Debated in Parliament on 2 Sep 2019.
Order for Second Reading read.
Mr Deputy Speaker, on behalf of the Minister for Law, I beg to move, "That the Bill be now read a Second time."
This Bill is linked to the next Bill on our Order Paper – the Reciprocal Enforcement of Commonwealth Judgments (Repeal) Bill or the RECJA Repeal Bill. Sir, may I therefore propose, with your permission, that the substantive debate on both Bills take place now. Members would be welcome to raise questions or express their views on both Bills during the debate. We will still have the formal second reading of the RECJA Repeal Bill to ensure that procedural requirements are dealt with. However, this proposal to have the substantive debate for both Bills take place now, will allow for the substantive arguments to be captured cogently in a single debate.
Yes, please proceed.
Thank you, Sir. Sir, over the past few years, MinLaw has been working on strengthening Singapore's position as a centre for international dispute resolution. To this end, we have built up a suite of well-regarded international dispute resolution services – the Singapore International Arbitration Centre (SIAC), the Singapore International Commercial Court (SICC) as well as the Singapore International Mediation Centre (SIMC). We have also bolstered our infrastructure significantly to support the growing demand for these services. Most recently, the opening of the Maxwell Chambers Suites has tripled Maxwell Chambers' size in terms of offerings for venues for dispute resolution, meeting places and also working spaces.
Integral to effective international dispute resolution is the ability to enforce judgments, awards and settlements – not just in the countries where they were obtained but also in the countries where the parties' assets are located. For businesses and investors, enhanced frameworks for cross-border recognition and enforcement of foreign judgments, awards and settlements would increase legal certainty and reduce the costs and uncertainties associated with cross-border dealings and disputes.
Singapore actively participates in and supports the development of appropriate multilateral frameworks for the enforcement of judgments, awards and settlements resulting from international dispute resolution. We are parties to the Hague Convention on Choice of Court Agreements and the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. Just last month, we signed and hosted the signing ceremony of the Singapore Convention on Mediation – the first United Nation's Convention to be named after Singapore – which will complete the picture by filling in the long-standing gap in the enforcement of cross-border mediated settlements.
In terms of foreign court judgments in civil proceedings which fall outside of the Hague Convention framework, Singapore's existing legislative framework consists of two Acts – the Reciprocal Enforcement of Commonwealth Judgments Act or RECJA, and the Reciprocal Enforcement of Foreign Judgments Act or REFJA. These Acts have not been updated since their enactment under the British colonial administration and the number of jurisdictions under Singapore's reciprocal enforcement of judgments regime is very low.
Further, only money judgments from superior courts of recognised jurisdictions may be enforced by registration. Money judgments from other foreign jurisdictions may still be enforced by common law, but this would entail commencing a fresh action in Singapore to enforce a debt, which may then be costlier and also more time-consuming. This route would obviously not be desirable for foreign litigants.
Singapore has a vision to be the premier dispute resolution hub in Asia, if not the world. As mentioned earlier, we have developed a comprehensive range of institutions and infrastructure. In terms of our legal regime, we have entered into a network of international agreements so as to enhance the recognition and enforcement of judgments, awards and settlement agreements from Singapore. It is therefore timely, that we supplement the existing regime, to further strengthen Singapore's value proposition for litigants considering where to resolve their disputes.
Comparable Commonwealth jurisdictions, such as the UK, Australia and New Zealand, have already expanded their regimes to cover more types of civil judgments, or civil judgments from more tiers of courts. This Bill seeks to bring our legislation in line with international developments. It will give us the flexibility and the framework to expand our network of bilateral arrangements.
This Bill, together with the RECJA Repeal Bill, will consolidate our statutory regime on the reciprocal enforcement of foreign judgments into a single framework. Let me now explain the main features of the reconstituted regime.
First, the new framework expands the scope of reciprocal arrangements that Singapore can enter into with foreign countries, by allowing more types of judgments to be covered by these arrangements. As mentioned earlier, currently, the scope of judgments that such arrangements can cover is limited. Only two main types of judgments are covered – and I think the legal practitioners in this House will know – that the Act covers final money judgments given by foreign superior courts in civil proceedings, which would in this case, include foreign judgments that might be based on a right of action conferred by a regulatory statute but otherwise provides for compensation. So, it is the compensatory aspect that would also be caught in the current regime.
Secondly, final judgments given by foreign superior courts in any criminal proceedings for the payment of damages or compensation to an injured party. Penal orders, punitive fines and confiscation or forfeiture orders made in criminal proceedings do not fall within the present or the proposed – if this Bill is passed – scope of the REFJA.
The Bill will expand and modernise the framework by adding four types of judgments given in civil proceedings. So we will bring in four more types of judgments in civil proceedings into the fold recognised by REFJA.
First, non-money judgments. This will enable litigants to realise a fuller range of remedies granted by the Courts. Non-money judgments include:
(a) Freezing orders, injunctions which prevent a party from dealing with assets, to ensure that assets remain available to satisfy an eventual money judgment. So if a party has assets in Singapore, there is a freezing injunction that is ordered in the foreign country, if it is under REFJA, this will then be brought into the fold as well;
(b) It also includes injunctions which require a party to do or to refrain from doing an act; and finally
(c) Orders for specific performance which require a party to perform the obligations under a contract, usually to complete a sale and purchase or some other matter where the proceed or the item that is sought is of intrinsic value.
Ordinarily, the judgment creditor of a foreign non-money judgment seeking recognition and enforcement of this judgment requires the Singapore Courts' assistance so that the orders in the foreign judgment may be effected in Singapore. There may, however, be practical difficulties, or issues of policy and convenience in recognising and enforcing foreign non-money judgments, especially if given by a court from a different legal system. The Bill therefore gives our Courts the discretion to only register a non-money judgment if it is satisfied that the enforcement of the judgment would be just and convenient. If the Court is of the opinion that such enforcement would not be just and convenient, then the Court may order the registration of such amount as it considers to be the money equivalent of the relief.
Let me just explain that. If a Court considers that the recognition of an order which requires the doing of an Act or the refraining from doing of an Act is not just and convenient, then the Court would consider what is an equivalent monetary value and order that in its place.
For instance, where the Court finds that it would not be just and convenient to grant specific performance or an injunction, it may then grant damages in lieu of the relief. Damages may be assessed on a compensatory or restitutionary basis, in accordance with established principles on assessment of damages, so as to arrive at a fair equivalent of what is lost by the refusal of the non-money relief. In doing so, the Court would consider the value of the foreign non-money relief being effected in Singapore, given that what the judgment creditor seeks is for the non-money relief to be effected in Singapore. So the assessment tenet is based on the performance in Singapore.
Second, lower court judgments. This Bill will also allow for the recognition and enforcement of judgments from both lower and higher courts. This will also open the doors for judgments from our State Courts to be enforced overseas, the Bill being reciprocal in nature.
Third, interlocutory judgments. This will strengthen the enforceability of judgments, including by ensuring that assets are not dissipated before a final judgment is obtained so that the successful claimants are not left with only a "paper" judgment. This ties in with my earlier point, where injunctions sometimes, instead of being final in nature, are also interim or interlocutory in nature. This Bill also contemplates the recognition of this type of judgments. The ability to enforce Singapore interlocutory judgments in foreign jurisdictions – in other words, the converse – will enhance the attractiveness of Singapore Courts to litigants.
Fourth, judicial settlements, consent judgments and consent orders. Arrangements between parties concluded before a Court to end the Court proceedings should equally be recognised and enforced like a judgment so as to afford parties certainty of finality in their disputes and to respect the parties' binding commitment. This amendment will also bring the regime under the REFJA in line with that under the Choice of Court Agreements Act, which recognises and enforces judicial settlements, consent judgments and consent orders.
These reforms provide the broad statutory framework for Singapore to negotiate reciprocal enforcement agreements or arrangements with foreign countries. However, the precise scope of enforceable judgments will be decided and negotiated with each foreign country individually. So, the fact that we have the Act or the Bill being passed into the Act, does not automatically mean that there will be a whole series of countries that will come on board. What will happen thereafter is, armed with these amendments, we will then proceed to negotiate with foreign countries, and decide in the case of each country, what is suitable, what is appropriate and obviously, on a reciprocal basis.
The factors that will be taken into account will include factors, such as the compatibility of our respective court systems – Singapore's and the foreign courts' – the needs of users of our Court systems and, of course, our countries' respective interests. This means that while the reformed REFJA will provide a broad menu of options available for negotiation, Singapore might enter into an agreement or arrangement with Country A for the reciprocal enforcement of only a limited category of judgments, whereas with Country B, there could be reciprocal enforcement of the full range of judgments under the REFJA. It really depends on what is also being negotiated and what is also being offered by the reciprocal country.
Second, to ensure that the requirement for reciprocity is not circumvented or bypassed, the Bill provides that some types of foreign judgments will not be recognised. For example, if a judgment is given by a recognised court, on appeal from a court that is not a recognised court, in other words, it is an appeal, but it originates from a court that is not a recognised Court, then this will not be recognised under the framework. Or, conversely, where a judgment registered or enforced in a recognised court but which originated from a court that Singapore has no reciprocal enforcement arrangements with, will also fall outside the scope of the framework.
Third, to reduce fragmentation of the different regimes – and I think lawyers in practice will know, that for a long time, we have had to contend with the REFJA and then the RECJA – the RECJA Repeal Bill provides for the repeal of RECJA on a date to be stipulated by the Minister. Reciprocating countries currently recognised by the the RECJA are expected to be transferred over to the REFJA regime before the RECJA Repeal Bill comes into force, so it will be consolidated into one common Reciprocal Enforcement Act.
In conclusion, this Bill will:
(a) expand the scope of reciprocal recognition and enforcement of foreign judgments that Singapore can offer to, and also at the same time receive from, other jurisdictions;
(b) in turn, further boost Singapore's status as an international dispute resolution centre and hub; and also
(c) together with the RECJA Repeal Bill, streamline the process and statutory regime for reciprocal recognition and enforcement of foreign judgments into a single statute.
Mr Deputy Speaker, with that, I beg to move.
Question proposed.
Sir, this Bill furthers justice. How? By facilitating the realisation of judgments into real, tangible benefits even if these need to be realised overseas. This is especially important in a world where cross-border business transactions frequently occur and where assets and goods may be dispersed around the globe.
Enforcement via a registration of judgment is a regime that allows for cost-savings and greater certainty when an overseas judgment is being enforced. It is based on reciprocity, that is, that Singapore's judgments will be recognised and enforced in their jurisdiction and that that jurisdiction's judgment will be recognised and enforced in Singapore except for a few exceptions. This reciprocity is based on executive action, namely, through the Minister making an order under section 3 of the Act. At this stage, Sir, allow me to declare that I am practising lawyer at the Singapore Bar.
This Bill streamlines and broadens the regime, furthering Singapore's position as a dispute resolution hub. Because our judgments will be more easily enforced overseas, parties will have greater reason to choose Singapore to resolve the dispute. As more cases in Singapore are heard, Singapore's jurisprudence will develop. With more established jurisprudence and greater familiarity with Singapore law, more contracting parties will choose Singapore law as the choice of law and Singapore as the place with exclusive jurisdiction.
This Bill streamlines the regime by removing the distinction between commonwealth and non-commonwealth countries. Although they operated in generally the same way, there were a few minor differences. For example, the tests for setting aside registration of a judgment on grounds of public policy are slightly different in section 5(a)(v) of the Reciprocal Enforcement of Foreign Judgment Act and section 2(f) of the Reciprocal Enforcement of Commonwealth Judgment Act.
This streamlined statutory regime supplements other processes by which foreign judgments are enforced in Singapore. The Choice of Court Act implements the Hague Choice of Court Convention, a multilateral treaty with 32 contracting parties currently. However, it does not include recognition and enforcement of interim measures. The statutory regime as amended by this Bill will allow such reciprocal recognition if and when such bilateral agreements are entered into.
Besides formalised statutory procedures, there are also non-binding memoranda between countries that help facilitate this process of recognition and enforcement. As of September 2018, the Supreme Court of Singapore had entered into Memoranda of Guidance as to the Enforcement of Money judgments with five courts in various jurisdictions. One such example is the Memorandum of Guidance Between The Supreme People's Court of The People's Republic of China and The Supreme Court of Singapore on Recognition and Enforcement of Money Judgments In Commercial Cases signed on 31 August 2018.
Relevant to how the Reciprocal Enforcement of Foreign Judgment Act supplements and does not affect other existing regimes, would the Minister explain the rationale behind the retention of section 7(1) of the Reciprocal Enforcement of Foreign Judgment Act which says that "no proceedings for the recovery of a sum payable under a foreign judgment, being a judgment to which this Part applies, other than proceedings by way of registration of the judgment, shall be entertained by any court in Singapore"? Does this mean that if a judgment could be enforced via the Choice of Court Act instead of the Reciprocal Enforcement of Foreign Judgment Act that the Reciprocal Enforcement of Foreign Judgment Act must be resorted to and not the Choice of Court Act? That is a question.
As this streamlined statutory regime supplements existing regimes, this Bill also broadens the scope of the Act, making it more useful.
Firstly, it broadens the kinds of judgment that can be registered under this Act. Although retaining the limitations of certain kinds of judgments in section 2(2), clause 2 includes non-money judgement as a type of judgment. This is very helpful even for commercial matters. For instance, in cases involving intellectual property rights, the remedy may be to transfer property or to destroy infringing material. Coupled with the inclusion of interlocutory judgments as a type of judgement recognised by the Act in clause 2, global mareva injunctions can be registered and enforced without commencing a separate action. Because there may be differences in legal remedies available or some other reasons where it may be just and convenient not to strictly enforce a non-money judgment, the new section 4(3A)(b) gives the court discretion on how to enforce non-money judgments.
Secondly, clause 3(1) allows the minister to recognise judgments coming from courts besides superior courts. The previous blanket ban against recognition of subordinate courts prevented Singapore's state court judgments from being registered overseas due to the need for reciprocity.
Because of the increase in jurisdictional limit of the State Courts, cases that need to be enforced overseas have to be enforced overseas have to be transferred to the High Court. This has disadvantages. The party who needs overseas enforcement may not get High Court costs from the other party, incurring greater unrecoverable costs. So, this change to make it possible for Singapore to enter into bilateral agreements that recognise judgments from our state courts directly is ideal.
Even while this Bill expands the possibilities for enforcing judgments and interim measures from other jurisdictions, this Bill also puts in safeguards to prevent abuse. Firstly, the new section 3(4) ensures that the judgment originates from the court recognised, preventing the requirement of reciprocity from being circumvented.
Secondly, clause 4 adds another ground for setting aside a registered judgment, that is, if the judgment was discharged. According to the Explanatory Statement, an example of this is in the event of a bankruptcy. This prevents the bankruptcy regime from being circumvented.
Thirdly, the new section 4(3B) allows Singapore courts to register a judgment for the amount of compensation but not for punitive or exemplary damages. Unlike section 16 of the Choice of Court Agreements Act which provides the court the discretion to refuse to recognise or enforce the part of a judgment that exceeds compensation for the actual amount of loss or harm suffered, the position for such judgments are unclear under the Reciprocal Enforcement of Commonwealth Judgments Act and the Reciprocal Enforcement of Foreign Judgments Act. In this way, this Bill makes the position under the statutory regime of registering reciprocal judgments certain and accommodates differences in legal remedies available in different jurisdictions. This is a major advantage.
With more possibilities albeit with in-built safeguards, there will be greater flexibility to negotiate bilateral agreements on the recognition and enforcement of court judgments. No changes seem to have been made to the list of countries under the Reciprocal Enforcement of Foreign Judgments Act and Reciprocal Enforcement of Commonwealth Judgments Act at least since 1999. Hopefully, more bilateral agreements to this effect would be entered into following this Bill. This would boost dispute resolution in Singapore as the ability to enforce a judgment in multiple countries can be valuable for certain commercial disputes.
In conclusion, Sir, this Bill opens a lot of opportunities for negotiating bilateral agreements such that Singapore's court judgments can be enforced overseas, furthering Singapore's position as a premier dispute resolution hub. And therefore, I support the Bill.
PAPERCUTS