1995-7(1)-saclj-103-toh

7 S.Ac.L.J. Obtaining Jurisdiction Over Foreign Companies 103

OBTAINING JURISDICTION OVER FOREIGN COMPANIES

A. INTRODUCTION:

A recurrent problem in international commercial disputes is determiningwhen a foreign company1 is amenable to the jurisdiction of the local courts.The somewhat instinctive response of chasing the foreign corporation toits place of incorporation by effecting service out of jurisdiction underOrder 11 of the Rules of Supreme Court (hereinafter, the RSC), is oftennot the most ideal solution, both in terms of convenience and tactics.2

Other jurisdictional heads which involve only service within jurisdiction3

should be considered first, whenever possible.

The purpose of this article is to explore these jurisdictional heads whichonly require service within jurisdiction of the Singapore forum and considerhow they might be invoked, if at all, in the context of different physicaland economic manifestations of a foreign company within Singapore. Anearly caveat is apposite, however. Scarcity of local cases, doubts as to

A foreign company is defined in the s.4 of the Companies Act (Cap. 50, 1994 RevisedEdition) as (a) a company, corporation, society, association or other body incorporatedoutside Singapore; or (b) an unincorporated society, association or other body whichunder the law of its place of origin may sue or be sued, or hold property in the name ofthe secretary or other officer of the body or association duly appointed for that purposeand which does not have its head office or principal place of business in Singapore. Thequestion of jurisdiction over foreign companies was the subject of an earlier article: seeWoon, ‘Jurisdiction over Foreign Companies in Singapore Law’ [1987] 2 MLJ xxviii.However, the whole basis of assuming civil jurisdiction was changed in 1993 owing toamendments to s.16 of the Supreme Court Judicature Act. (Cap. 322, Singapore Statutes,1993 Reprint of the 1985 Revised Edition.) On the effects of the amendments, seeYL Tan [1993] SJLS 557 at pp 563–569. It is therefore timely to re-examine this area ofjurisdiction over foreign companies in view of these statutory changes, as well as thecaselaw which has emerged over the last few years.For instance, service out of jurisdiction is not available as of right; a jurisdictional limbunder O.11 r.1(1), RSC must be shown and leave of court must be obtained. Burden ofproving the appropriateness of the forum according to the Spiliada [1986] 3 All ER 843criteria rests with the plaintiff. Such service may be ignored and any resulting defaultjudgment may not be enforceable in another jurisdiction (at least in most Commonwealthcountries), depending on the conflict of laws rules of that jurisdiction. It is true that aforeign company may not have assets in Singapore so that even if jurisdiction over it isobtained by service within jurisdiction and judgment obtained, such a judgment mayhave to be enforced elsewhere. However, if there have been submission or presence ofthat company within jurisdiction, that may furnish a ground for enforcement beforeanother court in the Commonwealth, although ultimately, everything depends on theenforcement rules of that jurisdiction. If the foreign company has a local debtor, thengarnishee proceedings might be commenced after obtaining the local judgment.This expression, ‘within jurisdiction’ will be used interchangeably with the expression, ‘inthe forum’. Needless to say, ‘forum’ refers to the country before whose courts the actionis brought.

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applicability of cases from other jurisdictions, absence of judicial survey ofthe entire field and recent statutory amendments in 1993 make the task ofconstructing a conceptual framework in this area difficult and the analysisto be put forward presently, tentative.

B. THE STATUTORY REGIMES

The starting point is s.16(1) of the Supreme Court Judicature Act4 whichsets out the scheme of civil jurisdiction of the High Court of Singapore forin personam actions. In fact, s.16(1) supplies two of the three statutoryregimes in relation to jurisdiction over foreign companies. Under s.16(1)(i),the High Court has jurisdiction to hear an action in personam where thedefendant is served with a writ or other originating process in Singaporein the manner prescribed by the Rules of Court. S.16(1)(b) confers theHigh Court with jurisdiction if the defendant submits to the jurisdiction ofthe High Court.

In addition, s.16(3) provides that without prejudice to the generality ofsubsection 1 the High Court should have jurisdiction as is vested in it byany other written law.5 S.16(3) thus captures any other jurisdiction conferringstatutory provisions, which in relation to foreign companies in Singapore,would presently be argued to include Part XI, Division 2 of the CompaniesAct.

C. DIVISION II, PART XI OF THE COMPANIES ACT

Whilsts.16(1) of the SCJA sets out the heads of civil jurisdiction inSingapore, it may be more convenient to begin with this third statutoryregimeunder the Companies Act rather than the two contained in s.16(1).If, as presently argued that it would, certain provisions of this Part of theAct do indeed confer jurisdiction, then any foreign company that isregistered under s.368 of this Part could be served in accordance with theprocedure prescribed in s. 376 and be made amenable to jurisdiction of theSingapore courts. There would be no further need to consider if the othertwo jurisdictional limbs in s.16(1) could be invokedwhich,subject to oneexception,6 remain possible (though in many situations, less attractive)alternatives.

Supra, note 1.‘Written law’ according to s.2(1) of the Interpretation Act (Cap.1, Singapore Statutes,1985 Rev. Ed.) includes, inter alia, all Acts, Ordinances and enactments by whatevername called.That of service under s.16(1)(a)(i) read with O.62 r.4. Infra, Part D of this article.

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(i) Relevant Provisions of Part XI, Division 2 of the Companies Act.7

Under Division 2, a foreign company which wishes to commence to carryon business or establish a place of business8 in Singapore must be registeredunder s.368. Registration of such a foreign company requires the lodgmentwith the Registrar of Companies of, inter alia, the names and addresses oftwo or more natural persons resident in Singapore who are authorised toaccept on its behalf service of process9 (such persons being referred to as‘agents’10 of the foreign company). In addition, such a foreign companymust have a registered office in Singapore11 and notice of the situation ofthis office in Singapore must also be lodged.12 Failure to register beforecarrying on business or establishing a place of business attracts an offence(penalised by a fine) under s.386.

Any documents (including any originating processes) required to be servedon a foreign company may be left at or sent by post to

a.

b.

c.

the registered office of the foreign company (if addressed to theforeign company) or

the registered address of any of its agents (if addressed to itsagent) or

the registered office of the foreign company’s place of incorpora-tion if it has ceased to maintain a place of business in Singapore.13

In essence then, a foreign company which wishes to carry on business orestablish a place or business in Singapore must register itself, supplying thenames of its local agents as well as the address of its registered Singaporeoffice and once so registered, may be served with process in the mannerprescribed by s.376. It is significant to observe that if a foreign companycarries on business or establishes a place of business in Singapore but failsto register itself, the service procedure set out in s.376 does not apply.

As a matter of historical interest, this problem was addressed by s.305 ofthe Companies Ordinance of 1955 which allowed service on a place ofbusiness established by the unregistered foreign company. But this provision

It appears that Part XI, Division 2, in its present form was introduced in 1967, via theSingapore Companies Act of 1967 (Act 42 of 1967). The provisions relevant to thepresent analysis, ss.329, 330, 332 and 339 of the 1967 Act are similar to ss.365, 366, 368and 376 of the current Act. Prior to 1965, the provisions which dealt with registration andservice of foreign companies were in pari materia to those found in the various Englishcompanies legislations. Infra, note 32. See for instance, ss.300, 301 and 305 of theCompanies Ordinance, 1955 and prior to that, s.290 of the Straits Settlements CompaniesOrdinance of 1923 and s.287 of the Straits Settlements Companies Ordinance of 1915.The meanings of these two phrases will be considered presently.s. 368(1)(e), Companies Act.s. 366(1), Companies Act.s. 370(1), Companies Act.s. 368(1)(f), Companies Act.s. 376(a)–(c), Companies Act.

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and others dealing with registration and service in the 1955 Ordinance(which were probably borrowed from the English Companies Act of 1948)were left out of Companies Act of 1967 which repealed the 1955 Ordinanceand also introduced the present Part XI, Division 2 provisions.

(ii) Legislations Comparable to Division 2 of Part XI, Companies Act.

The provisions in Part XI, Division 2 of the Companies Act which arerelevant to our discussion have close parallels in Australia, Malaysia andEngland. For instance, s.343 of Part 4.1 Division 2 of the AustralianCorporations Law, 1989 forbids a foreign company to carry on business14

before it is registered under provisions in Part 4.1, Division 2. The ambitof the expression, ‘carrying on business’, found in s.21(2),(3) of the sameAct is similar to that found in s.366 of our Companies Act. Similarly, alocal agent must be appointed by the foreign company and the companymust have a registered office.15 Service procedure under s.363 is broadlysimilar to s.376.16

The Malaysian provisions are in pari materia similar to those in Singapore,albeit numbered differently.17

The provisions18 in England contained in Part XXIII of the 1985 CompaniesAct are different from Part XI, Division 219 in several pertinent aspectsalthough the basic schema remains the same. S. 691(1) of the EnglishCompanies Act 1985 requires a foreign company to register within onemonth after establishing a place of business20 and to lodge for registration,inter alia, the names and addresses of one or more persons authorised to

But s.343 of the Corporation Laws leaves out the expression, ‘place of business’ whichappears in Part XI, Division 2. This is perhaps because the two expressions, ‘place ofbusiness’ and ‘carrying on business’ are synonymous: see s.21(1). The relevant provisionsof two earlier companies legislation in Australia, the 1981 Australian Companies Codeand the 1961 Companies Act are in pari materia with those in Part XI Division 2. See,for instance, ss.510, 512, 518 and 530 of the 1981 Code.See ss.344 and 345 of the Corporations Law, 1989. See also s.363 on the ways service canbe effected.The main differences seem to be that there is no equivalent to s.376(c) in s.363 of the1989 Corporations Law (the provision that deals with service on registered foreigncompany) and s.363(3) permits service on locally resident directors. These two differencesare found in s.530 of the 1981 Code as well.See the Part XI, Division 2 of the Companies Act of 1965, Malaysia; in particular ss.329,330, 332, 333 and 339.Not taking into account the provisions introduced by virtue of the Eleventh CompanyLaw Directive under European Community regime.See the remarks of Chao Hick Tin J in the Court of Appeal decision of Bank of CentralAsia v Rosenberg [1995] 1 SLR 490. The first instance decision is reported in [1994] 1SLR 798.Unlike the Singapore provisions, there is no reference to ‘carrying on business’ in theEnglish provisions.

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accept service. Service on the foreign company may be effected on such anagent of the company by addressing the process to him and leaving theprocess at or posting it to the agent’s registered address.21 It will be noticedthat no mention is made in the English provisions of a company ‘carryingon business’ and service on a registered company may only be effected onthe agent. Perhaps more significantly, there is a UK provision which, since1967, has no local equivalent: if the foreign company fails to register, thenservice may still be effected at a place of business established by thecompany in the England.22 As will presently be discussed, this lacuna in thelocal legislation presents problems on both jurisdiction and service.

(iii) Does Division 2 of Part XI confer jurisdiction?

This question does not admit of an easy reply. However, what appears tobe an affirmative answer may be obtained from a number of indirect sources.

The legislative purpose behind the registration and service provisions ofthis Division, particularly ss. 365, 366, 368 and 376 seems predominantly tobe one of protection of local creditors of the foreign company by securingfor them a procedure for service which does not involve service out ofjurisdiction. This obviates the inconvenience of service out and puts thepotential plaintiff at no worse a position than he would be if he were to suea local company. This purpose was identified by Ackner LJ (as he thenwas) in South India Shipping Corporation v Export-Import Bank of Korea23,by Winslow J in Goh Siew Wah v Columbia Films of Malaysia24 and hasbeen echoed in two Australian decisions, Maronis Holdings Ltd v NipponCredit Australia Ltd25 as well as Gillett v The National Benefit Life andProperty Assurance Company Ltd.26 Another justification, somewhat lesssophisticated, stems from some notions of mutuality: a foreign companycan sue any local creditor as if it is a local plaintiff 27 and so should becapable of being sued as if it were a local defendant.

Admittedly, these judicial pronouncements do not bear directly on thejurisdiction question and that there is no express provision in any Part XI,Division 2 or other comparative legislation which deals specifically with

S.695, English Companies Act 1985.S.695(2), English Companies Act, 1985.[1985] 2 All ER 219 at p.224. See also the judgment of Lord Sumner in Employers’Liability Assurance Corporation v Sedgwick, Collins and Company [1927] AC 95 at p.108[1966] 1 MLJ 39 at pp.40–41. His Honour said that ‘the object of s.305 (a predecessor ofs.376) is to provide a method of service on a company incorporated abroad which carrieson business locally...its justification is convenience to the public.’ See also United KingdomTobacco v Malayan Tobacco Distributors [1933] MLJ 1 where it was said that the provisionshave the salutary effect of controlling the activities of foreign companies within jurisdiction.[1990] 2 ASCR 136 at p.140, a decision of the Supreme Court of New South Wales.(1918) 24 CLR 374 at 378, a decision of the High Court of Australia.As far as jurisdictional requirements are concerned. Needless to say, it may be asked toput up security for cost.

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jurisdiction. However, it should be noted that as far as English andAustralian cases are concerned, they are to be read with the common lawconflict of laws principle in mind, that the foundation of jurisdiction inpersonam is service of the writ on a defendant present within jurisdiction.28

It may therefore be argued that by providing for a statutory substitute forthe common law equivalent criterion of corporate presence in the form ofregistration and a special facility for service on foreign companies registeredwithin jurisdiction, the legislatures of these countries have already createdan avenue by which jurisdiction over foreign companies may be exerted.Any express enactment on denoting that service in the forum confersjurisdiction would be superfluous.29

Indeed, such an argument, reading into statutory provisions dealing withforeign companies a jurisdictional nexus is supported by writers and caseson the area. Both Dicey and Morris and Cheshire and North regard serviceunder the relevant UK provisions on foreign companies as conferringjurisdiction. The editors of Cheshire and North, citing as support the decisionof the Theodohos,30 make this point aptly:

‘... the basis for taking jurisdiction against foreign companies followingservice of a writ within the jurisdiction is to be found in the provisionsof the Companies Act,...’31

While, the English provisions on which the above observations are basedare somewhat different from those of Singapore in that they include serviceprovisions against errant, unregistered foreign companies, the principlethat service on registered companies confers jurisdiction has always beenmaintained, even at a time when the English provisions contained thesame lacuna as the local provisions.32 In Employers Liability Assurance

See Dicey and Morris, Conflict of Laws, 12th edition, Volume 1 at p.298; Cheshire andNorth, 12th edition, at p.182.The argument can be taken one step further. A Singapore incorporated company may beserved in the way described in s.387. The lack of any express conferment of jurisdictionin s.387 bothers no one. Such a company is assumed to be present by virtue of its localincorporation. (See Dicey and Morris, supra note 28 at p.305; Dicey and Morris’ remarkseems to equate corporate domicil which is a function of incorporation with corporatepresence). As aforesaid in the text, the aim of requiring registration of a foreign companyis after all to put it in the same position as a local company, as regards convenience ofstarting a suit against it.[1977] 2 Lloyd’s Rep 428.Cheshire and North, supra, note 28 at p.186.It may be useful at this juncture to briefly state the legislative history of the Englishprovisions. Before the Companies Act 1907 was enacted, there was no statutory provisiondealing with service of foreign companies and so recourse was had to O.9 r.8 of the RSCof 1883. S.35 of the Companies Act of 1907 changed this by introducing registration offoreign companies and a service procedure on such registered foreign companies. Thisprovision was repealed and re-enacted in s.274 of the Companies (Consolidation) Act,1908 which was in turn repealed by the Companies Act 1929 and replaced by ss.346(3)and 349. Until the Companies Act of 1929, there was no provision dealing with serviceof unregistered companies; therefore, England had the same statutory lacuna as thatpresently prevailing in Singapore. However, s.349 closed up the lacuna by the introduction

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Corporation Limited v Sedgwick, Collins and Company Limited33, LordsSumner and Parmoor opined that the act of registration amounted to asubmission to the territorial jurisdiction of the English courts.34 LordParmoor, additionally, appeared to accept that registration upon establish-ment of a place of business created some kind of territorial presence whichis the statutory equivalent of corporate presence under common law inthat it, too, renders the foreign company amenable to jurisdiction andservice.35 Submission to jurisdiction based on registration is admittedly‘artificial’36, since registration on pain of a fine37 hardly connotes anyvoluntariness which underlies any submission to jurisdiction and in anyevent, any such submission is probably implied, a notion which has beenlargely rejected in English and local cases.38 Registration as a statutoryparallel to common law corporate presence within jurisdiction is somewhatmore attractive and seems to have the support of Dicey and Morris39

although it would be inconsistent with cases which decided that cessationof business at the time of service did not render the service bad.40

The Australian conflict of laws writers, Sykes and Pryles, also rejectsubmission.41 The learned writers adopt the position that the act of

of service on a place of business established by an unregistered foreign company. Theseprovisions in the 1929 Act were repealed by the Companies Act 1948 and re-enacted asss. 407, 409, and 412 (The Theodohos, supra, being decided on these provisions). The1948 provisions became ss.691and 695 of the English Companies Act of 1985.Supra, note 23.This notion of submission to jurisdiction based on registration was subsequently followedin Sabatier v The Trading Company [1927] 1 Ch 495 and The Madrid [1937] P 42. Seealso Nygh, Conflict of Laws in Australia, 5th Edition (1991) at p. 501 which takes thesame view.See Part D of this article.See Dicey and Morris, supra, note 28 at p.313. See also, Sykes and Pryles, AustralianPrivate International Law, Conflict of Laws, 2nd Edition, (1987) at pp.27–28. This viewis omitted in the 3rd Edition (1991) of the book although the position that the companieslegislations confer jurisdiction is still retained. See pp. 25–26 of the 3rd Edition.Failure to register a foreign company attracts a fine of maximum $1000 under s. 386 ofthe Companies Act in addition to a default penalty under s.408.See Vogel v Kohnstamm Ltd [1973] QB 133, Sunline v Cantopex, [1986] 2 MLJ 348; UOBv Tjuk Tjio Nyuk [1987] 2 MLJ 295.Supra, note 28, at p.313.It is hardly surprising to note these cases, like Sedgwick & Collins, supra, note 23 andSabatier, supra, note 34 are those that espouse the submission by registration theory.Supra, note 36. Cf Kelty v Athertons (SA) Pte Ltd, (1982) 6 ACLR 477, a decision ofSangster J of the Supreme Court of South Australia. The Court in this case seemed torely on the common law requirement of corporate presence (or residence) as the sourceof jurisdiction over foreign companies and did not see the need for reliance on the SouthAustralian Companies Act provisions which relate to registration and service. The courtwent on to observe that these provisions do not bring a registered foreign company intoa different position in relation to jurisdiction of the South Australian courts than anunregistered foreign company. This observation is, with respect, aberrant as it runs counterto the view taken by cases and academic writers, including the Australian conflicts writers,cited above. Further, the remarks are probably dicta since the judge considered the issueon his own accord without either counsel challenging the court’s jurisdiction and in anyevent, jurisdiction was in fact obtained by submission through unconditional appearance.

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registration confers jurisdiction under the legislation and thus no recourseneed be had to jurisdiction derived from either submission or carrying onbusiness in the forum. The Australian perspective is particularly relevantgiven the greater local resemblance between their provisions and ours, afact which is not altogether surprising, since a fair number of provisions inour Part XI, Division 2 bear Australian roots.

In view of these judicial and academic authorities, it seems difficult toargue that Part XI, Division 2 of the Companies Act is not jurisdictionconferring. Whether the conceptual basis of jurisdiction conferment issubmission, corporate presence or registration per se, is perhaps not asimportant as the fact that the provisions actually create a source ofjurisdiction.

In any event, whatever might have been the position before, the 1993amendments to s.16 of the Supreme Court Judicature Act, for two reasons,the new provisions of s.16(1) do compel the conclusion that Part XI, Division2 is jurisdiction conferring. The first reason is this. S.16(1)(a)(i) providesthat jurisdiction is based on service according to the rules of court. Ifservice is effected under s.376 of the Companies Act, such service is not inaccordance with the RSC and so falls outside the purview of s.16(1)(a)(i).One might then ask rhetorically what is the effect of service under s.376.If it is solely to give notice of suit to the foreign corporate defendant, mustjurisdiction nevertheless be made available through compliance withs.16(1)(a)(i)? This would necessitateduplication of service. Furthermore,in the absence of submission to jurisdiction by the defendant, the avenuefor such service is very restricted. O.62 r.442 cannot be employed as itapplies only in the absence of provisions made in any other enactment, likes.376. O.10 r.2, which is the other alternative, can only be invoked if itsspecial criteria are fulfilled.43 It should also be noted that the Legislaturedoes not intend s.16(1) to as operate to the exclusion of all other statutorysources of jurisdiction, including that found in the Companies Act. S.16(3)makes this quite apparent.

Secondly, with the amendment to s.16(1) making jurisdiction dependenton service within or out of jurisdiction, the conceptual premise of inpersonam jurisdiction in Singapore, even though cloaked in a statutoryoutfit, now resembles that of common law.44 That being the case, thearguments about the superfluity of a specific jurisdiction provision alongwith a service provision in the company legislations of Australia and Englandwould apply with full effect in Singapore as well.

See Part E of this article.Ibid.See the remarks of the Minister of Law in parliamentary debates to the amendment ofs.16 reproduced on p. 20. Parliamentary debates are relevant to the construction ofstatutes; see s.9A of the Interpretation Act (Cap 1, Singapore Statutes, 1985 Rev Edition)as well as the decisions of Pepper v Hart [1992] 3 WLR 1032 and Raffles City v AttorneyGeneral [1993] 2 SLR 580.

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(iv) Meaning of ‘place of business’ and ‘carrying on business’

The analysis thus far is registration of a foreign company is necessarybefore it establishes ‘a place of business’ or commences to carry on business45

and when so registered, it becomes subject to the service and jurisdictionalregime of the Companies Act. Since either ‘establishing a place of business’or ‘carrying on business’ triggers off certain jurisdictional consequences, itis essential to ascertain what kinds of corporate acts amount to eitheractivity.

(a) ‘Place of Business’

Beginning with ‘place of business’, this expression is not defined in PartXI, Division 2. However, there are two sources of jurisprudence whichmay be tapped in determining the parameters of this phrase. The firstwould be common law cases on what is meant by a company carrying onbusiness ie corporate presence.46 The second would be cases fromjurisdictions which have considered this phrase in comparable legislations.47

The common law cases on carrying on business will be considered in detailpresently; suffice, however, that the main principles distilled from thesecases be stated for present purposes. A company’s place of business refersto a local habitation of its own;48 it is where the company carries outbusiness for a definite period of time. There must be a degree of fixity orpermanence about the place where business is conducted (although a boothin an exhibition lasting 9 days has been held to be sufficient)49; tenure ofthe place in the form of lease or title though not essential, is a strongindicium.50 If business of the company is carried out by an agent, therewould be compelling evidence of corporate presence if the agent has theauthority to enter into transactions binding on the foreign company51

although other aspects of the relationship are also relevant.52

See ss.365 and 368 of Part XI, Division 2 of the Companies Act.See Dicey and Morris, supra, note 28 at p.306 and Cheshire and North, supra, note 28,11th Edition at pp.189–191. See also, The Theodohos, supra, note 30, The Vrontados[1982] 2 Lloyds’ Rep 428 and South India Shipping Corporation v Export-Import Bankof Korea , supra, note 23.It is true that the Singapore Court of Appeal in the Rosenberg decision cautioned againstindiscriminate adoption of English cases on ‘place of business’ and pointed out the relevantprovisions of the Singapore and UK company legislation are materially different. Seepage 15 of the judgment. However, this caution was made in the context of constructionof O.10 r.2 of the RSC, rather than Division 2 Part XI of the Companies Act. However,it should be noted that in the UK provisions, the only jurisdictional trigger is ‘establishinga place of business’; ‘carrying on business’ is absent.Lord Advocate v Huron & Erie Loan and Savings Co. [1911] SC, 615.Dunlop Pneumatic Tyre v A G Cudell & Co [1902] 1 KB 342.La Bourgogne [1899] P 1, affirmed on appeal to the House of Lords, [1999] AC 431.Okura & Co v Forsbecka Jernverks Aktiebolag [1914] 1 KB 715.Adams v Cape Industries [1990] Ch 433.

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These common law principles are not to be regarded as rigid requirements.Indeed, as some decisions which construed comparable English legislationsshow, the expression,‘place of business’ in Part XI seems to encompass butis not confined to its common law meaning. In this connection, a trilogy ofEnglish decisions are illuminating.

The first is South India Shipping Corporation v Export-Import Bank ofKorea,53 in which the defendant bank was held to have established a placeof business for the purpose of the proviso to s.412 of the English CompaniesAct of 194854 even though its branch office in London did not conclude anybanking transactions but merely conducted activities incidental to its bankingbusiness, such as the collection and dissemination of information,maintenance of public relations with other banking and financial institutionsin the United Kingdom, as well as conduct of other liaison activities. TheDefendants took up a lease of the premises and employed staff to carryout its activities. On these facts, Ackner LJ found that the defendant bankhad established a place of business in England. His Lordship saw no needfor the activities carried out within jurisdiction to be the substantial orparamount part of the defendant’s business; such activities could beincidental to the main objects of the company, as those in this case were.As Parliament has not place any express qualifications or limitations onthe words ‘a place of business’, the court did not see fit to imply any.

The second case in the trilogy, Re Oriel Ltd, did not arise in a jurisdictionalcontext.55 It is nonetheless useful in that it reads into the same expression,‘establish a place of business’,56 a degree of permanence and corporateidentifiability in the premises taken up by the foreign company. To beginwith, Oliver LJ did not think that there is complete symmetry in the conceptsof carrying on business and establishing a place of business. A companysending its agents over to meet clients in a hotel lounge may be carryingon business there but does not establish the hotel lounge as a place ofbusiness. His Lordship went on to expound on the meaning of the expres-sion,

‘...when the word ‘established’ is used adjectively, ..., it connotes notonly the setting up of a place of business at a specific location, but adegree of permanence or recognisability as being a location of thecompany’s business. The concept, as it seems to me, is of some moreor less permanent location, not necessarily owned or even leased by

Supra, note 23.The proviso to s.412 of the 1948 Companies Act dealt with service on unregisteredcompanies. As note 32 makes it clear, this was the predecessor to s.695(2) of the CompaniesAct of 1985.[1985] 3 All ER 216. The case actually involved registration of a charge created by aforeign company over English property.Which also appeared in s.106 of the English Companies Act of 1948.

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the company, but at least associated with the company and fromwhich habitually or with some degree of regularity business isconducted.’57

So, in this case, a foreign company which acquired and mortgaged severalpetroleum garage sites as well as entered into petroleum supply agreementswith the mortgagee, was held not to have by these acts alone establisheda place of business on any of the sites it acquired. The private residencewithin jurisdiction of the directors per se did not amount to a place ofbusiness either, although it might be if it is the seat of corporate directionand control from which business correspondence emanates. Physicalindication of the company such as a signboard or brass plate is not necessarythough its absence is a factor to be taken into account.58

Cleveland Museum of Art v Capricorn Art International,59 the third Englishdecision on the issue, illustrates how far the courts have gone in stretchingthe notion of place of business. A disused church converted into a storageand viewing place of substantial pieces of artwork belonging to an art-dealing foreign company was found by Hirst J to constitute the latter’splace of business, storage and viewing being important activities of the art-dealing business. There was no evidence that art pieces were sold andpurchased at this place, or of external signs of corporate identity (thoughperhaps understandable on the facts); nor indeed did the foreign companyhave exclusive use of the place. Perhaps influenced by the tenuous evidencesupporting jurisdiction (although this was not expressed, there being thefirmer ground of lis alibi pendens to stand on), the court was prepared tostay the action on forum non conveniens.

Several trends emerge from this trilogy of cases. First, all the judges inthese three cases seemed to approach the matter as a question of fact anddid not adhere rigidly to the common law requirements outlined above, inparticular, the ability of the branch or agent to contract on the foreigncompany’s behalf. Instead, decisions are arrived at largely a matter ofscrutiny on the kind of corporate activities pursued in the forum. In otherwords, establishment of a place of business is a question of fact whichdepends on the circumstances of the individual case. Secondly, as SouthIndia Shipping and Cleveland Museum demonstrate, incidental or facilitativeactivities, which are not directly capital generating, may be sufficient toconstitute a place of business, depending on the nature of the business as

At p. 220 of the judgment. Cf Re Tovarishestvo Manufactur [1944] 1 Ch 404 in a companywhose directors conducted business from the same hotel each of a number of years washeld to have a place of business there for the purposes of winding up.On this point, see also Deverall v Grant Advertising Inc. [1955] 1 Ch 111.[1990] BCLC 546. See also the extreme decision of Sabatier v The Trading Company,supra, note 34 in which a registered foreign company which had ceased to carry onbusiness within jurisdiction was held to continue maintaining its place of business eventhough all that was done there were certain administrative activities like remittance ofdividends to shareholders. It is however not entirely clear from the judgment how theconclusion was arrived at.

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well as the extent and continuity of such activities. Thirdly, neither thephysical premises on which the business is located, nor the tenure (if any)which the company holds on it seems to matter very much. A commercialsetting, say an office, is not essential so long as the place (which could evendouble as a residence) is and has for some time been identified with theforeign company.

Finally, as the expression, ‘place of business’ received a wide constructionin the cases, there is a corresponding expansion in the scope of jurisdictionunder the English Companies Act and thence, if we adopt the approach inthese cases, in our Companies Act as well. What this means in practicalterms is that even tangential economic activities in a fixed place may be nosafeguard for a foreign company against the necessity of registration andbeing ensnared into the web of jurisdiction if such manifestations amountto the establishment of a place of business. As it appears to be a questionof degree, depending on the kind, frequency and volume of corporateactivities conducted within jurisdiction, measures to forestall jurisdictionmight not have their expected effects, if indeed they are commerciallypracticable. This may be a matter of some concern for a commercial (andregional) hub like Singapore that foreign companies desiring to carry outanything but the slightest activities may have to register and be exposed tosuits which may have nothing to do with the activities here, especially fromparties or their advisers attuned to the practice of forum-shopping. Themore extensive this jurisdictional web, the most pressing is the need to stayactions for which Singapore is not appropriate forum,60 especially thosethat smack of forum-shopping.

(b) ‘Carrying on Business’

This expression is partly defined in s. 366(1) as including ‘establishing orusing a share transfer or share registration office or otherwise dealing withproperty situated in Singapore as an agent, legal personal representative,or trustee, whether by employees or agents or otherwise...’. As this definitionis not exhaustive61, s.366(1) does not set out all the parameters of theexpression although, s.366(2) does enumerate a number of activities whichdo not amount to the company carrying on business in Singapore. Theseexceptions consist of the company becoming a party to any action or

The Spiliada, supra, note 2 which has been locally accepted: see, for instance, BrinkerhoffMaritime Drilling v PT Airfast Services [1992] 2 SLR 776; Eng Liat Kiang v Eng BakHem [1995] 1 SLR 577.Since it uses the word, ‘includes’. See also Luckin v Highway Motel (Carnarvon) Pty Ltd(1975) 133 CLR 164 at p.178. For instance, as Gibbs J pointed out in Luckin’s case, ifa defendant company dealt with property for itself and not as an agent (and thereforenot coming within the partial definition of the equivalent of our s.366(1)), it would stillbe carrying on business provided its dealings were not isolated transactions.

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arbitration proceedings, holding meeting for its directors or shareholders,maintaining a bank account, effecting any sale through an independentcontractor, soliciting any order which has to be accepted outside Singapore,creating a charge over property, securing or collecting a debt or enforcingsecurity relating to such debt,62 conducting an isolated transaction notrepeated from time to time and investing funds or holding property.

It is difficult to discern any unifying principle that threads through thesemotley collections of exceptions. They can broadly be divided into twokinds: those that reflect common law principles and others which appearto be a collection of some common corporate acts. Coming within theformer category would be the exceptions relating to soliciting for orderswhich are transmitted for acceptance outside Singapore63 and carrying outisolated transactions.64 The effect of sale through an independent contractoris, on plain reading, wide for an agent paid by commission may conceivablybe an independent contractor, yet such a factor per se does not precludethe company from carrying on business at common law. A sensibly narrowerreading, by confining this exception to situations of resale through a thirdparty, would render it more resonant with common law principles.

Aside from the statutory parameters laid out in s.366(1) and s.366(2), it isstill necessary to ascertain what other activities might conceivably comewithin the expression, ‘carrying on business.’ There appear not to be anydirect local authorities on the point, but two lines of cases are worthexploring. The first consists of cases borrowed from jurisdictions withcomparable legislations, particularly Australia. The clearest guidelines asto what ‘carrying on business’ entails come from the Australian High Courtdecision of Luckin v Highway Motel (Carnarvon) Pty Ltd65, in particularthe judgment of Gibbs J (as he then was).

Although this case, like Re Oriel, involves registration of charges createdby a foreign company, the provision construed is in fact the Australianequivalent of our s.366(1) and so to that extent, relevant to the presentanalysis. The foreign corporate defendant was a tour agency whose overlandtour buses over a period of a year travelled through Western Australia(where it had neither an agent, a place of business or any property). The

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On this exception, see also Koh Kim Chai v Asia Commercial Banking Corporation[1981] 1 MLJ 196 which decided that for the purposes of the Banking Act of Malaysia,taking steps to enforce a charge created over land within jurisdiction does not amountto carrying on business there.See, for instance, the common law cases of Okura v Forsbecka , supra, note 51 and Vogelv Kohnstamm, supra, note 38.At common law, business must be carried out within jurisdiction for a definite period oftime: SaccharinCorporation v Chemische Fabrik von Hedyon v Saccharin Corporation[1911] 2 KB 516 though nine days of business at a particular place has been held to beenough: Dunlop v Cudell, supra, note 49.Supra, note 61.


defendant agreed to provide its tourists with food and either accommodationor camping sites while they were in Western Australia which arrangementnecessitating the buying of food and hiring of accommodation from variousparties in Western Australia.

Such commercial transactions entered into in Western Australia was heldto amount to carrying on business there. It should be noted that thecommercial transactions in nature were more of a facilitative or incidentalnature, but like cases construing the expression, ‘place of business’, thatfact did not seem to influence the decision. Gibbs J opined that the ‘carryingon business’ connotes ‘...at least, the doing of a succession of acts designedto advance some enterprise of the company pursued with a view to pecuniarygain.’66 This emphasis on a succession of acts echoes the natural meaningof ‘carrying on’. It is also consistent with the exception in s.366(2)(h) basedon isolated transactions as well as earlier Australian authorities.67

As is evident from Luckin itself, the carrying on business does not have tobe conducted through a place of business within jurisdiction,68 a pointborne out by the disjunctive language used in s.365 itself. Neither is thereneed for corporate residence (in the sense of the place where centralmanagement and control emanates)69 within jurisdiction. The way businessis conducted can even be rather transitory, like the transactions in Luckinswhich were entered into as and when the tour buses travelled throughAustralia, though of course, it can take the more usual form of a localagent, as Re Norfolk Island Shipping Line Pty Ltd,70 another Australiandecision on the equivalent of s.365, illustrates.

In the final analysis, the task at hand is an application of these principlesto the facts of the case, but in some instances, this factual enquiry havesurprisingly liberal results. For instance, in Re Atlantic Isle Shipping CoInc,71 a decision of the Supreme Court of New South Wales, the onlyevidence of any trading within jurisdiction was the foreign company’s only

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Supra, note 61 at p.178. This principle was applied in Re Norfolk Island Shipping LinePty Ltd (1988) 6 ACLC 990, a decision of the Supreme Court of New South Wales.See Lamson Store Service v Weidenbach (1904) 7 WAR 166 (a single transaction withinjurisdiction is insufficient) and Colley v Mead (1917) 20 WAR 1.To the extent that no place of business is needed, Oibbs J’s construction of ‘carrying onbusiness’ may even be somewhat broader than the common law understanding of thephrase. See Part D of this article for discussion of common law cases on the area.Which is the common law meaning of corporate residence: see de Beers ConsolidatedMines v Howe [1906] AC 455. See, however, Lorraine Osman v Elders Finance Asia Ltd[1992] 1 SLR 369, cases on corporate residence which arose in a jurisdictional contextshould not be used in the context of a moneylending statute. The court did not say thatcases on corporate residence which arose in other contexts should not be used in a casewhich involves jurisdiction.Supra, note 66. See also, Gillett v The National Benefit Life and Property AssuranceCompany Ltd, supra, note 26.(1988) 6 ACLC 992


vessel performing some loading operations in New South Wales from timeto time coupled with a bank account there. This meagre evidence notwith-standing, the court found sufficient material to suggest that the companywas carrying on business there. But however varied the requirement as tothe requisite degree of trading may be, there must actually be some trading;acts preparatory to that are not adequate.72

Apart from this line of cases which interpret comparable provisions, theline of common law cases on corporate presence may also cast some lighton the ambit of the expression, ‘carrying on business’ in s.366. These caseswill be dealt with in Part III of this article. Suffice that we now examinewhat claims they have to relevancy. First, given the presence of an inclusivedefinition of ‘carrying on business’ in s.366, a restrictive construction whichexcludes the common law principles would be odd. Secondly, the exceptionsin s.366(2) which reflect common law principles bear out the inference thats.366 was drafted with the common law in mind, even though there mighthave been an intention to extend beyond it. Thirdly, the cases that construedprovisions which are the equivalent of s.366 referred to common law casesas well, suggesting again s.366 was not meant to stand on its own.

(v) Service on Registered Foreign Company and Various ProblematicSituations arising therefrom.

As aforesaid, under s.376, a registered foreign company may be servedwith process sent by post to or left at (if addressed to him) the registeredaddress of one of its agents73 or (if addressed to the company) its registeredoffice or if the company has ceased to maintain a place of business inSingapore, at the registered office in the company’s place of incorporation.A foreign company that fails to register although it is required to cannotbe served according to the procedure in s.376 since there would not be anyregistered addresses either of its office in Singapore or of its agents. Otherprovisions for service would have to be resorted to.74

Nothing in s.376 suggests that service under s.376 is confined to actionsbased on causes of action which arose in Singapore or out of the foreigncompany’s operations in Singapore.75 There is also nothing in Part XI,Division 2 or indeed, s.376 which confines service on a registered foreigncompany to the above procedure. Thus, if service is effected under, say,O.10 r.1(2) or O.10 r.1(3) of the RSC, the procedure in s.376 need not be

Colley v Mead, supra note 67.See Goh Slew Wah v Columbia Films of Malaysia Ltd, supra, note 24, a decision of theHigh Court of Singapore in which a challenge was unsuccessfully mounted on the formof address on the writ.See Part D of this Article.See South India Shipping’s case, supra note 23, for instance. See also Dicey and Morris,supra, note 28 at p.308. Cf Service under O.10 r.2, RSC.

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followed.76 Similar reasoning applies to service under O.10 r.2.77 However,O.62 r.4 of the RSC which permits service on various officers of theregistered company cannot be used in lieu of s.376 since the former provisiononly applies ‘in cases for which provision is not otherwise made by anywritten law’, and ‘written law’ would of course include a statutory provisionlike s.376 of the Companies Act.78

S.376, by itself, seems clear enough but there can still be situations inwhich service under s.376 might be problematic. What follows is a discussionof some such situations.

(i) Irregularity of Service

In at least one local decision, P T Pelajaran Nasional Indonesia v JooSeang & Co Ltd,79 a strict view was taken on the need for strict compliancein service of process on companies. The case actually involved irregularityof service on a local company80 (the writ being wrongly addressed thoughthe defendant’s director appeared to have notice of it) for which the plaintiffwas entirely blameless. It is conceivable that this emphasis on strictcompliance with a prescribed procedure for service might extend to s.376,although in this regard, clear authorities are absent.

However, contrary to what Joo Seang’s case decided, what scant authoritythere is does suggest a certain degree of tolerance. In Goh Siew Wah vColumbia Film of Malaysia,81 the writ was sent to the address of a registeredforeign company’s agent (being then the only method of service) butinadvertently addressed to the company instead of the agent which waswhat the legislation required. Service, as may be recalled, was eventuallyeffected in another manner, according to O.10 r.1(2) but Winslow J seemedprepared to hold, obiter, that the writ itself was ‘correctly addressed’ forthe purpose of the Companies Act provisions notwithstanding the slightviolation of the service provision. Contrariwise, if the irregularity is use ofan entirely erroneous service provision, there is some authority for sayingthat service should be set aside.82

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See Goh Siew Wah’s case, supra note 24 in which the act of the solicitor for the foreigncompany in accepting service under O.10 r.1(2) on behalf of his clients was held to beeffective service. Winslow J said that the service under the equivalent of s.376 ‘is amethod which is alternative to any other method of service provided by the rules.’ at p.41of the judgment.See Part D of this article. In William Heinemann & Donald Moore v Christie (1960) 26MLJ 99, a Federation of Malaya case, the defendant appeared to be registered as foreigncompany but service was sought under the equivalent of O.10 r.2 instead.See The Theodohos, supra note 30.(1958) 24 MLJ 113, a decision of the High Court in Penang.See s.387 of the Companies Act.Supra, note 24. See also Ch’ng Kim Huat v Hamburg Amerika-Nische [1936] MLJ Rep216 where the court gave leave to amend a small irregularity in service.See Nord Deutscher Lloyd v Ockerby and Co (1917) 14 WAR 104 where use of serviceprovision for locally incorporated company on a registered foreign company was notpermitted. The provisions discussed in this case are somewhat different from those foundin our Companies Act.


Whilst the effect of irregularity of service under s.376 remains unclear, itmay be apposite to bear in mind that the objective of service, apart fromcompleting the process of obtaining jurisdiction, is to give the defendantnotice of proceedings. One wonders if slight transgressions which do notaffect the adequacy of notice might not be rectified without rendering theproceedings a nullity.83

(ii) Cessation of Business in Singapore

If a registered foreign company ceases to carry on business, service maystill be effected through s.376. The English decisions on this point haveconsistently decided that service is not affected by cessation of business. InEmployers’ Liability Assurance Corporation v Sedgwich and Collins, aregistered Russian company which was being liquidated but not yet dissolvedhad ceased carrying on business within jurisdiction but did not remove thename of the agent from the register. The majority of the House of Lordsheld that the submission to jurisdiction continued notwithstanding thecessation and as the agent’s name continued to remain in the register, thecompany could be served through him. This decision was followed inSabatier where it was held in dictum that even if there was cessation ofbusiness and abandonment of place of business which the Registrar wasinformed, the retention of the agent’s name on the register was all thatmattered. Perhaps the most extreme case is Rome v Punjab National Bank(No.2)84 where the same result was repeated despite cessation of business,closure of the place of business, closure of the register’s file on the companyon request for cancellation of registration and the withdrawal fromjurisdiction of its agents whose names, unfortunately for the company,remained on the register. Punjab National Bank’s result is somewhat lessdrastic when one considers that the court may exercise its discretion tostay the action on forum non conveniens.

The policy rationale behind these cases is to prevent a foreign companyfrom uprooting itself with jurisdictional impunity (apart from being pursuedin its place of incorporation or through service out) leaving behind a trailof local creditors.85 However, hardship may descend on a registered foreigncompany which has long ceased to trade in the forum if it is sued on acause of action which has nothing to do with its local commercialoperations.86 Perhaps it was this concern which persuaded the High Courtof Australia in Gillett v National Benefit Life and Property Assurance Co

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By analogy with some O.2 r.1 cases, such as The Goldean Mariner [1990] 2 Lloyd’s Rep215. More serious irregularities or that which prejudice the defendant, of course, maydeserve less sympathy.[1990] BCLC 20.Rome v Punjab National Bank (No.2) [1989] 1 WLR 1211.Punjab National Bank’s case, ibid, see the judgment of Parker LJ at p,1221.


Ltd87 to arrive at the opposite conclusion on facts roughly similar to Sabatierand Punjab National Bank by reasoning that a company that ceases totrade ceases to be present or resident within jurisdiction at the time ofservice.

Given this dichotomy of decisions and policies, it is unclear which waylocal courts88 might incline though the preponderance of authorities wouldsuggest that cessation of business is no immunity to jurisdiction. S.376(c)is some indirect support for this position as well, as it allows service on aforeign company at its place of incorporation when it has ceased to maintainits place of business in Singapore.

Assuming no jurisdictional immunity, a registered foreign company thatceases to maintain a place of business can still be served at its registeredoffice or at its agent’s registered address. If it has ceased to maintain theplace of business which it set up, then it can be served at its place ofincorporation in accordance with s.376(c). Since this involves service out,it is unclear if leave of court is necessary.89 In addition, the agent of theregistered company which has quitted its place of business may also beserved under s.376(b).

In the light of the above decisions, a foreign company that wishes to ceasebusiness or have a place of business would be well advised to give noticeto the Registrar of such cessation under s.377(1). The same provision statesthat upon the expiration of 12 months after such notice, the company’sname would be removed from the register. Until then, service under s.376seems still a looming possibility. Ex abundantia cautela, to avoid a situationlike Punjab National Bank where the company’s file was closed but itsagents’ names remained, it should consider, for good measure, terminatingthe authority of its agent as well and giving notice of such terminationunder s.370(3).90 Again, if the company wishes to terminate an agent’sauthority to accept service without cessation of business, it has to givenotice under s.370(3) although s.370(5) obliges it to appoint another tomaintain the minimum requirement of at least two local agents.

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Supra, note 26.Certainly local authors take this position. See Woon and Hicks, The Companies Act ofSingapore: An Annotation in their annotation of s.376 at p. XI 121.Woon and Hicks, ibid, think leave is unnecessary.See also s.370(2) which states that an agent shall continue to be one until he ceases tobe such in accordance with subsection (4). It is unclear if this provision still continues toapply if (i) the company has given notice under s.377 or (ii) upon removal of its namefrom the register. There is an argument for saying that if the company has been removedfrom the register, its agents, even if not having their authority terminated, should not beleft vulnerable to service when the very effect of registration has been reversed. Havingsaid there, Punjab National Bank, supra, note 85, is a disturbing reminder. Thus, removalof agent under s.370(4) is a prudent move.


(c) A Registered Company that subsequently neither carries on businessor establishes a place of business.

It can conceivably arise because the combined effect of ss.365 and 368 isto require registration before either carrying on of business or establish-ment of place of business. Subsequently, such a company changes its mindabout commencing operations in Singapore. There is no direct authorityon whether such a company is amenable to jurisdiction and service unders.376.

However, by analogy from the English cases on cessation of businessdiscussed above, it can be argued that as long as there is registration, s.376service is possible. After all, there is little difference between not havingstarted business at all or have stopped business by the time service iseffected. However, if the justification for assuming jurisdiction over aregistered foreign company is that the latter has a corporate presence orplace of business in the forum, then it seems inconsistent that mereregistration alone, without any subsequent trading, should attractjurisidiction.

(d) A company that ought to have registered but fails to do so.

This is the lacuna in s.376. S.376(a) and (b) are obviously inapplicable asthere would not be an address either of its registered office or its registeredagent since, to begin with, there is no registration. S.376(c) on its literalwording may cover a narrow situation even for unregistered company butwhen read with s.365, it is evident that it, as is the case with ss.376(a) and376(b), only applies if the company is registered. This lacuna has recentlybeen implicitly been recognised by the Court of Appeal in Bank of CentralAsia v Rosenberg, in which Chao J compared s.376 with its Englishcounterpart, s.695(2)(a). The latter provision allows for service on anyplace of business established by a company which defaults on registration.

Given the unavailability of s.376, service on, indeed the whole jurisdictionbasis applicable to such an unregistered company, falls outside the realmof Part XI, Division 2 of the Companies Act. Other sources of jurisdictionand other service provisions must be used for such a company. And it isto this that attention is now turned.

D. SERVICE IN SINGAPORE UNDER S.16(1)(a)(i) OF THESUPREME COURT JUDICATURE ACT

This provision, it will be recalled, confers jurisdiction upon the High Courtin action in personam where the defendant ‘is served in Singapore in themanner prescribed by the Rules of Court.’ It is submitted that for acorporate defendant to be served in Singapore, there is a presuppositionthat it is present in Singapore at the time of service in the sense of carryingon business here for a definite period at a fairly permanent place of business.

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In other words, the common law principle that a company must be presentbefore it can be served (which will be discussed shortly) is an impliedrequirement of s.16(1)(a)(i).

This conclusion is best supported by reference to the Parliamentary debateswhich ensued at the time the amendments to s.16 were mooted.91 TheHonourable Minister for Law in explaining the effects of the amendmentsstated that:

‘Prior to 1964, the general civil jurisdiction of the High Court inactions in personam was unlimited and founded on service of a writon a defendant either in Singapore or abroad...The amendment ofsection 16 will place the High Court in exactly the position as it wasbefore 1964 and in the position of the High Court of Judicature inEngland today in relation to countries outside the European EconomicCommunity.’92

It is evident from the Minister’s speech that the legislative intent behindthe 1993 amendments to s.16 is to re-introduce a jurisdictional frameworksimilar to that which exists at common law and based, in part, on serviceon a defendant within jurisdiction. It follows that when it is invoked againstforeign corporate defendants, s.16(1)(a)(i) must therefore be interpretedin the light of English common law principles which govern service on aforeign company within jurisdiction. To put it in another way, the conceptof corporate presence must be read into expression in s.16(1)(a)(i),‘... served... in Singapore...’

A clarification is apposite at this juncture. Firstly, strictly speaking, insofaras foreign corporate defendants are concerned, the current position inEngland is not based on the common law, but rather on provisions of theCompanies Act 1985, as discussed above.93 But that, it is submitted, shouldnot affect the position of unregistered foreign companies, the service onwhich is not covered by s.376 of our Companies Act. This local lacuna wasalso prevalent in England prior to the introduction of s.349 of the EnglishCompanies Act 1929 (the equivalent of s.695(2) of the present Act) to dealwith service on unregistered foreign companies. English courts respondedto this lacuna, and indeed, prior to the introduction of legislation on thisarea in 1907,94 to the whole problem of jurisdiction over foreign companies,by the enunciation of common law principles on corporate presence. Thereis no reason why such common law principles cannot be garnered to fill up,

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Reference to Parliamentary debates is permissible in the interpretation of statutes. Supra,note 44.Parliamentary Debates Singapore, Official Report, Volume 61, No 1 at col 95.See The Theodohos, supra, note 30, as well as the Dicey and Morris, Conflict of Lawsand Cheshire and North, Private International Law at p. 185–186.Supra, note 32 for an account of the English legislative history on the area.

(1995)


through another statutory channel,95 the lacuna in our s.376 just becausethe problem has been eradicated in England since 1929.

(a) Presence of a Foreign Company at Common Law

Although it has been decided as far back as 1872,96 that a foreign companycan be sued in England, the use of terminology in the caselaw has not beenuniform. Presence of a foreign company within jurisdiction of the forumhas variously been described as having a residence within jurisdiction,97 aplace of business within jurisdiction,98 a domicile within jurisdiction99 orcarrying on business within jurisdiction100 or simply being ‘here’ withinjurisdiction.101 For ease of exposition, the term, ‘corporate presence’ whichis favoured by some writers,102 is used throughout this article.

The concept of corporate presence is analogous to presence of the individualwithin the territory of the Sovereign which subjects him to the jurisdictionof the courts in that country. As a company cannot be physically presentlike an individual, it can only be present through the business it carries onwithin the territory of the country in which the action is brought. Thus, asis the case with individuals, it is the company’s territorial connection withthe forum that matters. The relevant time for assessing corporate presenceis the time of service of process, so that if at that time, a company hasceased trading, it cannot be served within jurisdiction.103

There are two requirements for corporate presence.104 First, the companythat conducts business within jurisdiction by means of an agent who hasauthority to enter transactions on its behalf would be considered to bepresent for jurisdictional purposes. A company may instead of beingrepresented by an independent agent have a branch office staffed by its

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Viz s.16(1)(a)(i), SCJA.Newby v Van Oppen (1872) LR 7 QB 293. For a detailed account of cases on this areaat the turn of the century, see Farnsworth, The Residence and Domicil of Corporations(1939).See for instance, La Bourgogne, supra, note 50 (CA decision); Newby v Van Oppen, ibid,Haggin v Comptoir D’Escompte de Paris (1889) 23 QBD 519.Huron & Erie’s case, supra, note 48.See for instance, the decision of Canon Iron v Mclaren 5 HLC 416See for instance, the decision of Lhoneux Limon and Co v Hong Kong and ShanghaiBank (1886) 33 Ch D 446.Newby’s case, supra, note 96.See for instance, Cheshire and North, supra, note 28, at p. 185.Adam v Cape Industries, supra, note 52. Also the Singapore decision of Korea MetalsExport Corporation v Sakota Ltd SA [1973] 1 MLJ 228 where service was invalidlyeffected on the defendant’s former agent which had ceased to carry on business. See alsoBethlehem Steel Corporation v Universal Gas and Oil Co Inc (a House of Lords decision,The Times, 3rd August 1978) where a mysterious company which neither carried onbusiness or had a place of business in England successfully avoided service. This case isan example of a foreign company operating in a phantasmic manner and managing toevade a fairly extensive jurisdictional net.These requirements were most clearly laid down in Okura & Co’s supra, note 51 thoughthey have been alluded to in the earlier cases as well.


own employees in the forum which carries on its business.105 The samerequirements apply to both forms of representation but in the case ofindependent agent, the question of authority to contract on the company’sbehalf must be more closely examined. Being represented by an agent perse is not sufficient. It must be shown that the business the agent conductsmust be the company’s and not his own.106 So long as it is the company’sbusiness that is carried on within jurisdiction, it does not matter if suchbusiness is the paramount object of the company or merely incidental tothat. Thus, in Actiesselskabet Dampskib Hercules v Grand Trunk PacificRailway,107 the defendant’s business in England was solely the raising offinances to run a railway in Canada; it was still held to be present inEngland. The carrying of the foreign principal’s business is effected by themaking of contracts on the latter’s behalf, though such an agent may alsoact for other parties.108 If a company is represented by an agent who onlyreceives orders and transmits them abroad to his foreign principal foracceptance, then the company is not carrying on business withinjurisdiction109, for it is then regarded as doing business through the agent,not by him.110 Equally, an agent which carries out its own business byselling contracts with the foreign company would not render the latterpresent within jurisdiction.111

Authority to contract on the foreign company’s behalf, although a principalaspect in the relationship between the agent and its foreign principal toconsider, is not the only one. Slade LJ in Adams v Cape Industries listed

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Adams v Cape Industries, supra, note 52 recognises that a foreign company can be presentthrough an independent agent or a branch office. The requirements in Okura’s caseapply to both forms of representation, albeit that in that case of an independent agent,the question of authority to contract for the company has to be more closely examined.Adams v Cape Industries, supra, note 52, is actually a decision on enforcement of foreignjudgment but the court there assumed that cases on jurisdiction and foreign judgmentscan be used interchangably. For an Australian perspective, see National CommercialBank v Wimborne, (1979) 11 NSWLR 156, a decision of the Supreme Court of NewSouth Wales which essentially adopts the English principles.See Thames & Mersey Marine Insurance v Societa Lloyd Austriaco (1914) 111 LT 97.[1912] 1 KB 222. Cf. Some Canadian cases take a different stance: the business done bythe agent must be an integral part of the business of the foreign company and not merelyincidental to it. See, for instance, Canada Life Assurance v Canadian Imperial Bank[1974] 3 OR (2d) 70 and Central Trust of China v Dolphin SS Co Ltd [1950] 2 WWR 516.Saccharin Corporation Limited’s case, supra, note 64.See, for instance, Okura’s case, supra, note 51; Vogel v Kohnstamm, supra, note 38 (adecision on enforcement of foreign enforcement); Grant v Anderson [1892] 1 QB 108.Buckley LJ in Okura’s case, supra, note 51. This point is similar to the agent havingauthority to contract on his principal’s behalf: see the Court of Appeal decision in Bankof Central Asia v Rosenberg, supra, note 19.See The Lalandia [1933] P 56; Thames and Mersey Marine Insurance, supra, note 106.These cases involve shipping agents which sold passenger tickets or shipping space tothird parties. See also The Holstein [1936] 2 All ER 1660.


some other relevant factors, such as the method of remuneration of theagent,112 the degree of control the foreign company has over the runningof the agent’s business, whether the foreign company defrays for the costof running the agent’s business, in the form of payment of salary andrental, the degree of publicity the agency relationship is given by and howmuch of the agent’s premises and manpower are allocated to carrying onthe principal business. While it is wrong to say that there can never becorporate presence if authority to contract on the principal’s behalf iswanting, the circumstances pointing towards corporate presence in such asituation would have to be very compelling.

The second requirement is that the foreign company must have operatedits business (whether through an independent agent or a branch office) formore than a minimal period of time at a fixed place of business. A foreigncompany need not be the owner or lessee of the premises where it has itsplace of business, though either form of tenure would be a cogent piece ofevidence against them. Thus, corporate presence is not defeated by theforeign company being a mere licensee, or that the premises house otherparties’ business. So in Saccharin Corporation Limited v Chemische FabrikvonHeyden,11 3 a company was held to have a place of business in premisesthe rental for which was paid by its agent who also conducted other parties’business in the same place. As Fletcher Moulton LJ observed in the case,it is the fixity of the place of the business that matters, not the tenure bywhich such fixity is arrived. However, as Dunlop Pneumatic v AG Cudell114

illustrates, even an exhibition booth which the defendant occupied for ninedays has been held to satisfy this requirement. However, where a companyonly employs commercial travellers who come within jurisdiction to placeorders or solicit business without being at any definite or permanent place,as was what happened in Littauer Glove Corporation v Millington Limited,115

it cannot be said to have established a place of business. As for the lengthof time business must be carried out at the time of business, the courtshave not been very exacting and on one occasion, as mentioned above,held that nine days were sufficient though one isolated transaction in along while may be insufficient to constitute corporate presence.116 That theplace of business is seen to be associated with the company is anotherimportant indicium. Thus, there has been judicial scrutiny of the ways ofpublicising the company’s presence at a particular location, such as display

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On this point, see cases such as Saccharin Corporation, supra, note 64; The Lalandia,supra, Grant v Anderson supra and Thames & Mersey, supra, note 111. This factor wassomething the courts in these cases considered but did not seem have a decisive influenceon the outcome.Supra, note 64.Dunlop Pneumatic Co’s case, supra, note 49.(1928) 44 TLR 746, a decision of enforcement of foreign judgment.Colley v Mead, supra note 67; Lamson v Weidenbach, supra, note 67.

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of the foreign company’s name in the agent or branch office’s premise orstationery117 or even an entry in the telephone directory.118

Somewhat surprisingly, these requirements for corporate presence wereignored in the troublesome local case of Atmaran v Essa Industries Ltd119

in which service on the chairman of a Pakistanis company who wastemporarily in Singapore was held to be good even though, as the headnotesallege, the company had neither an office or an agent in Singapore. Parties’affidavit evidence was contradictory (and hence inconclusive) as to theauthority of this chairman to carry on business on the company’s behalf.At first blush, this case seems to go further in allowing service on foreigncompanies than permitted by common law principles. But it is submittedthat little weight should be placed on it. The case was only briefly reportedas a decision of Chua J in chambers with no finding of facts or grounds ofdecision given and the vast majority of common law cases, including oneon largely similar facts,120 were apparently not cited to the judge. Further,the decision made no mention of the grounds of obtaining jurisdictionpreviously enumerated in the earlier (pre-1993 amendment) version of s.16(which included place of business but not corporate presence). The bestthat can be said for the decision is that it is a very generous application ofcommon law rules on corporate presence.

The principles discussed thus far arose out of cases concerning tradingcompanies, leaving unexplored how, if at all, they can be modified to suenon-trading, non-profit making corporations. Slade LJ in Adams v CapeIndustries alluded briefly to this and thought that the same principles canbe applied by drawing a parallel between carrying on of such non-tradingactivities with the carrying on of business. A roughly similar test has beenused in Australia as well.121

So far, the discussion has been confined to independent agents and branchoffices. If the foreign company chooses to incorporate a subsidiary inSingapore instead as its corporate vehicle, then except in the rare situationwhere the court treats the parent and subsidiary as one economic entity,the doctrine of separateness of corporate entity dictates that business carriedout in the subsidiary’s own name even if at the instigation of its parent is

117

118119120121

See for instance, La Bourgogne, supra, note 50; Grant v Anderson, supra, note 109;Haggins’ case, supra, note 97 and Lhoneux Limon’s case, supra, note 100; Logan v Bankof Scotland [1904] 2 KB 495.The Handgate [1987] 1 Lloyd’s Rep 142.[1969] 1 MU 44.Thames & Mersey’s case, supra, note 111.See p.524 of Adams v Cape Industries, supra, note 52. See also BHP Petroleum Ltd v OilBasins Ltd [1985] VR 723 where the foreign company was a trustee company whoseprincipal business was simply to hold certain petroleum royalty. The test used seems tobe whether the company carried out activities within the forum in its capacity as atrustee. The court also found that such corporate activities could be carried out at theoffices of its solicitors and accountants who performed them on its behalf.

126


its own and not its parent’s.122 Thus, for foreign companies, some measureof immunity to jurisdiction is attainable through use of local subsidiarieswhich in ordinary circumstances in perfectly legitimate.

As the problem of subsidiaries illustrates, the concept of corporate presence,based as it is on territorial connection of the company with the forum byanalogy with presence of the individual, does not cater to newer vehiclesof doing business which might not have been foreseen in the cases discussedearlier, many of which were decided at the turn of the century. Choosinga method of doing business in the forum which does not establish thenecessary territorial connection enables the company to avoid the potentialjurisdictional of the forum, regardless of the economic benefits which thecompany may derive from such business. Thus, it has been suggested thatthe economic rather than territorial presence of a foreign company shouldbe the new criterion,123 but the powerful reaffirmation of existing principlesand approval of the use of subsidiaries for jurisdictional immunity in Adamsv Cape Industries seemed to have forestalled any such trend.

(b) Service on An Unregistered Company.

It is submitted an unregistered company which is present in the waydiscussed above can be served within jurisdiction in one of two ways, eitherthrough O.62 r.4 (service of corporate officials) or O.10 r.2 (service on itslocal agents) of the RSC.

(i) Service Pursuant to O.62 r.4, RSC.

A couple of preliminary issues must first be resolved. The first relates tothe suitability for use of O.62 r.4 against an unregistered foreign company.O.62 r.4 makes no express reference to foreign companies but there areample authorities to say that it can in fact be applied to such companies.O.62 r.4 was adapted, with some variation of language, from O.65 r.3 ofthe English RSC 1965 which was a simpler version of O.9 r.8 of the EnglishRSC 1883 and which in turn traced its genesis to s.16, Common LawProcedure Act, 1852.124 In many of the corporate presence cases discussedabove,125 service was effected under O.9 r.8 of the English RSC 1883. True,O.9 r.8 has since 1929 been obsolete in England in its application tounregistered foreign companies.126 However as the lacuna on service of

122

123124125

126

See Fawcett, A New Approach to Jurisdiction Over Companies in Private InternationalLaw (1988) 37 ICLQ 645., at p.663.Ibid.Newby’s case, supra, note 96 was an example of the use of s.16 of CLPA, 1852.See, for instance, Haggins’ case, supra, note 97; La Bourgogne; supra, note 50;Actlesselskabet Dampskib Hercules v Grand Trunk Pacific Railway of Canada [1912] 1KB 222; Thames & Mersey’s case, Saccharin Corporation’s case, supra note 64 and Okura’scase, supra, note 51.See The Theodohos, supra, note 30.


unregistered companies still exists locally in s.376 of our Companies Act,O.62 r.4, which traces its origins to the English O.9 r.8, can be invoked tofill the same void which until 1929 was filled by O.9 r.8 in England. Thesame approach has been taken in Australia127 (whose companies legislationcontains the same lacuna) and in at least one local decision.128 Local writerstake the same view as well.129

The other preliminary issue is how the abovementioned concept of corporatepresence is related to O.62 r.4. O.62 r.4 like S16(1)(a)(i) is also silent onany requirement of corporate presence. However, there is little doubt thatthe latter has to be satisfied as a precondition to use of the former sinceit is a common law aphorism that a defendant (where individual or company)has to be present and served with process within the forum before he isamenable to jurisdiction there.130 In any event, the same requirement isimplicit in s.16(1)(a)(i) itself.

O. 62 r.4 provides that personal service of a document on a body corporatemay be effected by serving it on the chairman or president of the body, orthe secretary, treasurer or other similar officer. Substituted service underO.62 r.4 may be ordered.131 If the foreign company is represented locallyby an agent, it is arguable that such a person may not be within thedescription of persons that can be served upon under O.62 r.4, unless hecould come within the expression, ‘other similar officer’ which is notprobable if that expression is given a ejusden generis construction. Thepoint arose in Korea Metal Export Corporation but was left undiscussed.In the older English cases on corporate presence, service on local agentsor managers was justified on the basis that these persons might, dependingon their functions and extent of authority, be considered as ‘head officers’132

an expression which has been left out of both the English O.65 r.3 and ourO.62 r.4.

127

128129130

131132

See, for instance, BHP Petroleum v Oil Basins Ltd, supra, note 121; State of Queenslandv Property Nominees Pty Ltd (1982) 6 ACLR 739, a decision of the Supreme Court ofQueensland.Korea Metal Export Corporation, supra note 103.See Woon and Hicks, supra, note 88, at p. XI 121; Pinsler, Civil Procedure, p.98.See Cheshire and North, supra, note 28 at p.182–3. This explains why most of the caseson corporate presence discussed the concept in conjunction with service under O.9 r.8.The Vrontados, supra, note 46.Persons who have some familiarity with the business of the company (see SaccharinCorporation’s case, supra, note 64) and whose knowledge would be deemed that of thecompany (see Newby’s case, supra, note 96.) See also The Princess Clementine [1897]P 18 where service on the agent’s managing clerk was judged to be bad.


(ii) Service Pursuant to O.10 r.2, RSC

O.10 r.2 permits service of writ on a manager or agent of a person (whichcould be a foreign company) who is not resident in or absent from Singaporeprovided that the agent has control or management over the foreignprincipal’s business to which the claim relates and the court grants leavefor such service.133 As it permits service on the agent, O.10 r.2 can beinvoked when O.62 r.4 is inapplicable.

O.10 r.2 arrives in its present form after a fairly chequered history. It wasintroduced in 1901 via Ordinance 21 and was inserted into the StraitsSettlements Civil Procedure Code of 1878 as S.60A, later renumbered ass.115 of the Civil Procedure Code of 1907. In its pristine form, it wasprobably taken from s.76 of the Indian Procedure Code of 1877. For thisreason, Indian authorities on this provision are pertinent to its construc-tion.

In 1934, this provision became relegated without material change in sub-stance to subsidiary legislation to become O.9 r.8 of the RSC of 1934, astate of affairs which lasted until 1970 when Singapore decided to adoptthe English RSC of 1965. O.9 r.8 was thereupon repealed. Its place wastaken by O.10 r.2 which was borrowed from O.10 r.2 of the English RSC.However, O.10 r.2 of the 1970 RSC was shortlived as it gave way in 1973to a differently worded O.10 r.2. This 1973 version of O.10 r.2 which hassurvived, almost unscathed,134 till the present day, re-introduced in O.10r.2(1)(a)–(c)requirementswhich were first set out in the 1934 O.9 r.8 (thelatter provision being, as aforesaid, taken from the Indian Civil ProcedureCode 1877), while retaining some of the features of the English O.10 r.2.The retained English features include the requirements of leave of courtand the transmission of a copy of the court order granting such leavetogether with a copy of the writ to the foreign defendant. Thus, O.10 r.2in its present form has both Indian and English parentage. This historicalbackground to O.10 r.2 is important in assessing the correctness of caseswhich interpreted the provision.

133

134

The requirement of leave is not expressly spelt out in O.10 r.2 but the language of O.10r.2(1) itself bears it out: ‘Where the Court is satisfied, ..., the Court may...’.(Emphasisadded). So does the local decision of Maritime (Pte) Ltd v ETPM SA [1988] 2 MLJ 289.The English Practice Direction on O.10 r.2, infra, note 146 is also unequivocal about theneed for leave before service.It did undergo further changes in 1991 vide the Government Gazette Subsidiary LegislationSupplement no.532 of 1991. The significant change brought about by the 1991 amendmentsis that the affidavit which accompanies an application for leave to serve on an agent neednot state the reasons why service out of jurisdiction under O.11 cannot conveniently beeffected.


The requirements for service under O.10 r.2 are spelt out insub–rule 1(a)–(c) which, with paraphrasing, consist of —

(a)

(b)

(c)

the action pursuant to which service under O.10 r.2 is desiredmust relate to any work or business against a person not residentin or absent from Singapore

but who has an agent or manager with control or management ofsuch business or work for the defendant within Singapore and

the latter’s authority has not been terminated.

An ex parte application must be made to Court, accompanied with affidavitstating the nature of the claim, and the Court has a discretion as to whetherto grant leave to serve on such manager or agent. If leave is granted, acopy of the court order granting leave and of the writ must be deliveredto the foreign defendant (O.10 r.2(6)) and he is given 21 days to enterappearance (O.10 r.2(5)).

The main difficulties which have confronted the courts are the requirementsof ‘control or management’ and ‘such business or work’ in O.10 r.2(1)(b).

The first, authoritative local interpretation of the expression, ‘control ormanagement’ is supplied by Thomson CJ in William Heinemann Ltd &Donald Moore Ltd v Christie.135 His Lordship considered the common lawtest of corporate presence enunciated in cases such Okura v ForsbackaJernverks Aktienbolag, Saccharin Corporation v Chemische Fabrik andDunlop Pneumatic Tyre v Actien-Gesellschaft, and concluded that it can beapplied in the context of O.10 r.2. Thus, it has to be shown that the localmanager or agent carries on at a fixed place of business, the business of theforeign defendant and not his own, and in so doing, is vested with authorityto contract on behalf of the latter. The dictum in Okura’s case that businessmust be conducted by and not through an agent was also cited and approved.So, in William Heinemann itself, the local representative who purchasedbooks from the foreign defendant for reselling was held not to have anycontrol or management over the defendant’s business in the forum.

Additionally, it was decided that to ensure that the foreign defendant hasnotice of the action, the relationship between him and the local manageror agent should be such that the latter is obliged to bring notice of theservice to the notice of his employer or principal.

These two requirements which underlie the expression, ‘control ormanagement’ was reaffirmed by the Federal Court of Malaysia in GetzBrothers v Pan Malaysian Wood Products13 6 although in that case,

135136

Supra, note 77.[1980] 2 MLJ 79.


Chang FJ seemed to consider agent’s authority to contract on the principal’sbehalf and a company doing business within jurisdiction by and not throughan agent as separate tests.

Until recently, it was not entirely clear if these principles applied inSingapore. In Reading & Bates Exploration v Dione,137 a decision of theSingapore Court of Appeal, these Malaysia authorities were not cited.There, service was allowed on the local agent based on the rather slenderfacts that the defendant’s local office varied the terms of the plaintiff’semployment and corresponded with the plaintiff. Such a factual matrix is,with respect, hardly enough to constitute corporate presence. Neither wasthere much of a discussion in Maritime Ltd v ETPM SA, although in thatcase, the agent did enter into a charterparty for his principal.

However, one might argue that in not bringing the corporate presencerequirement under the umbrella of ‘control or management’, these twocases are not necessarily wrong. After all, O.10 r.2(1)(a) makes it clear thatO.10 r.2 only applies to a defendant who is absent from or not resident inSingapore; taking this to mean the negation of presence, how is thisrequirement to square with that of corporate presence which according toWilliam Heinemann is to be read into ‘control or management’ ? Perhaps,one might reconcile the inconsistency by suggesting that O.10 r.2(1)(a)applied in the context of a foreign company only requires a foreign companybe incorporated outside though admittedly, it would be stretching linguisticsto draw such an equation.

The final word on this point may have recently been spoken by theSingapore Court of Appeal in Bank of Central Asia v Rosenberg.138 As thisis the latest Singapore decision involving service within jurisdiction on aforeign company, it repays careful study. The defendant, an Indonesianbank, was sued by the plaintiff endorsee of certain dishonoured chequeswhich the bank drew. Service was sought to be effected on the manager ofits Singapore representative office who, it was alleged, had no control ormanagement of defendant’s business. Neither did the representative office,139

137138139

[1978] 1 MLJ 234, a decision of the Singapore Court of Appeal.Supra, note 19.For another instance of service on representative office of a foreign company, see AngloAustralian Foods v Credit Suisse (1989) 1 ACSR 69 whose facts are broadly similar toSouth India Shipping Corporation, supra note 23 and Rosenberg, supra note 19. Verysurprisingly, service was allowed on an unregistered foreign company (a bank) in thatcase; however, it was not followed recently in Bank of America v Bank of New York,unreported judgment of the Supreme Court of New South Wales delivered on 27thOctober 1994. Anglo Australian Food was, with respect, wrongly decided as it misappliedthe principles of corporate presence. See also National Commercial Bank v Wimborne,supra, note 105 where a foreign bank was not held to carry on business within jurisdictionjust because it had a local bank acting as its collecting and correspondent bank.


which in fact did no banking business and merely conducted liaison workfor the defendants and their clients. The Court of Appeal, through ChaoJ, overturned the first instance decision and held service could not beeffected under O.10 r.2.

On the meaning of ‘control or management’, Chao J adopted the tworequirements enunciated in William Heinemann, ie obligation to informthe foreign principal and that the latter must be conducting business atsome fixed place in the forum through its local manager or agent.140

As regards the first requirement of notice, it may be wondered if this issuperfluous since O.10 r.2(6) already removes the possibility that the foreigndefendant may be kept in the dark by mandating that notice of a copy ofthe court order granting leave as well as of the writ be sent to the defendantoutside jurisdiction. It should be appreciated that when William Heinemannwas decided in 1960, there was nothing in O.9 r.8A (the Malayan Federationequivalent of O.10 r.2) which resembled O.10 r.2(6), which was in factintroduced in Singapore in 1970. Thus, while in 1960, the potential problemof an uninformed plaintiff had to be addressed by this requirement inWilliam Heinemann,141 there may be no further need to read this obligationinto O.10 r.2(1)(b), given the introduction of O.10 r.2(6) in 1970.

In respect of the element of corporate presence, his Honour did not drawany distinction, which Chang FJ in Getz Bros seemed to suggest, betweenthe ‘tests’ of the company carrying on business by (and not through) anagent and the agent having the principal’s authority to contract on itsbehalf. They are merely different formulations of the same test. This, it isrespectfully submitted, is right since an agent can only carry on his principal’sbusiness if he has the authority to enter into contracts on the principal’sbehalf.

Somewhat surprisingly, the Court did not rule on whether this requirementwas satisfied on the facts. One would have thought not since therepresentative office did not appear to have any authority to conduct anybanking business in Singapore. Perhaps the court was concerned aboutpossible incidental contracts which the defendant’s representative officemight have entered into on its behalf, such as lease of its premises oremployment contracts. One of the advantages of setting up a non-tradingrepresentative office rather than a full-scale branch office is jurisdictional

140

141

This requirement of carrying on business through an agent is accepted in Indian cases ons.76 of the Indian Civil Procedure Code 1877. See Goculdas v Ganeshlal ILR 4 Bom 416.In fact, this concern was raised as far back as 1926 by Van Someren in his book on CivilProcedure in the Straits Settlements, p.271, 2nd Ed; a similar concern was voiced in thefirst edition of Mallal’s Straits Settlements Practice at p.33 published in 1935.


immunity. It may be hoped that nothing in Rosenberg is seen to disturbthat advantage.

In adopting the common law principles of corporate presence, the courtrejected the more liberal concept of ‘place of business’ enunciated by AcknerLJ in South India Shipping, which gained acceptance in the court below.The rejection of South India Shipping in the context of O.10 r.2 is, it isrespectfully submitted, right since it dealt with a differently worded provisionin a different statute (the forerunner to s.695(2), which, in any event, hasno local equivalent) that has been recognised to extend beyond the commonlaw principles, which principles, as is noted have been transplanted intoO.10 r.2. While both O.10 r.2 and s.695(2) grasp the same nettle of serviceon unregistered foreign companies, their respective jurisdictional basis isquite different. But this rejection uncovers yet another inadequacy in thisarea. A company that comes within the broader criterion of s.365 andwhich therefore has to be registered but fails to do so will enjoy jurisdic-tional impunity from both Part XI, Division 2 as well as O.10 r.2 (or forthat matter, O.62 r.4) so long as it does not have a corporate presence inthe narrower common law sense. In other words, the s.376 lacuna is notfully covered when a company falls outside the umbra of common lawpresence but within the penumbra of the s.365 criterion of either ‘carryingon business’ or ‘place of business.’

This incorporation of corporate presence in O.10 r.2(1)(b) attracts severalcomments. First, the same requirement is already embodied in s.16(1)(a)(i),as discussed above. However, rather disappointing, the court did not takethe opportunity to link s.16(1)(a)(i) with a service provision like O.10 r.2so as to give judicial recognition to the new jurisdictional frameworkintroduced through the amendments to s.16. Secondly, the possibleinconsistency in O.10 r.2(1)(a) and O.10 r.2(1)(b) which William Heinemannperhaps unwittingly created is left unresolved. Thirdly, by maintainingsilence over whether the representative office had ‘control or management’over the defendant’s business, the court might have let slip an opportunityto expressly correct a misconception which was present in the lower court’sdecision. The learned judge at first instance seemed to reason that justbecause the defendant had a manager heading its representative office,ipso facto, that manager had the necessary ‘control or management’. Thisis close to saying that just because an agent has been appointed, he isconducting business on the defendant’s behalf, which would be inconsistentwith principles on corporate presence. Besides, as Thomson CJ remarked,there is nothing inconsistent with having a local agent and not vesting himwith the necessary control or management. Having an agent and givinghim control or management are two separate things, the language ofO.10 r.2 itself bears this out. Arguably, by highlighting the requirement ofthe agent’s authority to contract, the Court of Appeal has impliedly rebuttedthe lower court’s unwarranted assumption. A further, related issue is theincidence of the burden of proof as to ‘control or management’. Despite

142 Emphasis added.


the precedent of Willliam Heinemann which placed the onus of proving theagent has the necessary ‘control or management’ on the plaintiff, the judgeat first instance felt that such a rule would be too onerous on the plaintiffto show that manager was the officer actually in control of the representa-tive office. That onus was relieved through use of the same kind of ipsofacto reasoning. It was not demonstrated why the burden of proving controlor management is onerous just because a manager as opposed to an agentwas appointed as the local representative, a difference which was used todistinguish William Heinemann. However, this non-allocation (or is itreversal?) of the burden of proof was only mentioned but not commentedon by the Court of Appeal.

The second interpretional difficulty in O.10 r.2 is the expression, ‘suchbusiness or work’.142 When O.10 r.2(1)(a) and (b) are read together, it willbe noticed that the action must relate to work or business which the localagent or manager has control or management of. The phrase, ‘business orwork’ appears first in O.10 r.2(1)(a) which also makes it plain that theaction must relate to this. ‘Business or work’ reappears in O.10 r.2(1)(b)but prefixed by the word, ‘such’. The choice of the word, ‘such’, before thephrase, ‘business or work’ must be intended to bring the reader back to thesame phrase where it appears earlier, ie in O.10 r.2(1)(a). It may thereforebe concluded that the claim must relate to business or work which fallsunder the control or management of the local agent. This train of reasoningis supported by an early Indian decision, Goculdas v Ganeshlal in whichthe court stated that to invoke this provision,

‘...there must be a person residing without the local jurisdiction, butcarrying on business within those limits by a manager or agent, andsued on account of such business — that is...business or work actuallyitself carried on by the agent or manager,...’ (emphasis added).

On the facts of Goculdas, service was held to be ineffective because theaction did not relate to any business or work done under the control ormanagement of the defendant’s agent, but rather to a debt arising out ofdirect business transactions between the plaintiff and defendant which didnot involve the agent. This construction was accepted and applied inRosenberg itself. The claim, it will be recalled, related to cheques drawn bythe defendant’s headquarters in Jakarta; it had nothing to do with thework of the Singapore representative office, let alone be within the latter’scontrol or management. Thus, this requirement in O.10 r.2 (1)(b) was notsatisfied. The Court of Appeal disallowed service on account of thisrequirement alone. In so doing, it rejected an argument which found favourbelow, which is that the defendant’s business which was carried out by theagent need not be the ‘main business’ of the defendant so long as it hadsome relation to the type of business from which the action arose.


The question of leave of court under O.10 r.2 was not dealt in Rosenberg,either at first instance or on appeal.143 But there is little doubt that adiscretion not to permit service exists,144 though if leave is not obtainedbefore service, such a irregularity may, depending on circumstances of thecase, be curable under O.2 r.l145 It is not clear given this silence on theissue of leave what the attitude of the local courts is towards the issue. InEngland, the attitude towards leave to serve under O.10 r.2 has since itsinception in 1920 been conservative. A Practice Direction issued in 1920cautions against allowing leave for service under O.10 r.2 in circumstanceswhen there are no difficulties in obtaining service out of jurisdiction.146 TheWhite Book does not carry a single English case which deals with O.10 r.2.This absence is itself a telling indication of the stringency of the practicethere towards this mode of service.

In comparison, in Maritime Ltd v EPTM SA,147 the court opined that hadleave been sought before service was effected (which it was not), it wouldhave been granted. No investigation was made as to whether there wereany difficulties with service out of jurisdiction. Similarly, at first instance inRosenberg, the court seemed quite content to allow service once the pre-requisites were found to be satisfied. It should also be noted that the sameEnglish Practice Direction requires that an elaboration in the affidavitaccompanying the application for service under O.10 r.2 of the difficultiesattending service out of jurisdiction. This used to be a requirement in the1973 version of O.10 r.2 but was removed when this version was amendedin 1991. Quaere if the removal was intended to mark a departure from theconservative English attitude.

However, the English approach is not unattractive. Giving leave to serveunder O.10 r.2 readily puts a foreign defendant to the considerable burdenand annoyance of having to defend his case in Singapore without the plaintiffhaving met the more exacting requirements in Order 11, in particularshowing the satisfaction of one of the jurisdictionalheads in O.11r.1(1)and that Singapore is forum conveniens for the action. Rosenberg itself isan illustration. Were leave to serve out under O.11 been sought, in alllikelihood, it would have been refused because, inter alia, Singapore wasa forum non conveniens. O.10 r.2 was invoked to facilitate what seemed

Its not being discussed on appeal is perhaps understandable since one of the pre-requisitesof O.10 r.2 was not satisfied.Supra, note 133.Maritime Ltd v ETPM SA, supra note 133.Practice Direction 65 SJ 131, December 4,1920. The 1995 Edition of the Supreme CourtPractice (The White Book) at p.78 still cites this Practice Direction and states that itapplies today. Mallal’s Supreme Court Practice (2nd Edition (1980), at p.50) also citesthis Practice Direction with apparent approval.Supra, note 133.

143

144145146

147


like an attempt at forum shopping, and on reflection, it is somewhat sadthat the defendant had to go up to the Court of Appeal to extricate himselffrom the jurisdictional web.

(c) Other Service Provisions which may confer Jurisdiction.

There are a number of other modes of service in O.10 including O.10r.1(2),148 and r.3 which can be used on a foreign company. However, servicepursuant to these modes should more properly be regarded as giving riseto submission to jurisdiction and will therefore be discussed in the nextPart of this article.

E. SUBMISSION TO JURISDICTION

It will be recalled thatunder s.16(1)(b) of the SCJA, submission by thedefendant to the jurisdiction of the High Court is a method of foundingjurisdiction. There are no special rules on submission which pertain toforeign companies except for some judicial observations, discussed above,which suggest that registration of a foreign company under the Englishcompanies legislation amounts to submission to the jurisdiction of theEnglish courts. Thus, what follows is a discussion of the general principleson submission which applies both to companies and individuals.

Submission can assume a number of forms: it can be taking a step in theproceedings or agreeing to the jurisdiction of the courts. The general notionbehind it is the voluntary recognition by the defendant that the Court hasjurisdiction to hear and determine the claim which is the subject matter ofthe proceedings.149 Thus, if a defendant appoints solicitor to accept serviceon his behalf, the writ would be deemed to be duly served on him150 butif his solicitors, in accepting service, reserve the right to protest againstjurisdiction, there may yet be no waiver of any jurisdictional objections.151

Similarly, a plaintiff who commences an action would be subject to thecourt’s jurisdiction for any counterclaim.152 A voluntary appearance by a

PT Pelajaran’s case, supra, note 79.The Messiniaki Tolmi [1984] 1 Lloyd’s Rep 266.O.10 r.1(2), RSC. Cheshire and North, p.188Sphere Drake Insurance v Gunes Sigorta Anonim Sirketi [1988] 1 Lloyd’s Rep 139. Thisis at least so in the context of service out of jurisdiction. In this case, defendants’ solicitorsaccepted service on them under an agreement that such service was tantamount to serviceout of jurisdiction under O.11 (a measure motivated by cost and convenience) butmaintained throughout the right to challenge the jurisdiction of the English courts whichthe defendants would have had if the usual O.ll procedure were used. It was held thatthere was no waiver of the right to contest jurisdiction. See also, Manta Line Inc vSofianites and Midland Bank Plc [1984] 1 Lloyd’s Rep 14.Metal Scrap Trade Corporation v Kate Shipping Co Ltd [1990] 1 WLR 115 at p.130.

148149150151

152


defendant who does not dispute jurisdiction will be treated as submission,153

as would also be the case if he contests the action on its merits,154 such aswhere he applies to strike out part of a claim.155

Thus, a defendant who wishes to contest any irregularities giving rise tojurisdictional deficiencies should enter an appearance (which per se doesnot amount any waiver of irregularity)156 and within the time limited forserving a defence, apply to court for one of the orders enumerated inO.12 r.7(1)(a)–(d). By so applying to court to contest jurisdiction, he cannotbe regarded to have submitted to it.157 But there would be submission if theapplication fails.158 If a defendant takes any steps which are useful ornecessary only if he has waived his jurisdictional objections,159 that too mayamount to submission.

An application to contest jurisdiction coupled with an alternative applica-tion to stay proceedings would not amount to submission, especially if theprotest of jurisdiction has all along been maintained.160 It is not howeverclear if a stay application alone would amount to submission. An argumentcan be made that requesting the court not to exercise jurisdiction (whichessentially is what is asked for in a stay application) is tacit recognition thatthe court has jurisdiction in the first place. This kind of reasoning workedin a case on foreign judgment,161 where a defendant tried to persuade aforeign court not to exercise jurisdiction to serve out of jurisdiction on theground of forum non conveniens. Dicey and Morris too think that itproduces submission (though citing no authority), unless it is accompaniedby a protest of jurisdiction. But there are remarks in Williams & Glyn’sBank v Astro Dinamino162 which suggest any contest of jurisdiction, whetherit be in relation to exercise or existence of jurisdiction, is not submission.The issue was expressly left open in The Messiniaki Tolmi.163 A related

O.12 r.7(6). See also The Avro International [1988] 1 MLJ 147, which deals with theeffects of an unconditional appearance, namely submission to jurisdiction and waiver ofany service irregularity. While the distinction between conditional and unconditionalappearance has since been abolished, it is likely that if an appearance is made withoutany protest of jurisdiction (whether or not arising out service irregularities), the sameconsequences would still follow.Boyle v Sucker (1888) 39 ChD 249.Messiniaki Tolmi, supra note 149.O.12 r.6.0.12 r.7(5). See also Re Dulles Settlement (No. 2) [1951] Ch 842.0.12 r.7(5) read with r.7(6).Rein v Stein (1892) 66 LT 469.Williams & Glyn’s Bank v Astro Dinamico Cia Naviera SA [1984] 1 All ER 760.Henry v Gepresco International Ltd [1976] QB 726. The decision has been severelycriticised: Collins (1976) 92 LQR 268. In England, this decision has been reversed bystatute: see s.33(1) of the Civil Jurisdiction and Judgment Act, 1982.Supra, note 160.Supra, note 155 at p. 271. See also recent Malaysian authorities like Seloga Jaya vPembenaan Keng Ting [1994] 2 MLJ 97 and Inter Maritime Management v Kai Tai Timber[1995] 1 MLJ 322 which suggest that a failure to challenge renewal of a Mareva injunc–tion before seeking for a stay of action does not amount to submission: Cf. Esal v Pujara[1989] 2 Lloyd’s Rep 479.

153

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issue which yields a slighter more definite answer is whether a failedapplication to set aside service out of jurisdiction amounts to submission.It seems so, since such an application comes within O.12 r.7(1)(c) and O.12rr.7(5) and 7(6), read together, would treat such a failed application assubmission.164

Another common way of founding jurisdiction by submission is throughthe use of a jurisdiction agreement165 conferring jurisdiction on the courtsof a particular country. This is a standard device of modern commercialcontracts which selects a particular forum before dispute arises. A jurisdic-tion clause should ideally be accompanied by an agreed machinery forservice, such as nomination of a local service agent,166 for that gives rise tosubmission as well as the convenience of service within jurisdiction. On theother hand, if there is merely the jurisdiction agreement without a localservice agent, leave for service out of jurisdiction on a foreign corporatedefendant is necessary, although a Singapore jurisdiction clause is a headof jurisdiction under O.11 rr.1(1)(d)(iv) and 1(1)(r).

F. A SUMMARY OF THE METHODS OF OBTAININGJURISDICTION OVER FOREIGN COMPANIES

The analytical framework put forward above, which considers how a foreigncompany can be served in Singapore rather than out of jurisdiction underO.11 of the RSC can be briefly recapitulated as follows:

(i) A foreign company which establishes a place of business orcarries on business in Singapore has to register and lodge withthe Registrar the address of its local office and the names aswell as addresses of its local agents. Such a company can beserved under any of the three methods set out in s.376 of theCompanies Act (service on agent, on its registered office and,if it no longer maintains a place of business locally, on its office

See also, Henry v Geopresco International Ltd, supra, note 161 (a foreign judgment case)Such an agreement can confer exclusive or non-exclusive jurisdiction: on exclusivity ofjurisdiction clauses, see British Aerospace v Dee Howard [1993] 1 Lloyd’s Rep 368Quaere if it can be implied. Cases on enforcement of foreign judgments are mostlyagreed that there cannot be implied submission to jurisdiction for the purposes of inter-national jurisdiction: see Vogel v Kohnstamm, supra, note 38; Sfeir v National Insuranceof New Zealand [1964] 1 Lloyd’e Rep 330; locally, UOB v Tjong Tjui Nyuk, supra, note38; Sunline v Cantopex, supra, note 38 which held that an English arbitration agreementcannot be implied submission to English courts. Cf Blohn v Desser[1961] 3 All ER 1Adams v Cape Industries, supra note 52, decision of Scott J at first instance.See O.10 r.3(1) which provides that if the contract confers jurisdiction on Singaporecourts and also provides for a service machinery, service in accordance with the latter isdeemed effective service. This reaffirms the common law principle that parties can, inaddition to choosing their preferred jurisdiction, also choose their own mode of serviceso long as it is not contrary to the rules of court: Tharsis Sulphur and Copper Companyv La Societe des Metaux (1889) 58 LJQB (NS) 435; also Montgomery, Jones & Co vLiebenthal & Co [1898] 1 QB 486. Cf. The British Wagon Company v Gray [1896]1 QB 35.

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in the place of incorporation) and if so served, the Singaporecourts have jurisdiction over it.

Jurisdiction over such a foreign company may also be derivedfrom corporate presence under s.16(1)(a)(i) or submission unders.16(1)(b). However, service under s.376 would in most instancesbe more convenient. If jurisdiction is grounded on corporatepresence, service must be effected through O.10 r.2 (ie serviceon local agent or manager with control or management overthe foreign company’s business to which the action relates). Ifjurisdiction is based on submission, O.10 r.1(2) and r.3 can beused although submission can also take other forms.

However, a registered foreign company cannot be servedaccording to O.62 r.4 which only applies in the absence ofprovisions in other written law, and which, in this context, wouldinclude s.376 of the Companies Act.

An unregistered company cannot be served under s.376 of theCompanies Act. Thus the jurisdictional regime created underthe Companies Act does not apply to such a company.

Jurisdiction over such a company would have to be obtainedthrough use of s.16(1)(a)(i) or (b).

Where jurisdiction is sought under s.16(1)(a)(i), corporatepresence must be demonstrated. If the company is so present,service can be effected under O.62 r.4. However that provisionprobably does not cover service on independent agents of thecompany.

Service on an unregistered foreign company may also beeffected under O.10 r.2. Where such a company appoints alocal agent, O.10 r.2 would have to be used since O.62 r.4 maynot extend to agents.

Such an unregistered foreign company may also be amenableto jurisdiction by way of submission in its various forms.

If the above means of obtaining jurisdiction fail, then serviceout of jurisdiction is the remaining recourse.

If the jurisdictional web cast in the various ways discussed aboveis, in the circumstances of a case, too wide, the compensationmay well lie in greater readiness to stay the action on the groundof forum non conveniens.

TOH KIAN SING*

(ii)

(iii)

(iv)

(v)

(vi)

(vii)

(viii)

(ix)

(x)

* LLB (Hons)(NUS); BCL(Oxon); Lecturer, Faculty of Law, National University ofSingapore; Advocate and Solicitor.I thank my colleague, Mr Tan Yock Lin, who kindly read a draft of this article andoffered many helpful comments. The usual caveat applies. This article is based primarilyon a paper delivered on 31st Marcy 1995 at a Workshop on Conflict of Laws in CommercialPractice organised by the Faculty of Law, National University of Singapore.

1995-7(1)-saclj-103-toh

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