Btn v Btp

• Judge: Belinda Ang Saw Ean J
• Judgment Date: 16 September 2019
• Court: High Court (Singapore)
• Docket Number: Originating Summons No 683 of 2018 and Summons No 2611 of 2018
• Date: 16 September 2019

BTN and another

and

BTP and another

[2019] SGHC 212

Belinda Ang Saw Ean J

Originating Summons No 683 of 2018 and Summons No 2611 of 2018

High Court

Arbitration — Arbitral tribunal — Jurisdiction — Respondents in arbitration seeking declaration that tribunal had jurisdiction — Whether tribunal's decision in holding prior court's factual finding to be binding was negative jurisdiction ruling — Section 10(3)(b) International Arbitration Act (Cap 143A, 2002 Rev Ed)

Arbitration — Award — Recourse against award — Setting aside — Respondents in arbitration seeking to set aside arbitral award — Whether breach of natural justice occurred in making of arbitral award — Whether arbitral award contrary to public policy — Whether arbitral tribunal failed to decide matters — Article 34(2) UNCITRAL Model Law on International Commercial Arbitration — Section 24(b) International Arbitration Act (Cap 143A, 2002 Rev Ed)

Held, dismissing the application in OS 683:

(1) The Partial Award was not a ruling on jurisdiction. This was because neither the Construction Issue nor the Res Judicata Issue was a jurisdictional issue. The tribunal's decisions on both issues were decisions on the merits of the parties' legal questions submitted to the tribunal for determination. As for the Construction Issue, the tribunal had exercised its jurisdiction to construe the parties' contracts; it was not a case of the tribunal abdicating its jurisdiction. As for the Res Judicata Issue, the Partial Award had answered the substantive merits of the issues submitted by the parties for determination, namely, res judicata. Thus, the decisions could not be reviewed de novo by the court: at [45], [46], [52], [57] and [78].

(2) There was a distinction between the admissibility of a claim and the jurisdiction of the tribunal. Jurisdiction referred to the power of the tribunal to hear a case, whereas admissibility referred to whether it was appropriate for the tribunal to hear it. The doctrine of res judicata fell within the concept of admissibility of a claim, and not the concept of jurisdiction, because the doctrine of res judicata took aim at the claim and not at the defect of the improper forum: at [62] to [64].

(3) In the context of commercial arbitration, the concept of admissibility was useful as a foil to better illustrate the ambit of the concept of jurisdiction because challenges as to the admissibility of claims were not jurisdictional objections. Concepts of jurisdiction, admissibility and merits were not unique to any specific types of dispute resolution or forum. There was no reason why the concept of admissibility could not be utilised as a tool to determine whether an objection lodged in a commercial arbitration was a jurisdictional objection: at [70].

(4) In any case, relief under s 10(3) of the IAA was not available when a party sought to set aside a ruling which was predominantly on jurisdiction but also marginally dealt with the merits. Thus, even if the Companies were right to argue that the decision on the Construction Issue and the Res Judicata Issue were decisions on jurisdiction, the Partial Award also dealt with whether a valid termination of the Employees required the existence of audited accounts at the time of termination (“Audited Accounts Issue”). The parties did not dispute that the tribunal's decision on the Audited Accounts Issue was a decision on the substantive merits. Thus, the remedy under s 10(3) of the IAA was inapplicable to the present case: at [85] to [87].

(5) The Companies' application in the alternative to set aside the Partial Award was also dismissed. On the facts, there was no breach of natural justice, and the tribunal neither breached the parties' agreed arbitral procedure, nor exceeded its jurisdiction. While the Companies were right to contend that the hearing was intended to resolve only legal issues, the tribunal did not rely on disputed facts in the hearing and thus neither breached the parties' agreement nor natural justice. On the Construction Issue, the tribunal relied wholly on the construction of the SPA and the PEAs. The tribunal did not rely on any material not clear from the record. On the Res Judicata Issue, it was clear from the agreed list of legal questions that the tribunal had abided by the parties' reference to arbitration: at [91] to [97].

(6) There was also no breach of natural justice because the tribunal did not adopt a new approach in the Partial Award that was out of the parties' expectation. The ambit of the requirement of identity of subject matter – one of the requirements of issue estoppel – was argued extensively by the parties and decided upon by the tribunal. All that the tribunal decided was to prefer the Employees' approach on this requirement: at [101] and [102].

(7) The tribunal did not fail to consider the Companies' argument that issue estoppel should not be granted where it would be unjust given that the Companies would have had no opportunity of presenting their case. This argument was not pleaded by the Companies in the arbitration. While the Companies raised the point orally, a tribunal was not obliged to deal with every argument; in this case, the tribunal was keenly aware that BTO was absent from the MIC proceedings and did not present its case: at [104] and [105].

(8) The tribunal did not fail to decide on matters submitted to it. The tribunal was tasked with determining whether the findings of the MIC were contractually binding and had res judicata effect, and the tribunal decided the very matters submitted to it: at [108].

(9) While the Companies raised a last-minute claim that the Employees breached the dispute resolution clauses in the PEAs, it was unclear which ground of challenge this related to. If the Companies were alleging that the tribunal lacked jurisdiction, this went against the whole tenor of their case, which was that the tribunal had jurisdiction. In any case, this argument was meritless because the alleged breaches were breaches of the PEAs, and the Companies did not allege any breach of the preconditions to arbitration under the SPA. The Companies did not explain how a breach of the PEAs resulting from the MIC proceedings would affect the jurisdiction of the tribunal that was constituted under the SPA: at [109] and [110].

(10) The Partial Award could not be set aside under the public policy ground. The Companies failed to address the ambit and delineation of the alleged public policy that a party should not be prevented from having its case determined through a series of procedural and other mishaps. In any case, the Companies were not prevented from having their case heard: at [112] to [116].

(11) The Companies' further argument that the Employees were in breach of the Arbitration Agreements in the PEAs in seeking recourse from the MIC was an objection to the findings of fact and law made by the tribunal on the interpretation of the jurisdiction clauses and dispute resolution clauses in the PEAs. Such findings of fact and law by the tribunal in a public policy challenge could not be reviewed by the court: at [117].

(12) The Partial Award should also not be set aside against BTN. While BTN was not a party to the MIC proceedings, the tribunal found that the MIC's findings were binding on BTN by applying legal principles based on contractual construction and the concept of issue estoppel. It could not be said that the application of these legal principles shocked the conscience or was wholly offensive to the ordinary reasonable and fully informed member of the public: at [118] and [119].

Case(s) referred to

AJU v AJT [2011] 4 SLR 739 (folld)

AKN v ALC [2015] 3 SLR 488 (folld)

AMCO Asia Corp v Republic of Indonesia ICSID Case No ARB/81/1 (10 May 1988) (refd)

AQZ v ARA [2015] 2 SLR 972 (folld)

BAZ v BBA [2020] 5 SLR 266 (folld)

BLC v BLB [2014] 4 SLR 79 (folld)

BNX v BOE [2017] SGHC 289 (refd)

Chiron Corp v Ortho Diagnostic Systems 207 F 3d 1126 (9th Cir, 2000) (refd)

Coal & Oil Co LLC v GHCL Ltd [2015] 3 SLR 154 (folld)

CRW Joint Operation v PT Perusahaan Gas Negara (Persero) TBK [2011] 4 SLR 305 (distd)

Henderson v Henderson (1843) 3 Hare 100 (refd)

International Research Corp PLC v Lufthansa Systems Asia Pacific Pte Ltd [2014] 1 SLR 130 (refd)

Kingdom of Lesotho v Swissbourgh Diamond Mines (Pty) Ltd [2019] 3 SLR 12 (refd)

Marriott International Hotels, Inc v JNAH Development SA No 09/13550 (9 September 2010) (Court of Appeal, Paris) (refd)

Marty Ltd v Hualon Corp (Malaysia) Sdn Bhd [2018] 2 SLR 1207 (refd)

Pipeline Services WA Pty Ltd v ATCO Gas Australia Pty Ltd [2014] WASC 10 (refd)

PT Asuransi Jasa Indonesia (Persero) v Dexia Bank SA [2007] 1 SLR(R) 597; [2007] 1 SLR 597 (distd)

Rakna Arakshaka Lanka Ltd v Avant Garde Maritime Services (Pte) Ltd [2019] 2 SLR 131 (folld)

Rotoaira Forest Trust v AG [1999] 2 NZLR 452 (refd)

Royal Bank of Scotland NV, The v TT International Ltd [2015] 5 SLR 1104 (folld)

SEF Construction Pte Ltd v Skoy Connected Pte Ltd [2010] 1 SLR 733 (folld)

Sinolanka Hotels & Spa (Pte) Ltd v Interna Contract SpA [2018] SGHC 157 (refd)

Soh Beng Tee & Co Pte Ltd v Fairmount Development Pte Ltd [2007] 3 SLR(R) 86; [2007] 3 SLR 86 (folld)

Swissbourgh Diamond Mines (Pty) Ltd v Kingdom of Lesotho [2019] 1 SLR 263 (refd)

TMM Division Maritima SA de CV v Pacific Richfield Marine Pte Ltd [2013] 4 SLR 972 (folld)

Turner v London Transport Executive [1977] ICR 952 (refd)

WSG Nimbus Pte Ltd v Board of Control for Cricket in Sri Lanka [2002] 1 SLR(R) 1088; [2002] 3 SLR 603 (distd)

Facts

This case arose from the sale and purchase of shares in a group of companies (“the Group”), of which the second plaintiff, BTO, was the holding company. BTO was an online travel agency incorporated in Malaysia. The defendants – BTP and BTQ – were two individuals who were the owners of the Group. On 26 September 2012, the defendants, along with two other owners of the Group, entered into a share and purchase agreement...