Xu Xiangrong and another v Fu Xianwei and others [2025] SGHC 95

Case Details

• Citation: [2025] SGHC 95
• Court: General Division of the High Court of the Republic of Singapore
• Decision Date: 22 May 2025
• Coram: Tan Siong Thye SJ
• Case Number: Originating Claim No 623 of 2024; Summonses Nos 3555 and 3645 of 2024
• Hearing Date(s): 11 March 2025
• Claimants / Plaintiffs: Xu Xiangrong (Mr Xu); Shanghai Changzhou International Freight Transport Agency Co Ltd (Changzhou)
• Respondent / Defendant: Fu Xianwei
• Counsel for Claimants: Khng Una, Huang Peide, Ho Qi Rui Daniel and Natalie Ng Hai Qi (Helmsman LLC)
• Counsel for Respondent: Tan Wee Kong and Poh Ying Ying Joanna (JLex LLC) for the first to ninth defendants
• Practice Areas: Civil Procedure; Service; Conflict of Laws; Injunctions

Summary

The judgment in Xu Xiangrong and another v Fu Xianwei and others [2025] SGHC 95 represents a significant clarification of the procedural interface between the dispensation of personal service and the requirements for service out of jurisdiction under the Singapore Rules of Court 2021. The dispute arose from a breakdown in a long-standing business relationship between two Chinese nationals, Mr. Xu and Mr. Fu, involving the Pacific Glory Group, a shipping enterprise with substantial connections to Singapore. The core of the litigation involved allegations of breach of a Shareholders’ Cooperation Agreement, misappropriation of funds, and the operation of a "Trust Vessels" investment scheme where beneficial interests were allegedly held through various Singapore-incorporated entities.

The High Court was primarily tasked with resolving two interlocutory challenges: first, the defendants' application to set aside an order dispensing with personal service on Mr. Fu; and second, an application to set aside or vary a Worldwide Mareva Injunction (WMI) that had been granted to restrain Mr. Fu from dissipating assets up to the value of S$39 million. Central to the service dispute was the question of whether a claimant must obtain prior permission for service out of jurisdiction before seeking an order to dispense with personal service on a defendant located abroad, particularly when the proposed method of service (delivery to a local law firm) occurs within Singapore. Tan Siong Thye SJ held that such prior permission is not a prerequisite where the act of service itself—facilitated by the dispensation order—is performed within the jurisdiction.

Furthermore, the court engaged in a detailed forum non conveniens analysis under the Spiliada framework. Despite the presence of a governing law clause selecting Chinese law for the Shareholders' Agreement and parallel proceedings in the Shanghai Maritime Court, the court determined that Singapore was the natural forum for the majority of the claims. This conclusion was driven by the incorporation of the second to eighth defendants in Singapore and the fact that the "Trust Vessels" claims were governed by Singapore trust law. The judgment also provides a nuanced treatment of the duty of full and frank disclosure in ex parte applications, specifically regarding the non-disclosure of foreign asset preservation orders. While the court found a breach of this duty, it elected to vary rather than discharge the WMI, emphasizing the court's discretion to maintain protective relief where the risk of dissipation remains high.

Ultimately, the court's decision reinforces the robustness of Singapore's jurisdiction in complex international commercial disputes involving local corporate structures, even where the primary protagonists are foreign nationals and the underlying contracts are governed by foreign law. It serves as a practitioner's guide to the strategic use of service dispensation and the high evidentiary threshold required to sustain a worldwide freezing order in the face of non-disclosure allegations.

Timeline of Events

1. 1 April 2014: Mr. Fu and Mr. Xu entered into a Shareholders’ Cooperation Agreement (the “Shareholders’ Agreement”) to govern their joint shipping business.
2. 1 January 2016: (Approximate) Commencement of the "Trust Vessels" investment scheme involving various single-purpose companies.
3. 24 May 2024: Mr. Fu terminated Mr. Xu’s positions and functions within the Pacific Glory Group following a breakdown in their relationship.
4. 7 June 2024: Date relevant to the alleged unauthorized transfers of assets within the group structure.
5. 12 June 2024: Further transactions or communications regarding the disputed distribution of profits.
6. 5 July 2024: Mr. Xu commenced legal proceedings against Mr. Fu in the Shanghai Maritime Court in China (the “Chinese proceedings”).
7. 7 August 2024: Filing of the Originating Claim No 623 of 2024 in the High Court of Singapore.
8. 15 August 2024: The claimants obtained an ex parte Worldwide Mareva Injunction (WMI) against Mr. Fu.
9. 16 August 2024: The court granted an order for the dispensation of personal service on Mr. Fu, allowing service via his Singapore solicitors, JLex LLC.
10. 21 August 2024: Service of the originating process was effected on JLex LLC pursuant to the dispensation order.
11. 13 September 2024: The defendants filed Summons No 3555 of 2024 to set aside the WMI and the disclosure orders.
12. 17 October 2024: The defendants filed Summons No 3645 of 2024 to set aside the order for dispensation of personal service.
13. 11 March 2025: Substantive hearing of the summonses before Tan Siong Thye SJ.
14. 22 May 2025: Delivery of the judgment by the General Division of the High Court.

What Were the Facts of This Case?

The dispute centered on the commercial dealings between Mr. Xu Xiangrong and Mr. Fu Xianwei, both Chinese nationals, who had collaborated in the shipping industry for over a decade. The second claimant, Shanghai Changzhou International Freight Transport Agency Co Ltd (“Changzhou”), is a company incorporated in Shanghai, China, through which Mr. Xu conducted business. The defendants included Mr. Fu (the first defendant) and eight companies (the second to ninth defendants), seven of which were incorporated in Singapore. These companies formed part of the "Pacific Glory Group," an enterprise involved in ship operations, chartering, management, and investment.

Under the Shareholders’ Agreement dated 1 April 2014, the parties agreed to a profit-sharing and ownership structure where Mr. Fu contributed US$4.25 million for an 85% interest, and Mr. Xu contributed US$750,000 for a 15% interest in the Pacific Glory Group. While Mr. Xu was responsible for the group's operations, Mr. Fu maintained absolute control over the financial management and the group's bank accounts. The relationship was initially successful, but tensions arose regarding the transparency of the group's finances and the distribution of accumulated profits, which Mr. Xu alleged exceeded US$39 million.

A significant portion of the dispute involved the "Trust Vessels" scheme. This was an investment model where Mr. Xu, Mr. Fu, and other third-party investors contributed funds to purchase vessels. Each vessel was held by a single-purpose company (SPC), and investors were granted beneficial interests proportional to their contributions. Mr. Xu alleged that Mr. Fu had misappropriated funds from the Pacific Glory Group to finance his own personal contributions to these Trust Vessels, thereby diluting Mr. Xu's interests or depriving the group of its rightful assets. Specifically, Mr. Xu claimed beneficial ownership in several vessels, including the Pacific 08, Pacific 18, Pacific 28, Pacific 68, and Pacific 88, which were held through the Singapore-incorporated defendant companies.

The conflict reached a breaking point in early 2024. Following heated discussions in March and April 2024, Mr. Fu summarily terminated Mr. Xu’s roles within the group on 24 May 2024. Mr. Xu subsequently discovered what he characterized as unauthorized transfers of assets and funds. On 5 July 2024, Mr. Xu initiated proceedings in the Shanghai Maritime Court, seeking a declaration of his 15% shareholding in the Pacific Glory Group and the distribution of profits. However, he also turned to the Singapore courts, filing Originating Claim No 623 of 2024 on 7 August 2024.

The Singapore action comprised three main categories of claims:

• The Shareholders’ Agreement Claims: Alleging breaches of the 2014 agreement, including the failure to distribute profits and the unauthorized use of group funds.
• The Trust Vessels Claims: Seeking declarations of beneficial interest in the vessels held by the Singapore companies, based on the law of trusts.
• The Unauthorized Transfer Claims: Alleging that Mr. Fu and others conspired to move assets out of the group to defeat Mr. Xu's claims.

In support of these claims, Mr. Xu sought and obtained an ex parte Worldwide Mareva Injunction (WMI) to freeze Mr. Fu's assets up to S$39 million. Because Mr. Fu was primarily based in China and frequently traveled, the claimants also sought and obtained an order to dispense with personal service, allowing them to serve the court documents on JLex LLC, the law firm representing the defendants in Singapore. The defendants subsequently challenged these orders, leading to the present judgment.

What Were the Key Legal Issues?

The court identified four primary legal issues that required resolution:

• Setting Aside the Dispensation of Personal Service: Whether the order allowing service on JLex LLC instead of personal service on Mr. Fu in China was valid. This involved determining if the court had jurisdiction to dispense with service on a foreign defendant without first granting leave for service out of jurisdiction.
• Forum Non Conveniens: Whether the Singapore proceedings should be stayed in favor of the Chinese courts. This required an application of the two-stage Spiliada test to determine which jurisdiction was the "natural forum" for the dispute, considering factors like the governing law, the location of witnesses, and the presence of parallel proceedings.
• Setting Aside the Worldwide Mareva Injunction (WMI): Whether the claimants had established a "good arguable case" on the merits and a "real risk of dissipation" of assets. The court also had to consider whether the claimants had breached their duty of full and frank disclosure during the ex parte application.
• Variation of the WMI and Disclosure Orders: If the WMI were to stand, whether its terms should be varied, whether the ancillary disclosure orders should be set aside, and whether the claimants should be required to provide "fortification" (security) for their undertaking in damages.

How Did the Court Analyse the Issues?

1. Dispensation of Personal Service

The defendants argued that the order for dispensation of personal service was a "backdoor" attempt to avoid the requirements for service out of jurisdiction. They contended that since Mr. Fu was in China, the claimants were required to obtain leave under Order 8 Rule 1 of the Rules of Court 2021 before any alternative form of service could be considered. The court rejected this argument, relying on the recent decision in [2024] SGHC 184.

Tan Siong Thye SJ clarified that the requirement for "service out" leave is only triggered if the act of service is to occur outside Singapore. In this case, the dispensation order permitted service on JLex LLC at their offices in Singapore. Because the service was effected within the jurisdiction, the "service out" regime was not engaged. The court noted at [41]:

"I agree that the claimants did not have to obtain for permission for service out of jurisdiction before an order for dispensation of personal service can be granted in favour of ordinary service, because the ordinary service itself was effected in Singapore vis-à-vis JLex."

The court further found that the factual threshold for dispensation was met. Mr. Fu's frequent travel and the practical difficulties of effecting personal service in China, combined with the fact that JLex LLC was already actively representing him in related matters, made dispensation appropriate to ensure the proceedings were brought to his attention efficiently.

2. Forum Non Conveniens and the Spiliada Test

The court applied the two-stage test from Spiliada Maritime Corporation v Cansulex Ltd [1987] AC 460. Under Stage 1, the court looks for the forum with which the action has the most real and substantial connection.

Connecting Factors:

• Governing Law: The Shareholders' Agreement was governed by Chinese law (Article 11). However, the Trust Vessels claims were governed by Singapore law, as they involved beneficial interests in assets held by Singapore companies. The court noted that while Chinese law was relevant, the "Trust Vessels" claims were a significant part of the litigation and pointed toward Singapore.
• Location of Parties and Witnesses: While the main protagonists were Chinese, the second to eighth defendants were Singapore companies. The court observed that these companies were required to keep records in Singapore under the Companies Act 1967, which would be crucial evidence.
• The "Albaforth" Principle: For the tort of conspiracy (Unauthorized Transfer claims), the court applied the principle that the place where the damage is suffered or where the core of the tort occurred is a heavy factor. Since the assets were moved from Singapore companies, this favored Singapore.

The court also scrutinized Article 11 of the Shareholders' Agreement, which provided for arbitration or litigation in the "local People's Court." The claimants' expert, Mr. Li Hongdeng, argued this clause was "uncertain" under Chinese law because it did not specify a particular court. The defendants' expert, Ms. Xue, disagreed. The court found that even if the clause was a valid non-exclusive jurisdiction clause, it did not preclude Singapore's jurisdiction. Ultimately, the court concluded that Singapore was the natural forum, particularly because the Trust Vessels claims were "inextricably linked" to the Singapore-incorporated defendants.

3. The Worldwide Mareva Injunction (WMI)

To maintain the WMI, the claimants had to show a "good arguable case" and a "real risk of dissipation."

Good Arguable Case: The court found that Mr. Xu had provided sufficient evidence of his 15% interest and the lack of profit distribution. Regarding the Trust Vessels, the court accepted that there was a serious question to be tried as to whether Mr. Fu had used group funds to acquire these assets. The court applied the standard from The “Vasiliy Golovin” [2008] 4 SLR(R) 994, noting that the case must be "more than barely capable of serious argument."

Risk of Dissipation: The court looked at Mr. Fu's conduct, including the summary termination of Mr. Xu and the subsequent transfer of funds. The court noted that the shipping industry involves highly mobile assets. Relying on JTrust Asia Pte Ltd v Group Lease Holdings Pte Ltd [2018] 2 SLR 159, the court found that Mr. Fu's absolute control over the group's finances and the lack of transparency created a real risk that assets would be moved to frustrate a potential judgment.

4. Full and Frank Disclosure

The defendants argued the WMI should be discharged because Mr. Xu failed to disclose that he had already obtained an asset preservation order in China. The court agreed this was a material non-disclosure. However, the court exercised its discretion not to discharge the injunction. Tan Siong Thye SJ reasoned that the non-disclosure was not "flagrant" and that the need to protect the claimants from the risk of dissipation outweighed the procedural lapse. Instead, the court varied the WMI to credit the value of any assets frozen in China against the S$39 million limit in Singapore to prevent "double recovery" or excessive hardship on Mr. Fu.

What Was the Outcome?

The court reached a balanced disposition, partly allowing the defendants' applications while maintaining the core protective relief for the claimants. The operative orders were as follows:

"SUM 3555 is granted in part (to the extent that the Disputed Disclosure Orders are set aside) and SUM 3645 is dismissed." (at [190])

Key Results:

• Dispensation of Service: The order stood. Service on JLex LLC was deemed valid service on Mr. Fu.
• Jurisdiction: The application for a stay on forum non conveniens grounds was dismissed. The Singapore High Court retained jurisdiction over the matter.
• WMI: The Worldwide Mareva Injunction was maintained but varied. The court inserted a "proviso" to account for the Chinese asset preservation orders, ensuring the total value of assets frozen across both jurisdictions did not exceed the S$39 million cap.
• Disclosure Orders: The court set aside the ancillary disclosure orders that required Mr. Fu to provide a detailed list of his worldwide assets. The court found these orders were too broad and oppressive at this early stage of the litigation, especially given the parallel proceedings.
• Fortification: The court ordered the claimants to provide fortification for their undertaking in damages in the sum of S$200,000, to be paid into court as security.
• Costs: The court reserved the issue of costs for further submissions from the parties.

Why Does This Case Matter?

This judgment is of significant importance to practitioners for several reasons, particularly in the context of Singapore's role as a hub for international commercial litigation and its evolving procedural rules.

1. Procedural Efficiency in Service: The decision confirms that the "dispensation of personal service" is a viable and efficient alternative to the often cumbersome "service out of jurisdiction" process, provided that the substituted method of service (such as service on a local law firm) takes place within Singapore. This clarifies the scope of [2024] SGHC 184 and provides a clear pathway for claimants facing elusive foreign defendants who have already engaged local counsel.

2. Jurisdiction over "Trust" Claims: The court’s analysis of forum non conveniens highlights that the presence of Singapore-incorporated companies and the application of Singapore trust law can outweigh a foreign governing law clause in a related contract. This reinforces the principle that Singapore courts are the natural forum for disputes involving the internal affairs and beneficial ownership of Singapore entities, even when the broader commercial relationship is centered elsewhere.

3. Nuanced Approach to Non-Disclosure: The court’s refusal to discharge the WMI despite a clear breach of the duty of full and frank disclosure (regarding the Chinese asset preservation order) demonstrates a pragmatic, justice-oriented approach. It signals that while the duty is "the golden rule," the court will not allow procedural errors to leave a claimant vulnerable to asset dissipation if the error was not "flagrant" and can be remedied by varying the order.

4. Restraint in Disclosure Orders: By setting aside the disclosure orders while maintaining the WMI, the court reminded practitioners that ancillary orders must be proportionate. A WMI is a "nuclear weapon," and the court will be wary of granting extensive discovery-style disclosure orders at the ex parte stage if they appear oppressive or unnecessary to the primary goal of freezing assets.

5. Interpretation of Chinese Law Clauses: The case provides an interesting look at how Singapore courts handle conflicting expert evidence on Chinese law, specifically regarding the "uncertainty" of jurisdiction clauses that refer to "local People's Courts." It suggests that such clauses may be treated as non-exclusive, thereby preserving the jurisdiction of the Singapore courts where other connecting factors are strong.

Practice Pointers

• Service Strategy: When dealing with a foreign defendant, check if they have instructed Singapore solicitors for any related matter. If so, consider applying for dispensation of personal service via those solicitors to avoid the delays of service out of jurisdiction.
• Disclosure Checklist: In ex parte applications for WMIs, ensure that all related foreign proceedings and all foreign interim orders (even if they are not identical in scope) are disclosed. The non-disclosure of a foreign asset preservation order is a material omission.
• Drafting Provisos: When seeking a WMI where foreign freezing orders already exist, proactively include a proviso in the draft order that credits the value of foreign-frozen assets against the Singapore cap. This demonstrates "full and frank" intent and protects the order from being set aside.
• Trust vs. Contract: In multi-jurisdictional disputes, distinguish between claims arising from a contract (which may have a foreign governing law) and claims arising from the ownership of shares or assets in Singapore companies (which will likely be governed by Singapore law). This distinction is vital for forum non conveniens arguments.
• Fortification Readiness: Be prepared to provide fortification for an undertaking in damages. The court in this case required S$200,000 for a S$39 million claim; practitioners should advise clients to have such liquidity available when seeking high-value injunctions.
• Proportionality in Ancillary Orders: Avoid asking for "everything" in an ex parte summons. Broad disclosure orders regarding worldwide assets may be viewed as oppressive and set aside, even if the underlying injunction is maintained.

Subsequent Treatment

As a 2025 decision, the subsequent treatment of Xu Xiangrong v Fu Xianwei is currently developing. However, its adoption and expansion of the principles in Madison Pacific Trust Ltd v PT Dewata Wibawa [2024] SGHC 184 suggests it will become a leading authority on the interplay between Order 7 (Service) and Order 8 (Service out of Singapore) of the Rules of Court 2021. Its ratio regarding the non-necessity of "service out" leave for local dispensation orders provides a clear precedent for future procedural challenges.

Legislation Referenced

• Civil Law Act 1909 (2020 Rev Ed), Section 4(10) and Section 4(10A)
• Supreme Court of Judicature Act 1969 (2020 Rev Ed), Section 16(1)(a)(i)
• Companies Act 1967 (2020 Rev Ed)
• Rules of Court 2021, Order 7 Rule 7 (Dispensation of personal service)
• Rules of Court 2021, Order 8 Rule 1 (Service out of Singapore)

Cases Cited

• Applied: Madison Pacific Trust Ltd and others v PT Dewata Wibawa and others [2024] SGHC 184
• Referred to: Raffles Education Corp Ltd and others v Shantanu Prakash and another [2020] SGHC 83
• Referred to: IM Skaugen SE and another v MAN Diesel & Turbo SE and another [2018] SGHC 123
• Referred to: Parastate Labs Inc v Wang Li and others [2023] SGHC 153
• Referred to: Consistel Pte Ltd and another v Farooq Nasir and another [2009] 3 SLR(R) 665
• Referred to: Zoom Communications Ltd v Broadcast Solutions Pte Ltd [2014] 4 SLR 500
• Referred to: Zhang Jinhua v Yip Zhao Lin [2024] 5 SLR 1046
• Referred to: Man Diesel & Turbo SE and another v IM Skaugen SE and another [2020] 1 SLR 327
• Referred to: Vinmar Overseas (Singapore) Pte Ltd v PTT International Trading Pte Ltd [2018] 2 SLR 1271
• Referred to: JIO Minerals FZC and others v Mineral Enterprises Ltd [2011] 1 SLR 391
• Referred to: Best Soar Ltd v Praxis Energy Agents Pte Ltd [2018] 3 SLR 423
• Referred to: Rappo, Tania v Accent Delight International Ltd and another [2017] 2 SLR 265
• Referred to: Pacific Recreation Pte Ltd v S Y Technology Inc [2008] 2 SLR(R) 491
• Referred to: Overseas Union Insurance Ltd v Turegum Insurance Co [2001] 2 SLR(R) 285
• Referred to: Shen Sophie v Xia Wei Ping and others [2023] 3 SLR 1092
• Referred to: CIMB Bank Bhd v Dresdner Kleinwort Ltd [2008] 4 SLR(R) 543
• Referred to: JTrust Asia Pte Ltd v Group Lease Holdings Pte Ltd and others [2018] 2 SLR 159
• Referred to: The “Vasiliy Golovin” [2008] 4 SLR(R) 994
• Referred to: CPIT Investments Ltd v Qilin World Capital Ltd and another [2017] 3 SLR 1
• Referred to: Spiliada Maritime Corporation v Cansulex Ltd [1987] AC 460

Source Documents

• Original Judgment PDF (eLitigation)
• Case Summary on eLitigation