Singapore court intervenes to halt parallel litigation in China

The dispute arose from a shipping joint venture involving companies that Xu Xiangrong alleges form the Pacific Glory Group. Proceedings concerning the breakdown of the venture were already underway in Singapore when Fu Xianwei commenced three separate actions in Shanghai: one seeking repayment of an alleged loan, and two concerning disputed shareholdings in two companies connected to the venture, Changzhou and Ocean Future, respectively.

At the time the SICC’s decision was issued, the Shanghai courts had dismissed the alleged loan suit and the Ocean Future suit on the basis that the Shanghai courts lacked jurisdiction and that the proceedings were parallel to the ongoing Singapore court proceedings, and Fu had filed appeals against both decisions. The Changzhou suit had been withdrawn and refiled.

The Shanghai proceedings concerned issues already before the Singapore courts, including company ownership, shareholdings and financial entitlements. The SICC identified risks of inconsistent findings, increased costs and inefficiencies from fragmenting the litigation.

The SICC concluded Singapore was the natural forum, noting the earlier Shanghai court's jurisdiction ruling and the progress of the Singapore proceedings. It also found that the sequence in which the Shanghai actions were commenced, together with their substantial overlap with the Singapore case, supported a finding of vexatious or oppressive conduct. Its analysis included specific findings of bad faith.

Wee Jian Ang, an expert in arbitration and cross-border litigation at Pinsent Masons, said: “For parties engaged in multi-jurisdictional tussles, especially across China and Singapore, it is critical to carefully consider and develop a coordinated litigation strategy across the relevant countries.

“Parties should consider not only where they are entitled to bring proceedings, but also how proceedings in one jurisdiction interact with those already underway in another and the risk that parallel litigation may prompt anti-suit relief,” he said.

“This decision makes clear that established courts, including the SICC, will scrutinise the sequence, timing and scope of proceedings across jurisdictions and will not hesitate to grant anti-suit injunctions where the conduct of a party indicates bad faith or a deliberate attempt to fragment litigation for tactical advantage.”

The injunction prevents Fu Xianwei from continuing the three Shanghai actions and from commencing or pursuing any other proceedings concerning disputes arising out of, or connected with, matters to be determined in the Singapore proceedings.

Alice Wang, an expert in arbitration at Pinsent Masons, said: “The decision also draws an important distinction between directing foreign authorities and making orders against a party. Although the SICC could not direct the Chinese market authorities to change share registrations, it could order Mr Xu to transfer shares registered in his name.”

“Parties should not assume that an exclusive foreign jurisdiction clause will necessarily shield parallel proceedings from an anti-suit injunction,” she said.

“Chinese parties entering into cross-border commercial arrangements should carefully consider whether their dispute resolution clauses will withstand scrutiny if proceedings are commenced in multiple jurisdictions, and should ensure that any jurisdiction clause is consistent with the broader structure of the parties' agreements.

“Here, the court was inclined to accept the Shanghai jurisdiction clause as valid, but found strong reasons to intervene even if it was effective. Those reasons included abusive conduct, overlapping issues affecting parties outside the clause, and the risk of inconsistent findings.”