A. LEGISLATION AND RULES
A.1 No legislative amendments to the IAA or AA in Singapore
International arbitration continues to be governed by the International Arbitration Act (IAA), the Arbitration Act (AA) and the Arbitration (International Investment Disputes) Act. Apart from consequential amendments to remove references to the Reciprocal Enforcement of Commonwealth Judgments Act (RECJA) in the IAA following the RECJA’s repeal in Singapore, there have been no legislative amendments in the past year.
A.2 Institutions, rules and infrastructure
The main arbitral institution in Singapore is the Singapore International Arbitration Center (SIAC), which was ranked second among the world’s top five arbitral institutions and the most preferred institution based in Asia in findings released in 2021.[1] The SIAC continued to extend its global reach, having signed memoranda of understanding with the Silicon Valley Arbitration & Mediation Centre[2]; the Arbitration and Mediation Centre of the Ecuadorian American Chamber of Commerce of Quito[3]; the Arbitration Centre of the Quito Chamber of Commerce[4]; the Law School of Tsinghua University[5]; the Centre for Analysis and Dispute Resolution of Pontificia Universidad Cátolica del Perú[6]; and the National Law School of India University, Bangalore.[7]
The SIAC saw 357 new case filings in 2022. The total sum in dispute for all new case filings in 2022 was USD 5.61 billion (SGD 7.53 billion), and the highest sum in dispute for a single administered case was USD 627.38 million (SGD 841.86 million).[8] India was the top foreign user of the SIAC, with the US and China being in the top five foreign users.[9] New case filings in the first quarter of 2023 were at a historical high, with 332 new cases filed, including related cases.[10]
Between 22 August 2023 and 21 November 2023, the SIAC held a public consultation on the draft seventh edition of the SIAC Rules, with the public invited to submit feedback on the draft rules.[11] The proposed changes to the SIAC Rules include a new streamlined procedure for claims not exceeding SGD 1 million, the disclosure of the existence of any third-party funding agreements, and the identity of third-party funders and a new case management system. The revisions to the SIAC Rules aim to provide its users with the most modern features of international arbitration and are expected to increase the SIAC’s attractiveness as an arbitral institution.
The SIAC, with its world-class facilities, and Singapore remain the preferred choice for parties to settle their disputes.
B. CASES
In the past year, there were a number of significant cases that further developed the law of arbitration in Singapore, in particular in relation to the following:
- Whether transnational issue estoppel applies in the context of international commercial arbitration in Singapore
- The determination of whether there is a condition precedent to arbitration in an agreement
- Whether non-signatories to a contract may be bound by an arbitration agreement
- Whether the court’s enforcement of tribunal-ordered interim-measures is affected by forum non conveniens considerations
- Whether the interpretation of a substantive clause is an issue that relates to the tribunal’s jurisdiction
- Whether sealing orders should be granted if the confidentiality of the arbitration has been lost
In general, the Singapore courts have affirmed a commercial and practical approach to arbitration, which gives primacy to the parties’ intentions in choosing arbitration as their means of dispute resolution forum.
B.1 Transnational issue estoppel recognized in Singapore where Singapore court is asked to consider arguments that had been previously litigated before the seat court
In The Republic of India v. Deutsche Telekom AG [2023] SGCA(I) 10, a five-judge panel of the Court of Appeal held that the doctrine of transnational issue estoppel could and should be applied by a Singapore enforcement court when determining whether preclusive effect should be accorded to a seat court’s decision going toward the validity of an arbitral award.
The case concerned an investor-state arbitration commenced by a German entity (“DT“) against the Republic of India (“India“) under a bilateral investment treaty between Germany and India (“India-Germany BIT“). The arbitration was governed by the UNCITRAL Rules and seated in Geneva, Switzerland. The tribunal issued an interim award on jurisdiction and liability (“Interim Award“), dismissing India’s objections to jurisdiction and finding India liable for breaching its obligation to accord fair and equitable treatment under the India-Germany BIT to DT’s investment in an Indian company. India then applied to the Federal Supreme Court of Switzerland (“Swiss Federal Supreme Court“) to set aside the Interim Award (“Swiss Setting-Aside Application“). The Swiss Federal Supreme Court rejected India’s application. Thereafter, the tribunal issued a final award on quantum (“Final Award“), which was certified by the Civil Court of Geneva as being enforceable and legally binding.
After the Final Award was issued, DT commenced enforcement proceedings in Singapore and obtained an order from the court granting it permission to enforce the Final Award (“Leave Order“). India subsequently applied to the Singapore court to set aside the Leave Order. The Singapore International Commercial Court (SICC)rejected India’s application. India, therefore, filed an appeal against the SICC’s decision (“Appeal“).
In the Appeal, a threshold issue was whether India was precluded from making arguments that had already been argued before and determined by the Swiss Federal Supreme Court. In that connection, the Court of Appeal held that India was precluded from ventilating arguments it had already raised before the Swiss court by the application of transnational issue estoppel. In this regard, the court noted that while the application of transnational issue estoppel to foreign judgments is generally well-established in Singapore law, the applicability of transnational issue estoppel in the context of international commercial arbitration had not been settled. Nevertheless, following the court’s careful consideration of authorities both in Singapore and abroad, the court concluded that transnational issue estoppel could — and should — be applied by a Singapore enforcement court when determining whether preclusive effect should be accorded to a seat court’s decision going toward the validity of an arbitral award. The court explained that it was appropriate to apply transnational issue estoppel in international arbitration because, among other things, the IAA was silent on this issue so that the doctrine applied as part of the residual domestic law applicable in setting aside or enforcement proceedings, the doctrine respected parties’ choice of arbitral seat in a principled manner, and it cohered with the notion that courts co-exist as part of an international legal order.
Notably, the Court of Appeal also made important observations on the Primacy Principle, i.e., that a decision of the seat court on matters that go to the validity of the award would typically enjoy primacy in the scheme of modern international arbitration. The majority (comprising Sundaresh Menon CJ, Judith Prakash JCA, Steven Chong JCA, and Robert French IJ) noted that although it was not necessary to apply the Primary Principle in this case, if it had been necessary to do so, the majority’s likely view would have been to treat the decision of the seat court as presumptively determinative of the matters it dealt with, to the extent these went to the validity of the award. In observing that the Primacy Principle could apply, the majority explained that the Primary Principle derives from the widely held view in international commercial arbitration that the seat court enjoys a position of primacy in the transnational framework that governs the conduct and supervision of international arbitration and the enforcement of the awards that emanate from international arbitration.
Jonathan Hugh Mance IJ concurred with the majority’s holding that transnational issue estoppel applied in this case. However, Mance IJ departed from the majority’s observations regarding how an enforcement court should rely on the Primary Principle. In Mance IJ’s view, the courts did not need to give decisions of courts of the seat a specially elevated status in law, given that there were existing tools such as the doctrines of issue estoppel or abuse of process, which the courts could resort to. Mance IJ further explained that there were difficulties in treating a prior decision of the seat court as determinative or presumptively determinative, such as the effect that doing so would bypass the first necessary inquiry, namely whether the prior court’s decision is preclusive and if it is not, why it is not.
B.2 Determination of the existence of condition precedent to arbitration
Before a claimant commences arbitration, any condition precedent to arbitration would ordinarily need to be fulfilled to avoid challenges to the tribunal’s jurisdiction to hear the dispute. In CZQ and another v. CZS [2023] SGHC(I) 16, the SICC had to consider whether contractual language referring to the parties’ resorting to amicable settlement was a condition precedent to arbitration.
The claimant had commenced arbitrations against each respondent, pursuant to a contract that incorporated the FIDIC Conditions of Contract for Plant and Design Build. Sub-Clause 20.5 of the contract provided for the process by which parties could amicably settle their disputes. Sub-Clause 20.6 provided that “[u]nless settled amicably, any dispute shall be finally settled by international arbitration.” The tribunal determined that Sub-Clause 20.6 did not make compliance with the Sub-Clause 20.5 procedure a condition precedent to the commencement of arbitration. Based on the wording of Sub-Clauses 20.5 and 20.6, a dispute could be “settled amicably” in a variety of ways, one of which was the procedure in Sub-Clause 20.5. Accordingly, the tribunal ruled as a preliminary question that it had jurisdiction to hear the dispute, notwithstanding that the procedure in Sub-Clause 20.5 had not been complied with prior to the commencement of the arbitrations.
Following the tribunal’s ruling, the respondents applied to the SICC under Section 10 of the IAA for a determination that the tribunal had no jurisdiction. The SICC dismissed the respondents’ application and substantially agreed with the tribunal’s reasoning. The SICC observed that clear words are necessary to create a condition precedent to the commencement of arbitration. In the SICC’s view, there were no such clear words in Sub-Clauses 20.5 and 20.6 establishing a condition precedent to the commencement of arbitration, and Sub-Clause 20.5 did not oblige the parties to initiate the amicable settlement procedure if neither wished to do so.
B.3 Non-signatories may be bound to arbitration agreement
In COT v. COU and others and other appeals [2023] SGCA 31, the Court of Appeal upheld a tribunal’s finding that a non-signatory to a contract was bound to an arbitration agreement. In this case, the claimant supplied modules to the third respondent through a series of back-to-back contracts entered into between 2015 to 2016, including a Module Supply Agreement (MSA) between the claimant and a company affiliated with the respondents (“Procurement Company“) and other arrangements between the Procurement Company and the second and third respondents. The first, second, and third respondents, as well as the Procurement Company, belonged to the same corporate group (“Rohan Group“). By March 2016, the claimant had received payment on only six of the invoices, and three were overdue. Accordingly, the claimant indicated that it would suspend all further deliveries of modules until it received payment. Thereafter, representatives from the claimant and the Rohan Group entered into negotiations to resolve the issue of the unpaid invoices and the delivery of the remaining modules (“March 2016 Negotiations“). One of the key representatives from the Rohan Group in the negotiations was a director of the first respondent (“Aragon“). During the negotiations, a non-disposal undertaking (NDU), which contained an arbitration agreement, was executed by the claimant and the first respondent. The second and third respondents did not sign the NDU. After the March 2016 Negotiations and following certain payments made to the claimant, the sum of UAH 7.35 million still remained due and owing to the claimant. The claimant accordingly commenced arbitration pursuant to the arbitration agreement in the NDU.
The tribunal allowed the claimant’s claim and found that: (i) the parties had entered into a partly written, partly oral “Modules Delivery Agreement” that included the NDU; (ii) the NDU contained a valid arbitration agreement; and (iii) Aragon had the authority to agree — and did agree — on behalf of the first to third respondents jointly and severally to pay the unpaid invoices in consideration of the claimant agreeing to release the remaining modules. Accordingly, the first to third respondents had collectively entered into the MDA.
The respondents applied to set aside the tribunal’s award on the basis that, among other things, there was no valid arbitration agreement. The Court of Appeal dismissed the applications and held that the tribunal was correct in finding that all the respondents, including the non-signatory second and third respondents, were party to the arbitration agreement. The Court of Appeal explained that it agreed with the tribunal’s findings because: (i) the very purpose of the March 2016 Negotiations was to arrive at an agreement for the claimant to release the remaining modules in exchange for improved payment terms to assure the claimant of payment beyond the terms contained in the MSA; (ii) the NDU being a supplement to the MDA was precisely why the NDU did not expressly stipulate the claimant’s obligation to release the modules; and (iii) based on the plain wording of the NDU and the events that occurred during the March 2016 Negotiations, it was clear that the parties reached an agreement that included the NDU and that the NDU was binding on all the respondents. The court further observed that a court hearing a setting aside application premised on the absence of a binding contract undertakes a de novo review, bearing in mind that it need only concern itself with whether such a contract existed. In that connection, the court’s review would not involve examining the merits of the tribunal’s award, including any interpretation of the terms of the contract and the parties’ liability under those terms.
B.4 Court’s enforcement of tribunal-ordered interim measures not affected by forum non conveniens considerations
In CXG v. CXI [2023] SGHC 244, the High Court held that a Singapore court that possesses the jurisdiction to hear an application to enforce a tribunal-ordered interim measure in a Singapore-seated international arbitration (“domestic interim measure“) should not be prevented from exercising that jurisdiction on grounds of forum non conveniens (FNC). The claimants had applied to the court (“Leave Application“) for permission to enter judgment in respect of a tribunal’s interim order (“Interim Order“). The defendants applied to stay the Leave Application on the ground that it was not appropriate for the Singapore court to exercise jurisdiction to hear it as Singapore was not the proper forum (“Stay Applications“). The High Court’s decision itself related to the Stay Applications as the Leave Application was not before the High Court.
The defendants argued that Malaysia was the more appropriate forum for the enforcement of the Interim Order and that FNC considerations were relevant to the High Court’s determination as to whether the Singapore court should decline to enforce a domestic interim measure. The High Court dismissed the Stay Applications. Among other reasons, the High Court cited the following reasons for finding that FNC considerations should not be considered:
- Where the enforcement of domestic interim measures is concerned, the court is not concerned with adjudicating the substantive merits of the dispute or the interim measure itself. The court is accordingly not concerned with the typical connecting factors that a particular forum has to the dispute, i.e., FNC considerations.
- The application of FNC principles would undermine party autonomy and the expectation of parties, insofar as parties choose the seat of the arbitration based on considerations that may have little connection with the parties, such as the parties’ confidence in the legal infrastructure of the seat, the national curial law and willingness of the courts to support and facilitate the arbitration, or the neutrality of the seat.
- There may be legitimate and practical benefits for seeking enforcement at the seat (e.g., the seat jurisdiction’s approach toward enforcing awards), regardless of considerations such as the ease of enforcement at the seat jurisdiction.
B.5 Interpretation of a substantive clause ordinarily concerns the admissibility of the claim made, which does not go to jurisdiction
If a party objects to a tribunal’s jurisdiction on the basis that a claim made does not fall within the terms of a contractual clause, the question arises whether it is open to a court hearing a challenge to the tribunal’s jurisdiction to revisit the tribunal’s finding on this point. In CYY v. CYZ [2023] SGHC 101, the Singapore court held that such a finding was a finding on the merits that the court should not interfere with. The parties were in the marine salvage industry. One of the parties (“Charterer“) was engaged to provide urgent salvage services in respect of a vessel that had run aground. A representative of the Charterer contacted the other party, the owner of a crane barge (“Owner“), to charter the said crane barge. The Charterer and Owner entered into an agreement to charter the crane barge (“Contract“), which was governed by Singapore law and contained an arbitration clause naming Singapore as the seat of the arbitration. The Contract also included an additional clause (Clause 39), which provided that the Charterer would be charged at cost plus 15% for “Consumables, communications and medicine on the [crane barge]” used by the Charterer or “procurement services by the Owner” requested by the Charterer. Throughout the salvage operation, the Charterer requested various services, personnel, equipment and craft, which the Owner procured (“Disputed Claims“). After the Charterer failed to pay the Owner for the procured items, the Owner commenced an arbitration against the Charterer.
The tribunal found that it had jurisdiction to hear the Disputed Claims. In reaching its finding, the tribunal interpreted Clause 39 and found that adopting a contextual interpretation, the clause encompassed all procurement services rendered by the Owner in relation to the entire salvage operation, and not just to the charter of the crane barge (as contended by the Charterer). The tribunal thus concluded that it had jurisdiction to determine the Disputed Claims on the basis of Clause 39 or as a quantum meruit claim.
The Charterer later applied to the Singapore court to challenge the tribunal’s positive jurisdictional ruling under Section 10(3)(a) of the IAA. The Charterer argued that Clause 39 should be construed to apply only to procurement services rendered in relation to the charter of the crane barge, such that the tribunal had no jurisdiction to hear the Disputed Claims, which generally related to procurement services concerning the salvage operation. The High Court held that the interpretation of Clause 39, and specifically what was meant to be covered by the phrase “all procurement services,” is a matter of the admissibility of the claim, which was an objection directed at the claim rather than the tribunal’s authority under the arbitration agreement. Accordingly, the court held that the interpretation of Clause 39 was not a matter for the court to decide, even if the court considered the tribunal reached a wrong conclusion on this issue. In any event, the court went on to consider how Clause 39 should be interpreted because counsel and the tribunal appeared to have proceeded on the basis that the interpretation of the clause went to jurisdiction and ultimately agreed with the tribunal’s interpretation of the clause.
B.6 Sealing order not appropriate for arbitration-related court proceedings when confidentiality of arbitration has already been lost
In The Republic of India v. Deutsche Telekom AG [2023] 2 SLR 77, the Court of Appeal held that it was not appropriate to grant an order to seal a case file concerning an arbitration when the confidentiality of the arbitration had been lost. The facts concerning the case have been described earlier in this chapter. At the time that India filed the Appeal, India also filed an application seeking orders that the Appeal and any other applications filed in connection with it be heard in private, that any information (including the parties’ identities) or documents relating to the Appeal or any application filed in the Appeal be concealed, that the case file for the Appeal be sealed, that the parties in the Appeal not be identified in any hearing lists, and that any published judgment or decision that may be issued in these proceedings be redacted (“Application“).
The Court of Appeal dismissed the Application. The court explained that it may grant a sealing order pursuant to its inherent powers to regulate its own processes and make appropriate orders to achieve the ends of justice. However, the general rule was that the making of such orders would entail a departure from the principle of open justice and, therefore, should be the exception rather than the norm. In that connection, the court noted that if the information in question was known to the public, it would be unrealistic and pointless to seek to deal with it as though it was confidential. In this case, there had already been multiple disclosures of considerable information relating to the arbitration, the identities of the parties, and enforcement proceedings in Singapore and abroad, including the interim and final awards being available on third-party online sites and an article expressly identifying India and DT as parties to the enforcement proceedings in Singapore. Given these disclosures, the confidentiality of the arbitration had substantially been lost, and there was no compelling interest in keeping the enforcement proceedings in Singapore confidential.
[1] SIAC, SIAC is Most Preferred Arbitral Institution in Asia and 2nd in the World, 7 May 2021, https://siac.org.sg/siac-is-most-preferred-arbitral-institution-in-asia-pacific-and-2nd-in-the-world
[2] SIAC, SIAC Signs Memorandum of Understanding with the Silicon Valley Arbitration & Mediation Centre, 16 March 2023, https://siac.org.sg/siac-signs-memorandum-of-understanding-with-the-silicon-valley-arbitration-mediation-centre
[3] SIAC, SIAC Signs Memorandum of Understanding with the Arbitration and Mediation Centre of the Ecuadorian American Chamber of Commerce of Quito, 9 June 2023, https://siac.org.sg/siac-signs-memorandum-of-understanding-with-the-arbitration-and-mediation-centre-of-the-ecuadorian-american-chamber-of-commerce-of-quito
[4] SIAC, SIAC Signs Memorandum of Understanding with the Arbitration Centre of the Quito Chamber of Commerce, 13 June 2023, https://siac.org.sg/siac-signs-memorandum-of-understanding-with-the-arbitration-centre-of-the-quito-chamber-of-commerce
[5] SIAC, SIAC Signs Memorandum of Understanding with the Law School of Tsinghua University, 13 November 2023, https://siac.org.sg/siac-signs-memorandum-of-understanding-with-the-law-school-of-tsinghua-university
[6] SIAC, SIAC Signs Memorandum of Understanding with the Center for Analysis and Dispute Resolution of Pontificia Universidad Cátolica del Perú, 5 December 2023, https://siac.org.sg/siac-signs-memorandum-of-understanding-with-the-center-for-analysis-and-dispute-resolution-of-pontificia-universidad-catolica-del-peru
[7] SIAC, SIAC Signs Memorandum of Understanding with the National Law School of India University, Bangalore, 5 January 2024, https://siac.org.sg/siac-signs-memorandum-of-understanding-with-the-national-law-school-of-india-university-bangalore
[8] SIAC Annual Report 2022, https://siac.org.sg/wp-content/uploads/2023/04/SIAC_AR2022_Final-For-Upload.pdf
[9] SIAC Annual Report 2022, https://siac.org.sg/wp-content/uploads/2023/04/SIAC_AR2022_Final-For-Upload.pdf
[10] SIAC, SIAC Announces 2022 Statistics; Q1 2023 Sees High Filings, 4 April 2023, https://siac.org.sg/siac-announces-2022-statistics-q1-2023-sees-high-filings
[11] SIAC, SIAC Announces Public Consultation on the Draft 7th Edition of the SIAC Rules, 22 August 2023, https://siac.org.sg/siac-announces-public-consultation-on-the-draft-7th-edition-of-the-siac-arbitration-rules
