JudgeS Mohan JC
Judgment Date19 June 2020
Neutral Citation[2020] SGHC 118
Plaintiff CounselChew Sui Gek Magdalene, Cai Jianye Edwin and Tan Chengxi (AsiaLegal LLC)
Date19 June 2020
Docket NumberOriginating Summons 1521 of 2019 (Summons 6442 of 2019)
Hearing Date04 March 2020,11 March 2020
Subject MatterSetting aside enforcement order,Award,Recourse against award,Arbitration
Defendant CounselChenthil Kumar Kumarasingam and Sherah Tan Ying Zhong (Oon & Bazul LLP)
CourtHigh Court (Singapore)
Citation[2020] SGHC 118
Published date24 June 2020
S Mohan JC: Introduction

In Originating Summons 1521 of 2019 (“OS 1521”), the Plaintiff applied for leave to enforce a Final Arbitration Award (the “Final Arbitration Award”) dated 26 August 2019 and an Additional Award to the Final Arbitration Award dated 25 September 2019 (the “Additional Award”) (collectively, the “Award”) issued by a sole arbitrator (the “Arbitrator”) in a Singapore Chamber of Maritime Arbitration (“SCMA”) arbitration (the “Arbitration”). The underlying dispute between the Plaintiff and Defendant involved the sale and purchase of three vessels.

As is common, leave was granted ex parte to the Plaintiff by an Assistant Registrar pursuant to an Order of Court (HC/ORC 8300/2019) dated 12 December 2019 (the “Leave Order”) for the Plaintiff to enforce the Award. The Leave Order was served on the Defendant on 18 December 2019.1

In Summons 6442 of 2019 filed on 27 December 2019 (“SUM 6442”), the Defendant applied for the Leave Order to be set aside in its entirety. The Defendant did not commence separate proceedings to apply to set aside the Award itself. The parties appeared before me on 4 and 11 March 2020. I reserved judgment and now deliver my grounds of decision.

It was common ground during the hearing before me that s 19 of the International Arbitration Act (Cap 143A, 2002 Rev Ed) (the “IAA”) read with Article 36 of the UNCITRAL Model Law on International Commercial Arbitration (“the Model Law”) as set out in the First Schedule (“Sch 1”) of the IAA would apply in this matter, and not s 31 IAA as originally submitted by the Plaintiff in its written submissions.2 By its plain terms, s 31 IAA only applies to foreign arbitral awards and would not therefore apply when enforcement of a domestic international arbitral award is being challenged under the IAA.

As explained by the Court of Appeal in PT First Media TBK (formerly known as PT Broadband Multimedia TBK) v Astro Nusantara International BV and others and another appeal [2014] 1 SLR 372 (“PT First Media”) at [84] – [85] and [99], the same grounds for resisting enforcement of a foreign award under Article 36(1) of the Model Law are equally applicable to a party resisting enforcement of a domestic international award under s 19 IAA. Consistent with the design of and the philosophy behind the Model Law, an award debtor has a choice of remedies. In other words, an award debtor may actively apply to set aside the award before the seat court, or passively seek to resist recognition or enforcement of the award before the enforcing court (PT First Media at [65] and [71]). A party may of course, in appropriate circumstances, also seek to invoke both active and passive remedies.

Background facts

In Suit No. 300 of 2016 (HC/S 300/2016) (the “Suit”), [name redacted “CFA”] commenced proceedings in the High Court against various parties, including the Defendant, to recover sums owed to CFA under a loan agreement and variation agreements thereto. Those sums were secured by mortgages and collateral deeds of covenants granted to CFA over three Vessels (the “Vessels”) and by corporate and personal guarantees.3 The Vessels comprised two steel tugboats and a steel deck cargo barge.4

Pursuant to a consent Order of Court (HC/ORC 4528/2016) dated 7 July 2016 in the Suit (the “Authorisation Order”), CFA was authorised to conduct, on the Defendant’s behalf, any and all activities necessary and/or incidental to the marketing, advertising and sale of the Vessels.5 Another entity, [name redacted “CF”], in turn acted as an agent for CFA in relation to those activities.6 In these grounds, and for avoidance of doubt, I shall refer to CFA and CF collectively as “CF”.

The Plaintiff (the claimant in the Arbitration) and the Defendant (the respondent in the Arbitration) entered into a contract in the form of a Memorandum of Agreement (the “MOA”) dated 3 August 2016 for the sale and purchase of the Vessels.7 The Plaintiff was the buyer and the Defendant the seller.

Clauses 11 and 12 of the MOA were central to the dispute between the parties in the Arbitration and provided as follows: Buyer’s Default

Should the Purchase Price not be paid in accordance with Clause 3 (Payment) or the Buyer fails to take delivery of the Vessels in accordance with this Agreement for any reason whatsoever attributable to the Buyer, the Sellers shall have the right to cancel this Agreement, in which case the Sellers shall be entitled to forfeit and withhold the Deposit which shall be for the account of the Seller, provided that the Buyer shall have the right to cancel this Agreement and be entitled to a full refund of the Deposit in the event that, whichever occurs earlier: (a) CF rejects the grant of the loan facilities to the Buyer for the purchase of the Vessels; (b) CF does not approve the grant of the loan facilities to the Buyer for the purchase of the Vessels within one month of the date of this Agreement and the date which the Buyer delivers its management accounts to CF for its 2015 financial year (whichever is later); or (c) the terms and conditions in relation to CF’s loan facilities to be granted to the Buyer are materially different from the Indicative Offer and the Buyer rejects such terms and conditions within 15 calendar days of CF’s signed commitment letter to the Buyer.

Seller’s Default

Should the Sellers fail to validly complete a legal transfer of the Vessels in accordance with this Agreement by the Date of Closing, the Buyers shall have the right to cancel this Agreement, in which case the Buyers shall be entitled to a full refund of the Deposit and any other monies already paid by the Buyer (which shall be non-interest bearing) under this Agreement and for the avoidance of doubt, Buyer’s sole claim against the Sellers for such failure to deliver the Vessels shall only be for the refund of the Deposit and any other monies already paid by the Buyer under this Agreement and Buyer agrees that it shall not institute any other claims or proceedings against the Seller or against CF for such failure.

It is undisputed that in accordance with the terms of the MOA, and in particular Clause 2, the Defendant received a deposit amounting to US$335,000 (the “Deposit”) for the purchase of the Vessels. The Deposit represented 10% of the total purchase price for the Vessels of US$3.35 million.8

CF issued a Term Commitment Letter (the “First TCL”) dated 30 September 2016 to the Plaintiff, which constituted its offer to the Plaintiff to finance a loan for the purchase of the Vessels.9 The First TCL was never signed by the Plaintiff and was subsequently superseded by the issuance of a second Term Commitment Letter (the “Second TCL”) dated 14 November 2016.10 It was accepted by the parties that the Plaintiff entered into the loan agreement with CF upon the Second TCL being signed.11 Both the First TCL and Second TCL were issued to [name redacted “XYZ”], a company nominated by the Plaintiff.12

It is also undisputed that on or about 20 February 2017, CF informed the Plaintiff that it was no longer able to fund the purchase of the Vessels.13 This development threw the completion of the sale and purchase into disarray and spawned the dispute between the parties. The Plaintiff’s position was that as the loan facilities from CF were no longer forthcoming, it was entitled, under Clause 11(a) and/or 11(b) of the MOA, to cancel the MOA and obtain a refund of the Deposit, essentially on the basis that “the grant of the loan facilities” had been rejected or had not been approved.14 On 23 March 2017, the Plaintiff (through its solicitors) demanded that the Defendant return the Deposit but the Defendant refused.15 The Defendant’s position (as intimated in its solicitors’ letter of 24 April 2017) was that the Defendant was entitled to cancel the MOA on the basis that the Plaintiff failed to take delivery of the Vessels due to a “reason…attributable to the Buyer” within the meaning of Clause 11 of the MOA and thereafter, to forfeit and withhold the Deposit. The Defendant then proceeded to do so.16

The dispute between the parties was referred to arbitration pursuant to Clause 13 of the MOA. Clause 13 of the MOA is reproduced as follows:17 Law and Arbitration This Agreement shall be governed by and constructed in accordance with Singapore law and any and all disputes arising out of or in connection with this contract, including any question regarding the existence, validity or termination, shall be referred to and finally resolved by arbitration in Singapore in accordance with the Arbitration Rules of the Singapore Chamber of Maritime Arbitration (‘SCMA rules’) for the time being in force at the commencement of the arbitration, which rules are deemed to be incorporated by reference to this clause or any statutory modification or re-enactment thereof save to the extent necessary to give effect to the provisions of this Clause.

The reference shall be to three (3) arbitrators. A party wishing to refer a dispute to arbitration shall appoint its arbitrator and send notice of such appointment in writing to the other party requiring the other party to appoint its own arbitrator within fourteen (14) calendar days of that notice and stating that it will appoint its arbitrator as sole arbitrator unless the other party appoints its own arbitrator and gives notice that it has done so within the fourteen (14) days specified. If the other party does not appoint its own arbitrator and gives notice that is (sic) had done so within the fourteen (14) days specified, the party referring a dispute to arbitrator (sic) may, without the requirement of any further prior notice to the other party, appoint its arbitrator as sole arbitrator and shall advise the other party accordingly. The award of sole arbitrator shall be binding on both Parties as if the sole arbitrator had been appointed by agreement.

Although Clause 13 of...

To continue reading

Request your trial
1 cases
  • Year Sun Chemitanks Terminal Corporation v Gunvor Singapore Pte Ltd
    • Singapore
    • High Court (Singapore)
    • 13 October 2021
    ...4 SLR 79 (folld) BRS v BRQ [2021] 1 SLR 390 (folld) CAI v CAJ [2021] 5 SLR 1031 (folld) CBS v CBP [2021] 1 SLR 935 (folld) CDI v CDJ [2020] 5 SLR 484 (folld) China Machine New Energy Corp v Jaguar Energy Guatemala LLC [2020] 1 SLR 695 (folld) Dampskibsselskabet “Norden” A/S v Andre & Cie SA......
1 books & journal articles
  • Arbitration
    • Singapore
    • Singapore Academy of Law Annual Review No. 2020, December 2020
    • 1 December 2020
    ...See paras 4.67–4.68 below. 19 BRS v BRQ [2021] 1 SLR 390 at [43]. 20 See para 4.18 above. 21 BXH v BXI [2020] 1 SLR 1043 at [75]. 22 [2020] 5 SLR 484. 23 CDI v CDJ [2020] 5 SLR 484 at [30]. 24 3rd Ed, October 2015. 25 [2021] 1 SLR 276. 26 No 177 of 1967. 27 Industrial Relations Act 1967 (No......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT