Southern Realty v Chen Jia Fu: Forum Non Conveniens & Beneficial Ownership of Shares

In Southern Realty (Malaya) Sdn Bhd v Darren Chen Jia Fu, the High Court of Singapore granted a stay of proceedings in favor of Indonesia based on the doctrine of forum non conveniens. The case concerns a dispute over the beneficial ownership of shares in TriSuryo Garuda Nusa Pte Ltd (TGN), a Singapore-incorporated company holding shares in Indonesian palm oil companies. The plaintiff, Southern Realty, claims the shares are held on trust for them, while the defendants argue the shares were intended as an equity stake for the first defendant. The court found that Indonesia had a more real and substantial connection to the dispute, considering the underlying assets, events, transactions, applicable law, and public policy.

1. Case Overview

1.1 Court

High Court of the Republic of Singapore

1.2 Outcome

Stay of proceedings granted with costs.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Singapore court grants stay of proceedings in favor of Indonesia due to forum non conveniens. Dispute concerns beneficial ownership of shares.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Southern Realty (Malaya) Sdn BhdPlaintiffCorporationProceedings StayedStayed
Darren Chen Jia Fu@ Suryo TanDefendantIndividualStay GrantedWon
Hendra Ade PutraDefendantIndividualStay GrantedWon
Christina SuryoDefendantIndividualStay GrantedWon

3. Judges

Judge NameTitleDelivered Judgment
Valerie TheanJudicial CommissionerYes

4. Counsels

Counsel NameOrganization
Lim Tong ChuanTan Peng Chin LLC
Joel WeeTan Peng Chin LLC
Chew XiangRajah & Tann Singapore LLP
Chew Ming Hsien RebeccaRajah & Tann Singapore LLP

4. Facts

  1. The suit concerns the beneficial ownership of shares in TGN, a Singapore-incorporated company.
  2. TGN was incorporated to hold shares in two Indonesian companies, PTPG and PTSA.
  3. The Plaintiff contends that the shares in TGN are held on trust for it.
  4. The defendants sought a stay of proceedings in favor of Indonesia, on the ground of forum non conveniens.
  5. The 1st Defendant agreed to assist PTPG and PTSA to resolve operational and licensing issues.
  6. It was agreed that 32% of the shares in PTPG and PTSA would be transferred to the 1st Defendant.
  7. The parties dispute whether the shares in TGN were held on trust for the Plaintiff.

5. Formal Citations

  1. Southern Realty (Malaya) Sdn BhdvChen Jia Fu Darren (alias Tan Suryo) and others, Suit No 349 of 2016, [2016] SGHC 230

6. Timeline

DateEvent
TGN was incorporated in Singapore
Deeds for the sale and purchase of shares were entered into between TGN, SKPP and SKPS
Florence Tan was removed from her position as director of TGN
The 1st Defendant transferred 98 of his 99 TGN shares to the 2nd Defendant
The 2nd Defendant transferred all his 99 TGN shares to the 3rd Defendant
SKPP and SKPS commenced Suit 252 against TGN for breach of trust
The Plaintiff brought this suit against the defendants for the return of the Singapore Shares
Counsel argued the application
Parties returned for a decision
Stay of proceedings granted

7. Legal Issues

  1. Forum Non Conveniens
    • Outcome: The court granted a stay of proceedings, finding Indonesia to be the more appropriate forum.
    • Category: Procedural
    • Related Cases:
      • [2008] 4 SLR(R) 543
      • [2011] 1 SLR 391
  2. Breach of Trust
    • Outcome: The court did not make a determination on the breach of trust claim, as the proceedings were stayed.
    • Category: Substantive
  3. Applicable Law
    • Outcome: The court provisionally viewed that Indonesian law had a closer connection to the dispute.
    • Category: Substantive
    • Related Cases:
      • [2008] 2 SLR(R) 491
      • [2001] 2 SLR(R) 285
      • [2007] 1 SLR(R) 377
      • [2015] SGHC 330
  4. Indonesian Public Policy
    • Outcome: The court found that questions of Indonesian public policy were directly in play, which was a strong factor in favor of a stay.
    • Category: Substantive
    • Related Cases:
      • [1995] 2 SLR(R) 851
      • [1999] 3 SLR(R) 842

8. Remedies Sought

  1. Return of shares

9. Cause of Actions

  • Breach of Trust

10. Practice Areas

  • Commercial Litigation

11. Industries

  • Palm Oil

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
CIMB Bank Bhd v Dresdner Kleinwort LtdCourt of AppealYes[2008] 4 SLR(R) 543SingaporeCited for the principles for granting a stay of proceedings on the basis of forum non conveniens.
JIO Minerals FZC and others v Mineral Enterprises LtdCourt of AppealYes[2011] 1 SLR 391SingaporeEndorsed the five non-exhaustive types of connections identified by the learned author of Halsbury’s Laws of Singapore for determining the most real and substantial connection with the dispute.
Pacific Recreation Pte Ltd v S Y Technology Inc and another appealCourt of AppealYes[2008] 2 SLR(R) 491SingaporeAffirmed the approach to determining the governing law of a contract.
Overseas Union Insurance Ltd v Turegum Insurance CoN/AYes[2001] 2 SLR(R) 285SingaporeSet out the three stages in determining the governing law of a contract.
Rickshaw Investments Ltd and another v Nicolai Baron von UexkullCourt of AppealYes[2007] 1 SLR(R) 377SingaporeHeld that where equitable duties arise from a factual matrix where the legal foundation is premised on an independent established category such as contract or tort, the appropriate principle in so far as the choice of law is concerned ought to be centred on the established category concerned.
Bunge SA and another v Indian BankHigh CourtYes[2015] SGHC 330SingaporeDiscussed the approach to determining the applicable law governing the dispute at this interlocutory stage.
Eng Liat Kiang v Eng Bak HernCourt of AppealYes[1995] 2 SLR(R) 851SingaporeThe court granted a stay of the action on the ground of forum non conveniens because an issue of Malaysian public policy is best left to be determined by the Malaysian court.
Peh Teck Quee v Bayerische Landesbank GirozentraleCourt of AppealYes[1999] 3 SLR(R) 842SingaporeAffirmed that the Singapore courts would not enforce contracts where the parties contemplate performance of acts which are illegal by the laws of a friendly country, whether or not it is the contractually stipulated place of performance.
Chan Chin Cheung v Chan Fatt Cheung and othersCourt of AppealYes[2010] 1 SLR 1192SingaporeThe Court of Appeal held that although the causes of action in Singapore and Malaysia were different, the trial courts would have to traverse much the same ground. In the result the High Court’s order for a stay pending outcome of the Malaysian proceedings promoted international comity.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
Indonesian Law No 25 of 2007 on InvestmentIndonesia

15. Key Terms and Keywords

15.1 Key Terms

  • Forum non conveniens
  • Beneficial ownership
  • Stay of proceedings
  • Trust
  • Indonesian Shares
  • Singapore Shares
  • Special purpose vehicle
  • Indonesian public policy

15.2 Keywords

  • forum non conveniens
  • trust
  • shares
  • Indonesia
  • Singapore
  • stay of proceedings

17. Areas of Law

Area NameRelevance Score
Conflict of Laws80
Civil Procedure75
Forum Non Conveniens70
Trust Law60
Company Law40
Property Law30
Estoppel20

16. Subjects

  • Conflict of Laws
  • Trusts
  • Civil Procedure