A high Court judge here has refused a bid by Morgan Stanley Asia (Singapore) to move a US$32 million (S$39.7 million) lawsuit it is facing from New York to Singapore.
Morgan Stanley is being sued by Hong Leong Finance as part of the fallout from investment products that failed amid the global financial crisis of 2008 and 2009.
Hong Leong was a distributor of Morgan Stanley's Pinnacle Notes, linked to collapsed investment bank Lehman Brothers.
Justice Belinda Ang in judgment grounds released on Tuesday said that "Singapore was not clearly the most appropriate forum" for the suit based on the overall circumstances of the case.
She added the New York court "would create the best chance for all matters to be effectively determined in one jurisdiction. In this way there would be no risk of inconsistent judgments".
After the failure of Pinnacle Notes, Hong Leong compensated Singapore-based customers for more than US$32 million in losses. It was also penalised by the authorities for having mis-sold the high-risk financial products.
Last year, it sued Morgan Stanley in New York alleging fraud, in a bid to recover its losses. It chose New York to join in an ongoing class action there against Morgan Stanley.
Morgan Stanley applied in the High Court here last November to stop Hong Leong's New York suit, arguing, among other things, the dispute "concerned losses suffered in Singapore on investment products sold in Singapore based on alleged misrepresentations made and relied upon in Singapore".
Its lawyer, Senior Counsel Alvin Yeo, said Singapore law therefore governed Hong Leong's claims against Morgan Stanley and suggested Hong Leong was "blatantly forum-shopping".
But Senior Counsel Lee Eng Beng countered Morgan Stanley was trying to "evade the jurisdiction of the New York Court". He said New York is a "very convenient forum" for Morgan Stanley as it is already defending itself in the US class action there.
Justice Ang found the court would not be justified to interfere with Hong Leong's right to sue in New York instead of Singapore.
She noted the claims in New York were common and the defendants were also common.
"Case management by the same judge is sensible and expedient as he can where appropriate, take into account the progress of both sets of proceedings to ensure a just and orderly disposal of the litigation as well as to prevent irreconcilable decisions."
Justice Ang added that inconveniences would be minimised and hearings of all claims would be coordinated in New York.
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