Corporate & Commercial Litigation in Singapore
JLex LLC Singapore’s clientele for commercial litigation comprises of local businesses, foreign enterprises and individuals who are stakeholders, officers and/or employees of businesses. Some of the examples of commercial disputes that we have been involved in include shareholders’ disputes, claims for breaches of fiduciary duties, claims made under the economic torts such as inducement of breach of contract, unlawful conspiracy to injure and defamation, contractual claims, tortious claims for negligence, employment disputes and other civil claims.
As part of the strategy during commercial litigation, we regularly advise clients on injunctions and other interim measures that arise in the course of litigation as well as enforcement of judgments.
Claims for Breaches of Fiduciary Duties
Often coupled with shareholders’ disputes are claims against directors for breaches of fiduciary duties. In general, directors of a company owe duties of good faith and diligence to the company. Some of the common misfeasance by directors complained of relate to allegations that directors have acted in conflict of interests by preferring their personal interests to that of the company’s interests, the diversion of business and company resources away from the company, negligence in discharging their duties as directors.
Where directors have breached in breach of duties causing loss to the company, a statutory action to seek leave of the court to allow an individual to sue on behalf of the company will be required as the proper plaintiff in such cases is the company under the law. Such actions taken out in the name of the company are known as derivative actions.
JLex LLC Singapore’s commercial litigation lawyers have advised clients on the commencement of derivative actions under the Companies Act and at common law. A noteworthy commercial litigation case that we have handled in relation to breaches of fiduciary duties is reported in Sinwa SS (HK) Co Ltd v Nordic International Ltd  4 SLR 320.
As directors are one of the types of fiduciaries recognised by the law, we have also advised clients in relation to matters involving other fiduciaries such as trustees and factual scenarios where a fiduciary relationship can arise.
Claims under the Economic Torts
The law provides a framework in the form of “Economic Torts” by which malicious actors may be prevented from destroying other parties financially. Common claims under such economic torts include claims for the tort of inducement of breach of contract, conspiracy, causing loss by unlawful means and defamation. In our experience, these are claims which require a close scrutiny of the facts at hand in order to formulate the right advice and strategy.
Contracting parties may fail to honour the bargain reached with their counterparts for many reasons regardless of the industries they are in and the scale of their businesses.
As a firm centered in dispute resolution, dealing with claims arising from breaches of contract are part of our normal day to day operations. Unless the parties have agreed on a mode of dispute resolution, the innocent party sustaining losses from their counterparty’s breach of contract will need to litigate in the courts to recover their losses. Our disputes lawyers aim to give comprehensive and cost-effective solutions to our clients faced with contractual issues.
Given the endless permutations and diverse fact patterns that contractual claims can arise in, we believe that a good understanding of the client’s business and the transaction in question is key to the rendering of comprehensive, sound and commercially minded advice.
Claims for Negligence
Claims for negligence in the context of commercial litigation can range from claims for negligent performance of contracts to negligent mis-statements made by professional advisors. In the Singapore context, although the law of negligence is based largely on English legal principles, it should be noted that the Singapore courts have departed from English law in several important areas.
For instance, further to the Singapore Court of Appeal decision in the case of Spandeck Engineering (S) Pte Ltd v Defence Science & Technology Agency  SGCA 37, claims where the damages suffered by the claimant is purely economic may be allowed in certain circumstances.
A thorough examination of the facts surrounding the claim is crucial to accurate assessing a claimant’s claim for negligence and we will be able to provide guidance in this regard.
We have assisted both corporates and individuals in dealing with disputes that arises in the course of employment, typically in relation to the termination of employment and the various legal recourse available to parties.
As an extension of our disputes practice where we regularly deconstruct employment agreements, we are well-placed to give preventative advice on the compliance of employment agreements to the requirements of Singapore law.
Injunctions and other Interim Reliefs
Given that complex commercial litigation proceedings may take some time to complete, we are often instructed to apply for and/or defend against various types of interim reliefs pending the conclusion of court proceedings. For instance, we have been instructed on matters involving interlocutory injunctions which are awarded to protect the applicant by directing the other party to do or refrain from doing something until the trial of the action.
In addition, we also have experience dealing with applications for Mareva injunctions or freezing orders, which are designed to prevent parties from taking steps to deliberately dissipate assets (either locally or worldwide) in order to avoid the risk of any adverse judgment or court order which may be entered against them in the proceedings.
Another interim measure that we encounter in our practice is the Anton Piller order which is purposed at preventing defendants from destroying incriminating evidence by permitting certain persons to enter his premises to search for, seize and retain documents or other items.
Enforcement of Judgments
Clients are often concerned about the recoveries after judgment is obtained and we regularly assist clients with enforcement procedures such as:
Garnishee Application – these are applications to obtain a court order that requires a third party who is indebted to the judgment debtor to pay the judgment creditor instead. The money paid to the judgment creditor is applied to satisfy the judgment.
Writ of seizure and sale – This is an application where the judgment creditor can obtain a court order to seize and subsequently sell the judgment debtor’s assets. The proceeds of sale are applied to satisfy the judgment.
Appointment of a receiver – This is an application to appoint a receiver who then receives the money, fund or income in question and holds it for the benefit of the judgment creditor.
Examination of Judgment Debtor – This is useful when the judgment creditor does not know what assets the judgment debtor holds as the court can make orders to compel the judgment debtor to provide information and documents on its assets. With the information and documents, the judgment creditor can then decide on the appropriate mode of executing the judgment.
Bankruptcy/Winding up of defendant companies – Where judgment debtor is unable to make payment of the sums awarded to the judgment creditor, the judgment creditor may, if certain requirements are met, apply to court for individual debtors to be made bankrupt or for corporate debtors to wound up.
Here are some of the frequently asked questions from our clients.
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The Singapore court system comprises of the Supreme Court (which includes the Court of Appeal and the High Court) and the State Courts.
The Singapore High Court generally hears cases where the quantum of the claim exceeds S$250,000.
The Singapore International Commercial Court (“SICC”) is a division of the High Court that deals with deals with disputes where (i) the claim is of an international and commercial nature; (ii) the parties have summitted to the SICC’s jurisdiction and (iii) the parties are not seeking relief in the form of a prerogative order.
The State Courts comprise of the Family Justice Courts, the District Court and the Magistrates’ Court. The Magistrates’ Court hears disputes where the quantum of the claim does not exceed S$60,000 while the District Court hears disputes where the claimed amount falls between S$60,000 and S$250,000.
The limitation period for claims founded on contract and tort is six (6) years from the date on which the cause of action accrues under section 6 of the Limitation Act (Cap 163).
The limitation period can be extended in certain stipulated situations. In cases involving fraud, the limitation period only starts to run from the time the fraud is actually discovered or could have been discovered with reasonable diligence (whichever is earlier). In the case of tortious claims, this limit can be extended where latent damage becomes apparent after the expiry of the 6-year limit.
Legal processes in the Singapore courts are commenced either by way of a Writ of Summons or an Originating Summons. If you have been served with an originating process and do not agree with the claims filed, you need to enter an appearance in the court proceedings by filing a Memorandum of Appearance within eight (8) days of receipt of the originating process if you are in Singapore. Defendants who are overseas have twenty-one (21) days after receipt of the originating process to enter an appearance.
The general rule is that costs follow the event i.e., the successful party recovers a portion of its legal costs from the unsuccessful party. The court retains the discretion to determine all awards on costs. However, a successful party may be deprived of some or all of its legal costs if the court is of the view that the party has conducted the matter in an unreasonable manner.
Disbursements incurred in the course of litigation are generally recoverable so long as they are reasonable. In the event that a dispute arises between the parties in relation to the quantum of disbursements that should be award, taxation proceedings will be necessary to determine the quantum of costs payable.
Late payment interest also accrues from the date of the costs order until the costs order is satisfied at the present default interest rate of 5.33% per year.
Q5. How do I prevent the defendant from removing their assets from Singapore to evade enforcement of judgment?
A Mareva injunction or a freezing order, which is an injunction restraining a defendant from removing his/her assets out of jurisdiction or from disposing of his/her assets to evade the satisfaction of a potential judgment against the defendant, is what you need to obtain in this case.
In order to persuade the court to grant a Mareva injunction, you will need to demonstrate to the court that you have a good arguable case, that the defendant has assets within Singapore and there is a real risk that the defendant, if not restrained, will dissipate his assets to frustrate the enforcement of a judgment.
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