Setting aside of arbitral award; Resisting enforcement of arbitral award; Time limits for application to set aside arbitral award.
Case Summary
The appellants (collectively, “Bloomberry”) engaged the respondents (collectively “GlobalGaming”) under a management agreement to develop and operate a resort and casino in Manila, Philippines. Disputes subsequently arose which resulted in Bloomberry terminating the management agreement for alleged material breaches by Global Gaming.
Global Gaming commenced arbitration proceedings for wrongful termination. In its award, the tribunal found that there had been no material breaches of the management agreement by Global Gaming, and accordingly, it had been wrongfully terminated by Bloomberry (“Award”).
Bloomberry Resorts applied to the Singapore High Court to set aside the Award. Bloomberry claimed that it discovered after the Award that Global Gaming executives were the subject of investigations by the US Securities and Exchange Commission (“SEC”) and Department of Justice (“DOJ”) in relation with transactions at their previous employer, Las Vegas Sands (“LVS”). The SEC’s and DOJ’s finding were presented in various documents referred to as the “FCPA Findings”
Bloomberry argued that by suppressing or concealing evidence in the arbitration concerning the investigations into LVS and the FCPA Findings, Global Gaming had procured the arbitral award through fraud.
The High Court judge dismissed Bloomberry’s application on the grounds that (i) the application had been brought out of time pursuant to Article 34(3) of the Model Law and (ii) Bloomberry’s allegations that the Award had been procured through fraud were not made out (“High Court Decision”).
Bloomberry appealed against the High Court Decision to the Singapore Court of Appeal (“SGCA”), relying on broadly its same arguments before the High Court.
Ruling
The SGCA dismissed Bloomberry’s appeal and refused to set aside the Award and / or refuse enforcement of the Award.
1st Issue – Whether Final Award was induced or affected by fraud [37] – [73]
The 1st Issue before the SGCA was whether the Award was “induced or affected” by fraud such that the Award should be set aside or enforcement should be refused.
Bloomberg argued that there had been 2 types of fraud: (i) Global Gaming’s concealment of their employee’s purported fraudulent actions under their previous employer LVS and SEC’s and DOJ’s investigations into this conduct and (ii) the suppression of certain email evidence in the arbitration by Global Gaming’s counsel in breach of document production orders by the arbitral tribunal. [37]
The SGCA rejected Bloombery’s arguments for broadly three reasons.
First, the SEC’s and DOJ’s investigations did not need to be disclosed in the arbitration because they were not at issue. The investigations involved different companies and did not relate to Global Gaming or its activities. Bloomberry had also not alleged in the arbitration that Global Gaming or its principals had been involved in the conduct that was the subject of the investigations. [38] – [44]
Second, purportedly false statements made by Global Gaming’s executives to Bloomberry in 2012, which were inconsistent with the FCPA Findings, did not constitute fraud, because the FCPA Findings did not establish, to the requisite threshold of proof, that the 2012 statements were actually false. Further, the accuracy of the 2012 Statements had not been in issue at the arbitration. In any case, the fact that the 2012 statements were not made in the course of the arbitral proceedings was a key factor in the assessment of whether the arbitral award was induced or affected by fraud. [49] – [67]
Third, the non-disclosure of certain emails by Global Gaming did not amount to procedural fraud as, even if those emails fell with the scope of the tribunal’s document production orders, there was no evidence that the decision not to produce the emails was made dishonestly, aimed at deceiving the arbitral tribunal. [68] – [72]
2nd Issue - Time limit for setting-aside applications [74] – [97]
The 2nd Issue before the SGCA was whether the time-bar set out in Article 34(3) of the Model Law was applicable to applications to set aside awards which are based on grounds provided by IAA, s 24.
The court, relying on the language of Article 34(3), and the travaux preparatoire to the Model Law, held that the three-month time limit in Article 34(3) of the Model Law applied to all setting-aside applications brought under Article 34.
The SGCA held that setting aside grounds in the IAA, s 24 were subject to the same time limit, since they were a subset of the public policy ground in Article 34(2)(b)(ii) of the Model Law and did not form a separate regime, but provided additional grounds to set aside an award within the same framework.
