Ont. energy firm challenges $5.4M judgment.
Richard Foot, CanWest News Service
Published: Wednesday, November 16, 2005
A Canadian company wants an Ontario court to dismiss a multimillion dollar judgment reached against it in Singapore on the grounds Singapore's justice system is corrupt and unlawful.
The landmark case has wide implications for Canadians doing business overseas. Never before, say lawyers for both sides, has a commercial case dealt with the question of whether a foreign judgment can be enforced in Canada because the courts that issued it may be inherently unfair.
Lawyers for EnerNorth Industries Inc., a Toronto-based energy services company, will make that argument before the Ontario Court of Appeal in April, in a bid to avoid paying a $5.4-million US judgment awarded to Oakwell Engineering Ltd., a Singapore firm.
One of EnerNorth's lawyers, David Wingfield, said if the Singapore decision is upheld in Canada, a precedent will be set which would turn the Canadian courts into "little more than a glorified sheriff's department for all foreign legal systems -- no matter how odious or compromised they are by reason of government influence or monetary bribery."
Oakwell's lawyer, Ed Babin, said Canadian courts enforce judgments from other countries all the time and that refusing to do so in this case would carve out "a dramatic change" in the law.
In 1997, EnerNorth embarked on a project with Oakwell to finance, build and operate two power plants in India. In 2002, after the project ran into problems, Oakwell sued EnerNorth in the Singapore courts -- where each company had previously agreed they would settle any disputes.
The trial and appeal courts in Singapore allowed Oakwell's claim, awarding it damages against EnerNorth. Because EnerNorth's assets are in Canada, Oakwell asked a Canadian court to enforce the decision.
Last August, Ontario Superior Court Justice Gerald Day agreed with Oakwell's request, dismissing arguments by EnerNorth that the Singapore judgment is tainted by that country's allegedly corrupt and biased legal system.
"If this court were to accept the argument of general bias in this case, it would mean that no judgments from Singapore courts would be enforceable in Ontario," wrote Day in his decision,
But in documents filed with the Ontario Court of Appeal, EnerNorth's lawyers say Day failed to apply the proper legal test required of Canadian courts when enforcing foreign judgments.
In 2003 -- in a case involving a decision from a U.S. court -- the Supreme Court of Canada said Canadian courts can only recognize a foreign judgment if the foreign legal system meets Canadian constitutional standards.
The Singapore decision is the first foreign judgment, issued in a country other than Britain or the U.S., to be tested under this principle, said Wingfield. EnerNorth says Singapore's justice system fails to meet Canadian standards by almost every measure.
"Singapore is ruled by a small oligarchy who control all facets of the Singapore state including the judiciary, which is utterly politicized," the company's court documents say. "The judiciary bends over backwards to support the government's and ruling elite's interests."
The documents also say Oakwell is a subsidiary of a Singapore conglomerate whose owners have close ties with Singapore's government and ruling party and that the judges who presided over the case in Singapore also have close ties with Singapore's leaders.
Day said he could find "no cogent evidence" that there was specific bias toward Oakwell by the Singapore courts. However, EnerNorth says evidence of general bias, or systemic corruption, is enough to reject the judgment in Canada.
"EnerNorth is faced with having its assets seized under Canadian law to pay a judgment that was granted by a corrupt legal system before biased judges in a jurisdiction that operates outside the rule of law," the company's documents say
© The Edmonton Journal 2005
5 comments:
Oh come on, who is Oakwell? Nobody. The Canadian company is obviously trying its luck in its home country. Singapore courts are good at whacking opposition figures and extremely harsh on criminals ....but for matters that involve businesses, they are fair as anyone in the world.
The canadians will turn their system into a joke if they just rule in favour of their own company when the contract clearly states that the matter is to be settled in Singapore courts. That alone should have the case thrown out in the Canadian court.
I guess the govt of Singapore must be quite good to have SingabloodyPore harp on minor issues like these.
"Singapore courts are good at whacking opposition figures and extremely harsh on criminals..."
Oh, I see, at last someone like you now could agree for what people have been debating on. Isn't this deemed to be a state terror?
It's bec of such laws and rules that singaporeans are afraid to speak up, even when others saw the flaws of NKF but nobody would dare to say it for fear of being charged and being discriminated. Otherwise, I believe situation like this would not have been so bad and caused other innocent charity orgns to suffer as well as donors to lose their confidence and trust in other charitable orgns. This is in fact uncalled for if sg govt could be more open and accepting towards criticisms and see criticisms as something positive for rectification instead of something negative or against them.
Singapore's courts are always well-regarded for the way they handle business & commercial disputes. In fact, PERC has consistently ranked Singapore's courts the world's best in those areas.
The way Singapore courts handle other kinds of cases may arguably be controversial or wrong (eg defamation suits against opposition politicians etc). But those kinds of cases are quite different from the Oakwell case, which is a pure business case (if I recall correctly, it's about the sale of defective machinery or something like that).
You'll note this part of the report:
"Day said he could find "no cogent evidence" that there was specific bias toward Oakwell by the Singapore courts. However, EnerNorth says evidence of general bias, or systemic corruption, is enough to reject the judgment in Canada."
What does this tell you? EnerNorth is NOT saying:
"I do NOT owe you money. The courts in Singapore were unfair to me and they should not have ordered me to pay you money."
What EnerNorth is really saying is:
"I -do- owe you money. The courts in Singapore DID act fairly in handling my case. However, over the years, in different matters totally unconnected to our present case, Singapore courts have acted in ways which are questionable and dubious. That's my chance to make some technical legal argument that I don't have to pay you a cent of the money I owe you, haha. Let's hope I can keep the 5 million dollars for myself."
I hope that puts things in some perspective for you.
"EnerNorth says evidence of general bias, or systemic corruption, is enough to reject the judgment in Canada." For a Canadian court to define all of the Sg court system as biased does seem to be a rather hopeless stance to try to argue.
If however that was equated to the notion that the legislature, judiciary and executive are not separated but one and the same may carry some weight.
I agree with MrW simply because it seems rather bizzare for Enernorth to agree to have all issued dealt with in the Sg court, then when a ruling goes against them claim foul play. Surely if Enernorth believes the Sg court to be biased in favour of the Oakwell group they should have had this debate when they first entered into the agreement.
I personally do not like this case. The Singapore Judiciary System is put into a no-win situation. The implication is far reaching. If the jugdement is in favour of Singapore, well, life goes on. Otherwise, all future Singaporean Court judgement will be tainted internationally.
In the worst senario, will not be recognised by countries who choose to do so.
It is a calculated tactical move. It seems to me like:
Enernorth:
Judge Day, you look into my
case and see whether you can
identify any biasness.
Day:
I cannot find any that suggest.
Enernorth:
You cannot find does mean that
there is none. What if I
show you cases involving the
Government or its affiliates,
Singaporean judges are bias. Then
the principle of 'benefit of the
doubt' should apply. At the same
time can you examine whether the
Singapore Judiciary system meet our
Standard. If not you should not
enforce their request.
I believe Enernorth will argue along the line that reputable QCs are not allowed to represent the defendants, the judgement themselves as well as the sentences are like 'killing an ant with a sledge hammer'.
Good Luck Singapore, you may need it.
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