Cbx v Cbz

CourtCourt of Three Judges (Singapore)
JudgeJudith Prakash JCA,Quentin Loh JAD,Jonathan Mance IJ
Judgment Date21 June 2021
Docket NumberCivil Appeal No 136 of 2020
CBX and another
CBZ and others

Judith Prakash JCA, Quentin Loh JAD and Jonathan Mance IJ

Civil Appeal No 136 of 2020

Court of Appeal

Arbitration — Award — Recourse against award — Setting aside — Ambit of parties' submission to arbitral tribunal's jurisdiction — Approach to parties' terms of reference in arbitration — Whether tribunal acted in excess of its jurisdiction — Whether tribunal acted in breach of rules of natural justice — Effect of external arbitrations — Article 34 UNCITRAL Model Law on International Commercial Arbitration as appended to International Arbitration Act (Cap 143A, 2002 Rev Ed) — Section 24 International Arbitration Act (Cap 143A, 2002 Rev Ed)

Arbitration — Costs — Awarded — Treatment of costs awarded by tribunal where material part of tribunal's award was later set aside — Tribunal's power to award compound interest under s 20 International Arbitration Act (Cap 143A, 2002 Rev Ed) — Article 34 UNCITRAL Model Law on International Commercial Arbitration — Sections 20 and 24 International Arbitration Act (Cap 143A, 2002 Rev Ed)

Held, allowing the appeal:

(1) The Court of Appeal allowed CA/CA 136/2020 and set aside: (a) the Phase II Partial Awards in so far as they ordered payment of the Remaining Amounts; (b) the Costs Award; and (c) the Tribunal's order for compound interest: at [64], [85], and [95].

(2) The Tribunal had based its conclusion that it had jurisdiction to order payment of the Remaining Amounts, irrespective of any acceleration, upon the terms of the Sellers' Reply. However, the Buyers never accepted the claims for the Remaining Amounts as being or coming within the Tribunal's jurisdiction. On the contrary, the Buyers had made repeated objection to those claims being considered by the Tribunal. However, the Judge did not refer to the concluding summaries and footnotes in either of the Buyers' post-hearing briefs, and discounted the clear references to the ALRO arbitration in the Buyers' second post-hearing brief dated 5 November 2018: at [40] to [42].

(3) The present situation arose from the absence of any clear identification of or ruling on the issue or exercise of the Tribunal's jurisdiction over any claims to the Remaining Amounts, other than on an accelerated basis. The Terms of Reference (“ToRs”) dated 11 August 2016 and 8 September 2016 in the two arbitrations arising from the SPAs recorded claims by the Sellers, but did not include any claims to the Remaining Amounts save, in the case of SPA II and later in the case of both SPAs, by way of acceleration. While the arbitration clauses provided that “[t]he [ToRs] shall not include a list of issues to be determined”, the ToRs themselves indicated that they were subject to Art 23(4) of the ICC Rules. What Art 23(4) clearly contemplated in the event of a party wishing to make a new claim was express consideration and determination by the arbitral tribunal of the question of whether this should be permitted having regard to its nature, the stage of the arbitration, and all other relevant circumstances. The provision in the ToRs foregoing any list of issues thus needed to be read in the context of the claims identified in the ToRs. The Tribunal and parties could not, especially in the light of their express reservation as to the application of Art 23(4), have meant that any party could raise any new claim or issue whatsoever at any time without any arbitral input or control: at [45] and [46].

(4) At the close of “Phase I”, the only issues of liability stood over by the tribunal to “Phase II”, apart from questions of damages, were those relating to acceleration of the Remaining Amounts and any other claims or counterclaims already raised in Phase I. If the Sellers were to seek to introduce any other claim, this would have been expected to be done in their initial claim submissions for Phase II and by way of express application to the Tribunal. This was even clearer in the context of a claim for the Remaining Amounts independent of any acceleration, in that such a claim was not yet due, and might or would not become due until after the award was made – a matter which the Tribunal was aware was before the Agricultural Land Reform Office (“ALRO”) tribunal, whose jurisdiction the Tribunal did not question. Either way, whenever such a claim was sought to be introduced, it should, if its introduction was challenged, have led to a clear jurisdictional ruling: at [47].

(5) The Sellers' reliance on PT Prima International Development v Kempinski Hotels SA[2012] 4 SLR 98 (“PT Prima”) for the proposition that the Sellers had the right at any time to introduce any new matter, including any claims that might have arisen or might accrue prospectively by the time of any final award, was unmeritorious. That was not a correct analysis of the case. The observations in PT Prima did not give an unrestrained licence to introduce new claims: at [48] to [52].

(6) Bearing in mind that the issue of jurisdiction had been squarely raised before it, it was incumbent on the Tribunal to rule on it by determining whether or not the Sellers were or should be permitted to pursue any claim to the Remaining Amounts in the present arbitrations, other than on an accelerated basis. Had the Tribunal identified this issue as requiring determination, the Buyers' case that the tribunal in the ALRO arbitration was seized of the issue of whether the Remaining Amounts would become payable would inevitably have called for and received attention. Once it was recognised that the Buyers did signal their true position on the Remaining Amounts, it was clear that the jurisdictional issue was not resolved in a manner which ever brought the claims to the Remaining Amounts (which were in any event still largely prospective at the time when the parties were addressing Phase II) properly within the Tribunal's jurisdiction: at [55] and [56].

(7) The jurisdictional issue raised by the Buyers should have been, but never was, resolved by a ruling determining whether or not any claim should be permitted to the Remaining Amounts other than by way of acceleration. The Tribunal did not make any ruling admitting such claims, and so the Tribunal had no jurisdiction to rule on them in its Phase II Partial Awards. It followed that the Phase II Partial Awards should be set aside as having been made in excess of jurisdiction in so far as they ordered payment of the Remaining Amounts. There was no basis for any other order: at [57] and [64].

(8) Turning next to the Costs Award, an award which was based in material part on illegitimate considerations was flawed and could not in fairness stand. In terms of the IAA and UNCITRAL Model Law on International Commercial Arbitration (“Model Law”), this conclusion followed from first principles. The fruit fell with the tree. Where a later order was ancillary to and depended upon the validity and premises of a prior order, the Legislature could not have intended that the later order should survive the setting aside of the former. Whether the two orders were physically combined in one award or were made in separate awards, the latter was integral to the former. Any other conclusion would have the potential for extraordinary anomalies and serious injustice. Ultimately, the test for whether a costs order could survive had to be one of materiality and judgment: at [72] to [74].

(9) In this jurisdiction, there was, under the IAA and Model Law, no equivalent power to remit to the same tribunal after setting aside. The only power of remission contained in Art 34(4) of the Model Law operated as an alternative to, and was designed to avoid, any setting aside. However, it would be a matter of regret if, after the setting aside in whole or part of an award, accompanied consequentially by the setting aside of a costs order, it were not possible in one way or another to find a means, where appropriate, for a party to seek and for some tribunal (or even the court) to make a valid costs order, where appropriate according to the circumstances. The area was one which those having an oversight of arbitration law might wish to consider: at [78] and [85].

(10) Given that the orders made for payment of the Remaining Amounts were set aside, the orders for compound interest on those amounts also fell to be set aside. In any event, the Tribunal's order for compound interest went beyond the scope of the submission to arbitration within the meaning of Art 34(2)(a)(iii) of the Model Law, in that it went (inadvertently) outside the scope of what both parties had agreed that the Tribunal could, under the relevant governing law, or should, afford by way of relief. The award of compound interest would have had to be set aside on that ground: at [86] and [95].

Case(s) referred to

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

City of Vancouver and Walsh, Re [1961] BCJ No 110 (refd)

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

Dallah Real Estate and Tourism Holding Co v The Ministry of Religious Affairs, Government of Pakistan [2011] 1 AC 763 (refd)

Davis v Witney Urban Council (1899) 63 JP 279 (refd)

Front Row Investment Holdings (Singapore) Pte Ltd v Daimler South East Asia Pte Ltd [2010] SGHC 80 (refd)

GD Midea Air Conditioning Equipment Co Ltd v Tornado Consumer Goods Ltd [2018] 4 SLR 271 (folld)

Kempinski Hotels SA v PT Prima International Development [2011] 4 SLR 633 (refd)

Martin v Harris [2019] EWHC 2735 (Ch) (refd)

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

PT Prima International Development v Kempinski Hotels SA [2012] 4 SLR 98 (refd)

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


The parties' disputes arose from two sale and purchase agreements (“SPA I” and “SPA II” respectively, and “SPAs” collectively) dated 19 June 2015 and governed by Thai law. The SPAs were for the sale and purchase...

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