AKN and another v ALC and others and other appeals

• Judge: Sundaresh Menon CJ
• Judgment Date: 27 November 2015
• Neutral Citation: [2015] SGCA 63
• Hearing Date: 12 August 2015
• Citation: [2015] SGCA 63
• Published date: 03 December 2015
• Year: 2015
• Defendant Counsel: Alvin Yeo SC, Chan Hock Keng, Lin Wei Qi Wendy and Chong Wan Yee Monica (WongPartnership LLP),Davinder Singh SC, Zhuo Jiaxiang and David Fong (Drew & Napier LLC),Evans Ng Hian Pheng (Rodyk & Davidson LLP)
• Court: Court of Three Judges (Singapore)
• Docket Number: Civil Appeals Nos [P], [Q] and [R]
• Plaintiff Counsel: Andre Yeap Poh Leong SC, Adrian Wong Soon Peng, Ang Leong Hao (Rajah & Tann Singapore LLP) (instructed) and Ng Lip Chih (NLC Law Asia LLC)

Sundaresh Menon CJ (delivering the judgment of the court): Introduction

Following the delivery of our judgment on 31 March 2015 in AKN and another v ALC and others and other appeals [2015] 3 SLR 488 (“the Main Judgment”), certain matters were raised by the parties and we address these in this judgment. In the Main Judgment, we allowed, in part, an appeal against the decision of a High Court judge to set aside an arbitral award in its entirety. We held that only some parts of the award should be set aside. We invited the parties to file written submissions on costs and on any consequential orders that they wished to seek. The parties raised various matters, some of which were subsequently resolved. In this judgment, we deal only with those matters that remain outstanding. For convenience, the defined terms that we used in the Main Judgment will continue to be used here.

Brief background

Shortly after the Main Judgment was issued on 31 March 2015, we issued the following direction on 1 April 2015:

We refer to [139] of the judgment of the Court of Appeal dated 31 March 2015 ([2015] SGCA 18).

2 Parties are to file written submissions on costs and any consequential orders no later than 16 April 2015. Parties will thereafter be informed if any further written or oral submissions may be needed.

Each party duly filed a set of written submissions on 16 April 2015. The Purchasers sought the following consequential orders: An order identifying the specific paragraphs of the Award that had been set aside by us pursuant to the Main Judgment. A declaration that where specific parts of the Award had been set aside on the grounds of a breach of natural justice, that: the issues or claims in relation thereto remain to be determined between the parties in the arbitration given that by reason of that part of the award having been set aside, there was no longer a valid and binding determination or award under s 19B of the International Arbitration Act (Cap 143A, 2002 Rev Ed) (“IAA”); and the Tribunal accordingly retained jurisdiction to make a fresh determination or award in respect of such matters. Alternatively: that the issues in question be remitted by this Court to the Tribunal for its consideration; or that a consequential order under s 8(2) of the IAA be made (although it subsequently became apparent that it was an order under s 8A(2) that the Purchasers were seeking, in effect to extend any applicable limitation period by the time that had elapsed between the commencement of the arbitration and the Main Judgment).

The Purchasers also submitted that each party should bear its own costs of both the appeal and the hearing below. The Judge had awarded the costs of the hearing below to the Respondents. Oddly, the Purchasers’ “alternative” submission on costs was that they should be awarded 50% of their costs of both the appeals and the hearing below.

The Secured Creditors submitted that they should be awarded costs of the appeal (in CA No [Q]) and the proceedings before the Judge (in OS No [M]) and that there should be no order as to remission. The Liquidator submitted he should be awarded costs of the appeal (in CA No [R]) and the proceedings before the Judge (in OS No [L]) “with (at most) a reduction of up to 20% to reflect the partial success of [CA No [R]] vis-à-vis the Tribunal’s findings on issues of liability”. The Liquidator also sought the following: An order specifying the portions of the Award that had been set aside as a result of the Main Judgment; and A clarification that certain orders made by the Judge (on 17 November 2014 in OS No [L]) remained in force.

The Funds submitted that they should be awarded costs of the appeal (in CA No [P]). They also sought an order to the effect that references to the Funds at Annex A of the Award should be deleted.

We wrote to the parties on 25 May 2015 indicating our determination in respect of some of the matters. The relevant part of our letter reads: 2. The court has considered the material that has been placed before it and makes the following orders in relation to costs:

a. The costs orders made by [the Judge] in relation to the matters below are to remain.

b. In CA No [P], the appellants are to pay the respondents’ costs. Such costs are to be taxed if not agreed.

c. In CA No [Q] and CA No [R], each party is to bear its own costs.

3. The court declines to make any order clarifying which paragraphs of the award have been affected or set aside because it is clear and evident from the judgment of the court that was rendered earlier, which are the dispositive parts of the award that have been set aside and to this extent there is no need for any further clarification. The court does not consider that it can or should make any order in relation to the specific paragraphs of the award that concern the reasons of the Tribunal rather than its disposition of the matters presented. 4. The court declines to make any further order in respect of the orders made by [the Judge] on 17 November 2014.

In the same letter, we also directed that the parties, save the Funds, file further submissions on four particular points. These points arose out of the application made by the Purchasers for the declarations or orders that we have summarised at [3] above. The relevant portion of the letter reads: 5. The court requires the parties – save the respondents in CA No [P] – to furnish written submissions and any relevant authorities within 30 days and thereafter attend an oral hearing on a date after June 2015. The parties will be advised on the exact date in due course. The written submissions should not exceed 20 pages. The purpose of both the written submissions and the oral hearing is for the parties to address the court on the following questions:

a. What is the effect of parts of the award being set aside in relation to (i) the arbitral proceedings, (ii) the Tribunal’s jurisdiction and (iii) the possibility of those parts being remitted to arbitration?

b. After setting aside an award, does the court have the power to remit matters to the Tribunal or is the Tribunal functus officio? If there is such power, what are the considerations that should direct the court as to whether or not it should exercise it? In particular, might there be justifiable doubts as to the Tribunal’s ability to consider afresh and impartially the matters remitted to it having regard to the fact that it has already ruled on these matters once albeit that this has since been set aside?

c. Does the court have the power to remit such matters to a new tribunal?

d. Are the appellants precluded by the application of res judicata, or any related doctrine, from seeking to remit and re-arbitrate these matters?

The parties, except for the Funds which were no longer directly involved in the proceedings, duly complied with this and filed written submissions on 24 June 2015. The parties appeared before us for a further hearing on 12 August 2015, at the conclusion of which we reserved judgment, which we now deliver.

The parties’ arguments

Of the various questions posed, only one received a common answer. This was the third, namely whether the court, after having set aside an arbitral award, has the power to refer matters to arbitration before a new tribunal. All the parties agreed that the court has no such power, citing BLC and others v BLB and another [2014] 4 SLR 79 (“BLC”) at [119] where this court noted as follows:

In our view, even assuming that the case was an appropriate one for remission because it concerned a stand-alone issue, the clear language of Art 34(4) does not, with respect, permit the remission of the award (without more) to a newly constituted tribunal. It has been observed in Blackaby et al, Redfern and Hunter on International Arbitration (OUP, 5th Ed, 2009) (at para 10.34) that Art 34(4) is in fact “an equivalent provision to that of remitting the award to the tribunal for reconsideration” [emphasis added]. That the matter must be remitted to the same tribunal is also supported by Art 32(3) of the Model Law which provides that the mandate of an arbitral tribunal terminates, inter alia, on the issuance of the final award, subject only to the provisions of Art 33 and Art 34(4). [emphasis in original; emphasis added in bold italics]

In the light of the settled position we say no more about this, save to note that it was not suggested by parties, nor is it our view, that the court has some power, beyond or aside from Art 34(4) of the Model Law, to remit matters to a tribunal in cases governed by the IAA or the Model Law. Hence, any issue of remitting an award to a tribunal must be situated within the context of that provision.

In most other respects, the parties (with the Purchasers on one side and the Secured Creditors and Liquidator on the other) took opposed positions. These differences pertained to (a) the effect of setting aside the Award and (b) the question of remission to the Tribunal.

In respect of the former, at some risk of oversimplifying the submissions, the Purchasers take the view that once a court has set aside an award, it ceases to exist. From this, the Purchasers develop their case by contending that arising from the fact that the award no longer exists, it should be treated as though the award had never been made and therefore, the jurisdiction of the tribunal revives, whether on the direction of the court or otherwise. On this basis, they contend that in such circumstances, the parties may canvass again the matters that had been the subject of the award before the same tribunal. As a result, the Purchasers’ primary “prayer” was for a declaration that various issues, notably those which were the subject of those parts of the Award that we had set aside, remain outstanding and unresolved and therefore that the Tribunal retains the...