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The recent ruling indicates that the court is more in line with Singapore's pro-arbitration approach and that it would only reject the execution of international arbitral awards in exceptional circumstances.
Introduction
Sanum Investments Limited / ST Group Co., Ltd. and others [2018] SGHC 141 on June 18, 2018, determined an application for refusal to execute an arbitration award for procedural and procedural defect in arbitration. Although having confirmed the existence of procedural irregularities, the court dismissed the application (as defined below) on the grounds that the applicants (as defined below) did not show any prejudice resulting from the procedural irregularities.
in this case was published on August 22, 2016, in which $ 200 million in damages were to be paid to Sanum by ST Group Co., Ltd., Mr. Sithat Xaysoulivong, ST Vegas Co., Ltd. and ST Vegas Enterprise (the Claimants)
Sanum applied to the Singapore District Court on November 23, 2016 for a judgment on the award.
The applicants challenged the enforcement of the award under s. 36 (1) citing the following jurisdictional and procedural objections:
- the award was made pursuant to s. an arbitration agreement to which all parties were not parties, and the award related to a dispute not provided for by the scope of the submission to arbitration (the jurisdictional exceptions)
- the composition of the court and the seat of arbitration were not in accordance with the agreement of the parties (the procedural exceptions).
(collectively known as
The Decision
(i) The Exceptions of Jurisdiction
The court noted that the court was relying on the framework agreement and the participation agreement between Sanum and ST Vegas Enterprise to determine its jurisdiction.The court ruled that it was incorrect, since the underlying dispute arose solely from the framework agreement. Group, Mr. Sithat and ST Vegas Co were parties to the Master Agreement, they were bound by the arbitration agreement contained in the agreement and were parties to the arbitration. then the award tied them in. Conversely, as ST Vegas was not party to the arbitration agreement and it was not party to the arbitration agreement. arbitration, award did not bind ST Vegas.
(ii) Procedural Exceptions
Having determined that the arbitration agreement was it The court concluded that the seat of the arbitration was Macao and not Singapore. The court also decided that the court should consist of only one arbitrator instead of three.
Nonetheless, the court dismissed the application because the plaintiffs did not discharge the burden of proving the seriousness of the violation (ie, an improperly seated arbitration or an incorrect number of arbitrators on Arbitral Proceedings)
The Court cited Gary Born, International Commercial Arbitration (Kluwer Law International, 2nd Edition, 2014) :
Article V (1) (d) also requires a serious breach of an important procedural clause of the arbitration agreement of the parties to justify the non-recognition of an award. This is not a ground for denying the recognition of a sentence that there has been a minor or incidental breach of the agreement of the parties or the breach of an incidental condition or insignificant of this agreement …
[i] t usually required for an award – the debtor who claims non-recognition under Article V (1) d) to show that the violation of the procedures arbitrations agreed by the parties has materially affected the rights of the party. to respect the provisions of the agreement of the parties, including the substantive provisions of this agreement, furthermore, the non-compliance must have had a significant effect on the arbitration process that produced the award in question. ..
With regard to the incorrect number of arbitrators, the court cited AQZ against ARA [2015] 2 SLR 972 which concluded as follows:
Even though the supplier is right to argue that arbitration should not have been after being brought before a sole arbitrator, the Supplier has not discharged its burden of explaining the materiality or the seriousness of the breach. Nor has it been shown that the arbitral procedure adopted has caused injury. If the prejudice is not a legal obligation to annul an award under Article 34 (2) (a) (iv), it is a relevant factor that the court to consider whether the violation in question is serious and therefore
Observations
Foreign users of an international arbitration proceedings can be reassured that the court n & # 39; 39 authorizes the refusal to execute an international arbitral award only in exceptional cases. circumstances in which serious prejudice resulting from a procedural irregularity may be demonstrated by the injured party. Logical and practical reasoning affirms the pro-arbitration approach adopted by Singapore courts from the point of view of enforcement. The pro-arbitration approach is aligned with Singapore's goal of being the preferred seat and the preferred forum for settling international disputes, which has borne fruit. According to the latest International Arbitration Survey of Queen Mary University of London released on May 9, Singapore has been ranked as the most preferred arbitration seat in Asia and the Arbitration Center. Singapore International as the most preferred arbitration institution in Asia.
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