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On 21 October 2022, the Singapore High Court published the grounds for its decision in Janesh s/o Rajkumar v Unknown Person (“CHEFPIERRE”) [2002] SGHC 264 involving an interlocutory injunction that was issued earlier in May this year. This judgment is noted to be the first written judgment in Asia to protect a non-fungible token (“NFT”).
The facts
Grounds for the injunction
In his decision, the judge (Justice Lee Seiu Kim) held that based on the available facts, the Singapore court was the appropriate forum to hear the application. This was notwithstanding the decentralised nature of blockchain that could pose difficulties when it comes to establishing jurisdiction. The primary connecting factor was the fact that Janesh was located in Singapore and carried on his business here.
In addition, Justice Lee held that the present case demonstrated that it was perfectly possible for a person to conclude a contract with someone online where the parties to the contract have concealed their true identities using pseudonyms. Hence, even though the identity of Chefpierre was unknown, the judge’s view was that the Singapore court had the jurisdiction to grant the interim relief sought by Janesh.
Justice Lee also held that NFTs can be regarded as property. The judge considered that the classic definition of a property right in the English judgment National Provincial Bank Ltd v Ainsworth [1965] AC 1175 (“Ainsworth”) could be applied to determine if crypto assets (such as NFTs) were property. The Singapore courts would examine whether the four requirements in Ainsworth could be satisfied:
Concluding thoughts
This case is significant not only because it is the first judicial decision in Asia to protect an NFT, but also because it is the first judgment in Singapore which dealt with whether NFTs were counted as assets. With other jurisdictions (e.g., the United Kingdom) recently recognising NFTs as “legal property”, it is encouraging to see that the Singapore judiciary has now followed suit and recognised NFTs as property in its landmark ruling.
Additionally, we note that the decision included the High Court granting permission for Janesh to serve court papers on Chefpierre through Twitter and other chat platforms (e.g., Discord), as well as the messaging function of the latter’s cryptocurrency wallet. This decision is, in our view, a practical one. In cases of digital art theft or unauthorised use, the location of the defendant is always a major issue, given that his/her/their physical location cannot always be ascertained. Effecting service through social media/Internet messaging platforms would, in most scenarios like the present case, be the only practical manner.
Going forward, the express recognition by the Singapore High Court of an NFT as property means that, in practice, crypto assets will be capable of being the subject of freezing order and proprietary injunctions, which will provide greater protection to NFT owners in enforcing their rights in respect of their digital assets.
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Clyde & Co is a leading global law firm with over 50 offices and associated offices worldwide, 440 partners, 1,800 lawyers, 2,500 legal professionals and 4,000 total staff. The Singapore office of Clyde & Co has advised a range of companies in size and scope (from start-ups to incumbent financial service companies) on contentious and non-contentious crypto asset matters, including crypto assets fraud and disputes. Should you have any queries on crypto assets fraud investigations and regulatory matters, our team would be happy to assist. Please do not hesitate to contact the authors of this article.
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