Singapore takes a restrictive approach to state immunity. The Singapore State Immunity Act (Chapter 313, Revised Edition 2014) (SSIA) is modelled closely on the UKSIA, with some minor differences. These include removing references to international conventions on state immunity to which Singapore is not a party (such as the European Convention on State Immunity and the International Convention for the Unification of Certain Rules Concerning the Immunity of State-owned Ships).
Under the SSIA, foreign states are generally immune from jurisdiction, save for where: the state has submitted to the jurisdiction of the Singaporean courts (s. 4(1)); a state has agreed to arbitrate (s. 11(1)); and proceedings relate to commercial transactions entered into by the state or a contractual obligation of the state (whether commercial transaction or not) that falls to be performed wholly or partly in Singapore (s. 5(1)). In defining a “commercial transaction”, Singapore has followed the UK approach by setting out a list of categories of such transactions (s. 5(3)).
As for immunity from execution against a state’s property, the general immunity is set out in section 15(2) of the SSIA. However, there is a commercial exception to this immunity: a state’s immunity from execution against its property does not apply to property “which is for the time being in use or intended for use for commercial purposes” (s. 15(4)). “Commercial purposes” is defined as “purposes of such transactions or activities as are mentioned in section 5(3)”, and section 5(3) in turn and as explained above, relates to the “commercial transactions” exception to state immunity.
In WestLB AG v Philippine National Bank and others [2007] 1 SLR(R) 967, the Singapore High Court considered the commercial transaction exception (s. 5(1)(a) SSIA), albeit obiter. This case concerned funds accumulated by the late President of the Republic of Philippines (Philippines), Ferdinand E Marcos, which were, as a result of steps taken by the Philippines and the Swiss authorities, moved from bank accounts in Switzerland to the Philippines National Bank (PNB), and then by PNB to WestLB AG, Singapore (WestLB). In 2003, the Supreme Court of the Philippines ordered the funds to be forfeited to the Philippines and PNB instructed WestLB to release the funds. WestLB refused as it faced competing claims to the funds. WestLB commenced interpleader proceedings in Singapore to determine ownership, adding the Philippines as a defendant to those proceedings. The Philippines applied for a stay on the basis that it was, inter alia, entitled to state immunity.
The court held that the Philippines had submitted to the court’s jurisdiction (a finding upheld on appeal). Although it was unnecessary to determine whether the commercial transaction exception was made out, the court went on to consider this for completeness. The court took the view that the act of placing the funds into WestLB’s bank account must be looked at in its whole context and that, in context, it was “an integral part of the exercise of its sovereign powers to recover the funds and … not commercial transactions undertaken by [the Philippines]”. Accordingly, the commercial transaction exception would not have applied (and this point was not pursued on appeal).