Deutsche Bank AG, London Branch v CIMB Bank Berhad

For a stay on forum non conveniens grounds, the applicant must show that the alternative forum is clearly or distinctly more appropriate. The existence of parallel proceedings, duplicated costs or a risk of inconsistent findings does not by itself satisfy that test where the relevant evidence is equally available in both jurisdictions. Separate contractual relationships must be respected. Fraud affecting the issuing bank’s agreements with its customer or guarantor does not provide a defence to the confirming bank’s claim unless the issuing bank’s own contractual relationship with the confirming bank was rescinded or avoided before payment. A dispute concerning documentary compliance and the confirming bank’s knowledge of forged documents could be tried in either forum.

Deutsche Bank AG, London Branch, as confirming bank, claimed reimbursement from CIMB Bank Berhad, as issuing bank, for sums paid under letters of credit governed by UCP 600. CIMB sought a stay of the English proceedings in favour of related proceedings in Singapore involving its customer, guarantors and other parties. CIMB relied on overlapping factual issues, alleged fraud, duplicated costs, possible inconsistent decisions, the location of evidence and the more advanced stage of the Singapore proceedings.

The central issue was whether Singapore was clearly or distinctly the more appropriate forum for determining Deutsche Bank’s claim against CIMB.

1. The application for a stay was dismissed. CIMB had not established that Singapore was clearly or distinctly the more appropriate forum for the determination of Deutsche Bank’s claim: [1987] AC 460.

2. The contractual relationship between the confirming bank and the issuing bank was separate from the relationship between the issuing bank and its customer. The risk of duplicated proceedings and inconsistent findings concerning documentary compliance did not make Singapore the more appropriate forum. The documents themselves, with any necessary expert evidence, could be considered in either jurisdiction.

3. The same conclusion applied to the allegation that the documents were forged. The crucial question was whether Deutsche Bank had sufficient knowledge of the alleged forgery before accepting the documents as compliant. That question depended principally on what was apparent from the documents and information available to Deutsche Bank at the material time, which evidence was in London.

4. Although evidence concerning alleged fraudulent misrepresentations inducing CIMB’s agreements with Cashcot and Bhadresh was likely to be more readily available in Singapore, those agreements were separate from CIMB’s relationship with Deutsche Bank. Fraud affecting the former relationships therefore did not provide CIMB with a defence to Deutsche Bank’s claim. There had been no suggestion that CIMB had rescinded or avoided its relationship with Deutsche Bank before Deutsche Bank accepted the documents and paid Global.

5. The Singapore proceedings were not shown to be significantly further advanced. Nor did the possibility of joining other parties to the English proceedings justify staying the confirming bank’s claim. The court also expressed doubt, obiter, that the cash principle made it appropriate to stay that claim so that it could be determined with CIMB’s separate claims against other parties.

First-instance decision on an application for a stay. No appellate history is stated in the judgment.