Skip to content
laws.sgby aturio
Grounds publishedDecided 30 Dec 2013
Contents

Court of Appeal

The Republic of the Philippines v Maler Foundation and others and other appeals

Feedback & support

[2013] SGCA 66Case no. Civil Appeals No 109, 110 and 111 of 2012 (Originating Summons No 134 of 2004)

What happened, in plain English

There is no plain-English summary of this judgment yet.

Ask about this judgment

Laws this judgment relies on

Grounds of decision

Official text from eLitigation

  1. Chao Hick Tin JA (delivering the judgment of the court):

  2. Introduction

  3. [1] These are three appeals against the decision of a High Court Judge (“the Judge”) in WestLB AG v Philippine National Bank and others [2012] 4 SLR 894 (“the Judgment”) determining entitlement to the sums of US$16.8m and £4.2m (“the Funds”) held in an account with the Singapore branch of WestLB AG (“WestLB”). The appeals presented the court with a novel factual scenario which did not appear to be readily susceptible to the mechanistic application of established conflict of laws rules. A sui generis situation cannot, however, justify a radical departure from settled law. The issues before this court should still be approached on the basis of principle.

  4. [2] The appellant in Civil Appeal No 109 of 2012 (“CA 109/2012”) is the Republic of the Philippines (“the Republic”).

  5. [3] The appellants in Civil Appeal No 110 of 2012 (“CA 110/2012”) are the plaintiffs in a human rights class action suit (“the Human Rights Victims”) brought against the deposed President of the Philippines, Ferdinand E Marcos (“Mr Marcos”), in the United States District Court for the District of Hawaii. The Human Rights Victims are also the sixth respondents in CA 109/2012. The Human Rights Victims form a class comprising 9,539 civilian citizens of the Philippines, their heirs and beneficiaries, who had in December 1995 obtained final judgment in the sum of US$1,964,005,859.90 against Mr Marcos’ estate (“the Marcos Estate”) after Mr Marcos passed away while the litigation was pending.

  6. [4] The appellants in Civil Appeal No 111 of 2012 (“CA 111/2012”) are the Maler Foundation, Avertina Foundation, Palmy Foundation, Vibur Foundation and Aguamina Corporation (hereafter collectively described as “the Foundations”). The Foundations are also named as the first to fifth respondents in CA 109/2012. The Maler Foundation, Avertina Foundation, Palmy Foundation and Vibur Foundation are foundations established in Vaduz, Liechtenstein, and the Aguamina Corporation is a Panama-incorporated corporation. The Foundations were the purported original named account holders of certain sums of money that were previously held in various bank accounts in Switzerland. The Funds in dispute are derived from these sums.

  7. [5] The Philippine National Bank (“PNB”) is the respondent in both CA 110/2012 and CA 111/2012. PNB is a bank incorporated in the Philippines with its principal office in Manila.

  8. [6] After the first hearing on 7 February 2013, we appointed Prof Yeo Tiong Min SC (“Prof Yeo”), Dean of the Faculty of Law of the Singapore Management University, as amicus curiae. The parties subsequently made submissions on Prof Yeo’s opinion.

  9. Facts

  10. Background to the dispute

  11. [7] In February 1986, Mr Marcos was overthrown by a non-violent coup that was later popularised as the People Power Revolution, and was exiled to Hawaii with his wife Imelda Marcos (“Mrs Marcos”). On 28 February 1986, Mr Marcos’ successor President Corazon C Aquino issued Executive Order Nos 1 and 2 creating the Presidential Commission on Good Government (“PCGG”), which was given the mandate of recovering the ill-gotten wealth accumulated by Mr Marcos, his family and associates. Article XI Section 4 of the 1987 Constitution of the Republic of the Philippines granted the anti-graft court known as the Sandiganbayan – constituted under Article XIII of the 1973 Constitution of the Republic of the Philippines – continued jurisdiction over criminal and civil cases involving graft and corrupt practices by public officers and employees in relation to their offices, and by Executive Order Nos 14 and 14A, the jurisdiction of the Sandiganbayan was extended to include cases investigated by the PCGG.

  12. [8] On 7 April 1986, the Solicitor General of the Philippines sought formal assistance from the Swiss authorities pursuant to the Switzerland Federal Act on International Mutual Assistance in Criminal Matters (20 March 1981) (“IMAC”). The Republic requested the Swiss authorities to provide information on assets belonging to Mr and Mrs Marcos that had been deposited in Switzerland, and to take the necessary precautionary measures to freeze such assets.

  13. [9] The Swiss authorities in the cantons of Zurich, Fribourg and Geneva gave in-principle acceptance to the Republic’s requests for legal assistance and, between April 1986 and January 1990, issued freezing orders against various bank accounts held in the names of the Foundations (“the Swiss Deposits”). In the meantime, Mr Marcos passed away on 28 September 1989. The orders were subject to multiple appeals by the Foundations, Mrs Marcos and the Marcos Estate; this culminated in two concurrent decisions of the Federal Supreme Court of Switzerland, both dated 21 December 1990, which upheld the freezing orders in Fribourg and Zurich with slight modifications and gave directions for the in-principle transmission of the Swiss Deposits to the Republic. In the judgment relating to the assets located in Zurich, the Supreme Court ordered that the actual remittance of the Swiss Deposits would be deferred:

  14. A similar order was given for the appeal against the orders authorising transmission of the assets in Fribourg. The proceedings before the Philippine court or tribunal had to be instituted within a year of the decision and comply with minimal guarantees of due process under the Federal Constitution of the Swiss Confederation and the European Convention for the Protection of Human Rights and Fundamental Freedoms (Rome, 4 XI 1950).

  15. [10] The Republic filed a petition to the Sandiganbayan on 17 December 1991, seeking forfeiture of the assets held by Mrs Marcos and the Marcos Estate, including the Swiss Deposits in the name of the Foundations (“the Forfeiture Proceedings”). This petition was made under the provisions of Republic Act No 1379 (“RA 1379”), a statute governing the forfeiture of property that is unlawfully acquired by public officials and employees.

  16. [11] In the meantime, in April 1986, soon after the People Power Revolution, a human rights class action suit on behalf of over 10,000 putative class members was initiated by one Robert A Swift (“Mr Swift”) against Mr Marcos in the United States District Court for the District of Hawaii (“the District Court of Hawaii”). Following Mr Marcos’ death, the Marcos Estate was substituted as the defendant and his personal representatives continued to contest the litigation. On 3 February 1995, judgment for the sum of US$1,964,005,859.90 was entered against the Marcos Estate in favour of the Human Rights Victims, together with a preliminary injunction enjoining, inter alia, any transfer, conveyance or disposal of the Swiss Deposits. The judgment was appealed to the United States Ninth Circuit Court of Appeal and affirmed in Maximo Hilao v Estate of Ferdinand Marcos 103 F 3d 767 (9 Cir 1996).

  17. [12] On 10 July 1995, an Order Granting Additional Relief for Contempt was issued against the representatives of the Marcos Estate which stated:

  18. [13] Following the failure of the legal representatives of the Marcos Estate to execute the assignment ordered above, a deed of assignment dated 14 July 1995 was executed by one Walter AY Chinn – a Clerk of the District Court of Hawaii – on behalf of the said legal representatives (hereafter referred to as “the Chinn Assignment”). The terms of the Chinn Assignment were as follows:

  19. [14] The Republic made a second request for assistance from the Zurich District Attorney in August 1995 (“the Second Request”), seeking the immediate transfer of the Swiss Deposits into escrow accounts held by PNB in the names of each of the Foundations. A number of escrow agreements dated 14 August 1995 (“the Escrow Agreements”) were also entered into between the PNB and the PCGG on behalf of the Republic. The material clauses are as follows:

  20. [15] In the Second Request, the Republic noted that Mrs Marcos had deliberately delayed the Forfeiture Proceedings in the Philippines and that the Human Rights Victims had obtained judgment against the Marcos Estate and intended to enforce the judgment in Switzerland. The Republic claimed that the Philippines was the natural forum for the resolution of these disputes; the claims of the Human Rights Victims against the Marcos Estate should also be dealt with by the Probate Court in the Philippines. The Zurich District Attorney granted the Second Request, subject to the condition that the transfer of the assets would take place within the framework of the obligations set out in the Escrow Agreements, and imposed an investment policy that the assets may be invested in the money market and in securities with a Standard & Poor’s credit rating of at least “AA”.

  21. [16] The Federal Supreme Court of Switzerland affirmed the order in relation to the Aguamina Corporation on 10 December 1997, subject to two additional conditions:

  22. (a) the Republic had to guarantee that the seizure or restitution of the Swiss Deposits would be determined by judicial proceedings that satisfied the principles of due process embodied in Article 14 of the International Covenant on Civil and Political Rights (16 December 1966); and

  23. (b) the Republic had to undertake to inform the Swiss authorities about developments regarding the judicial proceedings for restitution and measures taken to indemnify the Human Rights Victims.

  24. The Federal Supreme Court issued similar decisions for the other Foundations.

  25. [17] The Republic gave the necessary undertakings in an exchange of diplomatic notes with the Swiss Federal Office for Police Matters, and the Federal Supreme Court issued additional decisions in March and April 1998 that denied motions to suspend the release of the Swiss Deposits to the Republic.

  26. [18] Between April to July 1998, the Swiss Deposits were released to PNB to be held in escrow. The total sum of the remitted Swiss Deposits amounted to US$567.2 million, and PNB placed part of the Swiss Deposits into fixed deposit accounts with the Singapore branch of WestLB in accordance with the investment requirements of the Swiss authorities and the Escrow Agreements. The Funds in dispute constitute a portion of the monies deposited with WestLB.

  27. [19] On 15 July 2003, the Supreme Court of the Philippines issued an en banc decision in Republic of the Philippines v Sandiganbayan (GR No 152154) (July 15, 2003) (“the Forfeiture Judgment”) which ordered as follows:

  28. Mrs Marcos and the Marcos Estate subsequently filed motions to the Supreme Court seeking reconsideration of the Forfeiture Judgment on the grounds that the judgment had violated constitutionally enshrined rights of due process. The motions for reconsiderations were denied with finality in Republic of the Philippines v Sandiganbayan (GR No 152154) (18 November 2003) (“the Forfeiture Resolution”).

  29. [20] The Swiss Federal Office of Justice issued a press release on 5 August 2003 confirming that the Philippine government could dispose of the Swiss Deposits without further decision on the part of the Swiss authorities. This concluded procedure pursuant to the agreement between the Swiss and Philippine authorities under the IMAC will hereafter be referred to as “the Green Line”.

  30. [21] The Republic took out a writ of execution dated 22 January 2004 (“the Writ of Execution”) to enforce the Forfeiture Judgement and cause the immediate transfer of the Swiss Deposits held in escrow by PNB to the Republic. PNB attempted to procure the release of the Funds from WestLB, but WestLB informed PNB that it had received notice from Mr Swift of orders made by the District Court of Hawaii, and therefore refused to release the Funds pending further legal advice.

  31. The court proceedings in Singapore

  32. [22] On 30 January 2004, WestLB filed Originating Summons No 134 of 2004 seeking interpleader relief (“the Interpleader Proceedings”). On 24 March 2004, Lai Siu Chiu J granted interpleader relief and ordered WestLB to pay the Funds into an escrow account held by M/s Drew & Napier (“D&N”) – the then solicitors for PNB – for the credit of the Interpleader Proceedings.

  33. [23] PNB, the Foundations, the Estate of Roger Roxas and the Golden Buddha Corporation lodged competing claims to the Funds. The last two claims were withdrawn and are not relevant for the purposes of these appeals. After M/s Harry Elias Partnership (“HEP”) replaced D&N as solicitors for PNB, the Funds were transferred into an escrow account established by HEP.

  34. [24] The Republic subsequently filed Summons No 1048 of 2006 in March 2006 to be added as party to the Interpleader Proceedings and applied for the Interpleader Proceedings to be stayed pursuant to s 3 of the State Immunity Act (Cap 313, 1985 Rev Ed). The stay application was dismissed at first instance and affirmed on appeal by this court: see Republic of the Philippines v Maler Foundation and others [2008] 2 SLR(R) 857 (“Republic of the Philippines (Sovereign Immunity)”).

  35. [25] The substantive Interpleader Proceedings to determine entitlement to the Funds were heard by the Judge in November 2011 and are the subject of the present appeals.

  36. The basis of each party’s claim to the Funds

  37. [26] In the Interpleader Proceedings, the Republic initially claimed legal and beneficial title of the Funds on the basis that:

  38. (a) foreign acts of state had transferred and vested ownership of the Funds in the Republic, and the court should therefore recognise the validity of the Republic’s title; and,

  39. (b) the Human Rights Victims and the Foundations were estopped from re-litigating the act of state doctrine by reason of the decision of the United States Ninth Circuit Court of Appeal in In Re Philippine National Bank; Philippine National Bank v United States District Court for the District of Hawaii 397 F 3d 768 (9 Cir 2005) (“In Re PNB”), which had held that the act of state doctrine was applicable on the facts.

  40. [27] The claim of the Human Rights Victims was premised on the Chinn Assignment, which was allegedly effective under United States law (subsequently used to refer more specifically to the law applicable in the state of Hawaii) to transfer or convey all proprietary right, title and interest of the Marcos Estate and the Foundations in the Funds to the benefit of the Human Rights Victims. Further, and to the extent that the Foundations were adjudged to be the owners of the Funds, the Human Rights Victims claimed the Funds as assignees to whom the Foundations had transferred their interest in the Funds.

  41. [28] The Foundations asserted a default proprietary interest in the Funds as the undisputed original legal owners of the Swiss Deposits and thus of the Funds which were traceable therefrom. The Forfeiture Judgment purporting to vest title to the Funds in the Republic had not satisfied the conditions imposed by the Swiss courts for the release of the Funds. Further, or in the alternative, the Forfeiture Judgment did not bind the Foundations as they were not party to the proceedings.

  42. [29] PNB claimed that it continued to retain legal title to the Funds as the escrow agent holding the Funds pending a final and binding judgment deciding on the restitution or forfeiture of the Funds by a competent Philippine court and as the original named account holder of the Funds deposited with WestLB.

  43. The decision below

  44. [30] The Judge held (at [43] of the Judgment) that the act of state doctrine was a “red herring” as the key issue before the court was whether the Forfeiture Judgment had validly vested beneficial title of the Funds in the Republic. The act of state doctrine did not apply as the Forfeiture Judgment was not a legislative or executive act, and the court had not been requested to determine the propriety of any foreign sovereign act as neither the Human Rights Victims nor the Foundations had challenged the legitimacy of any act of the Swiss or Philippine governments (ibid).

  45. [31] After characterising the crux of the dispute as one concerning the legal effect of the Forfeiture Judgment (at [44] of the Judgment), the Judge considered whether the Forfeiture Judgment would be recognised by the Singapore courts. The Forfeiture Judgment was a judgment in rem (at [59] of the Judgment) but the Judge could not recognise it as such as it purported to affect title to a res that was not situated in the Philippines at the time of the Forfeiture Judgment (at [63] of the Judgment). Further, the Singapore courts could not, under well-established conflict of laws principles, enforce a foreign penal law, and the foundation of the Republic’s claim was dependent on the indirect enforcement of a foreign penal law, viz, RA 1379 (at [73] of the Judgment). The Republic’s claim was therefore dismissed.

  46. [32] In relation to the claim of the Human Rights Victims, the Judge characterised the relevant issue as centring on the question of whether the Chinn Assignment had effectively vested proprietary rights in the Funds in the Human Rights Victims, not the validity of the assignment vis-à-vis the assignor and assignee (at [80]–[81] of the Judgment). The Judge considered that the putative effect of the Chinn Assignment was that of a garnishee order (at [87] of the Judgment); after examining alternative formulations of the connecting factor to determine the governing law, the Judge concluded that the appropriate connecting factor should be the proper law of the debt, ie, the system of law bearing the closest and most significant connection to the debt (at [101] of the Judgment). Applying this test, the Judge found that Swiss law bore the closest and most significant connection with the Swiss Deposits at the material time (at [101] of the Judgment). The Chinn Assignment had no effect under Swiss law and thus the Human Rights Victims could not have any proprietary right, interest or title to the Funds (at [106] of the Judgment). The Judge also added that if United States law was assumed to be the governing law, the Chinn Assignment would nonetheless have been ineffective as the locus of the deposits was outside the United States (at [107] of the Judgment).

  47. [33] Having dismissed the claims of the Republic and the Human Rights Victims, the Judge held that PNB had legal title to the Funds as trustee of the Funds held in escrow (at [113] of the Judgment). The Judge also relied (at [114] of the Judgment) on a finding of fact previously made by this court in Republic of the Philippines (Sovereign Immunity) that PNB was “the original account holder and the legal owner of the Funds while they were held in accounts at [WestLB]” [emphasis added]: see Republic of the Philippines (Sovereign Immunity) at [63(c)]. PNB was not divested of this legal title when the court ordered the Funds to be held by D&N – and subsequently HEP – for the credit of the Interpleader Proceedings (at [115] of the Judgment).

  48. [34] Following from the above finding that PNB held legal title to the Funds, the Judge also dismissed the Foundations’ claim that the Funds must necessarily revert to the Foundations as the original legal owners of the Funds in the absence of any other party entitled to the Funds (at [118] of the Judgment).

  49. The parties’ submissions

  50. [35] Before us, the Republic did not pursue its claim on the premise that it already had legal title to the Funds, and, instead, advanced two parallel threads of argument:

  51. (a) Under the act of state doctrine, the Singapore court should, as a rule, accept the validity of the Forfeiture Judgment in determining entitlement to the Funds as the courts are required to (i) give effect to the acts of state adopted by the Philippine and Swiss governments that culminated in the issuance of the Forfeiture Judgment or (ii) regard the Forfeiture Judgment as constituting an act of state. The fact that the locus of the Funds was outside of the Philippines at the time the Forfeiture Judgment was issued should not affect the legal analysis. Further, the Forfeiture Proceedings pursuant to RA 1379 were not penal in nature and the alleged penal nature of RA 1379 is in any event immaterial within the act of state context.

  52. (b) Under the Green Line, the Republic is entitled to the Funds by virtue of cl 2(vii) of the Escrow Agreements, which gave effect to the IMAC measures agreed upon by the Swiss and Philippine governments. The conditions imposed by the clause had been met. This claim to entitlement will hereafter be referred to as “the Green Line Argument”. The Republic asserted that this claim “finds its roots” in the following statement of this court in Republic of the Philippines (Sovereign Immunity) at [57]:

  53. (a) It was not immediately apparent what the precise legal nature of this claim was in the Republic’s Appellant’s Case. After having sight of Prof Yeo’s opinion, the Republic nuanced its Green Line Argument and submitted that the Escrow Agreements created an express trust in favour of the Republic and that the beneficial interest in the Funds was to be vested in the Republic by operation of law after the Sandiganbayan issued the Forfeiture Judgment, satisfying the condition in clause 2(vii) of the Escrow Agreements.

  54. [36] The Human Rights Victims submitted that the relevant issue to be determined with respect to the Chinn Assignment was whether the Chinn Assignment was valid vis-à-vis the Human Rights Victims and the Foundations; as this involved a question of the “first-tier relationship” between the assignor and assignee, the appropriate choice of law rule was the proper law of the assignment, which was United States law. Under United States law, the Chinn Assignment had validly transferred all the rights of the Marcos Estate – including the Swiss Deposits in the names of the Foundations – to be held for the benefit of the Human Rights Victims.

  55. [37] The Foundations submitted that they were the original named legal owners of the Funds, and if the Republic, Human Rights Victims and PNB failed in their claims, the Funds must of necessity revert to the Foundations.

  56. [38] The Human Rights Victims and the Foundations also adduced largely similar arguments against the Judge’s finding that PNB had legal title to the Funds:

  57. (a) PNB only had mere custody of the Funds as an escrow agent, and PNB had been divested of any legal title to the Funds when WestLB released the Funds to be held by D&N, and later HEP, for the credit of the Interpleader Proceedings; and,

  58. (b) PNB did not hold legal title to the Funds as a trustee and its obligations as an escrow agent were grounded in contract and restitution.

  59. A preliminary procedural issue

  60. [39] Before turning to the substantive merits of the three appeals, we first consider a preliminary objection raised by the Human Rights Victims and the Foundations that CA 109/2012 was procedurally invalid and should be dismissed as the Republic had named the wrong parties as respondents to the appeal. The Human Rights Victims and the Foundations contended that as the only party who had succeeded in asserting an entitlement to the Funds before the Judge was PNB, the Republic ought to have named PNB, and not the Human Rights Victims or the Foundations, as the correct respondent to the appeal. The Republic’s position was that it was not appealing the Judge’s finding that PNB was legal owner of the Funds, and was only asserting a beneficial interest in the Funds on appeal; it was thus not necessary to name PNB as a respondent as PNB would not be directly affected by the appeal. We add that both the Human Rights Victims and the Foundations had, in CA 110/2012 and CA 111/2012 respectively, also named only PNB as the respondent. The apparent effect of this procedural anomaly would be that not all the ten original parties to the Interpleader Proceedings would technically be bound by an order made in each of the appeals.

  61. [40] It seems to us that in raising this procedural objection the Human Rights Victims and the Foundations are adopting too narrow and technical an approach. It must be borne in mind that it was WestLB which took out the Interpleader Proceedings to enable the court to rule, as amongst the competing claimants, namely, the Republic, the Human Rights Victims and the Foundations, who had the better claim to the Funds. PNB was not and is not claiming any beneficial interest in the Funds, but was the titleholder to the Funds held in the account with WestLB. The Judge had ruled that none of the competing claimants had proved any entitlement to the Funds. If the Republic was wrong not to have cited PNB as a respondent to CA 109/2012, so too were the Human Rights Victims and the Foundations when they, in CA 110/2012 and CA 111/2012, cited only PNB as the respondent. This was an interpleader proceeding to enable all the contesting parties to show who had a better claim to the Funds. If we were to accept this argument of the Human Rights Victims and the Foundations, it would mean that this court would have to call a halt to the hearing of these appeals to enable the defects in all three appeals to be rectified. In any event, as all the parties made full substantive arguments before us vis-à-vis each and every party’s competing claim to the Funds, we are of the view that it would be unnecessarily convoluted at this stage to regard only the respondents to each of the three appeals as strictly bound by an order made by this court in any single appeal. At this juncture, the most practical course of action is to consider the merits of all the appeals together such that all parties to the Interpleader Proceedings will be bound by every order made in the three appeals, thus disposing of all the claims to the Funds with finality. Quite rightly, none of the parties sought to press the procedural objection any further before us during oral arguments, and as all the parties were given ample opportunities to be heard on all the issues that arose, no prejudice would be caused if PNB is bound by the orders made in CA 109/2012 and the Republic is bound by the orders made in CA 110/2012 and CA 111/2012.

  62. The Republic’s claim

  63. Whether the act of state doctrine applied to deem the Forfeiture Judgment as validly passing title to the Funds to the Republic

  64. [41] The Republic’s case relied largely on the legal proposition that the act of state doctrine mandated the recognition by this court of the validity of the Forfeiture Judgment which gave effect to the acts of state of the Philippine and Swiss governments. In essence, the argument was that the act of state doctrine would require this court to accept the effect of an action of a foreign sovereign as presumptively valid.

  65. [42] The locus classicus of the act of state doctrine is Fuller CJ’s judgment in the Supreme Court of the United States decision of Underhill v Hernandez 168 US 250 (1897) (“Underhill”) (at 252):

  66. This definition emphasised the Westphalian notion of sovereignty, with each nation state exercising absolute power and sovereignty within its territorial boundaries. The act of state doctrine was initially conceived from this perspective as a matter of judicial restraint and comity.

  67. [43] However subsequent American jurisprudence shows a gradual shift in the courts’ perception of the act of state doctrine. This was especially so when cases involving the expropriation or confiscation of property by Latin American neighbours during the early 20 century came before the American courts with some regularity. In Oetjen v Central Leather Co 246 US 297 (1918) (“Oetjen”), the Supreme Court observed that (at 303-304):

  68. The rationale of the doctrine was therefore based on the acceptance of the validity of sovereign acts and was a manifestation of external deference: see also Ricaud v American Metal Co, Ltd 246 US 304 (1918) (“Ricaud”), which was decided on the same day.

  69. [44] Later, the act of state doctrine took on an internal constitutional dimension in the seminal Supreme Court decision of Banco Nacional de Cuba v Sabbatino 376 US 398 (1964) (“Sabbatino”). There the Supreme Court departed from the foundations of the act of state doctrine in Oetjen and Ricaud, holding (at 421) that the doctrine was not compelled by the inherent nature of sovereign authority or by principles of international law. Instead, the act of state doctrine (at 423):

  70. The conceptual basis of the doctrine was therefore reformulated as one of judicial abstention based on separation of powers between the judicial and political branches, a ‘foreign government’ analogue of the American political question doctrine: see International Association of Machinists v OPEC 649 F 2d 1354 (9th Cir, 1981) at [24]. Prof F.A Mann observed in Foreign Affairs in English Courts (Oxford University Press, 1986), after tracing the history of the act of state doctrine in the United States, that American precedents (at p 176):

  71. [45] An increasingly broad scope of the act of state doctrine, founded on vague general exhortations of judicial abstention, was eventually circumscribed in the Supreme Court decision in WS Kirkpatrick & Co, Inc v Environmental Tectonics Corporation, International 493 US 400 (1991) (“Kirkpatrick”), which held that (at 410):

  72. [46] The modern act of state jurisprudence in England developed in a way where it is not possible to discern a consistent thread of authority. Oetjen was cited with approval in Princess Paley Olga v Weisz [1929] 1 KB 718 and Aksionairnoye Obschestvo Dlia Mechanisches-Koyi Obrabotky Diereva AM Luther (Company for Mechanical Woodworking AM Luther) v James Sagor and Company [1921] 3 KB 532 (“Luther”), where Scrutton LJ contemplated (at 558–559) that it would be a “serious breach of international comity” to “postulate that [a foreign state’s] legislation is ‘contrary to essential principles of justice and morality’”. In common with the early United States decisions, the emphasis was on external deference.

  73. [47] In Buttes Gas and Oil Co and another v Hammer and another [1982] AC 888 (“Buttes Gas”), Lord Wilberforce considered (at 931A–B) that the “territorial act of state” doctrine was “concerned with the applicability of foreign municipal legislation within its own territory, and with the examinability of such legislation”. His Lordship ostensibly appeared to be partial to the view that the doctrine was concerned with the choice of the proper law to be applied. Lord Wilberforce distinguished this from “a more general principle that the courts will not adjudicate upon the transactions of foreign sovereign states” which, as a matter of terminology, was not a variety of act of state but of “judicial restraint or abstention” (at 931G–H). In contrast, Lord Phillips of Worth Matravers in R v Bow Street Metropolitan Stipendiary Magistrate, ex parte Pinochet Ugarte (No 3) [2000] 1 AC 147 was of the view (at 286C) that the act of state doctrine was “a matter of judicial restraint” and concerned situations in which the courts have held themselves “not competent to entertain litigation that turns on the validity of the public acts of a foreign state” [emphasis added]. This was reiterated by Lord Hope of Craighead in Kuwait Airways Corporation v Iraqi Airways Co (Nos 4 and 5) [2002] 2 AC 883, who stated (at [135]) that the act of state doctrine gave effect to a policy of judicial restraint or abstention. In the same case, both Lord Nicholls of Birkenhead and Lord Steyn also adopted the classic Underhill formulation, viz, the court would not “sit in judgment” on the acts of a foreign government (at [24] and [112] respectively).

  74. [48] From this brief survey of the authorities, it does not appear that a coherent or unified principle has emerged in the English jurisprudence. The act of state doctrine in England is perhaps best characterised as a combination of judicial restraint, comity and a territorial choice of law rule in relation to acts of a foreign sovereign that affect property within its jurisdiction. With respect to the last mentioned aspect of the act of state doctrine, this was the simple explanation of Oetjen and Luther advanced in Michael Zander, “The Act of State Doctrine” (1959) 53 AJIL 826 at p 831 and pp 836–837, and Cheshire, North & Fawcett, Private International Law (Oxford University Press, 14th Ed, 2008) at p 134. It was also the basis of Bankes LJ’s decision in Luther (at 545–546) and the approach of the English Court of Appeal in Peer International Corporation and others v Termidor Music Publishers Ltd and others (Editora Musical de Cuba, Part 20 Defendant) [2004] 2 WLR 849 (“Peer International”). If acts of expropriation relate to property which was located within foreign territory and later removed from the jurisdiction, the lex situs at the time of the act would be the law of the foreign territory and the transfer of title would thus be valid under that law. It is nevertheless clear that the conceptual justification for the act of state doctrine in England is still rooted in its historical basis. The shift in focus in the American jurisprudence towards viewing the act of state doctrine as a constitutionally mandated principle also suggests that some caution should be exercised in importing principles from the United States as the emphasis placed on the internal separation of powers has not been endorsed in the English and local contexts.

  75. [49] Before considering in more detail the Republic’s specific arguments on the act of state doctrine, we observe that this court recently had the occasion to consider the applicability of the act of state doctrine in Maldives Airports Co Ltd and another v GMR Malé International Airport Pte Ltd [2013] 2 SLR 449. There, counsel attempted to argue that the court had no jurisdiction to grant an interim injunction pending arbitration involving a foreign sovereign as it would offend the act of state doctrine. The court (at [27]) considered that the act of state doctrine involved a decision of the court on whether it ought to assume or decline jurisdiction and cited Lord Pearson’s comments in Attorney-General v Nissan [1970] AC 179 at 237 (arising in the context of domestic acts of state) that:

  76. The version of the act of state doctrine that was in issue thus seemed to be the non-justiciability aspect – the court will not adjudicate upon matters that turn on the legality of a foreign sovereign act.

  77. [50] The act of state doctrine contended for by the Republic in the present appeals instead appears to be in the nature of the “territorial act of state” alluded to by Lord Wilberforce in Buttes Gas, where the forum court is requested to accept the validity and legal effect of a foreign act of state. However, the Republic’s reliance on the “territorial act of state” is undermined by two basic obstacles. The only act relied on as having a legal effect on title to the interpleaded Funds is the issuance of the Forfeiture Judgment by the Philippine Supreme Court, and the Forfeiture Judgment purported to transfer title to Funds which were located in Singapore and not the Philippines at the material time. The Republic recognised these limitations and urged us to adopt a more pragmatic and flexible approach to the act of state doctrine in the light of the entirely fortuitous presence of the Funds in Singapore.

  78. [51] First, the Republic submitted that the act of state doctrine applied in the present case as the Swiss and Philippine governments had, under the IMAC measures, delegated the determination of entitlement to the Funds to the Philippine courts, and the Forfeiture Judgment gave effect to and brought into fruition these governmental acts. The Republic further cited the Ninth Circuit Court of Appeal decision of In Re PNB as authority for the proposition that a judgment of a foreign court may constitute an act of state under certain circumstances. In Re PNB arose from the same background facts that led to the present proceedings before the Singapore courts. The District Court of Hawaii had ruled that the Forfeiture Judgment was entitled to no deference as it violated due process, and issued an injunction stating that any bank which participated in the release of monies in Singapore pursuant to claims filed by the PCGG would be in contempt of court unless the banking institution appeared to show cause before the District Court of Hawaii. An order to show cause was issued to PNB, and PNB filed a petition before the Ninth Circuit Court of Appeal for a petition of mandamus seeking to restrain the District Court of Hawaii from enforcing its order to show cause. PNB contended that the entire course of proceedings against it had violated the act of state doctrine. The Ninth Circuit Court of Appeal held that the District Court of Hawaii had violated the act of state principle in holding that the Forfeiture Judgment was invalid, and stated (at 773) that:

  79. In ascertaining whether an act was an “act of state”, the court thus appeared to place more emphasis on the character of the act – whether it gave effect to the public interest of the foreign government – rather than the capacity of the actor. The Republic argued that due to the public nature and historical and political significance of the Forfeiture Proceedings, the Forfeiture Judgment should be considered an act of state.

  80. [52] We recognise that the Republic’s argument is not merely that the legal effect of the Forfeiture Judgment conclusively determines proprietary entitlement to the Funds, but is premised on a more subtle contention that the Singapore courts should decline to adjudicate upon title in the Interpleader Proceedings independently as it would in effect frustrate or nullify the purpose and object of the IMAC measures entered into by the Swiss and Philippine governments. However, based on the traditional English common law approach to the act of state doctrine, we are not prepared to accept such an expansive notion of the doctrine or to extend its application to judgments of a foreign court which relate to assets not situated within its jurisdiction. In our view, whether the act of state doctrine is considered in the “territorial act of state” sense or judicial abstention sense, it has never been conceived as additionally mandating a positive approach, viz, that the courts should recognise the legal effect of a foreign judgment or other actions that flow from governmental or legislative acts so as to give effect to the intended consequences of particular acts of state. This court is not merely being asked to accept the validity or legitimacy of acts of the Swiss and Philippine governments or the purported delegation of the determination of entitlement to the Funds, but additionally to accept the legal effect and validity of the Forfeiture Judgment as a necessary concomitant of these acts of state. There is no English or local authority that supports this application of the act of state doctrine.

  81. [53] With all due respect, we also decline to follow the Ninth Circuit Court of Appeal’s holding in In Re PNB that the Forfeiture Judgment may itself constitute an act of state. The act of state doctrine has consistently been applied in England only to acts of foreign legislatures or governmental acts of officials: see Lucasfilm Ltd and others v Ainsworth and another [2012] 1 AC 208 at [87] per Lord Collins of Mapesbury; this is also assumed in Dicey, Morris & Collins, The Conflict of Laws vol 1 (Sweet & Maxwell, 15th Ed, 2012) ("Dicey, Morris & Collins vol 1") at para 5-045 and Jonathan Hill and Adeline Chong, International Commercial Disputes (Hart Publishing, 4th Ed, 2010) at para 2.2.4. The reasoning in In Re PNB was premised on the fact that the Forfeiture Judgment was issued in response to a forfeiture action initiated by the Philippine government pursuant to its statutory mandate to recover property that was allegedly stolen from the treasury; the distinguishing factor was that the judgment gave effect to the public interest of the Philippines. It is not evident to us, however, how the conceptual underpinnings of the act of state doctrine under the common law could justify this extension of the doctrine to cover judicial acts.

  82. [54] The difference between governmental or legislative acts and judicial acts was recently considered by the English Court of Appeal in Yukos Capital Sarl v OJSC Rosneft Oil Co (No 2) [2013] 3 WLR 1329 (“Yukos Capital”). In Yukos Capital, which involved the enforcement in England of an arbitral award against the Russian state-controlled respondent company that had been set aside by a Russian court, it was alleged by the appellant company that the decision of the Russian court had been partial and biased and was part of an overall campaign waged by the Russian state against the appellant. The question before the Court of Appeal was whether the act of state doctrine precluded the forum court from adjudicating upon the conduct of the judiciary of a foreign state. Rix LJ, delivering the judgment of the Court of Appeal, distinguished In Re PNB and held that the act of state doctrine did not apply to judicial acts. The rationale for the difference between legislative and executive acts on the one hand and judicial acts on the other was explained in the following terms at [87]:

  83. [55] We concur with the above observations. Private international law is concerned with both executive/legislative sovereignty and adjudicative sovereignty. The former is covered by the act of state doctrine that applies to governmental and legislative acts; the latter is covered by the rules on recognition, enforcement and public policy that apply to foreign judgments. As explained in Underhill (cited above at [42]), courts should not judge governmental acts as sovereigns are equal on the plane of international law and recourse for grievances must be obtained “through the means open to be availed of by sovereign powers”. The exclusion of judicial acts from the ambit of the act of state doctrine may be explained quite simply on the basis that much of the ground that would be covered by the doctrine vis-à-vis judicial acts is implicitly embodied in the common law conflict of laws rules relating to foreign judgments. A fundamental premise of the rules on recognition is that a foreign judgment is generally conclusive of the matter adjudicated upon and cannot be impeached for an error of fact or law, save for limited exceptions which refer to the international standards of rule of law alluded to by the Court of Appeal in Yukos Capital. These are two distinct concepts that have been designed to deal with acts or decisions emanating from different institutions, and have understandably developed in response to separate considerations. Judgments of a foreign court should not be additionally considered within the rubric of the act of state doctrine.

  84. [56] Second, and more fundamentally, the application of the act of state doctrine is territorially limited. The Republic submitted that the locus of the Funds in Singapore should not preclude the act of state doctrine, and cited the following passage in In Re PNB which merits citing in extenso (at 773):

  85. The Republic also relied on the decision of the Appellate Division of the Supreme Court of New York in Osqugama F Swezey v Merrill Lynch, Pierce, Fenner & Smith, Inc 87 A D 3d 119 (2011) (“Swezey”), where an argument was raised that the Sandiganbayan did not have in rem jurisdiction of assets held by one Arelma Foundation in a New York bank account. The majority of the court observed:

  86. [57] The Republic contended that the theory underlying the territorial limitation to the act of state doctrine was that the foreign state was presumed to be less concerned about the effects of its acts on property outside of its territory than within; however, there may be situations where the considerations underlying the act of state doctrine may still be present when the property is located outside the territorial boundaries of the state. It was argued that the Republic had an underlying governmental interest in the enforcement of its laws over the Swiss Deposits and that the Republic had not intruded into Singapore in exercising its forfeiture jurisdiction over the Swiss Deposits as the presence of the Swiss Deposits in Singapore was the direct result of acts of the Swiss and Philippine governments.

  87. [58] We do not consider that the reasoning of the Ninth Circuit Court of Appeal in In Re PNB or the Appellate Division of the Supreme Court of New York in Swezey may be readily imported into the common law act of state doctrine that presently applies in England and Singapore. First, the finding in Swezey that the Sandiganbayan had jurisdiction over the assets held by the Arelma Foundation was expressly founded on the premise that the Republic’s claim was that the assets belonged to the Republic as a matter of Philippines law at the time of misappropriation. In other words, it was a patrimonial claim (see footnote 7 of the majority’s opinion in Swezey), but this was not the basis upon which the Republic advanced its claim to the Funds before us.

  88. [59] Second, the argument that the Republic had a governmental interest in recovering the ill-gotten gains from corruption that were secreted in bank accounts overseas precisely to place the money beyond the reach of the Republic does have an intuitive appeal. However, the territorial limitation of the act of state doctrine has historically been regarded as an essential element of the doctrine (see Dicey, Morris & Collins vol 1 at para 5-049, citing Empresa Exportadora De Azucar v Industria Azucarera Nacional SA (The "Playa Larga" and "Marble Islands") [1983] 2 Lloyd’s Rep 171 at 194; Yukos Capital at [68]). Where title to property is concerned, the lex situs rule in Rule 137 of Dicey, Morris & Collins, The Conflict of Laws vol 2 (Sweet & Maxwell, 15th Ed, 2012) ("Dicey, Morris & Collins vol 2") also states (at para 25R-001):

  89. [60] There is no principled basis for us to displace either established rule merely because the act purporting to have extraterritorial effect is based on an underlying governmental interest. The classic enunciation of the act of state doctrine was premised on sovereign states possessing absolute sovereign powers with respect to acts within their territorial boundaries that should not be questioned by a foreign court, and “[t]he near universal rule of international law is that sovereignty, both legislative and adjudicative, is territorial, that is to say it may be exercised only in relation to persons and things within the territory of the state” (per Lord Millett in Société Eram Shipping Co Ltd v Cie Internationale de Navigation and others [2004] 1 AC 260 at [80]). We are unable to accept that the invocation of governmental interest, in the form of the public policy of mutual judicial assistance in enforcing foreign confiscation orders, creates an exception to the territoriality or lex situs rule.

  90. [61] A similar argument was rejected by the English Court of Appeal in Peer International. In Peer International, a Cuban decree purported to assign the United Kingdom copyright in a number of Cuban music works to a Cuban entity, and the issue before the court was whether the decree was effective to divest the original owner of the copyright by reason of a positive public policy exception to the lex situs rule. The Cuban decree was purportedly aimed at reasserting Cuban control over intellectual property rights that had been exploited by foreign companies, and it was argued that the decree was consonant with both English and international concepts of public policy. After reviewing the old English authority of Lorentzen v Lydden and Company, Limited [1942] 2 KB 202 which had held that a foreign wartime decree for the requisition of property could be recognised and given effect to even if the property was located beyond the territorial boundaries of the foreign country, Aldous LJ concluded that the case had been wrongly decided and observed at [46]:

  91. Mance LJ also considered (at [65]) that there was “little basis for elevating public policy to a positive connecting factor overriding the law of the situs” and that to do so would create confusion and uncertainty. We respectfully adopt these reasons, and would add in this regard that Singapore, as the situs of the Funds at the material time, regulates the proprietary incidents of the Funds and must itself determine whether the exercise of the forfeiture jurisdiction by the Sandiganbayan constituted an intrusion into Singapore. The presence of a governmental interest of a foreign state cannot displace our established domestic property law principles or established rules of private international law based on territorial jurisdiction.

  92. [62] Further, as Prof Yeo astutely observed, the focus of the Ninth Circuit Court of Appeal in In Re PNB on the underlying governmental interest of the Republic is unsurprising in the light of the choice of law jurisprudence in the United States, which has departed from the traditional common law approach and now focuses on a state interest analysis, viz, a balancing of factors including the policy of the forum and the policies of interested states and the relative interests of these states in the determination of the issue (see §6(2) of the Restatement (Second) of Conflict of Laws). The United States position has been interpreted as elevating the act of state doctrine to a “super choice of law rule requiring the lex fori to apply foreign law as the lex causae where it otherwise would not do so under its own private international law rules” (per Perram J in Habib v Commonwealth of Australia [2010] FCAFC 12 at [38]), which may occasionally displace the law of the situs where governmental interests dictate this. In contrast, there is no such counterpart to the choice of law analysis under the common law in Singapore, which proceeds by a rule-based identification of connecting factors, derived from requirements of justice, that are applicable to the resolution of particular categories of legal issues.

  93. [63] In summary, we conclude that the traditional version of the act of state doctrine, as applicable in Singapore, does not assist the Republic’s case. The court will not question the validity of the IMAC measures entered into by the Swiss and Philippine governments or the delegation of the determination of entitlement to the Swiss Deposits (and hence the Funds) to the Philippine courts, but it remains for the Singapore courts to determine the effect of the Forfeiture Judgment on title to the Funds – and to do so would require this court to apply the common law rules on recognition of foreign judgments.

  94. Recognition of the Forfeiture Judgment

  95. [64] We agree with the Judge that the Forfeiture Judgment is properly characterised as an in rem judgment, which was defined in the following terms by Lord Mance in the Privy Council decision of Pattni v Ali and another [2007] 2 AC 85 (“Pattni”) at [21]:

  96. The above passage was cited with approval by this court in Takako Marakami (executrix of the estate of Takashi Murakami Suroso, deceased) v Wiryadi Louise Maria and others [2007] 4 SLR(R) 565 at [32], and it was also observed (at [30]) that in characterising the nature of a foreign judgment, the Singapore court would consider the substance of the judgment and its intended effect on the parties, whether or not the foreign law recognised the concepts of an in rem or in personam judgment.

  97. [65] It is clear that the Supreme Court of the Philippines had considered that the Forfeiture Proceedings were proceedings against a res, and had framed its orders in the Forfeiture Judgment as a forfeiture of title to the Swiss Deposits instead of a judgment directed against Mrs Marcos or the Marcos Estate personally:

  98. This corresponds with the relevant section of RA 1379, which states as follows:

  99. The Forfeiture Resolution also expressly endorsed an earlier decision of the Philippine Supreme Court in Republic v Sandiganbayan and Macario Asistio, Jr 200 SCRA 667 [1991] that “forfeiture proceedings [were] actions in rem and therefore civil in nature”. The nature of the Forfeiture Proceedings was therefore such that the Forfeiture Judgment was intended to have an in rem effect by deciding on the ownership of the Swiss Deposits.

  100. [66] We now turn to consider the question of whether the Philippine Supreme Court had jurisdiction – in an international sense – to issue an in rem judgment, which question is governed by the common law rules on the recognition of foreign judgments. The rule relating to the recognition of the legal effect of a foreign in rem judgment in the forum court is set out in Rule 47 of Dicey, Morris & Collins vol 1 (at para 14R-108):

  101. It is therefore essential to the recognition of a foreign judgment in rem that the res was situated in that foreign country at the time of the judgment. The Judge considered the authorities of Louis Castrique v William Imrie and another (1869-1870) LR 4 HL 414 and Minna Craig Steamship Company and James Laing v Chartered Mercantile Bank of India London and China [1897] 1 QB 55 in some detail (at [48]–[53] of the Judgment), and it suffices for us to note that that the key principle that may be distilled from these authorities is embodied in Dicey, Morris & Collins’ Rule 47: also see Pattni at [24].

  102. [67] It is not disputed that the situs of the Funds was Singapore as the Funds were held by the Singapore branch of WestLB at the time the Forfeiture Judgment was rendered. Territoriality is a historically entrenched principle that underpins the common law concepts on recognition, and departing from the rules on recognition of in rem judgments would engender considerable difficulties in delineating the scope of an exception for sui generis circumstances. Although the Judge tentatively alluded (at [65] of the Judgment) to a possibility that recognition of judgments in rem may be extended to circumstances where the foreign court has “constructive custody” of the subject matter of the judgment, the Republic did not make full arguments on this point before us, and we do not express any concluded opinion on this. We therefore find that the legal effect of the Forfeiture Judgment, in so far as it purported to vest title to the Funds in the Republic at the time the Funds were located outside of the Philippines, cannot be recognised for the purposes of determining entitlement to the Funds in the Interpleader Proceedings.

  103. [68] We are also of the view that the legal effect of the Forfeiture Judgment cannot, in any event, be recognised as it would be tantamount to the indirect enforcement of a penal law of a foreign country. The relevant principles of law in this regard are well-established and we summarise them as follows:

  104. (a) The courts will not enforce, either directly or indirectly, a penal, revenue or public law of a foreign state: see Rule 3(1) in Dicey, Morris & Collins vol 1 (at para 5R-019).

  105. (b) The question of whether a law is “penal” is to be determined by the lex fori, and while the word “penal” does not lend itself to an accurate or specific definition, the broad test is whether the proceeding leading to the judgment is in the nature of a suit in favour of the State for the recovery of penalties (Huntington v Attrill [1893] AC 150 (“Huntington”) at 155–157).

  106. (c) Whether or not the penal law is part of the criminal code of the foreign country is not conclusive; the forum court must give due consideration to the particular impugned provision of the foreign law (Huntington at 155–156; Attorney-General of New Zealand v Ortiz and others [1984] AC 1 (“Ortiz”) at 33).

  107. (d) Whether the recognition of a foreign law would involve a direct or indirect enforcement of a penal law depends on whether such recognition involves the execution of the penal law (Huntington at 155; Ortiz at 32).

  108. [69] Applying the above principles, we find that RA 1379 was clearly a penal law although the Forfeiture Proceedings were regarded as civil proceedings under Philippines law (see the Forfeiture Resolution at 10). The Republic’s expert witness, Dean Ed Vincent S Albano (“Dean Albano”), strenuously denied that RA 1379 imposed a penalty but said that it instead “[partook] in the nature of a penalty”, and we consider that it is clear that RA 1379 would, under Singapore conflict of laws principles, be classified as a penal law as it is directed towards the forfeiture of the property of public officials that is presumed to have been derived from illegal sources. The property is forfeited in favour of the State and the proceedings are instituted by the State: see ss 2 and 6 of RA 1379. Dean Albano also acknowledged that forfeiture proceedings under RA 1379 are a means of punishing and deterring public officials to advance a State interest.

  109. [70] We are thus unable to recognise the legal effect of the Forfeiture Judgment – made pursuant to RA 1379 – as affecting title to the Funds, as this would in substance be an execution and indirect enforcement of a foreign penal law.

  110. The Green Line Argument

  111. [71] The Green Line Argument was initially run as the secondary string to the Republic’s bow, but following Prof Yeo’s opinion that this court is not precluded from recognising a beneficial entitlement arising under an express trust, the Republic sought to reframe the Green Line Argument as a claim to the Funds under an express trust created by the Escrow Agreements. The Republic argued that the beneficial interest in the Swiss Deposits, which were held on trust by PNB, vested by operation of law in the Republic following the satisfaction of the condition in cl 2(vii) of the Escrow Agreements. Clause 2(vii) of the Escrow Agreements provides as follows:

  112. [72] We will first address the threshold procedural objection of the Human Rights Victims and the Foundations that the Republic should not be permitted to claim a beneficial interest under an express trust as this was not pleaded before the Judge or argued at the first hearing before us on 7 February 2013. The Republic underscored the fact that the parties were not required to file formal pleadings in the Interpleader Proceedings, and that this claim was implicit in its Green Line Argument and had been recognised by this court in Republic of the Philippines (Sovereign Immunity).

  113. [73] As mentioned above (at [22]), the interpleader proceedings were commenced by way of originating summons, and parties were directed by Kan Ting Chiu J on 4 March 2009 to file and exchange Statements of Case and replies to the same, presumably pursuant to O 17 r 5(1)(b) of the Rules of Court (Cap 322, R 5, 2006 Rev Ed) which states as follows:

  114. The parties subsequently obtained directions for discovery and the filing of affidavits of witnesses and experts, and this was followed by an 11 day hearing with cross-examination of witnesses. While strict formal pleadings – in the nature of statements of claim or defences in a writ action – were not filed for the Interpleader Proceedings, we recognise that the objection raised by the Human Rights Victims and the Foundations is not merely technical or pedantic. It appears to us from a perusal of the record that the nature of the evidence adduced during the hearing before the Judge was shaped by the legal characterisation and controverted aspects of the claims as framed by the parties in their Statements of Case. The Judge and parties must, therefore, have proceeded on the assumption that the Statements of Case clearly defined the issues for determination by the court in relation to each competing claim, and we are of the view that the rationale underlying the rules for pleadings on the raising of new arguments on appeal should be given due weight where one party may be taken by surprise by the canvassing of new arguments by the other.

  115. [74] No mention was made in the Republic’s Statement of Case filed below of any claim to a beneficial interest under an express trust; the Statement of Case did not identify the asserted entitlement to the Funds within the parameters of a trust claim, nor did it aver to the facts relating to the Escrow Agreements that gave rise to an express trust, ie, the terms of the Escrow Agreements that evinced an intention of the parties to the Escrow Agreements that the Funds would be held by PNB as trustee. Turning to the Republic’s argument that it must have, in any event, been obvious from this court’s observations in Republic of the Philippines (Sovereign Immunity) that the Republic was, in the alternative, relying on a proprietary claim as a beneficiary under a trust, we do not read the relevant remarks as categorically stating a legal conclusion of the basis of the Republic’s claim. The court noted at [21] that:

  116. The general references to PNB holding the Funds “for [the Republic’s] account or on trust” [emphasis added] should be construed in the specific context of whether the Republic had a sufficient interest in the Funds to assert state immunity. The court’s remarks were merely a possible interpretation of the Republic’s vague assertion that it had “possession and control” of the Funds, and did not define the actual legal basis upon which the Republic had in fact framed its substantive claim of entitlement to the Funds.

  117. [75] For the above reasons, we consider that the Republic had to satisfy the usual requirements for raising a new argument on appeal to advance a claim to a beneficial interest under a trust at this belated stage, viz, this court should be in as advantageous a position as the court below to consider the issue and no new evidence is required to be adduced: see Ang Sin Hock v Khoo Eng Lim [2010] 3 SLR 179 at [61]–[62].

  118. [76] In our judgment, it would be prejudicial to the Human Rights Victims and the Foundations to allow the Republic to assert an additional claim premised on a beneficial interest under an express trust created by the Escrow Agreements. If there were no foreign law elements and the sole legal question was whether the terms of the Escrow Agreements should be construed as creating an express trust, this would possibly have been a pure question of law that this Court could determine. However, the express trust analysis is complicated by the interpolation of multiple layers of choice of laws issues; Prof Yeo’s opinion identified at least two different aspects – the law governing the creation of the express trust and the law governing the operation of the express trust – which raise questions relating to the application and interpretation of foreign law as well as the principles of construction of documents (ie, the Escrow Agreements) that may be governed by foreign law. Satisfactory evidence of these matters was not placed before us.

  119. [77] It is trite that foreign law has to be proven as a matter of fact and that the law of the forum will be applied in default of proof: Dicey, Morris & Collins vol 1 at para 9-002. However, we do not think that it lies in the mouth of the Republic to assert that Singapore law may apply as the default position or that the court may take judicial notice of the relevant aspects of the foreign law (ie, Philippines law), when the very reason why evidence on these matters was not available was because the Republic had failed to argue this point below. Indeed, the Republic took the position that it was “apparent that the Republic had asserted an interest on the grounds of, inter alia, a trust” when the Republic first made a claim to the Funds, yet the Republic only expressly articulated the legal nature of its claim as a beneficial interest under an express trust for the first time after Prof Yeo submitted his opinion. Both the Human Rights Victims and the Foundations also disagreed with the Republic’s submissions on the applicable foreign law and the interpretation of that law, but did not have the opportunity to canvass comprehensive arguments or adduce expert evidence. We therefore consider that it would not be in the interests of justice to grant leave to the Republic to raise this additional point on appeal. As stated earlier in this paragraph, foreign law must be proven as a fact. It is too late now for the Republic to raise a new point which has a foreign law dimension, ie, requiring evidence relating to foreign law governing the point.

  120. [78] For completeness, we note that the original Green Line Argument was premised on the satisfaction of the escrow condition in cl 2(vii) of the Escrow Agreements, but there was no further legal analysis as to why the satisfaction of cl 2(vii) would vest the beneficial interest in the Funds in the Republic. In the absence of a trust, the satisfaction of cl 2(vii) would, at most, give the Republic a contractual claim against PNB under the Escrow Agreements. This was not the Republic’s case.

  121. Conclusion

  122. [79] In the premises, we affirm the Judge’s finding that the Forfeiture Judgment cannot be recognised as having the legal effect of vesting beneficial interest in the Funds in the Republic.

  123. The Human Rights Victims’ claim

  124. [80] The claim of the Human Rights Victims hinges on a single question: did the Chinn Assignment validly pass title to the Swiss Deposits, and hence the Funds, from the Marcos Estate or Foundations to the Human Rights Victims? This question is in turn to be answered by the law that governs the validity and effectiveness of an involuntary judicial assignment purporting to transfer title to a contractual chose in action.

  125. [81] The broad common law methodology for resolving a legal question with a foreign law element involves a three-stage process: (i) the characterisation of the relevant issue; (ii) the selection of the appropriate choice of law rule in the context of the relevant connecting factors; (iii) the identification of a system of law by the application of those connecting factors: see Raiffeisen Zentralbank Österreich AG v Five Star Trading LLC and others [2001] 1 QB 825 (“Raiffeisen Zentralbank”) at [26]; Macmillan Inc v Bishopsgate Investment Trust plc (No 3) [1996] 1 WLR 387 (“MacMillan”) at 391–392.

  126. Characterisation of the issue

  127. [82] In our view, the fundamental flaw in the methodology of reasoning adopted by the Human Rights Victims is one of characterisation, viz, the identification of the functional juridical category within which the relevant issue falls, and not the subsequent selection of an appropriate connecting factor or the identification and application of the foreign law.

  128. [83] The Human Rights Victims submitted that there were two tiers of relationships involved in the assignment of debts:

  129. This distinction is drawn from Rule 135 of Dicey, Morris & Collins vol 2 at para 24R-050, which is based on what was then Article 12 of the Rome Convention on the Law Applicable to Contractual Obligations and said to also represent the common law position:

  130. The Human Rights Victims argued that the question before the court only concerned the first-tier relationship. The second-tier relationship as between the Swiss Banks, the Foundations (as assignor) and Human Rights Victims (as assignee) was but “a matter of history” as the Swiss Banks had ceased to hold the Funds since 1998 and are not claimants in the Interpleader Proceedings.

  131. [84] We are not persuaded by the contention that the proper issue before this court should be framed as whether the Chinn Assignment was valid vis-à-vis the assignor (the Marcos Estate and/or the Foundations) and assignee (the Human Rights Victims). As observed by Staughton LJ in Macmillan at 418A–B:

  132. As the Human Rights Victims seemed to be saying that the formulation of their claim to the Funds did not involve any assertion that they had obtained proprietary rights to the Funds at the time the Chinn Assignment was executed, then in the context of the present Interpleader Proceedings, their claim would be seriously undermined. The only question that the court is concerned with in an interpleader proceeding is the resolution of adverse claims to the res that forms the subject matter of the interpleader, and the entitlement must be founded on a title or proprietary interest: see the decision of this court in Tay Yok Swee v United Overseas Bank and others [1994] 2 SLR(R) 36 at [12]–[15], followed in Thahir Kartika Ratna v PT Pertambangan Minyak dan Gas Bumi Negara (Pertamina) [1994] 3 SLR(R) 312 at [14]–[16]; Singapore Civil Procedure 2013 (Sweet & Maxwell Asia, 2013) at para 17/1/6. Interpleader proceedings are not concerned with a relative in personam entitlement to property, or an oblique jus ad rem in the form of a right relating to another person’s right to the property.

  133. [85] While the Human Rights Victims chose to frame their cause of action based on a hierarchy of relative entitlement to the Funds, we consider that the defining element of the claims of all the parties to the Interpleader Proceedings is the question of title to property – the correct characterisation of the substance of the issue before this court is the effect of the Chinn Assignment on the title to the Swiss Deposits at the time that the judicial assignment allegedly took place, and this falls most appropriately within a proprietary rubric. The common law does not recognise a distinction between a right of property as between the assignor and assignee and a right of property as between the assignee and the rest of the world, and we consider that the Human Rights Victims’ characterisation of the issue as one relating to the first-tier relationship is hardly adequate. If the Human Rights Victims’ contention was that a different characterisation of the proprietary issue ought to apply to the transfer of property in relation to the present matter as only the assignor and assignee are involved in the appeals, we were not referred to any authority that supported this proposition (see the rejection of a similar argument in Glencore International AG v Metro Trading International Inc (formerly Metro Bunkering and Trading Co) (No 2) [2001] CLC 1732 at [30]) and nor do we think that this is the correct characterisation of the issue before us, which involves competing assertions of entitlement to property by parties other than the assignor and assignee.

  134. The relevant connecting factor

The judgment continues past this page. Read the rest at eLitigation.