Nippon Catalyst v PT Trans-Pacific: Stay of Proceedings & International Arbitration Act
In Nippon Catalyst Pte Ltd v PT Trans-Pacific Petrochemical Indotama and PT Pertamina (Persero), the Singapore High Court addressed appeals by Nippon Catalyst against decisions to grant a stay of proceedings in favor of arbitration for PT Trans-Pacific Petrochemical Indotama and to set aside an order granting leave to serve out of jurisdiction against PT Pertamina. The case involved a dispute over a lease agreement for catalysts and subsequent claims of conversion, joint tortfeasorship, and unlawful conspiracy. The court dismissed the appeals, ordering a stay of the Conversion Claim in favor of arbitration, and staying the Joint Tortfeasor and Conspiracy Claims, finding Singapore was not the proper forum.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Appeal dismissed; Conversion Claim stayed in favour of arbitration; Joint Tortfeasor Claim and Conspiracy Claim stayed.
1.3 Case Type
Civil
1.4 Judgment Type
Judgment
1.5 Jurisdiction
Singapore
1.6 Description
Singapore High Court granted a stay of proceedings in favor of arbitration under the International Arbitration Act regarding a lease agreement.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Nippon Catalyst Pte Ltd | Plaintiff, Appellant | Corporation | Appeal dismissed | Lost | Joseph Tay, Lee Ping, Lin Ruizi |
| PT Trans-Pacific Petrochemical Indotama | Defendant, Respondent | Corporation | Conversion Claim stayed in favour of arbitration, Conspiracy Claim stayed | Won, Won | Chew Kei-Jin, Mabelle Tay |
| PT Pertamina (Persero) | Defendant, Respondent | Corporation | Joint Tortfeasor Claim stayed, Conspiracy Claim stayed | Won, Won | Nandakumar Ponniya, Michelle Lee, Kong Xie Shern |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Audrey Lim | Judicial Commissioner | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Joseph Tay | Shook Lin & Bok LLP |
| Lee Ping | Shook Lin & Bok LLP |
| Lin Ruizi | Shook Lin & Bok LLP |
| Chew Kei-Jin | Ascendant Legal LLC |
| Mabelle Tay | Ascendant Legal LLC |
| Nandakumar Ponniya | Wong & Leow LLC |
| Michelle Lee | Wong & Leow LLC |
| Kong Xie Shern | Wong & Leow LLC |
4. Facts
- Nippon and TPPI executed a Lease Agreement in 2005 for catalysts to be installed in TPPI's refinery.
- TPPI's refinery ceased operations in 2008, and TPPI defaulted on rent payments.
- In 2009, Nippon and TPPI entered into a Heads of Agreement to extend the Lease Agreement.
- TPPI's refinery was shut down again in 2011 due to financial difficulties.
- In 2012, TPPI entered into a Composition Agreement with creditors, including Nippon.
- Nippon's claim against TPPI was converted into shares amounting to 4.46% of TPPI's shares.
- TPPI resumed operations and continued to use the Catalysts without a new agreement.
5. Formal Citations
- Nippon Catalyst Pte Ltd v PT Trans-Pacific Petrochemical Indotama and another, Suit No 657 of 2017 (Registrar’s Appeal Nos 46 and 47 of 2018), [2018] SGHC 126
6. Timeline
| Date | Event |
|---|---|
| Lease Agreement executed between Nippon and TPPI. | |
| TPPI's refinery ceased operations. | |
| Heads of Agreement became valid and effective. | |
| Lease Agreement extended by Heads of Agreement expired. | |
| TPPI's refinery shut down again. | |
| TPPI entered into a Composition Agreement with creditors, including Nippon. | |
| Composition Agreement endorsed by the Commercial Court of Jakarta Pusat. | |
| Nippon's claim against TPPI was converted into shares. | |
| Suit 657 of 2017 filed by Nippon. | |
| Minute Sheet. | |
| Hearing date. | |
| Hearing date. | |
| Judgment reserved. |
7. Legal Issues
- Stay of Court Proceedings
- Outcome: The court ordered a stay of proceedings for the Conversion Claim in favour of arbitration.
- Category: Procedural
- Sub-Issues:
- Application of International Arbitration Act
- Validity of arbitration agreement
- Scope of arbitration agreement
- Service Out of Jurisdiction
- Outcome: The court found that Singapore was not the proper forum for the dispute and stayed the Joint Tortfeasor Claim and Conspiracy Claim.
- Category: Procedural
- Sub-Issues:
- Proper forum for dispute
- Application of Spiliada test
- Damage suffered in jurisdiction
- Conversion
- Outcome: The court found that the Conversion Claim fell within the scope of the arbitration clause.
- Category: Substantive
- Sub-Issues:
- Unlawful appropriation of chattel
- Right to possession
- Joint Tortfeasor
- Outcome: The court stayed the Joint Tortfeasor Claim, finding Singapore was not the proper forum.
- Category: Substantive
- Sub-Issues:
- Authorisation of tort
- Procurement of tort
- Instigation of tort
- Unlawful Conspiracy
- Outcome: The court stayed the Conspiracy Claim, finding Singapore was not the proper forum.
- Category: Substantive
- Sub-Issues:
- Agreement to take advantage of property
- Lack of fair value or due consideration
8. Remedies Sought
- Damages for conversion
- Damages for detinue
- Damages for joint tortfeasor
- Damages for unlawful conspiracy
9. Cause of Actions
- Conversion
- Detinue
- Joint Tortfeasor
- Unlawful Conspiracy
10. Practice Areas
- Arbitration
- Commercial Litigation
11. Industries
- Chemicals
- Energy
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Tomolugen Holdings Ltd and another v Silica Investors Ltd and other appeals | Court of Appeal | Yes | [2016] 1 SLR 373 | Singapore | Cited for the principle that the court should grant a stay in favor of arbitration if a prima facie case is established. |
| Wilson Taylor Asia Pacific Pte Ltd v Dyna-Jet Pte Ltd | Court of Appeal | Yes | [2017] 2 SLR 362 | Singapore | Cited for reiterating the principle that the court should grant a stay in favor of arbitration if a prima facie case is established. |
| Larsen Oil and Gas Pte Ltd v Petroprod Ltd (in official liquidation in the Cayman Islands and in compulsory liquidation in Singapore) | Court of Appeal | Yes | [2011] 3 SLR 414 | Singapore | Cited for the generous approach towards construing the scope of an arbitration clause. |
| Tjong Very Sumito and others v Antig Investments Pte Ltd | Court of Appeal | Yes | [2009] 4 SLR(R) 732 | Singapore | Cited in Larsen Oil for recognizing that words such as “any dispute” are wide enough to include any matter related to the contract even if the underlying action is based in tort. |
| Linglong Americas, Inc v Horizon Tire, Inc | Sixth Circuit | Yes | Linglong Americas, Inc v Horizon Tire, Inc 666 Fed Appx 445 (6th Circuit, 2016) | United States | Distinguished as the claims were not based on any rights created by the expired agreement. |
| Local 703, International Brotherhood of Teamsters v Kennicott Bros Co | Seventh Circuit | Yes | Local 703, International Brotherhood of Teamsters v Kennicott Bros Co 771 F.2d 300 (7th Circuit, 1985) | United States | Distinguished as the events triggering the grievances occurred after the collective-bargaining agreement expired. |
| BCY v BCZ | High Court | Yes | [2017] 3 SLR 357 | Singapore | Distinguished as the arbitration agreement remained subject to contract, and no binding arbitration agreement was formed before the main contract was concluded. |
| Zoom Communications Ltd v Broadcast Solutions Pte Ltd | Court of Appeal | Yes | [2014] 4 SLR 500 | Singapore | Cited for the requirements for service out of jurisdiction. |
| Rappo, Tania v Accent Delight International Ltd and another and another appeal | Court of Appeal | Yes | [2017] 2 SLR 265 | Singapore | Cited for the Spiliada test to determine the proper forum. |
| Spiliada Maritime Corp v Cansulex Ltd | House of Lords | Yes | [1987] AC 460 | United Kingdom | Cited for the Spiliada test to determine the proper forum. |
| Metall Und Rohstoff AG v Donaldson Lufkin & Jenrette Inc | English Court of Appeal | Yes | [1990] 1 QB 391 | England and Wales | Cited for the principle that there must be some significant damage suffered within the jurisdiction for a claim to fall within O 11 r (1)(f)(ii). |
| Alfred Dunhill Ltd v Diffusion Internationale de Maroquinerie de Prestige SARL and others | Queen's Bench Division | Yes | [2001] 1 All ER (Comm) 950 | England and Wales | Cited for the principle that it is insufficient to show that a plaintiff has a bank account within the jurisdiction to establish damage. |
| Kishinchand Tiloomal Bhojwani v Sunil Kishinchand Bhojwani and another | High Court | Yes | [1997] 1 SLR(R) 518 | Singapore | Cited for the test to be applied to determine where in substance the cause of action arose. |
| Karaha Bodas Co LLC v Pertamina Energy Trading Ltd and another | High Court | Yes | [2005] 2 SLR(R) 568 | Singapore | Cited for the test to be applied to determine where in substance the cause of action arose. |
| Rickshaw Investments Ltd and another v Nicolai Baron von Uexkull | High Court | Yes | [2007] 1 SLR(R) 377 | Singapore | Cited for the general rule that the place where a tort occurred is prima facie the natural forum for determining the claim. |
| EFT Holdings, Inc and another v Marinteknik Shipbuilders (S) Pte Ltd and another | High Court | Yes | [2014] 1 SLR 860 | Singapore | Cited for the test to be applied to determine the place of a tort. |
| Faith Maritime Co Ltd v Feoso (Singapore) Pte Ltd and another action | High Court | Yes | [2002] 2 SLR(R) 1088 | Singapore | Cited for the essence of conversion lying in the unlawful appropriation of another’s chattel. |
| General and Finance Facilities Ltd v Cooks Cars (Romford) Ltd | Queen's Bench Division | Yes | [1963] 1 WLR 644 | England and Wales | Cited for the proposition that the demand for delivery of the chattel is an essential requirement of an action in detinue. |
| Tolofson v Jensen | Supreme Court | Yes | (1994) 120 DLR (4th) 289 | Canada | Cited for the principle that where an act occurs in one place but the consequences are directly felt elsewhere, it may well be that the consequence would be held to constitute the wrong. |
| Ang Ming Chuang v Singapore Airlines Ltd (Civil Aeronautics Administration, third party) | High Court | Yes | [2005] 1 SLR(R) 409 | Singapore | Cited Tolofson v Jensen for the principle that where an act occurs in one place but the consequences are directly felt elsewhere, it may well be that the consequence would be held to constitute the wrong. |
| JIO Minerals FZC and others v Mineral Enterprises Ltd | High Court | Yes | [2011] 1 SLR 391 | Singapore | Cited for the principle that Pertamina has failed to adduce evidence that foreign witnesses would at least arguably be relevant to its defence. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| International Arbitration Act | Singapore |
| International Arbitration Act (Cap 143A, 2002 Rev Ed), s 6 | Singapore |
| Rules of Court (Cap 322, R 5, 2014 Rev Ed), O 11 r 1 | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Catalysts
- Lease Agreement
- Heads of Agreement
- Composition Agreement
- Tolling agreements
- Arbitration Clause
- Conversion Claim
- Joint Tortfeasor Claim
- Conspiracy Claim
- Stay of proceedings
- Service out of jurisdiction
- Proper forum
15.2 Keywords
- arbitration
- stay of proceedings
- international arbitration act
- lease agreement
- conversion
- joint tortfeasor
- unlawful conspiracy
- service out of jurisdiction
- proper forum
16. Subjects
- Arbitration
- Civil Procedure
- International Trade
- Tort Law
- Contract Law
17. Areas of Law
- Arbitration Law
- Civil Procedure
- International Arbitration Law
- Tort Law
- Contract Law