Shanghai Turbo v Liu Ming: Setting Aside Service Order & Interim Injunctions

In Shanghai Turbo Enterprises Ltd v Liu Ming, the High Court of Singapore heard an application by Liu Ming to set aside an ex parte order allowing Shanghai Turbo to serve a writ of summons and statement of claim out of jurisdiction in China, as well as related interim injunction orders. The claim concerned alleged breaches of post-termination obligations by Mr. Liu under a service agreement. Hoo Sheau Peng J allowed the application, setting aside the service order and interim injunctions, finding that Singapore was not the forum conveniens and that Shanghai Turbo had failed to make full and frank disclosure at the ex parte stage.

1. Case Overview

1.1 Court

High Court of Singapore

1.2 Outcome

Application to set aside service order and interim injunctions allowed.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

The High Court set aside an order allowing service of process on Liu Ming in China and discharged interim injunctions due to forum non conveniens.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Shanghai Turbo Enterprises LtdPlaintiffCorporationApplication to serve out of jurisdiction dismissedLost
Liu MingDefendantIndividualApplication to set aside service order grantedWon

3. Judges

Judge NameTitleDelivered Judgment
Hoo Sheau PengJudgeYes

4. Counsels

Counsel NameOrganization
Foo Soon YienBR Law Corporation
Molly LimWong Tan & Molly Lim
Thaddeus OhBR Law Corporation
Toh Kian SingRajah & Tann Singapore LLP
Chen ZhidaRajah & Tann Singapore LLP
Jared KokRajah & Tann Singapore LLP

4. Facts

  1. Shanghai Turbo sued Mr Liu for breaches of post-termination obligations under a service agreement.
  2. Mr Liu was the Executive Director and CEO of Shanghai Turbo until 15 April 2017.
  3. The service agreement contained obligations regarding delivery of documents, non-competition, and confidentiality.
  4. Shanghai Turbo alleged Mr Liu failed to deliver up the CZ3D factory and diverted business to Changzhou Hengmiao.
  5. Shanghai Turbo sought leave to serve the writ of summons out of jurisdiction on Mr Liu in China.
  6. Mr Liu applied to set aside the service order and interim injunctions.
  7. CZ3D commenced a related action against Mr Liu in China.

5. Formal Citations

  1. Shanghai Turbo Enterprises Ltd v Liu Ming, Suit No 571 of 2017 (Summons No 1345 of 2018), [2018] SGHC 172

6. Timeline

DateEvent
Mr. Liu’s late father acquired CZ3D.
Shanghai Turbo was formed to be the ultimate parent company of CZ3D and to achieve the listing on the SGX.
Mr Liu became the Executive Director of Shanghai Turbo.
Mr Liu became the Chief Executive Officer of Shanghai Turbo.
Service Agreement entered into between Shanghai Turbo and Mr Liu.
Mr Liu was removed as Executive Director and Chief Executive Officer of Shanghai Turbo.
Shanghai Turbo brought proceedings against Mr Liu.
Shanghai Turbo applied for leave to serve the writ of summons out of jurisdiction on Mr Liu.
Court granted the service order.
CZ3D commenced a related action against Mr Liu in China.
Shanghai Turbo obtained an ex parte mareva injunction.
Shanghai Turbo obtained an ex parte order restraining Mr Liu from exercising voting rights.
Mr Liu entered an appearance in the proceedings.
Mr Liu lodged the setting aside application.
Court allowed the setting aside application.

7. Legal Issues

  1. Jurisdiction over foreign defendant
    • Outcome: The court held that it did not have jurisdiction over the defendant because Singapore was not the forum conveniens and the plaintiff had failed to make full and frank disclosure.
    • Category: Jurisdictional
    • Sub-Issues:
      • Service out of jurisdiction
      • Forum conveniens
      • Full and frank disclosure
    • Related Cases:
      • [2014] 4 SLR 500
      • [1999] 3 SLR(R) 1156
      • [1987] AC 460
      • [2018] SGHC 64
  2. Proper law of contract
    • Outcome: The court found that there was no valid express choice of law in the service agreement and made no conclusive finding as to the objective proper law.
    • Category: Substantive
    • Sub-Issues:
      • Express choice of law
      • Objective proper law
    • Related Cases:
      • [2008] 2 SLR(R) 491
      • [1980] 2 Lloyd’s Rep 450
      • [1984] 2 Lloyd’s Rep 380
  3. Validity and severability of contract clauses
    • Outcome: The court held that the jurisdiction clause was not severable from the invalid choice of law clause and was therefore unenforceable.
    • Category: Substantive
    • Sub-Issues:
      • Floating choice of law clause
      • Floating jurisdiction clause
    • Related Cases:
      • [1986] 1 Lloyd’s Rep 529

8. Remedies Sought

  1. Order for delivery of documents
  2. Account of profits
  3. Damages
  4. Interests
  5. Costs

9. Cause of Actions

  • Breach of Contract

10. Practice Areas

  • Commercial Litigation

11. Industries

  • Precision Engineering

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Zoom Communications Ltd v Broadcast Solutions Pte LtdCourt of AppealYes[2014] 4 SLR 500SingaporeCited for the requirements for granting leave for service out of jurisdiction and the duty of full and frank disclosure.
Bradley Lomas Electrolok Ltd v Colt Ventilation East Asia Pte LtdUnknownYes[1999] 3 SLR(R) 1156SingaporeCited for the standard of a good arguable case to prove that a claim falls within Order 11 rule 1 of the Rules of Court.
Pacific Recreation Pte Ltd v S Y Technology IncUnknownYes[2008] 2 SLR(R) 491SingaporeCited for the three-stage test to determine the proper law of a contract.
Armar Shipping Co Ltd v Caisse Algerienne D’Assurance Et De ReassuranceUnknownYes[1980] 2 Lloyd’s Rep 450EnglandCited for the principle that the governing law of a contract cannot 'float' in abeyance until the happening of some subsequent event.
Dubai Electricity Co and ors v Islamic Republic of Iran Shipping LinesUnknownYes[1984] 2 Lloyd’s Rep 380EnglandCited for the principle that the proper law of a contract must be built into the fabric of the contract from the start and cannot float in an indeterminate way.
The Frank PaisUnknownYes[1986] 1 Lloyd’s Rep 529EnglandCited regarding the severability of a jurisdiction clause from a choice of law clause.
Spiliada Maritime Corporation v Cansulex LtdUnknownYes[1987] AC 460EnglandCited for the two-stage test to determine forum conveniens.
JIO Minerals FZC and others v Mineral Enterprises LtdCourt of AppealYes[2011] 1 SLR 391SingaporeCited for the connecting factors to determine the natural forum and the considerations for witness convenience and compellability.
PT Gunung Madu Plantations v Muhammad Jimmy Goh MashunHigh CourtYes[2018] SGHC 64SingaporeCited for the legal basis for the requirement that Singapore be the forum conveniens.
Rickshaw Investments Ltd and another v Nicolai Baron von UexkullCourt of AppealYes[2007] 1 SLR(R) 377SingaporeCited for the importance of the location and compellability of witnesses when the main disputes revolve around questions of fact.
Virsagi Management (S) Pte Ltd v Welltech Construction Pte Ltd and another appealUnknownYes[2013] 4 SLR 1097SingaporeCited for the principle that related concurrent foreign proceedings would be a relevant connecting factor when determining forum conveniens.
The Vasiliy GolovninUnknownYes[2008] 4 SLR(R) 994SingaporeCited for the principle that all material facts should be fairly stated in the affidavit, and it is not open to a plaintiff to say that it has fulfilled its duty to make full and frank disclosure because the relevant facts can be distilled somewhat from somewhere in the voluminous exhibits filed.
Manharlal Trikamdas Mody and another v Sumikin Bussan International (HK) LtdHigh CourtYes[2014] 3 SLR 1161SingaporeCited for the duty of full and frank disclosure that is owed relates to the facts which are set out in the supporting affidavit bearing in mind that the applicant has to establish a good arguable case.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
Rules of Court (Cap 322, R5, 2014 Rev Ed) O 11 r 1Singapore
Rules of Court (Cap 322, R5, 2014 Rev Ed) O 11 r 2(2)Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Service Agreement
  • Service out of jurisdiction
  • Forum conveniens
  • Full and frank disclosure
  • CZ3D factory
  • Delivery up obligation
  • Non-competition clause
  • Confidentiality clause
  • Mareva injunction
  • Voting rights injunction

15.2 Keywords

  • Service out of jurisdiction
  • Forum conveniens
  • Injunction
  • Contract
  • Singapore
  • China

17. Areas of Law

Area NameRelevance Score
Jurisdiction90
Natural forum90
Civil Practice75
Civil Procedure75
Private International Law70
Breach of Contract60
Contract Law60
Commercial Disputes50
Litigation50
Company Law40
Corporate Litigation40
Corporate Law40
Asset Recovery30
Directors and Officers Liability30
Shareholder Disputes30
Appeal30
International Arbitration20
Estoppel20
Property Law20
Costs20
Torts20
Breach of Court Order20
Constitutional Law10

16. Subjects

  • Civil Procedure
  • Conflict of Laws
  • Contract Law
  • Jurisdiction