Morgan Stanley v Hong Leong Finance: Anti-Suit Injunction & Pinnacle Notes Failure

Morgan Stanley Asia (Singapore) Pte and others sought an anti-suit injunction in the Singapore High Court to restrain Hong Leong Finance Ltd from pursuing legal proceedings in New York concerning claims arising from the failure of Pinnacle Notes. The High Court, presided over by Belinda Ang Saw Ean J, refused the application, finding that Singapore was not clearly the most appropriate forum and that the New York proceedings were not vexatious or oppressive. The court considered the non-exclusive jurisdiction clause, the ongoing US Class Action, and principles of international comity in reaching its decision.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Plaintiffs' application in OS 798/2012 refused with costs.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Singapore High Court refused to grant an anti-suit injunction, allowing Hong Leong Finance to pursue claims against Morgan Stanley in New York regarding the failure of Pinnacle Notes.

1.7 Decision Date

18 April 2013

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
Morgan Stanley Asia (Singapore) Pte (formerly known as Morgan Stanley Dean Witter Asia (Singapore) Pte)	Plaintiff	Corporation	Application Refused	Lost	Chua Sui Tong of WongPartnership LLP Alvin Yeo of WongPartnership LLP Edmund Koh of WongPartnership LLP Lim Shiqi of WongPartnership LLP
Pinnacle Performance Limited	Plaintiff	Corporation	Application Refused	Lost	Chua Sui Tong of WongPartnership LLP Alvin Yeo of WongPartnership LLP Edmund Koh of WongPartnership LLP Lim Shiqi of WongPartnership LLP
Morgan Stanley & Co International Plc (formerly known as Morgan Stanley & Co International Limited)	Plaintiff	Corporation	Application Refused	Lost	Chua Sui Tong of WongPartnership LLP Alvin Yeo of WongPartnership LLP Edmund Koh of WongPartnership LLP Lim Shiqi of WongPartnership LLP
Morgan Stanley Capital Services LLC (formerly known as Morgan Stanley Capital Services Inc)	Plaintiff	Corporation	Application Refused	Lost	Chua Sui Tong of WongPartnership LLP Alvin Yeo of WongPartnership LLP Edmund Koh of WongPartnership LLP Lim Shiqi of WongPartnership LLP
Morgan Stanley & Co LLC (formerly known as Morgan Stanley & Co Incorporated)	Plaintiff	Corporation	Application Refused	Lost	Chua Sui Tong of WongPartnership LLP Alvin Yeo of WongPartnership LLP Edmund Koh of WongPartnership LLP Lim Shiqi of WongPartnership LLP
Hong Leong Finance Ltd	Defendant	Corporation	Application to Restrain Proceedings Refused	Won	Lee Eng Beng of Rajah & Tann LLP Disa Sim of Rajah & Tann LLP Ng Kexian of Rajah & Tann LLP

3. Judges

Judge Name	Title	Delivered Judgment
Belinda Ang Saw Ean	Judge	Yes

4. Counsels

Counsel Name	Organization
Chua Sui Tong	WongPartnership LLP
Alvin Yeo	WongPartnership LLP
Edmund Koh	WongPartnership LLP
Lim Shiqi	WongPartnership LLP
Lee Eng Beng	Rajah & Tann LLP
Disa Sim	Rajah & Tann LLP
Ng Kexian	Rajah & Tann LLP

4. Facts

Morgan Stanley Asia (Singapore) Pte was the arranger of the Pinnacle Notes.
Pinnacle Performance Limited was the issuer of the Pinnacle Notes.
Hong Leong Finance was the distributor of the Pinnacle Notes.
The Pinnacle Notes failed during the global financial crisis in 2008.
Hong Leong Finance compensated Singapore-based customers for losses exceeding US$32m.
Hong Leong Finance filed a suit in New York alleging fraud against the plaintiffs.
A US Class Action was commenced by Singapore investors against the plaintiffs in New York.

5. Formal Citations

Morgan Stanley Asia (Singapore) Pte (formerly known as Morgan Stanley Dean Witter Asia (Singapore) Pte) and others v Hong Leong Finance Ltd, Originating Summons No 798 of 2012, [2013] SGHC 83

6. Timeline

Date	Event
2006-10-06	Master Distributor Appointment Agreement entered into between Hong Leong Finance and Morgan Stanley Asia (Singapore) Pte and Pinnacle Performance Limited and Morgan Stanley & Co International Plc.
2006-10-01	Hong Leong Finance distributed Pinnacle Notes Series 2.
2007-12-01	Hong Leong Finance distributed Pinnacle Notes Series 10.
2008-01-01	Global financial crisis; investors in Pinnacle Notes lost investments.
2010-04-01	Hong Leong Finance filed Originating Summons No 403/2010 against Morgan Stanley Asia (Singapore) Pte seeking pre-action discovery of documents.
2010-10-25	Singapore investors commenced a class action in the New York Court alleging fraud against the plaintiffs.
2011-10-31	Judge Sand allowed the motion in part in Dandong, et al v Pinnacle Performance Limited, et al (10 Civ. 8086 (LBS).
2012-08-06	Hong Leong Finance sued the plaintiffs in New York vide Case No 12 Civ 6010.
2012-08-22	Originating Summons No 798/2012 was filed to restrain Hong Leong Finance from suing in the US.
2012-10-15	The NY Proceedings and the US Class Action were transferred from Judge Sand to Judge Furman.
2013-04-19	Decision Date of the judgment.

7. Legal Issues

Anti-Suit Injunction
- Outcome: The court refused to grant the anti-suit injunction.
- Category: Procedural
- Sub-Issues:
  - Natural forum
  - Vexatious or oppressive proceedings
  - International comity
- Related Cases:
  - [2012] 2 SLR 625
  - [2009] 4 SLR(R) 428
  - [2004] 2 SLR(R) 457
  - [1987] 1 AC 871
  - [2009] 2 CLC 408
  - [2004] 1 CLC 170
  - [2010] 1 WLR 1023
  - [2002] 1 All ER 749
  - [2002] 1 WLR 107
  - [2011] 4 SLR 503
  - [2012] 2 SLR 519
  - [2008] 5 HKLRD 631
  - [2012] 2 SLR 289
  - [1990] 3 SCR 1077
  - [1993] 1 SCR 897
  - (1993) 102 DLR (4th) 96
  - [1999] 1 AC 119
  - [1997] 2 SLR(R) 148
  - [2010] NSWCA 196
  - [1987] 1 AC 460
Forum Non Conveniens
- Outcome: The court determined that Singapore was not clearly the most appropriate forum.
- Category: Procedural
Fraud
- Outcome: The court considered the allegations of fraud in the New York proceedings but did not make a determination on the merits of the fraud claim.
- Category: Substantive

8. Remedies Sought

Anti-Suit Injunction
Damages

9. Cause of Actions

Fraud
Breach of Contract
Indemnity

10. Practice Areas

Commercial Litigation
Injunctions
Cross-Border Litigation

11. Industries

Finance

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
Ashlock William Grover v SetClear Pte Ltd	Singapore Court of Appeal	Yes	[2012] 2 SLR 625	Singapore	Cited for the general principles governing the exercise of the court’s jurisdiction to grant an injunction restraining a party from pursuing foreign proceedings.
John Reginald Stott Kirkham and others v Trane US Inc and others	Singapore Court of Appeal	Yes	[2009] 4 SLR(R) 428	Singapore	Cited for the general principles governing the exercise of the court’s jurisdiction to grant an injunction restraining a party from pursuing foreign proceedings.
Evergreen International SA v Volkswagen Group Singapore Pte Ltd and others	Singapore Court of Appeal	Yes	[2004] 2 SLR(R) 457	Singapore	Cited for the broad principle underlying the anti-suit jurisdiction is that it is to be exercised when the ends of justice require it.
Société Nationale Industrielle Aerospatiale v Lee Kui Jak and another	Privy Council	Yes	[1987] 1 AC 871	United Kingdom	Cited for the broad principle underlying the anti-suit jurisdiction is that it is to be exercised when the ends of justice require it.
Cherney v Deripaska	English High Court	Yes	[2009] 2 CLC 408	England and Wales	Cited to distinguish the natural forum from 'a natural forum'.
Royal Bank of Canada v Cooperatieve Centrale Raiffeisen-Boerenleenbank BA	English High Court	Yes	[2004] 1 CLC 170	England and Wales	Cited to distinguish the natural forum from 'a natural forum'.
Deutsche Bank AG & another v Highland Crusader Offshore Partners LP & others	England and Wales Court of Appeal	Yes	[2010] 1 WLR 1023	England and Wales	Cited to emphasize the importance of comity when considering whether to grant an anti-suit injunction.
Donohue v Armco Inc and others	House of Lords	Yes	[2002] 1 All ER 749	United Kingdom	Cited for the general rule that an exclusive jurisdiction clause ought to be enforced as between the parties unless there are strong reasons not to do so.
Turner v Grovit and others	House of Lords	Yes	[2002] 1 WLR 107	United Kingdom	Cited for the general rule that an exclusive jurisdiction clause ought to be enforced as between the parties unless there are strong reasons not to do so.
UBS AG v Telesto Investments Ltd and others and another matter	Singapore High Court	Yes	[2011] 4 SLR 503	Singapore	Considered the principles governing the exercise of the court’s jurisdiction to grant an anti-suit injunction where a non-exclusive jurisdiction clause was in play.
Orchard Capital I Ltd v Ravindra Kumar Jhunjhunwala	Singapore Court of Appeal	Yes	[2012] 2 SLR 519	Singapore	Considered the legal effect of a non-exclusive jurisdiction clause in favour of Hong Kong in a stay application on grounds of forum non conveniens.
Noble Power Investments Ltd v Nissei Stomach Tokyo Co Ltd	Hong Kong Court of Appeal	Yes	[2008] 5 HKLRD 631	Hong Kong	Considered the effect of non-exclusive jurisdiction clauses.
The Reecon Wolf	Singapore Court of Appeal	Yes	[2012] 2 SLR 289	Singapore	Cited for the definition of 'Comity'.
Morguard Investments Ltd v De Savoye	Supreme Court of Canada	Yes	[1990] 3 SCR 1077	Canada	Cited for the definition of 'Comity'.
Amchem Products Incorporated v British Columbia (Workers' Compensation Board)	Supreme Court of Canada	Yes	[1993] 1 SCR 897	Canada	Cited for the definition of 'Comity'.
Amchem Products Inc. v Workers’ Compensation Board of British Columbia	Supreme Court of British Columbia	Yes	(1993) 102 DLR (4th) 96	Canada	Discussed the importance of comity considerations in anti-suit injunction applications.
Airbus Industrie GIE v Patel	House of Lords	Yes	[1999] 1 AC 119	United Kingdom	Cited to emphasize that the anti-suit jurisdiction must be exercised with caution.
Koh Kay Yew v Inno-Pacific Holdings Ltd	Singapore Court of Appeal	Yes	[1997] 2 SLR(R) 148	Singapore	Cited for the principle that the court should be slow to grant an anti-suit injunction where there is no existing lis in Singapore.
Global Partner Fund Ltd v Babcock & Brown Ltd (in liq)	Supreme Court of New South Wales Court of Appeal	Yes	[2010] NSWCA 196	Australia	Compared the jurisdiction agreement in this case with the jurisdiction agreement in Global Partner Fund Ltd v Babcock & Brown Ltd (in liq) [2010] NSWCA 196.
The Spiliada	House of Lords	Yes	[1987] 1 AC 460	United Kingdom	Cited for the 'Cambridgeshire Factor'.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute Name	Jurisdiction
No applicable statutes

15. Key Terms and Keywords

15.1 Key Terms

Pinnacle Notes
Anti-Suit Injunction
Master Distributor Appointment Agreement
Reference Entities
US Class Action
Forum Non Conveniens
Equitable Subrogation
Non-Exclusive Jurisdiction Clause
International Comity

15.2 Keywords

Pinnacle Notes
Anti-Suit Injunction
Hong Leong Finance
Morgan Stanley
Singapore High Court
New York Proceedings
Jurisdiction
Fraud
Financial Crisis

17. Areas of Law

Area Name	Relevance Score
Fraud and Deceit	80
Banking and Finance	75
Commercial Litigation	70
Credit-linked notes	65
Contract Law	60
Private International Law	50
Financial Crisis	40
Arbitration	30

16. Subjects

Financial Products
Cross-Border Litigation
Injunctions