2006 CNN report

Eric Ellis, Sydney Morning Herald, 7 Jan 2008

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 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 alive, 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.