Lloyd's Maritime and Commercial Law Quarterly
WHAT DO YOU MEAN, “NON-EXCLUSIVE”?
Adrian Briggs*
Shanghai Turbo v Liu
If parties to a commercial contract, the validity of which is not in dispute, have agreed that two courts, one local and one foreign, are to have non-exclusive jurisdiction, what exactly does that mean and achieve? In Shanghai Turbo Enterprises Ltd v Liu,1 a company with a claim against its former CEO for sundry breaches of duty wished to sue him in Singapore, and needed permission to serve him in China. The analysis of the Singapore Court of Appeal was that the jurisdiction clause in the service contract got the claimant through the gateway for claims in which a contract contains a term that the High Court shall have jurisdiction,2 and that permission was likely to be granted unless the defendant showed strong cause why he should not be summoned to a jurisdiction to which he had agreed ante litem. This, the court concluded at the end of a very thorough analysis, was the content and the consequence of what the parties had agreed to. Its conclusion was unimpeachable: the defendant’s objection to the order granting permission to serve him was bound to fail.
The dispute resolution clause was in the following terms:
“This agreement shall be governed by the laws of Singapore/or People’s Republic of China and each of the parties hereto submits to the non-exclusive jurisdiction of the Courts of Singapore/or People’s Republic of China.”
This is hardly the epitome of the draftsman’s art. So far as the governing law aspect of it was concerned, a fair reading was that the contract was intended to be governed by Singapore law if litigated in Singapore, and by Chinese law if litigated in China. Such a clause contains no information about the law which governs the contract from its creation, and as it is axiomatic in the common law that every contract must have a proper law from the moment of its birth,3 the words which created the absence of a governing law were irrelevant and void. The court considered the clause to be operable and cut away the rotten part,4 leaving a jurisdiction clause by which “each of the parties hereto submits to the non-exclusive jurisdiction of the courts of Singapore/or People’s Republic of China”. On the question whether that was enough for permission to serve out, only one answer was possible: it was. Each side had promised the other that it would, among other things,
* QC; Professor of Private International Law, Oxford University.
1. [2019] SGCA 11.
2. The relevant provision of Order 11 r.1 is materially identical with the English CPR PD6B, para.3.1(6)(d).
3. Amin Rasheed Shipping Corp v Kuwait Insurance Co (The Al Wahab)
[1983] 2 Lloyd's Rep 365; [1984] AC 50, 65.
4. It was on the possibility or impossibility of doing this that the court differed from the judge below.
330