsel for the plaintiffs, Allen & Gledhill LLP (“A&G”), did not argue at the hearing of SUM 2740 that anything should be made of SLB’s attendance at the hearing or the fact that they were not objecting to the application.

  147. [76] I agreed with AOPL and Mr Bhasi that in these circumstances, the filing of the amended writ and Statement of Claim (Amendment No 1) on e-Litigation did not constitute valid service of the same on SLB. By all accounts, SLB did not have instructions to accept service of the writ in Singapore. In fact, as just mentioned, AOPL and Mr Bhasi had expressly reserved their position on jurisdiction. The only reason why A&G were able to serve the amended writ and Statement of Claim (Amendment No 1) via e-Litigation was because AOPL and Mr Bhasi had entered an appearance. An entry of appearance does not constitute waiver of one’s right to mount a challenge to jurisdiction.

  148. [77] For these reasons, I reject the preliminary point that there was submission to the jurisdiction of the Singapore courts.

  149. The claims against AOPL

  150. The AOPL US$50m Claim

  151. [79] In relation to the AOPL US$50m Claim, there were two key issues before me:

  152. (a) whether the AOPL US$50m Claim may be taken into consideration for the application to set aside the service of the writ on AOPL; and

  153. (b) whether Singapore is the proper forum for the dispute.

  154. Whether the AOPL US$50m Claim may be taken into consideration

  155. [80] It will be recalled that the AOPL US$50m Claim was a belated addition to the writ of summons and the statement of claim (see [61]–[62] above). A preliminary issue is whether the court has a discretion to take the AOPL US$50m Claim into consideration in the application to set aside the service of the writ out of jurisdiction, or whether the court must assess the application based only on the facts and claims as they existed at the time leave was granted.

  156. [81] A similar point was canvassed in IM Skaugen SE and another v MAN Diesel & Turbo SE and another [2018] SGHC 123 (“Skaugen (HC)”), which was relied on by the plaintiffs. In Skaugen (HC), after the ex parte application for leave had been granted, but before the setting aside application was made, the plaintiffs had commenced concurrent proceedings – with the very same subject matter – in Norway against the defendants: Skaugen (HC) at [173]. Vinodh Coomaraswamy J held that, at the setting aside application, the court has a discretion to take into account evidence of events occurring after leave is granted ex parte: Skaugen (HC) at [190]. The court disagreed with the defendants’ argument that their setting aside application should be determined based on the facts as they existed at the time of the plaintiffs’ ex parte application for leave, and excluding consideration of the fact of the Norwegian proceedings, and the fact that proceedings in Germany were no longer available.

  157. [82] In support of their argument before Coomaraswamy J, the defendants had cited the English authority of ISC Technologies Ltd and another v James Howard Guerin and others [1992] 2 Lloyd’s Rep 430 (“ISC Technologies”). However, the court instead preferred the competing line of English authorities rejecting the position in ISC Technologies: at [187]–[188]. The leading case in that line of cases was NML Capital Ltd v Republic of Argentina [2011] 2 AC 495 (“NML Capital”).

  158. [85] Lastly, I note that Skaugen (HC)’s holding that the court is entitled, during setting aside applications, to take into account subsequent events has recently been endorsed by the Court of Appeal in Man Diesel & Turbo SE and another v IM Skaugen SE and another [2019] SGCA 80 (“Skaugen (CA)”) at [50]. Three reasons underpinned this – principle, coherence and policy (at [52]–[55]).

  159. (a) As a matter of principle, the approach in Skaugen (HC) furthers the objective of forum non conveniens, ie, to select the more appropriate forum. This inquiry is a dynamic one.

  160. (b) As a matter of consistency, subsequent events can be considered in stay applications, and there is no reason why the approach should be any different for setting aside applications – the same normative considerations in [85(a)] above apply to both applications.

  161. (c) As a matter of policy, only subsequent developments that are relevant to the forum non conveniens analysis will be considered. In this connection, if parties “raise wholly unmeritorious matters on the pretext of them being ‘subsequent developments’ … the concept of abuse of process … would apply in its full force”.

  162. [87] Indeed, as stated above at [62]–[63], the plaintiffs had, by 29 June 2018, already obtained leave to amend the writ of summons and the statement of claim so as to include the AOPL US$50m Claim, and to serve the amended documents on AOPL and Mr Bhasi. It bears noting that this was well before the application to challenge jurisdiction filed by AOPL and Mr Bhasi on 13 July 2018, although a little after SBI’s application filed on 4 June 2018 to stay the proceedings on forum non conveniens grounds. In my view, there was no evidence to suggest that the addition of the AOPL US$50m Claim was an abuse of process on the part of the plaintiffs. The plaintiffs had sought to pursue this additional claim expeditiously, and, as stated below at [89(b)], there was a sufficient degree of merit to the claim. On the whole, it did not seem to me that the claim was only added so as to resist the jurisdictional challenges by SBI, AOPL and Mr Bhasi.

  163. [88] Therefore, following Skaugen (HC), I do not see any reason why the AOPL US$50m Claim should not be taken into consideration for the purposes of the setting aside application.

  164. Whether Singapore is the proper forum for the claim

  165. [89] Before I turn to the natural forum issue, I briefly set out my views as to the other limbs of the Zoom Communications test (set out at [69] above).

  166. (a) Limb (a) – a good arguable case on the heads of jurisdiction under O 11 r 1 of the ROC: AOPL did not contest this, and rightly so. It was clear that at least O 11 r 1(d)(iv) was made out (ie, the claim is brought to obtain relief in respect of a breach of contract, being a contract which contains a jurisdiction clause in favour of Singapore).

  167. (b) Limb (b) – that the claim has a sufficient degree of merit: AOPL submitted that the AOPL US$50m Claim was wholly without basis, and that the sums claimed were due from ACF rather than AOPL (see [46] above). This was a matter to be tried at the trial. It bears mention that the threshold is not a high one – all that is required is that there be a serious question to be tried – and I was satisfied that the threshold was met.

  168. [90] As to whether Singapore is the natural forum, GRIPT pointed out that there was an applicable exclusive jurisdiction clause in favour of Singapore. The AOPL US$50m Claim arose in relation to the AOPL-GRIPT Contract, cl 2 of which provides as follows:

  169. [91] The AOPL US$50m Claim was founded upon AOPL’s alleged breach of its obligations under the AOPL-GRIPT Contract to arrange for SBI to issue letter(s) of credit. It clearly falls within the ambit of the exclusive jurisdiction clause above. On AOPL’s part, it seemed to have accepted that the AOPL US$50m claim is “related to” the AOPL-GRIPT Contract. As a result, the burden fell on AOPL to show strong cause before it would be allowed to renege on its agreement to litigate the dispute in Singapore.

  170. (1) Whether strong cause was shown

  171. [92] As discussed at [70]–[73] above, the court’s task is to determine whether there existed exceptional circumstances amounting to “strong cause”. In doing so, I considered the following factors both individually and holistically: (a) connections of the parties to the dispute; (b) availability of witnesses; (c) the applicable law; and (d) the impact of related proceedings and the overall “shape of the litigation”.

  172. (A) Connections of parties to the dispute

  173. [93] AOPL argued that the parties to the dispute were closely related to India. AOPL, an Indian merchanting trader, and SBI, an Indian bank, were the key players in the Indian merchanting trade transactions:

  174. (a) AOPL was incorporated in India, with its offices, executives and documents all located in India. Against this, GRIPT had argued that AOPL had a wholly-owned subsidiary in Singapore – Advantage Overseas Singapore Pte Ltd (“AOSPL”), but as AOPL rightly pointed out, AOSPL was a separate legal entity unrelated to the dispute.

  175. (b) The relevant banking entity involved in India was SBI’s Gwalior branch.

  176. [94] On the other hand, GRIPT was incorporated in Singapore and carried on business in Singapore. AIT, the entity to whom AOPL allegedly paid the US$50m, was also a Singapore-registered company. Against this, AOPL argued that GRIPT’s Singapore connection was fortuitous and irrelevant to the Bunge-AOPL merchanting trade structure. GRIPT was simply a part of Bunge’s overall FSG operations. In this regard, it was of greater relevance that Bunge was operating out of India and had a presence in India. GRIPT’s reply was that Bunge operated on a “hub and spoke” model, and that the Singapore “hub” was more closely related to the dispute than the India “spoke”.

  177. [95] I consider the implications of Bunge’s “hub and spoke” structure further below, and taking into account those findings, in my view, the parties’ connections were split across Singapore and India. No strong cause was shown on this factor. For completeness, I note that the other entities relating to the 17172A Trade, ACF and Tracon, constituted a neutral factor as they were UAE companies.

  178. (B) Availability of witnesses

  179. [97] The AOPL US$50m Claim, in particular, centred on three crucial questions of fact:

  180. (a) Whether Bunge had instructed AOPL to source for trade flows from its trading partners, including AIT, so that AOPL could on-sell the said cargo to ACF under the 17172A, 17173A and 17174A Trades.

  181. (b) Whether Ms Jadhav or Mr Ambujakshan had, as Mr Srivastava alleged, purported to give assent to or confirmation of (on Bunge’s behalf) AOPL’s instruction to SBI to release the US$150m (earmarked for GRIPT under the 15 December 2015 IPU) to AIT instead.

  182. (c) If indeed the said assent and/or confirmation had been given, whether Ms Jadhav and/or Mr Ambujakshan were duly authorised by Bunge to give the said assent and/or confirmation.

  183. [98] AOPL argued that issues [97(a)] and [97(b)] above were key, and that the witnesses relevant to those factual issues were in India, many of whom could not be compelled to give evidence in Singapore. They included, in the main:

  184. (a) Bunge’s representatives, Ms Jadhav and Mr Ambujakshan, one of whom gave the confirmation;

  185. (b) AOPL’s employees, Mr Singh and Mr Krishna, who were together responsible for instructing SBI to issue the letter of credit to GRIPT. Further, since the plaintiffs appeared to deny that the Admission Letter was signed by Mr Singh on Mr Rigby’s insistence, but did not dispute that Mr Rigby had gone to AOPL’s offices in India to procure Mr Singh’s signature, evidence from Mr Singh as to the circumstances under which he had signed the Admission Letter would be pertinent. Mr Singh had also allegedly received instructions from GRIPT to purchase cargo from AIT;

  186. (c) SBI’s employees, Mr Srivastava and one Razdan; and

  187. (d) ACF’s sole director, Anil Varghese, who is an Indian national – given AOPL’s allegation that the funds were eventually paid to ACF, and the US$50m was therefore due from ACF.

  188. [99] In contrast, GRIPT argued that the key factual issue was that in [97(c)]; quite apart from whether or not Ms Jadhav or Mr Ambujakshan had given the alleged confirmation, the real issue was whether they had the requisite authority to do so. The key witnesses on this issue were located in Singapore:

  189. (b) In particular, Mr Tan was to give evidence:

  190. (i) that there was no shortage of trade flows from GRIPT (and therefore no need for GRIPT or Bunge to instruct AOPL to source for trade flows from AIT);

  191. (ii) of the standard process that applied on the rare occasions where GRIPT did consent to the release of an IPU given (and therefore, as to whether the 15 December 2015 IPU had been waived in the course of the 17172A Trade); and

  192. (iii) to respond to Mr Srivastava’s allegations that Ms Jadhav or Mr Ambujakshan knew about and had all relevant information and document in relation to the GRIPT contracts. In fact, they reported directly to Mr Tan, were not decision-makers for Bunge and were only involved in administrative matters. They thus had no evidence to give.

  193. (c) GRIPT named some other potential witnesses who were based in Singapore. One was Won Lee Kiew (“Mr Won”), who was the TSF Operations Manager at the material time, and whom Mr Tan reported to. Mr Won was also responsible for determining whether the September 2015 Bunge-AOPL String Sales was a transaction that TSF should participate in. Mr Won was no longer in Bunge’s employ. Other potential witnesses were several Bunge staff based in Singapore who handled the commercial and financial aspects of the transactions, as well as the operational staff under Mr Tan.

  194. (d) GRIPT also argued that in light of the defendants’ account that the US$50m was transferred to AIT, the evidence of AIT’s chief executive officer, Daniel Amarilla (“Mr Amarilla”) who resided in Singapore, would be more readily available should the trial be held in Singapore.

  195. [100] In my judgment, the twin factual issues of (a) whether Bunge had given the instructions/confirmations to AOPL and SBI, and (b) whether those instructions/confirmations were authorised, were both at the forefront. Ultimately, both were questions that needed to be answered for the determination of the claim. The evidence of witnesses in the Bunge “spoke” in India, relating to the former issue, and the evidence of witnesses in the Bunge “hub” in Singapore, relating to the latter, were thus equally important.

  196. [101] Ultimately, in my view, the witness availability factor was finely balanced and did not pull strongly in favour of either jurisdiction:

  197. (a) Those who were in the employ of each party were compellable, whether in India or Singapore.

  198. (b) Regarding the witnesses compellable only in Singapore:

  199. (i) While Mr Won was no longer in Bunge’s employ, I agreed with AOPL that his role seemed peripheral – the key actor managing the operations was Mr Tan.

  200. (ii) I did not think Mr Amarilla’s evidence would be of particular importance, given that the plaintiffs did not even dispute that AOPL had procured the trade flows from AIT.

  201. (c) Regarding the witnesses compellable only in India:

  202. (i) Mr Srivastava and Razdan remained employees of SBI and therefore could be procured to testify on behalf of SBI in Singapore. While they could not be compelled to give evidence on behalf of AOPL in Singapore, there was some reason for either of them to do so – given that the positions of SBI and AOPL are fairly aligned. Certainly, there was no evidence that they were not prepared to do so.

  203. (ii) As for Ms Jadhav and Mr Ambujakshan, GRIPT argued that the defendants would easily be able to procure their attendance in Singapore since Mr Ambujakshan was now an employee of AOPL, and Ms Jadhav was employed by a company within Mr Bhasi’s Carnival Group. While I was of the view that Ms Jadhav was not compellable in Singapore – even if she was in the employ of the Carnival Group of companies – there is no indication that Ms Jadhav will not give evidence in Singapore.

  204. Certainly, the threshold of “strong cause” was not reached on this factor.

  205. (C) Applicable law

  206. [102] As stated above, the starting point of the analysis is that the AOPL-GRIPT Contract, from which the AOPL US$50m Claim arose, was expressly governed by Singapore law. According to AOPL, that was not the end of the inquiry. The focus ought not to be on the AOPL-GRIPT Contract, but on the Bunge-AOPL merchanting trade structure as a whole. On AOPL’s case, this structure was devised entirely to evade Indian regulations on the inflow of foreign investment so that all involved might benefit from the interest arbitrage. This raised questions as to whether the overall string and structure of transactions (which included the AOPL-GRIPT Contract) would be void for illegality in the place of performance, ie, India:

  207. (a) Indian foreign capital restrictions under its Foreign Exchange Management Act 1999 (“FEMA”) prohibited unauthorised payments into and out of India. The raison d’être of the Bunge-AOPL merchanting trade structure was to work around this prohibition by creating a pretext for the inflow and outflow of funds from Bunge into India via the Indian merchanting trade counterparties.

  208. (b) The Reserve Bank of India’s Circular 115 placed certain restrictions on merchanting trade transactions (eg, the maximum tenor of letters of credit mentioned at [18] above), and required, amongst other things, that merchanting traders had to be genuine traders of goods, and not mere financial intermediaries. The particular characteristics of the Bunge-AOPL merchanting trade structure reflect the parties’ attempts to work around those restrictions.

  209. (c) The financing which Bunge provided in the course of the deferred mandate trades potentially flouted the FEMA and RBI’s regulations on external commercial borrowings.

  210. (d) The IPUs which SBI gave were bank guarantees of US$50m, which may have exceeded the regulatory limit of US$20m per transaction.

  211. [103] According to AOPL, resolution of the dispute will inevitably require consideration of these Indian regulations to determine the legal effect of their contravention (if any), and whether the relevant contractual obligations could be preserved notwithstanding their illegality. On this front, the Indian courts were better placed to address these issues of Indian law, as these questions could not be meaningfully answered by a Singapore court, even with expert evidence, not least because the Singapore courts ought not to opine on such matters of Indian public policy, which the Indian courts had an interest in deciding. These factors, AOPL submitted, amounted to strong cause.

  212. [104] I was unpersuaded by AOPL’s argument that these factors demonstrated strong cause. While the Indian regulations above may explain why the transactions were structured the way they were, they did not affect the specific dispute – which pertains to AOPL’s obligations under the AOPL-GRIPT Contract. More importantly, the parties were well aware of these Indian laws/regulations when they nevertheless agreed to the exclusive jurisdiction clause. As stated (see [73] above), factors within the contemplation of the parties at the time of contracting carry less weight in the determination of whether strong cause has been shown.

  213. [105] I was likewise unpersuaded by AOPL’s argument that there was strong cause on the basis that the dispute involved a determination of illegality which, on account of public policy, should be left to the Indian courts. I note that neither AOPL nor Mr Bhasi adduced any expert evidence of Indian law to make good their point. Further, a similar argument was recently made to and rejected by the Court of Appeal. In Trisuryo, the Court of Appeal held that, when addressing the question of jurisdiction, “foreign illegality is generally a matter that should be considered when determining the substantive merits of the action” (at [61]). This is because adjudication of the existence of foreign illegality involves a judgment on the merits, a full hearing and findings of fact, for which the stay application would not be the appropriate forum.

  214. [106] In any event, these do not amount to strong cause in light of the other factors taken in totality. One such factor was, as just mentioned, the fact that the governing law of the AOPL-GRIPT contract was Singapore law, as stipulated by its express choice of law clause.

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