Sinopec v Bank of Communications: Jurisdiction & Forum Non Conveniens in Letter of Credit Dispute

In Sinopec International (Singapore) Pte Ltd v Bank of Communications Co Ltd, the Singapore High Court addressed jurisdictional and forum non conveniens issues in a dispute over letters of credit. Sinopec SG, the plaintiff, sued Bank of Communications Co Ltd (BComm), the defendant, after BComm Tokyo refused payment due to alleged fraud in presented documents. The court, presided over by Ang Cheng Hock J, dismissed BComm's applications challenging jurisdiction and seeking a stay of proceedings, finding Singapore to be the appropriate forum. The court granted BComm leave to amend its prayers for the Case Management Stay Application, but dismissed the Case Management Stay Application on its merits. The case involves a breach of contract claim.

1. Case Overview

1.1 Court

General Division of the High Court

1.2 Outcome

Declaration Application and Stay Application dismissed. Amendment Application granted. Case Management Stay Application dismissed.

1.3 Case Type

Civil

1.4 Judgment Type

Judgment

1.5 Jurisdiction

Singapore

1.6 Description

Singapore court addresses jurisdiction and forum in a letter of credit dispute between Sinopec and Bank of Communications, focusing on fraud allegations.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Sinopec International (Singapore) Pte LtdPlaintiffCorporationApplications by Defendant DismissedWon
Bank of Communications Co LtdDefendantCorporationApplications DismissedLost

3. Judges

Judge NameTitleDelivered Judgment
Ang Cheng HockJudgeYes

4. Counsels

Counsel NameOrganization
Toh Kian SingRajah & Tann Singapore LLP
Lin Yong'en NathanaelRajah & Tann Singapore LLP
Wu JunnengRajah & Tann Singapore LLP
Marcus Chiang Mun LeongRajah & Tann Singapore LLP
Khoo Boo Teck RandolphDrew & Napier LLC
Liu Chenghan AloysiusDrew & Napier LLC
Chan Jian DaDrew & Napier LLC

4. Facts

  1. Sinopec SG is the beneficiary of four letters of credit issued by BComm Tokyo.
  2. SIH applied for the LCs to meet payment obligations under contracts for purchasing Paraxylene from Sinopec SG.
  3. BComm Tokyo refused to make payment, claiming fraud in the presented bills of lading.
  4. The bills of lading were suspected of fraud because the Cargo had already been discharged.
  5. SIH filed a police report with the Shanghai PSB, suspecting fraud relating to the Sale Contracts.
  6. BComm commenced civil proceedings in Shanghai against Sinopec SG and China Jinshan.
  7. Sinopec SG claims it acted as a credit facilitator for Shanghai Jinshan.

5. Formal Citations

  1. Sinopec International (Singapore) Pte Ltd v Bank of Communications Co Ltd, Suit No 832 of 2020 (Summonses Nos 4431 of 2020 and 1899 of 2021), [2021] SGHC 245

6. Timeline

DateEvent
Sale Contracts entered into for the purchase of Paraxylene from Sinopec SG.
Sinopec SG presented documents under the LCs at Westpac HK.
BComm Hong Kong branch informed Sinopec SG that the Presentation was rejected.
Sinopec SG issued a letter of demand to BComm’s Tokyo branch.
Sinopec SG commenced Suit No 832 of 2020 against BComm.
Writ of summons served at the office of BComm SG.
BComm entered an appearance.
BComm filed Summons No 4431 of 2020.
BComm submitted a civil complaint to the Shanghai Financial Courts against Sinopec SG and China Jinshan.
The PRC Plaintiffs applied to the Shanghai Court for it to initiate a process to investigate and collect evidence arising from the PRC Criminal Investigations for use in the PRC Civil Proceedings.
The PRC Investigation Order was granted.
BComm filed Summons No 1899 of 2021 for leave to amend its prayers for the CMS Application.
Hearing date.
Hearing date.
Judgment reserved.

7. Legal Issues

  1. Jurisdiction
    • Outcome: The court held that service on BComm SG constituted effective service on BComm, establishing jurisdiction.
    • Category: Jurisdictional
    • Sub-Issues:
      • Effective service of originating process
      • Treatment of bank branches as separate legal entities
  2. Forum Non Conveniens
    • Outcome: The court held that BComm failed to show that any alternative forum was distinctly more appropriate than Singapore.
    • Category: Procedural
    • Sub-Issues:
      • Appropriateness of alternative fora
      • Connecting factors
      • Governing law of contract
      • Availability and compellability of witnesses
      • Overlapping proceedings
  3. Case Management Stay
    • Outcome: The court dismissed the application for a case management stay, finding no reason to exercise its case management powers.
    • Category: Procedural
    • Sub-Issues:
      • Relevance of foreign proceedings
      • Fair and efficient resolution of dispute
      • Risk of stifling proceedings
  4. Fraud Exception to Autonomy Principle
    • Outcome: The court did not make a ruling on the merits of the fraud defence, but considered its elements in the forum non conveniens analysis.
    • Category: Substantive
    • Sub-Issues:
      • Misrepresentation in presented documents
      • Knowledge of untrue representations
      • Spent bills of lading

8. Remedies Sought

  1. Monetary Damages

9. Cause of Actions

  • Breach of Contract

10. Practice Areas

  • Commercial Litigation
  • Banking Litigation
  • Cross-Border Litigation

11. Industries

  • Banking
  • Commodities Trading

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Grains and Industrial Products Trading Pte Ltd v Bank of India and anotherHigh CourtYes[2016] 3 SLR 1308SingaporeCited to define negotiation under documentary credit and the place for presentation of documents under a letter of credit.
Taurus Petroleum Ltd v State Oil Marketing Co of the Ministry of Oil, Republic of IraqUK Supreme CourtYes[2018] AC 690United KingdomCited regarding the treatment of bank branches as separate entities under UCP 600, but distinguished based on differing contexts.
LG Electronics Hong Kong Ltd v Bank of TaiwanHong Kong Court of First InstanceYes[2001] HKEC 2098Hong KongCited for the principle that bank branches are not separate legal entities for service of process.
Rickshaw Investments Ltd and another v Nicolai Baron von UexkullCourt of AppealYes[2007] 1 SLR(R) 377SingaporeEndorsed the Spiliada test for forum non conveniens applications.
Spiliada Maritime Corporation v Cansulex LtdUK House of LordsYes[1987] AC 460United KingdomArticulated the test governing an application for a stay of proceedings on grounds of forum non conveniens.
Ivanishvili, Bidzina and others v Credit Suisse Trust LtdCourt of AppealYes[2020] 2 SLR 638SingaporeCited for the application of the Spiliada test, including the burden of proof and relevant connecting factors.
Rappo, Tania v Accent Delight International Ltd and another and another appealCourt of AppealYes[2017] 2 SLR 265SingaporeCited for the factors considered in a forum non conveniens analysis, including personal connections, events, and applicable law.
JIO Minerals FZC and others v Mineral Enterprises LtdCourt of AppealYes[2011] 1 SLR 391SingaporeCited for the requirement that the applicant for a stay must show that there is another forum which is 'clearly or distinctly more appropriate' than Singapore.
Siemens AG v Holdrich Investment LtdHigh CourtYes[2010] 3 SLR 1007SingaporeCited for the principle that Singapore can only be forum non conveniens if the connecting factors pointing away from Singapore identify a distinctly more appropriate forum than Singapore.
Lakshmi Anil Salgaocar v Jhaveri Darsan JitendraHigh CourtYes[2019] 2 SLR 372SingaporeCited for the principle that the court will weigh the connecting factors with reference to the likely issues.
Perwira Habib Bank Malaysia Bhd v Soon Peng Yam and othersHigh CourtYes[1994] 3 SLR(R) 768SingaporeCited for the principle that connections which have little or no bearing on the adjudication of the issues in dispute between the parties will generally carry little weight.
Yeoh Poh San and another v Won Siok WanHigh CourtYes[2002] SGHC 196SingaporeCited for the principle that connections which have little or no bearing on the adjudication of the issues in dispute between the parties will generally carry little weight.
CIMB Bank Bhd v Dresdner Kleinwort LtdHigh CourtYes[2008] 4 SLR(R) 543SingaporeCited for the principle that the governing law of the dispute is a connecting factor that points to the courts of the jurisdiction from which that system of law originates as the more appropriate forum.
The “Chem Orchid”High CourtYes[2015] 2 SLR 1020SingaporeCited for the principle that the Singapore courts would not face any difficulty in applying Hong Kong law to resolve the dispute between the parties.
Sinotani Pacific Pte Ltd v Agricultural Bank of ChinaCourt of AppealYes[1999] 2 SLR(R) 970SingaporeCited for determining the governing law of letters of credit.
Marconi Communications v PT Pan Indonesia BankEnglish Court of AppealYes[2007] 2 Lloyd’s Rep 72EnglandCited for determining the governing law of letters of credit.
Bunge SA and another v Shrikant Bhasi and other appealsCourt of AppealYes[2020] 2 SLR 1223SingaporeCited for the principle that the physical locations of witnesses are generally of less significance in present times given the ease of travel and the option of giving evidence from a foreign jurisdiction by video-link.
Grains and Industrial Products Trading Pte Ltd and another v State Bank of India and othersHigh CourtYes[2019] SGHC 292SingaporeThe High Court had dismissed an application by the defendant for a stay of the Singapore proceedings in favour of India.
United City Merchants (Investments) Ltd v Royal Bank of CanadaHouse of LordsYes[1983] 1 AC 168United KingdomCited for the fraud exception to the autonomy principle in letters of credit.
The Yue You 902 and another matterHigh CourtYes[2020] 3 SLR 573SingaporeCited for the principle that a bill of lading will only become “spent” if cargo was delivered to a person entitled to delivery under the bill.
The Star Quest and other mattersHigh CourtYes[2016] 3 SLR 1280SingaporeCited for the principle that a bill of lading functions as a document of title enabling the consignee to take delivery of the goods or dispose of them by transfer of the bill of lading.
Virsagi Management (S) Pte Ltd v Welltech Construction Pte Ltd and another appealCourt of AppealYes[2013] 4 SLR 1097SingaporeCited for the principle that where the forum defendant commences proceedings against the forum plaintiff in a foreign jurisdiction, the fact of such parallel or overlapping foreign proceedings is accorded legal significance by reference to the doctrine of forum non conveniens.
Peters Roger May v Pinder Lillian Gek LianHigh CourtYes[2006] 2 SLR(R) 381SingaporeCited for the principle that little or no weight will be accorded to this factor if the foreign proceedings have been commenced for strategic reasons to demonstrate the existence of a competing jurisdiction and bolster the case of a clearly more appropriate forum elsewhere.
Trisuryo Garuda Nusa Pte Ltd v SKP Pradiksi (North) Sdn Bhd and another and another appealCourt of AppealYes[2017] 2 SLR 814SingaporeCited for the principle that little or no weight will be accorded to this factor if the foreign proceedings have been commenced for strategic reasons to demonstrate the existence of a competing jurisdiction and bolster the case of a clearly more appropriate forum elsewhere.
Mizuho Corporate Bank Ltd v Cho Hung BankHigh CourtYes[2004] 4 SLR(R) 67SingaporeCited for the principle that claims for negative declarations should be viewed with great caution in situations involving conflicts of jurisdictions as it is a sign of an improper attempt by parties at forum shopping in apprehension of proceedings that might be commenced against them.
John Reginald Stott Kirkham and others v Trane US Inc and othersCourt of AppealYes[2009] 4 SLR(R) 428SingaporeCited for the principle that the location of documentary evidence generally does not present a weighty connecting factor for the purposes of Stage One as it is easily transportable between jurisdictions in this digital age.
Review Publishing Co Ltd and another v Lee Hsien Loong and another appealCourt of AppealYes[2010] 1 SLR 52SingaporeCited for the guiding principle that such amendments should be allowed if they would enable “the real question and/or issue in controversy between the parties” to be determined.
Wright Norman v Oversea-Chinese Banking Corp LtdHigh CourtYes[1993] 3 SLR(R) 640SingaporeCited for the principle that amendments should serve the ends of justice.
BNP Paribas Wealth Management v Jacob Agam and anotherCourt of AppealYes[2017] 3 SLR 27SingaporeCited for the principle that the grant of a limited stay of proceedings is a discretionary exercise of the court’s case management powers and does not require the application of the principles of forum non conveniens.
Chan Chin Cheung v Chan Fatt Cheung and othersCourt of AppealYes[2010] 1 SLR 1192SingaporeCited for the principle that the grant of a limited stay of proceedings is a discretionary exercise of the court’s case management powers and does not require the application of the principles of forum non conveniens.

13. Applicable Rules

Rule Name
Rules of Court

14. Applicable Statutes

Statute NameJurisdiction
Companies ActSingapore
Supreme Court of Judicature ActSingapore

15. Key Terms and Keywords

15.1 Key Terms

  • Letter of Credit
  • Bill of Lading
  • Forum Non Conveniens
  • Jurisdiction
  • Fraud
  • UCP 600
  • Paraxylene
  • Credit Facilitator
  • Rehabilitation Proceedings
  • Case Management Stay

15.2 Keywords

  • Letter of Credit
  • Jurisdiction
  • Forum Non Conveniens
  • Singapore High Court
  • Banking Dispute
  • International Trade
  • Fraud Allegations

17. Areas of Law

Area NameRelevance Score
Conflict of Laws80
Jurisdiction75
Civil Procedure65
Natural forum60
Contract Law30

16. Subjects

  • Banking
  • Civil Procedure
  • Conflict of Laws
  • International Trade