The International Arbitration Review: Singapore
Singapore has continued to maintain its prominence regionally and internationally as a go-to dispute resolution hub with its full suite of international dispute resolution institutions, including the Singapore International Arbitration Centre (SIAC), Singapore International Mediation Centre (SIMC) and the Singapore International Commercial Court (SICC). The signing of the Singapore Convention on Mediation is also set to lend further weight to Singapore as a leading venue for dispute resolution. The 2018 Queen Mary University of London and White & Case International Arbitration Survey ranked Singapore as the third most preferred international arbitration seat.2 The 2019 Queen Mary University of London and Pinsent Masons International Arbitration Survey (International Construction Disputes) is a further testament to the statistics, with Singapore among the most common seats that respondents indicated as the preferred choice of seat for construction disputes.3
There are many reasons why Singapore has emerged as one of the world's leading centres for international arbitration. These include its convenient geographical location, which is enhanced by the fact that it is a modern, clean and extremely efficient country with excellent infrastructure and world-class communications. Added to this, the government and courts have a reputation for integrity and competence that are second to none. Moreover, its courts have proven to be knowledgeable about and supportive of international arbitration.
In short, Singapore is seen as a neutral option for international parties looking to resolve their disputes through arbitration in a geographically convenient location supported by a physical, legal and political infrastructure that is sophisticated, skilled and of high integrity. There are few other venues in Asia, if any, which can claim all of these attributes.
i The Singapore legal regime governing arbitration
There are two parallel legal regimes governing arbitrations in Singapore – the Arbitration Act4 (AA), which governs domestic arbitrations, and the International Arbitration Act5 (IAA), which governs international arbitrations.
The AA applies to any arbitration where the place of arbitration is Singapore, in relation to which Part II of the IAA, does not apply.6 In turn, Part II of the IAA applies to international arbitrations as well as to non-international arbitrations where parties enter into a written agreement between themselves providing for Part II of the IAA and the Model Law to apply.7 The criteria for determining whether an arbitration is of international nature is set out in Section 5(2) IAA (read with Section 5(3) IAA). Under Section 5(2) IAA, an arbitration is international if at least one of the parties to the arbitration agreement, at the time of the conclusion of the agreement, has its place of business in any State other than Singapore or if the place of arbitration or any place where a substantial part of the obligations of the commercial relationship is to be performed is outside Singapore.
The IAA adopts the United Nations Commission on International Trade Law (UNCITRAL) Model Law on international commercial arbitration (Model Law), with certain amendments. Section 3(1) of the IAA provides for the Model Law (except for Chapter VIII thereof) to have the force of law in Singapore. Any departures from the Model Law are listed in Part II of the IAA. However, Section 15(1) IAA provides parties an option to opt out of the Model Law and for the AA to apply to their arbitration. In addition, given that Singapore is a signatory to the New York Convention, this Convention is given the force of law by way of Schedule 2 of the IAA.
The AA seeks to align the domestic arbitral regime with the Model Law as well and applies to arbitration proceedings commenced on or after 1 March 2002. The corollary of this is that where there are similar provisions in the AA and the IAA, 'the court is entitled and indeed even required to have regard to the scheme of the [IAA or the Model Law] for guidance in the interpretation of the [AA]'.8 This is consonant with the legislative intent to align the domestic regime under the AA with the Model Law.
The fundamental difference between domestic and international arbitrations is the degree of curial intervention in respect of these two types of arbitrations. In particular, while the Singapore courts adopt the policy of minimal curial intervention, the AA permits additional remedies against an award such as an appeal on a question of law,9 whereas the only recourse against an award under the IAA is a challenge to the award on certain limited grounds including those set out in the Model Law.
ii Arbitral institutions in Singapore
SIAC is a renowned institution both globally and in Asia.10 In 2019, SIAC had a record 479 new case filings with parties from 59 jurisdictions; 95 per cent were administered by SIAC and the remaining 5 per cent were cases in which SIAC was called upon to make appointments of arbitrators in ad hoc arbitrations.11 SIAC's international appeal continues with users from diverse legal systems; while India, China and the US retained top foreign user rankings, Brunei, the Philippines, Thailand, Switzerland, the UAE and the UK were also significant contributors.12 The new procedures introduced by SIAC in recent years have continued to gain traction; a total of 30 applications have been made under the early dismissal procedure by parties since the procedure was first introduced in 2016.13 In 2019, SIAC received 61 requests for the expedited procedure to be utilised, of which 32 were accepted,14 and 10 applications for the appointment of emergency arbitrators, all of which were accepted.15
The Singapore Chamber of Maritime Arbitration (SCMA) was originally established in November 2004 as a carve-out of SIAC.16 In May 2009, due to industry feedback, it was reconstituted and started functioning independently. The aim and focus of the SCMA is to provide a framework for maritime arbitration that is responsive to the needs of the maritime community. SCMA received a total of 41 reported case references in 2019.17 The fourth edition of the SCMA Arbitration Rules is to be launched in 2020.18
The Singapore Institute of Arbitrators (SIArb) is an independent professional body that was established in 1981 and that focuses on the training of arbitration practitioners and arbitrators and the promotion of arbitration in Singapore.19 Of significance is the release in 2018 of guidelines formulated by SIArb for party representative ethics (an amalgam of overarching principles common to jurisdictions based on reviews) to aid in the creation of a consistent standard governing the conduct of counsel and representatives in international arbitration, which has become ever more important with the growing complexity and volume of international arbitration proceedings conducted worldwide.20
The ICC Singapore Arbitration Group was established in June 2019, reinforcing Singapore's reputation as the gateway city for international trade and one of the most preferred seats of arbitration worldwide. The Group consists of locally based Singaporean and foreign arbitration practitioners, Singaporean arbitration practitioners based overseas, academics and corporate counsel. The Group will also have a selection committee of arbitrators that will be responsible for nominating arbitrators for ICC arbitration cases referred to ICC Singapore. This comes amid figures released that the ICC Case Management Office, which was opened in Singapore in April 2018, has already administered its first 100 cases.21
On 8 August 2019, the revamped Maxwell Chambers Suites was inaugurated in Singapore, marking the world's first integrated dispute resolution complex, housing both hearing facilities and international dispute resolution institutions, including the ICC International Court of Arbitration, the International Centre for Dispute Resolution, the Permanent Court of Arbitration and the World Intellectual Property Organization Arbitration and Mediation Centre.22
The Singapore office of the Permanent Court of Arbitration (PCA) was officially launched in November 2019, allowing the growing number of PCA cases administered in Singapore to be better managed and serve the dispute resolution needs of states and businesses in Asia.23
The year in review
i Developments affecting international arbitration
In June 2019, the Ministry of Law issued a public consultation paper on proposed amendments to the IAA.24 The proposals are expected to enhance Singapore's international arbitration regime by providing parties with more options to tailor an international arbitration agreement to suit their purposes. The proposals include providing for a default mode of appointment for multi-party arbitrations, allowing parties to appeal to the High Court on a question of law arising out of an arbitral award where parties have opted in to such a procedure, allowing parties to agree to waive or limit annulment grounds under the Model Law and the IAA and for the courts to have power to order costs in cases where awards are set aside. The public consultation period ended on 21 August 2019 and we are currently awaiting the Ministry of Law to publish a response to the feedback received.
In a further bid to enhance Singapore's international arbitration regime, amendments were introduced to provide for arbitrations relating to intellectual property rights (IPR) by way of the Intellectual Property (Dispute Resolution) Act 2019 to statutorily recognise the arbitrability of IPR disputes in Singapore; a new Part IIA was added to the IAA to give effect to this. Under Part IIA, IPR is defined to cover various IP-related rights including patents, trademarks, registered designs and copyrights, with the list kept non-exhaustive.25 An IPR dispute is also defined to include a dispute over enforceability, infringement, subsistence, validity, ownership, scope, duration or any other aspect of an IPR, a dispute over a transaction in respect of an IPR and a dispute over any compensation payable for an IPR.26 Section 26B of the IAA expressly stipulates that the subject matter of an IPR dispute is capable of settlement by arbitration. The arbitrability of an IPR will also not be compromised just because a provision (in Singapore law or elsewhere) gives jurisdiction to a specific entity to decide the IPR dispute and does not mention possible settlement by arbitration.27 Finally, Section 26C of the IAA also clarifies that an arbitral award has effect only on the parties to the arbitration (in personam) and not against the whole world (in rem).
In December 2018, the United Nations General Assembly adopted, by consensus, the United Nations Convention on International Settlement Agreements Resulting from Mediation, also known as the Singapore Convention on Mediation (Singapore Convention). On 7 August 2019, the signing ceremony for the Convention was held in Singapore. The Singapore Convention will facilitate international trade and commerce by enabling disputing parties to consider alternate dispute resolution, such as mediation, and easily enforce and invoke settlement agreements arising from such mediation, across borders.28 This will also serve as an additional dispute resolution option for businesses to consider in addition to litigation and arbitration in settling cross-border disputes. Fifty-two countries, including heavyweights China, India and the US, have signed the Convention thus far. In March 2020, the UN announced that the Singapore Convention will come into force on 12 September 2020. Much like the New York Convention has been seen as the bedrock of the success of international commercial arbitration, it is hoped that the Singapore Convention will go a long way to promoting the use of mediation for cross-border disputes. While some may perceive the Singapore Convention as a threat to international arbitration, it can also be seen to enhance the international dispute resolution scene with arbitration and mediation being used in tandem (with the possibility of multi-tiered dispute resolution clauses) in the dispute resolution process.
ii Arbitration developments in local courts
In this section, we deal with some recent Singapore case law on issues in international arbitration.
Tribunals will lack jurisdiction where claimants obtain the right of suit after the commencement of arbitration
BXH v. BXI 29 considered novel issues on whether a dispute relating to the right of suit following an assignment of the underlying agreement pertains to the existence or the scope of an arbitration agreement, with Singapore's apex court, the Court of Appeal, holding that it relates to the existence of an arbitration agreement. The Court of Appeal also held that an arbitrator would not have jurisdiction over a dispute if the claimant only obtained the right of suit after the commencement of an arbitration.
This was a complex case that involved a respondent who developed and manufactured consumer goods and an appellant who distributed the respondent's goods. The respondent was a wholly owned subsidiary of a Singapore company (parent company). The relationship between the appellant and the respondent had to be seen in light of eight related contracts. Of pertinence was the distributor agreement, the assignment and novation agreement, the participation agreement and the buyback agreement.
The arbitration agreement was contained in the distributor agreement. While the appellant was dealing with the parent company, the latter subsequently transferred its rights and obligations to the respondent through the assignment and novation agreement.
For easy identification, the debts that the appellant owed can be classified as Debt 1A, Debt 1B and Debt B – these were assigned by the respondent to a third party through the participation agreement. However, they were re-assigned back to the respondent through the buyback agreement in April 2015 and December 2015.
The issue arose as, in October 2015, the respondent issued a notice of arbitration to the appellant, seeking payment for Debts 1A and B. The appellant resisted the notice of arbitration on several grounds, including that the tribunal lacked jurisdiction. This was dismissed by the tribunal, and the award was issued in favour of the respondent in July 2017.
The appellant then appealed to the High Court, which found that the tribunal did possess jurisdiction as, while the right of suit for several debts was only reassigned in December 2015, these were retrospectively vested in the respondent, and hence the tribunal possessed the jurisdiction when the arbitration was commenced in October 2015.
The appellant then appealed to the Court of Appeal. The Court of Appeal found that as an arbitration agreement does not have a life independent of the substantive obligations that it attaches to, the assignment of a debt from one party to another also results in an assignment of the right to arbitrate a dispute in relation to that debt. It was held that the buyback agreement in 2015 did not have the effect of reassigning Debt B back to the respondent, and instead Debt B was only reassigned in 2017. Thus, at the relevant time, there was only an agreement between the parties to arbitrate over disputes relating to Debt 1A. The retrospective vesting principle could not apply to confer jurisdiction on the tribunal to adjudicate over Debt B when the parties had not consented to such a dispute to be referred at the time when the arbitration was commenced.
Thus, the Court of Appeal held that the tribunal had exceeded its jurisdiction, and hence the award was set aside under Article 34(2)(a)(i) of the Model Law.
Extension of time to set aside an award not granted where fraud and corruption are discovered after the time limit has expired
In Bloomberry Resorts and Hotels v. Global Gaming Philippines,30 the Singapore High Court affirmed that strict timelines must be adhered to in an application to set aside an award, even where the basis for the setting aside of the award was only discovered after the expiry of time to set aside the award.
In this case, the tribunal had found that Bloomberry had wrongfully terminated an agreement with Global Gaming and ordered Bloomberry to pay Global Gaming US$296 million in damages.
Bloomberry sought to set aside the award in the High Court under Section 24 IAA and Article 34(2) Model Law on the grounds that the award was induced by fraud and corruption and, in the alternative, to refuse enforcement of the award under Article 36(1)(b)(ii) Model Law as the award was contrary to Singapore public policy, and Article 36(1)(a)(ii) Model Law on the grounds that it were unable to present its case by reason of fraud committed by the defendants in the conduct of the arbitral proceedings in multiple respects, such as the suppression of critical evidence and deception of the tribunal.
However, the application to set aside the award was made over a year after the three-month time limit for challenging awards, as laid out under Article 34(3) Model Law. Bloomberry argued that it should be granted an extension of time as the alleged fraud was only discovered after the time limit had expired.
The High Court held that the time limit set out in Article 34(3) Model Law was an absolute time limit and could not be extended, even in cases where fraud or corruption is discovered at a later date: there was no provision in Singapore law that stated that the limit for a setting-aside application should run from the date of discovery of an alleged fraud, or of any other facts that come to light after an award has been rendered. Such an absolute time limit recognises the need for finality and legal certainty. The time limit in Article 34(3) Model Law applied to grounds for setting aside under Section 24 IAA. In this regard, the Court clarified that Section 24 IAA must be read with Article 34 Model Law, and that it is not a standalone statutory regime.
However, the Court allowed the alternative application – that is, for an extension of time in respect of the application to resist the enforcement of the award. It was held that under Order 3 Rule 4(1) of the Singapore Rules of Court, the Court did have the discretion to do so, and it assessed that it was in the overall interests of justice for it to do so.
Nonetheless, on the substantive merits of the application, the Court held that the allegations of fraud had not been substantiated and that in any case, the alleged fraud would not have materially affected the award. Thus the application was not allowed, and the award was allowed to stand.
Where parties specify only one geographical location in an arbitration agreement it is a reference to the seat of the arbitration and not the venue
BNA v. BNB31 concerned the interpretation of an arbitration agreement and was an appeal against a jurisdictional challenge in the Singapore High Court against a SIAC jurisdictional ruling.
The jurisdictional challenge arose out of a dispute over the law governing the arbitration agreement, while the disputes section of the contract in question had an express clause selecting the law of the People's Republic of China (PRC) as the proper law of the substantive agreement. The arbitration clause stated that 'any and all disputes arising out of or relating to this Agreement . . . shall be finally submitted to the Singapore International Arbitration Centre (SIAC) for arbitration in Shanghai, which will be conducted with its Arbitration Rules'.
The crux of the jurisdictional challenge was whether the proper law of the arbitration agreement was Singapore law or PRC law. The appellant argued that the arbitration agreement was invalid as the proper law of the arbitration agreement was PRC law, with Shanghai being the seat of the arbitration. As PRC law did not permit a foreign arbitral institution (such as SIAC) to administer a PRC-seated arbitration, the arbitration agreement should be found invalid.
The tribunal and Singapore High Court dismissed the appellant's jurisdictional challenge. The High Court found that the phrase arbitration in Shanghai meant that parties had chosen Shanghai as the physical venue of arbitration. This was because Shanghai was a city and not a law district, and thus the phrase arbitration in Shanghai was a reference to a venue rather than a legal seat. It also held that, in accordance with Rule 18.1 of the SIAC Rules 2013, as the parties had not chosen a seat, the default seat of arbitration would be Singapore.
However, the Court of Appeal allowed the appellant's appeal to a limited extent and declared Shanghai as the legal seat of the arbitration agreement, but declined to decide definitely whether the tribunal had jurisdiction.
As there was no express choice of law for the arbitration agreement, the Court had to determine the implied choice of law. In determining the implied choice of law governing the arbitration agreement, the starting point is that the governing law of the substantive contract is the proper law of the arbitration agreement, and the Court of Appeal found that there was nothing to displace the implied choice of PRC law in this case.
The Court of Appeal also held that, where parties specified only one geographical location in an arbitration agreement, the location should most naturally be construed as a reference to the legal seat of the arbitration agreement and not the venue.
As the governing law of the arbitration agreement was held to be PRC law, the Court noted that it would be inappropriate to determine whether the arbitration agreement was invalid, as this would be a matter for the relevant PRC court as the seat court applying PRC law.
Of particular note is the fact that the Court of Appeal rejected the argument that the consequence of finding that PRC law applies to the arbitration agreement in the form of invalidation of an agreement should be a relevant factor. The Court took the view that the evidence did not suggest that parties were aware that the choice would have such an impact on the validity of the arbitration agreement. Further, the Court took the view that there was no competing proper law that should cause the Court to be unduly concerned by the validation principle as generally accepted in international arbitration jurisprudence.
No qualitative test to be imposed where a setting-aside application is brought after an application for correction of the award is disposed of
In BRQ v. BRS,32 of importance are the High Court's observations where a setting-aside application is brought after an application for the correction of an award had been disposed of.
Here, the plaintiffs had applied to set aside an award after the three-month time period prescribed by Article 34(3) Model Law. The Court held that although the three-month period to set aside an award under Article 34(3) Model Law is strict, timelines can be extended to bring a setting-aside application, if parties apply to correct an award under Article 33 of the Model Law (which the plaintiffs had done). In such instances, the three-month period only commences when the tribunal disposes of a request for correction of the award.
The defendants argued that an extension of time should only be granted if the application for correction was genuine and material to the setting aside application. However, the Court held that this was not necessary. It noted that the plain language of the Model Law did not support such a qualitative gloss and that the Model Law drafters had not intended such a qualitative test. A qualitative test was inconsistent with the language of Article 34(3) Model Law, which only stated that 'if a request had been made under Article 33, from the date on which that request had been disposed of by the arbitral tribunal'. In the Court's view, adding a qualitative test would only further bring about uncertainties. Furthermore, any potential abuse was ameliorated by the deadlines by which the correction application under Article 33 Model Law must be met, and the power of the tribunal to make cost orders.
Thus, the Court allowed the extension of time for the setting aside application. However, on the substantive merits of the application the award was not set aside.
Enforcement of arbitral awards refused where the seat of arbitration was incorrect
In Sanum Investments Limited v. ST Group Co,33 the Court of Appeal overturned the High Court's decision and refused to enforce an award where the seat of arbitration was found to be incorrect.
Sanum, ST Group, Sithat, ST Vegas Co and ST Vegas Enterprise entered into a master agreement for the formation of three joint ventures, one of which concerned the operation of slot clubs. Separately, Sanum and ST Vegas Enterprise entered into a participation agreement to execute the joint venture for the slot clubs. There was a third slot club, Thanaleng Slot Club, which was not part of the slot club joint venture. Nonetheless, the master agreement envisaged that Sanum would take over the Slot Club in the future. Three agreements were entered into in relation to this club. It later transpired that ST Vegas Co did not turn over the club to Sanum. After being unsuccessful in seeking relief through the Lao Organisation of Economic Dispute Resolution (OEDR) and the Lao court system, Sanum eventually commenced arbitration proceedings at SIAC seeking damages for breaches of the master agreement and the participation agreement. The defendants objected to the SIAC arbitration on the basis that arbitration was to be commenced in Macao according to the dispute resolution clause in the master agreement and not at SIAC, and accordingly did not participate in the proceedings. An award was subsequently rendered in favour of the plaintiff, and the plaintiff obtained leave to enforce the award from the Court and judgment was entered. The defendants then brought an application for the refusal of enforcement of the award pursuant to Article 36(1) Model Law and argued that, among other things, the composition of the tribunal and the seat of the arbitration were not in accordance with the agreement of the parties.
It is pertinent to note at this juncture that the dispute resolution clause in the master agreement had a provision that stated that where one of the parties was unsatisfied with the results of the OEDR and Lao PDR courts, arbitration should be commenced at an internationally recognised arbitration company in Macao. Under the participation agreement, there was a similar provision, but this one prescribing arbitration at SIAC. The tribunal had proceeded on the basis that the underlying dispute arose out of the master agreement and the participation agreement, and thus the tribunal was rightfully constituted under the SIAC Rules.
The High Court, however, found that on the contrary, the underlying dispute had arisen out of the master agreement alone, and thus the agreement to arbitrate was found at Clause 2(10) of the agreement. Therefore, the tribunal had made an error in determining the seat, instead of adhering to the choice of seat of arbitration expressly provided under Clause 2(10) of the master agreement regarding Macao. The High Court held that this irregularity was not a ground for refusal of enforcement under Article 36(1)(a)(iv) of the Model Law because there is a need to show material prejudice. Here the applicant did not show what prejudice arose out of the procedural irregularities in the award (for example, evidence of how adopting a wrong seat would have affected the arbitration procedure) and did not demonstrate the seriousness of the error by the tribunal. Further, it was noted that in an enforcement application, a wrong choice of seat is less relevant than it would be in a setting aside application because an enforcement application can be brought in any court but setting aside can only be brought in the court of the seat.
The Court of Appeal overturned the decision of the High Court. It refused to enforce the award on the ground that the selection of the seat of arbitration was incorrect. In its view, once an arbitration is wrongly seated, in the absence of waiver of the wrong seat, any award that ensues should not be recognised and enforced by other jurisdictions as the award would not have been obtained in accordance with the parties' arbitration agreement. The Court of Appeal reasoned that the parties' choice of an arbitral seat is one of the most important expressions of party autonomy in an arbitration agreement as it determines the natural law pursuant to which the arbitration will be conducted.
The Court of Appeal disagreed that a party resisting enforcement of an award arising out of a wrongly seated arbitration had to demonstrate actual prejudice. It was sufficient that if the arbitration had been correctly seated, a different supervisory court would have been available for parties to seek any court recourse (if necessary).
This case shows the significance that the Court of Appeal gives to the seat of an arbitration as well as to upholding parties' intention on how an arbitration should be conducted.
Court powers under the SCJA not able to extend time under the Model Law to bring a setting aside application
BXS v. BXT34 is the first arbitration-related judgment of the SICC since the jurisdiction of the SICC was extended to hear proceedings relating to international commercial arbitration under the IAA in 2018.
In this case, the plaintiff applied to set aside a Singapore-seated SIAC award. The defendant applied to strike out the plaintiff's setting aside application on the basis that it was brought outside the three-month time limit for challenging an arbitral award under Article 34(3) Model Law, and hence the court had no jurisdiction to consider the setting aside application.
An international judge of the SICC held that the setting aside application should be struck out for being out of time, as the three-month time limit to set aside under Article 34(3) Model Law is mandatory and the court has no power to extend.
Pertinently, the court clarified that the general power to extend time under Section 18(1) of the Supreme Court of Judicature Act (SCJA) read with Paragraph 7 of the First Schedule of the SCJA does not apply to Article 34(3) Model Law as the latter was a 'written law relating to limitation'.
Not challenging a preliminary jurisdiction ruling does not preclude setting aside awards for lack of jurisdiction for a non-participating respondent
In Rakna Arakshaka Lanka Ltd v. Avant Garde Maritime Services,35 the Court of Appeal overturned the decision of the High Court, which had previously held that non-participation in an arbitration will preclude a subsequent challenge to the jurisdiction of an arbitral tribunal under Article 34 of the Model Law if a jurisdictional challenge had not been brought earlier.
The parties were Sri Lankan-incorporated companies that had entered into various agreements relating to maritime security-related projects. Subsequently, when a dispute arose, the claimant, AGMS, commenced arbitration. Although the respondent, RALL, asked for several extensions of time and copies of communications and documents, it did not participate in the arbitral proceedings. Subsequently, the tribunal issued a final award in favour of AGMS. RALL then commenced proceedings in the High Court to set aside the award on the basis that the dispute did not fall within the terms of submission to arbitration and hence the tribunal lacked jurisdiction.
The High Court held that where a tribunal decides an issue of jurisdiction as a preliminary issue, a party cannot choose between a Section 10(3) IAA challenge to a jurisdictional ruling, and an application to set aside the final award for lack of jurisdiction under Article 34(3) Model Law stemming from the arbitral tribunal's preliminary ruling on jurisdiction. This is because, where a tribunal decides jurisdiction as a preliminary issue, parties are expected to bring a challenge within 30 days and utilise the early avenue for parties to promptly and finally resolve jurisdictional challenges. It would then defeat this purpose to allow the party to reserve jurisdictional challenges until an application is made to set aside a final award. Thus, if a party does not proceed with a Section 10(3) challenge, it would be found to have waived its right to set aside a subsequent award on this ground.
The Court of Appeal, however, decided that there is a limited exception to the preclusive effect of Article 16(3), that is, non-participation in an arbitration will not preclude a subsequent challenge to the jurisdiction of the tribunal in a setting aside application under Article 34 Model Law, even if a jurisdictional challenge had not been brought earlier under Article 16(3) or Section 10 IAA within the 30-day period.
In the Court's view, while a claimant is obliged to arbitrate, a respondent who believes that an arbitral tribunal has no jurisdiction is open to choose not to participate. Here, the Court held that neither Article 16(3) Model Law nor Section 10 IAA prevented a respondent who chose not to participate in an arbitration due to a valid objection to jurisdiction from raising the objection as a ground to set aside an award subsequently. The preclusive effect of Article 16(3) does not extend to a respondent who does not participate in an arbitration as such a party has not contributed to wastage of costs or incurring additional costs that could have been prevented by a timely application under Article 16(3).
This case shows that a respondent can choose not to participate in an arbitration if it believes that it has sufficient grounds to subsequently challenge the jurisdiction of the tribunal in a setting aside application if a potential award is made against it. Nonetheless, the Court of Appeal noted that this would be a risky course of action as, if the respondent's grounds are not accepted, it would have lost its opportunity to present its case.
Outlook and conclusions
The Singapore courts continue to take a balanced approach between the regulation of the arbitral process and giving effect to party autonomy. This bodes well for Singapore's aspiration to be a one-stop shop for dispute resolution.
Singapore is expected to maintain its position as a key dispute resolution hub, particularly with the signing of the Singapore Convention, and to solidify its position as an arbitral seat, with SIAC continuing to burgeon, with the support of other institutions such as the SCMA and SIArb, and the growing prominence of Singapore as a seat in ICC arbitrations.
1 Margaret Joan Ling and Vivekananda Neelakantan are partners at Allen & Gledhill (Singapore). The authors wish to thank Dhivya Rajendra Naidu, an associate at the firm, for her considerable assistance in the preparation of this chapter.
2 Report of 2018 Queen Mary University of London and White & Case International Arbitration Survey, p. 9.
3 Report of 2019 Queen Mary University of London and Pinsent Masons International Arbitration Survey: International Construction Disputes, p. 12.
4 Cap 10 (2002 Rev Ed).
5 Cap 143A (2002 Rev Ed).
6 Section3, AA.
7 Section 5(1), IAA.
8 LW Infrastructure Pte Ltd v. Lim Chin San Contractors Pte Ltd  1 SLR 125 (CA) at -.
9 Section 49, AA.
10 Refer to footnote 3.
11 2019 SIAC Annual Report, p. 4: https://www.siac.org.sg/newsite/index.php/70-articles-publication/190-annual-report.
12 SIAC, 'SIAC Sets a New Record in 2019', 8 April 2020: https://www.siac.org.sg/69-siac-news/655-siac-sets-a-new-record-in-2019.
13 2019 SIAC Annual Report, p. 13: https://www.siac.org.sg/newsite/index.php/70-articles-publication/190-annual-report.
14 2019 SIAC Annual Report, p. 13: https://www.siac.org.sg/newsite/index.php/70-articles-publication/190-annual-report.
15 2019 SIAC Annual Report, p. 19: https://www.siac.org.sg/newsite/index.php/70-articles-publication/190-annual-report.
16 SCMA – About Us: https://www.scma.org.sg/scma/126/2969/4175/About-Us.
20 SIArb – Party Representative Ethics: https://www.siarb.org.sg/resources/party-representative-ethics.
21 Singapore Business Federation, 'ICC Singapore Arbitration Group to raise Singapore's profile in international arbitration and dispute resolution', 26 June 2019: https://www.sbf.org.sg/icc-singapore-arbitration-group-to-raise-singapore-s-profile-in-international-arbitration-and-dispute-resolution.
22 Maxwell Chambers Suites, 'Maxwell Chambers Suites Officially Opens Today Giving Yet Another Boost to Singapore's Legal Hub Position', 8 August 2019: http://www.maxwellchamberssuites.com/2019/08/08/maxwell-chambers-suites-opens.
23 PCA, 'Permanent Court of Arbitration launches office in Singapore', 11 December 2019: https://pca-cpa.org/en/news/permanent-court-of-arbitration-launches-office-in-singapore.
24 Ministry of Law, 'Public Consultation on Proposed Amendments to the International Arbitration Act', 26 June 2019: https://www.mlaw.gov.sg/news/press-releases/public-consultation-on-proposed-amendments-to-the-international-arbitration-act.
25 Section 26A(1), IAA.
26 Section 26A(4), IAA.
27 Section 26B(3), IAA.
28 Singapore Convention on Mediation: https://www.singaporeconvention.org/about-convention.html.
29 BXH v. BXI  SGCA 28.
30 Bloomberry Resorts and Hotels v. Global Gaming Philippines  SGHC 1.
31 BNA v. BNB  SGCA 84.
32 BRQ v. BRS  SGHC 260.
33 Sanum Investments Limited v. ST Group Co  SGCA 65.
34 BXS v. BXT  4 SLR 390.
35 Rakna Arakshaka Lanka Ltd v. Avant Garde Maritime Services  2 SLR 131.