This article was featured in Jus Mundi‘s 2023 Arbitration Year in Review, in collaboration with VYAPs, a yearly collection of articles from jurisdictions all around the globe updating you on arbitration-related developments from the previous year.
THE AUTHOR:
Sunita P. Advani, Arbitral Assistant to Mr. Michael Lee of Twenty Essex
This article highlights the key developments in international arbitration in Singapore in 2023, and in particular analyses four recent arbitration-related decisions from the Singapore courts.
Determining the Arbitrability of a Dispute
In Anupam Mittal v Westbridge Ventures II Investment Holdings, the Singapore Court of Appeal (“CA”) adopted a “composite” approach to determining the arbitrability of a dispute at the pre-award stage.
A dispute arose out of a shareholders’ agreement (the “SHA”) between the appellant’s company (the “Company”) and its investor, the respondent. As a result, the respondent commenced proceedings in the National Company Law Tribunal in Mumbai, India, for corporate oppression (the “NCLT Proceedings”). The SHA was governed by Indian law and contained an arbitration clause stipulating a Singapore-seated arbitration under the ICC Arbitration Rules. The parties had not explicitly specified the governing law for the arbitration clause.
Justice Judith Prakash, delivering the judgment of the CA, dismissed the appeal and thereby upheld the permanent anti-suit injunction against the appellant granted by the Singapore High Court (the “HC”). In particular, she held that the arbitrability of a dispute is, in the first instance, determined by the law governing the arbitration agreement. She further elucidated that if the governing law is foreign and provides that the subject matter of the dispute cannot be arbitrated, the Singapore court will not allow the arbitration to proceed because it would be contrary to public policy, albeit foreign public policy, to enforce such an arbitration agreement. She noted that it is common ground that claims of corporate oppression can be arbitrated under Singapore law but not under Indian law, under which they can only be resolved by the NCLT. She added that because of the operation of s 11 of Singapore’s International Arbitration Act (“IAA”) (which states that “[a]ny dispute which the parties have agreed to submit to arbitration under an arbitration agreement may be determined by arbitration unless it is contrary to public policy to do so”), where a dispute may be arbitrable under the law of the arbitration agreement but Singapore law as the law of the seat considers that dispute to be non-arbitrable, the arbitration would not be able to proceed.
While the SHA was governed by Indian law, the CA found that Singapore Sunita P. Advani Arbitral Assistant to Mr. Michael Lee of Twenty Essex law was the proper law of the arbitration agreement, besides being the law of the seat. The CA found that virtually all the complaints made by the appellant in the NCLT Proceedings were related to the management of the Company or the SHA in some way and were thus encompassed by the arbitration agreement. It further elaborated that the fact that all these allegations might eventually support a finding of oppression cannot take them out of the categories of disputes that the SHA specifically stipulated should be submitted to arbitration. The CA, therefore, found that in commencing the NCLT Proceedings, the appellant had breached the arbitration agreement and that there was no ground to discharge the anti-suit injunction, thereby dismissing the appeal.
Availability of Sealing Orders in Arbitration-Related Court Proceedings
In the Republic of India v Deutsche Telekom AG, the CA was faced with determining whether to grant a sealing order for enforcement proceedings by Deutsche Telekom (“DT”) against the Republic of India relating to a US$132 million arbitral award.
Sundaresh Menon CJ stated that the purpose of a sealing order under ss 22 and 23 of the IAA is to protect the confidentiality of the arbitration and that imposing a cloak of privacy on court proceedings is an exceptional measure that departs from the general rule that such proceedings are subject to the principle of open justice. He then held that where the confidentiality of the arbitration has been lost, the principle of open justice would weigh strongly in favour of lifting the cloak of privacy.
Menon CJ concluded that, in this case, confidentiality had been lost, and there was no basis for maintaining the confidentiality of the enforcement proceedings. In particular, he noted that, among others, the Interim and Final Awards issued in the Arbitration were accessible on third-party websites.
Confidentiality of Arbitral Deliberations
In CVG v CVH [2022] SGHC 249, the Singapore High Court held that that an interim award made by an emergency arbitrator in a foreign seated arbitration was, in principle, enforceable in Singapore. In this case, the emergency interim award of the emergency arbitrator was made in Pennsylvania, United States, in International Centre for Dispute Resolution (“ICDR”) arbitration proceedings. The defendant had been the claimant’s franchisee in Singapore, Malaysia, Taiwan, and the Philippines. The dispute arose out of the termination of various agreements which governed the Singapore franchise business.
The SICC noted the established public policy reasons for this implied obligation, in particular:
- Ensuring open and genuine discussions among arbitrators;
- He facilitation of untrammeled conclusions (and changes in conclusions) arising from the tribunal’s unrestricted review of the evidence;
- Shielding the tribunal from external influence; and
- Minimizing unfounded annulment or enforcement challenges.
The SICC found that the protection of the confidentiality of deliberations is subject to exceptions, which would apply if “the facts and circumstances are such that the interests of justice in ordering the production of records of deliberations outweigh the policy reasons for protecting the confidentiality of deliberations” – but stated that such exceptions are extremely rare and require a compelling case.
The SICC formulated a two-part test to determine if an exception exists: first, the allegations must be very serious in nature and, second, they must have real prospects of succeeding. The SICC found that none of the plaintiff’s claims had real prospects of succeeding, so there was no need to conclude whether these constituted exceptions. The SICC also clarified the extent of such protection – in particular, process issues, such as claims that an arbitrator has been excluded from deliberations or questions as to what matters have been submitted to an arbitrator for decision, fall outside the purview of such protection. Process issues do not involve arbitrators’ thought processes or reasons for their decisions. Hence, the policy reasons for protecting the confidentiality of arbitrators’ deliberations are not engaged.
Pre-Conditions to an Arbitration
In CNQ v CNR [2022] SGHC 267, the Singapore High Court dismissed a setting aside application for an ICC award in which the plaintiff had alleged that the arbitrator had prejudged the issues based on an earlier ICC award issued by the same arbitrator and involving the same parties.
The contract between the parties incorporated an amended version of the FIDIC Conditions of Contract for Plant and Design Build (First Edition, 1999), the relevant provisions of which are as follows:
“20.5 – Amicable Settlement
(a) If any dispute arises out of or in connection with the Contract, or the execution of Works… then either Party shall notify the other Party that a formal dispute exists. Representatives of the Parties shall, in good faith, meet within 7 days of the date of the notice to attempt to amicably resolve the dispute,
(b) If the representatives of the Parties cannot resolve a dispute within 7 days from the first meeting, 1 or more senior officer(s) from each Party shall meet in person within 14 days from the first meeting of the representatives in an effort to resolve the dispute. If the senior officers of the Parties are unable to resolve the dispute within 7 days from their first meeting, then either Party shall notify the other Party that the dispute will be submitted to arbitration in accordance with Sub-Clause 20.6.
20.6 – Arbitration
Unless settled amicably, any dispute shall be finally settled by international arbitration…”
When a dispute arose between the parties, neither party pursued negotiations or settlement discussions in accordance with Sub-Clause 20.5. The claimant commenced arbitration proceedings against the respondents, who claimed that the tribunal lacked jurisdiction as Sub-Clause 20.5 amounted to mandatory pre-conditions to arbitration, which had not been fulfilled. The tribunal dismissed the jurisdictional challenge, and the respondents applied to the court under s 10 of Singapore’s International Arbitration Act 1994 to determine that the arbitral tribunal had no jurisdiction.
In finding that the tribunal had jurisdiction, the SICC found that SubClause 20.5, unlike the pre-conditions to arbitration considered in Emirates Trading Agency LLC v Prime Mineral Exports and Ohpen Operations UK Ltd v Invesco Fund Managers Ltd [2019] EWHC 2246 (TCC), neither contained language which stipulated that the parties should “first” seek to resolve disputes in accordance with a stated procedure before commencing arbitration proceedings nor addressed the right to commence arbitration or litigation.
Further, the SICC held that the reference to “[u]nless settled amicably” in Sub-Clause 20.6 was not an express reference to the procedure in Sub-Clause 20.5, as the dispute could be settled in a variety of other ways too. Moreover, the SICC agreed with the Tribunal that the last sentence of Sub-Clause 20.5 did not make compliance with Sub-Clause 20.5 a condition precedent to arbitration under Sub-Clause 20.6, but rather that the notification contemplated therein was the logical conclusion of the Sub-Clause 20.5 process if chosen by the parties.
ABOUT THE AUTHOR:
Sunita P. Advani is an arbitral assistant to Mr Michael Lee, an English arbitrator member of Twenty Essex based in London and Singapore. In this role, she serves as tribunal secretary in Mr Lee’s high-value and complex international commercial arbitrations administered by the leading arbitral institutions globally, such as the ICC, LCIA and SIAC. Sunita previously practiced international arbitration as a Junior Associate at a leading international law firm in Singapore, and is admitted to practice in England & Wales, New York and Singapore. She holds an LL.B. from the University of Nottingham, and an LL.M. from the University of California, Berkeley, School of Law. Sunita is the Founder and Chair of SG VYAP (Singapore Very Young Arbitration Practitioners).
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