CIMB Bank v Dresdner Kleinwort: Forum Non Conveniens & Choice of Law in Restitution Claim

In CIMB Bank Bhd v Dresdner Kleinwort Ltd, the Singapore Court of Appeal dismissed CIMB's appeal against the High Court's decision to refuse a permanent stay of Dresdner's action to recover US$8,199,869.50. The claim arose from a purported sale and purchase of promissory notes. The court addressed the issue of forum non conveniens, considering factors such as the applicable law for unjust enrichment claims and the location of witnesses. The court found that Singapore was the more appropriate forum, given that the unjust enrichment occurred there and the key witnesses were located in Singapore and Malaysia. The court also considered the implications of third-party actions CIMB intended to institute. The Court of Appeal dismissed the appeal with costs.

1. Case Overview

1.1 Court

Court of Appeal of the Republic of Singapore

1.2 Outcome

Appeal Dismissed

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Singapore Court of Appeal addresses forum non conveniens in a restitution claim, focusing on choice of law and unjust enrichment after a fraudulent transaction.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
CIMB Bank BhdAppellantCorporationAppeal DismissedLost
Dresdner Kleinwort LtdRespondentCorporationAppeal DismissedWon

3. Judges

Judge NameTitleDelivered Judgment
Chao Hick TinJustice of the Court of AppealYes
Andrew Phang Boon LeongJustice of the Court of AppealNo

4. Counsels

Counsel NameOrganization
Aw Wen NiWong Partnership LLP
Alvin YeoWong Partnership LLP
Nish ShettyWong Partnership LLP
Tan Hsiang YueWong Partnership LLP
Hri KumarDrew & Napier LLC
Bhavish AdvaniDrew & Napier LLC
Tan Siu-LinDrew & Napier LLC

4. Facts

  1. Dresdner sought to purchase promissory notes from CIMB for US$8,199,869.50.
  2. The promissory notes were issued by Innaria Sdn Bhd and guaranteed by the Public Works Department of Sabah, Malaysia.
  3. Payment was effected by Dresdner to CIMB Singapore with instructions to credit CIMB Inanam.
  4. CIMB Singapore transferred the funds to HSBC Hong Kong in favor of New Speed Technologies Ltd.
  5. The promissory notes were dishonored upon presentation.
  6. CIMB claimed George Chau had no authority to execute the agreement.
  7. Dresdner claimed for unjust enrichment as an alternative if the agreement was invalid.

5. Formal Citations

  1. CIMB Bank Bhd v Dresdner Kleinwort Ltd, CA 35/2008, [2008] SGCA 36

6. Timeline

DateEvent
Promissory notes issued by Innaria Sdn Bhd to V V Enterprise
Dresdner sought to purchase promissory notes from CIMB
Yussof Bin Momin faxed message to Ms Callaghan confirming George Chau was authorised to sign on behalf of CIMB
Ms Callaghan wrote to Ms Francis seeking confirmation that Momin had authority to act on behalf of CIMB
Ms Sum and Momin jointly faxed a message to CIMB London confirming that one signatory was sufficient for the transaction of the Notes and that George Chau was so authorised
Ms Francis faxed message stating that George Chau’s sole signature was valid only for transactions up to US$10,000 and two signatories were required for transactions beyond that limit
Ms Nurdin asked CIMB’s headquarters in Kuala Lumpur, Malaysia to verify the transaction for security purposes
Payment for the transaction was effected by Dresdner to the Singapore branch of CIMB by SWIFT
CIMB Singapore transferred the Funds over to Hongkong and Shanghai Banking Corporation, Hong Kong in favour of New Speed Technologies Ltd
Maturity date of the promissory notes
SFS sued Dresdner in Munich, Germany, on the warranty
SFS obtained a German judgment against Dresdner
Limitation would have set in
Decision Date

7. Legal Issues

  1. Forum Non Conveniens
    • Outcome: The court held that Singapore was the more appropriate forum for the trial of the action.
    • Category: Procedural
    • Sub-Issues:
      • Applicable law in relation to unjust enrichment
      • Location of witnesses and relevant documents
      • Third-party actions and their relation to the main action
    • Related Cases:
      • [1987] AC 460
      • [1992] 2 SLR 776
      • [1995] 3 SLR 97
      • [2001] 2 SLR 49
      • [2007] 1 SLR 377
  2. Choice of Law
    • Outcome: The court held that the choice of law clause in the void contract did not apply to the restitutionary claim and that Singapore law was the proper law of the obligation to make restitution.
    • Category: Substantive
    • Sub-Issues:
      • Applicability of choice of law clause in a void contract
      • Proper law of restitutionary obligations
    • Related Cases:
      • [1970] AC 583
      • [1982] 2 Lloyd’s Rep 351
      • (1992) 9 OR (3d) 755
      • [1943] AC 32
      • (1960) 26 DLR (2d) 209
      • [1993] 1 Lloyd’s Rep 543
      • [1994] 3 SLR 257
      • [1967] 2 QB 590
      • [1996] 1 Lloyd’s Rep 589
      • [1997] CLC 108
  3. Unjust Enrichment
    • Outcome: The court considered the location of the unjust enrichment and the change of position in determining the appropriate forum.
    • Category: Substantive
    • Sub-Issues:
      • Whether CIMB was unjustly enriched
      • Whether CIMB changed its position in good faith

8. Remedies Sought

  1. Recovery of US$8,199,869.50

9. Cause of Actions

  • Restitution
  • Unjust Enrichment
  • Payment under a mistake
  • Money had and received

10. Practice Areas

  • Commercial Litigation
  • Banking Law
  • International Law

11. Industries

  • Banking
  • Financial Services

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Spiliada Maritime Corporation v Cansulex LtdHouse of LordsYes[1987] AC 460United KingdomEstablished the principles for determining forum non conveniens, which were adopted by the court.
Brinkerhoff Maritime Drilling Corp v PT Airfast Services IndonesiaSingapore Court of AppealYes[1992] 2 SLR 776SingaporeAdopted the Spiliada test for determining forum non conveniens.
Eng Liat Kiang v Eng Bak HernSingapore Court of AppealYes[1995] 3 SLR 97SingaporeAdopted the Spiliada test for determining forum non conveniens.
PT Hutan Domas Raya v Yue Xiu Enterprises (Holdings) LimitedSingapore Court of AppealYes[2001] 2 SLR 49SingaporeAdopted the Spiliada test for determining forum non conveniens.
Rickshaw Investments Ltd v Nicolai Baron von UexkullSingapore Court of AppealYes[2007] 1 SLR 377SingaporeAdopted the Spiliada test for determining forum non conveniens.
James Miller & Partners Ltd v Whitworth Street Estates (Manchester) LtdHouse of LordsYes[1970] AC 583United KingdomCited for the principle that a contract is governed by the law chosen by the parties.
The ParouthEngland and Wales Court of Appeal (Civil Division)Yes[1982] 2 Lloyd’s Rep 351United KingdomCited for the principle that a dispute as to the existence or the validity of the contract would be construed in accordance with the law that governs that contract as if the contract were valid.
Ash v Corporation of Lloyd’sOntario Court of AppealYes(1992) 9 OR (3d) 755CanadaCited for the principle that an allegation that a contract is void ab initio does not make it so until a final judgment of the court.
Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour, LimitedHouse of LordsYes[1943] AC 32United KingdomCited as an example where a part payment made in advance could be recovered by way of restitution or quasi-contract when a contract was frustrated.
Etler v KerteszOntario Court of AppealYes(1960) 26 DLR (2d) 209CanadaCited as an example where a claim for the refund of a payment made under a contract governed by Austrian law but the contract was illegal by that law was subject to Austrian law.
Arab Monetary Fund v HashimHigh Court of JusticeYes[1993] 1 Lloyd’s Rep 543United KingdomDiscussed in relation to whether a claim for the recovery of bribes comes within cl (2)(a) or cl (2)(c) of Dicey, Morris and Collins.
Kartika Ratna Thahir v PT Pertambangan Minyak dan Gas Bumi Negara (Pertamina)Singapore Court of AppealYes[1994] 3 SLR 257SingaporeCited as an example where this court was of the view that a claim for the recovery of bribes came within cl (2)(c) rather than cl (2)(a).
Mackender v Feldia AGEngland and Wales Court of Appeal (Civil Division)Yes[1967] 2 QB 590United KingdomCited for the principle that non-disclosure does not automatically avoid the contract, and the foreign jurisdiction clause is not abrogated.
Arab Monetary Fund v HashimEngland and Wales Court of Appeal (Civil Division)Yes[1996] 1 Lloyd’s Rep 589United KingdomCited as an example where the applicable law to govern the recovery of the bribe was that of Abu Dhabi.
Baring Brothers & Co Ltd v Cunninghame District CouncilCourt of SessionYes[1997] CLC 108United KingdomDiscussed in relation to whether the consequential restitutionary issues arising under a void contract were to be separately characterised and governed by a separate choice of law rule.
Industrial & Commercial Bank Ltd v Banco Ambrosiano Veneto SPASingapore High CourtYes[2000] SGHC 188SingaporeCited for the principle that the mere allegation of fraud is not in itself sufficient to impugn the choice of law clause in the contract.
Marconi Communications International Ltd v PT Pan Indonesia Bank Ltd TBKHigh Court of JusticeYes[2004] 1 Lloyd’s Rep 594United KingdomCited for the principle that if the legal issues are straightforward, or if the competing fora have domestic laws which are substantially similar, the identity of the governing law will be a factor of rather little significance.
Navigators Insurance Co Ltd v Atlantic Methanol Production Co LLCHigh Court of JusticeYes[2004] Lloyd’s Rep IR 418United KingdomCited for the principle that if the legal issues are straightforward, or if the competing fora have domestic laws which are substantially similar, the identity of the governing law will be a factor of rather little significance.
Amerco Timbers Pte Ltd v Chatsworth Timber Corp Pte LtdSingapore Court of AppealYes[1975-1977] SLR 258SingaporeCited for the principle that little weight should be given to the issue of applicable law if there is no evidence that the foreign law differs from Singapore law in any significant respect.
Myers v N & J Sherick LtdHigh Court of JusticeYes[1974] 1 WLR 31United KingdomDiscussed in relation to the construction of Order 16 r (1) of the Rules of Court.
Firststate Pte Ltd v Raviland Pte LtdSingapore High CourtYes[1995] 1 SLR 589SingaporeDiscussed in relation to the construction of Order 16 r (1) of the Rules of Court.
Baring Futures (Singapore) Pte Ltd v Deloitte & ToucheSingapore High CourtYes[1997] 3 SLR 312SingaporeDiscussed in relation to the construction of Order 16 r (1) of the Rules of Court.
IPCO International Construction Ltd v S T Kay & CoSingapore High CourtYes[1998] SGHC 198SingaporeDiscussed in relation to the construction of Order 16 r (1) of the Rules of Court.
Peters Roger May v Pinder Lillian Gek LianSingapore Court of AppealYes[2006] 2 SLR 381SingaporeCited for the principle that the convenience of witnesses who may be located in a different jurisdiction should also be considered against the easy availability of video conferencing.
Chatsworth Investments Ltd v Amoco (UK) LtdHigh Court of JusticeYes[1968] Ch 665United KingdomCited for the principle that it would be a hardship to the plaintiffs and to the third parties to allow the question of the enforceability of the later agreement to be tried in the same action as the question of the enforceability of the earlier agreement.
The Abidin DaverHouse of LordsYes[1984] AC 398United KingdomCited for the principle that an appellate court should not interfere with a judge's exercise of discretion unless the judge had misdirected himself on a matter of principle.
Dresdner Kleinwort Ltd v CIMB Bank BhdSingapore High CourtYes[2008] SGHC 59SingaporeThe High Court decision that was appealed in this case.

13. Applicable Rules

Rule Name
Order 16 r 1 of the Rules of Court (Cap 322, R 5, 2006 Rev Ed)

14. Applicable Statutes

Statute NameJurisdiction
No applicable statutes

15. Key Terms and Keywords

15.1 Key Terms

  • Promissory Notes
  • Forum Non Conveniens
  • Choice of Law
  • Restitution
  • Unjust Enrichment
  • Spiliada Test
  • Change of Position
  • Fraud
  • SWIFT
  • Third-Party Proceedings

15.2 Keywords

  • forum non conveniens
  • choice of law
  • restitution
  • unjust enrichment
  • promissory notes
  • fraud
  • Singapore
  • CIMB
  • Dresdner

17. Areas of Law

Area NameRelevance Score
Conflict of Laws90
Unjust Enrichment70
Contract Law50
Fraud and Deceit40
Judgments and Orders20
Inherent Jurisdiction20

16. Subjects

  • Banking
  • Finance
  • Conflict of Laws
  • Civil Procedure