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Grounds publishedDecided 14 Jul 2011
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High Court

UBS AG v Telesto Investments Ltd and others and another matter

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[2011] SGHC 170Case no. Originating Summons No 1160 of 2010 (Registrar's Appeal No 59 of 2011), Suit No 801/2010 (Registrar's Appeal No 58 of 2011)

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  1. Steven Chong J:

  2. Introduction

  3. [1] The two appeals before me (Registrar’s Appeal No 58 of 2011 and Registrar’s Appeal No 59 of 2011) relate to the issue as to which of the two jurisdictions, ie, Singapore or Australia, is the more appropriate forum to hear and decide the dispute between the parties arising from a customer-banker relationship.

  4. [2] The thrust of the plaintiff’s case in the Singapore proceedings lies in contract where it claims for payment due under various contracts entered with the first and second defendant respectively (see [10], [12] and [17] below). The defendants, on the other hand, have commenced proceedings in Australia against the plaintiff for, inter alia, damages based on “deceptive” or negligent misrepresentation. Counsel for the defendants conceded at the hearing that the defendants’ claim in Australia could essentially be mounted as a defence to the plaintiff’s claim in Singapore. In other words, the Singapore proceedings mirror the Australian proceedings. However, the defendants claimed that based on certain perceived advantages arising from some Australian legislation, ie, the Australian Securities and Investments Act 2001 (Cth) (“ASIC Act”), or alternatively, ss 68 and 72 of the Fair Trading Act 1987 (NSW), or alternatively, ss 99–100 of the Fair Trading Act 1989 (Qld) (“the FTAs”) (collectively known as the “Australian Acts”), their prospects of success in Australia are purportedly enhanced.

  5. [3] This decision will, inter alia, examine whether this factor of perceived juridical advantage, even if true, would be sufficient to displace the natural forum if it is determined to be Singapore instead of Australia. In addition, I will also consider the issue of whether the natural forum of a contractual claim can be displaced by the natural forum of a tort of misrepresentation, on the assumption that the natural fora for the contractual and misrepresentation claims are different, when the latter is in essence a defence to the contractual claim. Finally, I will examine the interplay of the principles governing stay applications with those governing anti-suit injunctions to determine whether such an injunction should be granted even if the stay is refused.

  6. Background Facts

  7. Dramatis Personae

  8. [4] The plaintiff in Suit No 801 of 2010 (“S 801/2010” or the “Singapore Proceedings”) and Originating Summons No 1160 of 2010 (“OS 1160/ 2010”) is UBS AG. Although UBS AG is named as the plaintiff in both S 801/2010 and OS 1160/2010, parties have made submissions by reference to UBS Singapore, which is the Singapore branch of UBS AG and carries on business in Singapore. For the avoidance of doubt, this judgment will employ the term “UBS AG (Singapore)” whenever the Singapore branch of UBS AG is referred to.

  9. [5] Telesto Investments Limited (“Telesto”) is an underlying company of the Dog Star Trust which is a purpose trust registered in Jersey, the Channel Islands. On 3 December 2007, Telesto opened an account, ie, Account No [xxx] (“the Telesto account”, “its account” or “the account” as the case may be) with UBS AG (Singapore).

  10. [6] Scott Francis Tyne (“Mr Tyne”), on the other hand, is a director and the controlling mind of Pole Star Funds Management Pte Ltd (“Pole Star”) which, at all material times, was in charge of Telesto’s discretionary investment. Mr Tyne was, at all material times, identified by Telesto (in the minutes of its directors’ meeting) as the sole beneficial owner of the assets in the account. He was also the guarantor of all the obligations and liabilities of Telesto owing to UBS AG (Singapore), pursuant to a continuing guarantee and indemnity dated 26 September 2008 (“the Guarantee”) in favour of UBS AG (Singapore).

  11. [7] Telesto and Mr Tyne are the first and second defendants of both S 801/2010 and OS 1160/2010.

  12. [8] ACN 074 971 109 Pty Ltd, the third defendant in OS 1160/2010, is the trustee of the Argot Unit Trust (“Argot”) which is also a customer of UBS AG, having opened an account, ie, Account No [xxx] (“the Argot account”) on or about 4 June 2010 with UBS AG (Singapore). Mr Tyne was, at all material times, the director of Argot and the sole beneficial owner of the assets under the Argot account. Therefore, at all material times, the common denominator of Telesto, Pole Star and Argot was Mr Tyne. The three defendants are hereinafter collectively referred to as “the defendants”.

  13. [9] As an application for a stay of proceedings and/or for an anti-suit injunction typically involves an examination of the connections that the relevant issues of the dispute bear to each jurisdiction for the determination of the natural forum, a careful and detailed analysis of the facts giving rise to the present dispute is essential.

  14. The events leading up to the commencement of S 801/2010

  15. (1) Telesto’s account and the relevant account documents

  16. [10] Telesto’s account was booked in Singapore and was serviced by UBS AG (Singapore). The account is subject to the terms and conditions (“T&Cs”) of the following documents, collectively referred to as the “Account Agreement”:

  17. [11] Documents (a) to (d) above were issued by UBS AG (Singapore) and were signed by the directors or authorised signatories of Telesto in Jersey. Documents (e) and (f) are the standard T&Cs as incorporated in the Account Agreement by, inter alia, the Account Mandate.

  18. (2) Telesto’s facilities provided by UBS AG (Singapore)

  19. [12] UBS AG (Singapore) extended to Telesto, by way of a Credit Services Notification Letter (“CSNL”) dated 12 December 2007 which was subsequently revised by CSNLs dated 13 February 2008, 1 June 2008 and 1 August 2008, the following facilities:

  20. It is not disputed that Telesto executed the CSNLs in respect of the above facilities (“the Facilities”) and is bound by the T&Cs set out therein.

  21. [13] The following are governed by Singapore law and contain (non-exclusive) jurisdiction clauses in favour of Singapore:

  22. (a) Pursuant to cl 19.1 of the account T&Cs (General Conditions), the account and Facilities are “governed by and construed in accordance with the law of the country in which the relevant Account is booked [ie, Singapore law] and [Telesto] irrevocably and unconditionally submits to the non-exclusive jurisdiction of the courts of [Singapore]”;

  23. (b) Pursuant to paras 27.1 and 27.2 of the Guarantee, the Guarantee is “governed by and to be construed in all respects in accordance with, the laws of Singapore. [Mr Tyne] hereby submits to the non-exclusive jurisdiction of the Singapore courts and such other jurisdictions as [UBS AG] may deem fit”.

  24. (3) The events leading to the Standstill Agreement between UBS AG (Singapore) and Telesto

  25. [14] Pursuant to the CSNLs, Telesto utilised the facilities to, inter alia, purchase various investments (“the Investments”) for its account. The Investments were secured by Telesto by way of a Charge Over Asset which, in turn, included the Investments and all other assets in the account (“the Collateral”). Notably, the Investments included bonds issued by certain Kazakhstan financial institutions, including Bank Turan-Alem (“BTA Bank”) and Astana Finance (“Astana”) (collectively the “Kazakh Bonds”).

  26. [15] It is undisputed that UBS AG (Singapore) had sent Telesto periodic statements and confirmations reflecting the purchase of the Investments and other transactions carried out under the Account Agreement. The periodic statements and confirmations were retained by UBS AG (Singapore) in Singapore at its Retained Mail unit pursuant to Telesto’s mailing instructions of 13 November 2007 when it signed the Account Mandate. Telesto did not dispute the statements or confirmations at any material time. Pursuant to cl 2.1 of the account T&Cs, Telesto undertook to inform UBS AG (Singapore) promptly and in any event, within 14 days from the date of such confirmation, and, within 90 days from the date of such statements (as applicable), of any discrepancies, omissions, credits or debits wrongly made to or inaccuracies or incorrect entries in the account or the contents of each confirmation or statement or the execution of any order. Failing which, upon the expiry of the 14 days, UBS AG (Singapore) may deem Telesto to have approved the original statements as sent by UBS AG (Singapore) to Telesto and in which case, Telesto shall be deemed conclusively to have accepted all the matters contained in such confirmation and statement without any further proof that the account is, and all entries therein and the execution of all the transactions are correct. Further, UBS AG (Singapore) shall be free from all claims in respect of the Account and all such transactions save for unauthorised transactions which have resulted from the forgery, fraud or negligence of UBS AG (Singapore) and/or any of its employees. UBS AG (Singapore), relying on RBS Coutts Bank Ltd v Shishir Tarachand Kothari [2009] SGHC 273, submitted that in the light of cl 2.1 of the account T&Cs, Telesto is deemed to have agreed to the Investments.

  27. [16] In or about September 2008, the value of the Collateral decreased due to market deterioration. Consequently, a margin shortfall occurred in the account. In or around 24 September 2008, Mr Tyne travelled to Singapore to, inter alia, meet with the representatives of UBS AG (Singapore) to discuss how to deal with the margin shortfall. Mr Tyne requested UBS AG (Singapore) not to liquidate the Collateral and agreed to furnish additional security by way of, amongst other things, the Guarantee.

  28. [17] Mr Tyne executed the Guarantee in Singapore on or about 26 September 2008. UBS AG (Singapore) and Mr Tyne, who was acting behalf of Telesto, further agreed to negotiate a standstill agreement on the basis that in return for UBS AG (Singapore) not exercising its right to (amongst other things) liquidate or request for more collateral, Telesto would arrange for additional collateral and repay the Total Liabilities, ie, “all moneys, obligations and liabilities now or at any time due, owing or incurred by [Telesto] to [UBS AG], anywhere, whether on the account, or in respect of the Facilities or any instructions or otherwise, in whatever manner, and actual or contingent, present or future, and whether as principal debtor or as surety, including (but not limited to) all principal moneys, interest at such rates as may from time to time be payable by [Telesto], fees, charges and all expenses” (see cl 1 of the account T&Cs (General Conditions)).

  29. [18] Pursuant to cl 11.2 of the account T&Cs, Telesto was to maintain at all times sufficient Collateral for the Facilities as determined by UBS AG (Singapore) in its sole discretion. UBS AG (Singapore) may, from time to time, require additional collateral to meet the required margin for the Facilities (“Required Margin”). As at 28 October 2008, there remained a shortfall of US$ 28,159,607 in the Required Margin.

  30. [19] As no standstill agreement was reached with Mr Tyne, UBS AG (Singapore) issued Telesto a Notice of Margin Call dated 29 October 2008 requesting that Telesto “immediately deposit additional Collateral, or, if applicable, terminate or deal with transactions booked in [Telesto’s] account, in each case in order to restore the Required Margin” (“the Margin Call”). Unfortunately, Telesto did not meet the Margin Call. Under cll 13.2 and 13.3 of the account T&Cs (General Conditions), the Total Liabilities became immediately due and payable. Telesto and Mr Tyne, however, continued to request UBS AG (Singapore) not to liquidate the Collateral or make further margin calls or call for further collateral. The negotiations for a standstill agreement continued.

  31. [20] On or about 22 December 2008, UBS AG (Singapore) wrote to Mr Tyne stating that “the Required Margin not been re-established[,] [a]s a result thereof, a Default Event has occurred and consequently, the full amount of the Total Liabilities became immediately due and payable to [UBS AG (Singapore)]”. However, “in recognition of [Mr Tyne’s] full co-operation to date and provided that (a) there [was] no default in any of the Collateral; and (b) there [was] no shortfall in the interest due under the account verses coupon payments under the Collateral, [UBS AG (Singapore) would] suspend enforcement of its rights under the Account Agreement for the time being”. In the meantime, negotiations to finalise the terms of a standstill agreement continued.

  32. [21] On or about 23 April 2009, UBS AG (Singapore) proposed in writing the terms of a standstill agreement. Telesto was to confirm it by signing and returning a copy of the letter to UBS AG (Singapore). However, this proposed standstill agreement was not signed by Mr Tyne on behalf of Telesto.

  33. [22] On or about 28 April 2009, BTA Bank defaulted on two of its debt facilities which, in turn, triggered a default under the Collateral which was partly constituted of BTA Bank bonds as defined below:

  34. [23] UBS AG (Singapore), by a letter dated 6 May 2009, demanded that Telesto make payment of €6.8 million and £2.35 million which represented the notional value of the BTA Bank bonds no later than 11 May 2009. This was because:

  35. (a) Telesto had not returned a countersigned copy of the proposed standstill agreement.

  36. (b) BTA Bank’s default had led to a default of the Collateral.

  37. (c) UBS AG (Singapore)’s understanding or agreement with Telesto to defer the enforcement of its rights was contingent on the absence of default under any of the Collateral including BTA Bank bonds.

  38. [24] By a separate letter dated 6 May 2009 to Mr Tyne, UBS AG (Singapore) called on the Guarantee.

  39. [25] Telesto and Mr Tyne failed to make any payment. They informed UBS AG (Singapore) that they would not be able to make up for the expected default by BTA Bank. Instead, they asked UBS AG (Singapore) to resume negotiations for a standstill agreement and to accept alternative collateral. UBS AG (Singapore) agreed to suspend enforcement of its rights under the Account Agreement for the time being.

  40. [26] A standstill agreement was finally entered into between UBS AG (Singapore) and Telesto, the terms of which are set out in the letter from UBS AG (Singapore) dated 14 December 2009. The letter of offer was signed by UBS AG (Singapore) in Singapore. It was countersigned and accepted in Jersey by Telesto on 31 December 2009 (the “Standstill Agreement”).

  41. (4) The Standstill Agreement

  42. [27] Under the Standstill Agreement, in consideration of UBS AG (Singapore) agreeing not to liquidate the Collateral or to make further margin calls or call for further Collateral until 31 March 2011 or an event of default, whichever is the earlier, under the Account Agreement, Telesto agreed, inter alia, to the following conditions (“the Conditions”):

  43. (a) Apply all cash flows generated by the Collateral towards the repayment of the Total Liabilities (as the term is defined in the Account Agreement);

  44. (b) Provide and/or procure the following in favour of UBS AG (Singapore) in support of the Total Liabilities by 31 December 2009:

  45. (i) the deposit and custody of all shares in one XS Platinum Inc held by Telesto (“Share Deposit”);

  46. (ii) an assignment of all proceeds from an action in the Supreme Court of Victoria in which Argot had an interest (“Litigation Proceeds”) in the form of a Deed of Assignment by way of Mortgage (“Deed of Assignment”);

  47. (iii) a letter of undertaking from Argot (“Letter of Undertaking”); and

  48. (iv) an overview of the assets and liabilities of Mr Tyne and his beneficially owned entities, duly signed by Mr Tyne.

  49. (c) For the time period starting on 19 January 2009 until 18 July 2009, pay interest at a rate of two percent (2%) per annum above UBS AG (Singapore)’s cost of funds. Thereafter, and until further notice, the applicable rate of interest will be reduced to 1.5% per annum above UBS AG (Singapore)’s cost of funds.

  50. [28] The Standstill Agreement further reserved the rights of UBS AG (Singapore) under, inter alia, the Account Agreement and provided that the Standstill Agreement shall terminate upon the occurrence of, inter alia, any of the following events of default:

  51. (a) Telesto fails to meet the Conditions (“Event of Default 1 under the Standstill Agreement”);

  52. (b) Telesto or Argot fails to comply with any of the obligations pursuant to the Letter of Undertaking (“Event of Default 3 under the Standstill Agreement”); or

  53. (c) In the reasonable opinion of UBS AG (Singapore), a material adverse change occurs in Telesto’s financial condition or operating environment or any event occurs or circumstances arise which causes UBS AG (Singapore) to believe that Telesto may not or may be unable to perform or comply with any one or more of its obligations (“Event of Default 5 under the Standstill Agreement”).

  54. [29] On or about 31 December 2009, pursuant to the Standstill Agreement, UBS AG (Singapore), Telesto and Argot entered into a Deed of Assignment under which, inter alia, Argot agreed to assign the Litigation Proceeds as security for Telesto’s liabilities under the account.

  55. [30] On or about 28 January 2010, pursuant to the Standstill Agreement, Mr Tyne executed a Letter of Undertaking on behalf of Argot. Under this Letter of Undertaking:

  56. (a) Argot undertook to open an account (ie, the Argot account) with UBS AG (Singapore) as soon as practicable but in any event before 31 December 2009 [sic].

  57. (b) Argot undertook to charge all and any assets held within the Argot account as a continuing security in favour of UBS AG (Singapore) to secure Telesto’s liabilities to UBS AG (Singapore) as soon as practicable but in any event before 31 December 2009 [sic].

  58. (c) Argot agreed to apply the Litigation Proceeds directly to the Argot account towards repayment of Telesto’s liabilities.

  59. [31] On or about 14 May 2010, Mr Tyne caused the Argot account to be opened. The Argot account was activated by UBS AG (Singapore) on 4 June 2010. Mr Tyne was the only authorised email user and representative of the Argot account. As with Telesto’s account, the Argot account is booked in, and serviced by UBS AG (Singapore). It is subject to, inter alia, the express terms and/or conditions of the account and is governed by Singapore law and subject to the exclusive jurisdiction of the Singapore courts.

  60. (5) The events of default

  61. [32] Between 31 December 2009 and October 2010, the following events of default under the Standstill Agreement occurred:

  62. (a) Telesto failed to provide and/or procure the Share Deposit. This constituted an Event of Default 1 under the Standstill Agreement (see [28] above).

  63. (b) Argot failed to execute a charge over all or any assets held within the Argot Account. The Argot Account remained an unfunded account (see Statement of Account as of 5 November 2010). This constituted an Event of Default 3 under the Standstill Agreement (see [28] above).

  64. [33] Telesto’s Australian solicitors, Messrs Eakin McCaffery Cox, by a letter dated 8 October 2010 (“Eakin’s letter”), made various claims against UBS AG in relation to, inter alia, the Kazakh Bonds. By reason of Eakin’s letter, UBS AG (Singapore) formed the opinion that Telesto may not or may be unable to perform or comply with any one or more of its obligations. This constituted an Event of Default 5 under the Standstill Agreement.

  65. [34] On or about 11 November 2010, UBS AG issued a conclusive certificate of indebtedness dated 11 November 2010 (“UBS AG’s certificate”) certifying, amongst other things, that “by reason of [Events of Default 1, 3 and 5 under the Standstill Agreement], UBS AG formed the reasonable opinion that events and circumstances had arisen which caused UBS AG to believe that Telesto may not (or may be unable to) perform or comply with any one or more of their obligations under the Standstill Agreement”. By reason of the Events of Default 1, 3 and 5, the Standstill Agreement was terminated.

  66. The Singapore Proceedings

  67. [35] By a letter dated 15 October 2010, UBS AG (Singapore) furnished a notice of termination of the Standstill Agreement to Telesto in the light of the occurrence of the Events of Default 1, 3 and 5 under the Standstill Agreement, and that the Total Liabilities (as at 14 October 2010) in the sum of US$12,619,499.56 was immediately due and payable, and demanded payment.

  68. [36] By a letter dated 15 October 2010, UBS AG (Singapore) also demanded from Mr Tyne, as guarantor under the Guarantee, payment of the Total Liabilities as at 14 October 2010.

  69. [37] To the best of the knowledge of UBS AG (Singapore), no Litigation Proceeds have to-date been paid to Argot. Therefore, UBS AG (Singapore) only demanded payment from Telesto and Mr Tyne. Neither has made payment to date.

  70. [38] In the light of the foregoing, on 15 October 2010, UBS AG commenced S 801/2010 against Telesto and Mr Tyne, inter alia:

  71. (a) to recover the Total Liabilities; and

  72. (b) for a declaration that the defendants are estopped from asserting, and/or have compromised, any claims or defences they may have arising out of, or in relation to, the Investments and/or Total Liabilities, including but not limited to, the acquisition or management of the Investments and/or the Total Liabilities.

  73. [39] The writ was served on Telesto in Jersey on 5 November 2010 and on Mr Tyne in Sydney (through his solicitor from Eakin McCaffery Cox) on 14 December 2010.

  74. The Australian Proceedings

  75. [40] On 2 November 2010, after the commencement of the Singapore Proceedings, the defendants filed Summons and Commercial List Statement proceedings number 2010/363808 in the Supreme Court of New South Wales against UBS AG’s branch in Australia (“the Australian Proceedings”). The defendants then filed an Amended Summons and Amended Commercial List Statement (“the Australian pleadings”) on 17 December 2010.

  76. [41] From the defendants’ affidavits filed in the Singapore Proceedings as well as their Australian pleadings, the defendants have sought to deny liability on several fronts, inter alia, as below:

  77. (a) First, they alleged that in or around mid 2007, Mr Tyne, acting on behalf of Pole Star, advised UBS AG that Pole Star was the investment manager of Telesto’s investment portfolio but had limited authority and required express authority of Telesto to invest in securities other than “investment grade” debt securities. This conversation purportedly took place over the phone between Mr Tyne (acting on behalf of Pole Star) and one Mr Steven Betsalel (“Mr Betsalel”) who was an officer of UBS AG. It was claimed that Mr Betsalel had advised Mr Tyne that UBS AG would procure Telesto to execute documents authorising Pole Star to operate the accounts, credit facilities and trading lines with UBS AG on behalf of Telesto;

  78. (b) Secondly, they alleged that the Kazakh Bonds were purchased as a result of certain misrepresentations made orally by Mr Betsalel and one Mr Edward Farrell (“Mr Farrell”), on behalf of UBS AG, to Mr Tyne (on behalf of Pole Star) and Telesto by way of a number of phone calls made in late 2007;

  79. (c) Thirdly, they alleged that UBS AG owed fiduciary duties to Telesto in relation to the account and breached the same by acting as advisers to BTA Bank. BTA Bank defaulted on payment of coupons owed to bond holders, including those under the BTA Bank bonds owned by Telesto. They claimed that the decision of BTA Bank to default was on the advice given by or with the concurrence of UBS AG.

  80. [42] In the Australian Proceedings, the defendants claim, inter alia:

  81. (a) A declaration that the investment transactions purportedly entered into between 14 January 2008 and 11 February 2008, (ie, the Kazakh Bonds) were entered into by UBS AG (Singapore) without Telesto’s authority such that they were not transactions done by or on behalf of Telesto.

  82. (b) An order that, each of the following, viz, the Facilities, Mortgage, the Guarantee, the Revision Letter (ie, the Standstill Agreement), the Trust Mortgage (ie, the Deed of Assignment) and the Letter of Undertaking, be declared void ab initio; or alternatively be declared void from a date to be determined by the court; or alternatively UBS AG be restrained from taking any action to enforce any right or entitlement arising under any such instrument.

  83. (c) Damages.

  84. (d) Damages or compensation pursuant to ss 12 GF or 12 GM of the ASIC Act (Cth), or alternatively, ss 68 and 72 of the Fair Trading Act 1987 (NSW) or alternatively ss 99–100 of the Fair Trading Act 1989 (Qld).

  85. (e) Equitable compensation.

  86. [43] The writ for the Australian Proceedings was served on UBS AG (Australia)’s office in Sydney, Australia on 3 November 2010 prior to the service of the Singapore writ on Telesto in Jersey on 5 November 2010. The slight delay in the service of the Singapore writ, given that it was filed on 15 October 2010, was probably due to the fact that Telesto’s previous solicitors in Singapore, Messrs CTLC Law Corporation, did not agree to accept service on Telesto’s behalf. Thus, UBS AG (Singapore) had to apply to serve the writ on Telesto out of jurisdiction.

  87. The Stay Applications and the Anti-Suit Injunction

  88. [44] On 11 November 2010, UBS AG (Singapore) filed an application for an anti-suit injunction in OS 1160/2010 against the defendants in respect of the Australian Proceedings.

  89. [45] On 21 December 2010, Telesto filed Summons No 5910/2010 to stay the Singapore Proceedings in favour of the Australian Proceedings. On 10 January 2011, Mr Tyne filed Summons No 83/2011 to stay the Singapore Proceedings in favour of the Australian Proceedings (collectively “the stay applications”).

  90. [46] All three applications were heard by an Assistant Registrar (“the AR”) on 21 February 2011. The AR dismissed Telesto and Mr Tyne’s stay applications and granted an anti-suit injunction against the defendants from continuing the Australian Proceedings.

  91. Registrar’s Appeal No 58/2011 and Registrar’s Appeal No 59/2011 (“the Appeals”)

  92. [47] Registrar’s Appeal No 58/2011 is an appeal brought by Telesto and Mr Tyne against the decision of the AR to dismiss their stay applications.

  93. [48] Registrar’s Appeal No 59/2011 is an appeal brought by the defendants against the AR’s decision to grant an anti-suit injunction in OS 1160/2010 against them from continuing the Australian Proceedings.

  94. [49] At the start of the hearing of the Appeals, I directed counsel for the defendants, Mr Eddee Ng (“Mr Ng”) to first proceed with his appeal in relation to the stay applications brought by Telesto and Mr Tyne. This was because, in the present circumstances where two fora have been chosen as the place of litigation by the plaintiff (on one hand) and Telesto and Mr Tyne (on the other), if I decide that stay of the Singapore Proceedings should be granted on the ground that Singapore is not the more appropriate forum to try the matter, the appeal against the AR’s decision to grant anti-suit injunction would, logically, be allowed. The converse, however, is not true. The fact that Singapore is the natural or more appropriate forum to hear the dispute per se does not mean that the anti-suit injunction must necessarily be ordered. There are other requirements for UBS AG to establish, eg, that the Australian Proceedings are vexatious and/or oppressive, to justify the granting of an anti-suit injunction.

  95. RA 58/2010: The appeal against the refusal of the stay applications

  96. [50] Parties were generally ad idem as regards the principles governing the stay applications on the basis of forum non conveniens, viz, the principles laid down in Spiliada Maritme Corporation v Cansulex Ltd [1987] AC 460 (“Spiliada”). Where parties expectedly differ is when applying the test, they arrived at opposing conclusions as to whether Singapore or Australia is clearly or distinctly the more appropriate forum.

  97. [51] It was common ground between the parties that Spiliada laid down a two-stage test to determine whether a stay of proceedings ought to be granted:

  98. (a) Stage one: The legal burden of proof falls on the defendant to demonstrate that there is some other available forum, having competent jurisdiction, in which the case may be tried more suitably for the interest of all parties and the ends of justice. If the court is satisfied, at this stage of the inquiry, that there is no other forum which is clearly and distinctly more appropriate than Singapore to try the matter, it will ordinarily refuse a stay.

  99. (b) Stage two: If the Singapore court is satisfied that there is another available forum which is more appropriate to try the matter, the burden is then on the plaintiff to show special circumstances by reason of which justice requires that the stay of the Singapore Proceedings should nonetheless be refused.

  100. Stage one of the Spiliada test

  101. [52] Under stage one of the Spiliada test, the defendants bear the burden of proving that Australia is clearly or distinctly the more appropriate forum to try the dispute between the parties. In this regard, the court would invariably examine the connecting factors which the dispute bears to each of the two competing jurisdictions. These factors include:

  102. (see Rickshaw Investments Ltd and another v Nicolai Baron von Uexkull [2007] 1 SLR(R) 377 (“Rickshaw”) at [15] and [23]).

  103. [53] The list of connecting factors is not closed and much will depend upon the precise factual matrix of each case (see JIO Minerals FZC and others v Mineral Enterprises Ltd [2011] 1 SLR 391 (“JIO Minerals”) at [41]). However, as the threshold is that the natural forum is prima facie clearly more appropriate to try the case, connections which have no or little bearing on the adjudication of the issues in dispute between the parties will carry little weight (see Halsbury’s Laws of Singapore on Conflicts of Law, Vol 6(2) (Lexis Nexis, 2009) (“Halsbury’s Laws of Singapore on Conflicts of Law”) at para 75.090 as cited in JIO Minerals at [41]).

  104. [54] In considering the natural forum of the dispute, it is not the mere personal or geographical connections that are decisive as there must be some legal significance in each of the connecting factors. As such, the numerical preponderance of personal or geographical connections per se is not by any means conclusive (see Yeoh Poh San & another v Won Siok Wan [2002] SGHC 196 at [17]–[18]). Each connecting factor cannot be analysed in vaccuo but must instead be examined in the context of the issues in dispute between the parties.

  105. [55] With these settled principles in mind, it is perhaps apposite to set out the key issues that arise from both the Singapore and the Australian Proceedings as it would assist in the determination of the natural forum. Given that the defendants have not filed their Defence in the Singapore Proceedings, the Australian Proceedings are relevant insofar as it provides a clear indication of the defendants’ position as regards their potential defence and their (counter)claim(s) against UBS AG.

  106. (1) Jurisdiction in which cause of action accrued and the applicable law of the issues in dispute

  107. [56] It is clear that UBS AG’s claims in the Singapore Proceedings against the defendants are made pursuant to various contractual documents:

  108. Noteworthy is that Telesto’s account with UBS AG (Singapore) from which the Total Liabilities (as at 14 October 2010) became due was booked in Singapore and serviced by officers of UBS AG (Singapore). Each of the contractual documents was issued by UBS AG (Singapore).

  109. [57] It is immediately apparent (see [42]–[44] above) that the issues raised by the defendants in the Australian Proceedings are essentially in the nature of defences to avoid liability to the claims brought by UBS AG in the Singapore Proceedings. By juxtaposing the respective positions of UBS AG and the defendants, it is clear that the ultimate issue hinges upon whether UBS AG is entitled to repayment of the Total Liabilities (as at 14 October 2010) under the contractual documents (listed at [10], [12], [17], [27] and [28] above) or whether the defendants are entitled to rescission or damages in respect of the investment in the Kazakh Bonds. Simply put, they are two sides of the same coin.

  110. [58] In response to each of the points raised by the defendants in the Australian Proceedings (see [41]–[42] above), counsel for UBS AG, Mr Hri Kumar (“Mr Kumar”), relied on provisions of the contractual documents to address them. Specifically, Mr Kumar submitted that by reason of the conclusive evidence clause, the deemed acceptance of the statements and confirmation (see [15] above), and to the execution of the Standstill Agreement, the defendants have either ratified the alleged unauthorised transactions and/or have waived their rights to challenge the Kazakh Bonds. For instance, it was Mr Kumar’s submission that under the terms of the T&Cs of the Risk Disclosure Statement, UBS AG is not responsible for any advice or recommendations it might have given to Telesto in relation to any Investments, including the Kazakh Bonds. In addition to that, Telesto had agreed that UBS AG was not acting as a fiduciary and/or adviser in respect of the Kazakh Bonds. The relevant T&Cs can be found in the following documents:

  111. In other words, UBS AG’s causes of action against Telesto and Mr Tyne respectively were accrued in Singapore by virtue of the account and Guarantee which gave rise to the customer-banker relationship between the parties being operated and serviced in Singapore.

  112. (2) The existence of non-exclusive jurisdiction clauses in favour of Singapore

  113. [59] Mr Kumar submitted that several non-exclusive jurisdiction clauses in favour of Singapore can be found in the Account Agreement:

  114. It was his submission that the presence of jurisdiction clauses in favour of Singapore, albeit non-exclusive, in the bulk of the contractual documentation clearly evinced an intention on the part of the parties that any dispute arising from the Account Agreement should be heard in Singapore.

  115. [60] Mr Ng, on the other hand, submitted that the focus of the defendants’ case on the lack of authority issue is based on the understanding/agreement reached between Mr Betsalel and Mr Tyne (whereby Mr Betsalel allegedly represented that he would procure the necessary authorisation from Telesto for Pole Star such that the latter could purchase non-investment grade securities) is independent of any contractual documents entered into between UBS AG (Singapore) and Telesto and Mr Tyne. Therefore the existence of the non-exclusive jurisdiction clauses is irrelevant. Mr Ng pointed out that the defendants’ claim against UBS AG for misrepresentations (for instance, the status of Kazakhstan banks) and for breach of fiduciary duties are matters which fall outside any contractual documents entered into between the parties. In fact, he submitted that all of the defendants’ claims, in any event, fell outside the ambit of the composite governing law and non-exclusive jurisdiction clause in the Account Agreement. For reasons as explained in more detail in [79]–[81] below, these issues raised by the defendants cannot justifiably be detached from its contractual context.

  116. (3) Choice of law clauses

  117. [61] The law chosen by the parties to govern their contractual relationship is also a significant factor in determining the appropriate forum. In Rickshaw, the Court of Appeal observed at [42]:

  118. [62] In this regard, it is beyond debate that the governing law of the contractual documents is Singapore law:

  119. [63] It is noteworthy that, save for Argot’s Letter of Undertaking which stipulates Victorian law as the governing law, none of the other material contractual documents provide for Australian law as the governing law.

  120. [64] Although the Standstill Agreement did not expressly stipulate any governing law, I agree with Mr Kumar that it would also be governed by Singapore law. As expressed by the Court of Appeal in JIO Minerals at [79]:

  121. It bears mentioning that the Standstill Agreement is not a standalone contract. Instead, it was executed to supplement and/or modify the rights and obligations of the parties under the Account Agreement. In fact, it was expressly provided in cl 7 of the Standstill Agreement that “the arrangements set forth [t]herein... are without prejudice to [UBS AG (Singapore)’s] rights under the Account Agreement, which remained reserved”. In my view, it is clear that the parties intended the Standstill Agreement to be governed by the same law which governs the Account Agreement, ie, Singapore law, given the origin and purpose of the Standstill Agreement.

  122. [65] In any event, it is also clear that Singapore law has the closest and most real connection with the Standstill Agreement. First, some of the negotiations for the Standstill Agreement took place in Singapore. Secondly, the place of performance for the defendants’ obligations under the Standstill Agreement, such as the Share Deposit and application of the cash flows generated by the Collateral towards repayment of the Total Liabilities, are to take place in Singapore. Thirdly, the Guarantee, which was entered into pursuant to the Standstill Agreement, was executed by Mr Tyne in Singapore. Finally, the Letter of Undertaking executed by Argot pursuant to the Standstill Agreement provided for the exclusive jurisdiction of Singapore.

  123. [66] In the face of the obvious contractual connections of the claim to Singapore, it was not surprising that Mr Ng conceded during the hearing of the Appeals that Singapore was clearly the natural forum for the determination of UBS AG’s claims under the various contractual documents against the defendants.

  124. (4) Location and compellability of witnesses

  125. [67] From the perspective of UBS AG (Singapore)’s contractual claim, all its witnesses to establish its claim are located in Singapore. On the other hand, the principal issues raised by the defendants centre on questions of fact which revolve around certain conversations between Mr Tyne and Mr Betsalel/Mr Farrell. To rebut the factual allegations as regards Telesto’s lack of authority to purchase non-investment grade securities and the misrepresentations made in relation to the status of the Kazakhstan banks (see [41] above), all of which were purportedly made over the telephone, Mr Ng submitted that the evidence of Mr Betsalel and one Ms Anna McCeery (Mr Betsalel’s direct supervisor) on the following issue would be critical:

  126. [68] Notably, Mr Betsalel has since left the employment of UBS AG (Singapore) and he appears from his email to Mr Ng (exhibited as SFT-3 in Mr Tyne’s affidavit filed on 31 January 2011) to be willing to testify in either the Australian or Singapore Proceedings, although he did express reservations about filing an affidavit on behalf of the defendants. It is not disputed that Mr Betsalel is currently resident in Singapore. As such, he is compellable to testify at the trial in Singapore.

  127. [69] The defendants, however, submitted that the issue of location and compellability of Mr Betsalel is not a weighty factor in favour of Singapore because it is not disputed that the evidence of Mr Betsalel may be adduced by way of deposition through judicial channels under the Australian Proceedings (see the opinion of Professor Mark Aronson of the University of New South Wales (exhibited as SFT-4 in Mr Tyne’s affidavit filed on 31 January 2011)).

  128. [70] The Court of Appeal in Rickshaw at [19] expressed the view that where the main dispute relates to questions of fact, and where “the judge’s assessment of a witness’s credibility is crucial, then the location of the witnesses takes on greater significance because there would be savings of time and resources if the trial is held in the forum in which the witnesses reside and where they are clearly compellable to testify.” [emphasis in italics in original, emphasis in bold italics added]. Indeed, in the present case, although the evidence of Mr Betsalel may be adduced by way of deposition and then presented before the Australian court, it is certainly not desirable that a critical witness for a serious issue like misrepresentation should not be compellable. ln addition to that, this court is also of the view that Mr Betsalel’s credibility as a witness is also of importance in assisting the trial judge’s determination of where the truth of this matter lay. Thus, the compellability and the importance of the assessment of credibility by the trial judge point to the unsuitability of a witness like Mr Betsalel giving evidence by way of deposition.

  129. (5) The alleged place of tort as the natural forum

  130. [71] In spite of the patently obvious indicators which inexorably point to Singapore as the natural forum to determine UBS AG’s claim, Mr Ng, nonetheless sought to convince this court to displace Singapore in favour of Australia as the more appropriate forum to try the matter. The principal point relied on by Mr Ng in aid of the appeal against the stay applications is based on certain misrepresentations made by Mr Betsalel and/or Mr Farell to Mr Tyne in relation to the Kazakh Bonds and that such misrepresentations were received and acted on by Mr Tyne in Australia. This was admittedly the only connection which the dispute has with Australia. The question then turns on whether the natural forum of UBS AG’s claim which is (clearly and distinctly) Singapore could change to Australia just because the (potential) defence and/or counterclaim grounded in tort might favour Australia as the more appropriate forum to determine the tort. Mr Ng answered in the affirmative on the premise that since the misrepresentations were received in Australia, the natural forum for the dispute is therefore Australia. Mr Ng relied on authorities such as Rickshaw, JIO Minerals, Cordoba Shipping Co Ltd v National State Bank, Elizabeth, New Jersey (The Albaforth) [1984] 2 Lloyd’s Rep 91 (“The Albaforth”), Diamond v Bank of London & Montreal Ltd [1979] 1 QB 333 (“Diamond”) and Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538 (“Voth”) for the proposition that the place where the misrepresentation was received is the place where tort was committed which, in turn, is prima facie the natural forum to try the dispute.

  131. [72] In addition to that, Mr Ng also stressed that the defendants would be able to invoke the Australian Acts, ie, the ASIC Act and the FTAs, in the Australian Proceedings which are not available in Singapore. To assist the court in the interpretation of the Australian Acts, the defendants submitted an expert opinion by Mr Justin Gleeson QC (“the Gleeson Opinion” or “Opinion” as the case may be). No competing opinion on the Australian Acts was submitted by UBS AG. I will separately review the Australian Acts with the benefit of the Gleeson Opinion to determine whether there are in fact material differences between Singapore and Australia as regards the matters covered by the Australian Acts and if so, where and how this factor would feature in the Spiliada test.

  132. [73] To place matters in perspective, this issue of the Australian Acts only becomes relevant for consideration if Australian law is the lex loci delicti. This would entail accepting Mr Ng’s submission that by virtue of the place of receipt of the alleged misrepresentation from Mr Betsalel and/or Mr Farell being Australia, Australia is the natural forum of the dispute. In the event that I find that Australia is not the place of the tort, the defendants would have no basis to rely on the Australian Acts in aid of the stay application.

  133. [74] According to Halsbury’s Laws of Singapore on Conflict of Laws, at paragraph 75.092, “where the tort has been committed is prima facie the natural forum. It will be a significant albeit not decisive factor”. As a general proposition, this much is not controversial. An analysis of the cases cited by Mr Ng is apposite at this juncture: in both the cases of The Albaforth and Diamond, the misrepresentations were received in London, England. As for Voth, a claim for negligent misstatement was made against an accountant for failing to draw attention to certain tax withholding laws in Missouri, USA which resulted in the imposition of a penalty. As his failure to draw attention to the requirement for withholding tax which, for all practical purposes, was equivalent to a positive statement that it was not payable occurred in Missouri, the place of the tort was determined to be Missouri. In Rickshaw, the Court of Appeal at [37] and [39] accepted that the place where the tort occurred (ie, misrepresentation was received) would, prima facie, be the natural forum of the tort. However, this was only one of the factors to be taken into account in the overall analysis, albeit a significant one (at [40] of Rickshaw). It should be noted that in Rickshaw, in respect of the respondent’s submission that the lex loci delicti was not Singapore law as the alleged misrepresentations were actionable where they had been received, ie, either Germany or New Zealand, the Court of Appeal found that it was not clear, on the pleadings, where the alleged misrepresentations were in fact received (at [72]).

  134. (A) The analysis on authorities which support the specific test of the the natural forum being the place of tort

  135. [75] Most of the authorities appear at first blush to support Mr Ng’s submission that the tort of misrepresentation is committed in the place where it was received. Notably, the AR accepted that the tort is governed by the law where the tort was received and acted upon. However, she found that the connection with Australia in the present case to be merely a fortuitous one, ie, it just so happened that Mr Tyne was in Australia when he received the misrepresentations from Mr Betsalel/Mr Farrell.

  136. [76] This is where my analysis differs from that of the AR. I am of the view that the pertinent question turns on whether the inquiry of where the tort of misrepresentation was committed ends at the point of receipt. Recent decisions indicate that the place of receipt is not necessarily decisive. For example, in JIO Minerals, the misrepresentation was received in India (JIO Minerals at [89]) and yet the Court found that the natural forum for the tort was Indonesia (JIO Minerals at [95]). At [91] of JIO Minerals, the Court of Appeal stated the English position, viz, the specific test that “the place of the tort is the place where the representation is received and acted upon” [emphasis added]. Given that reliance is a constituent element of the tort of misrepresentation, the place of reliance (and not merely receipt) of the misrepresentation is unquestionably relevant in the equation. It can be deduced from the cases cited at [74] above that much emphasis was placed on the place of receipt, as opposed to the place of reliance, because in those cases, the act of receipt and reliance took place in the same jurisdiction. In my view, different considerations should apply where the place of receipt and reliance are different.

  137. (B) Misrepresentation: receipt and reliance

  138. [77] At the hearing of the Appeals, both parties disagreed as to what constitutes “reliance” or “acted upon”. Mr Ng submitted that reliance occurred in Australia when Mr Tyne gave Mr Betsalel the green light to purchase the Kazakh Bonds. Mr Kumar, on the other hand, submitted that reliance took place in Singapore where the officers of UBS AG (Singapore) operated Telesto’s account in Singapore to purchase the Kazakh Bonds pursuant to and in accordance with Mr Tyne’s instructions.

  139. [78] Given that the courts have emphasised on the need to look back at the series of events in order to determine where, in substance, the cause of action arose, where there is a possibility that the act of receipt and reliance might have occurred in different jurisdictions, the court should adopt a fluid analysis in finding the place of the tort. In this regard, the Court of Appeal in JIO Minerals (at [90], [91], [93] and [94]) indicated that the real substance test as set out in Distillers Co (Biochemicals) Ltd v Laura Anne Thompson [1971] AC 458 at 468, should be adopted where the facts of the case do not fit comfortably with the more specific test (ie, where the misrepresentation was received) as suggested in The Albaforth.

  140. [79] If one looks at the continuum of the events, it is arguable that the place of reliance of Mr Betsalel’s alleged misrepresentation was Singapore: having received the misrepresentation (in Australia), Mr Tyne acted upon those misrepresentations by communicating his instructions to the officers in Singapore which then manifested itself in the form of his instructions being carried out by the officers of UBS AG in Singapore. In other words, reliance was crystallised when the officers of UBS AG (Singapore) operated Telesto’s account in accordance with Mr Tyne’s instruction. Thus, the chain of communication which constituted the act of misrepresentation was completed when Telesto’s account in Singapore was operated pursuant to Mr Tyne’s instructions which were based on Mr Betsalel’s alleged misrepresentation. This view accords with business efficacy as in a scenario where UBS AG (Singapore) transacts with, for and on behalf of international clients, to say that the place of the tort is where their client is located (barring any fortuitous happenstance) would be to hold UBS AG (Singapore) to a choice of law to which it had not agreed. It is pertinent to point out that the tort in the present case did not occur without a contractual context: but for the banking relationship between UBS AG and Telesto which stemmed from the various banking instruments between the two parties, Mr Betsalel and/or Mr Farrell would not have spoken to Mr Tyne about the Kazakh Bonds to begin with.

  141. [80] In applying the substance test, I find that the place of the tort for misrepresentation is Singapore and not Australia. Notably, even if the tort had occurred in Australia, in my view, that is not in and of itself sufficient to displace Singapore as the natural forum to determine the entire dispute between the parties (see [86]–[88] below).

  142. [81] Upon close scrutiny, one will find that the issues raised by the defendants cannot be legitimately divorced from the contractual context under which the Kazakh Bonds were purchased. It is correct that the Court of Appeal in Rickshaw observed at [47]–[48] that in the absence of bad faith, every plaintiff has the right to avail itself of the cause of action that is most advantageous to it, for instance, in the light of choice of law considerations. However, the situation before me is entirely different from the circumstances in Rickshaw. In the case of Rickshaw, the respondent commenced proceedings in Germany on 8 September 2004 against the first appellant (which was his former employer) for a contractual claim based on the Employment Agreement for:

  143. In respect of the German proceedings, a consent judgment was entered into for €151,700 on 9 December 2004 in favour of the respondent and as at November 2006, only partial payment had been made to the respondent.

  144. [82] The appellants in Rickshaw, on the other hand, commenced proceedings in Singapore on 10 June 2005 for the following:

  145. [83] An analysis of the causes of action of both parties in Rickshaw reveals that the appellants’ claims against the respondent for conversion, the tort of deceit and the breach of the equitable duty of confidentiality, which transpired from a set of misrepresentations given by respondent sometime in late 2002 and throughout 2003 (see [10] of Rickshaw), is “narrower” than the respondent’s claim in Germany, viz, for the breach of his Employment Agreement under which the appellants owed him his salary and expenses between 2001 and 2003 amounting to €242, 867.40. It cannot be ignored that in Rickshaw, the tortious claims mounted by the appellants were, in a way, independent of the respondent’s wrongful termination claim under the Employment Agreement. In other words, if the wrongful termination claim in the German proceedings should succeed, it does not follow that the tortious claims in the Singapore proceedings would necessarily fail. Phrased in a different manner: the appellants’ claim in Singapore did not form a complete defence and counterclaim to the respondent’s German proceedings as there were issues before the German court which the appellants’ claim in the Singapore proceedings had no bearing on.

  146. [84] My review of the cases relied on by the defendants confirmed my understanding that the determination of the natural forum in those cases typically occurred in the context where the tort was an independent cause of action and where it did not operate as a defence to a contractual claim. In JIO Minerals, the claim was to recover investments which were induced pursuant to a misrepresentation as regards the quality and quantity of iron ore reserve in Indonesia. It was not raised as a defence. Likewise in The Albaforth, the claim was for damages for misrepresentation arising from a status report provided by the defendant bank on the creditworthiness of the guarantor of a charterer’s liability under a charterparty. The claim was brought as an independent cause of action and was not raised to resist any contractual claim by the defendant bank. Similarly, in Diamond, the claim, which was an independent claim, was for misrepresentation arising from the confirmation of the credit standing of a particular broker. Finally, in Voth, the claim for negligent misstatement against the accountant was also pursued as an independent claim.

  147. [85] Here, the situation is quite different. It was accepted by Mr Ng that if the appeal in relation to the stay applications should fail, the defendants would simply raise the issues in the Australian Proceedings as a defence and counterclaim in the Singapore Proceedings. If UBS AG successfully discharges its legal and evidential burden of proof, this would mean that the defendants’ defence and counterclaim has failed. The converse holds true. This merely reinforces my view that the “claims” raised by the defendants in Australia are in truth the defences against the claim by UBS AG.

  148. (F) Whether the natural forum in determining a contractual claim can be displaced due to the tort being committed elsewhere

  149. [86] In my view, there is a very good reason why the natural forum in a dispute involving a contractual claim cannot be displaced simply because the defence seeks to avoid liability by raising a counterclaim or set-off premised on a tort which, viewed in isolation as an independent claim, might provide for a different natural forum. Commercial entities, in particular banks and financial institutions, strive for certainty of their contractual rights and obligations by choosing appropriately drafted governing law or jurisdiction clauses. It is not uncommon for parties to allege misrepresentation as a defence to a contractual claim. In this regard, it could not have been in the contemplation of the parties that a contractual claim, once properly instituted before a court of competent jurisdiction, could then be displaced by a foreign court merely because the place of the alleged misrepresentation (which constituted a defence to the contractual claim) was a foreign country. The impracticality and irrationality of this proposition is evident in the following scenario where the customer-banker relationship is governed by Singapore law and is subject to Singapore jurisdiction, exclusive or otherwise:

  150. (a) In the course of the relationship, several transactions were entered into based on certain representations made by the bank’s officers.

  151. (b) Assuming that three such representations were received by the customer over a period of time in three different countries resulting in three different transactions, taking Mr Ng’s submission to its logical conclusion would mean that disputes pertaining to these three transactions should be heard in the three different “natural forums”. This would be a most illogical and unnatural outcome.

  152. (c) If Mr Ng’s submission holds true, in order to avoid such an irrational and illogical outcome, bank’s officers would think twice before speaking to customers whenever they are overseas to prevent the risk of any potential claim being adjudicated in a jurisdiction not stipulated in the governing law/jurisdiction clauses. This would seriously undermine the very essence of international banking.

  153. [87] Although the tort of misrepresentation may be a separate and distinct cause of action, in the context of the present case, it can essentially be raised as a defence to the claims by UBS AG. What is before me is a classic case of the defendant, not the plaintiff, who is seeking to avoid being sued in the natural forum of the dispute by asserting what essentially is a tortious defence in the guise of a claim in Australia. The attempt to displace Singapore as the natural forum for UBS AG’s claim by doing so is disingenuous. The stay principles were not developed to facilitate such objectives. In my mind, this is nothing more than an instance of forum shopping by the defendants.

  154. [88] By reason of my analysis of the applicable legal principles and my examination of the facts which are germane to the issues before me, I arrived at the firm conclusion that Singapore is not only the natural forum of the dispute but is clearly and distinctly the more appropriate forum for the determination of the dispute between the parties. Thus, the appeal against the AR’s decision not to grant a stay of the Singapore Proceedings is dismissed.

  155. Stage two of the Spiliada test: The ends of justice

  156. [89] As I have found that Singapore is distinctly and clearly the more appropriate forum to hear the dispute, on this ground alone, RA 58/2010 must be dismissed. Stage two of the Spiliada test only comes into play if Australia is determined to be the more appropriate forum.

  157. [90] However, for completeness, I shall consider the submissions made by both counsel on the treatment and outcome of stage two of the Spiliada test. It was common ground between the parties that, should the defendants succeed in stage one of the Spiliada test, the court’s focus at stage two of the Spiliada test is to consider all factors as to why the ends of justice require the stay of the Singapore Proceedings should nonetheless be refused. The burden, in this connection, lies with UBS AG. The mere fact that UBS AG has a legitimate or juridical advantage in the Singapore Proceedings will not be decisive (see JIO Minerals at [43] where the Court of Appeal cited with approval Halsbury’s Laws of Singapore on Conflicts of Law paragraph 75.096). It is incumbent on UBS AG to establish, by way of cogent evidence, that it would be denied substantial justice if the case is heard in Australia. I should add that my analysis on the differences, if any, between Australian and Singapore law on the common issues has an important bearing and is entirely relevant to the issue of “injustice” to the defendants in the granting of the anti-suit injunction (see [155] below).

  158. (1) Injustice to UBS AG as it would be subject to Australian law which was not part of its contractual bargain

  159. [91] In this regard, Mr Kumar submitted that the burden is discharged by UBS AG because the parties have agreed for the dispute to be subject to Singapore jurisdiction and governed by Singapore law. Accordingly, to grant the stay of the Singapore Proceedings would be tantamount to mandatorily subjecting UBS AG to the Australian Acts which was never in the contemplation of the parties when they entered into the banking relationship. Notably, this factor would already have been considered at stage one of the inquiry and if that was held not to be sufficient (though in this case, it was) to refuse the stay, then, in my view, it would not be right for this same factor to be reconsidered at stage two. However, I must make clear that I am not suggesting that the court is invariably precluded from considering all matters relevant in stage one at stage two of the inquiry. Indeed, the issue of foreign law would become relevant for reconsideration if there are material differences in the foreign law which may apply unfairly or unjustly to the plaintiff in the Singapore Proceedings. For example, in Kuwait Oil Co (KSC) v Idemitsu Tankers KK (The Hilda Maru) [1981] 2 Lloyd’s Rep 510 at 513, the English Court of Appeal refused the stay of the English proceedings in favour of Kuwait because the indemnity provision in the contract might be held to be invalid or unenforceable in Kuwait.

  160. (2) The juridical advantage which Telesto and Mr Tyne can benefit from the Australian Acts

  161. (A) The Gleeson Opinion

  162. [92] There is clearly some overlap between the legal principles governing stay applications and anti-suit injunctions. In support of the appeals against the refusal to stay the Singapore Proceedings as well as the anti-suit injunction (which will be dealt with in detail below), Mr Ng submitted that the balance of justice is on the defendants’ side because they would be deprived of a legitimate juridical advantage if they are precluded from pursuing their claim in the Australian Proceedings. He relied on the Gleeson Opinion that highlighted several juridical advantages under the Australian Acts. Insofar as the ASIC Act is concerned, the Gleeson Opinion drew attention to the following advantages:

  163. (a) Under s 12BB, where the representation concerns a future matter (invoked in the present case as an alternative), there are two benefits to the plaintiff. First, unless the defendant had reasonable grounds for making the representation at the time it was made, it will be deemed misleading. Secondly, there is a reversal of onus of proof as the defendant will be taken not to have reasonable grounds for making representation unless evidence is adduced to the contrary.

  164. (b) There is no requirement for the plaintiff to prove or plead intent, negligence or carelessness in the conduct. If the conduct, viewed objectively, has the character of being misleading or deceptive, or likely, or is likely to mislead or deceive, it is actionable.

  165. (c) Assuming there is a contravention of s 12DA, the ASIC Act provides what has been described as a “remedial smorgasbord”.

  166. (d) In relation to damages, a body of Australian law has built up as to what constitutes as sufficient causation, ie, it is enough if the impugned conduct is a cause of the relevant loss, it need not be the sole or even dominant cause.

  167. (e) Concepts of remoteness and foreseeability (which might apply in a claim in tort) are not automatically translated into the statute.

  168. (f) In granting orders under s 12GF, the Australian court is not constrained by limitations under the general law upon a party’s right to rescind for misrepresentation. It can and must consider all the circumstances, including the causal link between the defendant’s conduct and the loss asserted, the plaintiff’s responsibility and any other available remedy (Akron Securities Ltd v Illife (1997) 41 NSWLR 353 at 366).

  169. [93] Further, the Gleeson Opinion also compared the ASIC/FTA regimes with that of the common law of causation, remedies for negligent misrepresentation, tort of deceit and the Misrepresentation Act (Cap 390, 1994 Rev Ed) (“Misrepresentation Act”) in Singapore and concluded that the claim under the Australian Acts is broader for the following reasons:

  170. (a) Singapore law requires the existence of a duty to act carefully in respect of the statements. The duty depends on the existence of factual foreseeability, proximity and policy considerations. Under the Australian Acts, the existence of a duty is not required.

  171. (b) The range of actionable conduct appears to be wider under the Australian Acts. A misstatement is an example of misleading conduct. Further, express statements may be taken together with omissions to determine whether the conduct as a whole is misleading.

  172. (c) Once it is established that the conduct is objectively misleading, there is no additional requirement to show that there was any negligence in the conduct.

  173. (d) Where the conduct consists of a future representation, there is a statutory reversal of onus. Thus, the conduct is deemed misleading unless the defendant proves it had reasonable grounds for the conduct at the time it occurred.

  174. (e) The range of available remedies under the Australian Acts is also wider.

  175. [94] The Gleeson Opinion also observed that the Misrepresentation Act would not extend to Telesto, Mr Tyne and Argot as, in reliance on the alleged misrepresentation, the purchase of the Kazakh Bonds was entered into with a third party. In other words, there was no contract with the alleged wrongdoer, UBS AG. In addition to that, s 2(1) of the Misrepresentation Act speaks of “representation of fact” which does not appear to extend to representations to the future and does not appear to carry a reversal of onus where representations to the future are concerned. Finally, the Misrepresentation Act does not provide for the same range of remedies available under the Australian Acts.

  176. (B) No contrary opinion adduced by UBS AG and its position that there is no difference between the Singapore and Australian regimes

  177. [95] As UBS AG did not submit a contrary opinion on the Australian Acts, my comparative analysis shall proceed on the basis that the Gleeson Opinion on Australian law is unchallenged. The issue of Australian law is relevant in the context of the stay applications to demonstrate that the ends of justice would not be achieved if the stay of the Singapore Proceedings is granted. At this stage of the inquiry, it is my task to determine whether there are material or significant differences between the two regimes. Mr Kumar sought to convince the court that the alleged advantages under the Australian Acts were “overstated” and even “false” and that in essence, there is no material difference between the two regimes in the area of the law on misrepresentation whereas Mr Ng advanced the divergent position by emphasising on the juridical advantages under the Australian Acts which are apparently unavailable under the Singapore regime. It may appear somewhat incongruous for Mr Kumar to assert at stage two of the Spiliada test that there are no material differences. However, on closer scrutiny, it is clear that Mr Kumar’s case against the stay application is premised on the defendants failing at stage one which I have accepted. Further, his position is entirely consistent with UBS AG’s case in support of the anti-suit injunction (as explained in detail at [155] below). This court, however, takes this view: proceeding on the basis that Australia is the natural forum (a necessary assumption before we reach the stage two balancing of justice exercise), if there are no material differences between the two regimes (the position emphatically advocated by Mr Kumar), then I can see no injustice to UBS AG for the case to be heard in Australia as no prejudice of any sort would befall upon it given that establishing UBS AG’s case in Singapore would not be any different from that in Australia.

  178. [96] Having reviewed the Gleeson Opinion and having compared it with the position under Singapore Law on the same issues, I arrived at the conclusion that there are no significant or material differences which would make it unjust or unfair for the case to be heard in Australia. Therefore, if stage one of the Spiliada test had been satisfied (which I found to the contrary at [79]–[80]; [86]–[88] above), UBS AG would not have satisfied the burden of proof under stage two. To fully appreciate the absence of material differences, it is imperative to set out the defendants’ case on the alleged misrepresentation:

  179. (a) The oral advice given by UBS AG (through Mr Betsalel and Mr Farrell) to Mr Tyne resulted in Mr Tyne and Pole Star agreeing to reconfigure Telesto’s portfolio to exclusively comprise, inter alia, the Kazakh Bonds recommended by UBS AG in order to reduce the risk of the portfolio. Subsequently, UBS AG advised Mr Tyne (and through him, Pole Star and Telesto) that the Kazakh Bonds met the criteria established pursuant to such recommendations.

  180. (b) UBS AG failed to inform Telesto, Mr Tyne, Argot (and Pole Star) of matters relevant to Kazakh Bonds, in particular the bank frauds which led to the bankruptcy of two government-regulated banks in Kazakhstan, that Kazakhstan banks frequently used disinformation, false accounting and bogus forecasts to routinely mischaracterise sources of problems, etc.

  181. (c) In the light of such matters which UBS AG had failed to disclose, the express representation by UBS AG as to the suitability of the Kazakh Bonds were misleading or deceptive or likely to mislead or deceive, and/or were representations as to future matters which under the Australian Acts would be taken to be misleading or deceptive absent evidence that there were reasonable grounds for making them.

  182. (d) The impugned conduct of UBS AG was causative of the damage to Telesto in that but for the conduct it would never have purchased the Kazakh Bonds and Mr Tyne and Argot would not have provided the additional securities.

  183. (C) The alleged differences between the Singapore and Australian regimes

  184. (i) The existence of Duty of care

  185. [97] Although no contrary opinion on Australian law was adduced by UBS AG, I should make some preliminary observations of the Gleeson Opinion. It provided an objective review of the salient features of the Australian Acts and a comparative analysis with Singapore law on common issues based on the advice received from Singapore counsel. However, the Gleeson Opinion, rightly and in my view fairly, did not seek to advance the defendants’ case that it would be unjust to deprive them of the juridical advantages available in the Australian Proceedings or that it would be unjust for the dispute to be heard in Singapore. Nor did the Gleeson Opinion conclude that the differences would make a material bearing on the outcome of the dispute given the specific facts of the case. For example, although there is no requirement for the defendants to establish that UBS AG owed them a duty of care under the Australian Acts, the Gleeson Opinion made no comment on whether this was a material juridical advantage in the sense that the defendants, on the facts, were bound or likely to fail in establishing such duty of care in Singapore. That was correctly reserved for Mr Ng to make good in his submissions in support of the Appeals. Although a claim under the Australian Acts appears to be broader than under Singapore law (given the prerequisite of duty of care in the latter), the language used in the defendants’ Australian pleadings nevertheless alluded to the existence of such duty of care:

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