Pertamina International Marketing & Distribution Pte Ltd v P-H-O-E-N-I-X Petroleum Philippines, Inc (also known as Phoenix Petroleum Philippines, Inc) and another matter

• Jurisdiction: Singapore
• Judge: Sir Henry Bernard Eder IJ
• Judgment Date: 28 June 2024
• Neutral Citation: [2024] SGHC(I) 19
• Court: International Commercial Court (Singapore)
• Docket Number: Originating Application No 1 of 2024 and Originating Application No 23 of 2023 (Summons No 21 of 2024)
• Hearing Date: 25 June 2024
• Citation: [2024] SGHC(I) 19
• Year: 2024
• Plaintiff Counsel: Daniel Chia Hsiung Wen, Ker Yanguang (Ke Yanguang), Charlene Wee Swee Ting and Chan Kit Munn Claudia (Prolegis LLC)
• Defendant Counsel: Koh Swee Yen SC (instructed) (WongPartnership LLP), Liew Yik Wee, Wong Wan Chee and Ng Tse Jun Russell (Rev Law LLC)
• Subject Matter: Arbitration,Agreement,Breach,Scope,Permanent anti-suit injunction
• Published date: 01 July 2024

Sir Henry Bernard Eder IJ: Introduction

These proceedings concern an arbitration brought under the auspices of the Singapore International Arbitration Centre (“SIAC”) in SIAC Case No. ARB No. 084 of 2022 (“ARB 84”) and a Final Award signed and dated 28 November 2023 (“Final Award”) whereby it was determined that the defendant, P-H-O-E-N-I-X Petroleum Philippines, Inc (also known as Phoenix Petroleum Philippines, Inc) (“Phoenix”), and another third party guarantor, Udenna Corporation (“Udenna”), were jointly and severally liable to the claimant, Pertamina International Marketing & Distribution Pte Ltd (“PIMD”), in the aggregate amounts of (a) US$142,932,694.04 (including interest and legal and other costs), and (b) S$218,948.60, plus interest from 29 November 2023 (save for interest on the legal and other costs, which would commence beginning 12 December 2023). Both Phoenix and Udenna are incorporated and based in the Philippines.

The background is set out in my previous judgment in Pertamina International Marketing & Distribution Pte Ltd v P-H-O-E-N-I-X Petroleum Philippines, Inc (also known as Phoenix Petroleum Philippines, Inc) [2024] SGHC(I) 13 (“Judgment”) which I do not propose to repeat.

I would only add that since that previous judgment: On 13 May 2024, Phoenix filed SIC/SUM 21/2024 (“SUM 21”) in SIC/OA 23/2023 (“OA 23”) seeking the setting aside of SIC/ORC 69/2023 (“ORC 69”). On 16 May 2024, PIMD filed a further Motion to Resolve to ask the Philippine Court of Appeal (“Phillipine CA”) to urgently issue a temporary restraining order and/or writ of preliminary injunction pending the resolution of the Certiorari Petition. On 22 May 2024, the Philippine CA issued its Resolution in which it (i) denied PIMD’s application to enjoin the Philippine Regional Trial Court (the “Philippine RTC”) from proceeding with the Philippines Action while it is considering PIMD’s Certiorari Petition; (ii) directed Phoenix to file its comments on the Certiorari Petition within 10 days from the date of notice of the Resolution; and (iii) permitted PIMD to file its reply to the comment within 5 days from its receipt of this. Service of OA 1 has now been effected on Phoenix in the Philippines under the Hague Convention.

There are now before the Court two separate applications which overlap to a certain extent, viz: OA 1 is PIMD's application for (i) a declaration that the Final Award is valid, final and binding; (ii) a permanent anti-suit injunction (“ASI”); and (iii) mandatory injunctions/orders essentially to require Phoenix to withdraw the Philippine proceedings and/or to prevent Phoenix from pursuing proceedings in the Philippines to seek declarations that the Final Award and ARB 84 are void. SUM 21 is Phoenix's application filed in OA 23 to set aside ORC 69, which is this Court’s order allowing PIMD to enforce the Final Award against Phoenix and Udenna in Singapore.

I heard these applications on 25 June 2024. At the end of the hearing, I informed Counsel of my decision viz, that I granted the relief sought by PIMD in OA 1 subject to: (a) slight amendment of the wording of the prayers set out in OA 1; and (b) the insertion of wording to the effect that nothing in my order has the effect of preventing Phoenix from resisting recognition or enforcement of the Final Award in the Philippines or elsewhere; and dismissed Phoenix’s application under SUM 21. In addition, I ordered Phoenix to pay PIMD’s costs of OA 1 and OA 23 including SUM 21, such costs to be assessed by me in due course unless otherwise agreed by the parties. These are my reasons for my decision.

In summary, the broad gist of Phoenix’s submissions is as follows. This Court should refuse enforcement of the Final Award on the ground that there was no arbitration agreement between Phoenix and PIMD in relation to the dispute in the SIAC Arbitration. Consequently, ORC 69 should be set aside. It follows from the lack of an arbitration agreement that there is no basis for the permanent ASI that PIMD seeks in OA 1 given that PIMD seeks the permanent ASI to restrain an alleged breach of an arbitration agreement. OA 1 should be dismissed on this basis. Further and in any event, this Court should dismiss OA 1 on jurisdictional grounds because the jurisdiction of the Singapore International Commercial Court (“SICC”) as conferred under the Supreme Court of Judicature Act 1969 (2020 Rev Ed) (“SCJA”) does not extend to hearing OA 1, in that the SICC has jurisdiction to hear only proceedings under the International Arbitration Act 1994 (2020 Rev Ed) (“IAA”), but OA 1 is not a proceeding under the IAA. Further and in any event, this Court should dismiss OA 1 on the merits because the Philippines Action is in substance not an attempt to challenge or set aside the Final Award and is simply a defensive proceeding under Philippine law intended only to have effect within the Philippines. In commencing and pursuing the Philippines Action, Phoenix is merely exercising its undoubted right to resist enforcement of the Final Award in the Philippines, albeit in a pre-emptive manner given the fact that PIMD could obtain the fruits of the Final Award without ever seeking to enforce the Final Award in the Philippines. Moreover, the issue of whether or not the Philippines Action is a proper course of action for Phoenix to take in the Philippines and as a matter of a Philippine law is, with respect, an issue for a Philippine court to resolve. In this regard, not only has the Philippine RTC denied PIMD’s motion to dismiss the Philippines Action and ruled that it has personal jurisdiction over PIMD and subject matter jurisdiction over the Philippines Action, the Philippines’ Court of Appeals has also denied PIMD’s application to enjoin the Philippine RTC from proceeding with the Philippines Action while it is considering PIMD’s appeal from the Philippine RTC’s ruling.

Before dealing with the substance of the applications, I should mention two matters.

First, PIMD has referred me to [32] of my previous Judgment where I expressed the view that “the actions taken by Phoenix in the Philippines Action […] clearly constitute a breach of ORC 5 and contempt of this court”. For present purposes, it is sufficient to note that although no formal proceedings have been commenced for leave to issue committal proceedings under Order 25 of the Singapore International Commercial Court Rules 2021 (“SICC Rules”), my view remains unchanged, and that Phoenix has taken no steps to purge such contempt. Notwithstanding, as at the last hearing, I propose, in the exercise of my discretion, to hear Phoenix and to consider its submissions on the two sets of applications.

Second, I proceed on the basis that this is a de novo hearing and that it follows that I am not bound by any of the conclusions expressed in the Final Award.

SUM 21

It is convenient to deal with this application first.

Jurisdictional framework under the Model Law

At the outset, it is important to understand the jurisdictional framework in which these applications come before the Court.

Section 3(1) of the IAA provides that “with the exception of Chapter VIII” the UNCITRAL Model Law on International Commercial Arbitration as set out in First Schedule to the IAA (“Model Law”) has the force of law in Singapore.

Section 19B of the IAA provides in material part as follows: “An award made by the arbitral tribunal pursuant to an arbitration agreement is final and binding on the parties...” In essence, it is Phoenix’s case that the Final Award is not final and binding because it was not made “pursuant to an arbitration agreement” within the meaning of s 19B of the IAA.

Article 34 of the Model Law provides that recourse against an award may be made only by an application for setting aside in accordance with paragraphs (2) and (3) of that Article. Article 34(3) provides that any such application must be made within three months of the date on which the party making the application has received the award.

Here, it is common ground that no such application has ever been made by Phoenix and that the time limit for so doing has expired. The result is that, as a matter of Singapore law, it is not open to Phoenix to seek recourse against the Final Award under Art 34.

However, Phoenix submitted, and I accept, that there is a separate question as to whether the Final Award may be enforced. That depends not on Art 34 but on s 19 of the IAA, which is the provision through which the Singapore Parliament had conferred on the courts the discretion to refuse enforcement of arbitral awards:

Enforcement of awards

19. An award on an arbitration agreement may, by permission of the General Division of the High Court, be enforced in the same manner as a judgment or an order to the same effect and, where permission is so given, judgment may be entered in terms of the award.

In exercising the court’s discretion under s 19 of the IAA, the Court of Appeal has stated that it is open to the court to consider the same grounds for resisting enforcement under Art 36(1) of the Model Law: PT First Media TBK v Astro Nusantra International BV [2014] SLR 372 (“PT First Media TBK”) at [84]. This, according to the Court of Appeal, best gives effect to the purpose of the IAA which was to embrace the Model Law: PT First Media TBK at [50], [84] and [143(d)]. This was the conclusion the court reached despite the express provision in s 3(1) of the IAA that Chapter VIII of the Model Law does not have the force of law in Singapore: PT First Media TBK at [86]–[90].

In any event, it was common ground between the parties that I should proceed on the basis that in deciding whether or not I should grant or refuse enforcement of the Final Award, I should be guided by Art 36(1) of the Model Law which stipulates a number of grounds for refusing enforcement (and recognition). In relevant part, Art 36(1)(a)(iii)...