Trafigura Beheer BV v Kookmin Bank Co

For conflict-of-laws purposes, a claim framed under a foreign law as a non-contractual civil wrong may constitute an issue relating to tort, even where the parties are connected by contract. Characterisation is undertaken by the forum court, but it requires an internationalist assessment which takes account of relevant foreign legal concepts.

Where tortious events occur in several countries, the court must identify the most significant element or elements by analysing all constituent events and making a value judgment. The general rule may be displaced where, considering all connecting factors, another law is substantially more appropriate. The parties’ pre-existing contractual relationship and its governing law may be important connecting factors.

Trafigura sold decant oil to Huron, whose purchase was financed by a letter of credit issued by Kookmin and advised through a London bank. The cargo was discharged in Korea without production of the bills of lading. Kookmin later alleged in Korean proceedings that Trafigura had committed tortious acts which deprived it of security in the cargo.

Trafigura brought English proceedings seeking declarations of non-liability and an anti-suit injunction. Cooke J had held that England was the appropriate forum and that the claims based on English law were unsustainable, but had not ruled out every possible Korean-law tort claim. The preliminary issue was which law governed Kookmin’s remaining security claim.

1. Characterisation. The security claim was an issue relating to tort under section 9(1) of the Private International Law (Miscellaneous Provisions) Act 1995 (PILA). The claim was advanced as a non-contractual civil wrong under Korean law, although the parties also had contractual relationships. The forum court had to characterise the issue for private international law purposes and could take an internationalist view of legal concepts and classifications.
2. General rule. Under section 11(2)(c) of PILA, the court had to identify all the events constituting the alleged tort and make a value judgment as to their significance. The most significant events were the surrender of the original bills of lading, the obtaining and clausing of the replacement bills, and their transmission into the banking chain. Those events occurred in Singapore. The general rule therefore pointed to Singapore law.
3. Displacement. Section 12 required comparison of the significance of the connections with Singapore and other countries. The parties’ pre-existing letter-of-credit relationship was the most important connecting factor. It was governed by English law. The sale contract, charterparty and letter of indemnity were also governed by English law, apart from the original bills of lading, which were governed by Indonesian law. Taken together, those factors made English law substantially more appropriate.
4. The court therefore answered the preliminary issue English law. Trafigura was in principle entitled to a declaration of non-liability, subject to further argument concerning the anti-suit injunction.

This was a first-instance determination of a preliminary issue. Cooke J’s earlier judgment on jurisdiction and the interim anti-suit injunction was not appealed, but its citation was not stated in the judgment.