A recent decision by the Singapore International Commercial
Court (SICC) in Teras Offshore Pte Ltd v Teras Cargo Transport
(America) LLC  SGHC(1) 02 (Teras) provides guidance
as to when a dispute will constitute an "offshore case"
Rules of the Court. Such cases are those with no substantial
connection to Singapore, and which permit the appointment of
The Teras case is important because it will inform
parties going to the SICC when they can appoint legal counsel with
no expertise in Singapore law. The classification of the proceeding
as an "offshore case" by Sir Henry Bernard Eder (an SICC
International Judge and former judge of the High Court of England
and Wales), demonstrates the SICC's commitment to being a forum
for the resolution of international commercial disputes.
THE FACTS OF THE CASE
In Teras, the dispute arose from claims and
counterclaims relating to three liquefied natural gas (LNG)
projects in or near Queensland, Australia.
The Defendant contracted with two Bechtel entities for the
provision of services and supply of equipment for these projects.
This work was then sub-contracted to the Plaintiff on back-to-back
The most important issue, however, was whether the proceeding
was an "offshore case" under the Rules of the Court.
AN "OFFSHORE CASE"?
An "offshore case" is defined as "an action which
has no substantial connection with Singapore" under O 110 r
1(1) of the Rules of Court.2 The Defendant submitted
that, under the Court's Practice Directions, the predominant
purpose of determining that a case is an offshore one is to allow
... given the role of the SICC to provide a dispute
resolution framework for the resolution of international commercial
disputes, a "parochial" insistence that parties appoint
Singapore qualified lawyers (even when there are only a handful of
coincidental or procedural connections with Singapore) would be
anomalous and self-defeating.3
Determining whether an action is an "offshore case" is
done by reference to the particular action. This is a negative
proposition that looks not at whether there is a substantial
connection with a place other than Singapore, but whether the
action has no substantial connection to Singapore.4 The
Rules of the Court also put this negatively and state there will be
no substantial connection to Singapore where:
Singapore law is not the law applicable to the dispute and the
subject-matter is not otherwise regulated by or subject to
Singapore law; or
the only connections between the dispute and Singapore are the
parties' choice of Singapore law as the law applicable to the
dispute and the parties' submission to the jurisdiction of the
The SICC identified wording differences for "offshore
case" in the Rules of the Court and SICC Practice Directions.
The former referred to a substantial connection between the
"action" and Singapore, and the latter referred to the
"dispute". His Honour noted that this gave rise to some
debate, with "action" being much broader than a
"dispute", which would only be concerned with the
underlying substantive dispute between the parties.6 The
SICC adopted the broader "action" as it embraced the
substantive dispute in addition to other relevant matters.
Next, his Honour considered paragraph 29(3) of the Practice
Directions which provided (again in the negative) that the
existence of each of the following factors would not, by
itself, constitute a substantial connection between the dispute and
any of the witnesses are in Singapore;
any documents relevant to the dispute are in Singapore;
funds connected to the dispute passed through Singapore;
one of the parties has properties or assets in Singapore;
one of the parties is a Singaporean entity or has Singaporean
Even though, on the facts, each factor was made out by the
Plaintiff, his Honour found that the claims and counterclaims of
the dispute were all connected to the LNG projects in or off
Further, the majority of the issues relating to these claims had
nothing to do with Singapore.7 Thus, his Honour
concluded that the proceeding was an offshore case.
Australian companies doing business abroad should recognise the risk to local assets that a foreign judgment may present.
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