Choice of law and forum clauses held invalid

What happens when two parties from different countries decide to enter into a contract? Commonly, the contract would contain a choice of law and choice of forum clause. The choice of law clause stipulates which country's laws would apply, and the choice of forum clause stipulates which Courts would determine the dispute.

That's a simple and clear concept, right? Well, not anymore.

In ISC Technology Sdn Bhd v Premium Systems Technology Pte Ltd, a Malaysian company sued in Malaysia against a Singaporean counterpart although the contract between them stipulated that any disputes would be determined in accordance to Singaporean laws in a Singaporean court.

The Singaporean company sought to strike out the suit on the basis of the contractual provision.

The High Court disagreed. It held instead:

(1) A contractual provision in respect of choice of law and choice of forum does not oust the jurisdiction of the Court.

(2) If the Court is satisfied on the face of the suit that the Malaysian court had jurisdiction, then it would exercise jurisdiction notwithstanding the choice of law and choice of forum clauses.

(3) The relevant provision for the Court to consider when deciding on jurisdiction would be sec23 Courts of Judicature Act, and not any private contractual stipulation.

Who says the law is simple, eh?

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