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Singapore Court Support For International Arbitration And Enforcement Of Awards
March 2010 | Litigation & Arbitration | Arbitration | Litigation Brief
Introduction
Singapore is becoming recognised rapidly as a favoured venue for international arbitration. Arbitration practitioners are seeing increasing instances where international contracts which have no obvious connection with Singapore contain arbitration clauses favouring Singapore as the arbitral venue. The efforts of institutions like the Singapore International Arbitration Centre and Maxwell Chambers, the new purpose built arbitration facility, also demonstrate Singapore's commitment to being one of the major arbitration centres of the world. Arbitration, though, is not just about a country or city promoting itself as a venue. It is about that country or city being seen by others as a participant on a world stage and being supportive generally of international arbitration and its awards. This article discusses Singapore court support for international arbitration and the enforcement of international arbitral awards. It outlines the implementation of the UNCITRAL Model Law in Singapore, the Singapore court's attitude to enforcing international arbitral awards and recent issues concerning the availability of interim relief in support of arbitrations that are not seated in Singapore.
Background to the International Arbitration Act
In 1993, the Law Reform Committee published a report on its review of arbitration laws. In that report the Committee made several recommendations. This included recommendations that the UNCITRAL Model Law should be adopted in Singapore in relation to international arbitrations and that assistance of the courts should be available to enforce interim orders and/or directions made by arbitrators under the Model Law. The report contained a draft International Arbitration Bill, which was by and large adopted by the Singapore Parliament and which became the International Arbitration Act ("IAA").
Enforcement of international arbitral awards
At the time that the IAA was enacted, a case was making its way through the Singapore courts. It involved a Singapore company who had concluded with a Chinese company a sale of goods contract containing a clause referring disputes to arbitration in the People's Republic of China. The Singapore company informed the Chinese company that it could not perform the contract due to force majeure events. This was rejected by the Chinese party and the ensuing dispute was referred to CIETAC. After writing some letters to CIETAC, the Singapore company took no further part in the arbitration. Subsequently, CIETAC made an award in favour of the Chinese company, who then registered the award in Singapore for enforcement. The Singapore company applied to set aside enforcement of the award.
By the time the High Court heard the Singapore company's application to set aside the enforcement of the award, the IAA had come into force. In what might be said to be a demonstration of its international attitude towards support for international arbitration, the Singapore court said that:
| (1) | the actions of an arbitral tribunal, where a respondent had made some representations and then exited the arbitration, would be measured by the procedural rules, norms and mores of the place of arbitration, and it would be inappropriate for Chinese arbitrators to be expected to know English/common law arbitration principles; |
| (2) | if a set of arbitral rules allowed an arbitral tribunal to make an award by default of appearance, then the Singapore court would regard a default award to be consistent with the law and procedure of the arbitration; |
| (3) | the failure to select or identify the governing law of the contract and the applicable procedural law was not fatal to the award because of the availability of the implied choice of law doctrine; and |
| (4) | Singapore public policy did not require the Singapore court to refuse enforcement of the award as the comity of nations required that the awards of foreign arbitration tribunals be given due deference and enforced unless exceptional circumstances exist. |
This first case, Re An Arbitration Between Hainan Machinery Import and Export Corporation and Donald & McArthy Pte Ltd [1996] 1 SLR 34, involving the IAA, now known memorably as Re an Arbitration, set the tone for the outcome of future cases on enforcement of international arbitral awards and presents the context by which subsequent enforcement cases should be understood.
Interim relief for arbitrations not seated in Singapore
Another area by which a country's support for international arbitration is measured is its court’s willingness to grant interim relief in support of international arbitration.
Until recently, it was assumed by practitioners in Singapore that the grant of interim relief by the Singapore court in support of arbitrations that were not seated in Singapore was governed by the principles developed in a series of cases beginning with the House of Lords decision in Siskina v Distos Compania Naviera SA [1979] AC 210 ("Siskina"), where it was said that interim relief would be granted in aid of foreign proceedings if the plaintiff's claim is justiciable in the court asked to grant the interim relief. A claim is justiciable in Singapore if it satisfies two requirements:
| (1) | The court that is asked to grant interim relief must have jurisdiction over the defendant whether by service of process within the country or permitted service of process outside of the country. |
| (2) | The claim must relate to a "legal or equitable right or interest... which is enforceable here by a final judgment of the High Court". |
This principle was expressly approved in Singapore in at least two Court of Appeal cases (Teo Siew Har v Lee Kuan Yew [1999] 4 SLR 560; Karaha Bodas v Pertamina [2006] 1 SLR 112). The word enforceable is stressed because later House of Lords cases (namely, Channel Group v Balfour Beatty [1993] AC 334; Mercedez Benz v Leiduck [1996] 1 AC 284) have decided that it was not necessary for the plaintiff to show that the claim would be enforced invariably or inevitably by the court asked to grant interim relief. This later House of Lords view was also articulated by at least one Singapore High Court judge in Front Carriers v Atlantic & Orient Shipping Group [2006] 3 SLR.
Swift Fortune
On 1 December 2006, the Singapore Court of Appeal ("SCA") decided, in Swift-Fortune Ltd v Magnifica Marine SA [2007] 1 SLR 629 ("Swift-Fortune"), that it had no power under the IAA to grant interim injunctions to support arbitrations that were not seated in Singapore. The IAA provisions, the SCA said, only gave the Singapore court the power to grant interim relief in aid of arbitrations seated in Singapore. The SCA did consider whether the Singapore court had the power to grant interim relief in favour of non-Singapore arbitrations under its general statutory power to grant injunctions in section 4(10) of the Civil Law Act, but made no definitive decision on the issue because it was not a direct issue in the appeal.
Swift-Fortune did not, by its terms, decide that the Singapore court had no power at all to grant interim relief in support of non-Singapore arbitration. However, the case involved an analysis by the highest court in Singapore of the main arbitration statute and gave rise to concern in the local arbitration community that Singapore's position on arbitration might be regarded by casual observers to be parochial and self-serving. It was feared that this might, in turn, dilute the reputation that Singapore had fought so hard to build as an international arbitration centre. Indeed, at one point in 2008, it appeared to be the position that Singapore required a substantive claim to not only be justiciable in Singapore but also required the substantive claim to terminate in a judgment in Singapore before interim relief in support of non-Singapore arbitrations would be granted thereby giving the Singapore court, in effect, no occasion to grant any interim relief for claims that were destined to be determined outside Singapore.
Return to form
Post Swift-Fortune, case law appears to be returning to form. In Multi-Code Electronics Industries (M) Bhd and Another v Toh Chun Toh Gordon and Others [2009] 1 SLR 1000, decided on 3 November 2008, the Singapore High Court appears to have answered the question left open in Swift-Fortune. It decided that the Singapore court has the ability under its general statutory power to grant injunctions in aid of foreign proceedings. It approached the exercise of its general statutory power in a manner consistent with the Siskina case and, in particular, the principle that there is no need to demonstrate that the substantive claim will end in a Singapore judgment before an interim injunction would be granted.
The Multi-Code case was encouraging in that it gave hope that if ever a direct issue arose before the SCA about the Singapore court's powers to issue interim injunctions for non-Singapore arbitration, the SCA would decide the issue in the affirmative. However, the tide of concern was increasing and a view was taken by many that final resolution lay in parliamentary intervention.
Amendments to the International Arbitration Act
On 19 October 2009 the Singapore Parliament passed the International Arbitration (Amendment) Bill to give the Singapore courts the power to grant injunctive relief irrespective of whether the arbitration it supported was seated in Singapore or elsewhere. In his speech on the Bill, the Minister for Law referred to the Swift-Fortune case as the reason for the amendment but also emphasised that the power of the Singapore courts would be restricted to interim measures such as the making of orders for the giving of evidence by affidavit, for the preservation and/or sale and/or evidence-taking of the subject matter of the dispute, to secure the amount in dispute, to prevent dissipation of a party’s assets and for interim injunctions "or any other interim measure". The Minister indicated that there was no proposal to make any provision which might be perceived as increasing the powers of the Singapore courts. So as to remain consistent with "Singapore's policy of minimal curial intervention in arbitration proceedings", the court would not be empowered to make orders on procedural or evidential matters concerning the actual conduct of the arbitration, such as discovery, interrogatories, or security for costs. These procedural matters continued to be solely within the province of the arbitral tribunal.
Conclusion
No man is an island. Singapore, despite its geography, is not an island and is dependent on its relations with others and has throughout its history been keen to preserve its position as a member of the international community. The story of court support for international arbitration and the enforcement of arbitral awards has been, so far, about the importance that Singapore places not only in developing itself as an arbitration venue but in recognising that part of that development lies in the regard that others have of her as a facilitative participant on the world stage of international arbitration.
Long may it continue.
End note: This article was first published in the December 2009 special edition issue of the Singapore Arbitrator, the newsletter of the Singapore International Arbitration Centre. It was adapted from a speech given by the writer on the occasion of the launch of the book by Merkin & Hjarlmarsson, Singapore Arbitration Legislation, Informa 2009 on 21st April 2009.
