A regional comparison of arbitration landscapes: Singapore

Singapore has been ranked as the most preferred seat for arbitration worldwide, edging ahead of Hong Kong and tying with London, due to favoured qualities including a stable legal environment with world-class arbitral institutions and a top-notch judiciary upholding arbitration rule of law in accordance with the New York Convention and UNCITRAL Model Law on International Commercial Arbitration.

This article takes a closer look at select interesting arbitration jurisprudence from the Singapore courts so far this year.

RECOGNITION AND ENFORCEMENT

Singapore courts continue to adopt a robust approach in granting mandatory stay of court proceedings in favour of arbitration under the International Arbitration Act, 1994. In Parastate Labs Inc v Wang Li and others (2023), the General Division of the High Court further found it appropriate to order a discretionary case management stay of court proceedings, pending the resolution of a related putative arbitration.

The general division, following the Court of Appeal decision in the seminal case of Tomolugen Holdings and another v Silica Investors and other appeals (2016), held that the stay was appropriate because claims in the putative arbitration were foundational to claims against all the defendants.

In two other cases, the general division addressed the distinction between claims falling within the scope of an arbitration agreement and non-arbitration claims made in the context of insolvency proceedings.

In Founder Group (Hong Kong) (in liquidation) v Singapore JHC (2023), the general division reaffirmed the Salford principle, i.e., where a claimant in a company’s winding-up proceedings asserts it is a creditor on the basis of a debt governed by an arbitration agreement, the insolvency court will ordinarily stay or dismiss the winding-up application if satisfied that, prima facie, a valid arbitration agreement capable of encompassing a challenge against the indebtedness exists. This is unless the company is acting in abuse of process.

In Gulf International Holding v Delta Offshore Energy (2023), the general division found the company’s denial of indebtedness was an abuse of process, as it previously admitted liability for the debt. However, the court opined that the Salford principle may not apply as strictly in a judicial management application, given that such applications “engage concerns of public interest which, in some instances, may justify giving precedence to the insolvency regime over arbitration”.

In the general division’s view, an insolvency court faced with a claim of indebtedness falling within an arbitration agreement should not find itself refraining from staying or dismissing a judicial management application only where the company is acting in abuse of process. Instead, the court should “make a more holistic assessment of the facts and consider, inter alia, the interests of the other stakeholders of the [company] and the wider public interest”.

JURISDICTION OF TRIBUNALS

In CYY v CYZ (2023), the general division once again distinguished matters that go towards a tribunal’s jurisdiction from matters that merely concern the admissibility of claims, when confronted with a challenge against a tribunal’s positive jurisdictional ruling. The applying party (respondent) contended that the tribunal lacked jurisdiction because the claimant was advancing claims for services rendered outside the ambit of a contractual clause stipulated in the parties’ charter agreement.

But the general division dismissed the challenge, holding that the applying party was conflating “a question of contractual interpretation concerning a substantive obligation of parties” with a question concerning the tribunal’s jurisdiction. The former was a matter of admissibility, whereas the latter, which typically would involve the interpretation of an arbitration clause, was a matter concerning jurisdiction.

A tribunal’s jurisdiction to decide issues arising from a purported termination of its mandate was also clarified in CNA v CNB and another and other matters (2023). The main respondent in an International Chamber of Commerce (ICC) arbitration sought to terminate the tribunal’s mandate by executing a later arbitration agreement between the parties, submitting the same dispute to another arbitral institution. The respondents claimed the manoeuvre was valid and binding on the claimant since it had previously granted the main respondent authority to contract on its behalf, and the ICC tribunal had therefore lost its mandate to determine any further issues. They applied to set aside two partial awards of the tribunal on grounds that it had acted without jurisdiction.

The Singapore International Commercial Court (SICC) dismissed the applications, holding that the tribunal was perfectly competent to determine for itself whether an event that materialised after a valid reference to arbitration properly deprived it of jurisdiction. The SICC further found, on de novo review, that the subsequent arbitration agreement was in breach of the main respondent’s fiduciary duty owed to the claimant.

DUE PROCESS CHALLENGES

The courts continue to exemplify vigilance in the scrupulous exercise of supervisory powers over Singapore-seated awards. In CWP v CWQ (2023), the general division, in dismissing an award setting-aside application alleging breaches of natural justice by the tribunal, found that the applicant was attempting an impermissible challenge of the tribunal’s findings.

In its judgment, the general division emphasised Singapore’s longstanding judicial policy that “the courts must be wary of attempts by an aggrieved party to mount what is, in effect, an appeal in disguise”.

The principle of minimal curial intervention was similarly demonstrated, once again in CYW v CYX (2023), where the SICC characterised an award setting-aside application as a “good example” of a misconceived case presented as involving a tribunal’s due process violation in its case management, despite that “almost inevitably” falling within the tribunal’s discretion.

The SICC further highlighted that even if a tribunal had breached a rule of natural justice, the court must additionally be satisfied that the breach caused actual or real prejudice to the aggrieved party before curial intervention is warranted.

The SICC found no denial of natural justice arising from the tribunal’s imposition of a circumscribed extended deadline for the applicant’s expert report and witness statements, on account of several past instances of the applicant’s failure to comply with procedural timelines.

In CFJ and another v CFL and another, and other matters (2023), allegations of apparent bias were made against a presiding arbitrator who, during the proceedings, accepted (without disclosure) an appointment to a panel of experts constituted by the judiciary of the national state of the claimants.

In dismissing the respondents’ application to remove the presiding arbitrator from the tribunal, the SICC applied the objective “fair-minded and informed observer” test and found no cause for the complaint.

The SICC urged that “an assertion of bias, whether apparent or actual, has to be carefully considered and made only where there is a compelling factual basis”.

Citing the UK decision of Halliburton Company v Chubb Bermuda Insurance (2020), it also held that arbitrators are required to disclose only appointments and matters “which would cause the [reasonable observer] to conclude that there was a real possibility of a lack of impartiality”.

CONFIDENTIALITY OF ARBITRATION

Two decisions are noteworthy. The first, The Republic of India v Deutsche Telekom (2023), raised the question of when confidentiality in arbitration is lost, such that parties can no longer enjoy legal privacy in award enforcement proceedings in court.

The Court of Appeal, in refusing an award debtor’s interlocutory application seeking sealing or redaction orders pending an appeal against the SICC’s enforcement of the final award, held that arbitration confidentiality had been lost due to: (1) availability in the public domain of the tribunal’s interim and final awards, the Swiss seat court’s prior decision relating to the arbitration, and case documents filed in enforcement proceedings in several jurisdictions; and (2) details of the arbitration having been published in the Global Arbitration Review and on social media of the award debtor’s lawyers.

The second case, CZT v CZU (2023), focused on the confidentiality of a tribunal’s records of deliberations. An award debtor applied to court seeking an ICC tribunal’s records of deliberations, following a 2-1 split in its decision on the merits where the minority member in his dissent cast strong aspersions on the impartiality of the majority members. The production order was sought in parallel with the award debtor’s application to set aside the award.

The SICC held that confidentiality of arbitrators’ deliberations exists as “an implied obligation in law”, and that confidentiality does not extend to “essential process issues” (such as where a co-arbitrator is alleged to have been excluded from deliberations).

However, the SICC was reluctant to recognise a categorical carve-out of all process issues from confidentiality, but instead preferred a more open-ended formulation of the exception to confidentiality, holding that “a case would fall within the exception 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”.

On the facts, the SICC declined to grant the production order, finding no compelling reasons to invoke the exception.