PT Selecta Bestama v Sin Huat Huat: Stay of Proceedings & Exclusive Jurisdiction Clause in Shipbuilding Contracts
In PT Selecta Bestama v Sin Huat Huat Marine Transportation Pte Ltd, the Singapore High Court heard an appeal by the defendant, Sin Huat Huat, against the assistant registrar's decision to impose a condition of payment of $173,500 into court for setting aside a default judgment and refusing a stay of proceedings in favor of Batam courts, as stipulated in the exclusive jurisdiction clause of two shipbuilding contracts. Steven Chong J allowed the appeal, setting aside the payment condition and ordering a stay of proceedings. The court found that the defendant's challenge to the validity of the contracts due to misrepresentation did not preclude reliance on the exclusive jurisdiction clause, and the plaintiff's failure to attempt negotiations, as required by the clause, further supported the stay.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Appeal allowed; proceedings stayed in favor of Batam courts.
1.3 Case Type
Admiralty
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Singapore High Court decision on stay of proceedings in favor of Batam courts based on an exclusive jurisdiction clause in shipbuilding contracts.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| PT Selecta Bestama | Plaintiff, Respondent | Corporation | Appeal Dismissed | Lost | Jason Tan Hin Wa |
| Sin Huat Huat Marine Transportation Pte Ltd | Defendant, Appellant | Corporation | Appeal Allowed | Won | Michael Chia Peng Chuang, Darius Lee Zhen Ying |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Steven Chong | Judge | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Jason Tan Hin Wa | Asia Ascent Law Corporation |
| Michael Chia Peng Chuang | Legal Solutions LLC |
| Darius Lee Zhen Ying | Legal Solutions LLC |
4. Facts
- The plaintiff and defendant entered into two contracts for the construction of two barges.
- The defendant claimed an oral agreement existed for only one barge, later cancelled due to lack of funds.
- The defendant signed multiple identical contracts, claiming misrepresentation regarding the number of barges.
- The plaintiff claimed the barges were 90 percent complete despite the defendant's non-payment and lack of representation at the shipyard.
- There was a six-month period of silence between the parties regarding the construction progress.
- The defendant's request to inspect the barges was denied by the plaintiff.
- The contracts contained an exclusive jurisdiction clause favoring the courts in Batam.
5. Formal Citations
- PT Selecta Bestama v Sin Huat Huat Marine Transportation Pte Ltd, Admiralty in Personam No 135 of 2014 (Registrar's Appeal No 236 of 2015), [2015] SGHC 295
6. Timeline
| Date | Event |
|---|---|
| Contracts signed | |
| Invoices issued for 20 percent of purchase price | |
| Invoices issued for another 20 percent upon laying of keels | |
| Letter of demand sent by plaintiff's solicitors | |
| Judgment in default of appearance obtained by plaintiff | |
| Defendant filed a Notice to Produce Documents | |
| Defendant filed application to set aside default judgment and stay proceedings | |
| Appeal allowed; proceedings stayed |
7. Legal Issues
- Stay of Proceedings
- Outcome: The court allowed the stay of proceedings in favor of the Batam courts, enforcing the exclusive jurisdiction clause.
- Category: Procedural
- Sub-Issues:
- Enforcement of exclusive jurisdiction clause
- Compliance with preconditions to jurisdiction
- Waiver of right to rely on exclusive jurisdiction clause
- Related Cases:
- [2004] 1 SLR(R) 6
- [1967] 2 QB 590
- [2014] 1 SLR 130
- [2008] 4 SLR(R) 543
- Validity of Contract
- Outcome: The court found that there were triable issues regarding the validity of the contracts due to potential misrepresentation, but this did not preclude reliance on the exclusive jurisdiction clause.
- Category: Substantive
- Sub-Issues:
- Misrepresentation
- Termination of contract
- Meeting of the minds
- Related Cases:
- [2008] 4 SLR(R) 543
8. Remedies Sought
- Monetary Damages
- Setting aside of default judgment
- Stay of proceedings
9. Cause of Actions
- Breach of Contract
10. Practice Areas
- Admiralty Litigation
- Commercial Litigation
- International Arbitration
11. Industries
- Marine Transportation
- Construction
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| PT Selecta Bestama v Sin Huat Huat Marine Transportation Pte Ltd | High Court | Yes | [2015] SGHCR 16 | Singapore | Cited to reference the assistant registrar's decision regarding the obligation to negotiate as a precondition to the exclusive jurisdiction agreement. |
| Australian Timber Products Pte Ltd v Koh Brothers Building & Civil Engineering Contractor (Pte) Ltd | High Court | Yes | [2005] 1 SLR(R) 168 | Singapore | Cited for the principle that the default judgment must be set aside before considering the stay application. |
| Mercurine Pte Ltd v Canberra Development Pte Ltd | High Court | Yes | [2008] 4 SLR(R) 907 | Singapore | Cited for the principle that the defendant had to establish a prima facie defence in the sense of showing that there are triable or arguable issues. |
| Golden Shore Transportation Pte Ltd v UCO Bank and another appeal | Court of Appeal | Yes | [2004] 1 SLR(R) 6 | Singapore | Cited for the principle that courts ordinarily give effect to valid exclusive jurisdiction clauses and the test for departing from the contractual forum. |
| Mackender and others v Feldia AG and others | Queen's Bench | Yes | [1967] 2 QB 590 | England and Wales | Cited for the principle that a dispute relating to the validity of the underlying agreement is nonetheless a dispute arising under the governing exclusive jurisdiction clause. |
| International Research Corp PLC v Lufthansa Systems Asia Pacific Pte Ltd and another | Court of Appeal | Yes | [2014] 1 SLR 130 | Singapore | Cited for the principle of complying with preconditions in order to invoke the right to refer the dispute to arbitration. |
| CIMB Bank Bhd v Dresdner Kleinwort Ltd | Court of Appeal | Yes | [2008] 4 SLR(R) 543 | Singapore | Cited for the proposition that a party could rely on the exclusive jurisdiction clause to apply for the stay notwithstanding that it was disputing the validity of the contracts. |
| Ash v Corporation of Lloyd’s | Ontario Court of Appeal | Yes | (1992) 9 OR (3d) 755 | Canada | Cited with approval by the Court of Appeal in CIMB Bank at [30] 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. |
| Hyundai Merchant Marine Company Limited v Americas Bulk Transport Limited | High Court of Justice | Yes | [2013] EWHC 470 (Comm) | England and Wales | Cited by the plaintiff, but distinguished by the court because in that case, the dispute was whether the parties had entered into any binding legal agreement based on a series of email exchanges. |
| Amoe Pte Ltd v Otto Marine Ltd | High Court | Yes | [2014] 1 SLR 724 | Singapore | Cited for the principle that the issuance of a Notice to Produce did not constitute a submission to jurisdiction, and did not amount to a waiver of the right to stay the proceedings in favour of arbitration. |
| The “Hyundai Fortune” | Court of Appeal | Yes | [2004] 4 SLR(R) 548 | Singapore | Cited for the principle that limited weight should be given to factors which were known to the parties at the time of the contract. |
| The “Jian He” | High Court | Yes | [1999] 3 SLR(R) 432 | Singapore | Cited for the principle that a lack of a defence may constitute “strong cause” on the ground that it indicates that the defendant does not genuinely desire a trial in the contractual forum. |
| The “Hung Vuong-2” | High Court | Yes | [2000] 2 SLR(R) 11 | Singapore | Cited for the principle that a lack of a defence may constitute “strong cause” on the ground that it indicates that the defendant does not genuinely desire a trial in the contractual forum. |
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
- Exclusive jurisdiction clause
- Stay of proceedings
- Misrepresentation
- Shipbuilding contract
- Barges
- Default judgment
- Prima facie defence
- Triable issues
- Precondition to jurisdiction
- Governing law
15.2 Keywords
- Admiralty
- Contract
- Stay of Proceedings
- Exclusive Jurisdiction Clause
- Shipbuilding
- Singapore
- Batam
- Misrepresentation
16. Subjects
- Admiralty
- Contract Law
- Civil Procedure
- Jurisdiction
- Shipping
- Construction
17. Areas of Law
- Admiralty Law
- Contract Law
- Civil Procedure
- Conflict of Laws
- Arbitration Law