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18 May 2017

SIArb Guidelines for Third Party Funders

SIArb released its draft Guidelines for Third Party Funders for public consultation on 28 February 2017. This was followed by a lively seminar on Third Party Funding with panelists from SIArb, the Law Society and the Singapore International Arbitration Centre in March 2017. A number of law firms and third party funders have written in with their helpful comments on the draft Guidelines. Following the consultation period, SIArb has finalised its Guidelines for Third Party Funders on 18 May 2017.

Please download the Guidelines HERE and Accompanying Notes HERE.


PRESIDENT'S MESSAGE

June 2017

I trust that those who attended this year's Members' Nite in April were pleased with the venue at VLV Singapore. Our Vice-President Dinesh Dhillon held court and welcomed new and existing members. The stylish and newly renovated heritage building at Clarke Quay was a perfect place to unwind and renew acquaintances..

Singapore's Third Party Funding regime is now firmly in place. The Civil Law (Amendment) Act (CLA) and the Civil Law (Third-Party Funding) Regulations 2017 are supplemented by the Law Society's Guidance Note 10.1.1 on Third Party Funding, the SIAC Practice Note on Arbitrator Conduct in Cases Involving External Funding and the SIArb Guidelines for Third Party Funders which were launched on 18 May 2017. We have taken on board suggestions that SIArb should offer third party funders an opportunity to declare their support for the Guidelines. Those who do will be acknowledged on the SIArb website as being a supporter of the Guidelines. I am pleased that some leading Third Party Funders have already come on board. I thank Dinesh Dhillon, Tay Yu-Jin and Sapna Jhangiani who worked with me on the SIArb Guidelines.

Read More

 

Chan Leng Sun S.C.
President,
SIArb 2013-2017

28 February 2017

Public Consultation on SIArb Guidelines for Third Party Funders

The Civil Law (Amendment) Act (CLA) and the Civil Law (Third-Party Funding) Regulations 2017 (CLA Regulations) to facilitate third party funding of Singapore-seated international arbitrations and related court or mediation proceedings take effect from 1 March 2017. This statutory framework is meant to be supplemented by industry-led guidelines to promote best practices amongst stakeholders.

The Singapore Institute of Arbitrators (SIArb) is working on Guidelines for Third Party Funders to complement the third party funding regime in Singapore. A draft of the Guidelines is released HERE for public consultation. Feedback is welcome and should be submitted to SIArb by letter emailed to the SIArb Secretariat at This email address is being protected from spambots. You need JavaScript enabled to view it. by 31 March 2017.


20 February 2017

Discontinuation of Continuing Professional Development (CPD) Return Form

We will be discontinuing the current practice of requiring submission of the annual Continuing Professional Development (CPD) Return forms to SIArb by Panel Arbitrators with immediate effect.
SIArb Panel Arbitrators will continue to have the individual responsibility, on an honour basis, to engage in continuing professional development activities to remain equipped to serve as arbitrators on the Panel, as per the Panel Arbitration CPD Points Guidelines HERE.


24 January 2017

SIArb E-Newsletter

SIArb is pleased to announce that its newsletter has gone fully online, and the hardcopy edition has been replaced with an e-newsletter.

We will continue to bring you quality content and timely updates, delivered right to your inbox.

Click HERE to read our latest issue. Read our other issues HERE

Should any member have any contributions to make to the e-newsletter, please email This email address is being protected from spambots. You need JavaScript enabled to view it.


 

 

 

Newsletter

 

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June 2017  (Issue No.22)
 
the president's column

PRESIDENT'S MESSAGE - June 2017

I trust that those who attended this year's Members' Nite in April were pleased with the venue at VLV Singapore. Our Vice-President Dinesh Dhillon held court and welcomed new and existing members. The stylish and newly renovated heritage building at Clarke Quay was a perfect place to unwind and renew acquaintances.

Singapore's Third Party Funding regime is now firmly in place. The Civil Law (Amendment) Act (CLA) and the Civil Law (Third-Party Funding) Regulations 2017 are supplemented by the Law Society's Guidance Note 10.1.1 on Third Party Funding, the SIAC Practice Note on Arbitrator Conduct in Cases Involving External Funding and the SIArb Guidelines for Third Party Funders which were launched on 18 May 2017. We have taken on board suggestions that SIArb should offer third party funders an opportunity to declare their support for the Guidelines. Those who do will be acknowledged on the SIArb website as being a supporter of the Guidelines. I am pleased that some leading Third Party Funders have already come on board. I thank Dinesh Dhillon, Tay Yu-Jin and Sapna Jhangiani who worked with me on the SIArb Guidelines.
Read More

Chan Leng Sun S.C.
President,
SIArb 2013-2017

case LAW Developments

This issue looks at three recent Singapore Court decisions:

a. Josias Van Zyl and others v Kingdom of Lesotho [2017] SGHC 104 (Kannan Ramesh J) Read More
b. BMO V. BMP [2017] SGHC 127
Read More
c. Wilson Taylor Asia Pacific Pte Ltd V. Dyna-Jet Pte Ltd [2017] SGCA 3 
Read More
By Gan Kam Yuin - Partner, Bih Li & Lee LLP and Timothy Quek - Associate, Bih Li & Lee LLP
 
 
 
articles

Anti-suit injunctions in favour of arbitration - a permanent fixture in Singapore?

By Sean Hardy - Senior Associate, Pinsent Masons MPillay & Raman Kaur - Associate, MPillay

In the recent case of BC Andaman v Xie Ning [2017] SGHC 64 the Singapore High Court confirmed its power to grant permanent anti-suit injunctions to restrain foreign court proceedings brought in breach of arbitration agreements governed by Singapore law.

Read More  
in the hot seat!

In each issue of our newsletter, we interview an SIArb member to get their views on the alternative dispute resolution scene in Singapore, and to obtain some insight into what makes them tick. In this issue, we interview Mr. Lok Vi Ming SC, Managing Director of LVM Law Chambers LLC.


Read More

 
Recent Events

The Members' Nite (25 April 2017)

Members and their guests braved the rain and made their way to VLV on Clarke Quay for the spring Members’ Nite on 25 April. The newly renovated, gold and marble-clad, VLV Club Lounge provided a glamorous backdrop for the well-attended and high-spirited evening.

SIArb’s Vice President, Dinesh Dhillon, took the opportunity to welcome to the Institute those soon-to-be new members who had completed the International Entry Course over the preceding weekend and to thank existing members for their continued support of the Institute.

Read More
 

Arbitration and Mediation - Siamese Twins for Dispute Resolution: The Issues and Potential

At this seminar, Mr Lok Vi Ming SC shared his vast experience in mediation with the audience, specifically focusing on its advantages, its role in the Arb-Med-Arb dispute resolution mechanism and the concerns over the arbitrator also being the mediator in an Arb-Med-Arb situation.

Mr Lok was quick to draw the attention of the audience to the SIMC Arb-Med-Arb Model Clause and suggested that agreement drafters should always have this in mind when choosing an appropriate dispute resolution mechanism between parties. This suggestion came strongly on the basis that a 75-85% success rate of settlement has been achieved through this dispute resolution route.

Upcoming Events
Date
Event
20 July 2017
6 Sept 2017
28 Sept 2017
Annual General Meeting and Pre-AGM seminar
10 Oct
2017
Independence and Impartiality of International Arbitrators
1 Nov 2017
16 Nov 2017
 
      View our past and Upcoming events HERE.
announcements
New Members
The Institute extends a warm welcome to the following members:
Associates
  • Dileepa Senarathna          
  • Michelle Wong 
  • Viknesh Ramanathan
              Members
  • Lim Pi Wen          
  • Lin Yuankai  
  • Syed Mustafa Mahdi                   

                  Fellows

  • Ho June Khai
  • Low Siew Woon  
  • Linda Heng Wun Hui         
  • Lee Wei Yung      
  • Krishna R Sharma              
  • Zippora Siregar  
  • Iain Cameron Potter         
  • Ignatius Hwang  
  • Dan Chong           
  • Tai Chin Hoe
Call for Contribution of Articles
The SIArb Newsletter is a publication of the Singapore Institute of Arbitrators aimed to be an educational resource for members and associated organisations and institutions of higher learning. Readers of the newsletter are welcome to submit to the Secretariat at This email address is being protected from spambots. You need JavaScript enabled to view it. well-researched manuscripts of merit relating to the subject matter of arbitration and dispute resolution. Submissions should be unpublished works between 1,500 to 2,500 words and are subject to the review of the editorial team.
    Council (2016 -2017) Publications Committee
President    
Chan Leng Sun S.C.
Vice President
Dinesh Dhillon
Honorary Secretary
Naresh Mahtani
Honorary Treasurer
Chia Ho Choon
Immediate Past President
Mohan R Pillay
Council Members
Francis Goh Siong Pheck
Steven Lim
Johnny Tan Cheng Hye BBM
Tan Weiyi
Tay Yu-Jin (co-opted wef 8 Sept 2016)
Yang Yung Chong
Yeo Boon Tat
 
Chair
Yeo Boon Tat (Editor)
Committee Members
Gan Kam Yuin (Co -Editor)
David K K Chung
Eric Chew
Cameron Ford
Lim Hseng Lu
Tan Weiyi
Tham Wei Chern





 

Disclaimer
The SIArb Newsletter is a quarterly of the publication of the Singapore Institute of Arbitrators. Distribution is restricted to members and those organisations and institutions of higher learning associated with the Institute.

The Institute does not hold itself responsible for the views expressed in the Newsletter which must necessarily lie with the contributors.
 
 
 
 
 
 
 

PRESIDENT'S MESSAGE

June 2017

I trust that those who attended this year's Members' Nite in April were pleased with the venue at VLV Singapore. Our Vice-President Dinesh Dhillon held court and welcomed new and existing members. The stylish and newly renovated heritage building at Clarke Quay was a perfect place to unwind and renew acquaintances

Singapore's Third Party Funding regime is now firmly in place. The Civil Law (Amendment) Act (CLA) and the Civil Law (Third-Party Funding) Regulations 2017 are supplemented by the Law Society's Guidance Note 10.1.1 on Third Party Funding, the SIAC Practice Note on Arbitrator Conduct in Cases Involving External Funding and the SIArb Guidelines for Third Party Funders which were launched on 18 May 2017. We have taken on board suggestions that SIArb should offer third party funders an opportunity to declare their support for the Guidelines. Those who do will be acknowledged on the SIArb website as being a supporter of the Guidelines. I am pleased that some leading Third Party Funders have already come on board. I thank Dinesh Dhillon, Tay Yu-Jin and Sapna Jhangiani who worked with me on the SIArb Guidelines.

In April 2017, our dedicated faculty led by Course Director Naresh Mahtani completed training another group of candidates for our International Entry Course. Our Fellowship Assessment Course will take place in October.

In May 2017, we were fortunate to have Mr Lok Vi Ming, SC share his take on Arbitration and Mediation, which he called the "Siamese Twins for Dispute Resolution". The seminar was chaired by our Treasurer, Mr Chia Ho Choon.

Looking ahead, I invite all members to mark your calendar for our Annual General Meeting on 28 September 2017 and our Annual Dinner on 1 November 2017. We still have other important and informative events lined up, such as CPD seminars delivered by leading lights and our perennial favourite, the SIArb Symposium. You will receive details on these events in due course.

Chan Leng Sun S.C.
President,
SIArb 2013-2017

By Sean Hardy - Senior Associate, Pinsent Masons MPillay & Raman Kaur - Associate, MPillay

In the recent case of BC Andaman v Xie Ning [2017] SGHC 64 the Singapore High Court confirmed its power to grant permanent anti-suit injunctions to restrain foreign court proceedings brought in breach of arbitration agreements governed by Singapore law. 

The Singapore Courts' application of anti-suit injunctions in this context is a relatively recent development but is now well-established.

Taking steps to stop (or prevent) the breach of arbitration agreements is of course consistent with both the Singapore Courts’ well established reputation for giving primacy to and upholding arbitration agreements, and Singapore's reputation as an international arbitration hub.

Some commentators, however, have suggested that while it is clear the Singapore Courts have the power to issue interim anti-suit injunctions in this context, they may not have the power to issue permanent anti-suit injunctions. Others continue to question the legitimacy of anti-suit injunctions which restrain foreign court proceedings more generally.

This month we examine in light of BC Andaman v Xie Ning anti-suit injunctions under Singapore law where there is an arbitration agreement, the sources of the Singapore Court's power to grant them, and some of the arguments against their application.

The basics

A valid arbitration agreement imposes a contractual obligation on the parties – in respect of matters governed by the agreement – to arbitrate disputes and, in turn, to refrain from commencing proceedings in any other forum.

When a party breaches that agreement by commencing foreign court proceedings, a Court (or Tribunal) may grant an anti-suit injunction to prevent the party from commencing or continuing those proceedings. An interim injunction, usually sought where there is great urgency, is of course temporary and subject to final determination by the Court or Tribunal. A permanent injunction is final.

An anti-suit injunction in this context (interim or permanent) does not restrain the foreign Court from hearing the proceedings. Rather, it restrains the party pursuing the foreign court proceedings from doing so, or continuing to do so.

Test

BC Andaman confirms that the test applied to the granting of anti-suit injunctions (interim or permanent) differs from the test applicable to interim injunctions generally (typically the test laid down in American Cyanmid Co v Ethicon [1975] A.C. 396).

The Court will consider various factors, including the breach of the arbitration or other jurisdiction agreement, which is the more appropriate forum, whether the foreign court proceedings are vexatious or oppressive, and whether any injustice would be suffered by the party bringing the foreign court proceedings by depriving it of legitimate judicial advantages in doing so.

However, the Singapore Courts will generally grant an anti-suit injunction to restrain a party from pursuing foreign court proceedings where it can be established that doing so is in breach of a valid arbitration agreement. In Maldives Airport v GMR Male International Airport the Singapore Court of Appeal followed the approach of the English Court of Appeal in Angelic Grace [1995] 1 Lloyd’s Rep that an injunction to restrain foreign Court proceedings is justified “on the clear and simple ground that the defendant has promised not to bring them" (Maldives Airport, at [42]).

Source of power

The Singapore High Court first granted an interim anti-suit injunction to prevent the breach of an arbitration agreement in 2002 (WSG Nimbus Pte Ltd v Board of Control of Cricket in Sri Lanka [2002] 1 SLR(R) 1088).

However, it was not until 2013 that the Singapore Courts considered the granting of a permanent anti-suit injunction in this context (Maldives Airport).

The Court of Appeal gave a clear nod to the practice. Menon CJ noted, obiter, at [42] that the right to resolve disputes pursuant to an arbitration agreement could “rightfully be protected by way of an anti-suit injunction, whether on a final or an interim basis”.

Finally, in 2015 in R1 International Pte Ltd v Lonstroff AG [2015] 1 SLR 521 the Singapore Court of Appeal granted a permanent anti-suit injunction, restraining Swiss court proceedings on the basis that that parties had an agreement to arbitrate in Singapore.

The existence and source of the court’s power to grant a permanent anti-suit injunction was not addressed in the judgment by the Court of Appeal in R1 International. However, these issues had been considered, obiter, in the decision at first instance ([2014] SGHC 69).

In the High Court below, Prakash J (as she then was) noted that the court has the power to grant a permanent anti-suit injunction to prevent a breach of an arbitration agreement and that this power emanated from section 4(10) of the Civil Law Act. She also noted that clear words would be needed to abrogate this general power and that the International Arbitration Act does not contain such language.

In BC Andaman Loh J noted the "well-established" principles governing the granting of permanent anti-suit injunctions and their statutory recognition. He cited s 4(10) of the Civil Law Act, as Prakash J had done, but also relied on the Court's inherent jurisdiction as per paragraph 14 to the First Schedule of the Supreme Court of Judicature Act:

14. [The High Court has the] Power to grant all reliefs and remedies at law and in equity, including, damages in addition to, or in substitution for, an injunction or specific performance."

This is a helpful clarification as reliance on section 4(10) of Civil Law Act alone is potentially problematic given it appears on its face to be limited to the court's power to grant interim (or interlocutory) rather than permanent injunctions.

Arguments against

International Arbitration Act

The Singapore Courts have previously recognised the International Arbitration Act as expressly granting it the power to grant interim anti-suit injunctions (section 12A, read with section 12(1)(i) of the IAA), but not permanent anti-suit injunctions (for example, R1 International Pte Ltd v Lonstroff AG [2014] SGHC 69).

 In turn, it has been suggested that Article 5 of the Model Law (which has the force of law pursuant to section 3(1) of the International Arbitration Act) precludes the Courts from granting permanent anti-suit injunctions, given the absence of an express power to do so (unlike interim anti-suit injunctions). Article 5 provides that:

"In matters governed by this Law, no court shall intervene except where so provided in this Law."

However, as above, the Singapore Courts have identified a different legislative source of their power to grant permanent anti-suit injunctions, which does not rely on the International Arbitration Act.

Further, this objection assumes that the Model Law exhaustively governs all matters relating to the enforcement of arbitration agreements, and that this must therefore include permanent anti-suit injunctions. However, the travaux prepartoires of the Model Law suggests that this is not the case, indicating that the Model Law does not govern all enforcement-related matters, including for example the impact of State immunity and parties' capacity to conclude an arbitration agreement

Kompentenz-Kompentenz

A further objection to the Court's power to grant permanent anti-suit injunctions has been proposed in the specific scenario where the injunction is sought before a tribunal decides on its jurisdiction, thus offending the kompetenz-kompetenz principle that the tribunal must have jurisdiction to do so.

However, this is academic because, if the anti-suit injunction is granted, the tribunal would still have the opportunity then to rule on its jurisdiction.

On the other hand, if the anti-suit injunction was not granted in these circumstances and the foreign court accepted jurisdiction, this would arguably represent a far more serious breach of the kompetenz-kompetenz principle given the foreign court would effectively be deciding that the arbitration agreement does not apply and the arbitral tribunal should not have jurisdiction.

New York Convention

A related argument is that in accordance with Article II of the NY Convention, which obliges courts of signatory countries to stay court proceedings brought in breach of an arbitration agreement, any foreign court of a signatory country should first be given the opportunity to stay those court proceedings. In turn, if an anti-suit injunction deprives the foreign court of this opportunity, it offends the NY Convention.

However, as noted by the High Court in WSG Nimbus, the NY Convention "obliges state parties to uphold arbitration agreements and awards". Anti-suit injunctions to restrain foreign court proceedings commenced in breach of arbitration agreements are, in principle, entirely consistent with this objective.

Further, the practical reality is that not all signatories fully honour their obligations under the NY Convention.

The alternative – if an anti-suit injunction is not granted on this basis and the foreign court accepts jurisdiction but does not then stay the court proceedings – would arguably represent a far more serious breach of the NY Convention.

International Comity

Finally, arguments to resist anti-suit injunctions (both interim and permanent) on grounds of international comity are probably as old as the remedy itself.

However, it is well established under English law, and there has been no departure from this under Singapore law, that any affront to comity is minimal where an anti-suit injunction is sought to enforce a party's contractual agreement to arbitrate. As noted in Angelic Grace, which was approved by the Singapore Court of Appeal in Maldives Airport at [42]:

“…I cannot accept the proposition that any Court would be offended by the grant of an injunction to restrain a party from invoking a jurisdiction which he had promised not to invoke and which it was its own duty to decline.”

Conclusion

It is clear that the Singapore Courts are prepared to take action against parties who breach valid arbitration agreements by commencing foreign court proceedings.

While BC Andaman is unlikely to silence all detractors, it helpfully provides further confirmation and clarity regarding the Singapore Court's position that it has the power to grant both interim and permanent anti-suit injunctions to restrain foreign court proceedings brought in breach of arbitration agreements, and the source of that power.

The Singapore legislation, NY Convention and legal doctrines considered above do leave some, limited room for arguments that the Singapore Courts do not have the power to grant anti-suit injunctions – particularly permanent anti-suit injunctions.

However, these arguments, although no doubt of interest to legal commentators, are unlikely to be of any practical application before the Singapore Courts when considered in the full context of the Singapore legislation and the NY Convention.


By Gan Kam Yuin - Partner, Bih Li & Lee LLP and Timothy Quek - Associate, Bih Li & Lee LLP

 

1. The issue before the High Court was whether section 14 of the State Immunity Act (Cap 313, 2014 Rev Ed) (“SIA”) applied to the service of an order granting leave to enforce an arbitral award.1   The material portion of section 14 is reproduced below:

Service of process and judgments in default of appearance

14.—(1) Any writ or other document required to be served for instituting proceedings against a State shall be served by being transmitted through the Ministry of Foreign Affairs, Singapore, to the ministry of foreign affairs of that State, and service shall be deemed to have been effected when the writ or document is received at that ministry.

2. In short, His Honour Justice Kannan Ramesh (“Ramesh J”) found that it did.2

 

Background

3. The Plaintiffs obtained two favourable arbitration awards: one on jurisdiction and merits on 18 April 2016 and another on costs on 20 October 2016.  It was the award on costs that was the subject of OS 95 of 2017 (“OS 95”).

4. After obtaining the award on costs, the Plaintiffs obtained an order (“Leave Order”) giving them leave to enforce the award as if it were a judgment from the Singapore High Court.  Later, the Plaintiffs sought to serve the Leave Order on the Defendant.  This brought about OS 95.

5. In OS 95, the Plaintiffs applied to have the Leave Order served on the Defendant via substituted service on the Defendant’s solicitors – M/s Rajah & Tann Singapore LLP.  However, the AR dismissed the Plaintiffs’ application because of non- compliance with section 14 of the SIA.

 

Analysis

6. Ramesh J held that the Leave Order fell within the definition of a “writ or other document required to be served for instituting proceedings against a State” under section 14 of the SIA.3  His Honour noted that section 12 of the UK State Immunity Act 1978 (“UK Act”) was in pari materia with section 14 of the SIA. The English authorities on the UK Act would therefore provide valuable insight into the meaning of section 14 of the SIA.4

7. In Norsk Hydro ASA v State Property Fund of Ukraine and others [2002] EWHC 2120 (Comm) (“Norsk Hydro”), the defendants sought to set aside the permission order (the English equivalent of a Leave Order) of the plaintiff on the basis that the time given for the defendants to respond was shorter than the prescribed 2 month and 21-day period under section 12 of the UK Act.  The plaintiff sought to excuse its non-compliance with the UK Act on the basis that section 12 applied only to the court’s “adjudicative jurisdiction” but not its “enforcement jurisdiction”.  The court in Norsk Hydro rejected the plaintiff’s argument.  It held that section 12(2) of the UK Act was applicable to both.5

8. In PCL and others v Y Regional Government of X [2015] EWHC 68 (Comm) (“PCL”), the defendants sought an order that the plaintiff’s act of serving the arbitration claim form at the address of the defendant’s solicitors, and abridging the time for filing an acknowledgment of service to three business days, was improper because they did not comply with section 12(1) of the UK Act.

9. The court in PCL agreed with the defendants.  It held that the plaintiff’s act of issuing the arbitration claim form amounted to “instituting proceedings” (under s 12(1) of the UK Act) against the defendants.6   The court explained that enforcement proceedings were distinct from the arbitration proceedings even though they might be considered as ancillary to them.  On the other hand, interlocutory applications did not involve the initiation of separate proceedings.

10. After considering the UK authorities, Ramesh J held that the local position would be similar to the English position where the Leave Order is concerned.7   The Leave Order fell within section 14(1) of the SIA just as a permission order fell within the scope of section 12(1) of the UK Act.8

11. Turning back to the SIA, Ramesh J held that enforcement proceedings were covered by the SIA given its wide ambit.9   The preamble of the SIA provides that the SIA is “[a]n Act to make provision with respect to proceedings in Singapore by or against other States, and for purposes connected therewith”.  This observation dovetailed with the UK authorities.10

12. The Defendant’s argument that section 14(1) of the SIA was limited to “adjudicative” proceedings was rejected.  Ramesh J was of the view that there was no substantive basis for drawing a distinction between “adjudicative” and “enforcement” proceedings for the purposes of section 14(1).11

13. His Honour also determined that the wording of section 14(1) of the SIA is “general and unqualified” and “not limited to proceedings seeking judgment”.12    These interpretations were underscored by the purpose of section 14.  Section 14 (and the consequential 2-month response time provided therein) grants respondent States the time and opportunity to respond.13   This position acknowledges the reality that States may have assets which are scattered across many jurisdictions; the requirement in section 14 thereby serves to notify the respondent State of the precise jurisdiction in which enforcement proceedings have been commenced and to give the respondent State time to respond.14

14. As the parties do not serve the originating process by which the leave to enforce is sought, the order granting leave is generally the first intimation to the respondent State that such relief is being sought, especially if the award is a foreign award.15  That underscores the point that the distinction in section 14 is not the form or title of the document, but its effect.  If the document institutes new proceedings, of which the State is not aware, the State should be notified through the official channel stipulated in section 14.16

15. Ramesh J held that the Plaintiffs could not rely on the Defendant’s factual knowledge (if any) of the enforcement proceedings to excuse their defective service.  Whether the Defendant in fact knew of the Plaintiffs’ intention to enforce the award was immaterial.  The Plaintiffs were required as a matter of law to adhere to section 14 of the SIA.17   It was a procedural safeguard which conferred rights upon the Defendant.

 

Conclusion

16.  The Plaintiffs had argued that both Order 11 Rule 7 of the Rules of Court and section 14 of the SIA applied only to originating processes.  After considering in detail the provisions of Order 11 and its interaction with Order 69A of the Rules of Court, as well as the special issues that service on a foreign State would raise, and the legislative history of the provisions, His Honour concluded that the omission of Order 11 Rule 7 from Order 69A Rule 6(3) was simply an oversight.18 It could not have been intended that service of process on a foreign State (Order 11 Rule 7) would be excluded from the operation of Order 69A Rule 6(3); that was simply a mistake.

17.    Whilst the particular issue of service under section 14 of the SIA is now clearly addressed, the decision is also an exemplary illustration of the application of the principles of statutory interpretation and His Honour’s careful analysis bears close study.


1Josias Van Zyl v Kingdom of Lesotho [2017] SGHC 104 at [1]
2 [2]
3 [13]
4 [14]
5 [17]
6 [21]-[22]
7 [24]-[26]
8 [26]
9 [34]
10 [34]-[36]
11 [34]-[37]
12 [41]-[43]
13 [45]
14 [45]
15 [43]
16 [44]
17 [47]
18 [58]

By Gan Kam Yuin - Partner, Bih Li & Lee LLP and Timothy Quek - Associate, Bih Li & Lee LLP

1. BMP had a dispute with BMO and 2 others, over BMP’s ownership of shares in its Vietnamese subsidiary1 . The Vietnamese subsidiary had a company charter (much like a Constitution for Singapore companies). For reasons which do not matter, the company charter was revised2 ; what does matter is that the revised charter contained an arbitration clause at Article 22(2).

2. BMP invoked Article 22(2) and brought an arbitration to the SIAC against BMO. A sole arbitrator was appointed. The arbitrator ruled that he had the jurisdiction to decide on the disputes raised in the arbitration. BMO then applied to the High Court under section 10(3) of the International Arbitration Act against the arbitrator’s ruling3 . BMO raised several challenges in its application.

3.One challenge was that Article 22(2) was merely permissive and did not compel the parties to submit their disputes to arbitration. The parties adduced different versions of Article 22(2) but eventually the Court accepted the version put forward by BMO4 . Justice Ang noted that the word “shall” appeared in BMO’s version whereas the word “may” was used in BMP’s version5 . The choice of words is a useful starting point for the question of whether the parties intended their disputes to be resolved by arbitration only, but departure from this starting point is warranted if there is “clear indication that parties intended otherwise6 . Construing the clause in its entirety and context, the Court found that this clause was indeed mandatory and the parties had to bring their disputes to arbitration7 .

4. BMO also argued that the disputes between itself and BMP did not strictly fall within the revised charter. This case note will not deal with the substance of the disputes as those are peculiar to the facts of the case. Nonetheless, we should note that whilst Justice Ang agreed that the disputes may not have been “directly premised on the rights and duties created by the Revised Charter”, the words “all arising disputes” in Article 22(2) had “a wide ambit and should be liberally construed so as to further the intent that the disputes should be susceptible to the forum chosen for the resolution of disputes8 ”. This approach is consistent with the approach taken in previous decisions of the Singapore Courts9 .

5. The other challenges raised by BMO were that BMP had waived the right to arbitrate, or repudiated the arbitration agreement, or was estopped from asserting the right to arbitrate10.

6. At first blush, BMO’s arguments seem particularly cogent because it was common ground between the parties that, prior to commencing arbitration proceedings, BMP had sued BMO in the British Virgin Islands for the same causes of action and the same relief11 . In fact, during the period of March 2015 to March 2016, there were ostensibly parallel litigation (in the BVI Court) and arbitration (in the SIAC) proceedings.

7. However, Her Honour held, on the facts, that BMP’s act of commencing litigation proceedings in the BVI did not amount to an election as BMP had not been “put to election12 . Waiver by election is a choice made by the innocent waiving party after the wrongdoing party’s breach of contract; in that situation, the wrongdoing party may assert that the innocent party has waived its rights. In this case BMP was the ‘wrongdoing party’ who had supposedly acted in breach of the arbitration agreement by suing in the BVI, and it was not open to BMO to argue that BMP had waived its rights. Her Honour went on to observe that, on the facts, it seemed that BMP had not had actual knowledge of Article 22(2) when the BVI litigation was commenced, due to (in particular) an oversight by the BVI Counsel13 . Therefore, BMP did not have the actual knowledge of the arbitration agreement which is necessary for waiver by election to arise.

8. As for repudiation, the Court held that commencing litigation proceedings per se need not constitute a repudiation of the arbitration agreement, and one must consider if there is an explanation for the breaching party’s conduct14 . Justice Ang noted the explanation given by BMP (that it had not been advised of the existence of Article 22(2)) and reviewed the procedural history of both the BVI litigation proceedings and the SIAC arbitration proceedings15 . Again, this case note will not set out the procedural history of both proceedings as they are specific to this case, but what is instructive is the approach the Singapore Courts will take in evaluating what actions amount to repudiation of an agreement to arbitrate.

9. Finally, on estoppel, BMO argued that BMP was estopped from pursuing the arbitration proceedings since it had litigated in the BVI16 . The Court held that BMO had not made out the first two elements of promissory estoppel as there was (1) no clear and unequivocal promise made by BMP to BMO that BMP would never commence arbitration proceedings in Singapore17 and (2) no change of position by BMO in reliance on any such promise18 .

10. In conclusion, the Court dismissed BMO’s application to the High Court and agreed with the arbitrator that he had the jurisdiction to decide on the disputes raised in the arbitration.

[1] At [5]

[2] At [8]

[3] At [1]

[4] At [57]-[60]

[5] At [57]-[58]

[6] At [63]

[7] At [63]-[64]

[8] At [55]

[9] At [47]-[54]

[10] At [65]

[11] At [24]

[12] At [66]-[76]; [74]

[13] At [85]

[14] At [94]-[95]

[15] At [97]; [101]; [103]-[108]

[16] At [118]

[17] At [125]

[18] At [126]

 

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