[LINK] SMH: 'Singapore libel case a test of Murdoch's bona fides'

[Roger Clarke]

Singapore libel case a test of Murdoch's bona fides
The Sydney Morning Herald
January 7, 2008
http://business.smh.com.au/singapore-libel-case-a-test-of-murdochs-bona-fides/20080106-1kg3.html?page=fullpage#contentSwap2

Dow Jones brought some unwanted baggage with it, Eric Ellis reports.

THE TIMES asked readers recently "Is libel dead?" The number of 
defamation writs issued in British courts last year was about an 
eighth of the 457 writs 10 years earlier.

The downward trends are similar in other Western jurisdictions such 
as Australia and North America, suggesting those who willingly stand 
in the public eye are becoming thicker-skinned in withstanding the 
decade's avalanche of media forms.

Or perhaps the media are more careful about who they traduce, and how.

But one place where libel remains a legal growth industry is in a 
tiny country desperate to become part of the developed world: among 
the sensitive political and business petals of Singapore. As Rupert 
Murdoch is himself finding out.

That is because of a long-running case concerning Singapore's premier 
political family, the Lees; a case Murdoch's News Corporation 
inherited via its recently completed $US6 billion ($6.8 billion) 
purchase of Dow Jones.

Lee family members include, of course, Singapore's elder statesman 
Lee Kuan Yew and his son, the Prime Minister, Lee Hsien Loong.

The Lees have a long history of libel stoushes with foreign media, 
battles they have never lost when heard in Singapore's own courts, 
which grants them damages payouts that set world records. The 
(pre-Murdoch) Asian Wall Street Journal, Time, The International 
Herald Tribune, Businessweek, Bloomberg and the Financial Times are 
among other international names respected for their accuracy and 
authority that have been hit with the Lees' libel broadsides. And 
lost.

The Lees have used similar tactics in seeking to silence political opponents.

Remarks that might be regarded as just part of the rough-and-tumble 
of competitive political or business culture in Australia often head 
to the libel courts when aired in Singapore.

However, it is one-way traffic. Opponents have never won an action 
against the Lees. Singapore is in effect a one-party state, and that 
party is the Lee party.

Such is the presumption of a libel loss that most media companies now 
do not even take the fight to trial, instead promptly settling. They 
know that history says they will not win, and management usually 
decides that a quick settlement limits expensive legal bills - and 
possible even higher damages when Lee lawyers insist mid-trial that 
publicly heard evidence has further harmed sensitive reputations, 
which prevents airing of issues that may be germane to the case.

It is not just the media. In 2001 what seemed to many bankers to be a 
normal tactical paper was prepared by Goldman Sachs on behalf of its 
local client DBS Bank. Goldman-DBS criticised the merits of a rival 
bid for a bank DBS was seeking to take over.

Target and rival were miffed, complaining to the central bank, and 
each board soon pocketed $US1 million in damages from DBS, which did 
not get the deal.

But the case Murdoch has inherited is different. It stems from a 
profile of the Singapore opposition figure Chee Soon Juan published 
in the Dow Jones-owned monthly The Far Eastern Economic Review in 
July 2006.
In it Chee criticises the Government's handling of a local charity scandal.

But Lees's lawyers saw a reputational attack and sued the Review on 
behalf of Lee Kuan Yew and Lee Hsien Loong.

But on this occasion the magazine refused to roll over and settle. 
Much to Singaporean annoyance, the offending article remains posted 
on the Review website (alongside a link to human rights press 
awards). There are front-page pointers to all legal exchanges on the 
matter and an editor's letter explaining why the Review is taking the 
battle to the Lees.

The Review's arguments are mostly about transparency and the rule of 
law, the very principles on which Singapore prides itself but many 
say does not practise with quite the gusto it claims.
It is a case that poses particular issues for all protagonists.

It will be the first time News and the Lees have crossed swords in a 
libel matter, which has become a perverse kind of rite of passage for 
other international media proprietors.

The Lees have been the dominant political family in Singapore since 
the 1950s, about the same time Murdoch has been in charge of News 
Corp. Both have helped build institutions about the same size; News 
Corp's market worth approaches $US100 billion, Singapore's GDP a bit 
bigger. Both are expert at projecting power, and neither brook any 
challenge to their authority.

The Review had argued, pre-Murdoch, that since it did not have an 
office or staff in Singapore, it should not be subject to Singapore 
law.

It wanted the matter heard in Hong Kong, where it is based, and where 
it feels it would get a fairer hearing. The Lees have never won a 
case outside Singapore.

In a letter to Singapore's Information Ministry, which has sought a 
bond from the Review in lieu of presumed damages and Singaporean 
jurisdiction over the Review, Dow Jones's lawyers argue "its 
imposition on the Review, merely for the sake of making it easier for 
senior ministers of the Singapore Government to recover personal 
damages in a libel action, would be deeply regretted by all who care 
for the rule of law in your country.

"It is an exorbitant and unlawful demand that even totalitarian 
states have never sought to impose on media."

And that is the way the matter has largely stayed since mid-2006, 
largely an exchange of testy lawyers' letters as Singapore throws out 
the Review's effort to end the action in Singapore.

But then came Murdoch's successful bid for Dow Jones last year. The 
management that previously backed the Review's feistier approach to 
Singapore no longer runs the company, after Murdoch put in a new team.

The status of the case is unclear. Outwardly, it seems as if nothing 
has changed, and a Murdoch-owned the Review is still taking on the 
Singaporeans. The articles and letters remain posted at the 
Review.com and the Review editors say it is still live, referring the 
matter to Dow Jones lawyers, who do not respond.

The matter is pregnant with the notion of what constitutes 
credibility - Singapore's own sense of it and News's in the court of 
public opinion after the reputational shellacking it received en 
route to the Dow Jones win.

Singapore's legal system is also under scrutiny. The US embassy in 
Singapore has frequently expressed concern about "the ruling party's 
use of the court system to intimidate political opponents". The 
Australian lawyer Stuart Littlemore, who has observed Singapore libel 
cases for the International Commission of Jurists, says "the 
Singapore leadership has a long-standing record of using the High 
Court as a mechanism for silencing its opponents - by suing them for 
statements that, in any comparable jurisdiction, would be seen as 
part of a robust political debate inseparable from democratic 
freedoms, and by being awarded such unconscionably high damages and 
costs as to bankrupt the defendants, forcing them out of parliament".

Credibility was at the heart of the Murdoch bid for Dow Jones. There 
were numerous critics of his Dow Jones tilt - notably in its own 
newsrooms, and including some members of the publisher's controlling 
Bancroft family (which quickly put aside its gripes in accepting 
News's generous offer). The critics said Murdoch and News had 
insufficient credibility to be custodians of venerable media assets 
like The Wall Street Journal and The Far Eastern Economic Review.

News Corporation prevailed after a searing battle in which Murdoch's 
personal and corporate reputation was assailed, almost to the point 
of him pulling out. Murdoch himself said bitterly that he was treated 
like a "genocidal tyrant".

A significant aspect of the appeal of Dow Jones to Murdoch is its 
under-played assets in booming Asia, a region where Singapore 
interests are hugely influential, both politically and commercially, 
and where Murdoch thinks he can add much value absorbing Dow Jones 
into the rest of the News empire.

But just as Murdoch has been cited as providing the type of media 
Asia does not want, notably by China, wealthy Singapore is often 
cited as a regional development model, particularly in effective 
one-party states like China and through Central Asia.

It is an important, if sometimes self-serving, voice in the so-called 
Asian Values debate.

Unlike many of his competitors, Murdoch's titles have never 
experienced a Singapore libel action. The city-state has rather been 
seen by News as a place to raise money and do business - notably in 
2001 when Murdoch briefly entered a joint venture with Singapore's 
state-owned telecom (then run by a son of Lee Kuan Yew) in an 
unsuccessful bid for Hong Kong's leading telecom.

But with this libel headache now on Murdoch's desk, Singapore faces a 
media company run by a dominant individual who is an archly pragmatic 
dealmaker when it suits him. That could mean wiggle room for legal 
negotiation except that, with libel, the Lees famously are not much 
for turning. Absolute victory is their goal. It will be fascinating 
to see how the battle plays out, mindful of the messages it could 
send around a democratising region where state control of media is 
evolving and where libel clearly is not yet dead.

Eric Ellis is South-East Asian Correspondent for Fortune Magazine.


[Declaration:  I was an expert witness called by the solicitors for 
Dow Jones in the Gutnick defamation case, and the spectre of 
Singapore was part of the argument: 
http://www.anu.edu.au/people/Roger.Clarke/II/Gutnick.html


-- 
Roger Clarke                  http://www.anu.edu.au/people/Roger.Clarke/
			            
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Visiting Professor in Info Science & Eng  Australian National University
Visiting Professor in the eCommerce Program      University of Hong Kong
Visiting Professor in the Cyberspace Law & Policy Centre      Uni of NSW