Karaha Bodas v Pertamina: Setting Aside Mareva Injunction & Service Out of Jurisdiction
In Karaha Bodas Co LLC v Pertamina Energy Trading Ltd and Pertamina Energy Services Pte Ltd, the Singapore High Court considered applications by the defendants to set aside an order granting the plaintiff leave to serve an originating summons out of jurisdiction and a Mareva injunction. The plaintiff, Karaha Bodas Co LLC, sought to enforce an arbitration award against Pertamina Energy Trading Ltd (Hong Kong) and Pertamina Energy Services Pte Ltd (Singapore). The court, presided over by Choo Han Teck J, allowed the defendants' applications, setting aside the orders, finding that the requirements for service out of jurisdiction were not met and that the Mareva injunction was improperly granted.
1. Case Overview
1.1 Court
High Court1.2 Outcome
The court set aside the order made under the ex parte application on 22 December 2004, which granted a Mareva injunction and an order for service of the Originating Summons out of jurisdiction.
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Singapore court sets aside Mareva injunction and service order in Karaha Bodas v Pertamina case, concerning foreign proceedings and jurisdictional issues.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Karaha Bodas Co LLC | Plaintiff | Corporation | Application Dismissed | Lost | |
| Pertamina Energy Trading Ltd | Defendant | Corporation | Application Allowed | Won | |
| Pertamina Energy Services Pte Ltd | Defendant | Corporation | Application Allowed | Won |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Choo Han Teck | Judge | Yes |
4. Counsels
4. Facts
- Plaintiff sought a Mareva injunction in Singapore to assist enforcement of a foreign arbitration award.
- The plaintiff obtained an ex parte order for a Mareva injunction and service out of jurisdiction.
- Defendants applied to set aside the Mareva injunction and the order for service out of jurisdiction.
- The plaintiff's claim was founded on the basis that the second defendant held US$36m on trust for the first defendant.
- The first defendant is a Hong Kong company and is a 99% subsidiary of Pertamina (Persero), a state-owned company in Indonesia.
- The second defendant, a Singapore company, is a 100% subsidiary of the first defendant.
5. Formal Citations
- Karaha Bodas Co LLC v Pertamina Energy Trading Ltd and Another, OS 1646/2004, SIC 4/2005, 257/2005, 295/2005, [2005] SGHC 57
6. Timeline
| Date | Event |
|---|---|
| Contract made between the plaintiff and Pertamina (Persero) for a joint venture to produce and develop energy resources in Indonesia. | |
| Pertamina (Persero) served notice of termination on the plaintiff. | |
| Arbitration proceedings commenced in Geneva, Switzerland. | |
| Arbitration award handed down in favor of the plaintiff against Pertamina (Persero) and PT PLN (Persero). | |
| Plaintiff registered the arbitration award in Hong Kong. | |
| Plaintiff obtained a garnishee and charging order in Hong Kong. | |
| Garnishee and charging order made absolute in Hong Kong. | |
| Plaintiff obtained an order of court appointing a receiver to find out what was due from the first defendant to Pertamina (Persero) under the garnishee order. | |
| Plaintiff issued a judgment-debtor summons against the first defendant in Hong Kong. | |
| Plaintiff obtained a Mareva injunction and an order for service of the Originating Summons out of jurisdiction in Singapore on an ex parte basis. | |
| Court set aside the order made under the ex parte application on 22 December 2004. | |
| Date for hearing the first defendant's application for leave to appeal out of time in Hong Kong. |
7. Legal Issues
- Setting Aside Mareva Injunction
- Outcome: The court set aside the Mareva injunction, finding that it did not have jurisdiction to grant it in the present circumstances.
- Category: Procedural
- Sub-Issues:
- Jurisdiction of court to grant Mareva injunction
- Requirements for granting Mareva injunction
- Related Cases:
- [1979] AC 210
- [1996] AC 284
- Service Out of Jurisdiction
- Outcome: The court set aside the order for service out of jurisdiction, finding that the requirements under Order 11 of the Rules of Court were not fulfilled.
- Category: Procedural
- Sub-Issues:
- Compliance with Order 11 of the Rules of Court
- Good cause of action
- Related Cases:
- [1979] AC 210
- [1996] AC 284
8. Remedies Sought
- Mareva Injunction
- Declaration that the second defendant holds US$36m in trust for the first defendant
- Order that the second defendant repay all the money it had received to the first defendant in Hong Kong
9. Cause of Actions
- Enforcement of Arbitration Award
- Declaration of Trust
10. Practice Areas
- Commercial Litigation
- Injunctions
11. Industries
- Energy
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Siskina v Distos Compania Naviera SA | House of Lords | Yes | [1979] AC 210 | United Kingdom | Cited for the principle that a right to obtain an interlocutory injunction is not a cause of action and is dependent on a pre-existing cause of action. |
| Mercedes Benz AG v Leiduck | Privy Council | Yes | [1996] AC 284 | Hong Kong | Cited for the principle that a Mareva injunction does not enforce anything but merely prepares the ground for a possible execution in the future. |
| Teo Siew Har v Lee Kuan Yew | Court of Appeal | Yes | [1999] 4 SLR 560 | Singapore | Cited for express endorsement of the Siskina principle that a Mareva injunction is only granted where there exists an action claiming substantive relief which the High Court has jurisdiction to grant. |
| Fowler v Lanning | Queen's Bench | Yes | [1959] 1 QB 426 | United Kingdom | Cited for the principle that there is no cause of action to say that A owes B money, when neither of them is the plaintiff. |
| Kishinchand Tiloomal Bhojwani v Sunil Kishinchand Bhojwani | High Court | Yes | [1997] 2 SLR 682 | Singapore | Cited for the question of where in substance the trust in favor of the plaintiff arose. |
| Bank Mellat v Nikpour | Court of Appeal | Yes | [1985] FSR 87 | United Kingdom | Cited for the consequences and effect of non-disclosure in respect of the duty of giving full and frank disclosure. |
| Channel Tunnel Group Ltd v Balfour Beatty Construction Ltd | House of Lords | Yes | [1993] AC 334 | United Kingdom | Cited for the power to grant interlocutory relief based on a cause of action recognised by English law against a defendant duly served where such relief is ancillary to a final order. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Rules of Court (Cap 322, R 5, 2004 Rev Ed) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Mareva injunction
- Service out of jurisdiction
- Garnishee order
- Arbitration award
- Trust
- Originating summons
- Jurisdiction
- Enforcement
- Dissipation of assets
15.2 Keywords
- Mareva injunction
- service out of jurisdiction
- arbitration
- Singapore
- Pertamina
- Karaha Bodas
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Mareva Injunctions | 95 |
| Service out of jurisdiction | 80 |
| Civil Practice | 75 |
| Asset Recovery | 60 |
| Arbitration | 50 |
16. Subjects
- Civil Procedure
- Injunctions
- Jurisdiction