KRAKEN SERVICES LTD (formerly known as KRAKEN REINSURANCE SERVICES LTD) Q LIFE AND MEDICAL INSURANCE COMPANY ASIA REGION & ORS

IN THE HIGH COURT OF MALAYA AT KUALA LUMPUR (COMMERCIAL DIVISION) [SUIT NO.: WA-22NCC-94-03/2021] BETWEEN KRAKEN SERVICES LTD …PLAINTIFF (formerly known as KRAKEN REINSURANCE SERVICES LTD) (Company No: LL07899) AND 1. Q LIFE AND MEDICAL INSURANCE COMPANY ASIA REGION (Company No.: LF12195) 2. QLM LIFE & MEDICAL INSURANCE COMPANY W.L.L …DEFENDANTS GROUNDS OF JUDGMENT Introduction [1] This is an application of the Defendants as documented in enclosure 7 for stay of proceedings pursuant to O. 12 r. 10 (2) of the Rules of Court 2012 (“the Rules”) on the ground that this Court / Malaysian Court is not the proper forum to hear the dispute. At the conclusion of the hearing, this Court allowed the application. 1 [2] Dissatisfied with the decision, the Plaintiff appealed. The following are the Grounds of Judgment of this Court. Background facts The parties [3] The Plaintiff was formerly an underwriting manager licensed under the Labuan Financial Services and Securities Act 2010 (“the Act”) with its registered address in Labuan. [4] The 1st Defendant is an insurer registered under the Act with its registered address also in Labuan. The 1st Defendant is a Labuan branch of Q Life & Medical Insurance Company LLC (“Q Life”). [5] The 2nd Defendant is carrying on life and medical insurance business and is incorporated in Qatar. On 1.1.2019, pursuant to a corporate restructuring, the 2nd Defendant had taken over all the business and operations of Q Life including the business operation of the 1st Defendant. All the outstanding liabilities in relation to the 1st Defendant are novated to the 2nd Defendant. The claim [6] The Plaintiff’s claim is for the purported outstanding sum payable to the Plaintiff under an Agreement for the Appointment of a Passive Introducer (“Passive Introducer Agreement”) and a Binding 2 Authority Agreement (“BAA”) entered into between the Plaintiff and Q Life (“collectively referred to as the Agreements”). [7] On 1.1.2017, the 1st Defendant and Q Life issued a notice to terminate the BAA. It was effectively terminated on 31.3.2017. [8] On 4.3.2021, the Plaintiff filed the writ and statement of claim claiming for purported overdue commission for a sum of USD 767, 248.00 payable to the Plaintiff under the Agreements. Enclosure 7 was subsequently filed by the Defendants for the action to be stayed. Parties’ contention [9] The Defendants submitted that pursuant to the Agreements, the parties have expressly, mutually and contractually agreed to the exclusive jurisdiction of the courts in Qatar and the laws of Qatar as the choice of law. [10] It was further argued that the Plaintiff had failed to show or prove any exceptional circumstances as to why the mutually and contractually agreed choice of foreign court clause should be disregarded. [11] In resisting the application, the Plaintiff relied on the rule of forum non-convenient. They contended that the Malaysian courts have 3 jurisdiction and the appropriate forum to hear the dispute is in Malaysia. [12] The arguments proffered by both parties will be examined below. Analysis and findings of this Court Exclusive Jurisdiction Clause [13] It must be re-emphasized that the subject matter of the dispute arose as a result of the Agreements. It is the view of this Court that primacy must be given to the exclusive jurisdiction clause contained in the said Agreements. This is because of the following factors: i. Clear and unambiguous provision in the Agreements [14] The Passive Introducer Agreement contains an express provision on Governing Law which reads – “Governing Law This agreement shall be governed by and construed in accordance with the laws of Qatar. The parties irrevocably agree that the courts of Qatar shall have exclusive jurisdiction.” [15] The BAA further provides clarity on the issue of exclusive jurisdiction of Qatar where section 42.1 provides that : 4 “SECTION 42 JURISDICTION AND GOVERNING LAW “42.1 The Agreement and any non-contractual dispute or obligation arising out of or in connection with it shall be subject to the law of Qatar and to the exclusive jurisdiction of the courts of Qatar save that the Company (Q Life & Medical Insurance Company LLC) may, at their discretion, determine that the applicable jurisdiction shall be that of the jurisdiction where the Coverholder is domiciled or does business.” [16] Against the clear and unambiguous clauses is the absence of any provision under the Agreements which provides for any exception for disputes to be resolved outside of the exclusive jurisdiction clause. As such, all disputes must be resolved in the courts of Qatar. [17] The proviso in section 42.1 of the BAA provides a discretion to depart from the jurisdiction of the Qatar Courts. However, the discretion only lies with the Company (i.e. the Defendants). As such, it is not open for the Plaintiff to claim otherwise. ii. Parties have agreed to be bound by the Passive Introducer Agreement and BAA [18] It cannot be disputed that the Agreements were mutually agreed between both parties at the time the Agreements were entered into. On settled principles of law, it follows that they are bound by the terms of the Agreements which they had executed. This has been expressly stated by the Court of Appeal in Ajwa For Food 5 Industries Co (MIGOP), Egypt v Pacific InterLink Sdn Bhd & Another Appeal [2013] 2 CLJ 395. “[17] The legal position is very clear: that parties are bound by the terms of the contract which they had executed and this includes reference to another incorporated document where those terms can be found whether they take the trouble of reading them or not. There is imputed knowledge that the terms of the document incorporated are binding as if it was written into the contract itself”. (Emphasis added) [19] No matter how unpalatable the terms of the Agreements are, it is not open for one party to abandon its original position simply because the practical effect of the agreement does not favour the objecting party. [20] There is no duty on this Court to read the clauses differently when the terms are clear. The court will give effect to the plain and unambiguous meaning of the contractual term as expressed by parties. The test is what a reasonable person would have understood the contractual term to mean. If there is no ambiguity as to the meaning of the term, the court has no choice but to apply the dictionary definition of the term. See the Federal Court decision of SPM Membrane Switch Sdn Bhd v Kerajaan Negeri [2016] 1 MLJ 464. [21] The BAA was meant to give the Plaintiff rights as the 2nd Defendant’s agent throughout the region. Invariably, it means that 6 potentially, the Plaintiff could be introducing clients to the Defendants from all over the region if not the world. It puts paid to the argument that an exclusive jurisdiction clause was therefore necessary to be included in the Passive Introducer Agreement and BAA. To now interpret that Qatar is not where the dispute is to be adjudicated militates against the original intent of wanting to centralise and direct all disputes resolutions in Qatar. [22] Furthermore, the Plaintiff’s pleaded case is premised on breach of the Agreements by the Defendants to pay commission. This falls squarely under the words “the Agreement” which has been agreed to be subject to the laws of Qatar and the exclusive jurisdiction of the courts of Qatar. [23] This Court finds support in two Court of Appeal decisions in World Triathlon Corp v SRS Sports Centre Sdn Bhd [2019] 4 MLJ 394 and Open Country Dairy Ltd v Able Food Sdn Bhd [2021] MLJU 969. [24] In World Triathlon, the appellant was a Florida-based American company which owned several trademarks for the IRONMAN Triathlon. The respondent was licensed by the appellant to organise/host triathlon events in Malaysia under the IRONMAN trademark. The event licence agreement between the parties contained an exclusive jurisdiction clause which stated that the agreement would be construed and interpreted according to the laws of Florida and of the United States of America and that the 7 venue for any litigation connected to the agreement shall be in Florida. As a result of various alleged defaults committed by the respondent, the appellant terminated the agreement. The respondent sued the appellant in the High Court in Malaysia, inter alia, for a declaration that the termination was unlawful. The appellant applied under O. 12 r. 10 (2) of the Rules to stay the proceedings on the ground that the Malaysian court was not the proper forum to adjudicate the dispute in view of the exclusive jurisdiction clause. [25] The Court of Appeal bench in allowing the appeal and granting stay held that - “The court was obliged to give effect to the exclusive jurisdiction clause because that was what the parties had agreed to. Otherwise, disregarding such a clause effectively meant the courts would be condoning a breach of the agreement.” Harminder Singh JCA in emphasising the need to give effect to the foreign jurisdiction clause held as follows: “[19] In the present appeal, just like the American Express case, the parties here had agreed to a foreign jurisdiction clause as well as to be governed not by the laws of Malaysia but by the laws of Florida/USA. Now, the law in relation to the exclusive jurisdiction or forum selection clause is not controversial. Although generally a forum selection clause does not oust the jurisdiction of the court, the court is nevertheless obliged to give effect to it as that is what the 8 parties had agreed (see Globus Shipping & Trading Co (Pte) Ltd v. Taiping Textiles Bhd [1976] 1 LNS 31; [1976] 2 MLJ 154). Disregarding such a clause would effectively mean the courts condoning a breach of the agreement.” (Emphasis added) [26] His Lordship then went on to hold that Malaysian courts are obliged to give effect to an agreed jurisdiction clause unless “the party challenging the exclusive jurisdiction clause is able to show exceptional circumstances amounting to a strong cause” warranting a refusal to give effect to such an agreement. His Lordship held: “[20] On the question of how such discretion is to be exercised when confronted with a foreign jurisdiction clause, the then Federal Court in Globus Shipping accepted the approach as summarised by Brandon J in The Eleftheria [1969] 2 All ER 641 as follows: The principles established by the authorities can, I think, be summarised as follows: (I) where plaintiffs sue in England in breach of an agreement to refer disputes to a foreign court, and the defendants apply for a stay, the English court, assuming the claim to be otherwise within its jurisdiction, is not bound to grant a stay but has a discretion whether to do so or not. (II) the discretion should be exercised by granting a stay unless strong cause for not doing so is shown. (III) The burden of proving such strong cause is on the plaintiffs. (IV) In exercising its discretion, the court should take into account all the circumstances of the particular case. (V) In particular, but without prejudice to (IV), the following matters, where they arise, may properly be regarded: (a) In what country the evidence on the 9 issues of fact is situated, or more readily available, and the effect of that on the relative convenience and expense of trial as between the English and foreign courts; (b) Whether the law of the foreign court applies and, if so, whether it differs from English law in any material respects; (c) With what country either party is connected, and how closely; (d) Whether the defendants genuinely desire trial in the foreign country, or are only seeking procedural advantages; (e) Whether the plaintiffs would be prejudiced by having to sue in the foreign court because they would - (i) be deprived of security for that claim, (ii) be unable to enforce any judgment obtained, (iii) be faced with a time-bar not applicable in England, or (iv) for political, racial, religious or other reasons be unlikely to get a fair trial. [21] So, to surmise, where there is an exclusive jurisdiction clause, effect should be given to it and a stay ought to be granted, unless the party challenging the exclusive jurisdiction clause is able to show exceptional circumstances amounting to a strong cause warranting a refusal. The burden is on the party challenging the exclusive jurisdiction clause to show why they should not be bound to honour the part of the contract where they had agreed to jurisdiction.” (Emphasis added) [27] World Triathlon has been referred by the Court of Appeal in its recent decision of Open Country Dairy. [28] In Open Country Dairy, a suit was filed for alleged breach of contract in, inter alia, supplying instant whole milk powder of unmerchantable quality. The defendant filed at the High Court 10 an application pursuant to O. 12 r. 10 (1) and/or (2) of the Rules and/or the inherent jurisdiction of the court - (i) to set aside the notice of writ to be served out of jurisdiction; and (ii) for an order that the courts in Malaysia should not assume jurisdiction over this dispute as parties had submitted to the exclusive jurisdiction of the courts in New Zealand. [29] The Court of Appeal bench emphasised the need to uphold the exclusive jurisdiction clause unless the party seeking to avoid the application of the clause is able to establish that there are exceptional circumstances to justify the contrary. Nanthabalan JCA held as follows: “[79] It is therefore clear that there was an exclusive jurisdiction clause per Clause 19.2 of the Terms of Trade and this was incorporated in the contracts for the purchase of the IWMP. Therefore, the respondent must be held to their bargain and a Malaysian Court is obliged to give effect to the exclusive jurisdiction clause, unless the respondent, as the party seeking to avoid the application of the clause, are able to establish that there are exceptional circumstances to justify the contrary (See: World Triathlon). 11 [80] Having carefully examined the record of appeal, we did not find any convincing evidence that would qualify as exceptional circumstances to justify not giving effect to the exclusive jurisdiction clause. Of course, from the perspective of the respondent, it would be quite unfair for the action to be filed in the New Zealand courts as they had paid a substantial sum to the appellant and would have to incur further costs in having to file and prosecute their action in New Zealand. [81] But then again, those were the terms upon which they had contracted with the appellant when they agreed to purchase the latter’s goods. Whatever the inconvenience that the respondent may be put to is purely a consequence of their agreement. The respondent’s complaint in having to file the action in New Zealand is a complaint that can cut both ways. The appellant can easily mount a like counter argument particularly when it is clear that the action ought to have been filed in New Zealand in accordance with clause 19.2 of the Terms of Trade.” (Emphasis added) [30] This Court is bound by the principles outlined in World Triathlon and Open Country Dairy. It follows that the exclusive jurisdiction clause must be given effect and upheld as the clause that determines Qatar as the jurisdiction of where the dispute should be resolved. (iii) No exceptional circumstances [31] The only way for the Plaintiff to succeed in resisting the stay is if exceptional circumstances can be shown to be present. What 12 amounts to special circumstances may not be readily defined and is factual, contingent on the facts of the case. Here the reason the Plaintiff argues that courts in Malaysia have jurisdiction is purely based on issues such as difficulties that they may encounter if the matter is tried in Qatar. [32] Difficulties in language and law if the dispute was adjudicated in Qatar cannot amount to an exceptional circumstance. While it may involve uncharted waters for the Plaintiff, this alone cannot be a consideration of this Court. Such apprehension on the part of the Plaintiff is purely based on conjecture and is speculative. This unfortunately is not a special circumstance. It has to be more. [33] The Plaintiff could not now complain about inconvenience and possible challenges as they were matters foreseeable at the time of entering into the Agreements. The exclusive jurisdiction clause thus was the clause built into the Agreements to address any impasse should a dispute as to jurisdiction arises. [34] Following World Triathlon, the onus is on the party challenging the clause to show exceptional circumstances to warrant a refusal of a stay. The Plaintiff has not shown any exceptional circumstance or reasons on why what the parties have irrevocably agreed to (i.e. the jurisdiction and governing laws of Qatar) is to be abandoned. 13 The commercial relationship of the parties [35] In assessing the arguments, this Court is mindful of the explanation by the representative of the Defendants in his Affidavit in Reply which explained their commercial relationship. It reads as follows: (i) The 1st Defendant is an insurer registered under the Labuan Financial Services and Securities Act 2010 with its registered address in Labuan, Malaysia. The 1st Defendant is a Labuan branch of Q Life. (ii) The 2nd Defendant was originally a limited liability company incorporated in mainland of Qatar carrying the name of "QLM Life & Medical Insurance Company WLL". Pursuant to a corporate restructuring on 30.12.2020, the 2nd Defendant had converted itself into a public shareholding company and its legal name was changed to "QLM Life & Medical Insurance Company QPSC". At all material times, the 2nd Defendant is carrying on life and medical insurance business. (iii) On 1.1.2019, the 2nd Defendant had taken over all the business operations of Q Life which were situated in the Qatar Financial Centre pursuant to the Corporate Restructuring. As the 1st Defendant was the Labuan branch office of Q Life, the 2nd Defendant had also taken over the business operation involving the 1st Defendant. 14 [36] It is therefore important to understand the status of both Defendants. The 1st Defendant was as a branch office of the 2nd Defendant. The 2nd Defendant was the main company which operated the business. [37] It was no surprise that all correspondences between the Plaintiff and the Defendants since 2017 including later correspondences on the disputed overdue fees and commission under the Agreements have always been directed to the 2nd Defendant at the Qatar business address. This was never disputed by the Plaintiff as it was the Plaintiff who exhibited the exchange of correspondences between the parties. From the exhibit shown to Court, it is clear that the Plaintiff was writing to the 2nd Defendant’s representative in Doha, Qatar. [38] In other words, the Plaintiff is well aware that matters on the disputed overdue fees and commission under the Agreements have always been handled by the 2nd Defendant in Qatar. [39] Furthermore, even the terms of the Agreements were entered into between the Plaintiff and Q Life contained the following features - i. Under the BAA, it is provided that the name(s) and address(es) to whom the coverholder (here, the Plaintiff) should send the notice of termination to (if it intends to terminate the BAA) is “Q Life & Medical Ins. Co., P. O. Box 201233 West Bay, Doha, Qatar”; and 15 ii. The Notice of Termination issued by the 1st Defendant (as a Labuan branch) was on behalf of “the management of Q Life & Medical Insurance Company LLC”; [40] It is perplexing for the Plaintiff’s representative to claim that the 2nd Defendant has no knowledge of the purported “Debt owing to the Plaintiff which accrued in 2016 -2017”. On the contrary, the conduct of parties has always been consistent with the understanding that the 2nd Defendant was the entity that was handling the business of the Defendants after the corporate restructuring. [41] The Plaintiff’s argument that their representative had never been to Qatar does not lend weight to the Plaintiff’s assertion that the jurisdiction to determine the dispute is in Malaysia. It was highlighted to the Court that the Plaintiff and the 1st Defendant were registered companies under the Labuan Financial Services Authority. However, to the mind of his Court, even if the agreement was signed in Labuan and that they were Labuan registered financial entities, it does not automatically mean the dispute must be determined in Malaysia. It must instead depend on the terms that parties agreed to bind themselves. In the current case, the exclusive jurisdiction clause is the operative clause. As such, the argument of the Plaintiff is rejected. 16 Links to Malaysia [42] The links to Labuan and this Malaysia stems were interspersed by the Plaintiff in their Statement of Claim and Affidavit In Reply. It was in the context of the 1st Defendant being licensed by the Labuan Regulators and that the Agreements between the Plaintiff and Q Life were signed in Labuan. With respect, such argument does not hold water as the location where the Agreements were signed cannot be the determinative factor where there is an express exclusive jurisdiction clause agreed upon between parties. [43] If the Plaintiff’s submission is to be adopted, then all choice of jurisdiction and governing law clauses will be rendered irrelevant and redundant if all such cases are to be determined and disposed of by the Malaysian courts simply by virtue of one or two party being a Malaysian entity. Forum non convenience [44] The Plaintiff submits that applying the Latin maxim of forum non conveniens, the dispute should be adjudicated in Malaysia. [45] The maxim means “inconvenient forum”. It does not refer to a judicial forum that is improper rather it refers to a judicial forum that is inconvenient or not as appropriate as another forum may be. 17 [46] In applying the maxim, it is essential that there must be another adequate alternate forum in which the case may be heard. Such a forum must be willing to hear the case, and the defendant must be able to be served with process within the alternate forum. [47] In the context of the current case, Malaysia is the alternate forum which is argued to be the more appropriate forum instead of Qatar. [48] The Plaintiff anchors its argument based on the Federal Court decision in Petrodar Operating Co Ltd v Nam Fatt Corporation Bhd & Anor (2014) 1 CLJ 18 (“Petrodar”). However, it must be highlighted that in Petrodar, the 1st and 2nd defendants’ agreement to submit to the jurisdiction of the Sudan courts was non-exclusive. Therefore, it was never expressly stated in any contractual provision that the dispute resolution venue was Sudan. Further, part of the Federal Court’s consideration when determining Malaysia to be the appropriate forum was the fact that the performance guarantee was issued in Kuala Lumpur by CIMB Bank having a place of business in Malaysia and that the guarantee money sought to be restrained by an injunction was at all material times in Malaysia. Issues pertaining to political climate and geographical constraints were also factors that the apex court took into account. [49] As such, it was most appropriate for the court to apply the maxim and rule that Sudan was not the convenient forum and instead, Malaysia was the most suitable forum. This Court again, would like 18 to emphasise that the agreement between parties in Petrodar did not contain an exclusive jurisdiction clause. [50] The Plaintiff also, in demonstrating why Malaysia should be the correct forum to adjudicate the dispute, submitted other cases such as Scandinavian Bunkering (Singapore) Pte Ltd v MISC Bhd [2015] 3 CLJ 291, American Express Bank Ltd v Mohamed Toufic Al -Qzeir & Anor [1995] 1 CLJ 273 and Goodness For Import and Export v Phillip Morris Brands Sarl [2016] 7 CLJ 303. [51] With respect, none of the cases by the Plaintiff were referring to an exclusive jurisdiction clause. As such, this Court finds the cases referred to were not helpful to the Plaintiff in light of the clear pronouncements in World Triathlon and Country Dairy. [52] In the present case, parties to the Agreements expressly agreed to the exclusive jurisdiction of the courts of Qatar in the Governing Law clause of the Passive Introducer Agreement and section 42 of the BAA. As such, the approach in World Triathlon and Country Dairy should be preferred. [53] It is fair to close the analysis of this case by revisiting the Plaintiff’s points in contending that Malaysia is the correct jurisdiction to adjudicate as found in the averments contained in their Affidavit In Reply. The salient points being: 19 (i) the Passive Introducer Agreement and BAA was executed in Labuan and therefore, the exclusive jurisdiction of the courts in Qatar do not arise; (ii) The Malaysian High Court can hear this case based on forum non conveniens; (iii) All the contracts of insurance negotiated and issued by the Plaintiff for and behalf of the Defendants were undertaken by the directors of the Plaintiff through their PWS Labuan's Kuala Lumpur office; (iv) The discussions pertaining to an "amicable settlement" involving "commission billings" and "account reconciliation" were conducted by the directors of the Plaintiff via their office address of PWS LABUAN LTD, a company incorporated under the laws of Labuan and having its address in Kuala Lumpur; and (v) The Defendants have failed to satisfy the special circumstances test for the consideration of the Court. [54] Again, with respect, the points raised by the Plaintiff hold no water as they neglected the exclusive jurisdiction clause. This Court rejects the arguments outrightly. 20 Conclusion [55] Premised on the foregoing reasons, having considered the submissions of the parties, it is the finding of this Court that primacy must be given to the exclusive jurisdiction clause contained in both the Passive Introducer Agreement and BAA. The Plaintiff has failed to show an exceptional circumstances to defeat the applicability of the exclusive jurisdiction clause. [56] In the circumstances, the stay application in enclosure 7 is allowed with costs. (AHMAD FAIRUZ BIN ZAINOL ABIDIN) Judge High Court of Malaya Kuala Lumpur Dated: 15th November 2021 21 Counsels J B Reuben Netto (together with Guna Seelan Maniam) for the Plaintiff. Messrs Naicker & Associates, Kuala Lumpur Loo Peh Fern (together with Siew Ka Yan) for the Defendants Messrs Skrine Advocates & Asolicitors, Kuala Lumpur 22