Choice of Law (Singapore Institute of Legal Education) PDF

The Conflict of Laws A portion of the Part B Contemporary Legal Knowledge & Practice Module Marcus Teo, Sheridan Fellow, NUS Law Choice of Law Overview What are choice of law rules? The contract rule The tort rule Limits on choice of law rules What are choice of law rules? What are c...

The Conflict of Laws A portion of the Part B Contemporary Legal Knowledge & Practice Module Marcus Teo, Sheridan Fellow, NUS Law Choice of Law Overview What are choice of law rules? The contract rule The tort rule Limits on choice of law rules What are choice of law rules? What are choice of law rules? Rules selecting the law of a state (domestic or foreign) to govern a legal issue arising in Singaporean legal proceedings. Must be the law of a state (cf non-state model laws, “soft law”, etc) Applies to precise issues, rather than claims or defences (broader), or whole disputes (even broader) The law selected is called the “lex causae” (the law of the cause) or the “governing law” Two choice of law rules The contract 3-stage choice of law rule The tort “double actionability” rule and its “flexible exception” Others (not covered): Property: the law of the place where the property is situated Restitution: the law of the place of enrichment Equitable claims: the law governing the underlying relationship The contract rule Contract The 3-stage choice of law rule (Pacific Recreation): Express choice of law Implied choice of law “Objective” choice of law Rationale: party autonomy, facilitates trade and commerce Contract: Express Choice Express choice of law clauses are generally effective even if the chosen law has absolutely no connection with parties’ dispute Subject only to the limit that the choice must be “bona fide and legal” Not bona fide only “if the only purpose for choosing Singapore law was to evade the operation of [foreign] law” (Peh Teck Quee) Contract: Implied and Objective Choice Courts will consider the following factors (Pacific Recreation): Jurisdiction or arbitration clause pointing toward given country Language or terminology in contract Form of documents used in transaction Connection with a preceding transaction Currency of contract/payment Place of residence/business of parties Place of performance of the contract Parties’ actual but implied choice vs the choice reasonable businesspeople in parties’ positions would objectively have made Same factors, different weight Contract: Implied and Objective Choice A few notes on the importance of factors: The place of performance is usually very important (First Laser) Governing law of related transactions usually very important “Internationalised” language, forms and currencies usually not important (Pacific Recreation) Contract: the Reach of the 3-Stage Rule The 3-stage choice of law rule covers most issues arising out of contract disputes, like: Validity Interpretation Enforceability Incorporation of terms Mode of performance Consequences of non-performance Third-party rights But not: Formation and agency (governed by a similar 3-stage rule; Solomon Lew) Capacity (governed either by this rule or the law of the defendant’s domicile) The tort rule Tort The “double actionability” rule (Rickshaw Investments) – a tort claim will succeed if: It would succeed under the lex fori (the law of the forum, i.e. Singapore law), and It would succeed under the lex loci delicti (the law of the place of the tort/delict) Double or nothing Rationale: territorial nature of tort law/unfamiliarity of foreign torts? Tort: the lex loci delicti The general rule: the “substance of the tort test” (Man Diesel): “[t]he right approach is, when the tort is complete, to look back over the series of events constituting it and ask the question, where in substance did the cause of action arise”?” I.e., what, in essence, is the claimant complaining about, and where did it happen? Note: where substance of claimant’s complaint occurred, not where claimant suffered damage (Man Diesel) Tort: the lex loci delicti Some non-exhaustive examples (which are exhaustive for this course): Negligence: where the defendant’s allegedly negligent conduct occurred (Man Diesel) Misrepresentation: where the alleged misrepresentation was received and acted upon (JIO Minerals) Conspiracy: where the conspiracy was most connected with, given (EFT Holdings) The identity, importance and location of the conspirators; The locations where any agreements or combinations took place; The nature and places of the concerted acts or means; The location of the claimant; and The places where the claimant suffered losses. Tort: the “flexible exception” The “double actionability” rule is a default rule, and one or both limbs can be disapplied – the court can Disapply the lex fori, so that only the lex loci delicti governs; Disapply the lex loci delicti , so that only the lex fori governs; or Disapply both the lex fori and the lex loci delicti, and select the law of a more connected third state to govern Tort: the “flexible exception” Strict criteria for disapplication: the disapplied law must be “purely fortuitous” (Rickshaw) This will be rare and will usually only be found where almost all the relevant facts point in favour of one law – which will be the governing law under the flexible exception “in order that the exception might not “overwhelm” the rule, it is imperative that the exception be strictly applied.” (Rickshaw Investments) Limits on choice of law rules Three limits Procedural issues Forum mandatory rules Public policy Procedural issues Choice of law rules apply to substantive issues (e.g., contract, tort, restitution, property) not procedural issues (e.g., jurisdiction, interlocutory orders, post-trial orders). Procedural issues are governed exclusively by the lex fori (i.e., Singapore law) Procedural issues Procedural issues include : Evidential rules (e.g., rules on admissibility and weight, presumptions of law) Availability of certain remedies (Goh Suan Hee) Limitation – but this is now mostly governed by the lex causae (Foreign Limitation Periods Act 2012 s 3-4) Forum Mandatory Rules Choice of law rules are common law rules, which can be overridden by statutes expressly or impliedly so providing But express provision is rare – when should a statute be taken to impliedly override the applicable choice of rule? Choice of law rule is impliedly overridden if statute was meant to perform a ‘regulatory’ or ‘protective’ function, and was not meant to merely ‘supplement’ existing private rights rights (JIO Minerals) Test is ambiguous – just note its relevance to practice Public Policy When applying a foreign lex causae, a specific rule thereof can be disapplied (i.e., treated as if non-existent) if its enforcement would be contrary to Singaporean fundamental public policy Only fundamental public policies will qualify: “The courts are not free to refuse to enforce a foreign right at the pleasure of the judges, to suit the individual notion of expediency or fairness. They do not close their doors unless help would violate some fundamental principle of justice, some prevalent conception of good morals, some deep-rooted tradition of the common weal.” (Burswood Nominees) Public Policy Examples of “fundamental public policies”: Fundamental human rights, e.g., discriminating solely on grounds of race (Oppenheimer v Cattermole) Fundamental common law principles, e.g., the principle of separate legal personality Statutory policies? (e.g., a policy against unregulated gambling; Desert Palace) End