SINGAPORE Law and Practice Contributed by: Jansen Chow and Ang Leong Hao, Rajah & Tann Singapore
leave to bring an action in the company’s name. The court would need to be satisfied that: • the complainant has given 14 days’ notice to the directors of the company of the complainant’s intention to apply to the court for leave to com - mence action if the directors of the company do not bring, diligently prosecute, defend or discon - tinue the action or arbitration; • the complainant is acting in good faith; and • it is prima facie in the interests of the company that the action should be brought. Under the common law derivative action, the action against the fraudulent director is brought in the share - holder’s name. There are two requirements that need to be satisfied before the court may grant leave to start a derivative action, namely: • it is prima facie in the interest of the company that the action should be brought; and • the complainant must have standing to bring the action by showing that there has been “fraud committed against the minority” and the alleged wrongdoers are in control of the company. The idea of “fraud on the minority” is a term of art here and is different from actual fraud under common law. It includes, for example, situations in which a director misappropriates the company’s funds or opportuni - ties, or receives bribes or benefits at the company’s expense. 4. Overseas Parties in Fraud Claims 4.1 Joining Overseas Parties to Fraud Claims Bringing a claim against overseas parties requires establishing that the Singapore court: • has jurisdiction over the overseas parties; or • Is the appropriate court to hear the action? Whether the Singapore courts assume extraterritorial jurisdiction will depend on the nature of the issue at hand. The Singapore Court of Appeal has held that the Singapore courts do not have jurisdiction to adju - dicate on matters concerning immovable property
located outside Singapore. In a separate case, it was held that the Singapore courts can order a foreign individual to be subject to examination in judgment- debtor proceedings if the foreign individual is so closely connected to the substantive claim that the Singapore court is justified in exercising jurisdiction over them. 4.2 Service of Proceedings out of the Jurisdiction Pursuant to the Rules of Court 2021, to establish that the Singapore court has jurisdiction over the overseas parties or is the appropriate court to hear the action, the claimant needs to show that (Order 8 Rule 1 (2)): • there is a good arguable case that there is suffi - cient nexus to Singapore; • Singapore is the forum conveniens (proper forum); and • there is a serious question to be tried on the merits of the claim. Specifically, under paragraph 63 (3) of the Supreme Court Practice Directions 2021, the claimant should refer to any of the non-exhaustive list of factors to show that there is a good arguable case that there is sufficient nexus to Singapore. As for the forum conveniens requirement, the claim - ant may refer to a non-exhaustive list of common law factors (the Spiliada factors) to show that Singapore is the proper forum for the trial of the claim. Some of the factors include: • the governing law of the contract; • where parties were incorporated; and • the location of witnesses. The court’s approval is not required if service outside Singapore is permitted under the parties’ contract (Order 8 Rule 1 (3)). In the event that the court’s approval is granted and the claimant is faced with a difficult defendant, the claimant may apply for substituted service (paragraph 65 of the Supreme Court Practice Directions 2021). To do so, two reasonable attempts must first be made at personal service (paragraph 65 (2)). Modes of substi -
311 CHAMBERS.COM
Powered by FlippingBook