Singapore: Civil Law Act Amendments Boost Singapore's Credentials As Hub For Cross-border Dispute Resolution

While much attention has been directed towards the new Rules of Court, equally significant is the newly enacted s 4(10A) of the Civil Law Act 1909 ("CLA"). The provision adds a powerful tool to the arsenal of measures a Singapore Court can grant in aid of foreign proceedings: free-standing interim injunctive relief.

Previous position

Previously, if a claimant wished to obtain a freezing injunction from a Singapore court to prevent dissipation of a defendant's assets pending the outcome of foreign proceedings, he/she needed to commence a substantive cause of action in the Singapore courts.

This rule, which prohibited free-standing freezing injunctions not tied to any subsisting cause of action in Singapore, was reaffirmed in multiple decisions of the High Court and Court of Appeal including Multi-Code Electronics Industries (M) Bhd and another v Toh Chun Toh Gordon and others [2009] 1 SLR(R) 1000, PT Gunung Madu Plantations v Muhammad Jimmy Goh Mashun [2018] SGHC 64 and Bi Xiaoqiong v China Medical Technologies, Inc (in liquidation) and another [2019] SGCA 50.

The rule against free-standing freezing injunctions gave rise to a conundrum for claimants who sought freezing injunctions from a Singapore Court in aid of foreign proceedings: to obtain the freezing injunction, the claimant would need to show that the Singapore Court had in personam jurisdiction over the defendant. This required the claimant to satisfy the Court that Singapore was forum conveniens – the forum in which the underlying cause of action may most suitably be tried. Yet by applying for freezing injunctive relief in support of the ongoing foreign proceedings, the claimant would have effectively conceded that it is the foreign jurisdiction which is forum conveniens, and not Singapore.

The difficulties caused by this previous position were analysed extensively in Allenger, Shiona (trustee-in-bankruptcy of the estate of Pelletier, Richard Paul Joseph) v Pelletier, Olga and another [2020] SGHC 279.

Section 4(10A) CLA

The new s 4(10A) CLA does away with the difficulties caused by the rule against free-standing injunctive relief. The provision empowers the Singapore Court to grant interim relief in aid of foreign proceedings "in any civil or commercial matter ... which have been or are to be commenced outside Singapore, if it appears to the court to be just or convenient that such order should be made".

It is thus no longer necessary for a party seeking a freezing injunction in aid of foreign proceedings to commence a parallel substantive cause of action in the Singapore Courts simply for the purpose of "grounding" the freezing injunction.
The enactment is a welcome change which substantially strengthens the Singapore Courts' powers to support ongoing proceedings in foreign jurisdictions. As noted by the Second Minister for Law, Mr Edwin Tong, at the Second Reading of the Courts (Civil and Criminal Justice) Reform Bill 2021, this will boost efforts to promote Singapore as a leading international dispute resolution hub.