IN THE KUALA LUMPUR REGIONAL CENTRE FOR ARBITRATION BETWEEN JACK SMALL LTD. (CLAIMANT) AND TAN SEN IMPORTS LTD. (RESPONDENT)

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1 THE 8 TH LAWASIA INTERNATIONAL MOOT COMPETITION IN THE KUALA LUMPUR REGIONAL CENTRE FOR ARBITRATION 2013 BETWEEN JACK SMALL LTD. (CLAIMANT) AND TAN SEN IMPORTS LTD. (RESPONDENT) MEMORIAL FOR THE RESPONDENT

2 TABLE OF CONTENTS TABLE OF CONTENTS... ii TABLE OF AUTHORITIES... iv STATEMENT OF JURISDICTION... vii QUESTIONS PRESENTED... viii STATEMENT OF FACTS... ix SUMMARY OF PLEADINGS:... xi PLEADINGS... 1 I.THE CLAIMANT MAY NOT CLAIM FOR THE TORT OF BREACH OF STATUTORY DUTY A. THE TORT OF BOSD IS NOT ACTIONABLE IN MALAYSIA AS THE DOUBLE ACTIONABILITY RULE HAS NOT BEEN FULFILLED The conflict of laws rules of Malaysia, which require the application of the double actionability rule apply to this dispute Applying the double actionability rule, the tort is not actionable under the law of the forum Even if the Tribunal applies the conflict of laws rules of Singapore, the double actionability rule is still required and has not been fulfilled B. EVEN IF THE EXCEPTION TO THE DOUBLE ACTIONABILITY RULE CAN BE INVOKED SUCH THAT SINGAPORE LAW IS THE ONLY APPLICABLE LAW, THE ELEMENTS OF THE TORT ARE NOT SATISFIED The Claimant does not have a private right of action In any event, the Respondent did not breach the ESA II.THE CLAIMANT DOES NOT HAVE A VALID CLAIM UNDER THE TORT OF PASSING OFF A. THE DOUBLE ACTIONABILITY RULE HAS NOT BEEN FULFILLED B. THE ELEMENTS OF THE TORT OF PASSING OFF HAVE NOT BEEN FULFILLED The Respondent accurately represented its products In any event, the Claimant has not suffered damage as a result of the Respondent s misrepresentation III.THE TRIBUNAL SHOULD NOT GRANT A PERMANENT INJUNCTION A. THE TRIBUNAL DOES NOT HAVE THE POWER TO GRANT A PERMANENT INJUNCTION The award of a permanent injunction is contrary to the Parties intentions to swiftly resolve their dispute at low cost The award of a permanent injunction contradicts the arbitral system which Parties have elected to arbitrate under ii

3 B. EVEN IF THE TRIBUNAL HAS THE POWER TO GRANT A PERMANENT INJUNCTION, IT SHOULD NOT BE GRANTED IN THIS CASE C. THE TRIBUNAL S AWARD OF A PERMANENT INJUNCTION WILL NOT BE ENFORCED IN SINGAPORE IV.THE TRIBUNAL SHOULD NOT ESTABLISH A PENALTY FOR FUTURE SALES OF PRODUCTS CONTAINING THE FUR OF ENDANGERED SPECIES A. THE TRIBUNAL DOES NOT HAVE THE POWER TO ESTABLISH A PENALTY The Parties did not confer on the Tribunal the power to establish a penalty The MAA does not provide the Tribunal a power to order penalties B. EVEN IF THE TRIBUNAL HAS THE POWER TO AWARD SUCH A PENALTY, A PENALTY SHOULD NOT BE ESTABLISHED IN THIS CASE C. THE AWARD OF SUCH A PENALTY IS NOT ENFORCEABLE IN SINGAPORE BECAUSE IT IS CONTRARY TO PUBLIC POLICY The power to punish lies exclusively with the State The Tribunal s punishment of the Respondent through a penalty violates Singapore s basic notion of justice and contradicts public interest PRAYER FOR RELIEF iii

4 TABLE OF AUTHORITIES Other Authorities Asian Regional Report of the 46 th CITES Standing Committee Meeting 7 CITES Notification to the Parties No. 2012/036 7 Singapore Parliamentary Debates, Official Report (17 Jan 2006) 19 Singapore Parliamentary Debates, Official Report (17 January 2006) vol 80 at cols 2184 (Heng Chee How, Minister of State for National Development) 7 Statutes and Treaties Companies Act (Cap 50, 2006 Rev Ed) 6 Endangered Species (Import and Export) Act (Cap 92A, 2008 Rev Ed) 1, 17 International Arbitration Act (Cap 143A, 2002 Rev Ed) 18, 23 Kuala Lumpur Regional Centre for Arbitration Fast Track Rules vii, 2, 13 Malaysian Arbitration Act Rules of Court (Cap 322, R 5, 2004 Re Ed) 15 Specific Relief Act UNIDROIT Principles United Nations Convention on International Trade in Endangered Species of Wild Fauna and Flora ix, 6 Arbitral Awards ICC Case No Malaysia Cases Chan Kwon Fong v Chan Wah [1977] 1 LNS 12 2, 3 Datuk Bandar Majlis Bandaraya Shah Alam & Anor v Yusuf Awang & [2007] 4 CLJ Extreme System Sdn Bhd v Ho Hup Construction Company BHD & Ors No2 [2010] 1 LNS Hamzah & Yeang Sdn Bhd v Lazar Sdn Bhd [1985] 2 MLJ M G G Pillai v Tan Sri Dato Vincent Tan Chee Yioun [1995] 2 MLJ Sababumi (Sandakan) Sdn Bhd v Datuk Yap Pak Leong [1998] 3 CLJ Seet Chuan Seng & Anor v Tee Yih Jia Foods Manufacturing Pte Ltd[1994] 2 MLJ Syarikat Zamani Hj Tamin Sdn Bhd & Anor v Yong Sze Fun & Anor [2006] 5 MLJ Singapore Cases iv

5 Afro-Asia Shipping Company (Pte) Ltd v Da Zhong Investment Pte Ltd [2004] 2 SLR(R) Asia Pacific Publishing Pte Ltd v Pioneers & Leaders (Publishers) Pte Ltd [2011] 4 SLR 10, 11 Loh Luan Choo Betsy v Foo Wah Jek [2005] 1 SLR(R) 64 5 PT Asuransi Jasa Indonesia (Persero) v Dexia SA [2007] 1 SLR(R) Rickshaw Investments Ltd and another v Nicolai Baron von Uexkull [2007] 1 SLR(R) 377 3, 4 Skandinaviska Enshilda Banken AB (Publ), Singapore Branch v Asia Pacific Breweries (Singapore) Pte Ltd [2009] 4 SLR(R) UK Cases Boys v Chaplin [1971] AC Chandris v Isbrandtsen-Moller [1951] 1 KB Chocosuisse Union des Fabricants Suisses de Chocolat v Cadbury Ltd [1999] R.P.C Erven Warnink BV v J Townend & Sons (Hull) LTD [1979] AC Gouriet v Union of Post Office Workers [1978] AC Lonrho Ltd v Shell Petroleum Co Ltd (No 2) [1982] AC Red Sea Insurance Co Ltd v Bouygues SA ( Red Sea ) [1995] 1 AC Rookes v Barnard [1964] AC USA Cases Broughton v Cigna Healthplans 21 Cal. 4 th 1066 (1999) 18 Garrity v. Lyle Stuart, Inc ( Garrity), 353 N.E.2d 793 (N.Y. 1976) 24, 25 Mastrobuono v. Shearson Lehman Hutton, Inc ( Mastrobuono ) 514 U.S. 52 (U.S. S.Ct. 1995)25 Scholarly Work and Articles Adrian Briggs Choice of Choice of Law (2003) L.M.C.L.Q Albert Jan van den Berg, The New York Arbitration Convention of 1958: Towards a Uniform Judicial Interpretation (1981) Alexis Mourre, Judicial Penalties and Specific Performance in International Arbitration, in Interest, Auxiliary and Alternative Remedies in International Arbitration, Dossiers ICC Institute of World Business Law, eds Filip De Ly and Laurent Lévy (Paris: ICC Publishing, 2008) Blackaby et al, Redfern and Hunter on International Arbitration (Oxford University Press, 5th ed 2009)... 12, 19, 25 v

6 Carole Malinvaud, Non-pecuniary Remedies in Investment Treaty and Commercial Arbitration in 50 Years of the New York Convention: ICCA International Arbitration Conference, ICCA Congress Series, 2009 Dublin Volume 14 (Albert Jan van den Berg Ed) (Kluwer Law International 2009) Chan Leng Sun SC, Singapore Law on Arbitral Awards (Academy Publishing, 2011).. 15, 18, 24 D.Dobbs, Handbook on the Law of Remedies 204 (1973) Gary Born, International Commercial Arbitration (Kluwer Law International, 3 rd Ed, 2009)2, 13, 14, 15, 17, 26 Gary Chan Kok Yew, The Law of Torts in Singapore (Academy Publishing, 2011)... 5, 24 Halsbury s Laws of Malaysia vol (3) (LexisNexis, 2009)...3 Jeff Waincymer, Procedure and Evidence in International Arbitration (Kluwer Law International 2012)... 20, 22 Jeffrey Pinsler, Civil Practice in Singapore and Malaysia, (2013) < &catid=sgcat4&prodid=prod950252> Micheal J Mustill & Stewart C Boyd, Law and Practice of Commercial Arbitration in England (Butterworths, 2 nd Ed, 1989)... 13, 14, 15, 24 Nicholas Poon, Striking a balance between public policy and arbitration policy in international commercial arbitration [2012] SJLS Richard M. Mosk, Injunctions in Contemporary Issues in International Arbitration and Mediation: The Fordham Papers 2007 (Arthur W. Rovine ed) Martinus Nijhoff Publishers, 2007) Sigvard Jarvin, Non-Pecuniary Remedies: The Practices of Declaratory Relief and Specific Performance in International Commercial Arbitration in Contemporary Issues in International Arbitration and Mediation: The Fordham Papers 2007 (Arthur W. Rovine ed) (Martinus Nijhoff Publishers, 2007) Sundaresh Menon SC, Rethinking Arbitrability in the Context of Corporate Disputes, paper presented in the Mauritius International Arbitration Conference , 26 Troy E. Elder, The Case Against Arbitral Awards of Specific Performance in Transnational Commercial Disputes, Arbitration International, (Kluwer Law International 1997 Vol 13 Issue 1) vi

7 STATEMENT OF JURISDICTION Jack Small Ltd ( Claimant ) and Tan Sen Chinese Emporium ( Respondent ) have agreed to submit the present dispute to arbitration in accordance with the Kuala Lumpur Regional Centre for Arbitration Fast Track Rules ( KLRCA Rules ). The validity and enforceability of the arbitration agreement has not been disputed by the parties. vii

8 QUESTIONS PRESENTED 1. Whether the claims in tort are actionable: (a) whether the double actionability rule has been fulfilled; and (b) whether the rule may be displaced such that Singapore law governs this dispute. 2. Whether the Respondent is liable for the tort of breach of statutory duty: (a) whether the Claimant has a private right of action for the Respondent s alleged breach of the Endangered Species Act; and (b) whether the Respondent breached the Endangered Species Act by unknowingly selling products made from the fur of endangered animals. 3. Whether the Respondent is liable for the tort of passing off: (a) whether the Claimant shares the goodwill of synthetic fur products; (b) whether the Respondent misrepresented its real fur products as synthetic fur products; and (c) whether the Claimant suffered damage as a result of the Respondent s misrepresentation. 4. Whether the Tribunal should award a permanent injunction against the Respondent for its breach of statutory duty. 5. Whether the Tribunal should establish a penalty on the Respondent for future sale of products containing the fur of animals classified as Endangered Species. viii

9 STATEMENT OF FACTS 1. The Claimant is a department store located in Singapore, primarily engaged in selling fur (both real and faux) products. Fur products account for 60% of its total sales and more than 90% of its profits. The Claimant is currently run by Mr. Small, whose family has run the business for more than 70 years. 2. The Respondent is a department store located in Singapore,that advertises its products internationally. International sales account for 25% of its profits. The Respondent also sells fur products, both real and faux. The Respondent s competitively-priced read fur products compete directly with the Claimant s faux fur products. 3. The dispute between the Parties arose when the Claimant filed complaints against the Respondent to the Enforcement Support Office of the CITES Secretariat ( the Secretariat ). CITES refers to the United Nations Convention on International Trade in Endangered Species of Wild Fauna and Flora, an international agreement between governments to protect wild animals and plants. CITES has been implemented in Singapore through the Endangered Species (Impart and Export) Act ( ESA ). The ESA prohibits the sale of products made from endangered animals. 4. The Claimant s complaints were prompted by its suspicion that the Respondent was selling real fur products. The Claimant became suspicious when it was told by customers that the Respondent sold a higher quality product at a lower price, resulting in the Claimant s loss of customers to the Respondent. The Claimant then lodged several complaints with the Secretariat. ix

10 5. The Secretariat, acting on the Claimant s multiple complaints, examined the Respondent s products. The Respondent has no record of breaching the ESA. Unfortunately, during one examination by the Secretariat, it was found that some of the products it sold were made from real fur, including the fur of the Asian Golden Cat. The Asian Golden Cat can be found in the wild in Southern China. It is an endangered species protected under CITES and the ESA. The Respondent believed that the products it sold were made from domestically raised animals as its China-based supplier, China Fur, had assured the Respondent that the products were made from the pelts of Asian Cats. Since the investigation by the Secretariat, the Singapore government has not taken any further action against the Respondent. 6. The Claimant also asserts that the products sold by the Respondent have been mislabelled as faux fur products when they are actually real fur products. The Respondent does sell faux fur products, which it conspicuously identifies as either simulated fur or artificial fur. The products examined however, were not identified in this manner. The Claimant s assertion of mislabelling is based on the labels, affixed to each of the products in question, which claim that the products have the touch feel and smell of real fur. The Respondent denies that this amounts to mislabelling, as the slogan accurately describes the products qualities. 7. The Parties have agreed to submit the dispute to binding arbitration in accordance with the KLRCA Rules. x

11 SUMMARY OF PLEADINGS: A. The claims in tort are not actionable as the double actionability rule has not been fulfilled Absent Parties agreement, the Tribunal may apply the conflict of laws rules it considers applicable to determine the law applicable to the dispute. The Tribunal should apply the conflict of laws rules of Malaysia since this is consistent with the Parties intention. The conflict of laws rules of Malaysia requires the application of the double actionability rule for actions in tort. The double actionability rule is not fulfilled on the facts. Alternatively, The Tribunal may apply the conflict of laws rules of Singapore to this dispute. The conflict of laws rules of Singapore requires the application of the double actionability rule and its exception. Both the double actionability rule and its exception are not satisfied. Accordingly the Claimants may not bring the claims in tort. B. Even if Singapore law applies the Respondent is not liable for the tort of breach of statutory duty If the Tribunal considers that the exception to the double actionability rule applies such that Singapore law governs this dispute, the Respondent is still not liable as the elements of the tort have not been satisfied. First, the Claimant does not have a private right of action as it is not the class protected by the ESA and further, parliament did not intend to confer a private right of action for a breach of the ESA. Second, the Respondent has not breached the ESA. C. The Respondent is not liable for the tort of passing off xi

12 The Respondent is not liable in passing off because first, the Respondent accurately represented its products. Second, the Claimant has not suffered damage as a result of the Respondent s misrepresentation. D. The Tribunal should not grant a permanent injunction This Tribunal should not award an injunction because, first, the Tribunal does not have the power to grant a permanent injunction. Such power is contrary to the Parties intention to resolve the dispute swiftly and is not consistent with the election of the KLRCA Rules. Second, the Tribunal should not grant an injunction as this is inconsistent with the Specific Relief Act of Malaysia. Third, Singapore courts will not enforce the award of a permanent injunction as the request for an injunction to prevent the Respondent from breaching its statutory duty is not arbitrable. E. The Tribunal should not establish a penalty for future sales of products containing the fur of endangered species. The Tribunal should not establish a penalty because first, the Tribunal does not have the power to establish a penalty. The power was not conferred by the Parties or the Malaysian Arbitration Act. Second, the Tribunal should not establish a penalty as the facts do not warrant the imposition of punitive measures. Third, the award of a penalty is not enforceable in Singapore as the power to punish does not lie with the Tribunal and such an award violates Singapore s basic notion of justice and contradicts public interest. xii

13 PLEADINGS I. THE CLAIMANT MAY NOT CLAIM FOR THE TORT OF BREACH OF STATUTORY DUTY. 1. The Claimant may not claim under the tort of breach of statutory duty ( BOSD ) for the Respondent s alleged breach of the duty imposed by the Endangered Species (Import and Export) Act of Singapore ( ESA ) 1 because: (A) The tort of BOSD is not actionable in Malaysia as the double actionability rule has not been fulfilled; and (B) Even if the exception to the double actionability rule can be invoked such that Singapore law is the only applicable law, the elements of the tort of BOSD have not been satisfied. A. THE TORT OF BOSD IS NOT ACTIONABLE IN MALAYSIA AS THE DOUBLE ACTIONABILITY RULE HAS NOT BEEN FULFILLED. 2. The tort of BOSD is not actionable in Malaysia because: (1) The conflict of laws rules of Malaysia, which require the application of the double actionability rule, apply to this dispute; (2) Applying the double actionability rule, the claim in BOSD is not actionable under the law of the forum; and (3) Even if the Tribunal applies the conflict of laws rules of Singapore, the double actionability rule is still required and has not been fulfilled. 1. The conflict of laws rules of Malaysia, which require the application of the double actionability rule apply to this dispute. 1 Endangered Species (Import and Export) Act (Cap 92A, 2008 Rev Ed). 1

14 3. The Parties have selected the KLRCA Rules to apply to this dispute. Pursuant to Article 6(1) of the KLRCA Rules, the seat of Arbitration is Malaysia. Hence, the Malaysian Arbitration Act ( MAA ) applies The Parties have not agreed on the law applicable to the dispute. 3 Article 6 allows the Tribunal to determine the law applicable to the dispute by applying the conflict of law rules which it considers applicable [emphasis added] absent Parties agreement. 5. The Tribunal should consider the conflict of law rules of Malaysia to be applicable to this dispute. This respects the will of Parties to the dispute as they are able to freely choose the seat of arbitration and therefore indirectly select the applicable conflict of laws rule. 4 The Parties have chosen Malaysia as the seat of the arbitration through their adoption of the KLRCA Rules. 5. Hence, applying the conflict of laws rules of the Malaysia to determine the law applicable to the dispute reflects the Parties intention. 6 The Tribunal should thus apply the conflict of law rules of Malaysia to determine the law applicable to this dispute. 6. Applying the conflict of laws rules of Malaysia, a claim has to be characterised before the choice of law rule may be applied to determine the law applicable to the dispute. 7 A claim in BOSD is characterised as a tort under the law of the forum. 8 The choice of law rule for torts committed abroad is the double actionability rule. 9 The rule mandates that the tort be actionable under both the law of the forum and the law of the place where the wrong was 2 Arbitration Act 2005 (No 646 of 2005) (M sia). 3 Clarifications-1 p3. 4 Gary Born, International Commercial Arbitration (Kluwer Law International, 3 rd Ed, 2009) at p Art 6(1) KLRCA Rules. 6 Supra n 4, at p Chan Kwon Fong v Chan Wah [1977] 1 LNS 12 at p Extreme System Sdn Bhd v Ho Hup Construction Company BHD & Ors No2 [2010] 1 LNS Supra n 7. 2

15 committed. 10 The exception to the double actionability rule, which allows the law of the country only fortuitously connected to the dispute to be displaced, has not been applied in Malaysia and thus does not form part of the conflict of laws rules of Malaysia Applying the double actionability rule, the tort is not actionable under the law of the forum. 7. The tort of breach of statutory duty is not actionable under the law of the forum (domestic law of Malaysia), as the Malaysian incorporation of the Convention on International Trade in Endangered Species of Wild Fauna and Flora ( CITES ) viz, the International Trade in Endangered Species Act 2008 ( ITESA ) only outlaws the import of scheduled species into Malaysia. However, the alleged act involves importing a scheduled species listed under the ESA into Singapore. Since the ITESA only prohibits importing scheduled species into Malaysia, there has been no breach of the ITESA and thus, the alleged act is not actionable under the domestic law of Malaysia. 12 Accordingly, the double actionability rule has not been satisfied as the tort is not actionable under the law of the forum (domestic law of Malaysia). 3. Even if the Tribunal applies the conflict of laws rules of Singapore, the double actionability rule is still required and has not been fulfilled. 8. Even if the Tribunal decides to apply the conflict of law rules of Singapore, the double actionability rule must be satisfied. This is because, under the conflict of laws rules of Singapore, the choice of law rule for torts is the double actionability rule. 13 The rule 10 Supra n Halsbury s Laws of Malaysia vol (3) (LexisNexis, 2009) at para[90.173]. 12 Adrian Briggs Choice of Choice of Law (2003) L.M.C.L.Q 12 at p Rickshaw Investments Ltd and another v Nicolai Baron von Uexkull [2007] 1 SLR(R) 377 ( Rickshaw ). 3

16 mandates that the tort must be actionable under both the law of the forum and the law of the place where the wrong was committed The double actionability rule has not been fulfilled, as the tort is not actionable under the law of the forum. (see [7] above) 10. However, under the conflict of law rules of Singapore, an exception is available to the rule where a country s law is only fortuitously connected to the dispute. When the exception is invoked, the law of the fortuitously connected country will not be applied. 15 This exception is inapplicable on the facts. The standard required for the exception to apply is high and the double actionability rule should be applied in most cases. 16 The courts should be slow to apply this exception unless the displaced law is purely fortuitous and would result in injustice and unfairness if applied The law of the forum is not fortuitous. Fortuitous ordinarily means happening by chance rather than intention. 18 In Boys v Chaplin, 19 the court stated that the exception will be invoked in order not to fix liability on two people according to a locality with which they have no more than a temporary, accidental and perhaps unintended presence [emphasis added]. 20 The Parties have specifically chosen the KLRCA Rules to govern the arbitration. Since Art 6(1) of the KLRCA Rules specifically state that the seat of arbitration is Malaysia, it is clear that the Parties intended to select the law of the Malaysia to apply to this dispute. Therefore, even if the Tribunal applies the conflict of laws rules of Singapore, the exception 14 Id, at [53]. 15 Red Sea Insurance Co Ltd v Bouygues SA ( Red Sea ) [1995] 1 AC 190 at 207; Id, at [56]-[57]. 16 Red Sea, id, at Supra n 13, at [58]. 18 Oxford Dictionaries < (accessed 15 July 2013). 19 Boys v Chaplin [1971] AC Id, at p

17 to the double actionability rule cannot be invoked and accordingly, the double actionability rule is not satisfied. B. EVEN IF THE EXCEPTION TO THE DOUBLE ACTIONABILITY RULE CAN BE INVOKED SUCH THAT SINGAPORE LAW IS THE ONLY APPLICABLE LAW, THE ELEMENTS OF THE TORT ARE NOT SATISFIED. 12. The Claimant is unable to bring an action against the Respondent for a claim in BOSD because: (1) The Claimant does not have a private right of action; and (2) In any event the Respondent did not breach the ESA. 1. The Claimant does not have a private right of action. 13. The Claimant does not have a private right of action under Singapore domestic law because: (1) The Claimant does not fall within the limited class that the statute seeks to protect; and (2) Parliament did not intend for a breach of the statutory duty under the ESA to give rise to a private right of action. These two elements must be satisfied for a breach of a statutory duty to give rise to a private right of action in Singapore. 21 a. The Claimant does not fall within the limited class that the statute seeks to protect. 14. The Claimant does not fall within the limited class that the statute seeks to protect as the ESA was enacted for the protection of the endangered animals. In order to have a private right of action, the Claimant must show that he falls within the limited class that the statute seeks to protect. 22 This was established in Skandinaviska Enshilda Banken AB (Publ), Singapore 21 Loh Luan Choo Betsy v Foo Wah Jek [2005] 1 SLR(R) 64 at [25]. 22 Gary Chan Kok Yew, The Law of Torts in Singapore (Academy Publishing, 2011) at para

18 Branch v Asia Pacific Breweries (Singapore) Pte Ltd ( Skandinaviska ), 23 where the Singapore High Court referred to a ministerial statement made in Parliament that the object of a specific provision in the Companies Act 24 was to protect public shareholders, and therefore excluded the plaintiff bank from its protection The ESA was enacted to protect the endangered species listed in the ESA. This is evident from the Preamble of the ESA, which states that the Act was enacted to give effect to CITES. CITES aims to protect the endangered species of flora and fauna from over-exploitation by regulating the international trade in wildlife. 26 Therefore, the limited class protected by the ESA is the endangered species listed in the ESA. Since the Claimant does not fall within this class, it does not have a private right of action. b. Parliament did not intend for a breach of the statutory duty under the ESA to give rise to a private right of action. 16. Parliament did not intend for the breach of a statutory duty under the ESA to give rise to a private right of action because the statute itself provides for means of enforcing its provisions to adequately protect the endangered species. 17. Where criminal sanctions are provided for the breach of a statute, there is usually no private right of action. In Skandinaviska, 27 the Singapore High Court applied this rule established by the House of Lords in Lonrho Ltd v Shell Petroleum Co Ltd (No 2), 28 and held that since a specific provision of the relevant statute stipulated for a fine and imprisonment for the breach 23 Skandinaviska Enshilda Banken AB (Publ), Singapore Branch v Asia Pacific Breweries (Singapore) Pte Ltd [2009] 4 SLR(R) 788 at [210]. 24 Section 199(2A), Companies Act (Cap 50, 2006 Rev Ed). 25 Supra n 23, at [208] [209]. 26 Preamble of CITES. 27 Supra n 23, at [210]. 28 Lonrho Ltd v Shell Petroleum Co Ltd (No 2) [1982] AC

19 of that provision, there was no parliamentary intention to confer a civil remedy against the company for breach of statutory duty. 18. Section 4 of the ESA is to be enforced by hefty criminal sanctions. Any individual who contravenes section 4 of the ESA is liable to be fined up to SGD per scheduled species and/or jailed up to 2 years. Hence, since there is a specific provision dealing with the consequence of a breach of section 4, Parliament could not have intended for the breach of section 4 to give rise to a private right of action 19. Further, Parliament could not have intended for a private right of action to arise from a breach of the ESA as the existing enforcement provisions accord more than adequate protection to the endangered species. In the Order for the Second Reading 29 of the Endangered Species (Import and Export) Bill, Parliament recognised that the previous maximum penalty of SGD 5000 was an inadequate deterrence. Hence, the ESA was amended to provide for a ten-fold increase in the maximum penalty. Coupled with other amendments conferring additional powers of arrest and investigation on the AVA, the ESA now provides for adequate means of protecting the endangered species. 20. The effectiveness of the ESA is evident, as Singapore received a Category I classification under the CITES National Legislation Project, 30 which indicates that Singapore s legislation met all the requirements for the implementation of CITES. 31 Since the provisions of the ESA are fulfilling its purpose of protecting the endangered animals, Parliament did not intend for a breach of the ESA to give rise to a private right of action. 29 Singapore Parliamentary Debates, Official Report (17 January 2006) vol 80 at cols 2184 (Heng Chee How, Minister of State for National Development). 30 Asian Regional Report of the 46 th CITES Standing Committee Meeting, 2002, p CITES Notification to the Parties No. 2012/036, at para 2. 7

20 2. In any event, the Respondent did not breach the ESA. 21. In order to establish the tort of BOSD, the Claimant must show that the Respondent breached the duty imposed by the ESA. The Respondent has not breached this duty because: (a) The defence under section 6 can be pleaded with respect to the offence committed under section 4(1) of the ESA; and (b) There was no offence committed under section 4(2) of the ESA. a. The defence under section 6 can be pleaded with respect to the offence committed under section 4(1) of the ESA. 22. It is acknowledged that the Respondent did import a scheduled species into Singapore without a valid permit in violation of section 4(1). However, the Respondent is able to raise a defence under section 6 of the ESA. In order to plead the defence, both sections 6(1)(a) and 6(1)(b) must be satisfied. 23. Under section 6(1)(a) of the ESA, the Respondent must establish that the commission of the offence was due to the act or default of another person or to some other cause beyond his control. Section 6(1)(a) has been satisfied. China Fur Import & Export Company ( China Fur ) was the company that supplied the products in this dispute to the Respondent. The offence under section 4(1) was committed due to the default of China Fur. China Fur represented to the Respondent that the products were made from Asian Cats. China Fur was thus aware that the products were made from real fur. Hence, it was under an obligation to ensure that its products met the requirements of CITES, especially since China Fur is located in China and China is a signatory to CITES. China Fur has thus committed an offence by exporting products made from the fur of the Asian Golden Cat. Accordingly, the Respondent contravened section 4(1) of the ESA due to the default of China Fur. 8

21 24. Under section 6(1)(b), the Respondent must show that it had taken all reasonable precautions and exercised all due diligence to avoid the commission of such an offence by himself. The Respondent sought to ascertain the origins of the fur products in question before making an order for them. It was told by China Fur that the products were made from the pelts of the Asian Cats. 32 The term Asian Cats could refer to a large number of cat breeds, including the Asian Leopard Cat, the Kennbury Asian Cat, and the Asian Wild Cat, all of which are not endangered species. Further, the Respondent s due diligence on China Fur also revealed that China Fur had no prior record of selling endangered animals. Therefore, the Respondent s inquiry constitutes sufficient due diligence as it was not required to ascertain if the specific Asian Cat referred to an endangered species, and accordingly section 6(1)(b) is satisfied. 25. Hence, the Respondent has a valid defence to the offence committed under section 4(1) of the ESA. b. There was no offence committed under section 4(2) of the ESA. 26. Pursuant to section 4(2) of the ESA, any person who sells or advertises for sale any scheduled species which have been imported in contravention of section 4(1) will be guilty of an offence. However, as established above, the Respondent has not contravened section 4(1) of the ESA. Consequently, there can be no breach of section 4(2) of the ESA. II. THE CLAIMANT DOES NOT HAVE A VALID CLAIM UNDER THE TORT OF PASSING OFF. A. THE DOUBLE ACTIONABILITY RULE HAS NOT BEEN FULFILLED. 32 Clarifications-1 p1. 9

22 27. Passing off has been characterized as a tort under the domestic laws of both Singapore and Malaysia. 33 As stated above at [5], the Tribunal should apply the conflict of law rules of Malaysia to determine the law applicable to the dispute. The conflict of law rules of Malaysia require the double actionability rule to be satisfied before a claim in tort can be brought in Malaysia. The double actionability rule has not been satisfied because the elements of the tort of passing off, which is identical under Singapore and Malaysian law, have not been fulfilled (discussed below at [29] [30]). B. THE ELEMENTS OF THE TORT OF PASSING OFF HAVE NOT BEEN FULFILLED. 28. The elements of the tort of passing off have not been fulfilled because: (A) The Respondent accurately represented its products; and (B) In any event, the Claimant has not suffered any damage as a result of the Respondent s misrepresentation. 1. The Respondent accurately represented its products. 29. The Respondent made no misrepresentation. Misrepresentation involves marketing goods in a way which will lead significant sections of the public to be under the impression that those goods have attributes which they do not truly possess. 34 Whether misrepresentation took place is to be judged from the point of view of the Claimant s potential customers. 35 While misrepresentations can be implied, 36 no such implication arises on the facts. All synthetic fur products the Respondent sold are conspicuously identified as either simulated fur or 33 Syarikat Zamani Hj Tamin Sdn Bhd & Anor v Yong Sze Fun & Anor [2006] 5 MLJ 262 (MY); Asia Pacific Publishing Pte Ltd v Pioneers & Leaders (Publishers) Pte Ltd [2011] 4 SLR ( Asia Pacific ). 34 Chocosuisse Union des Fabricants Suisses de Chocolat v Cadbury Ltd [1999] R.P.C Seet Chuan Seng & Anor v Tee Yih Jia Foods Manufacturing Pte Ltd[1994] 2 MLJ 770 at [15]. 36 Idem. 10

23 artificial fur. 37 The disputed products contained no such label. They were only labeled as having the touch, feel and smell of real fur. 38 In this context, the label would simply be interpreted by potential customers as a representation as to the product s quality, not origin. It merely assures the potential buyer that the products retain the original touch, feel and smell of real fur despite the production process that could have taken away from the authenticity of original fur. Hence, no misrepresentation has been made by the Respondents. 2. In any event, the Claimant has not suffered damage as a result of the Respondent s misrepresentation. 30. Even if misrepresentation took place, the Claimant has not suffered damage as a result of the Respondent s misrepresentation. Goodwill may be damaged in two ways. Firstly, it may be depreciated when the representor sells inferior counterfeit products under the claimant s name. 39 Secondly, goodwill may be damaged when the representor appropriates part of the sales of the product from the claimant. 40 When the period of misrepresentation has ended and the claimant is seeking damages instead of an injunction, the claimant is required to prove actual damage to his goodwill. 41 It is insufficient to infer that the plaintiff s goodwill has suffered damage from the fact that the parties were in a common field of activity On the facts, given the abundance of possible reasons for the Claimant s fall in sales, the Tribunal should not conclude that the losses were the result of damage to the Claimant s goodwill. Demand for luxury goods like fur products in general might have fallen. Alternatively, demand for the Claimant s products may have been diverted to the Claimant s 37 Clarifications-1 p3. 38 Clarification-1 p2. 39 Erven Warnink BV v J Townend & Sons (Hull) LTD [1979] AC 731 at Idem. 41 Asia Pacific, supra n 33, at [138]. 42 Id, at [139]. 11

24 105 other competitors. 43 Even if demand for the Claimant s products had been diverted to the Respondent, it could be for reasons other than the Respondent s misrepresentation. Customer s preference for the Respondent s goods may be attributed to its superior advertising which it conducts internationally in several other Asian countries (including Japan) and the United States. 44 Hence, attributing the Claimant s loss to the Respondent s misrepresentation is mere speculation and thus the Tribunal cannot find the Respondent liable for the Claimant s losses. III. THE TRIBUNAL SHOULD NOT GRANT A PERMANENT INJUNCTION. 32. The Respondent submits that even if the Claimant succeeds in its claim under the tort of BOSD, the Tribunal should nevertheless refuse to grant a permanent injunction. This is because: (A) the Tribunal does not have the power to do so; (B) Even if the Tribunal has the power to grant a permanent injunction, it should not be granted in this case; and (C) In any event, such an award will not be enforced in Singapore. A. THE TRIBUNAL DOES NOT HAVE THE POWER TO GRANT A PERMANENT INJUNCTION. 33. The Tribunal does not have the power to grant a permanent injunction in the present case because neither the Parties nor the MAA conferred on the Tribunal the power to grant a permanent injunction. A tribunal s remedial powers are conferred by the parties or the law of the forum. 45 Here, the arbitration agreement and the MAA are both silent on the issues of remedy. No agreement to grant the Tribunal the power to order injunctions can be implied 43 < (accessed 15 July 2013). 44 Clarification-1 p1. 45 Blackaby et al, Redfern and Hunter on International Arbitration (Oxford University Press, 5th ed 2009), at p 533, para

25 because: (1) The award of a permanent injunction is contrary to the Parties intentions to swiftly resolve their dispute at low costs; and (2) The award of a permanent injunction contradicts the arbitral system which the Parties have elected to arbitrate under. 1. The award of a permanent injunction is contrary to the Parties intentions to swiftly resolve their dispute at low cost. 34. The Parties did not impliedly grant the Tribunal the power to grant permanent injunctions as to do so contradicts their intention to resolve their dispute swiftly and at low cost. A term is implied to give effect to the presumed intention of parties if the term is something so obvious that if the term was suggested to the parties by an officious bystander while they were negotiating, the parties would respond that the term was of course included. 46 The agreement must also be necessary for business efficacy. 47 Thus, in interpreting their mandate, a tribunal must take into account the whole commercial background of the dispute, including the steps parties have taken before the arbitrators were appointed, 48 before discerning the Parties presumed intentions. Ultimately, a tribunal may only order remedies which are consistent with the consensual status of the arbitral process Here, the Parties have agreed to resolve the disputes swiftly and at low cost. 50 They also chose to arbitrate under the KLRCA Fast Track rules, which were specially designed for parties who wish to obtain an award in the fastest way with minimal costs. 51 Art 12(1) 46 Sababumi (Sandakan) Sdn Bhd v Datuk Yap Pak Leong [1998] 3 CLJ 503 at p 506, per Peh Swee Chin FCJ, p , per Zakaria Yatim FCJ. 47 Idem. 48 Micheal J Mustill & Stewart C Boyd, Law and Practice of Commercial Arbitration in England (Butterworths, 2 nd Ed, 1989) at p Supra n [4], at p Clarifications-1 p4. 51 KLRCA Rules at p

26 specifically cites the overriding interests of an expeditious determination of the dispute(s) in prohibiting requests for interim awards. 36. A permanent injunction contradicts the Parties consensus to resolve their disputes swiftly and at low cost. Once the tribunal renders its award, it becomes functus officio, 52 unable to oversee the enforcement of this long-term remedy. This is a problem that even proponents of the remedy sees force in. 53 For example, the Parties might disagree over whether an injunction has been complied with, resulting in even more disputes that require either more arbitration or traditional litigation to resolve. 54 This delays the resolution of the dispute and escalates costs. In this regard, Mustill & Boyd have commented that it is doubtful whether the power to make awards in the form of injunctions is to be implied in the usual forms of arbitration agreements. 55 The present arbitration agreement is merely a usual form of arbitration agreement, as it was borrowed from a contract that the Claimant uses in some of its other contracts. 56 The Parties have also agreed to resolve this dispute swiftly and at low costs. Accordingly, the Parties did not intend to confer on the Tribunal the power to grant injunctions. 2. The award of a permanent injunction contradicts the arbitral system which Parties have elected to arbitrate under. 37. The power to award a permanent injunction cannot be implied as it contradicts the arbitral system Parties are arbitrating under. A term can be implied through reasonable custom of the 52 Supra n [4], at p Id, at p Supra n [4], at p Supra n 48, at p 390, FN 18; Chandris v Isbrandtsen-Moller [1951] 1 KB 240 at 262, per Tucker LJ. 56 Clarifications-1 p4. 14

27 trade. 57 In the arbitral context, custom should refer to common practices in the trade as regards the resolution of disputes The power to order an injunction is not part of the custom of dispute resolution, as awards of specific performance (which are forms of injunctive relief) 59 are generally contrary to the arbitral system under the New York Convention ( the NY Convention ). 60 This problem arises as a result of arbitral tribunal s inability to enforce their orders; judicial assistance is necessary. 61 Those who elaborated the text of the NY Convention described the international system of enforcing foreign arbitral awards as a system that presupposed that a common law conception of damages is the usual remedy. 62 This simplifies the task of the enforcing court, which simply executes the relatively limited, mechanical task of transforming an award into a domestic money judgment. 63 The enforcement of such judgments will usually not involve an order of committal; contempt of court does not arise just because a debtor is unable to satisfy a money judgment The enforcement of the award of specific performance, on the other hand, could require an order of committal, 65 which is a more severe method of enforcement than the other processes of execution for it may lead to punishment by imprison or fine. 66 This contradicts the framework of the NY Convention by effectively conscripting a foreign court to involve 57 Hamzah & Yeang Sdn Bhd v Lazar Sdn Bhd [1985] 2 MLJ Supra n 48, at p Supra n [4], at p Troy E. Elder, The Case Against Arbitral Awards of Specific Performance in Transnational Commercial Disputes, Arbitration International, (Kluwer Law International 1997 Vol 13 Issue 1) at Id, at Id, at 20; See also Albert Jan van den Berg, The New York Arbitration Convention of 1958: Towards a Uniform Judicial Interpretation (1981) at p Id, at Chan Leng Sun SC, Singapore Law on Arbitral Awards (Academy Publishing, 2011) at para Rules of Court (Cap 322, R 5, 2004 Re Ed) O 45 r 5; See also idem. 66 Jeffrey Pinsler, Civil Practice in Singapore and Malaysia, (2013) < did=prod950252> at para

28 itself substantially in managing the implementation of a private decree. 67 While certain national arbitration legislations permit tribunals to grant injunctions, 68 the presence of such provisions does not answer the issues raised above regarding how such remedies will complicate the task of the enforcing court, contrary to the intentions of the drafters of the NY Convention. 40. The Parties have agreed to arbitrate under the MAA which does not expressly permit the grant of injunctions unlike other national legislations. 69 This arbitration will result in an award enforceable under the NY Convention. Given the inconsistency between the award of an injunction and the framework of the NY Convention, the Parties could not have impliedly granted the Tribunal the power to order a permanent injunction. B. EVEN IF THE TRIBUNAL HAS THE POWER TO GRANT A PERMANENT INJUNCTION, IT SHOULD NOT BE GRANTED IN THIS CASE. 41. Even if the Tribunal has the power to grant a permanent injunction, the Tribunal should not grant such a remedy in this case. The grant of remedies is generally governed by the law of the forum, 70 viz, Malaysian law. While Malaysian law gives the courts discretion in granting injunctions, 71 the courts must take into account the Specific Relief Act 1950 ( SRA ) in the exercise of their discretion. In Datuk Bandar Majlis Bandaraya Shah Alam & Anor v Yusuf Awang &, 72 the respondents received an injunction to prevent the authorities from evicting them from their home. However, the Court of Appeal reversed the injunction order as the 67 Id, at Sigvard Jarvin, Non-Pecuniary Remedies: The Practices of Declaratory Relief and Specific Performance in International Commercial Arbitration in Contemporary Issues in International Arbitration and Mediation: The Fordham Papers 2007 (Arthur W. Rovine ed) (Martinus Nijhoff Publishers, 2007) at p Idem. 70 Supra n 11, at para Section 50 of the Specific Relief Act 1950; Majlis Perbandaran Pulau Pinang v Boey Siew Than [1979] 2 MLJ 127, FC. 72 Datuk Bandar Majlis Bandaraya Shah Alam & Anor v Yusuf Awang & [2007] 4 CLJ

29 respondents were not within the ambit of section 53 of the SRA. Section 53 governs the grant of final injunctions. Section 53(3) provides that an injunction may be granted [w]hen the defendant invades or threatens to invade the plaintiff s right, or enjoyment of property in certain cases. The Court found that the respondents, as squatters, did not enjoy any right to the property and therefore could not be awarded an injunction. 73 Thus, the section 53(3) only envisages the grant of injunctions to protect proprietary rights. 42. The Claimant here does not have any proprietary right to the endangered species. Even if it is argued that the Claimant has the right to sue to protect the endangered animals, this does not give the Claimant any right vis a vis the animals themselves. Thus, the grant of an injunction will be contrary to the SRA. 43. Additionally, the injunction sought by the Claimant prohibits an act that is also prohibited by the penal provisions of the ESA. 74 Such injunctions are only granted sparingly as the defendant shall be in double jeopardy if the injunction is subsequently infringed. 75 This principle applies on our facts as the Respondent could face contempt of court in relation to the injunction and prosecution under section 4 of the ESA if it were to carry/promote/sell products of endangered animals again. Thus, an injunction should not be granted. C. THE TRIBUNAL S AWARD OF A PERMANENT INJUNCTION WILL NOT BE ENFORCED IN SINGAPORE. 44. The Tribunal should not grant a permanent injunction as it is inconsistent with the Tribunal s duty to render an enforceable award. 76 The Singapore International Arbitration Act ( IAA ) Id, at [33]. 74 ESA s Gouriet v Union of Post Office Workers [1978] AC 435 at , per Lord Diplock. 76 Supra n [4], at p International Arbitration Act (Cap 143A, 2002 Rev Ed) ( IAA ). 17

30 permits the Singapore courts to refuse enforcement of awards that fall within the scenarios outlined in section 31(4) of the IAA. 78 The courts will not enforce the Tribunal s award of a permanent injunction because section 31(4) of the IAA is satisfied. 45. The award of a permanent injunction will not be enforceable in Singapore as the request for an injunction to prevent the Respondent from breaching its statutory duty is not arbitrable. Under section 31(4)(a) of the IAA read with section 31(1), courts may refuse enforcement of awards if the subject matter of the difference between parties to the award is not arbitrable. A subject matter is not arbitrable where the issue raised goes beyond the purely private interests of the parties. 79 This concept is illustrated in American cases, where courts have held that under certain regulatory statutes, damages might be arbitrable, but claims for injunctive relief are not The rationale for this distinction was explained by in Broughton v Cigna Healthplans. 81 In rejecting a claim for injunctive relief but allowing a claim for damages under a statute prohibiting deceptive practices, the court found that a party seeking injunctive relief is functioning as a private Attorney-General to prevent future violations on behalf of the general public. This contradicts the purpose of arbitration as a forum to resolve private disputes The ESA (upon which the BOSD claim is based) can be characterized as a regulatory statute as it regulates the import of animal products. The Claimant, in seeking an injunction based a 78 S 31(1) IAA. 79 Sundaresh Menon SC, Rethinking Arbitrability in the Context of Corporate Disputes, paper presented in the Mauritius International Arbitration Conference 2010, at p , cited in Chan, supra n 64, at para Richard M. Mosk, Injunctions in Contemporary Issues in International Arbitration and Mediation: The Fordham Papers 2007 (Arthur W. Rovine ed) Martinus Nijhoff Publishers, 2007) a p Broughton v Cigna Healthplans 21 Cal. 4 th 1066 (1999). 82 Id, at