ABC Co v XYZ Co Ltd

• Jurisdiction: Singapore
• Judge: Judith Prakash J
• Judgment Date: 08 May 2003
• Neutral Citation: [2003] SGHC 107
• Docket Number: Originating Motion No 600027 of (Summons in Chambers No 601646 of 2002)
• Date: 08 May 2003
• Year: 2003
• Published date: 02 October 2003
• Plaintiff Counsel: VK Rajah, SC, with Allen Choong and Priya Selvam (Rajan & Tann)
• Citation: [2003] SGHC 107
• Defendant Counsel: Alvin Yeo, SC, with Tay Peng Cheng (Wong Partnership)
• Court: High Court (Singapore)
• Subject Matter: Article 34 of the UNCITRAL Model Law on International Commercial Arbitration,Whether new grounds may be added to originating motion after expiry of prescribed three-month period,Originating processes,Civil Procedure,Rules of Court (Cap 322, R 5, 1997 Rev Ed) O 20 r 5,Interim award,Arbitration,Award,Party seeking to set aside interim award,Application to amend originating motion seeking to set aside arbitration award after relevant limitation period

1 This summons in chambers raises an interesting point on the application of Article 34 of the UNCITRAL Model Law on International Commercial Arbitration (‘the Model Law’) which is part of our law by reason of the International Arbitration Act (Cap 143A) (‘the Act’).

2 In respect of an arbitration in Singapore which is an international arbitration within the meaning of s 5 of the Act, the governing legislation is the Model Law as implemented by the Act. As a result, the courts of Singapore have only such jurisdiction over the proceedings as is specifically conferred on them by the Act and the Model Law. The principle of party autonomy is one that is central to the Model Law. It is a principle that must be respected by the courts whenever they have cause to deal with any issues arising in relation to an international arbitration. Thus, the attitude to be adopted when a court is faced with such an issue is to look first to the Model Law for an indication as to how such issue is to be treated and, in the absence of such indication, to apply the applicable principles of the general law in the manner best suited to uphold the parties’ choice of arbitration as the appropriate method of dispute resolution.

3 Article 34 of the Model Law deals with the recourse that a party to an arbitration has when he is not satisfied with an arbitral award. The title of this article is ‘Application for setting aside as exclusive recourse against arbitral reward’ and the Article by ¶ (1) makes it clear that recourse to a court against an arbitral award may be made only by an application for setting aside in accordance with ¶ (2) and ¶ (3) of the Article. Paragraph (2) amplifies ¶ (1) by enumerating the grounds which the applicant has to prove in order to succeed in his application to set aside an award. The Model Law provides six such grounds and s 24 of the Act provides two extra grounds for parties to an international arbitration in Singapore. Paragraph (3) of Article 34 sets out the time limit for the making of an application to set aside. It states:

An application for setting aside may not be made after three months have elapsed from the date on which the party making that application had received the award or, if a request had been made under Article 33, from the date on which that request had been disposed of by the arbitral tribunal.

4 Article 34 does not provide the procedure by which recourse to the courts is to be had. The drafters left this to the domestic law of the various states implementing the Model Law. In our case, the procedure has been provided by O 69A of the Rules of Court 1996. Rule 2(1) of that order provides that every application to the court to set aside an award under s 24 of the Act or Article 34(2) of the Model Law must be made by originating motion to a single judge. By r 2(4), such application has to be made within three months from the date of receipt by the applicant of the award or corrected award. This rule echoes the time limit set by Article 34(3). The references to O 69A are references to that Order as it existed in October 2001. In April 2002, it was amended. These amendments specify that the notice of motion must state the grounds on which the application is made and must be accompanied by an affidavit that exhibits the relevant documents and sets out the evidence the applicant relies on.

The parties and the application

5 The applicants and the respondents here, both foreign companies, were respectively, the claimants and respondents in an international arbitration conducted according to the Rules of Conciliation and Arbitration of the International Chamber of Commerce. The arbitration started in 1998 and took place in Singapore. Both parties put in claims. On 10 September 2001, an interim award (‘the Award’) was issued by the arbitral tribunal. Basically, the claims of the applicants were dismissed and the counterclaims of the respondents were allowed. The Award dealt with issues of liability only leaving issues of causation and quantum to be decided later.

6 On 10 October 2001, well within the time limit specified by the Model Law, the applicants applied by way of originating motion for the award to be set aside ‘insofar as it purports to make the determinations or findings pertaining to the causes of action set out in the schedule attached [thereto], all of which arose prior to 15 November 1994’. The motion stated that the grounds of the application were that:

1 The Arbitral Tribunal had, by their determination that clause 2.1(a) of the Assignment dated 15 November 1994, entered into by the Respondents, assigned absolutely to a consortium of banks all claims that had arisen as at the date of the Assignment, thereby excluded from the scope of the arbitration all the Respondents’ counterclaims set out in the schedule attached hereto, all of which had arisen or accrued prior to 15 November 1994.

2 Notwithstanding such determination, the Arbitral Tribunal had, in excess of their jurisdiction, purported to make determinations and findings in respect of the said causes of action set out in the schedule attached hereto, all of which had arisen or accrued prior to 15 November 1994.

The above description of their grounds made it clear that the applicants were seeking to bring their case within Article 34(2)(a)(iii) which provides that an award may be set aside if the applicant proves that:

the award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or contains decisions on matters beyond the scope of the submission to arbitration …

7 The time period within which an application to set aside the Award could be made ended on 20 December 2001. Eleven months later, on 7 November 2002, after spending time in effecting service of these proceedings out of the jurisdiction on the respondents and after changing their lawyers, the applicants filed this summons in chambers. By it, they have asked for leave to amend the originating motion. The amendments asked for are quite substantial. They wish to add six new grounds as bases for the setting aside of the Award. The proposed additional grounds are as follows:

3 a breach of the rules of natural justice had occurred in connection with the making of the Award by which the rights of the applicants have been prejudiced;

4 the applicants were not treated equally and/or were not given a full opportunity to present their case and/or were otherwise unable to present their case;

5 the Award deals with disputes not contemplated by or, alternatively, not falling within the terms of the submission to arbitration and/or contains decisions on matters beyond the scope of the submission to arbitration;

6 the composition of the Arbitral Tribunal and/or the arbitral procedure was not in accordance with the agreement of the parties;

7 the Award is in conflict with the public policy of Singapore; and

8 the Award was induced or affected by fraud.

It can be seen that the applicants have not been particularly selective in relation to the new grounds. The new ground 5 is to a large extent a repetition of the original grounds 1 and 2. In addition, they have invoked three of the five other grounds under Article 34 of the Model Law and both of the grounds under s 24 of the Act. Further, when the summons in chambers was filed, it appeared that the applicants wished to set aside the whole of the Award, which would include the decision in relation to their claim as well as the decision in relation to the counterclaim, when their original request had been only for the setting aside of the decision on the counterclaim. In oral arguments before me, however, their counsel confirmed that the applicants were not asking for the decision on their claim to be set aside. The new grounds were intended only as additional ammunition for the setting aside of the decision on the counterclaim. Naturally, the respondents totally oppose any amendment being made to the originating motion.

The proper approach

8 The main battle ground is over how the court should treat such an application to amend. The respondents point to the intentions of the drafters of the Model Law which were that they would provide a fairly short period of time during which an application for setting aside could be made in order to minimise the risk of dilatory tactics. The respondents argue that the time limit of three months is a strict statutory time limit. Therefore when it is sought, outside this period of three months, to amend a setting aside application for the purpose of introducing new grounds, such application must be treated in the same way as an application to...