Study Notes For SILE Part B Course: Law and Practice of International Arbitration in Singapore PDF

© Darius Chan 23 July 2024 STUDY NOTES FOR SILE PART B COURSE LAW AND PRACTICE OF INTERNATIONAL ARBITRATION IN SINGAPORE Table of Contents 1. APPLICABLE LAWS.................................................................................................................................. 3 1.1 LEGISLATIVE FRAMEWORK IN SINGAPORE...................................................................................................... 3 1.2 RELATIONSHIP BETWEEN APPLICABLE LAWS.................................................................................................... 4 1.3 PARTIES CAN CHOOSE APPLICABLE LAWS........................................................................................................ 7 2. ARBITRATION AGREEMENT.................................................................................................................. 13 2.1 EXISTENCE OF AN ARBITRATION AGREEMENT................................................................................................ 13 2.2 PARTIES TO AN ARBITRATION AGREEMENT................................................................................................... 14 2.3 SUBJECT MATTER ARBITRABILITY................................................................................................................ 16 2.4 PATHOLOGICAL ARBITRATION CLAUSES........................................................................................................ 18 2.5 DRAFTING ARBITRATION CLAUSES............................................................................................................... 21 2.6 STAY OF COURT PROCEEDINGS (ENFORCEMENT OF ARBITRATION AGREEMENT).................................................... 22 3. JURISDICTION OF ARBITRAL TRIBUNAL................................................................................................. 26 3.1 OPTIONS TO CHALLENGE.......................................................................................................................... 26 3.2 DOCTRINE OF COMPETENCE-COMPETENCE................................................................................................... 27 3.3 VALIDITY OF ARBITRATION AGREEMENT (DOCTRINE OF SEPARABILITY)................................................................ 28 3.4 PROCESS OF OBJECTING TO TRIBUNAL’S JURISDICTION.................................................................................... 29 4. CONSTITUTION AND CHALLENGE OF ARBITRAL TRIBUNAL................................................................... 33 4.1 CONSTITUTION OF TRIBUNAL..................................................................................................................... 33 4.2 CHALLENGING ARBITRATORS..................................................................................................................... 34 4.3 ARB-MED.............................................................................................................................................. 42 5. CONDUCT OF PROCEEDINGS................................................................................................................. 44 5.1 FREEDOM TO AGREE ON THE PROCEDURE.................................................................................................... 44 5.2 CORE PROCEDURAL RIGHTS AND DUTIES...................................................................................................... 44 5.3 DEFAULT OF A PARTY (OR NON-PARTICIPATION)............................................................................................ 44 5.4 OBTAINING EVIDENCE.............................................................................................................................. 45 5.5 CONFIDENTIALITY................................................................................................................................... 46 5.6 PARTIES’ REPRESENTATION....................................................................................................................... 46 5.7 TERMINATION OF PROCEEDINGS................................................................................................................ 47 6. INTERIM MEASURES............................................................................................................................. 48 6.1 TRIBUNAL ORDERED INTERIM MEASURES..................................................................................................... 48 6.2 COURT ORDERED INTERIM MEASURES......................................................................................................... 50 6.3 ENFORCEMENT OF INTERIM MEASURES....................................................................................................... 52 6.4 ANTI-SUIT INJUNCTIONS........................................................................................................................... 53 7. AWARD................................................................................................................................................. 54 7.1 REMEDIES THAT THE TRIBUNAL CAN AWARD................................................................................................. 55 7.2 DEFINITION OF AWARD............................................................................................................................ 55 7.3 CONTENT AND FORM OF AWARDS.............................................................................................................. 58 7.4 CORRECTION AND INTERPRETATION OF AWARDS........................................................................................... 59 8. SETTING ASIDE OF AWARD................................................................................................................... 61 8.1 FINALITY OF AWARDS............................................................................................................................... 61 © Darius Chan. Kindly do not reproduce or distribute without prior permission. 1 © Darius Chan 23 July 2024 8.2 SETTING ASIDE AND RESISTING ENFORCEMENT ARE CUMULATIVE OPTIONS.......................................................... 62 8.3 SETTING ASIDE AWARD AT SEAT OF ARBITRATION.......................................................................................... 62 8.4 SETTING ASIDE OF FOREIGN AWARDS.......................................................................................................... 65 9. ENFORCEMENT OF AWARDS................................................................................................................. 66 9.1 ENFORCEMENT AT THE SEAT OF ARBITRATION............................................................................................... 66 9.2 ENFORCING FOREIGN AWARDS IN NYC COUNTRIES........................................................................................ 66 9.4 GROUNDS FOR REFUSAL OF ENFORCEMENT.................................................................................................. 69 9.5 ADJOURNMENT OF ENFORCEMENT PROCEEDINGS.......................................................................................... 76 © Darius Chan. Kindly do not reproduce or distribute without prior permission. 2 © Darius Chan 23 July 2024 1. Applicable laws 1 By way of background, a brief overview of the arbitral process can be found here. 2 In an arbitration, the applicable laws include: Arbitration rules Law of the seat of the arbitration (lex arbitri) Law governing the substance of the dispute Law governing the arbitration agreement Law applicable to non-contractual claims Law governing a party’s legal capacity to contract 1.1 Legislative framework in Singapore 3 In Singapore, arbitrations conducted pursuant to arbitration agreements which are considered domestic are governed by the Arbitration Act. Where the arbitration agreement is international, the International Arbitration Act applies. 4 The International Arbitration Act applies to an international arbitration or in any other case, if the parties agree that it applies (s 5(1) IAA). An arbitration is international if: At least one of the parties to an arbitration agreement, at the time of the conclusion of the agreement, has its place of business in any state other than Singapore (s 5(2)(a) IAA); or The place of arbitration, determined pursuant to the arbitration agreement, is outside the state in which the parties have their business (s 5(2)(b)(i) IAA); or The place where a substantial part of the obligations of the commercial relationship is to be performed is situated outside the state in which the parties have their places of business (s 5(2)(b)(ii) IAA); or The place where the subject-matter of the dispute is most closely connected is situated outside the state in which the parties have their places of business (s 5(2)(b)(ii) IAA); or © Darius Chan. Kindly do not reproduce or distribute without prior permission. 3 © Darius Chan 23 July 2024 The parties have expressly agreed that the subject matter of the arbitration agreement relates to more than one country (s 5(2)(c) IAA). 5 The UNCITRAL MAL on International Commercial Arbitration (1985) (MAL “MAL”), with the exception of Chapter VIII, has the force of law in Singapore (s 3(1) IAA). 6 By way of background, UNCITRAL is an UN body whose mandate is to harmonise and modernise the law of international trade. The MAL was designed by drafters at UNCITRAL so that States can reform and modernise their laws on arbitration. States can enact the MAL wholesale into its own laws, or they can enact selected portions. In Singapore the IAA enacts the MAL (with the exception of Chapter VIII), but contains additions and modifications. 7 Some other jurisdictions which have legislation based on or influenced by the MAL (commonly known as “MAL jurisdictions”) include Germany, Hong Kong, New Zealand, Australia, Canada.1 When one has to interpret certain MAL provisions, it is not uncommon to look to the (i) travaux préparatories of the MAL 2 ; and (ii) jurisprudence emanating from other MAL jurisdictions.3 Be mindful that UNCITRAL updated the MAL with certain amendments in 2006, but Singapore has not yet enacted the 2006 amendments. 8 The MAL applies to international commercial arbitration (Art 1(1) MAL). The term “commercial” should be given a wide interpretation so as to cover matters arising from all relationships of a commercial nature, whether contractual or not. This includes supply of goods or services, construction, banking, financing, carriage of goods, joint venture, etc. (See footnote to Art 1(1) MAL). 1.2 Relationship between applicable laws 1 See specific States here: https://uncitral.un.org/en/texts/arbitration/modellaw/commercial_arbitration/status 2 https://uncitral.un.org/en/texts/arbitration/modellaw/commercial_arbitration/travaux 3 https://uncitral.un.org/sites/uncitral.un.org/files/media-documents/uncitral/en/mal-digest-2012-e.pdf © Darius Chan. Kindly do not reproduce or distribute without prior permission. 4 © Darius Chan 23 July 2024 9 All arbitrations require a valid arbitration agreement between the parties for the arbitral tribunal to enjoy jurisdiction. In drafting the arbitration agreement, parties can generally choose between ad hoc or institutional arbitration.4 10 In institutional arbitration, parties designate the use of an arbitral institution to administer the arbitration, typically (but not always) in accordance with the arbitral rules of that institution. Such commonly used institutions in this region include Singapore International Arbitration Centre (SIAC), International Chamber of Commerce (ICC), Hong Kong International Arbitration Centre (HKIAC), London Court of International Arbitration (LCIA), etc. 11 Institutions publish model arbitration agreements (commonly known as “model clauses”) that parties can insert into their contracts. Rather than drafting one from scratch, parties can agree on an arbitral institution, and insert the appropriate model clause from that institution into their contracts. Many jurisdictional issues arise when parties alter the model clauses (which we will examine below). 12 In contrast, ad hoc arbitration means there is no involvement of an arbitral institution to help administer the arbitration. In ad hoc arbitrations, it is not uncommon for parties to agree to adopt the UNCITRAL Arbitration Rules, which were designed to be used by parties without the involvement of an arbitral institution. The UNCITRAL Arbitration Rules is not to be confused with the UNCITRAL MAL. The latter is a model set of provisions to be enacted as law by a legislative body, whereas the former is a set of procedural rules which parties can agree by contract to adopt. 13 Additionally, regardless of whether parties opt for institutional or ad hoc arbitration, an arbitration agreement will typically designate the seat of the arbitration, such as Singapore. The seat of the arbitration provides the procedural law governing the conduct of the arbitration, also known as the lex arbitri. It is important to note that the choice of a particular institution does not dictate the choice of the seat. For instance, parties can opt for SIAC arbitration, and designate the seat of arbitration as Kuala 4 In some jurisdictions ad hoc arbitration is not recognized: see Articles 16 and 18 of the Arbitration Law of the PRC (which is undergoing revision at the moment). © Darius Chan. Kindly do not reproduce or distribute without prior permission. 5 © Darius Chan 23 July 2024 Lumpur or Jakarta (instead of Singapore). Most institutions can administer arbitrations seated anywhere in the world. 14 The choice of the seat has important consequences, the key of which is that it dictates the procedural law governing the conduct of the arbitration (lex arbitri). By way of illustration: a. if an arbitration agreement provides that an arbitration is seated in Singapore, the procedural law governing the conduct of the arbitration is the AA or the IAA for a domestic and international arbitration respectively. b. If the arbitration agreement provides that the arbitration is seated in London, the procedural law governing the conduct of the arbitration is the English Arbitration Act. c. If the arbitration agreement provides that the arbitration is seated in Hong Kong, the procedural law governing the conduct of the arbitration is the Hong Kong Arbitration Ordinance. 15 Here is a complication: if parties in their arbitration agreement opt for institutional arbitration with the result that the arbitral rules of that institution apply to that arbitration, to what extent do those institutional rules override provisions of the lex arbitri? 1.2.1 Relationship between lex arbitri and international rules 16 Under Singapore law, a provision in an arbitration agreement referring or adopting any rules of an arbitral institution is by itself insufficient to exclude the application of the MAL (s 15(2) IAA; overruling John Holland v Toyo). Provisions of rules of arbitration selected by parties will apply to the extent that such provision is not inconsistent with a provision of the MAL or the IAA from which the parties cannot derogate (s 15A(1) IAA; overruling Dermajaya Properties). 17 A provision of rules of arbitration is not inconsistent with the MAL of the IAA merely © Darius Chan. Kindly do not reproduce or distribute without prior permission. 6 © Darius Chan 23 July 2024 because: it provides for a matter on which the MAL and the IAA is silent (s 15A(3) IAA), or merely because the rules are silent on a matter covered by any provision of the MAL or the IAA (s 15(4) IAA), or merely because it provides for a matter which is covered by a provision of the MAL or IAA which allows the parties to make their own arrangements by agreement but which applies in absence of such agreement (s 15A(5) IAA). 18 Insigma Technology v Alstom Technology SGCA 24 affirmed (at ) that parties to an arbitration in Singapore are free to adopt the arbitration rules of their choice to govern their arbitration, and their choice of arbitration rule would be respected by Singapore law and be given the fullest effect possible. Put simply, to the extent there is any conflict between the arbitration rules and the MAL as incorporated by the IAA, the rules chosen by parties will prevail unless the conflict was with a mandatory provision of the MAL. 19 However, this does not totally resolve the issue because the MAL does not expressly prescribe which provisions are mandatory in nature. Be that as it may, it is clear that some provisions in the MAL only provide for a default position and allow parties to derogate from that default provision. Such non-mandatory provisions can be identified from their use of the phrase “unless otherwise agreed by the parties, …”. 20 In other jurisdictions such as England, the English Arbitration Act sets out a list of mandatory provisions that have effect notwithstanding any agreement to the contrary. This means that any arbitral rules chosen by the parties will prevail to the extent they do not conflict with those mandatory provisions. 1.3 Parties can choose applicable laws 1.3.1 Arbitration rules 21 Parties may agree on a set of institutional (such as the ICC or SIAC Rules) or ad hoc arbitration rules (such as the UNCITRAL Rules) to apply to their arbitration. Alternatively, they may formulate their own rules by agreement. If the parties do not © Darius Chan. Kindly do not reproduce or distribute without prior permission. 7 © Darius Chan 23 July 2024 agree on any rules, the law of the seat of arbitration will govern the arbitral procedure (e.g. see Art 21-27 MAL). 22 A question as to the applicable version of any arbitration rules can arise when the rules are revised between the time the arbitration agreement is concluded and the time arbitration is commenced. In this situation, generally there appears to be a presumption in favour of rules that are applicable as at the date of commencement of arbitration and not at the date of contract (Black and Veatch Singapore v Jurong Engineering SGCA 30). 1.3.2 Seat of arbitration 23 Parties are free to agree on the seat (or place) of arbitration (Art 20(1) MAL). If parties fail to specify a seat, the arbitral rules may regulate how the seat is to be decided, for instance, by specifying a default seat in the absence of parties’ choice, or by giving the power to the arbitral tribunal to make that decision. 24 Once the seat of arbitration has been agreed upon, it can only be changed by agreement of all the parties. The seat of arbitration—which is a juridical concept—is not necessarily the same as the venue of any arbitral hearing which is a logistical concept. The seat does not change merely because the tribunal holds its hearing at a different place (PT Garuda v Birgen Air SGCA 12 at ). The tribunal may hold hearings and meetings by any means and at any location it considers convenient or appropriate, independent of the seat. Of course, the tribunal can also choose to hold hearings at the seat, but it is not required to do so. 25 Factors to consider when choosing a seat of arbitration: Seat should be a party to the New York Convention (“NYC”). This is important for enforcement of any resulting award in other NYC countries because many jurisdictions have adopted the NYC with reciprocity reservations. Seat’s arbitration should provide the desired level of judicial interference and control. © Darius Chan. Kindly do not reproduce or distribute without prior permission. 8 © Darius Chan 23 July 2024 The quality of the judiciary and court system should be considered in case it is necessary to approach a court for assistance. Seat should be neutral. 26 The New York Convention is presently the most successful treaty in the world with more than 160 signatory states. It covers the recognition and enforcement of foreign arbitration awards. The NYC is part of Singapore law (enacted under the IAA). Singapore has a made a reservation under the NYC whereby it will apply the NYC only to awards made in another signatory state of the NYC (commonly known as the reciprocity reservation).5 1.3.3 Law governing the substance of the dispute 27 Parties are free to choose the rules of law applicable to the substance of the dispute (Art 28(1) MAL). The parties are generally not restricted in their choice of applicable law. There is no requirement that the chosen law has some connection to the parties or to the dispute (Quarella SpA v Scelta Marble SGHC 166 at , citing Yves Derains and Eric Schwartz (2005) in A Guide to ICC Rules of Arbitration). A tribunal’s interpretation of a choice of law clause cannot normally be reviewed unless the tribunal deliberately disregarded the parties’ choice of law clause (Quarella SpA v Scelta Marble). 28 In the absence of any choice: a. The arbitral tribunal shall apply the law determined by the conflict of laws rules which it considers appropriate (Art 28(2) MAL). b. The MAL does not prescribe which set of conflict of laws rules to apply. Some commonly used conflict of laws rules include the conflict of laws rules of (i) the seat of arbitration; (ii) the place where the award is likely to be enforced; (iii) the jurisdiction that would have been competent but for the arbitration place; (iv) the place of contractual performance; (v) the jurisdiction with some element 5 “The Republic of Singapore will on the basis of reciprocity apply the said Convention to the recognition and enforcement of only those awards which are made in the territory of another Contracting State.”: https://www.newyorkconvention.org/countries © Darius Chan. Kindly do not reproduce or distribute without prior permission. 9 © Darius Chan 23 July 2024 common to the parties; (vi) general principles of private international law; or (v) the law with the closest connection to the dispute, etc. 29 Although the MAL requires tribunal to first apply conflict of law rules in order to ascertain the appropriate governing law, arbitral rules may not necessarily require the same approach. For instance, SIAC Rule 31 empowers the tribunal to apply the law or rules of law which the tribunal determines to be appropriate, without mandating a conflict of laws methodology. 30 A complication arises: are SIAC Rule 31 and Art 28(3) MAL inconsistent? If so, which prevails? A practical solution favoured by some tribunals is to apply a conflict of laws methodology anyway to ascertain the appropriate governing law, which is not prohibited under SIAC Rule 31. 1.3.4 Law governing the arbitration agreement 31 The law applicable to the arbitration agreement determines the formal validity of the arbitration agreement, from which the authority of the arbitrator flows (Dallal v Bank Mellat QB 441). It is also applicable to questions as to whether the dispute lies within the scope of the agreement and the agreed qualifications or constitution of the tribunal. It has been observed that the proper law of the arbitration agreement will be most relevant to questions as to formation, validity, effect and discharge of the arbitration agreement (BNA v BNB SGCA 84 at ). Such issues arise before the commencement of arbitral proceedings, such as during an application for stay of court proceedings. Such issues could also be raised at setting aside or refusal of enforcement proceedings. Once the law governing the arbitration agreement has been identified, the arbitration agreement must be interpreted according to that law. 32 It is implicitly recognised that parties are free to choose the law that governs their arbitration agreement. Art 34(2)(a)(i) MAL and Art V(1)(a) NYC both refer to the validity of an arbitration agreement ‘under the law to which the parties have subjected it’. In practice, however, parties traditionally have not expressed a choice as to the law governing the arbitration agreement. However, more and more model clauses are now expressly including a choice of law clause to govern the arbitration agreement. As a © Darius Chan. Kindly do not reproduce or distribute without prior permission. 10 © Darius Chan 23 July 2024 matter of good practice, it is suggested that one should expressly stipulate a choice of law to govern the arbitration agreement. 33 Separately, there have been English case law where the Courts have interpreted an express choice of law clause governing the “Agreement” (which was a defined term in that case) to include the arbitration clause as well. But what happens if the Courts find that the parties have not expressly stipulated a choice of law to govern the arbitration agreement? In England and Singapore, there have been a series of conflicting case law whereby some Courts held that the law governing the arbitration agreement is the law governing the main contract, whereas other Courts held that the law governing the arbitration agreement is the law of the seat. 34 In the absence of an express choice of law governing the arbitration agreement, the position in Singapore now is that there is a rebuttable presumption that parties have impliedly chosen the law governing the main contract to also govern the arbitration agreement. This presumption can be displaced if choosing the law governing the main contract as the governing law of the arbitration agreement would negate the arbitration agreement when the parties have evinced a clear intention to be bound to arbitrate their disputes. For instance, it was argued in BNA v BNB SGCA 84 that applying PRC law (the law governing the main contract) as the governing law of the arbitration agreement would negate the parties’ clear intent to arbitrate because PRC law (as it was argued) did not allow a foreign arbitral institution (SIAC in that case) to administer arbitral proceedings seated in China. 35 If there is no express or implied choice of law, the system of law with the closest and most real connection with the arbitration agreement will be applied. The system of law with the closest and most real connection with the arbitration agreement is generally taken to be the law of the seat. 36 Because of the complexities in this area, England (and other jurisdictions such as Malaysia) are now amending their relevant statutes to provide for greater certainty. These amendments generally provide that, in the absence of an express choice by the parties, the law of the seat will be the law governing the arbitration agreement. Whether such legislative amendments will be adopted in Singapore remain to be seen. © Darius Chan. Kindly do not reproduce or distribute without prior permission. 11 © Darius Chan 23 July 2024 1.3.5 Law governing a party’s capacity to contract 37 A party must have the capacity to enter into an arbitration agreement. 38 Issues of incapacity may be raised before or during arbitration and may be submitted as a ground to set aside the award (Art 34(2)(a)(i) MAL), or to resist enforcement of an award (Art V(1)(a) NYC; Art 36(1)(a)(i) MAL; S 31(2)(a) IAA). 39 A party’s legal capacity to contract is generally governed by the law of the party’s nationality (i.e. lex personam), even if a different law applies to the merits of the parties’ dispute. For a company, that will be the law of the place of incorporation or business. Alternatively, whether a party has validly entered into a contract may be determined by the law governing the contract. © Darius Chan. Kindly do not reproduce or distribute without prior permission. 12 © Darius Chan 23 July 2024 2. Arbitration agreement 2.1 Existence of an arbitration agreement 2.1.1 Definition 40 An arbitration agreement may be in the form of an arbitration clause in a contract or in the form of a separate agreement (Art 7(1) MAL; s 2A(2) IAA). 2.1.2 Writing requirement 41 An arbitration agreement must be in writing (Art 7(2) MAL 1985; s 2A(3) IAA). 42 An arbitration agreement is in writing if its content is recorded in any form, whether or not the arbitration agreement or contract has been concluded orally, by conduct or by other means (s 2A(4) IAA). The requirement that an arbitration agreement shall be in writing is satisfied by an electronic communication if the information contained therein is accessible so as to be useable for subsequent reference (s 2A(5) IAA). There is deemed to be an effective arbitration agreement where in any arbitral proceedings, a party asserts the existence of an arbitration agreement in a pleading, and the assertion calls for a reply but is not denied (s 2A(6) IAA). [Note 1: Article 7 MAL does not apply in SG (s 2A(9) IAA). Singapore’s version is similar to Option 1 of Art 7 of MAL 2006, except it has its own vocabulary.] 2.1.3 Incorporation by reference 43 Incorporation by reference refers to a situation where parties have not included an arbitration agreement in their own contract, but merely include a reference to another document which contains the arbitration agreement. 44 A reference in a contract to any document containing an arbitration clause constitutes an arbitration agreement provided the reference is such as to make that clause part of the contract (s 2A(7) IAA; Art 7(2) MAL). © Darius Chan. Kindly do not reproduce or distribute without prior permission. 13 © Darius Chan 23 July 2024 45 In Singapore, the test is whether the parties had intended to incorporate the arbitration agreement (International Research v Lufthansa Systems SGCA 55 at ). This is a question of construction. Specific words of incorporation may express such an intention (Concordia v Cornelder SGHC 269). Explicit reference to the arbitration clause is not necessary in order for it to be incorporated by reference. To do so would be far too restrictive (Gay Construction per Kaplan J; approved in International Research at ). Where the reference to another document is clearly to adopt all the terms of the document referred to, then incorporation includes the arbitration clause (Mancon v Heng Holdings SGHC 324). 2.2 Parties to an arbitration agreement 2.2.1 Non-signatories 46 As arbitration is based on consent, an arbitration agreement can bind only those who have consented to it. However, there are various legal doctrines that may bind non- signatories to an arbitration agreement. The applicable law on issues concerning the arbitration agreement is generally the law governing the arbitration agreement. To the extent Singapore law is the law governing the arbitration agreement, be mindful that the use of some of the concepts below, such as group of companies’ doctrine and estoppel, to make a non-signatory party to an arbitration agreement remain highly controversial. Implied consent: Arbitral tribunals have held that negotiation or performance of obligations of a contract by a non-signatory can bind it to the agreement, including its arbitration clause. The fundamental question in the context of implied consent is whether the parties’ objective intention was for the non-signatory to be a party to the agreement and its arbitration clause. Agency: A non-signatory can be bound to an arbitration agreement by agency principles, i.e. an agent who signs an agreement acting on behalf of a principal binds the principal to the agreement. In this connection, relevant concepts under the law of agency include actual authority (express or implied); apparent authority; and ratification. © Darius Chan. Kindly do not reproduce or distribute without prior permission. 14 © Darius Chan 23 July 2024 Assignment: An assignment refers to the transfer of property or rights to another party. Where a contract containing an arbitration agreement is assigned, the third party will ordinarily not have signed the contract or arbitration agreement, but is nevertheless bound. Group of companies’ doctrine: The doctrine allows, under certain limited conditions, the extension of an arbitration agreement signed only by one or some of the companies of a group also to the non-signatory companies of the same group. The oft-cited case on this doctrine is Dow Chemical v ISOVER Saint Gobain, which is an ICC arbitral decision, but it is often overlooked that, in this case, the non- signatory itself invoked the arbitration clause. In Manuchar Steel Hong Kong v Star Pacific Line SGHC 181, the Singapore High Court expressed doubts about the applicability of this doctrine under Singapore law. Estoppel: Under the doctrine of estoppel, a party is “barred by considerations of good faith and equity from acting inconsistently with its own statements or conduct”. A party is prevented from denying representations arising out of words or deeds on which another party has relied to its detriment. However, such a doctrine appears to be very narrow under Singapore law as it presently stands: o The doctrine applies to estop one party (A) from arguing that another party (B) to the arbitration agreement needs to commence a separate arbitration for B’s claims against A, in circumstances where (i) there is an ongoing arbitration commenced by party C against party A on the same facts as party B’s claim; and (ii) on a proper interpretation of the relevant contract party B is a party to the arbitration agreement: see Jiang Haiying v Tan Lim Hui SGHC 42. o The Singapore courts have considered, but not yet approved, of the wider approach to applying equitable estoppel to non-signatories endorsed in certain US cases: see Parmod Kumar Verma v Unique Food Partners Pte Ltd SGDC 254 2.2.2 Joinder © Darius Chan. Kindly do not reproduce or distribute without prior permission. 15 © Darius Chan 23 July 2024 47 Joinder and intervention are opposite sides of the same coin and fundamentally relate to consent. Joinder refers to the situation where an existing party seeks to add a new party to an arbitration proceeding and to have the third party bound by its outcome. Although the MAL, the NYC and most arbitration agreements are silent on the question of joinder, it is addressed in most institutional rules, which give arbitral tribunals the power to consider whether there is at least prima facie consent by the third party to be bound by the arbitration agreement. 2.2.3 Consolidation 48 Consolidation involves the fusion of two or more separate and independently existing arbitrations into one arbitration. The MAL, the NYC and most arbitration agreements are silent on the issue of consolidation, but like the issue of joinder, the consolidation is typically addressed in most institutional rules. 2.3 Subject matter arbitrability 49 The question of subject matter arbitrability concerns whether the subject matter of a dispute is capable of determination by arbitration. 50 For arbitrations seated in Singapore, any disputes which the parties have agreed to submit to arbitration under an arbitration agreement is arbitrable (subjective arbitrability) unless it is contrary to public policy to do so (objective arbitrability) (s 11(1) IAA). 2.3.1 Subjective arbitrability 51 Subjective arbitrability concerns whether the parties have agreed to arbitrate certain claims or issues. This involves interpreting the arbitration agreement, including phrases such as “in connection with” or “arising out of” the contract. [Note: must be “commercial” for the MAL and IAA to apply; see footnote to Art 1 MAL]. In Singapore, the SGCA has held that arbitration clauses should be construed widely such that all manner of claims relating to the contract (whether based on tort or contract; whether common law or statutory), should be regarded as falling within their scope unless there © Darius Chan. Kindly do not reproduce or distribute without prior permission. 16 © Darius Chan 23 July 2024 was a good reason to conclude otherwise (Larsen Oil v Petroprod SGCA 21 at ). The construction of an arbitration clause should start from the assumption that the parties, as rational businessmen, are likely to have intended any dispute arising out the relationship into which they have entered to be decided by the same tribunal (Premium Nafta v Fili Shipping applied in Larsen v Petroprod at ). 52 In Larsen, despite the SGCA’s broad approach towards the construction of arbitration clauses, it found that the company’s pre-insolvency management was unlikely to have contemplated including avoidance claims within the scope of an arbitration agreement (at ). Even if so contemplated, those claims were non-arbitrable as they were in essence insolvency claims (at ).]. 2.3.2 Objective arbitrability 53 Objective arbitrability concerns matters the law permits parties to resolve by arbitration. A dispute is not arbitrable if it is contrary to public policy (s 11(1) IAA). In Singapore, no specific subjects have been identified by statute as being or as not being arbitrable. However, it is generally accepted that issues which may have public interest elements may not be arbitrable, e.g. citizenship, legitimacy of marriage, grants of statutory licences, validity of registration of trademarks or patents, copyrights, winding-up of companies (Aloe Vera of America v Asianic Food SGHC 78 at ). 54 In Anupam Mittal v Westbridge Ventures SGCA 1, the Singapore Court of Appeal held that “public policy” for the purposes of s 11 of the IAA includes foreign public policy. The SGCA thus adopted a novel “composite” approach in determining the arbitrability of a dispute at the pre-award stage. In the first instance, the arbitrability of a dispute is determined by the law that governs the arbitration agreement. If it is a foreign governing law and that law provides that the subject matter of the dispute cannot be arbitrated, the Singapore court will not allow the arbitration to proceed pursuant to s 11. Second, 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. 2.3.3 Consequences of non-arbitrable disputes © Darius Chan. Kindly do not reproduce or distribute without prior permission. 17 © Darius Chan 23 July 2024 55 If a dispute is not arbitrable, an award on the dispute can be set aside (Art 34(2)(b)(i) MAL) or the courts may refuse to enforce it (Art V(2)(a) NYC; s 31(4)(a) IAA). 2.4 Pathological arbitration clauses 2.4.1 General approach 56 The term “pathological clause” is used to describe ambiguous or unclear arbitration agreements which contain defects liable to disrupt the smooth progress of the arbitration. 57 In Singapore, the SGCA has held that the concept of a “pathological clause” fulfilled a descriptive function rather than a prescriptive function, and labelling a clause as “pathological” did not automatically invalidate it as an agreement. Rather, “it depends on the nature or substance of the defect, or whether the defect was curable” (Insigma Technology v Alstom Technology SGCA 24 at ). In general, tribunals or courts will rely on the principle of effective interpretation to salvage the arbitration clause by restoring the true intention of the parties. However, the defect may not be curable if it is “impossible to infer an intention which is sufficiently coherent and effective to enable the arbitration to function” (Insigma at ). 58 Examples of defects: Naming the arbitral institution incorrectly or identifying a non-existent institution. Empowering one institution to administer another institution’s rules. Referring to an arbitral institution by its location rather than by its name. Failing to indicate clearly that the award is final and binding. Identifying a specific arbitrator who has died or become unable to act thereafter. Drafting terms that are inherently contradictory to other terms in the arbitration agreement. 2.4.2 Naming the arbitral institutions incorrectly or identifying a non-existent situation © Darius Chan. Kindly do not reproduce or distribute without prior permission. 18 © Darius Chan 23 July 2024 59 An arbitration agreement is not nullified simply because the parties chose the rules of a non-existent organisation. In such a case, the court may consider whether the dominant purpose of the agreement was to settle the disputes by arbitration. If it was, the court may direct arbitration before such tribunal as it determines to be the most appropriate in the circumstances (Lucky-Goldstar v Ng Moo Kee 2 HKLR 73 per Kaplan J). The court may determine through interpretation of the parties’ intentions a particular arbitration institution to apply. In Lucky-Goldstar, the arbitration clause selected the rules of procedure of the ‘International Commercial Arbitration Association’, which was a non-existent organisation. The Defendant sought a stay of proceedings and the Plaintiff argued that there was no binding arbitration agreement on ground of a common mistake that such an institution did not exist or was ‘inoperative or incapable of being performed’. Kaplan J granted the stay of proceedings, holding that the arbitration agreement was not nullified just because parties chose the rules of a non-existent organisation. 60 Another example is Re Shanghai Xinan Screenwall Building & Decoration Co Ltd SGHC 58 where the Singapore High Court interpreted a potentially defective arbitration clause, which selected the “China International Arbitration Center” (a non- existent institution), as an agreement to CIETAC arbitration and therefore upheld an award issued by a CIETAC Tribunal. The Court held that, provided the parties objectively intended to refer to the same arbitral institution (rather than intended different arbitral institutions, or it being impossible to tell either way), the validity of the arbitration agreement would not be affected. 61 A high watermark can be seen in the case of KVC Rice Intertrade Co Ltd v Asian Mineral Resources SGHC 32, where the relevant arbitration clauses in two contracts provided by “… arbitration as per Singapore Contract Rules” and “… arbitration as per Indian Contract Rules”. The Singapore High Court characterised the arbitration clauses as “bare” arbitration clauses which do not specify either the place of arbitration or the means of appointing arbitrators. The Court observed that the enforcement of “bare” arbitration clauses would give rise to practical difficulties over how the arbitral tribunal would be appointed. Be that as it may, the Court upheld the arbitration clauses by finding that the statutory appointing authority in the IAA, namely © Darius Chan. Kindly do not reproduce or distribute without prior permission. 19 © Darius Chan 23 July 2024 the President of the SIAC, has the power under Art 11(3) MAL to appoint the tribunal even in cases where the place of arbitration is unclear or not yet determined. 2.4.3 Empowering one’s institution to administer another institution’s rules 62 The Singapore Court of Appeal has held that, in general, there is no objection in principle to providing for a hybrid arbitration, namely one administered by one arbitration institution but governed by the rules (adapted as necessary) of another arbitration institution if the administering institution could arrange for organs to carry out functions similar to those performed by the other arbitration institution (Insigma Technology v Alstom Technology SGCA 24 at ). 63 In Insigma, the arbitration clause provided that “… such disputes shall be resolved… before the Singapore International Arbitration Centre in accordance with the Rules of Arbitration of the International Chamber of Commerce… the proceedings shall take place in Singapore”. The arbitral tribunal found that it was workable because the SIAC (in a letter to the tribunal) had indicated which bodies and individual officers within the SIAC would perform the roles of the functionaries described under ICC rules. The Singapore High Court upheld the tribunal’s award. The Singapore Court of Appeal affirmed the decision below. 64 In HKL Group v Rizq SGHCR 5, the Court had to deal with an arbitration agreement which provided as follows. “Any dispute shall be settled by amicable negotiation between two Parties. In case both Parties fail to reach amicable agreement, all dispute out of in connection with the contract shall be settled by the Arbitration Committee at Singapore under the rules of The International Chamber of Commerce of which awards shall be final and binding both parties. Arbitration fee and other related charge shall be borne by the losing Party unless otherwise agreed”. 65 However, no entity called the “Arbitration Committee” exists in Singapore. The Singapore High Court upheld the arbitration agreement, but on the condition that “parties obtain the agreement of the SIAC or any other arbitral institution in Singapore to conduct a hybrid arbitration applying the ICC rules, with liberty to apply should they fail to secure any such agreement. [The Court] will hear parties on the issue of the © Darius Chan. Kindly do not reproduce or distribute without prior permission. 20 © Darius Chan 23 July 2024 imposition of any other conditions”. The Court reached this decision even though after the Insigma case the ICC amended its institutional rules to clarify that the ICC is the only body authorised to administer arbitrations under the ICC Rules. 66 Notwithstanding these cases, it is good practice to avoid using hybrid arbitration clauses, namely, clauses that provide for arbitral institution to administer the arbitration using the rules of another institution. Even if the clause maybe upheld in Singapore, any consequent award may not be enforceable in another jurisdiction. 2.5 Drafting arbitration clauses 67 Try as much as possible to stick to the model clauses promulgated by the different arbitral institutions (these clauses are usually accessible on their websites). If you are free drafting, essential elements to include: Certainty regarding the identity of the parties. Certainty that the parties have agreed to submit their disputes exclusively to arbitration. Certainty as to the subject matter or scope of arbitrable disputes. Certainty of the seat of arbitration. Certainty as to the arbitral institution administering the arbitration, if any. Certainty as to number of arbitrators—avoid having a panel of two arbitrators. Stipulate the language of proceedings. Stipulate the governing law of the arbitration agreement. Stipulate to what extent parties agree to go for expedited arbitration (which is a feature available under certain institutional rules). 2.5.1 Clear obligation to arbitrate required 68 The drafting of optional arbitration clauses should be avoided. Arbitration agreements should provide that the dispute shall or will be referred to arbitration. 69 If an arbitration agreement provides that a dispute may be referred to arbitration, whether there is a clear obligation to arbitrate is arguable. Some jurisdictions have © Darius Chan. Kindly do not reproduce or distribute without prior permission. 21 © Darius Chan 23 July 2024 equated the term “may” to “shall’’ such that arbitration clauses which state that parties “may refer to arbitration” have been interpreted to mean that parties are obliged to do so (China State Construction v Madiford 1 HKC 320)]. 70 What if the clause states that the parties “can” refer the dispute to arbitration? In Guangdong Agriculture v Conagra International 1 HKLR 113, the Hong Kong High Court (per Barnett J) upheld such a clause. The clause stated that “All disputes… SHALL be settled by amicable negotiations. In case no settlement can be reached, the case under the dispute CAN then be submitted to… arbitration”. Construing the entire clause as a whole, the court found that the parties plainly agreed to settle any dispute by arbitration. 2.6 Stay of court proceedings (enforcement of arbitration agreement) 2.6.1 Staying of court proceedings in favour of arbitration 71 Where any party to an arbitration agreement institutes any proceedings in any court in breach of the arbitration agreement, the other party may apply to the court to stay the proceedings and refer the parties to arbitration (Art II(3) NYC; Art 8(1) MAL; s 6(1) IAA). 72 The application to stay the court proceedings must be done not later than the submission of the first statement on the substance of the dispute (Art 8(1) MAL). This may be done at any time after appearance and before delivering any pleading or taking any other step in the proceedings (s 6(1) IAA). 73 Under the IAA, the court shall stay the proceedings unless it finds that the arbitration agreement is null and void, inoperative or incapable of being performed (Art II(3) NYC; Art 8(1) MAL; S 6(2) IAA). 74 But in the case of domestic arbitration, the court retains some discretion to refuse to stay court proceedings in favour of a domestic arbitration under s 6(2) of the AA. Specifically, it may do so when it is satisfied that there is sufficient reason why the matter should not be referred to arbitration in accordance with the arbitration agreement © Darius Chan. Kindly do not reproduce or distribute without prior permission. 22 © Darius Chan 23 July 2024 or if the applicant seeking a stay was not ready and willing to do all things necessary for the proper conduct of the arbitration (s 6(2) AA; CSY v CSZ SGCA 43). 75 According to the Singapore Court of Appeal in CSY, in each case, the court must scrutinise the myriad factual circumstances to determine how best to manage its processes and ensure the efficient and fair resolution of the entire dispute. The term “sufficient reason” captures a broad range of factors (Fasi Paul Frank v Speciality Laboratories Asia Pte Ltd 1 SLR(R) 1138 at ). Ultimately, the factors invoked will be weighed against and will have to be found to outweigh the significant consideration that the parties had voluntarily bound themselves to arbitrate and ought therefore to be held to their agreement (Sim Chay Koon v NTUC Income Insurance Co- operative Ltd 2 SLR 871 at –). Amongst others, the following factors are also instructive in the inquiry: (a) the existence of related actions and disputes, some of which are governed by an arbitration agreement and others which are not; (b) the overlap between the issues in dispute such that there is a real prospect of inconsistent findings; (c) the likely shape of the process for the resolution of the entire dispute; (d) the likelihood of injustice in having the same witnesses deal with the same factual issues before two different fora; (e) the likelihood of disrepute to the administration of justice ensuing from the fact that overlapping issues may be differently determined in different actions; (f) the relative prejudice to the parties; and (g) the possibility of an abuse of process. 76 Some courts may refuse to grant a stay if it finds that there is, on the balance of probabilities, no dispute between the parties or that there is no valid and binding arbitration agreement between the parties. In Singapore, the courts will only conduct a prima facie examination of whether a dispute which is subject to the arbitration agreement exists and whether there is a valid and binding arbitration agreement between the parties. A mere denial of liability or of the quantum claimed, even in circumstances where no defence exists, will be sufficient to find a dispute for the purpose of s 6 IAA (or Art 8 MAL) (Dalian Hualiang Enterprise v Louis Dreyfus Asia © Darius Chan. Kindly do not reproduce or distribute without prior permission. 23 © Darius Chan 23 July 2024 SGHC 161 at ; Tjong Very Sumito v Antig SGCA 41). However, no dispute will exist if there has been a clear and unequivocal admission of liability and quantum. 77 When an application to stay court proceedings is made, arbitral proceedings may nevertheless be commenced or continued, and an award may be made, while the issue is pending before the court (s 8(2) MAL). 2.6.2 Attaching conditions 78 In Singapore, the court can order a stay of proceedings under such terms of conditions as it thinks fit (s 6(2) IAA), or impose any interim or supplementary orders as it thinks fit (s 6(3) IAA). The court has an unfettered discretion to impose terms and conditions upon a stay of court proceedings in favour of arbitration. However, the courts will generally be slow to interfere in the arbitration process (The “Duden” SGHC 149 at , ). 2.6.3 Prima facie finding 79 In an application to stay court proceedings in favour of arbitration, to what extent does the court consider the existence, scope and validity of the arbitration agreement? Should the court engage in a prime facie review, or make a definitive ruling based on a balance of probabilities? 80 In Malini v Ventura SGHC 225, it was argued that in cases where one party seeking the stay is contesting the very existence of an arbitration agreement, the court should make a definitive ruling on the existence of the arbitration agreement based on a balance of probabilities (which is applied under English law). The Singapore High Court disagreed and preferred the prima facie approach. 81 The Singapore Court of Appeal has since held, after a comprehensive review, that the court’s examination of whether the arbitral tribunal has jurisdiction is prima facie only because this is properly a matter within the jurisdiction of the arbitral tribunal (Tomolugen v Silica Investors 1 SLR 373). For instance, this means that, as long © Darius Chan. Kindly do not reproduce or distribute without prior permission. 24 © Darius Chan 23 July 2024 as it is arguable that the dispute falls within the terms of the arbitration agreement or that a party to the legal proceedings is a party to the arbitration agreement, a stay of proceedings should be granted so that the matters can be determined by the arbitral tribunal (Dalian Hualiang v Louis Dreyfus SGHC 161 at ). 82 In Tomolugen, the Singapore Court of Appeal laid down the following test under the IAA. A court hearing a stay application should grant a stay in favour of arbitration if the applicant is able to establish a prima facie case that: (a) there is a valid arbitration agreement between the parties to the court proceedings; (b) the dispute in the court proceedings (or any part thereof) falls within the scope of the arbitration agreement; and (c) the arbitration agreement is not null and void, inoperative or incapable of being performed. 83 Once this burden has been discharged by the party applying for a stay, the court should grant a stay and defer the actual determination of the arbitral tribunal’s jurisdiction to the tribunal itself. The court will only refuse to grant a stay when it is clear on the evidence placed before it that one or more of the above three requirements have not been satisfied. The arbitral tribunal’s determination of its jurisdiction will nonetheless remain subject to overriding court supervision in the form of an appeal under s 10(3) of the IAA against the arbitral tribunal’s jurisdictional ruling, or in proceedings for setting aside or refusing enforcement of the award rendered by the arbitral tribunal (see, respectively, s 24 of the IAA and Art 34 of the MAL, and s 31 of the IAA). 84 For completeness, the SGCA in Tomolugen also decided the minority oppression claims are arbitrable as a matter of Singapore law. © Darius Chan. Kindly do not reproduce or distribute without prior permission. 25 © Darius Chan 23 July 2024 3. Jurisdiction of arbitral tribunal 85 An arbitral tribunal’s jurisdiction derives from the agreement to arbitrate. The consensual basis of arbitration means that a party can attempt to contest arbitral jurisdiction by denying the agreement to arbitrate. 86 Jurisdictional objections can be absolute (e.g. no capacity, illegal, incapable of being performed) or partial (e.g. particular issue falls outside scope of arbitration clause). 3.1 Options to challenge 87 A party who wishes to contest jurisdiction of the arbitral tribunal has the following options. 88 Participate fully in the arbitration and raise objections directly with the arbitral tribunal. Tribunals are empowered to decide on their own jurisdiction under the competence- competence rule, either as a stand-alone preliminary issue, or together with the merits of the case. Under the MAL, a tribunal’s decision that it possesses jurisdiction is always subject to review by the courts, at two stages. The first stage is after the tribunal decides the jurisdiction as a preliminary issue. The second stage is after the tribunal releases its final award. 89 By way of illustration, assuming the seat is Singapore: a. If the tribunal decides that it has jurisdiction as a preliminary decision, the objecting party can make an application under s 10(3) of the IAA for the Singapore courts to review the tribunal’s decision on jurisdiction. i. It has been held in obiter that if the objecting party does not make an application under s 10(3) of the IAA, that party loses the right to make a setting aside challenge on any eventual award subsequently on the same jurisdictional objection: PT First Media v Astro Nusantara SGCA 57. © Darius Chan. Kindly do not reproduce or distribute without prior permission. 26 © Darius Chan 23 July 2024 ii. Nevertheless, subject to any waiver an award debtor always retains its rights to resist enforcement of the award wherever the award creditor may try to enforcement the award: PT First Media v Astro Nusantara SGCA 57. b. If the tribunal does not decide the issue of jurisdiction as a stand-alone preliminary issue and decides that it has jurisdiction in an award that also deals with the merits of the case, s 10(3) is not triggered. The objecting party can apply to set aside the award under Art 34 MAL, or resist enforcement the award wherever the award creditor may try to enforcement the award. 90 Refuse to participate in the arbitration. The party can wait for the arbitral tribunal’s final award then (i) seek to have that award set aside at the seat on the basis that the tribunal did not have jurisdiction to make the award; or (ii) wait for the claimant to commence proceedings to enforce the award then resist enforcement for the same reason: Rakna Arakshaka Lanka Ltd v Avant Garde Maritime Services SGCA 33 (overruling the SGHC). Although a respondent who protests a tribunal’s jurisdiction has the right not to participate in the arbitration, practically speaking, this is risky. If its jurisdictional plea fails, the non-participating party will be bound by an award made in circumstances where its position was never argued before the arbitral tribunal. 91 Participate in the arbitration and ask the tribunal to determine the jurisdictional objections as a preliminary issue. Boycott the arbitration if the tribunal decides, as a preliminary issue, that the tribunal has jurisdiction. For the same reasons above, this tactic is risky. Indeed, case law is presently unclear what if any recourse a boycotting party has against the tribunal’s eventual award. 92 Commence litigation. In such a case, it is expected that the opposing party will typically contest the court’s jurisdiction by applying for a stay of court proceedings in favour of arbitration. Nevertheless, the opposing party could decide to accept the domestic court’s competence (e.g. if it argues its defence before the court without objecting to the court’s jurisdiction), and waive its right to invoke the arbitration agreement in connection with the dispute. 3.2 Doctrine of competence-competence © Darius Chan. Kindly do not reproduce or distribute without prior permission. 27 © Darius Chan 23 July 2024 93 Under the doctrine of competence-competence, an arbitral tribunal may rule on its own jurisdiction, including any objections with respect to the existence or validity of the arbitration agreement (Art 16(1) MAL). 3.3 Validity of arbitration agreement (doctrine of separability) 94 The jurisdiction of the arbitrator is put in question if a party contends that the arbitration agreement is invalid. 95 Separate from the doctrine of competence-competence which deals with the power of the tribunal, under the doctrine of separability, an arbitration clause in a contract is treated as an agreement independent of the other terms of the contract (Art 16(1) MAL). 96 The validity of the arbitration clause does not depend upon the validity of the other parts of the contract in which it is contained. This allows a tribunal to declare a contract invalid and yet retain its jurisdiction to decide a dispute as to the consequences of such invalidity (Ferris v Plaister 34 NSWLR 474 per Kirby J). The arbitration agreement is treated as a distinct agreement that can be void or voidable only on grounds which relate directly to the arbitration agreement (Premium Nafta Products v Fili Shipping UKHL 40 at , per Lord Hofmann). This doctrine of separability has been applied by the courts in Singapore (Govt. of Philippines v Philippine International Air Terminals SGHC 206). 97 Practically speaking, this means that if one wants to challenge the validity of the arbitration clause, one cannot simply allege the invalidity of the entire contract—the challenge needs to be targeted at the arbitration clause. 98 There was previously debate on the extent to which the doctrine of separability should apply when the allegation of the complainant goes towards contract formation, as opposed to contract validity. The English courts appear to take the position that the doctrine does not apply when the complaint goes towards whether the contract is even formed in the first place6. The Singapore Court of Appeal recently endorsed the same 6 DHL Project & Chartering Ltd v Gemini Ocean Shipping Co Ltd EWCA 1555. © Darius Chan. Kindly do not reproduce or distribute without prior permission. 28 © Darius Chan 23 July 2024 proposition in COT v COU SGCA 31 at , namely, that the separability principle only applies to questions of contractual validity and not to contractual formation. 3.4 Process of objecting to tribunal’s jurisdiction 3.4.1 Timing of objection 99 If a party wishes to object to the tribunal’s jurisdiction, he must do so not later than the submission of the statement of defence (Art 16(2) MAL). A plea that the tribunal is exceeded its jurisdiction must be raised as soon as the matter alleged to be beyond the scope of its authority is raised during the arbitral proceedings. However, the arbitral tribunal may admit a late plea if it considers the delay justified (Art 16(2) MAL). 100 A party is not precluded from raising a plea that the arbitral tribunal does not have jurisdiction by the fact that he appointed, or participated in the appointment of an arbitrator (Art 16(2) MAL). 3.4.2 Failure to object 101 If the party has knowledge of the circumstances and yet proceeds with the arbitration without stating his objection to such non-compliance without undue delay or within the time limit provided, he shall be deemed to have waived his right to object (Art 4 MAL). 102 Alternatively, if a non-signatory participates in the arbitration and fails to object to a tribunal’s jurisdiction within the time limit specified, its silence may amount to entering into an arbitration agreement ( s 2A(6) IAA: there shall be deemed to be an effective arbitration agreement where a party asserts the existence of an arbitration agreement in a pleading and the assertion is not denied). 103 However, commencing an action in court specifically in relation to proceedings for temporary injunctive relief or interim measures does not amount to a waiver of the arbitration agreement (Art 9 MAL: it is not incompatible with an arbitration agreement for a party to request from a court an interim measure of protection). © Darius Chan. Kindly do not reproduce or distribute without prior permission. 29 © Darius Chan 23 July 2024 3.4.3 Preliminary question or award on the merits? 104 The arbitral tribunal may rule on a jurisdictional objection either as a preliminary question thus bifurcating the proceedings, or in an award on the merits (Art 16(3) MAL; s 10(3) IAA). 105 The advantage of deciding jurisdiction separately from the merits is that it potentially avoids long and costly proceeding on the merits when it is uncertain whether the arbitral tribunal possesses jurisdiction. It may make sense to bifurcate proceedings especially if the jurisdictional issues involved can be segregated from the merits of the case. On the other hand, if the jurisdictional objections are frivolous (which is not uncommon in attempted dilatory tactics), this militates against bifurcation which would only delay progression to the merits of the case. 3.4.4 Appeal to tribunal’s jurisdictional ruling 106 MAL: Mechanism to seek immediate review under Art 16(3): If the arbitral tribunal rules as a preliminary question that it has jurisdiction, any party may apply to the court at the seat of the arbitration within 30 days to decide the matter, which decision is subject to no appeal (Art 16(3) MAL). While such a request is pending, the arbitral tribunal may continue the arbitral proceedings and make an award (Art 16(3) MAL). Setting aside / enforcement proceedings: A tribunal’s preliminary decision on jurisdiction is not liable to be set aside under Art 34 MALbecause it is not an award. However, an award on the merits may be set aside (or resisted when enforced) on the ground that the tribunal lacked jurisdiction (Art 34(2) MAL; Art V NYC). Negative jurisdictional decisions: (1) The MAL does not provide for recourse against an arbitral tribunal’s decision that it lacks jurisdiction. In other words, if the tribunal decides that it has no jurisdiction, the court shall not second guess that decision. (2) Further, a negative determination on jurisdictional is similarly not an © Darius Chan. Kindly do not reproduce or distribute without prior permission. 30 © Darius Chan 23 July 2024 award as it is not a decision on the substance of the dispute. If jurisdictional decisions are not “awards”, they cannot be set aside under Art 34 MAL (PT Asurani v Dexia Bank SGCA 41 at ). 107 Singapore’s IAA: IAA slightly modifies the MAL’s mechanism of curial review under Art 16(3). In Singapore, if the tribunal makes a ruling on jurisdiction as a preliminary issue, then regardless of whether the arbitral tribunal makes a positive or negative jurisdictional ruling, any party may, within 30 days after receiving notice of that ruling, apply to the Singapore High Court to decide the matter (s 10(3) IAA). An appeal from the decision of the High Court can be made to the appellate court only with the leave of the appellate court (s 10(4) IAA). There is no appeal if the appellate court refuses to grant leave to appeal (s 10(5) IAA). 3.4.5 Scope of court review of tribunal’s jurisdictional decisions 108 Whenever a court at the seat of arbitration (typically called the curial court) reviews an arbitral tribunal’s decision on jurisdiction (whether under s 10(3) IAA or at the setting aside stage), the court decides the issue de novo and it is not bound by the tribunal’s decision. The court’s jurisdiction to decide the jurisdiction of an arbitral tribunal is an original jurisdiction and not an appellate one. This is implied from the wording of Art 16(3) MAL which provides for the court to “decide the matter” (Insigma Technology v Alstom Technology SGHC 134 at ; PT First Media v Astro Nusantara SGCA 57). The court is at liberty to consider the material before it, unfettered by any principle limiting its fact-finding abilities (AQZ v ARA 2 SLR 972 at ). 109 To what extent can parties adduce further evidence before the Courts when seeking curial review of a tribunal’s decision on jurisdiction? There is no definitive guidance from the Singapore courts yet, with AQZ v ARA suggesting a less restrictive approach, compared to Laos v Sanum SGHC 15 applying a stricter approach mirroring the Ladd v Marshall test in civil litigation. Most recently, in COT v COU SGHC 69 at , it was suggested that the Court has discretion to decide what evidence it will receive, but a party does not have the right to insist on a full rehearing of the evidence © Darius Chan. Kindly do not reproduce or distribute without prior permission. 31 © Darius Chan 23 July 2024 adduced before the tribunal. The discretion extends to what evidence the Court will receive, whether the Court is content to rely on the evidence presented to the tribunal or wishes to receive evidence anew and whether the Court receives the evidence on affidavit alone or viva voce, with or without cross-examination. © Darius Chan. Kindly do not reproduce or distribute without prior permission. 32 © Darius Chan 23 July 2024 4. Constitution and challenge of arbitral tribunal 4.1 Constitution of tribunal 4.1.1 Number of arbitrators 110 Parties are free to determine the number of arbitrators (Art 10(1) MAL). If the number of arbitrators is not determined by the parties: The default number of arbitrators is three (Art 10(2) MAL). Notwithstanding Art 10(2) MAL, there shall be a single arbitrator (s 9 IAA). 4.1.2 Procedure of appointment 111 Parties are free to agree on a procedure of appointing the arbitrator(s) (Art 11(2) MAL). This is a matter usually addressed by institutional rules. 112 Failing such agreement: In an arbitration with 3 arbitrators: o Each party shall appoint one arbitrator, and the parties shall by agreement appoint the third arbitrator (s 9A(1) IAA). If the parties fail to agree on the appointment of the third arbitrator within 30 days of the receipt of the request to do so, the appointment shall be made by the appointing authority (s 9A(2) IAA). In an arbitration with a sole arbitrator: o If the parties are unable to agree on the arbitrator, he shall be appointed by the relevant authority specified in Art 6 (Art 11(3)(b) MAL) Appointing authority: o In Singapore, the High Court is the competent court to perform the functions referred to in Art 6 of the MAL, while the President of the SIAC Court has been designated as the authority competent to perform the functions under Art 11(3) and (4) of the MAL (s 8(1), (2) IAA). © Darius Chan. Kindly do not reproduce or distribute without prior permission. 33 © Darius Chan 23 July 2024 4.2 Challenging arbitrators 113 Steps: Step 1: What is the ground for challenge? ➔ Test of ‘reasonable suspicion ➔ Look at the IBA Guidelines on Conflicts of Interest in International Arbitration Step 2: What is the challenge procedure under the institutional rules or lex arbitri? 4.2.1 Grounds for challenge 114 An arbitrator has an ongoing duty to disclose any circumstances likely to give rise to justifiable doubts as to his impartiality or independence (Art 12(1) MAL). An arbitrator may be challenged if circumstance exist that give rise to “justifiable doubts as to his impartiality or independence, or if he does not possess qualifications agreed to by the parties” (Art 12(2) MAL). However, a party may challenge an arbitrator nominated by him only for reasons of which he becomes aware after the appointment was made (Art 12(2) MAL). 115 An objection must be made as soon as the grounds are known to the party seeking the challenge. Failure to do so may constitute a waiver (Art 4 MAL). 4.2.2 Test for impartiality and independence 116 In Singapore, the applicable test is one of “reasonable suspicion”. The concern is not whether there is a real likelihood or possibility of bias, but simply whether a reasonable man without any inside knowledge might conclude that there was an appearance of it (Re Shankar Alan SGHC 194 at , ). 117 A ground which may give rise to impartiality are instances where an arbitrator has private contact with one party or appears to have some personal correspondence from that party. While that there is no absolute rule against an arbitrator corresponding directly with the parties, this should only be done in very exceptional circumstances (Turner (East Asia) v Builders Federal (Hong Kong) SGHC 47 at ). © Darius Chan. Kindly do not reproduce or distribute without prior permission. 34 © Darius Chan 23 July 2024 118 Parties can rely on Art 12(2) of the MAL to challenge the appointment of an arbitrator if “circumstances exist that give rise to justifiable doubts as to his impartiality or independence, …. A party may challenge an arbitrator appointed by him, or in whose appointment he has participated, only for reasons which he becomes aware after the appointment has been made.”. 119 The Singapore High Court affirmed (in PT Central Investindo v Francisus Wongso and ors and anor matter SGHC 190 (“PT Central Investindo”)) that the test under this particular provision is an objective one, and the court is to find circumstances that exist which give rise to justifiable doubts. Once such doubts have been found, the applicant need not prove the existence of actual bias. 120 Actual bias is one of the three forms of bias considered by the Singapore courts – (i) actual bias, (ii) imputed bias, or (iii) apparent bias. Findings of an actual bias will obviously disqualify a person from sitting in judgment. 121 The second form of bias is imputed bias which arises where a judge or arbitrator may be said to be acting in his own cause (nemo judex in sua causa) and this happens if he has, for instance, a pecuniary or proprietary interest in the case. In such a case, disqualification is certain without the need to investigate whether there is a likelihood or even suspicion of bias. 122 The third form of bias is apparent bias, with the test to be applied being the “reasonable suspicion test”, i.e. whether a reasonable and fair-minded person with knowledge of all relevant facts would entertain a reasonable suspicion that the circumstances leading to the arbitral award might result in the arbitral proceedings being affected by apparent bias if the arbitrator was not removed (PT Central Investindo, at ). 123 In BYL and ors v BYN SGHC(I) 6 (“BYL v BYN”), the Singapore Court analogised the test to be applied in order to determine apparent bias in arbitrators to that applied in court proceedings, namely a test of reasonable suspicion. This involves an assessment of whether there are circumstances which would give rise to a reasonable suspicion or apprehension in a fair-minded reasonable person with knowledge of the © Darius Chan. Kindly do not reproduce or distribute without prior permission. 35 © Darius Chan 23 July 2024 relevant facts that the tribunal may be biased and that a fair hearing may not be possible as a result. The test applies to applications to remove an arbitrator for bias under Art 13(3) of the MAL and applications to set aside an arbitral award for apparent bias under section 24(b) of the IAA and Art 34(2) of the MAL (BYL v BYN, at ). 124 The reasonable suspicion test is applied objectively. The hypothetical reasonable observer is presumed to be a lay-person who is (1) informed of the relevant facts and able to consider them in their proper context, (2) not wholly uninformed and uninstructed about the law in general or the issues to be determined in the proceedings, (3) aware of the traditions of integrity and impartiality that persons who exercise adjudicative functions generally have to uphold, and (4) fair-minded in the sense of being neither complacent nor unduly sensitive or suspicious. 125 A reasonable suspicion or apprehension arises when the hypothetical reasonable observer would think, from the relevant circumstances, that bias is possible. The belief should not be fanciful and must be capable of articulation by reference to the available evidence. A standard of possibility (as opposed to probability) is adopted to ensure that from the public perspective the administration of justice is beyond reproach (BYL v BYN, at ). 4.2.3 IBA Guidelines on Conflicts of Interest in 2014 126 While they are (typically) not binding and do not have the force of law, the IBA Guidelines on Conflicts of Interest in International Arbitration (2014) are widely referred to by parties, arbitrators, and courts. The IBA Guidelines contain certain “coloured lists” as follows. 127 Non-waivable red list includes situations deriving from the overriding principle that no person can be his or her own judge. Acceptance of such a situation cannot cure the conflict. 1.1 The arbitrator is a legal representative or employee of an entity that is a party in the arbitration. © Darius Chan. Kindly do not reproduce or distribute without prior permission. 36 © Darius Chan 23 July 2024 1.2 The arbitrator is a manager, director or member of the supervisory board, or has a controlling influence on one of the parties or an entity that has a direct economic interest in the award to be rendered in the arbitration 1.3 The arbitrator has a significant financial or personal interest in one of the parties, or the outcome of the case. 1.4 The arbitrator or his or her firm regularly advises the party, or an affiliate of the party, and the arbitrator or his or her firm derives significant financial income therefrom. 128 Waivable red list covers situations that are serious but not as severe. These situations are considered waivable, but only if and when the parties, being aware of the conflict- of-interest situation, expressly state their willingness to have such a person act as arbitrator. Relationship of arbitrator to the dispute. o 2.1.1. Where the arbitrator has given legal advice or provided an expert opinion, on the dispute to a party or an affiliate. o 2.1.2. Arbitrator had a prior involvement in the dispute. Arbitrator’s direct or indirect interest in the dispute o 2.2.1 The arbitrator holds shares, either directly or indirectly, in one of the parties, or an affiliate of one of the parties, this party or an affiliate being privately held. o 2.2.2 A close family member of the arbitrator has a significant financial interest in the outcome of the dispute. Arbitrator’s relationship with the parties or counsel. o 2.3.1 The arbitrator currently represents or advises one of the parties, or an affiliate of one of the parties. o 2.3.3 The arbitrator is a lawyer in the same law firm as the counsel to one of the parties. o 2.3.6 The arbitrator’s law firm currently has a significant commercial relationship with one of the parties, or an affiliate of one of the parties. o 2.3.9. A close family member of the arbitrator has a significant financial or personal interest in one of the parties, or an affiliate of one of the parties. © Darius Chan. Kindly do not reproduce or distribute without prior permission. 37 © Darius Chan 23 July 2024 129 Orange list: The arbitrator has a duty to disclose in such situations. The parties are deemed to have accepted the arbitrator, if, after disclosure, no timely objection is made. Previous services for one of the parties or other involvement in the case o 3.1.1 The arbitrator, has, within the past 3 years, served as counsel for one of the parties, or an affiliate of one of the parties, or has previously advised or been consulted by the party… but the arbitrator and the party… have no ongoing relationship. o 3.1.2 The arbitrator has, within the past 3 years, served as a counsel against one of the parties… Current services for one of the parties o 3.2.1 The arbitrator’s law firm is currently rendering services to one of the parties, or to an affiliate of one of the parties, without creating a significant commercial relationship for the law firm and without the involvement of the arbitrator. Relationship between an arbitrator and another arbitrator or counsel o 3.3.1 The arbitrator and another arbitrator are lawyers in the same law firm. o 3.3.2 The arbitrator and another arbitrator, or the counsel for one of the parties, are members of the same barristers’ chambers. o 3.3.3 The arbitrator was, within the past 3 years, a partner of, or otherwise affiliated with another arbitrator or any counsel in the arbitration. o 3.3.5 A close family member of the arbitrator is a partner or employee of the law firm representing one of the parties, but is not assisting with the dispute. o 3.3.6 A close personal friendship exists between an arbitrator and a counsel of a party. o 3.37 Enmity exists between an arbitrator and counsel appearing in the arbitration. Other circumstances o 3.5.1 The arbitrator holds shares, either directly or indirectly, that by reason of number or denomination constitute a material holding in one of the parties. o 3.5.2 the arbitrator has publicly advocated a position on the case, whether in a published paper, or speech, or otherwise. © Darius Chan. Kindly do not reproduce or distribute without prior permission. 38 © Darius Chan 23 July 2024 130 Green list: a non-exhaustive list of specific situations where no appearance and no actual conflict of interest exists from an objective point of view. The arbitrator has no duty to disclose situations falling within the green list. Previously expressed legal opinions. o 4.1.1 The arbitrator has previously expressed a legal opinion concerning an issue that also arises in the arbitration (but the opinion is not focused on the case). Current services for one of the parties. o 4.2.1 A firm, in association or in alliance with the arbitrator’s law firm, but that does not share significant fees or other revenues with the arbitrator’s law firm, renders services to one of the parties. Contacts with another arbitrator, or with counsel for one of the parties. o 4.3.1 The arbitrator has a relationship with another arbitrator, or with the counsel for one of the parties, through membership in the same professional association, or social or charitable organisation, or through a social media network. o 4.3.2 The arbitrator and counsel for one of the parties have previously served together as arbitrators. o 4.3.3 Arbitrator teaches in the same faculty or school as another arbitrator, etc. o 4.3.4 arbitrator participated in seminars or working parties of a professional organisation with another arbitrator or counsel to the parties. Contacts between the arbitrator and one of the parties. o 4.4.1 The arbitrator has had an initial contact with a party, or their co

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