THE LAW AND PRACTICE OF ARBITRATION

1. INTRODUCTION TO ARBITRATION LAW AND PRACTICE

1. Basic Premise

- Commercial Arbitration not Industrial Arbitration or any other kind

- ‘A judicial process concerned with the adjudication of rights of parties in a dispute.’ See
Halsbury’s Laws of England, 4th edition, Vol 2 at paragraph 502.

- Arbitration defined. See Halsbury’s Laws of Singapore (2003 Reissue), Vol 2 at p 3.

- A working definition: “The resolution of a commercial dispute between two parties who have
agreed to refer their dispute to an independent, impartial individual or tribunal (usually of 3
persons) privately appointed by the parties and whose findings or judgment in respect of the
dispute shall, by agreement, be binding upon the parties” – Chew, Law and Practice of Arbitration
in Singapore, LexisNexis, 2010 at p 2.

2. Some Differences between Arbitration and Litigation –

S/No. Arbitration Litigation

Consensually resorted to by agreement Does not require the agreement of the
(1)
of the parties. parties.
Is privately conducted by independent
Judges are state appointed and
(2) arbitrators selected and paid for by the
remunerated.
parties.
The dispute resolution is conducted in It is conducted publicly in a court
(3)
room.
private.
Conducted in private, its proceedings
Being public, the proceedings are not
(4) are confidential.
confidential.
The cost of the proceedings is borne by
(5) The cost is borne by the State.
the parties.

3. History of Arbitration

- Some date it as far back as 4000 BC – Sumerian era

- In Singapore’s modern context, traceable to Statute of 1698, 9 & 10 William III, c XV

(English statute) and subsequent English Acts for example, the Arbitration Act 1950
(UK).

- A comparison may be made with the Hong Kong experience which was also a British

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 Colony whose arbitration laws tracked those of the UK and eventually culminated in the
Arbitration Ordinance of today.

4. Two Types of Arbitration

- Domestic

- International

5. The Legislative Framework in Singapore

- Arbitration Act (Cap. 10)

- International Arbitration Act (Cap.143A)

- Note: The Arbitration Act and the International Arbitration Act only regulate arbitral
proceedings where the situs or seat of the arbitration is Singapore.

- Historical background to the law as represented by the two Acts – old Arbitration
Ordinance and Arbitration Acts.

- Why 2 Acts?

- UNCITRAL Model Law

- What is it?

- Why the Model Law? Any other alternatives – see Arbitration Act, 1996 (UK) for
example.

6. The Domestic Arbitration Regime – Arbitration Act (Cap.10)(‘AA’)

- Essentially it covers arbitrations between local parties and where there are no
international elements.

 When is an arbitration domestic?

o S 3 AA: This Act shall apply to any arbitration where the place of arbitration (seat
of arbitration) is Singapore AND where Part II of the International Arbitration Act
does not apply to that arbitration.
o S 5(4) read with S5(1) IAA: AA shall NOT apply to international arbitration AND
arbitrations that are not international but Part II IAA and Model Law applies to
them because parties agree to this in writing
o That which is not international arbitration under the IAA becomes a domestic
arbitration and becomes subject to the AA.

- Much of the arbitration disputes which dominate the domestic arena arises out of
construction disputes and other related areas. This is primarily because the Singapore
Institute of Architects (SIA) form of contract mandates the reference to arbitration of
disputes under the agreement.

- There are also other institutional agreements which include a reference to arbitration for
example the Singapore Institute of Surveyors and Valuers.
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- Traditionally also old forms of Tenancy Agreements and some continue to be used,
contain an arbitration clause or agreement.
7. International Arbitrations – International Arbitration Act (Cap.137A)(IAA)

- In reality a very new regime. Prior to 1995, before the enactment of the IAA international
arbitration as we have now become well known as a hub for was not a common feature.

- Historically international arbitrations or arbitrations with international elements did not

take place in Singapore. Even where Singapore as a State or Government was a party,
arbitration agreements provided for arbitration sitting either in London or Geneva or
Paris. London was a common arbitral seat even in Government contracts. Choice of
arbitral seat is usually driven by the perception of neutrality of the seat.

- The enactment of the IAA in 1995 was the result of the recommendation of the Sub-
Committee on Review of Arbitration Laws appointed by the Attorney-General in 1991.
The IAA came into force on 27 Jan 1995. For the first time, Singapore had a
comprehensive international arbitration regime. Singapore opted for the United Nations
Commission on Trade and Law (UNCITRAL) Model Law.

- The sub-committee in recommending the UNCITRAL Model Law did examine the UK
Arbitration Act which was passed in 1996. The UK Act does not adopt the UNCITRAL
Model Law. Indeed it is practically the only leading common law jurisdiction that does
not.

- The sub-committee concluded and recommended that Singapore unlike the UK could not
ignore the Model Law regime.

8. Why 2 Acts?

- A clue is found in the recommendation of the Sub-Committee of the Law Reform

Committee of the Singapore Academy of Law:

“... it is considered that the adoption of a unified arbitration regime

that resulted in a lesser degree of curial intervention would be
unacceptably radical for the local legal profession and local
businessmen.”

- Important for domestic arbitrations to be subject to greater scrutiny by the local courts:

a. Local arbitrations need not concern itself with international principles etc

b. Much local arbitrations are conducted by non-lawyers; these include

professionals allied to the building industry such as architects and engineers as
well as quantity surveyors. That being the case, it is perhaps important that they
be more closely supervised by the courts.

c. Local courts will have interest in the development of local jurisprudence

applicable to local situations which will inevitably arise out of domestic
arbitrations with entirely local overtones without any international feature
whatsoever.

d. A practical reason which is more of an assurance to the community is that local

parties may need the protection or aid of the courts more than international

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 parties who have access (by reason of financial muscle) to sophisticated advisors
and state of the art resources. The domestic regime should therefore provide for
this differentiation.

9. The UNCITRAL Model Law (United Nations Commission on International Trade

Law)

What is it? It is the product of the UNCITRAL and is the culmination of extensive
consultations amongst the international community spanning many years and finally
adopted by the UN General Assembly on 11 Dec 1985.

The thinking behind the Model Law is best encapsulated in the Resolution of the General
Assembly of the United Nations which was adopted – GA Resolution A/40/72 of 11 Dec
1985 – see The Law and Practice of Arbitration, LexisNexis, p 20.

When enacted by a State it becomes ‘lex specialis’ applicable to the exclusion of all other
non-treaty provisions for example those in a code of civil procedure etc.

As the name suggests, the Model Law is a basic template so that any State adopting it will
have a basic framework for international commercial arbitration.

As a ‘lex specialis’ the Model Law differentiates itself both in philosophy and doctrine as
it applies to commercial arbitration. This gives rise to a separate jurisprudence
sometimes antithetical to curial laws.

Almost universal. Now adopted by more than 60 countries.

Singapore has adopted the Model Law framework in both the AA and IAA. This makes
Singapore’s Arbitration laws uniform in respect of both the domestic and the
international regimes even though found in separate Acts.

10. The relationship between the IAA, Model Law and the Arbitration Rules

- IAA and Model law are the lex arbitri that apply where SG is the chosen seat of
arbitration (means SG court have supervisory jurisdiction over the arbitration). They
also apply where SG is not the seat of the arbitration but there are proceedings in SG wrt
to the Arbitration.
 Lex arbitri governs procedure of the arbitration.

 Smith (Paul) Ltd v H & S International [1991] 2 Lloyd’s Rep 127 at 130: “What
then is the law governing the arbitration? ...It is ... a body of rules which sets a
standard external to the arbitration agreement, and the wishes of the parties, for
the conduct of the arbitration. The law governing the arbitration comprises the
rules governing interim measures (e.g. Court orders for the preservation or
storage of goods) , the rules empowering the exercise by the Court of supportive
measures to assist an arbitration which has run into difficulties (e.g. filling a
vacancy in the composition of the arbitral tribunal if there is no other
mechanism) and the rules providing for the exercise by the Court of its
supervisory jurisdiction over arbitration (e.g. removing an arbitrator for
misconduct).”

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  Lex arbitri is normally the law of the situs i.e. “seat” of the arbitration (if different,
many practical problems (Halsbury’s): which court has supervisory jurisdiction,
the court named in the agreed lex arbitri or the court within whose jurisdiction
the arbitration is sited? How, if it is possible, could the court named in the agreed
lex arbitri effectively exercise its powers over an arbitration outside its territorial
jurisdiction? How, if it is possible, could the court within which the arbitration is
held give directions based on a foreign lex arbitri?).

 Note on situs (PT Garuda Indonesia v Birgen Air [2002] SGCA 12): Distinguish
between the place of arbitration, sometimes termed the “seat” or situs of the
arbitration, from the place where the arbitral tribunal carries on hearing
witnesses, experts or parties, namely, the venue of the hearing. Once parties have
agreed on the situs of the arbitration, this does not change even though the
tribunal may meet to hear witnesses or do other things in relation to the
arbitration at a location other than the situs of arbitration. The situs of the
arbitration will only change where parties have expressly agreed to it, or where it
is clear that there has been an implied agreement to do so.

 Even if arbitration agreement provides no situs OR provides options for its situs,
once situs is chosen, lex arbitri = law of the situs. An arbitration agreement can
exist without knowledge about what the lex arbitri will be.

 Lex arbitri can be different from the law of the arbitration agreement or the
substantive law of the contract (because an arbitration clause is an agreement
that is separate and distinct from the underlying contract)

- Arbitration Rules are different. They are the procedural rules chosen by parties
(operating contractually) to govern the conduct of their arbitration. They are a different
genus to lex arbitri (Model Law, as amended by IAA, is part of the law of international
arbitration and not in the genus of Arbitration Rules e.g. UNCITRAL Rules of Arbitration).

- Arbitration Rules cannot override lex arbitri (mandatory statutory provisions in the
Arbitration Act or the International Arbitration Act). Such Arbitration Rules are intended
to co-exist with and complement the applicable law of arbitration and the specific terms
of the arbitration agreement. Arbitration Rules adopted by parties are to be given effect
to the extent they are not inconsistent with the mandatory provisions of the law of the
arbitration (e.g. IAA, Model Law), whether they are adopted before or after the
commencement of the arbitration (s 15A IAA).

- In the event of conflict between lex arbitri and Arbitration Rules, resolve the conflict by
applying the lex arbitri (AA, IAA or Model Law) where applicable.
 Mandatory provisions in the (AA), IAA and Model Law will prevail in such a conflict.
o Mandatory statutory provisions normally relate to the power of the court to
intervene in certain situations to protect the integrity of the arbitral process,
the rights of the parties to be heard and the enforcement of the awards or
orders made. Such provisions are made in terms which would expressly
override the parties' contrary agreement (e.g. statute using words such as
'notwithstanding any term in an arbitration agreement', 'the court shall' and
'notwithstanding anything to the contrary'.)
 Arbitration Rules prevail only where they conflict with non-mandatory provisions in
the AA, IAA (modifying the Model Law).
o Non-mandatory, 'gap filling' provisions: Provisions in the AA and the IAA
which are made expressly subject to the parties' contrary agreement or apply
only in the absence of the parties' arrangements (e.g. statute uses words such
as 'unless parties otherwise agree', 'subject to agreement to the contrary' and
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 'in the absence of agreement'. Some provisions grant party autonomy in
terms like 'parties are free to agree'.)
o Where a rule of arbitration makes reference to or provides for a matter also
covered by a statutory provision which does not prohibit an agreed
arrangement, the same is to be considered not mandatorily applicable.
 Where Arbitration Rules make provision for a matter not provided by statute, and is
not inconsistent with the mandatory provisions contained in the statute, the
provision would remain applicable to the parties or to the arbitration.
 SEE BELOW (S15A IAA)

- Section 5 IAA generally and section 5(2) specifically

 S5(1) provides that Part II and the Model Law will not apply to any arbitration which
is not an international arbitration (i.e. only applies to international arbitration) unless
the parties agree in writing that this Part or the Model Law shall apply to that
arbitration

 S5(2) provides for when an arbitration is international:

 When 1 or more of e parties has its place of biz in any state other than SG at the
conclusion of agreement. S5(2)(a); OR
 The place of arbitration (determined by the arbitration agreement) is outside the
state where parties have their places of biz. S5(2)(b)(i); OR
 Any place where substantial part of the obligation of the commercial relationship
is to be performed is outside the state where parties have their places of biz.
S5(2)(b)(ii); OR
 The place with which the subject matter of dispute is most closely connected to is
situated outside the state where parties have their places of biz. S5(2)(b)(ii); OR
 The parties have expressly agreed that the subject-matter of the arbitration
agreement relates to more than 1 country. S5(2)(c)
 If party has more than 1 place of biz, place of biz shall be that which has the
closest relationship to the arbitration agreement. S5(3)(a)
 If party does not have place of biz, reference to his place of biz shall be
construed as a reference to his habitual residence. S5(3)(b)

- ‘Place of business’: in determining the place of business, court must have regard to the place
of ‘substantial performance’, which is where a party’s main obligations were to be carried out.
(Mitsui Engineering & Shipbuilding Co Ltd v PSA Corp Ltd & Anor)
- In the case Mitsui’s main responsibilities were design which were carried out in Japan. As such
its place of biz was Japan and arbitration was international as per s 5 IAA.
- Takeaway: place of business is where ‘substantial part of the contractual obligations’ are to be
performed.

- Substantial Performance: In some cases, it may require a detailed investigation of the key
obligations, not just majority of the obligations under the contract. This requirement is both
qualitative and quantitative.

- Can parties opt out of the Model Law regime – see Section 15 IAA

 YES, Model Law and Part II will not apply but the AA or the old AA will apply:

 Where parties have expressly agreed that the Model Law or Part II IAA will not
apply to the arbitration S15(1)(a); or

 Where parties have expressly agreed that the AA or the repealed AA 1985 Ed
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 shall apply to the arbitration S15(1)(b)

 NB: A provision in an arbitration agreement referred to or adopting any

Arbitration Rules shall not of itself be sufficient to exclude the application of
Model Law or Part II. S15(2)
Note that in context of a foreign award where Part II or Model Law doesn’t
apply, Part III of the IAA still governs recognition and enforcement of
foreign awards.
- Inconsistency between Arbitration Rules & Lex Arbitri

Where lex arbitri (e.g. AA, IAA, Model Law) OR Arbitration Rules are silent about a
matter: section 15A IAA
 Arbitration Rules agreed to or adopted by the parties, whether before or after the
commencement of the arbitration, shall apply and be given effect to the extent that such
Rules are not inconsistent with a provision of the Model Law or Part II IAA from which
the parties cannot derogate. S15A(1)
 Issue: Are the Arbitration Rules chosen by parties inconsistent with the Model Law or
Part II IAA?
 Arbitration Rules not inconsistent with the Model Law or Part II merely because it
provides for a matter on which the Model Law and Part II is silent: S15A(3)
 Arbitration Rules not inconsistent with the Model Law or Part II merely because the
Arbitration Rules are silent on a matter covered by any provision of the Model Law
or Part II: S15A(4)
 Arbitration Rules not inconsistent with the Model Law or Part II merely because it
provides for a matter which is covered by a provision of the Model Law or Part II
which allows the parties to make their own arrangements by agreeing to the
application or adoption of rules of arbitration or by providing any other means by
which a matter may be decided, but which applies in the absence of such agreement:
S15A(5) read with S15A(6)

Confusion Regarding inconsistency between Rules and Lex Arbitri prior to

enactment of S15 and S15A

String of cases prior to the 2001 amendments tended to suggest that where parties opted
for rules that had provisions which were alien to certain provisions of the Model Law,
they ousted application of the IAA and the Model Law entirely by implication and the AA
applied by default.

Amendments to the IAA corrected that and the proper application is guided by S15 and
S15A of the IAA. This means an express agreement is required to oust the application of
the IAA and/or Model Law entirely and where a provision in the rules is in conflict with
mandatory provisions in Part II & the Model Law, then the rule in conflict will not apply
to the extent that it is inconsistent. However the other rules which are not inconsistent
will still apply.

- Where parties choose a country apart from SG as the seat of the arbitration, the IAA has
no application unless there is an application or proceeding within Singapore. (Leslie
Chew) It is merely a question of the court applying the law of the land to the proceeding
before it.

Cases
- Coop International Pte Ltd v Ebel SA [1998] 3 SLR 670 (OLD CASE PRE S15 IAA): Expressly
agreeing to opt out of IAA and Model Law not necessary. It was done by implication by choosing
procedures alien and contrary to the mandatory provisions of the IAA or Model Law, such as the
Geneva Rules.

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  However there is an alternative argument. Just because parties have chosen
Arbitration Rules contrary to the Model Law doesn’t imply that there is a blanket
incompatibility between the Arbitration Rules and the Model Law. The lex arbitri
and the Arbitration Rules are of different genus and can operate in tandem with
each other.
 Should there be an inconsistency between the Arbitration Rules and the Model
Law, then the Model Law should prevail unless the relevant provision in the
Model Law could be derogated from (as some provisions in the Model Law are). If
the provision can be derogated from, then the relevant provision in the
Arbitration Rules would apply instead. (Leslie Chew)

- John Holland v Toyo Engineering Corp (Japan) [2001] 2 SLR 262 (OLD CASE PRE S15 IAA):
Parties chose ICC rules in place of Model Law but did not exclude IAA. Court held that where
parties opted for ICC rules, they ousted the application of IAA and Model Law by implication
 Seemed to indicate that where parties chose a set of rules to govern their
arbitration, the IAA and Model Law would be ousted entirely. S15 IAA now makes
it very clear that to opt out of the IAA and Model Law, there has to be express
agreement to do so by the parties.

- Dermajaya Properties Sdn Bhd v Premium Properties Sdn Bhd [2002] 2 SLR 164 : Guided by
2001 amendments and said opting out of Model Law required express agreement. However it
still held that where the Arbitration Rules were inconsistent with the Model Law, the Arbitration
Rules were excluded entirely.
 Inconsistent with S15A IAA

11. Recent revisions in 2006 to the Model Law

- Form of agreement - Article 7 Model Law

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 II. FUNDAMENTAL CONCEPTS OF MODERN ARBITRATION LAW

12. The Arbitration Agreement

- The most important aspect of arbitration law and practice is the fact that is based on
parties’ agreement – it is a consensual process. It is from this important starting point
that many consequences flow in the application of both law and practice to the arbitral
process. This is firmly embodied in modern Arbitration Law.

- For specimen clauses/agreements, see ICC and SIAC model clauses.

SIAC Model Clause

Any dispute arising out of or in connection with this contract, including any
question regarding its existence, validity or termination, shall be referred to and
finally resolved by arbitration in Singapore in accordance with the Arbitration Rules
of the Singapore International Arbitration Centre ("SIAC Rules") for the time being
in force, which rules are deemed to be incorporated by reference in this clause.

The Tribunal shall consist of _________________* arbitrator(s).

The language of the arbitration shall be ________________.

Seat of Arbitration – “the seat of the arbitration and the law of the place governs the
arbitral proceedings”. See Redfern and Hunter on International Arbitration, 5 th edition
(Oxford) Chapter 2.

- The seat of arbitration is a concept that localises the legal framework of the arbitration. This is to
be distinguished from the physical location of the arbitration which may be a different country
from the seat of arbitration. PT Garuda Indonesia v Birgen Air [2002] SGCA 12: Distinguish
between the place of arbitration, sometimes termed the “seat” or situs of the arbitration, from
the place where the arbitral tribunal carries on hearing witnesses, experts or parties, namely, the
venue of the hearing. Once parties have agreed on the situs of the arbitration, this does not
change even though the tribunal may meet to hear witnesses or do other things in relation to the
arbitration at a location other than the situs of arbitration. Situs of the arbitration only changes
where parties have expressly agreed to it, or where it is clear that there has been an implied
agreement to do so.

- Why seat of arbitration and venue of hearing can be different: when the governing rules provide
that arbitral sittings, hearing and meetings in connection with the arbitration may held in some
other location. E.g. R18.2 of SIAC rules

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Basic requirements of an Arbitration Agreement/Clause – see section 4 AA and
section 2A IAA.

 Arbitration agreement may be in the form of an arbitration clause in a contract OR a

separate agreement s4(2) AA / 2A(2) IAA
 Arbitration agreement MUST be in writing s4(3) AA / 2A(3) IAA
 An arbitration agreement is in writing if its content is recorded in any form
whether or not the arbitration agreement or contract was concluded orally, by
conduct or other means. S4(4) / 2A(4) IAA
 The “in writing requirement” is satisfied by electronic communication (e.g.
electronic mail, telegram, telex or telecopy (S4(9) AA / 2A(10) IAA) if the info
contained therein is accessible to be used for subsequent reference. S4(5) AA /
2A(5) IAA
 Where in any arbitral or legal proceeding, a party asserts existence of an arbitration
agreement in a pleading, statement of case or other document in circumstances
which the assertion calls for a reply AND the assertion is not denied, there shall be
deemed to be an effective arbitration agreement. S4(6) AA / 2A(6) IAA
 A reference in any contract to a document containing an arbitration clause shall
constitute an arbitration agreement in writing if the reference is such as to make the
clause part of the contract s4(7) AA / 2A(7) IAA
 Same as (7) but for bill of lading to a charterparty or other document s4(8) / 2A(8)

Interpretations of arbitration clauses by courts

 Courts generally take an expansive and generous interpretation of arbitration

agreements or clauses. They will do their reasonable best to ensure that a reference
or perceived reference to arbitration does not fail.

 Agreement deferring [agreement to refer disputes to arbitration] to arbitration

is not an arbitration agreement.
 The Benja Bhum [1993] 3 SLR(R) 242

 Interplay of arbitration clause and EXCLUSIVE-JURISDICTION CLAUSE

 Exclusive jurisdiction clause = parties agree that if any dispute arises under the
contract it shall be decided by Court X (cannot have any recourse to any other
court but Court X).
 Example of exclusive jurisdiction clause: The parties agree to submit disputes
to Court X.
 Example of non-exclusive jurisdiction clause: The parties submit to the
jurisdiction of Court X (i.e. if one of the parties to the contract is sued by the
other in Court X, he will not take any objection to its jurisdiction)
 An agreement to arbitrate indicates the parties' choice of arbitration as the
prescribed alternative to litigation in court. It is therefore generally inconsistent
to have a reference to arbitration as well as a choice of juridical forum or an
exclusive jurisdiction clause (Halsbury’s at 20.017). Inconsistency may negative
the intention to arbitrate.
 Cf Arbitration clause is a self-contained agreement providing for resolution of
disputes by arbitration. Exclusive-jurisdiction clause provides the lex arbitri
governing the arbitration. The lex arbitri is different from (1) proper law of the
contract (substantive law governing rights and liabilities of the parties), (2) law
that governs the arbitration agreement & (3) Arbitration Rules (e.g. of arbitral
institutions). All 3 regimes depend on the choice expressed by the parties. Smith
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 (Paul) [1991] 2 Lloyd’s Rep 127
 In the case, court provided that both the contract and arbitration agreement
were governed by English Law. The procedural rules applicable were derived
from the ICC rules which were provided for in the arbitration clause.

 Where clause provides arbitration as an OPTION (issue: did parties intend

arbitration instead of litigation)
 Inconsistent holdings in cases
 In BOTH the case of 'Dai Yun Shan' [1992] 1 SLR(R) 461 and William Co v Chu
Kong Agency Co Ltd [1993] 2 HKC 377, the arbitration clause read: 'All
disputes arising under or in connection with this Bill of Lading shall be
determined by Chinese law in the courts of, OR by arbitration in the People's
Republic of China'.
 In the 'Dai Yun Shan' case the Singapore court per Goh Joon Seng J held that
there was no agreement requiring the parties to proceed to arbitration and so
did not allow a stay of the court proceedings.
 In William Co v Chu Kong Agency Co Ltd the Hong Kong court per Kaplan J,
held that the intention to arbitrate was clear and that the clauses operated as
an arbitration agreement upon the election by any one party to proceed to
arbitration. As one of the parties had in fact elected for arbitration it was not
open to the other party to object to it.
 Better view: An agreement/clause which gives parties the option to elect for
arbitration will, if made, bind the other parties. And this an arbitration agreement
within the meaning of the IAA WSG Nimbus Pte Ltd v Board of Control for Cricket
in Sri Lanka [2002] 3 SLR 603
 An agreement which provides for disputes to be referred to arbitration upon
the election by any one of the parties to arbitrate would become a binding
arbitration agreement upon such an election (Westfal-Larsen & Co A/S v
Ikerigi Compania Naviera SA, The Messiniaki Bergen [1983] 1 All ER 382,
[1983] 1 Lloyd's Rep 424; Navigazione Alta Italia SpA v Concordia Maritime
Chartering AB, The Stena Pacifica [1990] 2 Lloyd's Rep 234)

 Ambiguous / Uncertain Clauses

 There are limits to an expansive approach to interpreting arbitration clauses.
Ambiguous clauses will not be upheld – Teck Guan Sdn Bhd v Beow Guan
Enterprises Pte Ltd [2003] 4 SLR 276
 Clause in that case: “Any quality dispute would be settle [sic] amicably with
reference to an independent surveyor. However, any dispute out of this
contract to be governed by the rules of the Cocoa Merchants’ Association of
America Inc … in force on that date.”
 Held: No arbitration agreement.
 Court found the clause was badly drafted and too vague, cannot be
seriously argued that the words “any dispute out of this contract to be
governed by the rules of the Cocoa Merchants’ Association of America”
make it clear that disputes that do not concern the quality of the goods
delivered are to be resolved by arbitration.
 Moreover, there is nothing in the CMAA’s rules and regulations that
require non-members to have their disputes settled through arbitration,
therefore argument that the clause incorporates an arbitration clause in
another document (i.e. CMAA’s rules) is a non-starter.
 However the case can be restricted to its facts. Neither of the parties were
members of the CMAA so rules of the Association which made arbitration
mandatory don’t apply.
 Also, clause in this case could be invalid due to Article 8(1) Model Law and
S6(2) IAA as it is inoperative or incapable of being performed since the
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 Association only settled disputes between members, and in fact CMAA made
it clear that it would not be involved in the dispute (i.e. provide arbitration
service) in view of the fact that neither TG nor BG were its members.

 The court will ascertain from the document the intention of the parties and has
adopted the 'principle of effective interpretation' under which the arbitration
agreement would not be interpreted restrictively or strictly but would instead be
given a commercial, logical and sensible construction over another commercially
illogical one to give effect to workable agreed arbitration agreements (Insigma
Technology Co Ltd v Alstom Technology Ltd [2009] 3 SLR(R) 936)
 Where there is a clear intention to arbitrate, effect will be given to the
agreement even if the clause is incomplete or lack certain particulars, so long
as giving effect to such intention does not result in an arbitration that is not
within the contemplation of either party (Insigma Technology)
 BUT if intention to arbitrate is expressly subject to some other terms that
have yet to be finalised, it may be argued that no agreement had been
reached.
 The Benja Bhum [1993] 3 SLR(R) 242 (SGHC) per LP Thean JA where, in a
claim for salvage remuneration, the parties had exchanged
correspondence agreeing to arbitration in London but could not agree on
the terms of the security to be provided. As the essential words of the
letter of undertaking which was to serve as the security could not be
agreed, the HC held that: 'Though the parties had agreed in principle to
refer the plaintiffs' claim to arbitration, the terms of the agreement had
yet to be agreed at that time. In effect, there was really no binding
agreement'.
 Critique: This decision appears to go against the current international
judicial trend to enforce arbitration agreements where the intention to
arbitrate was clear and unambiguous. From the words of the learned
judge, there was clearly an agreement to refer the dispute to arbitration
and that intention was not subject to the provision of security. It is
questionable whether the court should allow one party to renege on the
agreement to arbitrate on the ground that the terms of the security to be
provided was not settled. This decision was affirmed in Star Trans Far
East Pte Ltd v Norske-Tech [1996] 2 SLR(R) 196 SGCA. It appears that the
facts of the case differed and it is questionable whether the CA should
have affirmed or indeed referred to The Benja Bhum.

 One form of ambiguity: if words such as arbitrator or arbitration are used in the
agreement together with phrases which suggest an inconsistent intention, for
example, where the agreement indicates that the arbitrator's decision will be
persuasive but not binding or that the arbitration process is only a valuation or
assessment.
 The use of such terms in relation to a particular class of dispute may be
interpreted to negative the intention to extend arbitration over other types of
disputes which could arise under the agreement. Transfield Shipping Inc v
Sino-Add (Singapore) Pte Ltd (unreported, 16 July; Suit No 763/2001);
Tritonia Shipping Inc v South Nelson Forest Products Corp [1996] 1 LLR 114.
In both cases the courts held that the use of the term 'General average and
arbitration' referred only to arbitration of general average disputes only and
was not an agreement to refer other disputes to arbitration.

 Agreements relating to the same transaction, but which provide for litigation in
one agreement and arbitration in another may be an indication that parties
prefer to provide for specific resolution mechanisms for the different aspects of
12
 the transaction.
 Transocean Offshore International Ventures Ltd v Burgundy Global
Exploration Corp [2010] SGHC 31: Andrew Ang J found that the parties had
intentionally carved the Escrow Agreement from the Drilling Contract and
expressly subjected the Escrow Agreement to a non-exclusive jurisdiction
clause rather than an arbitration clause thereby evincing a clear intention to
subject claims arising from the Escrow Agreement to the dispute resolution
clause found within that particular agreement and not the arbitration clause
in the Drilling Contract.

 Uncertainty may arise where the arbitration clause makes no reference to any
specific situs.
 But the mere absence of a situs or agreed set of rules or choice of arbitral
institution does NOT affect the validity of the agreement to arbitrate.
 References in an arbitration agreement to non-existent arbitral institutions or
rules have generally been held to be insufficient to negative the intention to
arbitrate (Lucky-Goldstar International (HK) Ltd v Ng Mook Kee Engineering
Ltd [1993] 2 HKLR 73, [1993] 1 HKC 404)
 Held: Where the governing organisation is non-existent, it does not make
the arbitration agreement invalid. The test to be implemented is ‘whether
the dominant purpose of the agreement was to settle disputes by
arbitration’. If it can be so established and the agreement does not
provide a viable organisation through which arbitration may be had, the
court may direct arbitration before such tribunals as it may determine
would be the most appropriate.

 Arbitration agreement incorporated by reference

 The old approach taken by the English courts seemed to be narrower, however
the modern approach taken by SG towards arbitration clauses takes a wider view
of whether there is an agreement to provide for the reference of disputes to
arbitration, i.e., where there is a clear intention to arbitrate, effect will be given to
the agreement even if the clause is incomplete or lack certain particulars, so long
as giving effect to such intention does not result in an arbitration that is not
within the contemplation of either party (Insigma Technology) The old cases
however, are instructive for the principles of application.

Old Cases
 Whether or not there is an arbitration agreement incorporated by reference Is a
question of construction (Concordia Agritrading Pte Ltd v Cornelder Hoogewerff
(Singapore) Pte Ltd [2001] 1 SLR 222)
 “the law as regards the purported incorporation by general wording of
arbitration clauses in other contracts must be regarded as firmly settled and that
general words will not suffice in the absence of a clear intention held by the
parties to incorporate the arbitration clause” (Arbitration Law by Robert Merkin
(1991 Ed) para 4.24, endorsed in Concordia Agritrading Pte Ltd v Cornelder
Hoogewerff (Singapore) Pte Ltd [1999] 3 SLR(R) 618).
 Courts will construe words of incorporation narrowly; they have to be specific
(Star-Trans Far East Pte Ltd V Norske-Tech Ltd [1996] 2 SLR 409)
 An arbitration clause is an independent and self-contained contract, and is not to
be regarded as merely another term in the main contract which can be
incorporated by reference to that main contract. Aughton Ltd v MF Kent Services
Ltd [1992] ADRLJ 83 per Sir John Megaw
 Where, however, the reference to another document is clearly to adopt all the
terms of the document referred to, then the incorporation would include the
arbitration clause in that document  there is an arbitration agreement
13
  Mancon (BVI) Investment Holdings Co Ltd v Heng Holdings SEA (Pte) Ltd
[1999] 3 SLR(R) 1146: Tay JC took the view that an arbitration clause under a
head agreement applied to disputes arising out of a supplemental agreement
which provided for a rescheduling of payments under a head agreement. He
said: 'If the two contractual documents had to be read together, it would be
totally illogical to have the arbitration clause apply to one but not the other ...'

New Cases
As it requires clear intention held by the parties to incorporate the arbitration
clause, generally there will not be incorporation unless there is clear language
providing for incorporation of the arbitration clause.

 Not Incorporated: Transocean Offshore International Ventures Ltd v Burgundy

Global Exploration Corp [2010] 2 SLR 821 – Andrew Ang J found that the parties
had intentionally carved the Escrow Agreement from the Drilling Contract and
expressly subjected the Escrow Agreement to a non-exclusive jurisdiction clause
rather than an arbitration clause thereby evincing a clear intention to subject
claims arising from the Escrow Agreement to the dispute resolution clause found
within that particular agreement and not the arbitration clause in the Drilling
Contract.
 Court applied the principles set down in Tjong Sumito

 Not Incorporated: Same scenario as Transocean. Court also held that the
jurisdiction clauses in 2nd agreement were widely drafted to cover any dispute
arising out of the 2nd agreement. This presumptively excluded other means of
dispute resolution in favour of the jurisdiction of SG courts. Astrata (Singapore)
Pte Ltd v Portcullis Escrow Pte Ltd and another and other matters [2011] 3 SLR
386

 Incorporated: Main agreement used clear language stressing that the

supplementary agreements were annexed to and made a part of the main
agreement. This show that parties had objectively intended for the dispute
resolution mechanism in the main agreement to be binding on parties in the
supplementary agreements. The conclusion was also not opposed in the
supplementary agreements. International Research Corp PLC v Lufthansa
Systems Asia Pacific Pte Ltd and another [2012] SGHC 226

14
 13. Party Autonomy

- An important feature of arbitration

- Marks a stark difference between litigation in a national court and arbitration whether
international or to a slightly lesser degree, domestic arbitration. Concept of party
autonomy is equally applicable to domestic arbitration though subject to national court’s
supervision.

- Arbitration rules chosen by parties is an example of the expression of parties’ choice in

exercise of their autonomy

- See ABC Co v XYZ Co Ltd [2003] 3 SLR 546:

“The principle of party autonomy is one that is central to the Model Law. It is a
principle that must be respected by the courts whenever they have cause to deal
with issues arising or in relation to an international arbitration.”

- The importance and arguably the supremacy of the party autonomy principle may be
seen in Article 34(2)(a)(iv) of the Model Law

An arbitration award may be set aside by the court if the party making the
application furnishes proof:
that the composition of the arbitration tribunal or the arbitration
procedure was not in accordance with the agreement of the parties; or

agreement of the parties was in conflict with lex arbitri from which parties
cannot derogate or was not in accordance with the model law

14. The doctrine of separability

- An arbitration clause in a contract constitutes a self-contained contract collateral or

ancillary to the underlying contract (Bremer Vulkan Schiffbau und Maschinenfabrik v
South India Shipping Corp [1981] AC 909 HL). By this doctrine, an arbitration clause
being a collateral obligation in a contract survives the termination or avoidance of all the
primary obligations assumed under the underlying contract (Paal Wilson & Co A/S v
Partenreederei Hannah Blumenthal [1983] 1 AC 854, [1983] 1 All ER 34, HL).

- Even where the contract is alleged to be invalid or voidable, the arbitration clause in the
contract survives and can be given effect to in resolving a dispute.

An attitude in interpretation to give primacy to arbitration: “The

main practical advantage of this principle is that it constitutes a
serious bar, for a party who desires delay or wishes to repudiate his
arbitration agreement, to subvert the arbitration clause by
questioning in court the existence or validity of the arbitration
agreement [by questioning the validity of the main contract]” – see
The Law and Practice of International Commercial Arbitration, 4 th
edition at paragraph 3.60; See also Redfern and Hunter on
International Arbitration 5th edition (Oxford), at 2.89 – 2.92.

- See also Heyman v Darwins Ltd [1942] 1 All ER 337 HL. While the ratio of this case is the
upholding of the separability doctrine, the dicta of Viscount Simon and Lord Macmillan on the
competence-competence concept had been given greater prominence and had in fact caused a

15
 certain degree of confusion between the two. Subsequently, Harbour Assurance Co (UK) v Kansa
General International Insurance Co Ltd [1993] 3 All ER 897CA (Eng) was able to distinguish the
ratio from the dicta in Heyman v Darwins Ltd and upheld the separability doctrine.

The law in Singapore: separability of arbitration clause doctrine is given statutory

expression in AA and IAA: S21 AA, and International Arbitration Act Sch 1 Model
Law art 16(1) (same wording)

- The arbitral tribunal may rule on its own jurisdiction (e.g. whether the tribunal is exceeding the
scope of its authority), including a plea that it has no jurisdiction and any objections to the
existence or validity of the arbitration agreement, at any stage of the arbitral proceedings S21(1)
AA. A party shall not be precluded from raising the plea that the arbitral tribunal does not have
jurisdiction by the fact that he has appointed, or participated in the appointment of, an arbitrator
S21(5) AA.

- For the purpose of subsection (1), an arbitration clause which forms part of a contract shall be
treated as an agreement independent of the other terms of the contract S21(2). A decision by the
arbitration tribunal that the contract is null and void shall not entail ipso jure (as a matter of law)
the invalidity of the arbitration clause S21(3) AA.

- The arbitration tribunal may rule on its own jurisdiction, including any objections with respect
to the existence or validity of the agreement. An arbitration clause which forms part of the
contract shall be treated as an agreement independent of the other terms of the contract. A
decision by the tribunal that the contract is null and void shall not entail ipso jure the invalidity
of the arbitration clause. Article 16(1) Model Law

15. Principle of kompetenz-kompetenz

- The concept of competence [of an arbitral tribunal]-[to decide its own] competence relates to the
power of the arbitrator to rule on his own jurisdiction. It is a necessary corollary to the doctrine
of separability which obviates the necessity to refer issues of jurisdiction to domestic courts. In
SG, arbitrators are given express statutory power to decide on their own jurisdiction including
any objections with respect to the existence or validity of the arbitration agreement Art 16 of
Model Law & s21 AA.

- Participation in the proceedings on the issue of arbitral jurisdiction is not a submission to

the jurisdiction of the tribunal nor could it be construed as consent to an ad hoc
submission to arbitrate LG Gas Caltex Co Ltd v China National Petroleum Corp [2001]
EWCA Civ 788, [2001] 4 All ER 875, CA (Eng).

- Principle is based on pragmatism, to ensure that the arbitral process is not subverted by
a disputing party’s reliance on traditional approaches to legal interpretation. Example of
tension between the conventional approach in legal interpretation and the pragmatic
approach to give primacy to arbitration.

Old ways wrong: Previously, SG courts applied a purist and logical approach, and held
that where there are issues with a tribunal’s competence to hear the arbitration, it could
not decide on this issue. New India Assurance Co Ltd v Lewis [1965-1967] SLR(R) 433,
[1967] 1 MLJ 156, FC which was followed in Ian Leonard Jackman v Culifrance Furniture
Pte Ltd (unreported; Suit No 1590 of 1991)

Now fully recognized in Singapore Aloe Vera of America, Inc v Asiatic Food (S) Pte Ltd
[2006] 3 SLR 174 per Prakash J

16
 - General points to note
 A plea that the arbitral tribunal has no jurisdiction must be raised not later than the submission
of the statement of defence. s 21(4) AA; Model Law art 16(2).
 A plea that the arbitral tribunal has exceeded the scope of the reference must be raised as soon
as the matter alleged to be beyond the scope of the arbitral authority is raised during the
arbitration. S 21(6) AA; Model Law art 16(2)
 The tribunal may rule on the issue of jurisdiction either as a preliminary issue or together with
the award on the merits.
o If the ruling is made as a preliminary issue and if the tribunal rules that it has
jurisdiction, an appeal lies to the High Court: s 21(9)(a) AA; Model Law art 16(3).
A further appeal to the Court of Appeal on this issue is permitted with leave of the
High Court. s 21(10) AA; s 10 IAA
o If the tribunal rules that it has no arbitral jurisdiction, the matter ends there with
no review or appeal. (PT Asuransi Jasa Indonesia (Persero) v Dexia Bank SA
[2007] 1 SLR(R) 597, where the CA ruled that an arbitral tribunal's decision on a
preliminary issue of jurisdiction that it has no jurisdiction is not appealable by
reason of the Model Law art 16(3) and is further not subject to setting aside
under art 34 as it is not an 'award'.)
- During the pendency of appeal proceedings in court on the issue of jurisdiction, the
tribunal may proceed with the arbitration and make an award. In practice, however,
parties often request and the tribunal would generally accede to suspension of the
arbitration.

16. Confidentiality

- Arbitration is essentially private in nature (Dolling-Baker v Merrett [1991] 2 All ER 890).

because parties had agreed to submit their disputes to arbitration only between them
(Oxford Shipping Co Ltd v Nippon Yusen Kaisha, The Eastern Saga [1984] 3 All ER 835,
[1984] 2 Lloyd's Rep 373 per Legatt J).
 Strangers are to be excluded from the hearing and the conduct of the arbitration.
 Neither tribunal nor parties can insist that the dispute be heard together with or
determined concurrently with another dispute, however closely related they may be.

- Kan J in Myanma Yaung Chi Oo Co Ltd v Win Win Nu [2003] 2 SLR(R) 547 and Lai Siu
Chiu J in International Coal Pte Ltd v Kristle Trading Ltd [2009] 1 SLR(R) 945 accepted
that confidentiality is an essential feature in arbitration.
 However, the practical difficulty is with policing confidentiality. Major arbitrations and
outcomes have recently been published with full parties' particulars, lawyers and
arbitrators and freely available on the Internet.

- The position in Australia appears slightly different in that while accepting privacy, there
is some doubt as to confidentiality: see Esso Australia Resources Ltd v Plowman
(Minister of Energy and Minerals) (1995) 128 ALR 391

- SG position: Generally arbitration is confidential but this rule is subject to exceptions

such as:
 where the parties consented to disclosure; or
 disclosure is made pursuant to an order of court; or
 disclosure is made following grant of leave of court; or
 if disclosure is reasonably necessary for the protection of the legitimate interests of a
party vis-à -vis a claim by a third party (Hassneh Insurance Co of Israel v Mew [1993] 2
Lloyd's Rep 243; Insurance Co v Lloyd's Syndicate [1995] 1 Lloyd's Rep 272); or
 where the interest of justice requires disclosure; or
o In AZT and others v AZV [2012] SGHC 116 Andrew Ang J held that in deciding
whether to seal court documents, the principle of open justice had to be weighed
17
 against the need to preserve confidentiality in arbitration, with the latter being an
important factor in the court's exercise of discretion. Relevant considerations
would be whether the sealing of court documents would stifle the development of
arbitration jurisprudence in Singapore and whether there is any legitimate public
interest in the subject matter of the dispute.
 where it is reasonably necessary to disclose
o Myanma Yaung Chi Oo Co Ltd v Win Win Nu [2003] 2 SLR 547
 Main issue in that case: whether parties in arbitration proceedings have a
duty to maintain confidentiality of the documents in those proceedings, and
whether leave of court was necessary for disclosure.
 It was more in keeping with the parties’ expectations to take the position
that the proceedings are confidential, and that disclosures can be made
in accepted circumstances.
 There was no need to obtain the leave of the court before making the
disclosure.
 However, after disclosure is made, the party which argues that it was not
reasonably necessary to disclose (the “reasonably necessary” exception)
can apply to expunge the disclosure and the court will then decide whether
it was reasonably necessary to disclose.
o International Coal Pte Ltd v Kristle Trading Ltd [2009] 1 SLR 945 at [83] to [84]
(followed Myanma Yaung Chi Oo)
 The arguments in that case centred around 5 letters produced by the
arbitration; which was followed by civil suits.
 An obligation of confidentiality was to be implied in arbitration proceedings
due to the private nature of the proceedings.
But each case has to be evaluated in the context of its circumstances. There
should be no generalisations of what the duty of confidentiality
encompasses as each case should be evaluated in the context of its
circumstances (citing Associated Electric & Gas Insurance Services Ltd v
European Reinsurance Co of Zurich [2003] 1 WLR 1041)
 It was held on the facts that there was no real breach of confidentiality, and
even if it was breached, no prejudice was suffered by the party
complaining.

- A distinction has to be drawn between different types of confidentiality attaching to

different types of documents (Hasneh Insurance Co of Israel v Stuart J Meir [1993] 2
Lloyds Rep 243, cited in International Coal Pte Ltd v Kristle Trading Ltd [2009] 1 SLR(R)
945)

Halsbury’s notes:
- The Arbitration Act (Cap 10, 2002 Ed) and the International Arbitration Act (Cap 143A,
2002 Ed) do not provide for the covenant of 'confidentiality' or exceptions thereto.
- The rule on confidentiality is expressly extended to proceedings in court arising out of
any matter related to an arbitration or the agreement. (s 57 AA; s 23 IAA)
- The court must on the application of a party restrict the publication of information
relating to the proceedings. (s 57(2) AA; s 23(2) IAA)
- Where in the court's view the information to be published may reveal any matter
including the identity of any of the parties (who may reasonably wish to remain
confidential), the court must prohibit such publication. (s 57(3) AA; s 23(3) IAA)
- If a written judgment is given on a matter referred to the court and the court is of the
view the matter is of major legal interest, the court may authorise its publication in
professional legal journals. (s 57(4) AA; s 23(4) IAA)
o Where however a party reasonably wishes to conceal certain matter, including
the fact that he was a party, the court may give directions for restricted
publication but if such restrictions may not be sufficient to conceal the matter, the
18
report may be withheld from publication for a period not exceeding ten years. (s
57(4)(b) AA; s 23(4)(b) IAA)

19
III. THE ROLE OF THE NATIONAL COURT IN RESPECT OF ARBITRATION

17. Is the court excluded where parties have chosen arbitration?

- Is there a difference between domestic and international arbitrations?

- Why arbitration in the first place – in the case of domestic disputes and in the case of
international disputes

- Can you have an arbitration without reference to any territory?

18. The relationship between International Commercial Arbitrations and the domestic
or national court

General

- The arbitral seat ‘fixes’ the arbitration to a specific territory. Since, lex arbitri is normally
the law of the seat of the arbitration (if different, many practical problems (Halsbury’s)),
a Singapore seat will mean that the lex arbitri is Singapore law. Additionally, if an
international arbitration is involved, the IAA and Model law are the lex arbitri that
apply where SG is the seat of arbitration (s 5 IAA says Part II and Model Law (contained
in the First Schedule to the IAA) apply to international arbitrations).

- If Singapore law applies there is but one guardian of that law – the Courts in Singapore.
SG courts have a supervisory role re international commercial arbitration.

- In the case of a domestic arbitration, the SG courts have a wider supervisory role by
virtue of the dual regime for commercial arbitrations (for reasons, see above 8. Why 2
Acts?). See generally, Singapore Court Practice, 2009, at paragraph 69/1/5 and NCC
International AB v Alliance Concrete Singapore Pte Ltd [2008] 2 SLR 565.

Specific

- If the SG court recognizes the arbitration agreement / clause, it will defer to the
arbitration proceedings except in certain circumscribed situations under the AA, and
where international disputes are concerned, the IAA and Model Law.

- The SG court recognizes and defers to the arbitral proceedings by issuing a stay of
the litigation in favour of the arbitration proceedings.

19.

20
 Stay application (domestic arbitration)

Stay of legal proceedings

6.—(1) Where any party to an arbitration agreement institutes any proceedings in any
court against any other party to the agreement in respect of any matter which is the
subject of the agreement, any party to the agreement may, at any time after appearance
and before delivering any pleading or taking any other step in the proceedings, apply to
that court to stay the proceedings so far as the proceedings relate to that matter.
(2) The court to which an application has been made in accordance with subsection (1)
may, if the court is satisfied that —
(a) there is no sufficient reason why the matter should not be referred in
accordance with the arbitration agreement; and
(b) the applicant was, at the time when the proceedings were commenced, and still
remains, ready and willing to do all things necessary to the proper conduct of the
arbitration,
make an order, upon such terms as the court thinks fit, staying the proceedings so far as
the proceedings relate to that matter.
(3) Where a court makes an order under subsection (2), the court may, for the purpose
of preserving the rights of parties, make such interim or supplementary orders as the
court thinks fit in relation to any property which is or forms part of the subject of the
dispute to which the order under that subsection relates.
(4) Where no party to the proceedings has taken any further step in the proceedings
for a period of not less than 2 years after an order staying the proceedings has been
made, the court may, on its own motion, make an order discontinuing the proceedings
without prejudice to the right of any of the parties to apply for the discontinued
proceedings to be reinstated.
(5) For the purposes of this section, a reference to a party includes a reference to any
person claiming through or under such party.

- Power to grant a stay under AA is DISCRETIONARY, even if all the following elements are
satisfied the court still has the discretion to decide whether to grant a stay

- A stay application may be made even if the court proceedings were commenced after
commencement of the arbitration (s6(1) AA – “at any time ...”)

- Under s6(1) &(2) AA the right to apply for a stay exists only if
 (1) applicant for stay is a party to the arbitration agreement;
 (2) arbitration agreement covers the matter in dispute before the court;
 (3) applicant enters an appearance to the court proceedings;
 (4) applicant has not delivered pleadings or taken any step in the proceedings; AND
 (5) the applicant remains ready and willing to arbitrate

- Burden of proof (Mae Engineering Ltd v Dragages Singapore Pte Ltd [2002] 1 SLR(R)
853)
 The burden initially lies with the applicant to show the existence of the above.
This burden is discharged upon the court being satisfied that there is a prima facie
case that there is a valid arbitration agreement between the parties which covers
the subject matter in dispute before the court.
 The burden then shifts on to the party who has commenced the action to 'show
sufficient reason why the matter should not be referred to arbitration'

21
- Element (1) applicant for stay is a party to the arbitration agreement
 Applicant for stay under AA is usually the party not in breach of the arbitration
agreement (Halsbury’s 20.039)
 Only a party to the arbitration agreement, or (according to s6(5) AA) a person
claiming through or under him may apply to stay court proceedings commenced
against him.
o Yee Hong Pte Ltd v Tan Chye Yee Andrew (Ho Bee Development Pte Ltd, Third
Party) [2005] 4 SLR 398 (HC): s 6 AA empowers court to order Pf to
arbitration proceedings with Df despite there being no arbitration agreement
between them, if 3P has a contract with either of the parties that contained a
valid arbitration clause. Through the stay, parties involved can have their
disputes relating to one project determined via arbitration.
o A trend may start where consultants and sub-contractors are roped into
disputes involving the developer and contractor.
 A 3P beneficiary under the Contracts (Rights of Third Parties) Act is to be treated as
a party and may thus be entitled to make a stay application.
 A party to the arbitration agreement but who is NOT a party to in personam court
proceedings may not apply to stay under the AA by adding himself as a party and
applying for stay of those proceedings
 Where one party commences in rem court proceedings, and the rights of another
are affected, then if the plaintiff and the party whose rights are affected have an
agreement to arbitrate in relation to the matters relating to the res in action, the
court may stay the proceedings notwithstanding that the applicant was not a party
to the original in rem proceedings

- Element (2) arbitration agreement covers the matter in dispute before the court
 i.e. the matter in dispute before the court is a matter agreed to be referred to
arbitration under the arbitration agreement
 Court will interpret the arbitration clause and how it might apply to the matters in
dispute before the court (e.g. if the claim before the court is framed as a tortious
claim in negligence or conversion, instead of a claim for breach of contract, it can be
argued that the claim is not one “arising out of the contract”  arbitration
agreement might not cover the matter in dispute before the court  no stay)

- Element (3) applicant enters an appearance to the court proceedings

 Stay can only be applied for AFTER entry of appearance
 This is a requirement for applications for a stay under BOTH s6(1) AA & s6(1) IAA
 In Navigator Investment Services Ltd v Acclaim Insurance Brokers Pte Ltd [2010] 1
SLR 25 SGCA, the court examined the term 'appearance' and concluded that the
concept appearance should only occur when a substantive claim has been
crystallised and the defendant is cognisant of a clear claim that has in fact been made
(at [49]-[54]). An application for pre-action discovery or pre-action interrogatories
is by its very nature concerned with a situation where a substantive claim has yet to
be crystallised or made, and as such, from the perspective of the rules of civil
procedure, the power to order a stay against such an application would not arise
under the s 6 IAA (at [59])
 This holding should apply equally to AA

- Element (4) applicant has not delivered pleadings or taken any step in the proceedings
 This is a requirement for applications for a stay under BOTH s6(1) AA & s6(1) IAA
 A step taken in the proceedings by applicant nullifies his right to apply for a stay
 “step in the proceedings” = any step which affirms the correctness of the
proceedings or demonstrates a willingness or intention to defend the substance of
the claim in court instead of arbitration. Chong Long Hak Kee Construction Trading
22
 Co v IEC Global Pte Ltd [2003] 4 SLR(R) 499 at [9]; Australian Timber Products Pte
Ltd v Koh Brothers Building and Civil Engineering Contractor (Pte) Ltd [2005] 1
SLR(R) 168 at [20]
 Case law
o Contesting Pf’s application to amend writ and mentioning for the Pf’s
solicitors = step in the proceedings. Tan Hock Leng v Sigma International Ltd
o Halsbury’s [20.035] citing Chong Long Hak Kee Construction Trading Co v IEC
Global Pte Ltd [2003] 4 SLR(R) 499: UNLESS the following applications are
made with the expressed reservation that a stay application will be made on
the basis of the arbitration agreement, the following constitute ‘steps’ in the
proceedings by the applicant nullifying his right to a stay application
 filing of a defence on the merits of the claim;
 There is tension between a defendant who wishes to invoke the
arbitration clause and thus not willing to file a defence and the
requirement to file a defence to avert a default judgment.
 CA held that where stay application and judgment in default of
defence application were concurrently pending, they should he
heard together. The stay application should be filed before
defence is due and should include a prayer asking for all
proceedings (including filing of defence) to be stayed until the stay
application is disposed of. At the combined hearing, the stay is to
be dealt with first. Carona Holdings Pte Ltd v Go Go Delicacy
[2008] 4 SLR 460
 making a counterclaim;
 In Chong Long Hak Kee Construction Trading Co v IEC Global Pte
Ltd [2003] 4 SLR(R) 499, the court said that filing a defence to a
claim under an expressed reservation that a stay application will
be made on the basis of the arbitration agreement would preserve
the right to arbitrate, but the Df’s demand for the Pf to file a
defence to the counterclaim which was filed under such
reservation nullified the reservation and was fatal to the Df’s
application for a stay.
 the filing of affidavits setting out the merits of a case seeking leave to
defend, in opposition to an application for summary judgment (Pitchers
Ltd v Plaza (Queensbury) Ltd [1940] 1 All ER 151, CA (Eng));
 applying for security for costs (unless the application for security was
made also with the application for stay: Fasi v Specialty Laboratories Asia
Pte Ltd [1999] 1 SLR(R) 1138);
 applying for directions as to further conduct of the case in court (Sim
Hiang Kiaw v Lee Hoi Kim Construction Co [1986] 1 MLJ 347; Parker,
Gaines & Co Ltd v Turpin [1918] 1 KB 358)
o Halsbury’s [20.035] These are not ‘steps in the proceedings’
 The mere entry of unconditional appearance to the proceedings is
NOT a step in the proceeding (s 6(1) AA);
 Requests made to the Pfs for extension of time for filing a defence
(Daval Aciers d'Usinor et de Sacilor v Amare Srl, The Nerano [1996] 1
Lloyd's Rep 1, CA (Eng));
 Applying to the court for an extension of time to file a defence to
avert a judgment in default of defence being entered (Australian
Timber Products Pte Ltd v Koh Brothers Building and Civil Engineering
Contractor (Pte) Ltd [2005] 1 SLR(R) 168: Such a step is seen as a
safeguard to the defendant's position pending the determination of an
application for stay);
 Request for particulars of the claim or to file a defence (SP Chua Pte
Ltd v Lee Kim Tah (Pte) Ltd [1993] 1 SLR(R) 793, where the applicants
23
 had rightly requested for particulars and time to file the defence so that
they could be fully appraised of the claim and decide on the steps they
intended to take. The request for particulars could not be equated with an
application to the court for particulars: per Amarjeet JC);
 Applying to set aside a default judgment (Australian Timber Products
Pte Ltd v Koh Brothers Building and Civil Engineering Contractor (Pte)
Ltd [2005] 1 SLR(R) 168);
 Filing affidavits in opposition to the continuation of an interim
injunction (Seloga Jaya Sdn Bhd v Pembenaan Keng Ting (Sabah) Sdn
Bhd [1994] 2 MLJ 97, SC (Mal); European Grain and Shipping Ltd v
Compania Naviera Euro-Asia SA [1989] 2 SLR(R) 445: Chan Sek Keong J
held that steps taken by the Dfs in resisting the continuation of the
Mareva injunction were in his view defensive in nature and could not be
considered a 'step in the proceedings', and a stay was granted pending
arbitration in London.);
 Commencement of an action for the principal purpose of obtaining a
mandatory order for delivery up of goods (Star Trans Far East Pte Ltd
v Norske-Tech Ltd [1995] 2 SLR(R) 720);

- Element (5) applicant is ready and willing to arbitrate

 S 6(2) AA: Applicant must satisfy the court that he was, at the time of the
commencement of the judicial proceedings, and still remains, ready and willing to do
all things necessary to the proper conduct of the arbitration

 Case law
o If there was prior correspondence exchanged between the parties and
there was delay on the part of the applicant in responding or agreeing to refer
the matter to arbitration, court may infer that applicant was not ready and
willing to arbitrate. Cheung Wing Kong t/a Profit Extend Co v Ma Chan Shing
t/a Wing Yick Knitting Factory [1992] ADRLJ 229
o Absence of a request for arbitration prior to commencement of legal
proceedings would NOT, per se, be construed as unwillingness on the part of
the applicant to arbitrate. Halsbury’s 20.034
o The commencement of separate court proceedings in relation to the
same subject matter by the applicant for stay = abandonment of the right to
arbitrate. L & M Concrete Specialists Pte Ltd v United Engineers Contractors
Pte Ltd [2000] 2 SLR(R) 852
o Examples of facts which militate against proving that applicant is ready and
willing to arbitrate: applicant had refused or taken no steps to appoint an
arbitrator when requested to do so; or where an arbitrator had been
appointed, refused or neglected to take further steps in the arbitration; or
where the applicant had taken steps inconsistent with the arbitration
agreement such as commencing separate legal proceedings himself or had
denied the existence of the arbitration agreement. In the absence of such facts,
a simple assertion by the applicant that he is willing and ready to do so
would suffice. Tavica Design Pte Ltd v Schindler Lifts (Singapore) Pte Ltd
(unreported, 5 Dec 2001; OS No 601594/2001); Halsbury’s 20.034
o An act purporting to terminate the agreement containing the arbitration
clause is NOT, per se, tantamount to demonstrating an unwillingness to have
the matter resolved through arbitration. Forest Development Sdn Bhd v
Syarikat Permodalan dan Perusahaan Pahang Bhd [1981] 2 MLJ 285

- It is very common for a stay application to be challenged on the ground that there is no
dispute that can be referred to arbitration under the agreement.
 Why no dispute?
24
  Because claims are admitted, not disputed, or indisputably due (e.g. evidence
indicates that in any event one party will get judgment)
 In fact, the party that claims there is no dispute referable to arbitration (most likely
Pf) will not only resist a stay on the basis that it would delay satisfaction of just
debts, but also apply for summary judgment on the basis that there is no defence to
the claim.
 The existing Singapore law in respect of domestic arbitration does not allow a stay in
cases where there is in fact no dispute that needs to be referred to arbitration (e.g.
where a summary judgment could have been granted). In this sense a summary
judgment application is used to defeat a stay of court proceedings under AA.

- What constitutes a dispute for the purposes of a stay application under the AA? What is
the role of the court hearing such applications?

 'Dispute' means a controversy having both positive and negative aspects. It

postulates a claim made by one party and the denial by the other.
o Liability and quantum unequivocally admitted = NO dispute (The 'Dai Yun
Shan' [1992] 1 SLR(R) 461) stay refused
o Court is of the view that the claim is indisputable, stay may also be refused
and judgment entered instead (Uni-Navigation Pte Ltd v Wei Loong Shipping
Pte Ltd [1992] 3 SLR(R) 595 at [15]: GP Selvam J held that 'where the claim is
undisputed or indisputable the courts and not the arbitrators have the
jurisdiction to decide. So, in a case where the defendant in the action has made
a clear and unqualified admission of the claim the court cannot stay the action)
o If there appears to be a conflict between 2 provisions of a contract and such
conflict cannot be settled without delving deeply into the contract, then the
question of construction is a dispute which should go to arbitration. Multiplex
Construction Pty Ltd v Sintal Enterprise Pte Ltd [2005] 2 SLR(R) 530
o ‘Dispute’ includes any claim which a party refused to admit or did not pay,
whether or not there was any answer to the claim in fact or in law. Halki
Shipping Corp v Sopex Oils Ltd [1998] 2 All ER 23
o Even if a party could be said to have be evasive in its alleged admission,
the dispute as to the admission and the substantive claims should all be
referred to arbitration. The Makassar Caraka Jaya Niaga III-39 [2011] 1 SLR
982 at [46], following the CA’s decision in Tjong Very Sumito

 There is no requirement that the dispute need to be bona fide for that would
necessarily involve the court in a critical examination of the merits of the claim
which is outside the parameters of the court's functions under the provision in the
Arbitration Act.

 Nevertheless, court has discretion whether to grant stay under AA, so court is more
prepared to go beyond ascertaining whether there was a dispute, to the extent
of weighing if there was an arguable or plausible defence.

 The court’s role

o Should refrain from trying the merits of the case on affidavits
o When faced with an application for summary judgment by the Pf as well as for
stay of proceedings by the Df, courts adopt a holistic and commonsense
approach to see if there is a dispute. If a party makes out a prima facie case
of the existence of a dispute, the court, in considering the exercise of discretion
whether to stay the proceedings, should not embark on an examination of the
validity of the dispute as though it was an application for summary judgment
(Uni-Navigation Pte Ltd v Wei Loong Shipping Pte Ltd [1992] 3 SLR(R) 595)

25
 o Faced with a stay application and a summary judgment application, the court
should first consider the application for stay and only if stay is not ordered
should it proceed with the application for summary judgment.
o Courts will see if the dispute falls within the arbitration agreement or is based
on some other dispute. Giant Light Metal Technology (Kunshan) Co Ltd v Aksa
Far East Pte Ltd [2012] SGHC 2 (on the facts a stay was refused because it was
sought in relation to a enforcement of a debt arising from a judgment, and not
any dispute or controversy arising from a contract)

- Cf what constitutes a ‘dispute’ for the purposes of a stay application under the IAA is
DIFFERENT from what constitutes a ‘dispute’ for the purposes of a stay application
under AA
 Note that for IAA cases (unlike for AA cases), the party resisting the stay cannot
apply for summary judgment to defeat the stay application. This is because the
IAA stay is mandatory once the conditions are fulfilled and can only be refused based
on the agreement being “null and void, inoperative and incapable of being
performed”. The removal of the use of summary court proceedings in opposition to
an application for stay under the IAA serves to protect parties who have chosen
Singapore as a venue for arbitration from being subject to the jurisdiction of the
Singapore court when they have not expressly chosen to be so. Where foreign parties
agree to arbitrate in Singapore, they should be assured that their consent must not
be construed as a submission to the jurisdiction of the Singapore courts. To allow
one party to insist on proceeding to the Singapore court for the purpose of
determining the issue summarily would be totally inconsistent with the agreement
to arbitrate in Singapore.

 The court has no power to investigate the reality of or whether in fact a dispute
exists if it finds that the arbitration agreement covers a matter which is before the
court. (Dalian Hualiang Enterprise Group Co Ltd v Louis Dreyfus Asia Pte Ltd [2005]
4 SLR(R) 646 per Woo Bih Li J; affirmed by Tjong Very Sumito v Antig Investments
Pte Ltd [2009] 4 SLR(R) 732 (SGCA))
o The Arbitration Act 1950 (UK) s 1(1) gave to the English courts additional
ground to refuse stay in the extending words: 'the court, unless satisfied that
the arbitration agreement is null and void, inoperative or incapable of being
performed or that there is not in fact any dispute between the parties with
regard to the matter agreed to be referred, shall make an order staying the
proceedings'. Because of these extending words past English decisions have
examined whether the claim in action was disputable or whether the
defendant had an arguable defence to the claim as a precondition for granting
stay of court proceedings.
o Singapore courts have prior to Dalian Hualiang, referred to these English
decisions without realising the absence of these extending words in the
Singapore statute make English cases decided based on this the 1950 Act
inapplicable in SG.
o By the Arbitration Act 1996 (UK), the English legislature removed these
extending words. The English Court of Appeal in Halki Shipping Corp v Sopex
Oils Ltd [1998] 2 All ER 23 has since held that with the 1996 Act it is no longer
open to a plaintiff to bring summary proceedings to obtain judgment on the
basis of no arguable defence if the claim is not admitted.

 A positive assertion by the defendant (applicant for a stay) that he is disputing the
claim in an action commenced in breach of the arbitration agreement is sufficient to
constitute a ‘dispute’. Tjong Very Sumito v Antig Investments Pte Ltd [2009] 1
SLR(R) 861

26
  However if the applicant for a stay refuses to pay simply because he is unable to,
there is no ‘dispute’. Dalian Hualiang per Woo J

 If party remains silent prior to issuance of a writ, it is unclear whether there is a

‘dispute’. But there is clearly a ‘dispute’ if one party’s solicitors wrote to the other
party averring that their suit was ‘without merit and misconceived’. Tjong Very
Sumito
- Even after all the elements of a stay application under the AA have been satisfied, the
court nevertheless has the discretion whether or not to grant a stay.
 Halsbury’s 20.037 Court tends to stay judicial proceedings and uphold parties’
agreement to arbitrate
 But court may refuse a stay if it is satisfied that there are sufficient reasons why a
stay ought to be refused (s 6(2)(a) AA)
o undue delay by the applicant in making application for stay;
o allegation of fraud against the plaintiff; (this ground was specifically
provided for under the repealed Arbitration Act (Cap 10, 1985 Ed) s 12 but
was omitted in the Arbitration Act (Cap 10, 2002 Ed). Anwar Siraj v Teo Hee
Lai Building Construction Pte Ltd [2007] 2 SLR(R) 500 at [48] held that the
allegation of fraud is no longer a separate justification for refusal of a stay.
Halsbury’s: But it should be a factor the court could consider)
o plaintiff's inability to finance the arbitration; (Fakes v Taylor Woodrow
Construction Ltd [1973] QB 436)
o the subject matter in dispute being more suitable for court trial than
arbitration, for example, complex legal questions; (there is serious doubt
whether this could now be a factor relevant for consideration: see Fasi v
Specialty Laboratories Asia Pte Ltd [1999] 1 SLR(R) 1138; Re Phoenix Timber
Co Ltd's Application [1958] 2 QB 1, [1958] 1 All ER 815, CA (Eng))
o possible multiplicity of actions; (in Steelcrete Construction and Engineering
Pte Ltd v James Low Yao Chang (unreported, July 2001; Suit No 139/2001), the
earlier arbitration proceedings were discontinued by order of court on the
defendant's application on the ground that as the third party could not be
compelled to participate, there was risk of multiplicity of results)
o relief sought by the respondents was not one which was available in
arbitration (e.g. where relief sought is a winding up of a JV company, and this
is not available in arbitration, a stay of winding up proceedings will be refused.
Four Pillars Enterprises Co Ltd v Beeiersdorf Aktiengesellschaft [1991] 1 SLR
737)
o claim seeking to avoid transactions under the Bankruptcy Act are not
arbitrable on grounds of public policy (Larsen Oil and Gas Pte Ltd v Petroprod
Ltd (in official liquidation in the Cayman Islands and in compulsory liquidation
in Singapore) [2011] 3 SLR 414)

- If court makes an order granting a stay (regardless of whether it’s under AA or IAA), the
court has the power to impose such terms and conditions as it thinks fit. Examples:
 directing applicant to provide security for the claim in arbitration (PT Budi Semesta
Satria v Concordia Agritrading Pte Ltd (unreported, 20 April 1998; Suit 1332/1997))
 directing applicant to commence arbitration proceedings within a given time frame
and/or take certain steps to expedite the arbitration
 require the applicant to waive a time-bar which might have accrued in the meantime
(The Xanadu [1997] 3 SLR(R) 360); this condition of waiver of time-bar can only be
justified in very special circumstances as it takes away a substantive right of one of
the parties (The 'Duden' [2008] 4 SLR(R) 984 at [16])
 give directions for the preservation of the rights of the parties in relation to any
property which is the subject matter of the dispute: s 6(3) AA; s 6(3) IAA
20. Stay application (international arbitration)
27
Enforcement of international arbitration agreement (IAA)
6. —(1) Notwithstanding Article 8 of the Model Law, where any party to an arbitration
agreement to which this Act applies institutes any proceedings in any court against any
 - If all the conditions for a stay under the IAA are met, the court MUST grant a stay. Court’s
power to grant a stay is MANDATORY (Mitsui Engineering & Shipbuilding Co Ltd v PSA
Corp Ltd & Anor [2003] 1 SLR 446). Halsbury’s 20.042: There is no residual discretion to
refuse a stay otherwise than on the grounds set out in the IAA and the Model Law (even
though court always has inherent jurisdiction to order stay of court proceedings). In
addition, under the Model Law Art 8 the court has a duty to refer the parties to
arbitration unless it finds that the agreement is null and void, inoperative or incapable of
being performed (court granting stay under AA has no such duty or power).

- If IAA applies to the arbitration agreement, regardless of where the arbitration is held, a
party to the arbitration agreement may apply to stay any judicial proceedings
commenced in SG by a party to the agreement.

- Under s6(1) &(2) IAA the right to apply for a stay exists only if
 (1) party who commenced judicial proceedings and the applicant for stay are both
parties to the arbitration agreement;
 (2) arbitration agreement covers the matter in dispute before the court;
 (3) applicant enters an appearance to the court proceedings;
 (4) applicant has not delivered pleadings or taken any step in the proceedings; AND
 (5) arbitration agreement is not 'null and void, inoperative or incapable of being
performed' (s 6(2) IAA) or the subject matter is not arbitrable or is contrary against
public policy (s 11(1) IAA)

- Burden of proof (Overseas Union Insurance Ltd v AA Mutual International Insurance Co

Ltd [1988] 2 Lloyd's Rep 63 at 70)
 The burden lies with the applicant to show that an arbitration agreement exists to
which he is a party and to which the subject matter in the legal proceeding relates.
 The burden shifts to the party resisting a stay to show that the arbitration
agreement is 'null and void, inoperative or incapable of being performed

- Element (1) party who commenced judicial proceedings and the applicant for stay are both
parties to the arbitration agreement
 Application for a stay under IAA may be made by any party to the action who is also
a party to the arbitration agreement. There is no requirement that the applicant
satisfies the court that he was at the time of commencement of the action ready and
willing to do all things necessary to the proper conduct of the arbitration. Seems to
suggest that even Pf who commenced judicial proceedings in breach of arbitration
agreement can apply for stay under IAA.
 A 3P beneficiary under the Contracts (Rights of Third Parties) Act is to be treated as
a party and may thus be entitled to apply for a stay.
 As in the AA, s 6(5)(a) IAA says any person claiming through or under a party to an
arbitration agreement can apply for a stay.
 Special facts: The 'Engedi' [2010] SGHC 95, where Prakash J held that the court does
not have the power to stay an action in rem where the owner of the res is not a party
to the arbitration agreement, as doing so would deny the owner his right to defend
his interests.

- Element (2) arbitration agreement covers the matter in dispute before the court
 See above AA stay application Element (2)

- Element (3) applicant enters an appearance to the court proceedings

 See above AA stay application Element (3)

- Element (4) applicant has not delivered pleadings or taken any step in the proceedings
28
  See above AA stay application Element (4)

- Party resisting a stay can challenge the stay on the basis that the stay application was
made after the applicant filed pleadings or took steps in the proceedings, but the main
challenge to a stay would be that the arbitration agreement is NOT enforceable, viz, it is
'null and void, inoperative or incapable of being performed' (s 6(2) IAA)
 Refusal of a stay application under IAA is not based on factors such as al legations of
fraud, multiplicity of actions, or complex questions of law to be contested (unlike AA
– see discretion point above)

- ‘null and void, inoperative or incapable of being performed’ (s 6(2) IAA)

 Courts in Model Law jurisdictions have thus far given the term a very restrictive
meaning.
 What does NOT fall within this term
o Cases involving non-existent institutions named in the agreement;
o Cases involving hybrid clauses (adopting institutional rules of one institution
and using the administrative services of another); (Insigma Co Ltd v Alstom
Technology Ltd [2009] 3 SLR(R) 936)
o Cases involving non-existent rules, vague or unclear situs (Lucky-Goldstar
International (HK) v Ng Mook Kee Engineering [1993] 2 HKLR 73: HK court
ruled that the arbitration clause which provided for arbitration 'in a third
country, under the rules of the third country and in accordance with the rules
of procedure of the International Commercial Arbitration Association' was not
null and void nor inoperative nor that it was incapable of being performed
notwithstanding that no specific arbitral situs was identified and that a non-
existent body and rules were named. The court held that the intention to
arbitrate was clear and added that it could be brought into operation by the
election of the claimants of any situs other than the countries of the parties. In
Lucky-Goldstar International (HK) Ltd v Ng Mook Kee Engineering Ltd
(unreported; OS Nos 825 and 1020 of 1993), as a sequel to the HK
proceedings, Judith Prakash J, whose attention was drawn to the decision of
the HK court, granted the Pf’s application for the appointment of an arbitrator
under the repealed AA. Although this case was decided before the enactment
of the IAA, the decision appears to signal an acceptance of the HK decision that
so long as the intention to arbitrate is clear, the court would enforce it.)

 “null and void”

o Non-arbitrability of subject matter (but whether the law on arbitrability
should be that of the forum or the law of the place of arbitration is unclear and
left unresolved: Halsbury’s 20.041 fn 8)
o Nullity or voidability must impact the arbitration agreement and not merely
the underlying commercial contract (the doctrine of separability operates to
enable the arbitration clause to survive even if the underlying arbitration
clause is held void, invalid or non-existent)

 “inoperative”
o Where the contract provided that the arbitrator should be a named party
in the contract, it was held that the agreement was inoperative as the
arbitrator could not act without impartiality. Jean Charbonneau v Les
Industries AC Davie Inc [1989] Recueil de Jurisprudence de Qu bec p 1255
o Arbitration agreement not rendered inoperative by the fact that the right to
elect for arbitration is unilateral
o Prohibitive costs of international arbitration rendering one party unable
to participate have raised as a possible basis for inoperability (Case III ZR
33/00 (Germany: Federal Supreme Court, 2000) CLOUT Case 404
29
 A/CN.9/SER.C/ABSTRACTS/35 - bona fide inability to fund arbitration
renders arbitration clause 'inoperable')
o Breach of an agreement containing the arbitration clause and termination of
the said agreement will not render the arbitration clause inoperative. Mancon
(BVI) Investment Holdings Co Ltd v Heng Holdings SEA (Pte) Ltd [2000] SLR
220 at [28] – [30]

- See above for the discussion on ‘dispute’ referable to arbitration re IAA

- See above for the conditions that may be imposed by the court making an order granting
a stay

30
 21. Compelling attendance of witnesses at arbitration

- Since arbitral process is consensual and entered into by agreement of the disputing
parties, the arbitral tribunal does not have power/jurisdiction over non-parties and
those who do not consent to be part of the process.

- This causes particular difficulty re third parties, for example, non-cooperative potential
witnesses. The arbitral tribunal may order witness to give evidence or produce
documents but has no power to compel their attendance, so assistance of the national
court is required. The relevant sections are ss 13 IAA and s 30 AA.

- Witnesses required to testify at the oral hearing may be summoned by a writ of subpoena issued
on the application of any party made to the High Court to appear before any arbitral tribunal in
Singapore to give oral testimony or to produce documents.

- The court would not interfere with the tribunal's conduct of the proceedings and would defer to
the tribunal's decision as to whether a witness ought to testify.

Witnesses may be summoned by subpoena (IAA)

13. —(1) Any party to an arbitration agreement may take out a subpoena to testify
or a subpoena to produce documents.
(2) The High Court or a Judge thereof may order that a subpoena to testify or a
subpoena to produce documents shall be issued to compel the attendance before an
arbitral tribunal of a witness wherever he may be within Singapore.
(3) The High Court or a Judge thereof may also issue an order under section 38 of the
Prisons Act (Cap. 247) to bring up a prisoner for examination before an arbitral
tribunal.
(4) No person shall be compelled under any such subpoena to produce any
document which he could not be compelled to produce on the trial of an action.

Witnesses may be summoned by subpoena (AA)

30. —(1) Any party to an arbitration agreement may take out a subpoena to testify
or a subpoena to produce documents.
(2) The Court may order that a subpoena to testify or a subpoena to produce
documents shall be issued to compel the attendance before an arbitral tribunal of a
witness wherever he may be within Singapore.
(3) The Court may also issue an order under section 38 of the Prisons Act (Cap. 247)
to bring up a prisoner for examination before an arbitral tribunal.
(4) No person shall be compelled under any such subpoena to produce any
document which he could not be compelled to produce on the trial of an action.

31
22. Powers of arbitral tribunal to make orders or give directions
- Section 12 IAA
 Security for costs, S12(1)(a)
 Discovery of documents and interrogatories, S12(1)(b)
 Giving of evidence by affidavit, S12(1)(c)
 Preservation, interim custody or sale of property which is or forms part of the
subject-matter of the dispute, S12(1)(d)
 Samples to be taken from, or observations to be made of, or experiment conducted
upon, any property which is or forms part of the subject-matter of the dispute,
S12(1)(e)
 Preservation and interim custody of any evidence for purpose of the proceedings,
S12(1)(f)
 Securing amount in dispute, S12(1)(g)
 Ensuring that award in arbitration proceedings is not rendered ineffectual by the
dissipation of assets by a party, S12(1)(h)
 Interim injunction or any other interim measure, S12(1)(i)
 An arbitral tribunal shall, unless the parties to an arbitration agreement have
(whether in the arbitration agreement or in any other document in writing) agreed
to the contrary, have power to administer oaths to or take affirmations of the parties
and witnesses: S12(2)
 All orders or directions made or given by an arbitral tribunal in the course of an
arbitration shall, by leave of the High Court or a Judge thereof, be enforceable in the
same manner as if they were orders made by a court and, where leave is so given,
judgment may be entered in terms of the order or direction: S12(6)

- Section 28 AA
 The parties may agree on the powers which may be exercised by the arbitral tribunal
for the purposes of and in relation to the arbitral proceedings: S28(1)
 Without prejudice to the powers conferred on the arbitral tribunal by the parties
under subsection (1), the tribunal shall have powers to make orders or give
directions to any party for the following: S28(2)
o Security for costs, S28(2)(a)
o Discovery of documents and interrogatories, S28(2)(b)
o Giving of evidence by affidavit, S28(2)(c)
o A party or witness to be examined on oath or affirmation, and may for that
purpose administer any necessary oath or take any necessary affirmation
28(2)(d)
o Preservation and interim custody of any evidence for the purposes of the
proceedings S(28)(2)(e)
o Samples to be taken from, or any observation to be made of or experiment
conducted upon, any property which is or forms part of the subject-matter of
the dispute S28(2)(f)
o Preservation, interim custody or sale of any property which is or forms part of
the subject-matter of the dispute. S28(2)(g)
o Note: These are available under IAA but not AA – Securing amount in dispute,
S12(1)(g) IAA; Ensuring that award in arbitration proceedings is not rendered
ineffectual by the dissipation of assets by a party, S12(1)(h) IAA; Interim
injunction or any other interim measure, S12(1)(i) IAA
 All orders or directions made or given by an arbitral tribunal in the course of an
arbitration shall, by leave of the Court, be enforceable in the same manner as if they
were orders made by the Court and, where leave is so given, judgment may be
entered in terms of the order or direction: S28(4)

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23. Recognition and Enforcement of Awards

- This is perhaps the most important role of the national court. Unless and until the local
court recognizes an arbitral award for enforcement purposes, the arbitration process is
incomplete and of little practical use to the party who has the benefit of that arbitral
award.

- Singapore awards i.e. recognized by IAA under s 19; AA under s46 AA

An award on arb may, by leave of the HC or judge thereof, be enforced in the same
manner as a judgment or an order of the same effect and where leave is so given,
judgment may be entered in terms of the award.

- foreign arbitral awards are also recognized for purposes of enforcement s 29 IAA.
Foreign award may be enforced in court either by action or in the same manner as an
award of an arbitrator made in Singapore under s19 s29

What is a “Singapore award”?

An arbitral tribunal sitting in Singapore having its seat of arbitration in Singapore
will produce an award that will be a Singapore award.

“The award shall be deemed to have been made at the place of arbitration”: s 38(4)
AA
s 38(4) AA mirrors Article 31(3) Model Law

“the place of the arbitration” means the juridical seat of the arbitration: s 2 AA
This implies that this presumption will be applied even if the hearing takes place outside
Singapore, or the arbitrators put their signature on the award outside Singapore.

Enforcement of awards (local)

19. An award on an arbitration agreement may, by leave of the High Court or a Judge
thereof, be enforced in the same manner as a judgment or an order to the same effect
and, where leave is so given, judgment may be entered in terms of the award.

Recognition and enforcement of foreign awards

29. —(1) Subject to this Part, a foreign award may be enforced in a court either by
action or in the same manner as an award of an arbitrator made in Singapore is
enforceable under section 19.
(2) Any foreign award which is enforceable under subsection (1) shall be recognised
as binding for all purposes upon the persons between whom it was made and may
accordingly be relied upon by any of those parties by way of defence, set-off or
otherwise in any legal proceedings in Singapore.

Procedure
- Foreign awards may also be enforced by an action on the arbitral award in court. O69A
Rules of Court.
- s30 IAA governs procedure of adducing evidence when person seeks to enforce foreign
award)

25. Setting Aside of Arbitral Awards

- An important role of the national court which is the other side of Enforcement – see next

33
lecture on The Arbitral Award, its recognition and enforcement.

34
IV. THE ARBITRAL AWARD; RECOGNITION AND REFUSAL TO RECOGNISE AND SETTING
ASIDE

26. The Award and its form

- The Arbitral Award is the culmination of the arbitral process. It is the product the parties
to the arbitration seek to have, hopefully one in their favour. Simply put, it is the decision
of the Arbitral Tribunal with its grounds for the decision. It is the equivalent to the
judgment of a court.

- Strictly, arbitral awards with reasons in commercial arbitrations certainly in the

domestic context, is a fairly recent development. In early 1950’s up to perhaps 1970’s
there were what were known as ‘non-speaking awards’. Essentially, these were awards
without reasons. At a practical level, there grew up a practice amongst arbitrators, the
attitude that “if give no reasons, then it would be difficult to fault my decision”. However,
even then if parties requested a ‘speaking award’, i.e. one with reasons, the arbitrator
would be obliged to provide one.

- In modern commercial arbitrations, there is no particular form of the Arbitral Award,

though professional arbitrators adopt a style not dissimilar to court judgments. Certain
basic ‘formats’ are taught by professional arbitral institutes to ensure enforceability of
the awards.

Time to Make Award And Delay

- The award should be made within the time set under the agreed rules - Ting Kang Chung
John v Teo Hee Lai Building Constructions Pte Ltd and others [2010] 2 SLR 625. Example,
SIAC Rules - 45 days; CIETAC Rules (2005)—within 6 months from constitution of the
tribunal; ICC – 6 months from TOR.

- India: Supreme Court; NBCC Ltd v JG Engineering Pvt Ltd ; Civil Appeal 8/2010 (Decided:
5 January 2010). The case lingered for some 9 years with several arbitrators being
appointed and re-appointed.

- Tribunal becomes functus after expiry of time given. (Ian MacDonald Library Services Ltd
v PZ Resort Systems Inc [1987] 14 BCLR (2d) 273, BC CA set aside award made a few
months after time allowed)

- However, court has discretion not to set aside if delay causes no prejudice: FIAT SpA v
Republic of Suriname (USDC, South New York,1989) Yearbook Com Arb XXIII(1998) p
880-885)

- See delay in Hong Huat Development Co (Pte) Ltd v Hiap Hong & Company Pte Ltd [1999]
3 SLR 682; Ting Kang Chung John v Teo Hee Lai Building Constructions Pte Ltd and
others [2010] SGHC 20, [2010] 2 SLR 625

35
 International Arbitral Awards

27. Form and Type of Award (IAA)

- The basic requirements rather than form are those laid down in the UNCITRAL Model
Law where it is applicable. The essential requirements are:

a. In writing and signed by the arbitrator or by a majority of them - Art 31(1)

Model Law/s38(1) AA; usually reasons are given for the omission of the signature
of an arbitrator (dissenting/minority arbitrator)

b. Grounds or reasons for the decision/award save where parties do not require any
- Art. 31(2), Model Law/38(2). Findings of a tribunal are not its reasons but its
conclusions: Gora Lal v Union Of India (2003) 12 SCC 459 (India: Supreme Court,
18 December 2003)

c. Possibly the only formal requirement: MUST STATE (i) date of the Award and
(ii) the place of the award as determined by Article 20(1) of the Model Law/
s38(3) AA

Above are adopted in Singapore law by virtue of s 3(1) of the IAA.

Place of Award

- The ‘place of the award’ is an important aspect. It determines and characterizes the type
of award – whether a Singapore award or a foreign award. In the international context, it
has ramifications as to recognition and enforcement.

If Singapore award, the award will be recognized and enforced as if it were a Singapore
court judgment and judgment may be obtained upon it provided leave is obtained from
the court in Singapore – s 19 IAA. It may also be relied upon in any court proceedings in
any court of competent jurisdiction – see s 19B

If Foreign awards, so far as Singapore is concerned will be subject to the provisions of

Part III of the IAA. The formal requirements for recognition are straightforward and
found in s 30 IAA. (s30 IAA governs procedure of adducing evidence when person seeks
to enforce foreign award)
(NB: Part III of the IAA does not apply to foreign arbitration awards made before 19 Nov
1986 s 28(2) IAA.

- For the implication of the nature/type of the award in the context of recognition and
enforcement, see PT Garuda Indonesia v Birgen Air [2001] SGHC 262.
Essentially held that there was a difference between place of arbitration (juridical seat of
arb) and venue of arbitration. K provided for seat of arb to be Jakarta, whereas hearings
held in SG. It was held to be a foreign award. CA affirmed.

- Under the Model Law regime, an award is deemed to have been made at the seat of
the arbitration (unless otherwise indicated). This will determines the type of award it
is – Article 31(3) Model Law.

36
37
 Form and Type of Award Under the AA – domestic awards

- Same requirements as under the IAA – Part VIII of AA – see s 38; see sub-paragraphs (a)
to (c) above.

In writing and signed by the arbitrator or by a majority of them – S38(1); reasons must
be given for the omission of the signature of an arbitrator

Grounds or reasons for the decision/award save where parties do not require any –
S38(2). Findings of a tribunal are not its reasons but its conclusions: Gora Lal v Union Of
India (2003) 12 SCC 459 (India: Supreme Court, 18 December 2003)

Possibly the only formal requirement: MUST STATE (i) date of the Award and (ii) the
place of the award as determined by S38(3)

- AA expressly provides that award is deemed to be made at place of arbitration - s 38(4),

mirroring Article 31(3) Model Law.

28. Meaning of ‘Award’ under IAA and AA

- "award" means a decision of the arbitral tribunal on the substance of the dispute and
includes any interim, interlocutory or partial award but excludes any orders or
directions.” [s 2 IAA, AA]

- While taken literally the meaning of ‘award’ seems uncontroversial. However, as in

everything to do with law, there are surprising situations or nuances which call for a
more thorough investigation of the particular concept or term.

- A negative determination by the arbitral tribunal does not amount to a decision capable
of meaning an ‘award’ with its consequent ramifications PT Asuransi Jasa Indonesia
(Persero) v Dexia Bank SA [2007] 1 SLR 597 in relation to s 2(1) of the IAA and in the
context of Article 34 of the Model Law.
Negative determination referred to a determination that it had no jurisdiction to
determine an issued referred to it under an arb agreement.

29. Arbitral award must be Complete

Generally it is the duty of the arbitrator to make findings and decisions of all matters in
dispute. His duty is not discharged until all the issues are answered.

What is incomplete?
- Tan Toi Lan v Lai Kee Ying [1975] 1 MLJ 27; Jeeram v National Union of Plantation
Workers [1993] 3 MLJ 104.

- The award should decide all issues and make definite findings. Not leave any issue
unanswered. The tribunal cannot choose to ignore any issue raised even if he feels it may
not be relevant to the final outcome: Shanghai Tunnel Engineering Co Ltd v Econ-NCC
Joint Venture [2011] 1 SLR 217

- Mere narration of facts and the issue without answering amounts to misconduct which
warrants setting aside Jeeram v National Union of Plantation Workers [1993] 3 MLJ 104

38
- Award is incomplete if question of costs is not addressed. Re An Arbitration between
Becker, Shillan & Co and Barry Bros [1921] 1 KB 391 (see tan poh leng below) However
this omission of itself will not render the award invalid as the tribunal may rectify it by
an additional award or an amendment to the award under s39(5) AA (Doesn’t seem to be
equivalent in IAA, but could go under Art 33(3): counter-argument is that it provides that
tribunal can only make additional award as to claims presented in the arb proceedings .
though cost is a necessary order to be made in every proceeding, it cld be argued that an
order to cost isnt expressly presented. Better view is that it can, otherwise it wld lead to
irregular application.

Consequences of Incompleteness
The incompleteness of an award is not a ground for it to be set aside. The court may
however decline leave to enforce the award. (s46(1) AA/ s19 IAA) until and unless the
award is made complete. (S43AA/ Art 33 ML) The tribunal may make corrections to the
award or make additional awards on claims submitted but omitted in the award. (Party
has to within 30days of receipt of the award or otherwise agreed by parties, give notice
to parties and request the arb tri correct the award)

30. Final and Binding Effect of the Award

- A proper, complete and enforceable arbitral award is final and binding upon the parties.
This enures in subsequent proceedings as well – see s 19B IAA and s 44 of AA.

- Enforceable in like manner as a court judgment – see s 19 IAA and s 46 AA.

Initial Confusion by Court as to whether tribunal could revise issues

- There was confusion as to whether a tribunal could amend its award where it had issued
an award it deemed “final but save as to costs” Issue was whether it had become functus
officio upon issuing that award. HC held that it could not. Once the award was final, the
merits of the case had been decided on and the tri could only return to decide upon the
issue of costs. CA reversed this decision and sanctioned reopening of merits of decision
despite tri handing down a ‘final decision’. See Tan Poh Leng Stanley v Tang Boon Jek
Jeffrey [2001] 1 SLR 624 (HC); Tang Boon Jek Stanley v Tan Poh Leng Stanley (CA)
[2001] 3 SLR 237.
- S19B IAA/s44 AA specifically corrects the position taken by the CA above. The fact that
the tribunal is not yet functus officio does not ipso facto entail that it has jurisdiction to
re-visit issues and decisions made earlier.
- Pls see p95 of Leslie Chew for further commentary if needed

Functus Officio

- Russell on Arbitration 21st edition, 1997 wrote that:

“Proceedings will close after the oral hearings have finished and any
post-hearing submissions have been made. Thereafter the tribunal
makes its award. Once a final award is made, the tribunal becomes
functus officio. This means its authority to act ceases, the reference
terminates and the award cannot thereafter be amended.”

- See also Article 32(1) Model Law – an arbitration is terminated when the arbitral
tribunal makes its final award.

39
- If the award is the final award, it terminates the arbitration and extinguishes the original cause of
action. Arbitrator becomes functus officio

40
 Amendment of Clerical Errors

- Tribunal cannot “vary, amend, correct, review, add to or revoke” award except for
clerical or calculation errors – s 19B IAA; s 44(2) AA.
- These provision were added in 2001 to re-state the proper meaning of “finality of
awards” reversing the effect of CA’s decision in Tang Boon Jek Stanley v Tan Poh Leng
Stanley (CA) [2001] 3 SLR 237.

- Tribunal is also functus in respect of issues disposed in Interim Awards: MCIS

Insurance Bhd v Associated Cover Sdn Bhd [2001] 2 MLJ 561

- Original cause of action replaced by right to enforce award

- Res judicata (no re-litigation of same cause of action) and issue estoppel (no re-opening
of the state of law or fact which had earlier been established) applies to matters
decided in arbitral awards as in judgments of courts.

31. Recognition and Enforcement

Generally

- Even in the case of an international arbitration, Singapore awards by definition need no

recognition by the courts in Singapore. They do however require the leave of the court to
be enforced as judgment of a court – see s 19 IAA. Thus an arbitral tribunal sitting in
Singapore having its seat of arbitration in Singapore will produce an award that will be
Singapore award. Such an award is readily enforced by virtue of s 19 IAA.

- S 19 IAA - leave is however required of the court in order for judgment to be entered in
terms of the award.

Foreign Awards

A foreign award may be enforced either by an action in court or as a singapore award

would be under s19 IAA. S29(1) IAA

Any award which is enforceable is recognised as binding for all purposes upon parties to
whom it was made. S29(2) IAA

32. Recognition of Foreign Awards

- This is provided for in Part III of the IAA.

- To be noted that it applies only to awards that are made after 19 Nov 1986

Foreign award may recognized for enforcement as a local judgment – s 29 IAA.

Procedure

For AA, see order O69R3(1)(f) read w/ r14(1) of ROC

For IAA SG award, see O69AR3(1)(d) read w/ r r6(1) of ROC

41
 For IAA Foreign award, see O69A r 3 (1)(e) read with r 6(1A) of the Rules of Court,
formalities also provided for in s30 IAA

- Apply by Ex Parte Originating Summons

- The application is to be supported by an affidavit which:

a. Exhibit the arbitration agreement with an authenticated copy of the original

arbitral award accompanied by translation where required

b. Affidavit must state name of applicant with his usual address and the name of the
party against whom it is sought to enforce

c. Details of how and to what extent the award has not been complied with is also to
be provided.

- Once leave is given by the High Court to enter judgment on an application to enforce the
award, the other party has 14 days to challenge the leave granted.

Recognition is Mechanistic
- Recognition and enforcement, once formalities as above are complied with is essentially

automatic. Recognition as a process is to be ‘mechanistic’, i.e. it does not require the court
to investigate the merits of such enforcement – see Aloe Vera of America, Inc v Asianic
Food (S) Pte Ltd & Anor [2006] 3 SLR 174 at [42], followed in Denmark
SkibstekniskeKonsulenter A/S I Likvidation v Utrapolis 3000 Investments Ltd [2010] 3
SLR 661 but see concerns raised in Strandore Invest A/S v Soh Kim Wat [2010] SGHC 151
(actually simple shifts the burden to respondent to challenge to challenge the
enforcement by justifying grounds for refusal of enforcement)

Information on other jurisdictions that apply our Principles

UK
- See also Robert Merkin, Arbitration Law (LLP 1991):

“The Arbitration Act 1996, s 101(2) provides that the New

York Convention award, may by permission of the court, be
enforced in the same manner as a judgment or order of the
court to the same effect, and s 101(3) goes on to say that
“where leave is so given, judgment may be entered in terms of
the award”. The wording makes it clear that the enforcement
process is a mechanistic one, and that the court may simply
give judgment which implements the award itself...”.

[The reference to the Arbitration Act 1996 is a reference to the UK arbitration Act which
– the wording s 101 (2) and (3) of the 1996 Act is similar to s 19 of the IAA.

Recommended Model Law

- See also Chapter VIII of the Model Law on the conditions for recognition of foreign
awards – note however, that Part VIII is not part of Singapore law – cf. S 3(1) IAA.
However, the requirements in Article 35(2) which are the maximum requirements that

42
 may be imposed for the recognition of foreign arbitral awards under the New York
Convention are part of Singapore law and practice in 69A r 6 (1) of the Rules of Court.

33. Domestic Awards

- In the domestic context, under the AA, an award under a arb tribunal may with leave of
court be enforced in the same manner as a judgment or order of the court to the same
effect.; see s 46 AA.

43
 34. Grounds to Refuse Recognition of Foreign Awards under the IAA

Recognition and enforcement of foreign awards as provided for by s30IAA and S69A ROC
is formalistic and mechanistic in that it simply requires the applicant to produce evidence
of the arbitration agreement and proceedings and did not required judicial investigation
into its merits or authenticity. Aloe Vera of America Inc v Asianic Food (S) Pte Ltd [2006]
3 SLR 174

This formalistic and mechanistic approach to enforcement might appear to be

disadvantageous to the party against whom enforcement is sought. In reality, the process
simply transfers the burden to the respondent to challenge the enforcement by justifying
grounds that would call upon the court in Singapore to refuse recognition and
enforcement.

- The grounds are found in the IAA and are exhaustive. This flows from language of s31(1) IAA
which provides that ‘enforcement [may] be refused.. on the cases mentioned in subjections (2)
and (4) … but not otherwise”

GROUNDS FOR REFUSAL OF ENFORCEMENT

a. A party’s incapacity at the time when agreement was made – s 31(2)(a) IAA/
S48(1)(a)(i)AA/ A34(2)(a)(i) ML

Deals with the legal ability (capacity) of the party to enter into the arbitration agreement
– similar to the capacity of a party to enter into any other contractual transaction as
determined under his the proper law of the particular contract. It also involves the
application of the personal law of the party concerned

Eg. Where husband cannot enter into certain K without spousal approval under
Indonesian law.

- However if participated in arbitration without reservation, too late to raise non-party ground to
set aside:. See also Azoz Shipping v Baltic Shiping (No 3) [1999] 2 All ER 453.

b. The arbitration agreement is invalid under the lex arbitri/ or law of place award
made (by default) – s 31(2)(b) IAA/s48(1)(a)(ii) AA/ A34(2)(a)(i) ML

No local cases as yet. An example could be the decision in the Italian case of Bobbie
Brooks Inc (USA) v Lanificio Walter Banci sas (Italy). Italian party contended that the
arbitration agreement on the purchase order was invalid under Italian law. The Italian
CA rejected this plea – VolIV (1979) Yearbook Commercial Arbitration, 2889.

c. Failure to give notice of arbitration proceedings or the appointment of

arbitrators and the inability to present the case – s 31(2)(c)IAA / S48(a)(a)(iii) AA
/A34(2)(a)(ii) ML

Clearly based on rules of natural justice. Similar to litigation – notice of

hearings/proceedings and action must be duly given to the other side.

if a party has notice but refuses to participate in proceedings, the award cannot be
set aside: Re Corporacion Transnacional de Inversiones, S.A. de C.V. et al. and STET
International, S.p.A. et al. (Canada: Superior Court, 1999) CLOUT Case 391,

44
A/CN.9/SER.C/ABSTRACTS/34.

Inability to present case

The limb dealing with the party’s “inability to present the case” is arguably wider than
the earlier parts of the provision. See for example the case where the absent party to an
arbitration challenged the arbitral award in the New York courts on the ground that he
did not attend the proceedings and was therefore unable to present his case because he
feared extradition proceedings if he attended it in England – ICCA Yearbook XVIII, US 130
(sub-5).

Unable to prepare due to unreasonable time limits

It is arguable that where a party to an arbitration is denied adequate time to deal with
the dispute by reason of the arb tri;s unfair or unrealistic imposition of time constraints,
this grounds for refusing to enforce an award may be sustainable.

There is a case on point with such facts, but court did not deal with it under s 31(2)
(c)IAA, rather the court removed an arbitrator for misconduct. However it is likely that
the circumstances can be applied to sustain a refusal to enforce an award.
Koh Bros Building and Civil Engineering Contractor Pte Ltd v Scotts Development
(Saraca) Pte Ltd [2002] 4 SLR 748 – arbitrator was removed for misconduct because he
omitted to allow parties to be heard but nevertheless issued his decision without hearing
at least one side. If an award had been made, the matter would have founded a basis for
refusal to enforce. Prakash J said that failing to give parties the opportunity to address
him before making a decision, the arb had breached the rules of natural justice.

Denied counsel of choice

Where applicant argues that he has been denied his choice of representation because of
time constraints put on arb proceedings by arb.

Usually, party is entitled to be represented by his counsel of choice and therefore

anything that prevents this should satisfy the ground for a court to refuse enforcement of
the arbitral award. There may be scope for such argument but prejudice is likely to be
none where party is represented by other counsel (albeit none first choice)

However where party attends the proceeding anyway, court may still allow enforcement
of the award. This would be consistent with the view taken by the HK Court in China
Nanhai Oil Joint Service Cpn v Gee Tai Holdings Co Ltd a decision of the Hong Kong court
Vol XX (1995) Yearbook Commercial Arbitration 671
Courts always veer toward rendering an arbitral award as being valid or enforceable,
where parties had consensually opted for arbitration. That core intent should
therefore be given effect and a party should not be permitted to easily avoid such
previous agreement to arbitrate

d. Outside scope of the Arbitration Agreement – s 31(2)(d) IAA/ S48(1)(iv) AA/

A34(2)(a)(iii)

This ground deals with the scope of the arbitration. The arbitral tribunal only has the
jurisdiction and power to deal with the disputes contemplated by the arbitral agreement
and no more.

- HK case where the tribunal gave an award on non-payment was set aside because:

45
 - reference to arbitration was over ‘the quality or condition of the rubber’.
- Awarded was decided on basis of non-payment by one party
- The court refused enforcement as the arbitral award went beyond its proper
scope – ICCA Yearbook XVII Hong Kong I (sub 14- 17).

Talked about the jurisdiction of the arb tribunal to decide only issues referred to it PT
Asuransi [2007] 1 SLR 597 at [37] – [39];

Severability of Non-complying parts of Award

In the case of arbitral tribunal has dealt with matters not within the scope of the
arbitration agreement, if these matters are separable from those that are within scope,
then such non-offending parts may be saved. S31(3) IAA/ S48(1)(IV) IAA/ A34(2)(a)(iii)
ML

- Government of the Republic of Philippines v Philippine International Air Terminals Co, Inc
[2007] 1 SLR(R) 278

- e. Non-compliance with the agreed composition of the tribunal, the qualifications

of its members and the appointment procedure – s 31 (2)(e)/ s48(1)(a)(v) AA/
A34(2)(a)(iv) ML

Party autonomy principle must be given effect in arbitrations and therefore the choice of
parties previously agreed to must be given effect. See China Nanhai Oil Joint Service Cpn
v Gee Tai Holdings Co Ltd a decision of the Hong Kong court Vol XX (1995) Yearbook
Commercial Arbitration 671.
- A CIETEC arbitration was conducted by arbitrators from the Shenzhen list and not
by those on the Beijing list as provided for in the arbitration agreement.
- The HK court although agreeing the ground was made out, nevertheless permitted
enforcement because it found the party objecting had participated in the
proceedings with knowledge that arbitrators were not from the agreed list.
(Possible reason – courts always veer toward rendering an arbitral award as being valid
or enforceable, where parties had consensually opted for arbitration. That core intent
should therefore be given effect and a party should not be permitted to easily avoid such
previous agreement to arbitrate).

See also Insigma Technology Co Ltd v Alstom Technology Ltd [2008] SGHC 134; [2009] SGCA
24.

- f. Award not yet binding, is suspended or has been set aside – s31(2)(f) IAA/ A36(1)
(a)(v) ML[but N.A, use IAA] (only foreign awards)

The ground is self-explanatory. However, in practice national courts have used this to
refuse enforcement on their own policy grounds. Difficult balance courts must maintain
in dealing with international awards.

Some jurisdictions require registration w/ a local authority for an award to become

binding even where it meets its formal requires.

– see Chapter 10, Law and Practice of International Commercial Arbitration.

46
47
35. Two Additional Grounds for Refusal to Recognize Arbitral Award for Enforcement

Under the IAA and AA there two further grounds on which a court may refuse
enforcement: s31(4) IAA/ S48(1)(b) AA

a. The subject-matter of the difference between the parties to the award is not
capable of settlement by arbitration under the law of Singapore; and

b. Enforcement of the award would be contrary to the public policy of Singapore

Not Capable of Settlement by Arb under Law of SG s31(4)(a) IAA/ S48(1)(b)(i) AA

Subject matter is not capable of settlement by arbitration: This is not a controversial

ground. Generally, a State reserves to itself specific areas of law in which it alone has the
exclusive jurisdiction to deal with. Common examples would be family disputes and
estate and succession. These areas are generally accepted as being within the sole
purview of the domestic courts.

Against Public Policy s31(4)(b) IAA/ S48(1)(b)(ii) AA

- Enforcement of the award is against public policy:

- As the public policy is not defined in statute, it has become a ground quite commonly
relied upon to thwart the recognition and enforcement of foreign arbitral awards. The
differences in how each State treats the interpretation of what constitutes public policy
gives rise to interesting outcomes. It is also a ground which parties rely upon when they
are ‘desperate’ to seek a challenge of an arbitral award.

- An example which gives a good illustration –ED & F Man (Sugar) Ltd v Yani
Haryanto. This was an arbitration in London. Indonesian buyers of sugar from a
German company started an action to set aside an international arbitral award
made against it on the ground that it was contrary to public policy. This case
concerned the fact that at the time the importation of sugar into Indonesia
required Governmental approval. The Indonesian buyers did not have such
approval. At all levels of the Indonesia court system, the arbitral award was
denied enforcement on the public policy ground on the basis that the contract of
sale of sugar did not have the required approvals. The reasoning was essentially
that any arbitral award touching upon an ‘illegal contract’ could not be enforced
in Indonesia.

Question of approach by the national courts – A narrow or broad interpretation of the

public policy ground?

Narrow Interpretation is to be preferred

In Singapore, the conventional wisdom is that a narrow interpretation should be
given to the public policy ground – PT Asuransi Jasa Indonesia (Persero) v Dexia Bank SA
[2007] 1 SLR 597 (Court of Appeal) refusing to align itself with the position of the Indian
Supreme Court in Oil & Natural Gas Corp Ltd v Saw Pipes Ltd which applied a broad
interpretation and disallowed an ard award that was wrong in law.

There has been support for such a position in academic circles. Leslie Chew DJ (Chew)
agrees that such an interpretation should be adopted.

48
 CA in PT Asuransi cited international cases which also applied the narrow interpretation.
And also went to the preparatory materials to the Model Law which provided that public
policy was meant to cover fundamental principles of law and justice in substantive and
procedural respect which included inter alia, corruption, bribery, fraud or similar serious
cases.

Shock the conscience

- Shld only apply in instances where upholding of the award would ‘shock the
conscience’, clearly be injurious to the public good or violate the forum’s most basic
notion’s of morality and justice’ PT Asuransi citing Downer Connect Ltd v Pot Hole People
Ltd (A New Zealand decision); Deutsche Schaubau v Shell International Petroleum Co Ltd
(English) and Parson & Whittemore Overseas Co Inc v Societe Generale de L’industrie
Papier (RAKTA)

Errors of Fact
The CA has held that that the public policy objection in Art 34(2)(b)(ii) ML (s31(4)(b)
IAA/ S48(1)(b)(ii) AA )would only apply to findings of law made by an arbitral tribunal -
to the exclusion of findings of fact (save for the exceptions of fraud, breach of natural
justice or other recognised vitiating factor) - would be consistent with the legislative
objective of the IAA that, as far as possible, the international arbitration regime should
exist as an autonomous system of private dispute resolution to meet the needs of the
international business community [69]. See also AJU v AJT [2011] 4 SLR 739; [2011]
SGCA 41
Case involved an agreement which involved the promise to withdraw a criminal
complaint against A. A claimed that agreement was entered into by duress/
undue influence but determination by arb made a finding of fact that it was not
so.
CA held that such a finding of fact was not contrary to public policy.

- Therefore errors of fact unless approaching fraud, breach of natural justice or other recognised
vitiating factor cannot be against public policy.

Errors of law (not serious)

- In Singapore. errors of law or fact per se are final and binding on the parties and may not
be appealed against or set aside by a court except in situations provided for by IAA or
Model Law. The CA in PT Asuransi rejected the the Indian position taken in Oil & Natural
Gas Corporation Ltd v Saw Pipes Ltd AIR 2003 SC 2629 is broader.
Held that an arb award which was inconsistent with the provisions of the Indian
Abritration and Conciliation Act

- In deciding public policy, Singapore’s aspiration of being an international arbitration hub must
weigh heavily in the minds of the courts.

- Shld only apply in instances where upholding of the award would ‘shock the
conscience’, clearly be injurious to the public good or violate the forum’s most basic
notion’s of morality and justice’ PT Asuransi

Tribunal had allegedly ‘pierced the corporate veil’ without evidence to support
him. This was not held to offend against the most basic notions of justice. Aloe
Vera of America, Inc v Asianic Food (S) Pte Ltd [2006] 3 SLR 174

49
 Serious Errors of Law
- See also Commission Report (A/40/17) on the Model Law – see Holtzmann & Neuhaus, A
Guide to the UNCITRAL Model Law on International Commercial Arbitration, Kluwer at p
914:

“In discussing the term ‘public policy’, it was understood that it was
not equivalent to the political stance or international policies of a
State but comprised the fundamental notions and principle of justice...
It was understood that the term ‘public policy’, which was used in the
1958 New York Convention and many other treaties, covered
fundamental principles of law and justice in substantive as well as
procedural aspects. Thus, instances such as corruption, bribery or
fraud and similar serious cases would constitute a ground for setting
aside.”

- Notwithstanding the CA decision in PT Asuransi that errors of law by a tri are binding on parties,
the decision of the court suggested that there may be scope to find serious errors of law contrary
to public policy and thus set an award aside on that basis

- The argument is that if a tri got the law of the enforcing jurisdiction so wrong, surely that would
be both injurious to public good and would offend public policy to enforce it?

- Arguably the decision of the arizonia arbitrator to in effect ‘pierce the corporate veil’ in Aloe Vera
of America should offend the basis notions of morality and justice. It in effect, made a person
who did not voluntarily sign the arb agreement, a party to the arb agreement so that he then
becomes bound by an arbitral award that follows. However the words ‘serious’ or ‘egregrious
error of law’ were not specifically used and the HC in Asuransi was not impressed.

- It seems then that for an egregrious error to apply, it would require quite a great threshold, an
example of which is yet to be established in court.

- Agreement to withdraw criminal complaint AJU v AJT [2011] 4 SLR 739; [2011] SGCA
41
An agreement entered into for the withdrawal of a criminal complaint is not contrary to
public policy. Crt held that an agreement to withdraw a criminal complaint did not
require any action to take unlawful action to stop criminal proceedings and as such was
not contrary to public policy.

- Note that CA found that where tri had made finding of fact that there was no bribery or
undue influence, that was a finding of fact which could not be disturbed. Seems to
suggest that bribery and such are restricted to where it involves the tribunal itself.

- See also Astro Nusantara International BV and others v PT Ayunda Prima Mitra and
others [2012] SGHC 212.

Other Singapore/Malaysian cases:

- Even if P alleges that tribunal had not decided on real issues of the dispute, it would not

50
 offend public policy. Such a ground is better invoked under the Natural justice
exception. Hainan Machinery Import & Export Corp and Donald & McArthy Pte Ltd
[1996] 1 SLR 34 - respondent alleged that decision not based on law; no allegation of
illegality or fraud, CIETAC award was enforced

- “an agreement whose object to be attained is a breach of international comity will be

regarded by the courts as being against public policy and void” Peh Teck Quee v
Bayerische Landesbank Girozentrale [1999] 3 SLR(R) 842 –

- allegation that contract involved Israeli interests and therefore contrary to public policy
was nevertheless enforced. Harris Adacom Corp v Perkom Sdn Bhd [1994] 3 MLJ 504 -

English cases:

 Westacre Investments Inc v Jugoimport-SDPR Holding Co Ltd [1999] 2 LLR 65 (CA)-

arms trade; allegation of buying influence; tribunal found no illegality. Court took
approach it was the award and not the contract that is being enforced and enforced the
ICC award. Followed in Omnium De Traitement et de Valorisation SA v Hilmarton Ltd
[1999] 2 LLR 222. (Followed by CA in AJU v AJT)

 Soleimany v Soleimany [1998] 3 LLR 811, (Eng CA) award acknowledged contract
involved smuggling activities; the award was not enforced. (Not followed by CA in AJU v
AJT)

35 A. Breach of Natural Justice/ Outside Scope (Setting Aside under s 24(b) IAA and
Article 34(2)(a)(iii) of the Model Law/ S48(1)(a)(vi) AA)
(Note Art 34 does specifically say breach of natural justice, but outside scope is practically the
same)

3 grounds of setting aside under this head

- Jurisdictional, procedural and substantive grounds
- Applies where a tribunal improperly decided matter that had not been submitted to it
or failed to decide matters that had been submitted to it. CRW Joint Operation v PT
Perusahaan Gas Negara (Persero) TBK [2011] 4 SLR 305

Test
Court must be satisfied that:

1. Tribunal breached a rule of natural justice in making the arbitral award

2. More importantly, the court had to be satisfied that the breach of natural justice
caused actual or real prejudice to the party challenging the award.

- Issuing Award w/o going into merits

By issuing a final award without going into the substantive merits of the parties’
dispute, it was a breach of natural justice CRW Joint Operation

- Failure to deal with some issues

A failure to deal with every issue does not render the arbitral award liable to be set
aside unless there had been real or actual prejudice to either or both of the parties.

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 - Mere errors of Law/Fact
Mere errors of law or fact were insufficient to warrant setting aside an arbitral award
(PT Asuransi)

Erroneous Exercise of Power Tri HAS

- Erroneous exercise of the tribunal of a power vested in it is a (mere error of law)

Exercise of Power Tri didn’t have

- Purported exercise of a power which it did not possess. (Breach of natural justice)
Quarella SpA v Scelta Marble Australia Pty Ltd [2012] SGHC 166, at [52-54].

Disagreement w/ Interpretation
- Disagreement with interpretation that tribunal took regarding the choice of law is not
permitted.

36. Setting aside under the AA (equivalent to Refusal to Recognize for enforcement
under IAA)

- Under the AA, an arbitral award would be a Singapore award and no issue of recognition
strictly arises. But awards are challenged by way of setting aside applications.

- Equivalent provision to s 31 IAA is s 48 AA.

- Observations on Article 34 apply equally to the grounds in s 48 AA

- Important to note however that in the case of local or domestic arbitrations, the courts
have greater interest in exercising their supervisory powers (so perhaps there is more
scope to argue s48(b) public policy)

Courts more supervisory for AA

- “The Arbitration Act was enacted in October 2001 and many of its features reflect the
provisions of the [UNCITRAL] Model Law...the Act does not, however, follow the Model
Law in its entirety and the courts have more supervisory powers in respect of domestic
arbitrations than they do in respect of international arbitrations.” Fairmount is a case on
s 48(1)(a)(vii) AA. Fairmount Development Pte Ltd v Soh Beng Tee & Co Pte Ltd [2007] 1
SLR 32 at [8] – [9]:

- Not open to the court to set aside an award under IAA on the grounds that the decision
on the merits was perverse or irrational – Sui Southern Gas Co Ltd v Habibullah Coastal
Power Co (Pte) Ltd [2010] 3 SLR 3.

Breach of Natural Justice s 48(1)(a)(vii) AA,

Fairmount [2007] 3 SLR 86

1. Parties to an arbitration had, in general, a right to be heard effectively on every issue that
might be relevant to the resolutions of a dispute. The overriding concern was fairness.

52
 2. Fairness was a multi-dimensional concept; and it would be unfair to a successful party to
an arbitration if the loser were to raise a multitude of arid technical challenges.

3. The conception of fairness, justified a policy of minimal curial intervention.

4. The narrow scope for challenging an arbitral award, as acknowledged under the Act,
required a delicate balance between ensuring the integrity of the arbitral process and the
rules of natural justice.

5. Only meaningful breaches of the rules of natural justice that have actually caused
prejudice should be ultimately remedied.

TEST
Party challenging must establish:
1. Which rule of natural justice was breached
2. How it was breached
3. In what way the breach was connected to the making of the award
4. How the breach prejudiced its rights
Fairmount [2007] 3 SLR 86
A was not given fair opportunity to be heard on an issue which was crucial to the
outcome of the arbitrator’s decision but could not establish how the breach had
prejudiced its rights.

- see CA decisions of Fairmount [2007] 3 SLR 86 and L W Infrastructure Pte Ltd v Lim Chin
San Contractors Pte Ltd and another appeal [2012] SGCA 57; see also John Holland Pty
Ltd v Toyo Engineering Corp (Japan) [2001] 2SLR 262.

- Pacific Recreation Pte Ltd v SY S Y Technology Inc [2008] 2 SLR(R) 491 - held that it
would be a breach of natural justice if a court or tribunal decided a case on a basis not
raised or contemplated by the parties, as an affected party would have been deprived of
its opportunity to be heard or to address the issues upon which the case was decided
[30].

- St George’s Investment Co v Gemini Consulting Ltd [2004] EWHC 2353 (Ch). It was held inter alia that
an arbitrator is entitled to use his expert knowledge to arrive at his award; knowledge which he
would be reasonably expected to have, and provided he uses it to evaluate the evidence called and
not to introduce new and different evidence. Otherwise, it is his duty to expose those matters for
comment by the party concerned. The Arbitrator is also entitled to arrive at his award by deploying
the evidence in a way which is different from the way the parties’ witnesses have deployed them;
provided it addresses a matter which has been put into the arena.

Setting Aside Corrections Or Additional Awards under s43(4) AA

S43(4) required the requesting party to give notice to the other party. This was to give
the other party an opportunity to address the tribunal on the applicability of s43(4).
Failing to give a party adequate opportunity to respond to the request prejudices him
and is a breach of natural justice
Lim Chin San Contractors Pte Ltd v L W Infrastructure Pte Ltd [2012] SGHC 75.
Made worse in light of the fact that arbitration waited 3 days before rendering additional
award whereas s43(5) allowed 60 days to do so and consequence was to make part pay
additional $274K.

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37. Special Provision in AA for Non-Convention Foreign Arbitral Awards

- The New York Convention applies to arbitral awards emanating from countries which
are also parties to the Convention. There can be arbitral awards which are issued out of a
country which is not a party to the Convention. In such a case, the arbitral award cannot
be recognized under the regime of the Convention.

- Section 46 (3) AA provides that they shall be enforced in the same manner as a judgment
or order of the court.

38. Setting Aside of a foreign arbitral award ( If Question or client asks, tell him no pt.
Same grounds as for refusal of enforcement for purposes of SG. But if afraid will enforce
elsewhere, crt has no power to set aside foreign award)

- Article 34 Model Law – the grounds are those in s 31 IAA. The Model Law is in the First
Schedule of the IAA.

- Available only to awards ‘made’ in Singapore as seat of arbitration

PT Garuda Indonesia v Birgen Air [2002] 1 SLR (R) 401 – award referred to place
of arbitration as Jakarta, Singapore court declined jurisdiction to set aside even
though the oral hearings were entirely held in Singapore. No jurisdiction to set
aside.

Case 6 Sch 2/99 (Germany: Higher Regional Court Dü sseldorf, 2000) CLOUT Case
408 A/CN.9/SER.C/ABSTRACTS/35 – arbitrator’s auditing and subsequent
negotiations with both parties – took place in Zurich; the ‘effective place of
arbitration’ was held not to be situated in Germany. Court refused to entertain
application to challenge validity of award.

- S 31 IAA deals with grounds for inviting the court to refuse enforcement of the award.

- Article 34 properly speaking deals with the grounds upon which an application may be
made to set aside the foreign award – this is the only recourse against an arbitral award
under the Model Law regime.

- Mitsui also relied on art 34, and s 24 of the IAA. However, both provided for a challenge
against the arbitrator's award, not the arbitrator himself. Article 34(4) also appeared to
indicate that it was for the arbitrator to decide whether to stay arbitral proceedings. The
grounds for setting aside an award could be made on less serious grounds than those for
challenging an arbitrator. It was incongruous for the court to have the power to grant the
Interlocutory Injunction under art 34 if it did not have such a power under art 13. If the
court had such a power under art 34, this would be contrary to art 34(1), which provided
for recourse to the court "only" by an application to set aside. Finally, s 24 only provided
additional grounds on which to set aside, and did not change the concept of non-
intervention by the court on an interlocutory basis: at [30], [35] to [39See Mitsui
Engineering & Shipbuilding Co Ltd v Easton Graham Rush [2004] 2 SLR 14.

54
V. Interim Measures in Aid of Foreign Arbitrations

39. Powers of the Arbitral Tribunal under IAA

- The general principle is that an arbitral tribunal has such powers that are invested upon
them by the parties. In the modern context, such powers are frequently drawn from the
Rules which parties may have subscribed to or have incorporated into their arbitration
agreement by reference.

- Despite existence of arbitration rules, see Article 19 (2) – Power to conduct the
arbitration in a manner it considers appropriate. Power to determine admissibility,
relevance, materiality and weight of any evidence.

- See other powers under Model Law , eg: Article 24 (Hearings), Article 25 (Default of
party) and Article 26 (appointment of experts by tribunal).

- What about the Model Law and the IAA? – Some powers are listed in s 12 IAA.

- Specific Powers under IAA: see section 12. For example under s 12(1)(i) the arbitral
tribunal may grant an interim injunction and other interim measures. See below on s
12A.

40. What are interim reliefs?

- These are reliefs asked for and granted by a tribunal to deal with the matter on a
temporary basis until it can be dealt with at the Hearing proper or otherwise.

- Interim reliefs would include preservation of the subject matter of the dispute – s 12(1)
(d) IAA. So is an interim injunction.

- Where the arbitration has its seat in Singapore, the Singapore courts may be said to have
natural jurisdiction over any temporary relief a party may require. Indeed, in such a case,
Singapore law would be the lex arbitri which has direct impact on things procedural.

- Essentially, it is not incompatible for court to grant such measures if asked for even
though an arbitration is ongoing. Article 9 Model Law

41. What about the court’s ability to support a foreign arbitration?

- The question is can a local court exercise its powers to aid a foreign arbitration for
example where a party is based in Singapore but is involved in an arbitration being held
in London.

- This may be a situation where there are assets in Singapore and a court may be asked to
help one party to preserve assets held locally in Singapore in order to be made available
for subsequent use by the successful party in the London arbitration.

- Consider the 2 cases in Singapore of Swift-Fortune Ltd v Magnifica SA [2006] 2 SLR 323
and Front Carriers v Atlantic Orient Shipping Corp [2006] 3 SLR 854 which reached
different conclusions on the proper interpretation and effect of s 12 (7) IAA and Article 9

55
Model Law.

56
 Swift- Fortune

The case involved 2 parties who were in dispute over sale and delivery of a vessel. The
agreement between them provided for arbitration in London if there was a dispute. A
dispute ensued and arbitration was to be held in London. In the meantime, plaintiff
applied to the court in Singapore for an injunction to restrain the defendant from
removing or in any way disposing or dealing with its assets in Singapore up to the value
of US$2.5 million. The key issue was whether the court in Singapore had power to issue a
Mareva injunction over the Singapore assets of a foreigner in support of a foreign
arbitration.

Held: S 12(7) did not give the court power to grant a Mareva injunction in aid of a foreign
arbitration notwithstanding Article 9 Model Law.

Front Carriers

Plaintiff commenced arbitration proceedings against the defendant in London for breach
of a charter party allegedly concluded between them.

The Plaintiff successfully obtained ex parte a Mareva injunction to restrain the defendant
from removing from Singapore any of its assets up to a specified value or in any way
dealing with or disposing or diminishing the value of such assets.

Amongst other grounds, Defendant applied to set aside the Mareva on the ground that a)
the High Court in Singapore had no jurisdiction to order the Mareva injunction in
support of the arbitration proceedings in London.

Swift-Fortune was referred to but the court in Front Carriers disagreed with the outcome
of that case and, Held: The court in Singapore had the power under the IAA to assist
by way of interim orders international arbitrations both in Singapore and abroad.

Essentially, the court there opined that ‘The framework of the IAA, including Arts 1(2)
and 9 of the Model Law, recognizes that parties to an international arbitration may
require curial support by way of interim measures from the High Court even though the
seat of the arbitration is outside Singapore.”

42. A Singapore Stand-Off: Swift-Fortune v Front Carriers

As it stood in 2006 there was a big question mark over whether a Singapore Court had
the power to grant interim orders in aid of a foreign arbitration.

- Fortunately, the case of Swift-Fortune went on appeal to the Court of Appeal.

- Court of Appeal agreed with Prakash J in Swift-Fortune. The Court of Appeal made the
following rulings:

a. Section 12(7) of the IAA does not apply to foreign arbitrations only to Singapore
international arbitrations

b. S 12 IAA has to be read with s 4(10) of the Civil Law Act and s 18(1) of the
Supreme Court of Judicature Act

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 c. S 4(10) Civil Law Act does not grant a court in Singapore power to grant a Mareva
injunction over the assets of a defendant in Singapore unless the plaintiff has an
accrued cause of action againt the defendant that is justiciable in a Singapore
Court.

d. Contrary to what was decided in Front Carriers, the existence of the court’s
personal jurisdiction over the defendant in itself does not give power to the court
to grant a Mareva injunction in aid of a foreign arbitration.

43. The position in Singapore with respect to foreign arbitrations and interim reliefs

- The position prior to 1 Jan 2010 is as stated in Swift-Fortune in the Court of Appeal, i.e.
the court in Singapore has no power to grant interim reliefs in aid of foreign arbitrations.

- Subsequent to 1 Jan 2010, the International Arbitration (Amendment) Bill was passed
and came into effect on 1 Jan 2010.

- The new section 12A of the IAA, effectively incorporated Article 17 J of the Revised
Model Law.

- Article 17 J – “A court shall have the same power of issuing an interim measure in
relation to arbitration proceedings, irrespective of whether their place is in a territory of
this State, as it has in relation to proceedings in courts. The court shall exercise such
power in accordance with its own procedure in consideration of the specific features of
international arbitration.”

- S 12A IAA, therefore, legislatively overcomes the legal impediment in Swift-Fortune

preventing the court in Singapore from issuing an interim measure in aid of a
foreign arbitration.

- S12A(1)(b) provides that it applies irrespective of whether the place of arbitration is in the
territory of Singapore.

Application

- S12A(1) provides that it applies irrespective of whether the place of arbitration is in the territory
of Singapore.

- (2) HC or Judge shall have the same power to making an order in respect of any of the matters
set out in s12(1)(c) to (i):
(c) giving of evidence by affidavit
(d) preservation, interim custody or sale of any pty which is or forms subject matter
of dispute
(e) samples to be taken from or any observation to be made of or experiment
conducted upon any property which is or forms part of dispute
(f) preservation and interim custody of any evidence for the purpose of proceedings
(g) securing the amount in dispute
(h) ensuring that any award which may be made in arb proceedings is not rendered
ineffectual
(i) interim injunction or any other interim measure
- Power to ask for security for costs and discovery of documents and interrogatories is left out.

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 Non-Urgent
- If application is not urgent, HC or judge shall make an order only on the application of a party
(upon notice to tri and other parties) made with permission of the tri or the agreement in writing
of the other parties S12A(6)

Urgent (Mareva Injunction)

- If application is urgent, HC or judge may make such orders as he thinsk necessary for the
purpose of preserving evidence or assets. S12A(4)

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- VI. ARBITRATION RULES AND PRACTICAL MATTERS

44. What is the role of and relationship between Arbitration Rules in arbitration?

- Arbitration Rules provide the procedural framework to conduct the arbitration. These
may be likened to the rules of court. While substantive law determine and provide for
the law applicable to a particular dispute, the manner in which the administration and
adjudication of the dispute must depend on the applicable rules established for such
arbitration.

- Rules can be provided for on an ad hoc basis, i.e. parties to a commercial agreement
could theoretically draft rules which will govern the conduct of any future arbitration to
resolve their dispute.

- Happily, modern arbitral institutes provide as a matter of course, their version of rules
governing arbitrations which they administer in the first instance. These rules are now
generally adopted by parties when providing for arbitration as a means of resolving their
future disputes. In existence today there are a myriad number of such arbitration rules.

- Some examples are the ICC Rules and the SIAC Arbitration Rules.

- Arbitration Rules today are similar around the world, at least in key areas. This is
because internationally, arbitration rules have evolved to adopt and reflect best practices
in arbitration. Many rules are therefore identical.

- Arbitration Rules serve to provide for the key stages in the life of an arbitration.

- Broadly speaking these key stages are:

a. Commencement of the arbitration

b. Appointment of the Tribunal

c. The Proceedings

d. The Award

45. Commencement of the Arbitration

- Rules 4 and 5 of the ICC Rules deal with the Request for Arbitration and the Answer.
These roughly equate to the pleadings in a litigation in court.

- Though similar to they are not however the same as court pleadings. They do not possess
the formality of court pleadings which in the common law tradition is steeped in
historical basis and tradition.

- Under the SIAC Arbitration Rules, similar provisions are found in Rules 3, 4, 17.

- The forms in the SIAC Arbitration Rules do however resemble more closely to court
pleadings; possibly providing for clarity in complex cases.

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46. Terms of Reference/Memorandum of Issues

- This is a mechanism peculiar to arbitrations. This serves to assist the parties and the
Tribunal in defining and confirming in writing the issues to be dealt with in the
arbitration. It can be immediately seen that this is a very useful tool for complex and
complicated arbitrations.

- See Article 18 ICC Rules and Rule 17 of the 2007 edition of the SIAC Arbitration Rules –
this has been dropped from the 2010 edition of the SIAC Rules. Under the SIAC Rules
2013, Rule 17 remains unchanged from the 2010 edition. Nothing to stop an arbitrator
from adopting this framework even in an SIAC arbitration.

- . This serves both as an affirmation for the parties as well as a record of what was agreed
between parties as to matters that are properly before the Tribunal. In a A useful
feature of the Terms of Reference and the Memorandum of Issues is the addition of
requiring parties to the arbitration to sign off on them sense it helps define the scope
of the arbitration as well as provide a checklist for the Tribunal. See Chew, Law and
Practice of Arbitration in Singapore, p 141.

47. Appointment of the Arbitral Tribunal

- Generally both the AA and the IAA provide that parties can appoint the arbitrators by
agreement. (Article 10 and 11 of the Model Law under the IAA & S12 & 13 of the AA)
- For the number of arbitrators – see ss 9 and 9A IAA and s 12 AA.

- For the qualification of arbitrators and manner of appointment see s 13 AA and

Article 11 Model Law

- Note that Art 11 and s13 AA provide that no person shall be precluded from being an
arb by reason of his nationality unless parties agree so.

- The Arbitration Agreement can and will frequently provide for the number and in some
cases the type of arbitrators that are required, often through the adoption of standard
rules such as the SIAC or ICC rules.

- Under the ICC Rules – see Articles 8 and 9 which also provide for the number and manner
of appointment of arbitrators. 2010 edition of the SIAC Arbitration Rules equivalent – see
Rules 6 - 9. Under the 2013 edition of the SIAC Rules which came into effect on 1 April
2013, it is the President of the Court of Arbitration of SIAC who is to appoint the
arbitrator nominated by the parties (see rule 6.3 of the 2013 edition), whereas under the
2010 edition, it is the Chairman who is to appoint the arbitrator nominated by the parties
(see rule 6.3 of the 2010 edition).

- ICC rules: default is 1 arbitration unless the ICC court thinks the dispute warrants the apt
of 3. If so, the rules allow each party to nominate one each. The chairman or presiding
arbitrator is appointed by the ICC court. Art 8 ICC Rules.
- SIAC similar provisions.

48. Challenging the Appointment of an Arbitrator on the Tribunal

61
 - Unlike in court litigation, it is common for opposing parties to challenge the appointment
of a particular arbitrator. This is part and parcel of the arbitration framework. This is
premised on the consensual nature of arbitration as opposed to a state-sanctioned court
proceeding. While, from time to time, parties do for good reason usually based on issues
of impartiality or the perception of a lack of impartiality, apply to recuse a judge in court
proceedings, such applications are rare – see Joshua Benjamin Jeyaretnam v Lee Kuan
Yew [1990] 3 SLR 322 and [1992] 2 SLR 310 (CA) and Lee Kuan Yew v Tang Liang Hong
& Anor [1997] 2 SLR 233. See also, Re Raffles Town Club [2008] 2 SLR 1101 which was
overturned by the Court of Appeal.

- Parties are generally free to agree on challenge procedure. If they do not, challenge
procedure is found Art 13 of the Model Law/ S15 AA. Essentially, parties to an
arbitration agreement may provide for their own procedure. In default, Arts 13(2) and
(3) / S15(3) AA provide for the mechanism –

Procedure
Party who wishes to challenge shall within 15 days (a) after becoming aware of the
constitution of the tribunal or (b) after becoming aware of any of the grounds set out in
Art 12(2) Model Law/S14(3) AA: [Art 13(2) ML/s15(2) AA]

- The Arb tribunal shal unless the challenged arb withdraws, decide on the challenge. Art 13(2)
ML/ S15(3) AA
- If the challenge is unsuccessful, the aggrieved party may within 30days after receiving notice of
the decision, apply to the court to decide on the challenge. Art 13(3) ML/ S15(4)AA
- No appeal against decision of the court Art 13(3) ML/ S15(5)AA
- While appeal decision is pending, tribunal w/ the challenged arbitrator may continue the arb
proceedings and make an award. Art 13(3) ML/ S15(4)AA

Grounds of Challenge

- Set out in Art 12(2) Model Law/S14(3) AA:

-
- Circumstances exist that give rise to justifiable doubts as to his impartiality or
independence
- lacks the qualifications agreed to by parties.

- ‘Real likelihood of bias’ – Turner (East Asia) Pte Ltd v Builders Federal (HK) Ltd (No. 2)
[1988] 2 MLJ 502. ‘reasonable suspicion would suffice’
Case where arb showed bias through his tone as expressed through voluminous
documents. Gave rise to a real likelihood of bias

- C/f Goh Kah Heng (alias Shi Ming Yi) v PP [2009] SGHC 61.
The case involved an application in the High Court to move the criminal trial from
the District Court to the High Court on the ground that since the Chief District Judge
who was the former Director of CAD, which had investigated the case, had become
the supervisor of the District Judges, the case before the District Court would result
in a ‘likelihood of bias’. The High Court rejected the reasoning and the application.

Each DJ takes a statutory oath under the SCA to act impartially. The case did not

62
 appear to raise any grounds for a ‘reasonable suspicion of bias’, No evidence that a
DJ would not act impartially towards the accused.

- Re Raffles Town Club

Case of people being unhappy with RTC. Applied to prevent Income Tax Review
Board from being empanelled with a particular chairman of the trinbunal. Said
chairman was former member of club but quit, likely out of unhappiness. HC allowed
it but CA overturned. No evidence that chariman wld be bias and the case would turn
on the law, so no danger of bias.

Tactical Decisions

- Tactical decisions – frequently, the challenge to the appointment of an arbitrator to the

Tribunal is based on tactical considerations. These may involve the assessment by a
party as to the advantages or disadvantages arising from the appointment of a particular
arbitrator though not necessarily on the grounds of impartiality or lack of independence.
These tactical considerations are more appropriate and quite common place in
international arbitrations. Some of the reason relate to the nationality of the parties, the
system of law they are accustomed to viz. Common Law v Civil Law, and the known views
of certain arbitrators (arising from previous encounters or writings).

- Under arbitration rules – see Article 11 ICC Rules and Rules 11 – 13 of the 2010 edition
of the SIAC Arbitration Rules as examples. Under SIAC Rules 2013, if an arbitrator who is
being challenged does not withdraw voluntarily, the Court of arbitration of SIAC shall
decide the challenge (see rule 13.1).

49. Taking and Production of Evidence

EA does not apply

- Evidence Act (Cap 97) does not apply to arbitrations in Singapore – see s 2(1) Evidence
Act. Generally, arbitrations are not formally tied to any rules of evidence. Does it mean
arbitrators do not follow or apply rules of evidence? They do but in a generalized manner
– rather than adopting Evidence legislation arbitrators subscribe to the general
requirements of fairness and equality.

- In international arbitrations, the International Bar Association, in an attempt to bridge

the differences between the common law and civil law traditions came up with the very
admirable IBA Rules on the Taking of Evidence in International Commercial Arbitration.
Adopted in 1999 by the IBA Council, these rules are now regularly used by the
international community of arbitrators. The revised version was adopted in May 2010 –
see www.ibanet.org/publicatiions.

- Under the AA, in respect of domestic arbitrations similarly the Evidence Act does not
apply.

- S23 AA /Art 19 ML give parties freedom to agree on the procedure to be followed on the
arbitral agreement. This freedom is subject to the provisions of the act. Failing an
agreement, the tribunal may conduct proceedings as it considers appropriate

- Approach to admissibility of evidence – arbitrators generally take a more inclusive

approach subject of course to fairness. Generally, however, the approach is less rigid

63
 than that taken in litigation.

- Burden of Proof – Though it is normally taken for granted and seldom raised as an issue,
it is generally understood that arbitration which after all involve civil type claims, is
decided on proof based on a balance of probabilities; see Redfern and Hunter at
paragraphs 6-67.

- Note tension with evidence and international arbitrations

50. Procedure in obtaining aid of the court

- In Singapore, the Rules of Court contain specific provisions to facilitate applications

relating to arbitration matters. These are found in two Orders.

- O 69A governs applications under the IAA; O 69 governs applications under the AA.

- For detailed commentaries on the two Orders, see Pinsler, Singapore Court Practice.

- On how O 69A is to be applied, see ABC Co v XYZ Co Ltd [2003] 3 SLR 546; also see
generally, Chew, Singapore Arbitration Handbook at p 124.

51. Practical Matters

- Selection of arbitrators – factors to consider –

a. Qualifications having regard to the arbitration agreement;
b. Experience and reputation;
c. Nationality in international arbitrations;
d. Availability;
e. Suitability

- For a discussion of the various factors, see generally, Chew, Law and Practice of
Arbitration in Singapore

- Physical considerations – venue and support facilities.

52. General Powers of Arbitral Tribunal

- See section 12 IAA, generally

SFC,
Discovery,
Giving of evidence by affidavit,
preservation, interim custody or sale of property which forms subj-matter of dispute
orany evidence
Samples to be taken or observations to be made or experiment conducted upon any
property which forms part of sub-matter of dispute
Securing amount in dispute
Ensuring that award in arb proceedings is not rendered ineffectual through dissipation
An interim injunction or other interim measure
Power to administer oaths or to take affirmations of parties and witnesses (unless agreed
otherwise)

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- Section 28 AA
Parties may agree to power which may be exercised by tribunal
SFC,
Discovery,
Giving of evidence by affidavit,
preservation, interim custody or sale of property which forms subj-matter of dispute
orany evidence
Samples to be taken or observations to be made or experiment conducted upon any
property which forms part of sub-matter of dispute
Power to administer oaths or to take affirmations of parties and witnesses
- Injunctions, interim measures, and securing dispute amt not granted

- Compound Interest – see s 35 AA /s 20 IAA

- Legal Expenses/Costs – s 39 AA / s21 IAA

53. Appeals under AA

In domestic arbitrations under the AA, there is a limited right to ‘appeal to the Court on a
question of law arising out of an award made in the proceedings’ –s 49(1) AA.

Error in application of law may not amount to question of law - Northern Elevator
Manufacturing Sdn Bhd v United Engineers (Singapore) Pte Ltd [2004] SGCA 11; Progen
Engineering Pte Ltd v Chua Aik Kia (trading as Uni Sanitary Electrical Construction)
[2006] SGHC 159.

- Foreign law is a question of fact not law: see A/S Tallina Laevauhisus v
Estonian State Steamship Line (1946) 80 Ll L Rep 99 per Scott LJ at 107, which
was recently followed by Moore-Bick J in Glencore International AG v Metro
Trading International Inc [2001] 1 Lloyd's Rep 284 at 300.
Reliance Industries Ltd. v. Enron Oil and Gas India Ltd. and Another [2002] 1
Lloyd's Rep. 645 – issues of Indian law tried in England, not a ‘question of law’
under the English AA.

May be excluded by parties

- This right to appeal may also be excluded by agreement of parties. An agreement to
dispense with reasons for the award amounts to an agreement to exclude said jursdiction
– see s 49(2), Holland Leedon Pte Ltd v Metalform Asia Pte Ltd [2011] 1 SLR 517

- REQUIRED: Consent of Parties/ Leave of Court

- The right to appeal is based on either consent of the parties or by obtaining the leave of
court s 49(3)

- Leave is only given if the 4 cumulative requirements set out in s 49(5) are satisfied –
(a) Determination of question will substantially affect the rights of one or more of the
parties
(b) The question is one which the arb tribunal was asked to determine
(c) On the basis of findings of fact in the award
a. The decision is obviously wrong; or

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 b. The question is one of public importance and the decision is at least open to
some doubt; and
(d) It is just and proper for the court to determine the question

these requirements are based on the Nema principles – see The Nema [1981] 2 All
ER 1030 but see Engineering Construction below and s 69(3)(c) UK Arbitration Act
1996.

- On a leave application the court need not hold an oral hearing and may decide on the
documents only – s 52 (2).
- The Court to hear leave applications under this section is the High Court
by a Judge in Chambers

- If leave is refused, leave is required to appeal against such refusal

- The threshold questions of law based on the Nema principles and section 49 AA are to be
considered. These will not be met if the matter is based on the specific facts of the case –
Engineering Construction Pte Ltd v San Choon Builders Pte Ltd [2011] 1 SLR 681 where
the UK Arbitration Act (1996) s 69(3)(c) was referred to.

- An award may be set aside if in coming to its decision, the tribunal had acted in breach of
natural justice - Front Row Investment Holdings (Singapore) Pte Ltd v Daimler South
East Asia Pte Ltd [2010] SGHC 80; decision of High Court in Kempinski Hotels SA v PT
Prima International Development [2011] 4 SLR 633 and Court of Appeal’s decision in PT
Prima International Development v Kempinski Hotels SA and other appeals [2012] 4 SLR
98; [2012] SGCA 35.

54. Emergency Arbitrator under the SIAC Arbitration Rules (July 2010 and April 2013
Edition)

Under the SIAC Rules there is now a Schedule 1 which deals with the ability of the SIAC
on application, to appoint an ‘Emergency Arbitrator’:

- Designed for the appointment of an arbitrator to deal with emergency interim relief prior
to the constitution of the Arbitral Tribunal after Notice of Arbitration has been filed –
Paragraph
1 of Schedule 1 to the SIAC Rules (‘the Schedule’)

- Appointment is at discretion of Chairman of SIAC under the 2010 edition. In the 2013
edition, the appointment is by the President of the Court of Arbitration of SIAC. See
paragraph 2 of Schedule 1 of the respective editions.

- Known as the ‘Emergency Arbitrator’ such arbitrator shall have the power to order or
award interim relief that he deems necessary – Paragraph 6 of the Schedule

- The order or award made under the Schedule is binding on the parties – Paragraph 9 of
the Schedule

- The Emergency Arbitrator has the power to decide how the SIAC Rules apply to the

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emergency process – Paragraph 11 of the Schedule

- End -----

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