NW Corporation Pte. Ltd. v HK Petroleum Enterprises Cooperation Limited

NW Corporation Pte Ltd (NWC), a Singapore company, and HK Petroleum Enterprises Cooperation Limited (HKE), a Hong Kong company, both trade in chemical products and commodities. They entered into two transactions: one for light Naphtha crude and one for Gasoil. NWC claimed that HKE failed to deliver under either and kept deposits, and sued in HC/OC 295/2023 for, among other things, the Naphtha deposit of around US$2.234m, $350,000 in liquidated damages NWC had to pay its own buyer, and $375,000 said to be the outstanding Gasoil deposit.

For the Naphtha deal, NWC relied on a written contract dated 3 March 2023 which it had sent to HKE and which HKE never signed; NWC said HKE accepted it by conduct. Its law and jurisdiction clause referred disputes to the Singapore court and "to service of process by registered mail". The Gasoil agreement had no clause on service. HKE said the Naphtha terms were in a deal recap of 19 December 2022, providing for Singapore arbitration, and that NWC was the party in breach on both deals. NWC served the papers by registered post to HKE's Kowloon address without the court's approval for service out of Singapore, relying on O 8 r 1(3) of the Rules of Court 2021. When HKE did not file a notice of intention to contest, NWC obtained default judgment HC/JUD 252/2023. HKE applied in HC/SUM 2812/2023 to set it aside.

1. Whether, in deciding if a default judgment is regular, the court may consider a contract the claimant did not rely on when obtaining it
2. Whether a clause providing for Singapore court jurisdiction and service of process by registered mail is a contract allowing service out of Singapore under O 8 r 1(3), even though it does not say where service may take place
3. Whether the Gasoil part of the judgment, admittedly irregular, should be set aside as of right
4. Whether the Naphtha part, if regular, should be set aside because HKE showed a prima facie defence

The two parts of the judgment were treated separately, as a court may set aside a default judgment in part. Whether a default judgment is regular turns on whether the claimant was procedurally entitled to it on the materials and grounds it relied on when applying. NWC relied only on the written contract, so HKE's deal recap was irrelevant to regularity.

The AR rejected HKE's argument, drawn from O 10 r 3 of the 2014 Rules, that a qualifying contract must state where process may be served. Applying the purposive approach in Tan Cheng Bock v Attorney-General [2017] 2 SLR 850, and given that the court's jurisdiction over a foreign defendant is discretionary and founded by service, O 8 r 1(3) covers any agreement by a defendant not ordinarily in Singapore to be served with Singapore process. The rule says service "out" of Singapore, not "outside", and this reading avoids wasteful technical challenges. Read with the contract naming HKE's Kowloon address, the clause was such an agreement, so the Naphtha part was regular.

For the Gasoil part, NWC accepted that service was improper. Applying Mercurine Pte Ltd v Canberra Development Pte Ltd [2008] 4 SLR(R) 907, the irregularity was fundamental: the court's jurisdiction over HKE had never been established. HKE had not delayed or taken fresh steps, and NWC had pressed on although the Gasoil agreement plainly had no service clause. No finding was made on bad faith, which was not argued.

On the Naphtha part, the parties' accounts starkly conflicted, raising at least four triable issues: which document held the terms, whether the payment terms were varied, why the cargo was not delivered, and whether NWC could recover its losses on the onward sale. HKE had pointed to documents showing cargo within specification and a charter. Refusing to set aside would be disproportionate to HKE's late filing. As to costs, the application had largely been made necessary by NWC's own procedural default.

The Assistant Registrar allowed HKE's application and set aside the whole of JUD 252. The Gasoil part was irregular and set aside as of right; the Naphtha part was regular but set aside because HKE showed a prima facie defence to all the Naphtha claims. Each party was to bear its own costs of the application.