(g) Enforcement andrecognition of awards (or resisting the enforcement and recognition of awards) undersections 19. 29 and 31 of the IAA read with the New York Convention.
The SICC is designed to deal with international commercial disputes, and the move to allow the SICC to hear IAA applications is a recognition of the increasing complexity of IAA matters as Singapore has catapulted to being one of the most popular seats worldwide.
Court of Appeal Upholds Setting Aside of Investor-State Arbitral Award
In Kingdomof Lesotho v Swissbourgh Diamond Mines(Pty) Limited and others [2017] SGHC 195,the High Court allowed the Kingdom of Lesotho s application to set aside aninvestor-State arbitral award. This marked the first time the Singapore courts allowed an application to set aside an investor-State arbitration award on themerits. The application engaged novel issues of international arbitral law, international investment law and public international law.
In Swissbourgh DiamondMines(Pty) Limited and others v Kingdom of Lesotho [2018] SGCA 81, the Court of Appeal upheld the High Courts decision, further expounding on the issues raisedat first instance.
The Appellant investors in this case had brought a claim against the Kingdom of Lesotho before the Permanent Court of Arbitration("PCA"). While the PCA Tribunal found in favour of theappellants, the Singapore courts set aside the award in its entirety, holding that the PCA Tribunal did not have jurisdiction over the dispute. The Court of Appeal also held that the Singapore courts had jurisdiction to set aside the award.
The Kingdom of Lesotho wassuccessfully represented by Paul Tan, Alessa Pang and David Isidore an of Rajah&TannSingapore LLP.
Court of Appeal Upholds Setting Aside of Arbitral Award
In GD Midea AirConditioning Equipment Co Ltd v Tornado Consumer Goods Ltd [2017] SGHC 193, the High Court allowed an application to set aside the key parts of an arbitral award-amounting to around US$9m-on jurisdictional and procedural grounds. On 1 March 2018, the Court of Appeal upheld the High Courts decision and its reasons, maintaining the setting aside order.
The High Courtallowed the setting aside on the basis that:
(i) The tribunal exceeded its jurisdiction in finding that the respondent had breached a clause 4.2 of the contract between the parties. The parties had not alleged any breach of clause 4.2, nor was it an issue within the agreed list of issues.
(ii) The tribunal failed to adhere to the agreed procedure by departing from the agreed list of issues. The Respondent was not afforded any opportunity to object to this departure from the agreed procedure as the issue of the breach of clause 4.2 did not arise until theaward was released.
（iii） The tribunal had breached the rules of natural justice-specifically the fair hearing rule-by denying the Respondent a full opportunity to present its case with regard to the breach of Clause 4.2 point.
The Court of Appeal upheld the decision of the High Court and its reasons. The Respondentwas successfully represented at the High Court and the Court of Appeal by PaulTan and Devathas Satianathan of Rajah& Tann Singapore LLP.
Court sets asideArbitral Award as against minors on public policy Grounds
In BAZ v BBA and others [2018] SGHC 275, the High Court was faced with a S$720 million arbitral award which had been issued against-amongst others-a number ofminors(the"Minors"). The Court considered the public policy issues behind enforcing an award against minors, and ultimately decided to set asidethe award as against the minors.
This case involved a Share Sale and Purchase Agreement("SSPA」), which the Buyers alleged was obtained through fraudulent misrepresentation on the part of the sellers. The dispute went before the International Chamber of Commerce, and the tribunal issued an award of S$720 million in favour of the Buyers,with the Sellers being held jointly and severally liable for the damages.
However, a number of the Sellers were minors at the material time. The minors thus applied to the Singapore court to have the award set aside as against them on the ground that it was against public policy. The High Court held that it was part of the public policy of Singapore to protect the interests of minors incommercial transactions， and that the effect of the award was to enforce the SSPA on the Minors and to impose the liability for the fraudulent misrepresentation of their guardian or principal on them. This would violate the protection given to minors in contractual relationships under Singapore law and shock the conscience of the court. The Court thus allowed the Minors application.
The Minors were successfully represented by Lee Eng Beng S.C., Kelvin Poon, Alyssa Leong and Matthew Koh of Rajah Tann Singapore LLP.
Court Rejects Application to Adjourn Enforcement Proceedings Pending Setting Aside Challenge inArbitral Seat
In Man Diesel& Turbo SE V/M. Skaugen Marine Services Pte Ltd [2018]SGHC132, the High Court considered whether it should adjourn proceedings to enforcean arbitral award pending the determination of proceedings challenging the award in Denmark, being the seat of the arbitration. It is understood that this is the first time the Singapore Court has elaborated on the test to be applied when dealing with an application for adjournment and a cross-application forsecurity.
The Court rejected the Defendant's adjournment application, and upheld theorder granting leave for the immediate enforcement of the arbitral award. This decision illustrates that, in appropriate cases, the Singapore Courts are willing to assist in the enforcement of arbitral awards, not with standing that the award is being challenged in the seat of arbitration. This decision also offers practical guidance as to some of the factors the Singapore Courts may consider relevant to their analysis, such as the merits of the setting aside challenge and the likely consequences of any further delays in enforcement.
Danny Ong, Yam Wern-Jhien and Annabelle Teo of Rajah Tann Singapore LLPsuccessfully represented the plaintiff in these proceedings.
