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Canadian Court Grants Enforcement of Singapore Judgment
Posted on Tuesday, August 02, 2005 - 12:00 AM

The Ontario Superior Court of Justice in Oakwell Engineering Ltd. v. Enernorth Industries Inc., 2005 CanLII 27149 (ON S.C.) allowed a Singapore judgment to be enforced. The defendant, opposed recognition and enforcement of the judgment on the basis that that the Singapore legal system does not conform to the Canadian concept of justice.
The decision on 2 August 2005 is as follows:-

ONTARIO SUPERIOR COURT OF JUSTICE

COURT FILE NO.: 04-CV-271121CM3
04-CV-274860CM2
DATE: 20050802

BETWEEN:

OAKWELL ENGINEERING LIMITED .... Applicant

AND

ENERNORTH INDUSTRIES INC.
(Formerly known as Energy Power Systems Limited, Engineering Power Systems Group Inc. and Engineering Power Systems Limited, respectively) .... Respondent

Edward J. Babin & Matthew I. Milne Smith, for Oakwell

David R. Wingfield, M. Kate Stephenson & Paul D. Guy, for the Respondent

HEARD: December 6,7,8 & 9, 2004

DAY J.

Introduction

[1] The applicant, Oakwell Engineering Ltd. (?Oakwell?), has brought an application to enforce a judgment of the High Court of Singapore in Ontario. The defendant, Enernorth Industries Inc. (?Enernorth?), opposes recognition and enforcement of the judgment on the basis that that the Singapore legal system does not conform to the Canadian concept of justice.

Facts

[2] Oakwell is a Singapore corporation that supplies engineering works and products to the marine industry. Enernorth is an Ontario corporation engaged in engineering, construction, shipbuilding and power generation around the world.

[3] In 1995, Oakwell successfully tendered to build and operate two barge-mounted plants in the state of Andhra Pradesh, India. Oakwell then entered into a joint venture agreement with Enernorth in June 1997. Oakwell and Enernorth formed a project company that would finance, construct and operate the project. Enernorth owned 87.5% of the project company and Oakwell owned the remaining 12.5%.

[4] The project did not progress as the parties had hoped. To resolve various disputes between them, the parties entered into a settlement agreement (the ?Settlement Agreement?) in December 1998. The Settlement Agreement provided that any disputes that were to arise in the future would be governed by Singapore law and subject to the non-exclusive jurisdiction of the Singapore courts.

[5] Under the Settlement Agreement, Enernorth bought out Oakwell?s rights in the project in exchange for (1) shares in Enernorth, (2) a promise to pay US $2.79 million when the project obtained successful financing (called ?Financial Closure?) and (3) royalty payments once the project became operational.

[6] Enernorth did not achieve Financial Closure, nor has it paid Oakwell the US $2.79 million or the royalties. In August 2000, Enernorth entered into an agreement with VBC, an Indian company, to sell virtually all of its interest in the project. Oakwell entered into negotiations for its own agreement with VBC, which concluded in July 2002.

[7] In August 2002, Oakwell sued Enernorth in Singapore for the disputed sums.

The Proceedings in Singapore

[8] There is no evidence that Enernorth contested the jurisdiction of the Singapore courts. In fact, Enernorth defended the action and brought a counterclaim against Oakwell in the Singapore Superior Court in the same action for US $175 million.

[9] The trial judge allowed Oakwell?s claim and dismissed Enernorth?s counterclaim. Enernorth was ordered to pay the disputed sums in full, plus costs and interest.

[10] Enernorth appealed the trial judge?s decision to the Singapore Court of Appeal. Enernorth argued that the trial judgment was legally incorrect because the term that it implied into the contract (i.e. the obligation to get financing) was a contingent condition and as such the only obligation that could be implied was to make reasonable efforts to obtain such financing. The trial judge had imposed what Enernorth characterized as an unconditional obligation to get financing for the project within six months of the Settlement Agreement.

[11] The appeal was heard before a panel of three judges who dismissed the appeal from the bench.

[12] Oakwell has now brought an application for enforcement of the Singapore judgment in Ontario. Enernorth has brought a cross-application for a declaration that the Singapore judgment, affirmed on appeal, is not enforceable in Ontario.

The Law
Recognition & Enforcement of a Foreign Judgment

[13] Enernorth has urged that recognition and enforcement of the foreign judgment should be considered separately (Enernorth?s Factum at Paragraph 26). Enernorth relies on Morguard Investments v. De Savoye, 1990 CanLII 29 (S.C.C.), [1990] 3 S.C.R. 1077 [Morguard] to state that there are two requirements for a judgment to be recognized. First, there must be a real and substantial connection between the foreign court and the underlying cause of action. Second, the Canadian court must be satisfied that there are no concerns about the quality of justice in the foreign system. The Respondent refers to Beals v. Seldanha, 2003 SCC 72 (CanLII), [2003] 3 S.C.R. 416 [Beals] which did not explicitly require consideration of the ?quality of justice? of the foreign jurisdiction; nor was it explicitly required for recognition and enforcement. The reason was because that judgment was from the State of Florida, ?a jurisdiction which does not raise such concerns?. The Respondent argues that in the present case, the two-step test from Morguard must be applied in order for the judgment to be recognized and enforced.

[14] Oakwell asserts that the proper test for recognition and enforcement is to decide whether the foreign court had jurisdiction, and if the answer is yes, then to consider any defences alleged (Applicant?s rebuttal submissions at p. 1).

[15] Beals is a leading case on recognition and enforcement of foreign judgments. Enernorth finds support in the dissent of Le Bel J. in Beals at paragraph 195:

It should be part of the plaintiff?s burden in establishing a prima facie case of enforceability to prove that the system from which the judgment came is basically fair.

While it might be helpful to consider the nature of the system of justice at the stage of recognition and enforcement, this is a minority opinion. The majority opinion in Beals does not require such a consideration until defences are argued. The majority also makes no distinction between recognition and enforcement. Rather, the court makes the following statements at paragraphs 39 and 61, respectively:

Once the ?real and substantial connection? test is found to apply to a foreign judgment, the court should then examine the scope of the defences available to a domestic defendant in contesting the recognition of such a judgment.

[I]t is not the duty of the plaintiff in the foreign action to establish that the legal system from which the judgment originates is a fair one in order to seek enforcement. The burden of alleging unfairness in the foreign legal system rests with the defendant in the foreign action.

[16] Enernorth points to a passage about the real and substantial connection in Amchem Products Inc .v. British Columbia (Workers? Compensation Board), 1993 CanLII 124 (S.C.C.), [1993] 1 S.C.R. 897 [Amchem] at 932:

In most cases it will appear from the decision of the foreign court whether it acted on principles similar to those that obtain here, but, if not, then the domestic court must consider whether the result is consistent with those principles.

However, it would appear that Amchem does not apply directly to the case at bar, as Amchem is a case about anti-suit injunctions, not enforcement of a foreign judgment. Beals and Morguard appear to be the most prominent Canadian cases in this area.

[17] Enernorth also puts forward an article by Ivan F. Ivankovich, ?Enforcing U.S. Judgments in Canada: ?Things Are Looking Up!?? (1995) 15 Nw. J. Int?l L. & Bus. 491, in which the author cautions that Canadian courts will soon have to address fairness issues in deciding whether to enforce judgments from foreign courts in jurisdictions with substantially different concepts of justice from our own. He argues that if Morguard is applied to foreign judgments other than those from the United States and Britain, it will soon become apparent that ?Canadian courts are unable to make the same assumptions about procedural and substantive fairness and the quality of justice in the international context that they are able to make domestically? (at 518).

[18] This article was written before Beals was decided, and it would seem that Beals addressed such concerns about applying Morguard in the international context, at least to the extent of being cross-border.

[19] Furthermore, as MacPherson J.A. has observed for the court in Great American Leasing Corp. v. Yates 2003 CanLII 16128 (ON C.A.), (2003), 68 O.R. (3d) 225 (C.A.), referring to Morguard at 228,

[I]n a mobile society it is both necessary and desirable that governments and courts respect the orders made by courts in foreign jurisdictions with comparable legal systems.

[20] Based on the majority reasoning in Beals, the test to decide recognition and enforcement of the Singapore decision will be whether or not the foreign court properly assumed jurisdiction by applying the real and substantial connection test. If that test is met, the court will then decide whether or not Enernorth succeeds in proving any of its defences.

Should the foreign judgment be recognized and enforced?

[21] First of all, recognition and enforcement go together. For purposes of this Application, they are not distinguished, one from the other. For a foreign judgment to be recognized in Ontario and at the same time not be enforceable in Ontario would be a contradiction in terms.

[22] In order for the court to recognize and enforce the judgment, Oakwell must firstly prove a real and substantial connection, which ?requires that a significant connection exist between the cause of action and the foreign court? (Beals at paragraph 32).

[23] Oakwell submits that there are two bases for finding that the Singapore court had jurisdiction to hear this action. First, Oakwell relies on the ?Governing Law and Jurisdiction? clause in the Settlement Agreement:

19.1 This Settlement Agreement shall be governed by and construed in accordance with the laws of Singapore.

19.2 In relation to any legal action or proceedings arising out of or in connection with the Settlement Agreement, the parties submit to the non-exclusive jurisdiction of the courts of Singapore.

[24] Second, Oakwell submits that once the dispute between the parties arose, Enernorth submitted to the jurisdiction of the Singapore courts. It participated fully in the proceedings, including launching and prosecuting its counterclaim and then appealing the trial judgment, all in Singapore.

[25] Enernorth does not dispute that there was a forum selection clause and that Enernorth participated fully in the Singapore proceedings. Rather, its arguments not to enforce the judgment focus on the quality of justice in Singapore. (Respondent?s Factum at paragraph 190).

[26] It is clear from the forum selection clause and the fact that both parties attorned to the jurisdiction of Singapore that there was a real and substantial connection with Singapore, as contemplated in Beals at paragraph 37. As such, the judgment is prima facie enforceable.

[27] I will now turn to the defences alleged by Enernorth.

The Public Policy Defence

[28] The public policy defence is succinctly summarized in Beals at paragraph 71:

The third and final defence is that of public policy. This defence prevents the enforcement of a foreign judgment which is contrary to the Canadian concept of justice. The public policy defence turns on whether the foreign law is contrary to our view of basic morality. As stated in Castel and Walker at p. 14 ? 28:
? the traditional public policy defence appears to be directed at the concept of repugnant laws and not repugnant facts ?

In the present case the asserted repugnancy is in the facts emanating out of Singapore, not the laws of Singapore.

[29] The Supreme Court strictly limits the use of the defence of public policy at paragraph 75 of Beals:

The use of the defence of public policy to challenge the enforcement of a foreign judgment involves impeachment of that judgment by condemning the foreign law on which the judgment is based. It is not a remedy to be used lightly. The expansion of this defence to include perceived injustices that do not offend our sense of morality is unwarranted. The defence of public policy should continue to have a narrow application.

In the circumstances of the case at hand, the defence of public policy should not be taken to apply based on the limits expressed above in Beals.

Reasonable Apprehension of Bias

[30] Enernorth alleges that it is enough to prove reasonable apprehension of bias to prevent the judgment from being enforced. The Supreme Court stated the test for reasonable apprehension of bias in Wewaykum Indian Band v. Canada, [2003] 2 S.C.R. 260 at 294-295: ?What would an informed person, viewing the matter realistically and practically ? and having thought the matter through ? conclude?? The court remarked, first, that there must be serious grounds upon which to base this conclusion, as there is a strong presumption of judicial impartiality, and, second, that the inquiry is highly fact-specific (See also R.D.S. v. The Queen, 1997 CanLII 324 (S.C.C.), [1997] 3 S.C.R. 484 at 531 and Arsenault-Cameron v. Prince Edward Island, 1999 CanLII 641 (S.C.C.), [1999] 3 S.C.R. 851).

[31] Furthermore, in order to be a reasonable apprehension of bias, it must be apprehended and it must be reasonable. Here, Enernorth selected the jurisdiction and laws of Singapore. Enernorth attorned to the jurisdiction. If Enernorth apprehended bias at trial, or at appeal, Enernorth should have raised this issue earlier, at that point. The test is not met.

[32] Moreover, Beals at paragraph 72 indicates that bias must be proved. It mentions nothing about showing a reasonable apprehension of bias:

?? [t]he public policy defence against the enforcement of a judgment rendered by a foreign court, proven to be corrupt or biased?.

[33] Therefore, if Enernorth is raising the issue now for the first time, Enernorth must prove actual bias. Reasonable apprehension of bias cannot apply.

Bias

[34] Enernorth alleges a number of factors that it maintains lead to a suspicion of bias in the Singapore decision. While putting aside the fact that anything less than actual bias is insufficient to impugn the decisions, I will outline Enernorth?s allegations:

(a) First Allegation: The trial judge is a long-time associate of Lee Kuen Yew, former Prime Minister of Singapore and alleged to remain active in ruling the country;

(b) Second Allegation: A remark in the transcript means that the trial judge was confirming that Oakwell was owned by the Koh Brothers, who in turn have substantial ties to senior members of the executive associated with Lee Kuen Yew; and

(c) Third Allegation: The appeal was perfunctory and presided over by the Chief Justice, who is a long-time associate of Lee Kuen-Yew and also well-known to have supported the executive in his or his court?s rulings.

Elaboration is required regarding Enernorth?s Second Allegation concerning Oakwell?s connection with the Koh Brothers.

Evidence of Mr. Cassina on activity of the trial judge

[35] James Carmen Cassina represented Enernorth in negotiations with Oakwell, and participated in the Singapore trial. In his affidavit, he alludes to the following exchange between the trial judge and Mr. Low, a witness in the case, while he was being cross-examined by Mr. Khoo (Transcript of Mr. B.T. Low, Supplementary Application Record of the Applicant, Volume 3, page 967):

Mr. Low: ? Now, I mean, for your information, I lost control of Oakwell and now it?s under----it?s one of the subsidiary [sic] of Koh Brothers here.

Mr. Khoo: Right.

Mr. Low: So I am not ----

His Honour: Hmm?

Mr. Low: We are under the subsidiary of G & W where it?s a subsidiary of Koh Brothers, the listed company in Singapore.

His Honour: Ko, K-O, is it?

Mr. Low: K-O-H (spelt)

Mr. Khoo: K-O-H (spelt), I believe, Construction Company.

[36] Mr. Cassina, who observed this exchange, states that the judge was not simply asking how ?Koh? is spelled; rather, the judge was asking for identification of the owners of Oakwell. Mr. Cassina made the following statement on December 10, 2004 in cross-examination on his Affidavits sworn August 30, 2004 and November 4, 2004 (Cross-Examination of James Carmen Cassina, Supplementary Application Record of the Applicant, Volume 3, page 765, in response to Question 135):

What the transcripts do not reflect is the judge leaned forward so that he had the full attention of B.T. Low, and as B.T. Low answered the question the judge made notes in his notebook. I saw the judge underline the notes. The judge took particular care to make sure that he got it right.

It struck me as unusual that the judge would have so much interest in who the major shareholder of Oakwell is. Who is this company that had 400 million dollars, maybe or maybe not.

It struck me very odd, for example, that B.T. Low not only answered the question about who the Koh brothers are, but he introduced the subject of G & W, which is a very powerful organization in Singapore. And, again, it struck me very odd that the judge was so attentive to this, attentive enough to actually lean forward, spell out the names, and take extensive notes.

Furthermore, what is not evident just by reading the transcripts is the pause while the judge made, what I consider to be, more than just simple notes.

[37] Mr. Cassina also felt that Enernorth?s counsel was not treated fairly. In his affidavit he states that his concerns were solidified after receiving the High Court judgment, given the evidence and the facts that were heard. He states that it was at this point that Enernorth began investigating the independence of the Singapore judiciary.

[38] I cannot rely on Mr. Cassina?s opinion to find that the judge was questioning the ownership of the company in order to ensure he would find for the side with ?the right? connections. There would need to be much more specific and compelling evidence to prove bias or corruption. One surmise by Mr. Cassina to explain the trial judge?s activity far from establishes a finding of bias at this level. See also The Loewen Group et al. v. U.S.A. (2003), Case No. ARB (AF)/98/3 at 39, an American arbitration case for similar reasoning.

[39] Mr. Cassina?s affidavit evidence about why Enernorth began investigating the independence of the Singapore judiciary does not buttress Enernorth?s assertion that there was not a fair trial. Rather, it prompts the question of why Enernorth?s concerns about bias or corruption were not raised at trial or on appeal in Singapore. In answer to this question, Enernorth replied that it would be seditious to do so and cited section 3(1)(c) of the Sedition Act (Singapore, Cap. 290):

A seditious tendency is a tendency to bring into hatred or contempt or to excite disaffection against the administration of justice in Singapore.

I am not persuaded by this explanation. As will be discussed later, the courts of Singapore have a reputation for fairness in deciding cases between private commercial parties. Without cogent evidence that alleging bias or corruption in a court case would lead to charges of sedition, I have difficulty with the allegation that Enernorth was barred by the Sedition Act of Singapore from bringing objections until now.

[40] With respect to the First Allegation and the Third Allegation, above, concerning judicial association with Lee Kuen-Yew, Enernorth tendered expert reports to support the contention that there are connections in Singapore among the judiciary, the executive, and business; that these connections suggest that there is a real risk that judges in Singapore were biased in this case; and they suggest that the Singapore legal system is not sufficiently independent for its judgments to be recognized by Canadian courts. I will briefly discuss the expert witnesses? testimony in this respect.

The Expert Testimony on Alleged Oligarchy Penetrating the Judicial Process
Ross Worthington

[41] Enernorth relied upon the opinion of Ross Worthington, an Adjunct Professor of Governance at Griffith University in Australia and an associate of the Asia Research Centre on Social, Political and Economic Change at Murdoch University, also in Australia. Mr. Worthington has written on governance in Singapore and performed consultancy work in the area. He has been conducting empirical research in and on Singapore since 1988.

[42] He concludes that the judicial branch of the Government of Singapore is not independent from the executive branch. Mr. Worthington finds that ?all aspects of governance in Singapore, including the judiciary, are carefully manipulated and ultimately controlled by the core executive of individuals who use their powers to maintain their own power and further their own political, economic, social and familial interests? (Affidavit of Ross Worthington, Compendium of the Respondent, Vol. I, Tab 4, at page 6, paragraph 22). Mr. Worthington goes into great detail in describing Singapore as an ?oligarchy.? Specifically, Mr. Worthington asserts the following at page 51, paragraph 130:

(a) the traditional safeguards of judicial independence are either wholly absent or wholly undermined by conventional practice;

(b) the court system is structured so as to maximize opportunities for executive influence in cases involving the interests of the executive, and to minimize opportunities for decisions being made by persons who might not favour those interests; and

(c) there is an evident tendency for core executive interests to be favoured in judicial decisions.

[43] Oakwell challenges Mr. Worthington?s testimony on a number of grounds.

[44] It is beyond dispute that Mr. Worthington has changed his mind about the Singapore judiciary; in earlier writings his opinion of the judiciary was much less critical. The reason and date for this change of opinion are in dispute. However, as Oakwell points out, at least parts of Mr. Worthington?s affidavit are based on his previous writings, and on at least two occasions, he quotes passages from his book verbatim but then omits the next part of the passage that is more complimentary of the judiciary. An example noted by Oakwell follows, in which the part of the book omitted from his affidavit is included in italics (taken from Factum of the Applicant, page 37):

[The high salary paid to Singapore judges] is a strong incentive for judges to both resist monetary corruption, but also to conform to the oligarchic program?but is equally a necessary strategy for recruiting talented lawyers to the bench. It would be unfair, however, to view this level of remuneration as excessive in the context of the income of senior practitioners in Singapore?s legal profession[.]
(Affidavit paragraph 140, p. 1091; cross-examination Exhibit 2, p. 122).

[45] More germane to the issue being decided, Mr. Worthington?s opinion seems to come from the political cases and issues he has studied, rather than commercial cases. While he makes some assertions about the reason for the dearth of examples of questionable circumstances in commercial cases, the lack of evidence of corruption in private commercial cases remains.

Nihal Jayawickrama

[46] Enernorth also relied on the affidavit of Dr. Nihal Jayawickrama, the Co-ordinator and Lead Facilitator of the Programme on Strengthening Judicial Integrity, a program initiated by the United Nations. While Dr. Jayawickrama is an expert in the area of judicial corruption, his affidavit, as he acknowledges, is on ?the existence and nature of corruption in judicial processes around the world? (Affidavit of Nihal Jayawickrama, Compendium of the Respondent, Volume 2, Tab 1, paragraph 1). He does not appear to provide specific evidence of judicial corruption in Singapore.

Francis Seow

[47] Mr. Francis T. Seow is a former Crown Counsel and Solicitor General of Singapore. He is apparently now regarded as a dissident by the Singapore government because of political activities. Mr. Seow now resides in the United States.

[48] The following is the question he poses in his affidavit: ?Is it reasonable to presume that the case at bar was heard by an independent judiciary in Singapore?? (Affidavit of Francis T. Seow, Compendium of the Respondent, Vol. I, Tab 3, paragraph 23). Mr. Seow answers in the negative, citing three factors: (i) the autocratic nature of the government, which exercises control of the judiciary where the government may have an interest; (ii) the judges hearing this case were known to be inclined toward the government and entities associated with the government and/or government-linked corporations; and (iii) this appears to be a case in which interests of government-linked companies were involved (Affidavit, paragraph 25).

[49] Although Mr. Seow goes into great detail about the system in Singapore, and possible links that could be made among the judges, Oakwell?s associated and parent companies, and the government, this is not enough to impugn the proceedings or the decision. It is not specific or reliable enough to presume, let alone conclude, that there was not a fair trial in the case at bar.

Case Law

[50] Counsel on both sides advise that, to this point, there have not been any Canadian cases where it has been argued that a country?s system of justice is so inherently corrupt or biased that its judgments cannot be enforced by Canadian courts. Arguments of bias have been about specific instances of bias, not general ones. If this court were to accept the argument of general bias in this case, it would mean that no judgments from Singapore courts would be enforceable in Ontario.

[51] Oakwell has provided the court with a number of cases where a court has enforced a foreign judgment notwithstanding known corruption within the state institutions or specifically the judiciary. In Clinton v. Ford (1982), 37 O.R. (2d) 448 [Clinton], the Ontario Court of Appeal enforced a judgment in a contract dispute rendered by the Supreme Court of apartheid-era South Africa. This was a contracts case and had nothing to do with apartheid.

[52] Enernorth has pointed out that Clinton was decided before Morguard or Beals. However, there is nothing in either Morguard or Beals making it clear that enforcement of a specific decision can be denied based on allegations that a whole system is biased, when there is no cogent evidence that there was bias in the specific case.

[53] A Canadian court declined jurisdiction in favour of Iranian courts in Sarafi v. ?Iran Afzal? (The), [1996] F.C. 954 (T.D.). In that case, the plaintiff feared that even though the Iranian courts had the closest connection to the action, the Iranian courts would not allow him to pursue his claim there, which would deny him substantial justice. The Federal Court found that there was nothing to support that claim. The plaintiff argued that Iranian Courts leave no jurisdiction to sue the State. Justice No?l accepted in evidence a certified English translation of the Administrative Justice Tribunal Act of Iran. At paragraphs 34 and 35 of the judgment, Justice No?l states:

On the face of it, this Act does confer upon the courts of Iran jurisdiction to entertain suits against the state by state employees. There is no evidence before me establishing that the courts of Iran would refuse to exercise this jurisdiction, other than the bold assertion that Iranian courts ?leave no jurisdiction to sue the State.? More than this is required to, in effect, put into question the integrity of the judicial system of a foreign state. Nothing has been placed before me to suggest that the courts of Iran will refuse to exercise the jurisdiction conferred by the laws of Iran.

. . .

The complaint of the plaintiff is not directed at Iranian law or its effect on him, but at the Iranian judicial system based on his belief that Iranian courts will not hear his claim. While the plaintiff may hold this belief, he has placed before me no evidence which would allow me to conclude that justice will not be done in Iran.

[54] To echo the inverse of No?l J?s formulation, Enernorth in the present case has also failed to place any evidence before the court that justice was not done in Singapore.

[55] While not determinative, it is interesting to note that in Creative Technology Ltd. v. Aztech System Pte. Ltd. (1995), 61 F. 3d 696 (9th Cir.), an American court deciding the issue of forum conveniens considered Singapore to be an alternative forum and had no complaint about the court itself.

[56] In the British case of Moduroglu v. T.C. Ziraat Bankasi, [1986] Q.B. 1225, the plaintiffs brought an action in England, and the defendants sought a stay of the action based on Turkey being the natural forum. The plaintiffs opposed the stay and claimed, inter alia, that they could not get a fair trial in Turkey. The trial judge rejected this contention. In confirming the trial judge, the Court of Appeal made the following comment at page 1248:

On the one hand, the court must not adopt any line of reasoning which involves a finding or assumption of impropriety or unfairness on the part of an organ of a friendly foreign state, without solid evidence to support it. On the other hand, the court must not be too unworldly. It must recognize that there are parts of the world where things are badly wrong, and that by virtue of this very fact it may be impossible to obtain direct and complete evidence of the grounds of complaint. A balance must be struck.

[57] This comment may well apply equally to the case at bar. While Enernorth has presented much evidence to show that there could be connections between the judiciary and officials of the state, there has been nothing concrete to show actual bias or a reasonable apprehension thereof.

[58] Moduroglu is applicable to another aspect of Enernorth?s argument. Enernorth has alleged that because there is an institutional bias in Singapore?s courts, a fair trial is impossible. Oakwell, however, has drawn a distinction. While Oakwell acknowledges that Enernorth has tendered some evidence relating to possible government interference in trials, all of that evidence applies only to political cases. The case at bar is a commercial case. There is no evidence that Singapore courts are biased when deciding a commercial case between private parties.

[59] In Moduroglu, the Court of Appeal agreed with the trial judge?s decision in this aspect as well, at page 1237:

In discussing the evidence, the judge drew a distinction between political trials, and trials before the military courts, and civil trials. He concluded that there was a perfectly satisfactory and mature legal system in Turkey, effective to deal with civil commercial cases, and no evidence of personal risk to the plaintiffs? directors or witnesses or lawyers. He was satisfied that if the matter went to Turkey the plaintiffs would receive a fair trial of their case.

[60] Here, I am satisfied that in Singapore, in this situation, the parties received a fair trial of the case. Historically, there is no evidence of bias or unfairness by the Singapore court in private commercial proceedings. I am satisfied that there is no reason to doubt the impartiality of the judges who heard the case in Singapore: Re Provincial Court Judges, 1997 CanLII 317 (S.C.C.), [1997] 3 S.C.R. 3; R. v. Valente, 1985 CanLII 25 (S.C.C.), [1985] 2 S.C.R. 673.

[61] So much the more, there is no evidence of bias or unfairness by the Singapore Court in this specific case. Herman Jeremiah, a partner of the Singapore law firm that represented Oakwell, described the trial in his affidavit. He concludes at paragraph 19 that to the best of his knowledge, information, and belief, ?the Judgments were not obtained by fraud or any other improper means? (Affidavit of Herman Jeremiah, Application Record of the Applicant, Volume 4 of 6, Tab 5). Enernorth has not discharged its burden of proving unfairness in the foreign legal system (Beals, at paragraph 61).

Failure of Natural Justice

[62] Enernorth alleges that further and in the alternative, there was a failure of natural justice in the Singapore proceedings.

[63] In Beals at paragraph 64, the defence of natural justice is defined:

The defence of natural justice restricted to the form of the foreign procedure, to due process, and does not relate to the merits of the case. The defence is limited to the procedure by which the foreign court arrived at its judgment. However, if that procedure, while valid there, is not in accordance with Canada?s concept of natural justice, the foreign judgment will be rejected.

[64] While it was stated in Beals that ?the domestic court must be satisfied that minimum standards of fairness have been applied to the Ontario defendants by the foreign court,? that court also observed that ?the burden of alleging unfairness in the foreign legal system rests with the defendant in the foreign action.? (Beals at paras. 60-61). Therefore, it is Enernorth?s burden to prove, on a balance of probabilities, that there has been a failure of natural justice in the procedure used to reach the impugned decision.

Singapore Law

[65] Like Ontario, Singapore?s legal roots are in the English Common Law. Until 1993, Singapore automatically received English law, both statutory and common law. This meant that ?principles and rules of English common law and equity as well as pre-1826 English statutes of general application were applicable in Singapore, subject to the concepts of suitability and modification? (See Andrew Phang, ?Cementing the Foundations: The Singapore Application of English Law Act 1993,? (1994) 28 U.B.C.L. Rev. 205 at paragraph 7). Since 1993, section 3 of the Application of English Laws Act has provided that the English common law as it existed in November 1993 continues to be in force in Singapore, subject to modification. Section 4 of that Act explicitly adopted a number of English commercial law statutes.

[66] Singapore?s procedural law is also derived from the common law. Singapore?s Evidence Act was originally enacted as a codification of the common law, and its civil procedure dates back to nineteenth-century English procedure. There have been significant reforms, but its rules of evidence and procedure continue to be based broadly on English common law.

[67] Singapore?s Constitution provides for the independence and impartiality of the judiciary. Court proceedings are held in open court, accessible to the public.

[68] Singapore also operates on similar principles of comity to Canada and other common law countries. For example, in enforcing a Canadian judgment in Hong Pian v. Les Placements Germain Gauthier Inc., [2002] S.L.R. 81 at paragraph 12, the Singapore court, referring to English law, stated that:

? it is settled law that a foreign judgment in personam given by a foreign court of competent jurisdiction may be enforced by an action for the amount due under it so long as the foreign judgment is final and conclusive as between the same parties. The foreign judgment is conclusive as to any matter thereby adjudicated upon and cannot be impeached for any error, whether of fact or of law.
....
The local court will only refrain from enforcing a foreign judgment if it is shown that the plaintiff procured it by fraud, or if its enforcement would be contrary to public policy or if the proceedings in which the judgment was obtained were opposed to natural justice.

Comparison to Canadian Law by Enernorth

[69] Enernorth agrees that ?Singapore clearly adheres to the first component of Canadian rule of law,? which Enernorth quotes from Reference re Mantioba Language Rights (Man.), 1985 CanLII 33 (S.C.C.), [1985] 1 S.C.R. 721 (at 748-749) as ?an order of positive laws which preserves and embodies the more general principle of normative order.? (Respondent?s Factum at para. 150).

[70] Enernorth lists two other elements that constitute the rule of law in Canada, from Manitoba Language Rights (at 748-749) and Reference re Secession of Quebec, 1998 CanLII 793 (S.C.C.), [1998] 2 S.C.R. 217 (at 257): ?adherence to the principle that ?the law is supreme over officials of the government as well as private individuals,? and a requirement that all government authority be found in the law.? (Respondent?s Factum at paragraph 150)

[71] Enernorth then argues that singapore?s ?extensive system of positive laws? only gives the appearance of meeting the second and third components of the rule of law. Its arguments centre around the allegation that the governing party uses and changes the law for its own ends without being held accountable. Furthermore, Enernorth alleges that the judiciary in practice is not independent.

[72] While Enernorth?s experts, political scientists and lawyers, provide reports that aspects of the government of Singapore do not meet the standards of the rule of law in Canada, this evidence goes against Singapore?s formal legal structure as evidenced in its constitution and laws. Furthermore, Oakwell has provided evidence to the contrary.

Concluding Comments

[73] As mentioned in the discussion of bias, Enernorth should have alleged a failure of natural justice at trial, or at least on appeal:

The objection that the foreign proceedings were contrary to natural justice cannot be taken in the enforcing court if it could have been or was taken before the foreign court. (J-G. Castel & J. Walker, Canadian Conflict of Laws, 5th ed., looseleaf (Toronto: Butterworths, 2001 at 14.1)

[74] As Feldman J.A. observed for the court in Society of Lloyd?s v. Meinzer 2001 CanLII 8586 (ON C.A.), (2001), 55 O.R. (3d) 688 (C.A.) at 704, ?natural justice is a very flexible concept, the basis of which is notice and an opportunity to be heard.?

[75] There is no question that Enernorth received notice and participated fully in the legal proceedings. At trial and on appeal, Enernorth had the opportunity to raise objections about the system or the particular judges sitting. Enernorth did not do so.

[76] It is significant that there is no evidence in the case at bar that there was anything deficient in the process. In order for Enernorth to impeach the judgment, it must be shown that ?fair process was not provided to the defendant? (Beals at paragraph 63). The evidence, taken as a whole, leads to the conclusion, on a balance of probabilities, that both parties enjoyed fair process in the Singapore action.

Findings

[77] I find that there was a real and substantial connection to Singapore. I also find that no defences to enforcement have been made out.

[78] Therefore, Oakwell?s application for enforcement of the Singapore judgment is granted and Enernorth?s application is denied.

Costs

[79] If the parties are unable to come to terms as to costs, I will be available to make a determination by appointment.

DAY J.
Date: August 2, 2005

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