High Court upholds China ruling

SINGAPORE - In what is believed to be a first, a Singapore court last week enforced a judgment from China after listening to both sides in a trial.

The High Court ruled that Singapore-based Aksa Far East was liable to pay the US$190,000 (S$239,000) sought by China-based Giant Light Metal Technology (Kunshan), which was awarded the money in a civil suit in a Suzhou court in Jiangsu province in 2010.

Judgments issued by Chinese courts are currently not registrable under the Reciprocal Enforcement of Commonwealth Judgments Act or Reciprocal Enforcement of Foreign Judgments Act. A registrable judgment would enable an aggrieved party to seek its enforcement here without the need for a trial to determine the merits of the foreign judgment.

But the case showed Singapore courts may be prepared to enforce judgments from China after hearing the relative merits of both parties in an open trial. Justice Andrew Ang, who gave the oral decision last week, is likely to issue written grounds in due course, which could clarify the full impact the court ruling may have on deals between Chinese and Singapore-based firms that go sour and lead to court proceedings in China.

Giant Light had sued Aksa Far East and its China subsidiary Shanghai Yates Genset for supplying two generators found to be not new, incapable of use and not from the original United Kingdom source.

It won its case in China after government inspections showed the generator sets were not operational and several manufacturer test reports were not valid.

Rajah & Tann lawyer Rebecca Chew, presenting the case for Giant Light here, said this was "probably the first" time a Singapore court was asked to decide whether a judgment issued by a People's Republic of China court can be enforced against a Singapore-incorporated firm. "There are very few local authorities written on the issue of common law enforcement of a foreign court's judgment," she said.

She and her colleagues argued that the defendants did not apply for another inspection, and also had not taken issue with the judgment when they could have.

But Harry Elias Partnership lawyer Francis Goh, acting for Aksa, countered that there were no enforcement treaties between Singapore and China. He also pointed out that there were two court proceedings on the case in China, in 2005 and 2008.

Giant Light had withdrawn from the 2005 suit in favour of mediation, before re-commencing the suit three years later. Aksa had viewed the earlier suit as the end of the matter and had moved out of China in 2008.

That Aksa did not take any steps in the 2008 proceedings was clear evidence that it did not consent to the case being further pursued, said Mr Goh. Giant Light countered that both suits were part of the same continuous whole.

vijayan@sph.com.sg

A registrable judgment would enable an aggrieved party to seek its enforcement here without the need for a trial to determine the merits of the foreign judgment.

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