Oakwell Engineering v. Enernorth Industries
Encyclopedia
Oakwell Engineering v. Enernorth Industries (Canada
, Court of Appeal File No. C43898, Superior Court File Nos. 04-CV-271121CM3 & 04-CV-274860 CM2) was an appeal by Enernorth Industries Inc. (Enernorth), a Canadian
company, from a judgment granting an application brought by Oakwell Engineering Limited (Oakwell), a Singapore
an company, for an order recognizing and enforcing in Ontario a judgment granted against Enernorth by the High Court
of the Republic of Singapore
on October 16, 2003 and affirmed by the Court of Appeal of the Republic of Singapore on April 27, 2004.
The case is notable because Enernorth claimed that the Singapore judgment should not be recognized in Canada because judicial standards in Singapore
were not the same as those in Canada. Among other things, Enernorth alleged that links between the judiciary, business and the executive arm in Singapore suggested a real risk of bias.
If Enernorth's appeal to the Ontario Court of Appeal had succeeded, a legal precedent would have been set for regarding judgments by Singaporean courts as unenforceable outside Singapore. According to analyst Michael Backman
, this might have had the effect of dissuading companies from using Singaporean law for arbitration and trial, and calling into question the fairness of the Singaporean legal system. However, Enernorth lost its appeals before the Court of Appeal and the Canadian Supreme Court.
, India
. However, the licenses necessary for the project were never obtained, and a new Indian government requirement to use natural gas instead of furnace oil made the project infeasible.
Oakwell commenced arbitration
against Enernorth for failure to release the funds for the project. The two sides signed a Settlement Agreement in December 1998, agreeing that the earlier contract was "terminated" and "discharged", and that Enernorth was "released" from any obligations under the contract. Oakwell sold its stake in the venture to Enernorth. Enernorth paid an initial sum to Oakwell and agreed to pay the remainder within 30 days of "financial closure".
However, Enernorth later posited that as the Indian government had not granted the licenses necessary, the project had not achieved "financial closure", and according to Enernorth's lawyers, the Agreement "did not contain any express obligation on Enernorth to procure financial closure". Enernorth sold its remaining stake to an Indian company in 2000.
of Singapore to obtain the further payment. The court found in Oakwell's favor, with Justice Lai Kew Chai
ruling that Enernorth had an "implied" obligation to obtain financial closure within six months, and awarding Oakwell the sum of S$
4.39 million. The case was appealed to Singapore's Court of Appeal
, but Chief Justice
Yong Pung How
upheld Justice Lai's ruling.
As evidence, Enernorth obtained the testimony of expert witnesses including Ross Worthington,
Adjunct Professor of Governance at the National Key Centre for Ethics, Law, Justice and Governance at Griffith University
, Australia, and Francis Seow
, former Solicitor-General of Singapore. In his affidavit
, Worthington stated that "all aspects of the governance of Singapore, including the judiciary, are carefully manipulated and ultimately controlled by a core executive of individuals who use their powers to maintain their own power and further their own political, economic, social and familial interests." In turn, Seow's affidavit noted the government's use of the Internal Security Act
and defamation suits to suppress opposition politicians and non-compliant media, citing the example of the prosecution of J.B. Jeyaretnam.
The Singapore Ministry of Law
rejected the allegations of bias on the part of the Singapore judiciary as "spurious".
Enernorth's appeal was dismissed by the Court of Appeal for Ontario by a decision dated June 9, 2006. The judgement supports Justice Gerald Day's findings that the evidence of Enernorth's expert witnesses (Ross Worthington, Nihal Jayawickrama and Francis T. Seow) was "either unreliable ... or too general to prove that there was not a fair trial in this case". It also supports the findings that "there was a lack of evidence of corruption or bias [within Singapore legal system] in private commercial cases and no cogent evidence of bias in this specific case".
Before the Supreme Court, Enernorth argued that to recognize judgments such as those from Singapore meant that Canadian judges were "mere functionaries or sheriffs for foreign legal systems, no matter how corrupt they are". Oakwell responded that it was for Canadian courts to decide on this, based on the criteria laid out by the courts. Among other things, it pointed out that Enernorth had neither alleged bias nor contested the Singapore courts' jurisdiction when the case was heard in Singapore. When the case was moved to Canada, two of Enernorth's expert witnesses – including Francis Seow – had admitted they were unaware of any commercial case from Singapore that had been attacked as unfair or biased. In January 2007, the Supreme Court, presided over by Chief Justice
Beverley McLachlin
, dismissed Enernorth's appeal and ordered it to bear the costs of the appeal.
Canada
Canada is a North American country consisting of ten provinces and three territories. Located in the northern part of the continent, it extends from the Atlantic Ocean in the east to the Pacific Ocean in the west, and northward into the Arctic Ocean...
, Court of Appeal File No. C43898, Superior Court File Nos. 04-CV-271121CM3 & 04-CV-274860 CM2) was an appeal by Enernorth Industries Inc. (Enernorth), a Canadian
Canada
Canada is a North American country consisting of ten provinces and three territories. Located in the northern part of the continent, it extends from the Atlantic Ocean in the east to the Pacific Ocean in the west, and northward into the Arctic Ocean...
company, from a judgment granting an application brought by Oakwell Engineering Limited (Oakwell), a Singapore
Singapore
Singapore , officially the Republic of Singapore, is a Southeast Asian city-state off the southern tip of the Malay Peninsula, north of the equator. An island country made up of 63 islands, it is separated from Malaysia by the Straits of Johor to its north and from Indonesia's Riau Islands by the...
an company, for an order recognizing and enforcing in Ontario a judgment granted against Enernorth by the High Court
Judicial system of Singapore
The full Judicial power in Singapore is vested in the Supreme Court as well as subordinate courts by the Constitution of Singapore. The Supreme Court consists of the Court of Appeal and the High Court. The Court of Appeal exercises appellate criminal and civil jurisdiction, while the High Court...
of the Republic of Singapore
Singapore
Singapore , officially the Republic of Singapore, is a Southeast Asian city-state off the southern tip of the Malay Peninsula, north of the equator. An island country made up of 63 islands, it is separated from Malaysia by the Straits of Johor to its north and from Indonesia's Riau Islands by the...
on October 16, 2003 and affirmed by the Court of Appeal of the Republic of Singapore on April 27, 2004.
The case is notable because Enernorth claimed that the Singapore judgment should not be recognized in Canada because judicial standards in Singapore
Judicial independence in Singapore
Judicial independence in Singapore is protected by the Constitution, statutes such as the Subordinate Courts Act and Supreme Court of Judicature Act, and the common law...
were not the same as those in Canada. Among other things, Enernorth alleged that links between the judiciary, business and the executive arm in Singapore suggested a real risk of bias.
If Enernorth's appeal to the Ontario Court of Appeal had succeeded, a legal precedent would have been set for regarding judgments by Singaporean courts as unenforceable outside Singapore. According to analyst Michael Backman
Michael Backman
Michael Backman is an Australian-born writer who now resides in London. Much of his writing relates to Asia’s economies, business, culture and politics.- Writing and ideas :...
, this might have had the effect of dissuading companies from using Singaporean law for arbitration and trial, and calling into question the fairness of the Singaporean legal system. However, Enernorth lost its appeals before the Court of Appeal and the Canadian Supreme Court.
History of case
Oakwell and Enernorth formed a joint venture in June 1997 to build two barge-mounted power stations in Andhra PradeshAndhra Pradesh
Andhra Pradesh , is one of the 28 states of India, situated on the southeastern coast of India. It is India's fourth largest state by area and fifth largest by population. Its capital and largest city by population is Hyderabad.The total GDP of Andhra Pradesh is $100 billion and is ranked third...
, India
India
India , officially the Republic of India , is a country in South Asia. It is the seventh-largest country by geographical area, the second-most populous country with over 1.2 billion people, and the most populous democracy in the world...
. However, the licenses necessary for the project were never obtained, and a new Indian government requirement to use natural gas instead of furnace oil made the project infeasible.
Oakwell commenced arbitration
Arbitration
Arbitration, a form of alternative dispute resolution , is a legal technique for the resolution of disputes outside the courts, where the parties to a dispute refer it to one or more persons , by whose decision they agree to be bound...
against Enernorth for failure to release the funds for the project. The two sides signed a Settlement Agreement in December 1998, agreeing that the earlier contract was "terminated" and "discharged", and that Enernorth was "released" from any obligations under the contract. Oakwell sold its stake in the venture to Enernorth. Enernorth paid an initial sum to Oakwell and agreed to pay the remainder within 30 days of "financial closure".
However, Enernorth later posited that as the Indian government had not granted the licenses necessary, the project had not achieved "financial closure", and according to Enernorth's lawyers, the Agreement "did not contain any express obligation on Enernorth to procure financial closure". Enernorth sold its remaining stake to an Indian company in 2000.
Court cases in Singapore
In 2002, Oakwell sued Enernorth in the High CourtJudicial system of Singapore
The full Judicial power in Singapore is vested in the Supreme Court as well as subordinate courts by the Constitution of Singapore. The Supreme Court consists of the Court of Appeal and the High Court. The Court of Appeal exercises appellate criminal and civil jurisdiction, while the High Court...
of Singapore to obtain the further payment. The court found in Oakwell's favor, with Justice Lai Kew Chai
Lai Kew Chai
Justice Lai Kew Chai was the longest-serving member of the Supreme Court Bench, having served for almost 25 years as a Judge.Born in Tanjung Malim, Perak, he received his early education at Methodist English School at his hometown in 1950, and at the Methodist Boys' School, Kuala Lumpur in...
ruling that Enernorth had an "implied" obligation to obtain financial closure within six months, and awarding Oakwell the sum of S$
Singapore dollar
The Singapore dollar or Dollar is the official currency of Singapore. It is normally abbreviated with the dollar sign $, or alternatively S$ to distinguish it from other dollar-denominated currencies...
4.39 million. The case was appealed to Singapore's Court of Appeal
Judicial system of Singapore
The full Judicial power in Singapore is vested in the Supreme Court as well as subordinate courts by the Constitution of Singapore. The Supreme Court consists of the Court of Appeal and the High Court. The Court of Appeal exercises appellate criminal and civil jurisdiction, while the High Court...
, but Chief Justice
Chief Justice of Singapore
The Chief Justice of Singapore is the highest post in the judicial system of Singapore. The Chief Justice is appointed by the President, chosen from candidates recommended by the Prime Minister. The present Chief Justice is Chan Sek Keong....
Yong Pung How
Yong Pung How
Yong Pung How, DUT . He was the former Chief Justice of Singapore, serving from 1990 to 2006. Prior to his judicial career, he was a lawyer, banker and senior government official...
upheld Justice Lai's ruling.
Superior Court of Ontario
As Enernorth had no seizable assets in Singapore, Oakwell brought the case against Enernorth to Canada. Justice Gerald Day of the Superior Court of Ontario allowed Oakwell's claim to be enforced.Ontario Court of Appeal
However, Enernorth appealed to the Ontario Court of Appeal on the grounds that the lower court erred. According to Enernorth, the Superior Court had considered only whether there was bias against Enernorth in this particular case, but enforcing the judgment would require that Oakwell prove to the court that the standard of justice in Singapore in general must "meet Canada's constitutional standards".As evidence, Enernorth obtained the testimony of expert witnesses including Ross Worthington,
Adjunct Professor of Governance at the National Key Centre for Ethics, Law, Justice and Governance at Griffith University
Griffith University
Griffith University is a public, coeducational, research university located in the southeastern region of the Australian state of Queensland. The university has five satellite campuses located in the Gold Coast, Logan City and in the Brisbane suburbs of Mount Gravatt, Nathan and South Bank. Current...
, Australia, and Francis Seow
Francis Seow
Francis Seow is a Singapore-born political dissident who is in exile from Singapore after lawsuits by the former Prime Minister Lee Kwan Yew. He was educated at Saint Joseph's Institution in Singapore and at the Middle Temple in London...
, former Solicitor-General of Singapore. In his affidavit
Affidavit
An affidavit is a written sworn statement of fact voluntarily made by an affiant or deponent under an oath or affirmation administered by a person authorized to do so by law. Such statement is witnessed as to the authenticity of the affiant's signature by a taker of oaths, such as a notary public...
, Worthington stated that "all aspects of the governance of Singapore, including the judiciary, are carefully manipulated and ultimately controlled by a core executive of individuals who use their powers to maintain their own power and further their own political, economic, social and familial interests." In turn, Seow's affidavit noted the government's use of the Internal Security Act
Internal Security Act (Singapore)
The Internal Security Act of Singapore is a law that allows the Singapore government to investigate security threats like international terrorism, foreign subversion, espionage and acts of violence or hatred using race or religion...
and defamation suits to suppress opposition politicians and non-compliant media, citing the example of the prosecution of J.B. Jeyaretnam.
The Singapore Ministry of Law
Ministry of Law (Singapore)
The Ministry of Law is a ministry of the Government of Singapore responsible for ensuring that Singapore's legal infrastructure is clear, efficacious and transparent...
rejected the allegations of bias on the part of the Singapore judiciary as "spurious".
Enernorth's appeal was dismissed by the Court of Appeal for Ontario by a decision dated June 9, 2006. The judgement supports Justice Gerald Day's findings that the evidence of Enernorth's expert witnesses (Ross Worthington, Nihal Jayawickrama and Francis T. Seow) was "either unreliable ... or too general to prove that there was not a fair trial in this case". It also supports the findings that "there was a lack of evidence of corruption or bias [within Singapore legal system] in private commercial cases and no cogent evidence of bias in this specific case".
Canadian Supreme Court
Enernorth then appealed to the Canadian Supreme Court.Before the Supreme Court, Enernorth argued that to recognize judgments such as those from Singapore meant that Canadian judges were "mere functionaries or sheriffs for foreign legal systems, no matter how corrupt they are". Oakwell responded that it was for Canadian courts to decide on this, based on the criteria laid out by the courts. Among other things, it pointed out that Enernorth had neither alleged bias nor contested the Singapore courts' jurisdiction when the case was heard in Singapore. When the case was moved to Canada, two of Enernorth's expert witnesses – including Francis Seow – had admitted they were unaware of any commercial case from Singapore that had been attacked as unfair or biased. In January 2007, the Supreme Court, presided over by Chief Justice
Chief Justice of Canada
The Chief Justice of Canada, like the eight puisne Justices of the Supreme Court of Canada, is appointed by the Governor-in-Council . All nine are chosen from either sitting judges or barristers who have at least ten years' standing at the bar of a province or territory...
Beverley McLachlin
Beverley McLachlin
Beverley McLachlin, PC is the Chief Justice of Canada, the first woman to hold this position. She also serves as a Deputy of the Governor General of Canada.-Early life:...
, dismissed Enernorth's appeal and ordered it to bear the costs of the appeal.