Tsudakoma Corp. v Global Trade Well Pte Ltd

Tsudakoma Corp, a Japanese maker of textile machines, sued Global Trade Well Pte Ltd (GTW), a Singapore commodity trader, in HC/OC 135/2022 for unpaid sums. Under a 2017 memorandum of understanding, extended by a 2018 memorandum, GTW was appointed a dealer for certain Tsudakoma products. Clause (v) of the 2017 memorandum provided that the sole and exclusive jurisdiction to decide disputes between the parties would be Japan. Three sales were made under proforma invoices, but the letters of credit GTW issued for them were void, and GTW then sent a letter dated 29 September 2021 confirming the pending payment with interest on stated terms.

When GTW still did not pay, Tsudakoma sued on the footing that the 29 September letter was a settlement agreement which GTW had breached. GTW pleaded the jurisdiction clause without filing a defence on the merits, and applied in HC/SUM 3436/2022 for a stay. The application was dismissed, and GTW appealed in Registrar's Appeal No 340 of 2022, relying only on the jurisdiction clause.

1. Whether the 2018 memorandum was a binding contract and its jurisdiction clause sufficiently certain to have effect.
2. Whether the 29 September letter was a settlement agreement outside the jurisdiction clause.
3. Whether there was a good arguable case that the clause governed disputes under the proforma invoices.
4. Whether Tsudakoma showed strong cause, such as abuse of process, to refuse a stay.

Applying Vinmar Overseas (Singapore) Pte Ltd v PTT International Trading Pte Ltd [2018] 2 SLR 1271, GTW had to show a good arguable case that the clause governed the dispute, after which Tsudakoma had to show strong cause to refuse a stay.

The 2018 memorandum was the only document both parties signed and it appointed GTW as dealer; no later dealership agreement was produced, and the invoices themselves showed Tsudakoma treated GTW as its dealer. It was binding. The clause was not too vague merely because it named no particular forum: it required disputes to be resolved in Japan, and Tsudakoma, which the court noted had drafted the memorandum, could not now resist it.

The 29 September letter was at best an acknowledgment of debt and a variation of the payment terms in the invoices. Use of the word settle did not make it a settlement agreement. Since all three sales fell within the memorandum's period and concerned the products it covered, the clause was incorporated into the invoices by course of dealing.

On strong cause, even if GTW's affidavit admitted the material allegations, it admitted at most non-payment and a prima facie breach, not final liability, since no defence on the merits had been filed. That did not reach the threshold for abuse, and the merits of the defence were no longer relevant to refusing a stay.

The High Court allowed GTW's appeal and granted a stay of the Singapore proceedings, with costs to be heard later.