Clq v Clr

• Jurisdiction: Singapore
• Judge: Kannan Ramesh J,Sir Henry Bernard Eder IJ,Anselmo Reyes IJ
• Judgment Date: 26 November 2021
• Court: High Court (Singapore)
• Docket Number: Originating Summons No 7 of 2021

CLQ

and

CLR

[2021] SGHC(I) 15

Kannan Ramesh J, Sir Henry Bernard Eder IJ and Anselmo Reyes IJ

Originating Summons No 7 of 2021

Singapore International Commercial Court

Arbitration — Arbitral tribunal — Jurisdiction — Joint venture agreement between government and developer to develop site through joint venture company — Joint venture company to be incorporated pursuant to clause in joint venture agreement — Joint venture agreement containing arbitration agreement — Joint venture company was not registered by government ministry in charge of registering companies — Developer commencing proceedings in court against government ministry in charge of registering companies — Proceedings were to secure registration of joint venture company — Whether such proceedings were repudiatory breach of arbitration agreement — Section 10(3) International Arbitration Act (Cap 143A, 2002 Rev Ed)

Evidence — Admissibility of evidence — Expert evidence on foreign law not raised before arbitral tribunal — Party attempting to raise before reviewing court in application under s 10(3) International Arbitration Act (Cap 143A, 2002 Rev Ed) — Whether such evidence admissible — Section 10(3) International Arbitration Act (Cap 143A, 2002 Rev Ed)

Held, dismissing the application:

(1) The law governing the JVA was English law, and thus a rebuttable presumption that English law also governed the Arbitration Agreement was raised. This was not challenged by either party, and thus English law applied to the question of repudiation of the Arbitration Agreement: at [32].

(2) The Developer's conduct, from an objective standpoint, had to evidence a clear intention to repudiate the Arbitration Agreement. This required an examination of whether a reasonable person in the position of the Government would conclude from the Developer's conduct that it intended to no longer be bound by the Arbitration Agreement. This was a factual inquiry to which the context of the Ruritanian Proceedings was relevant: at [39] and [40].

(3) It was clear from the documents in the Ruritanian Proceedings, and the events leading up to them, that they were commenced by the Developer for the purpose of jumpstarting the JVA, and was limited to obtaining administrative relief that would support the preliminary steps in the JVA: at [42].

(4) From the backdrop to the Ruritanian Proceedings, it would not have been clear to the Developer why the JVC was not being registered and it would not have reasonably perceived that it was facing a breach of the JVA by the Government in its capacity as a party to the JVA. Instead, the Developer would have seen the issue as stemming from the MOC alone. This was evidenced by the fact that the Developer communicated only with the MOC, and the fact that the Developer did not know why its applications were being returned. Thus, objectively assessed, the Developer's solution was to compel the MOC to perform its duty through the Ruritanian courts: at [43] to [45].

(5) The Plaint was clearly focused on the MOC's conduct and on obtaining administrative relief. There was no claim for damages for breach of contract. This was clear from the summary of the Plaint, the reliefs sought, the ministries named therein, and the fact that there was no reference to both English law nor the Arbitration Agreement: at [46] to [52].

(6) The Government's response to the Plaint focused on the issues pertaining to the MOC and the registration of the JVC. It offered only regulatory and administrative reasons for not registering the JVC: at [56].

(7) The parties' first statements in the Ruritanian Proceedings were focused on the administrative actions of the MOC and not on the Government's actions as a party to the JVA. The Developer's statement did not mention any claim for damages even though it was entitled to make such a claim under the JVA. Further, the absence of a claim for damages went against the Government's position that the Developer was seeking the contractual remedy of specific performance. Further, the parties' first statements continued to focus on the MOC and its actions with regard to the registration of the JVC: at [57] to [60].

(8) Although the parties' later statements in the Ruritanian Proceedings put into issue the terms of the MLA, there was no dispute over the obligation to sign the MLA under the JVA. Further, it was clear from the Government's statements that the MLA was not the focus of the Ruritanian Proceedings. The court agreed that no significance could be attributed to the issue of the MLA in assessing whether the Developer repudiated the Arbitration Agreement: at [61] to [66].

(9) The Ruritanian Judgment was a contemporaneous record of the Developer's conduct and to that extent it was relevant to the question of repudiation. However, the views of the Ruritanian court and how it framed the issues were not. Nevertheless, the Ruritanian court's reasoning was consistent with the finding that, objectively assessed, the Ruritanian Proceedings were an action for administrative relief as a result of the MOC's failure to register the JVC: at [68] and [69].

(10) The Arbitration Agreement was a valuable protection to both parties, especially the Developer, who was a foreign investor involved in a contract being performed on the counter-party's own turf. Accordingly, it was unlikely that either would choose to abandon the Arbitration Agreement before the JVA was even off the ground. Further, it would be contradictory to treat the Developer as intending to disavow the Arbitration Agreement by bringing the Ruritanian Proceedings when the very purpose of the proceedings was to jumpstart the JVA which contained that agreement: at [75] to [77].

[Observation: The approaches under English and Singapore law to the question of repudiation of an arbitration agreement involved the same inquiry. The Singapore approach in Marty Ltd v Hualon Corp (Malaysia) Sdn Bhd[2018] 2 SLR 1207 essentially shifted the evidential burden to the breaching party to show that the conduct in question was not repudiatory, but this did not change the overall objective of the inquiry. Therefore, the end result ought to be the same regardless of which approach was adopted: at [33] and [34].]

Case(s) referred to

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

BEA Hotels NV v Bellway LLC [2007] 2 Lloyd's Rep 493 (refd)

BNA v BNB [2020] 1 SLR 456 (folld)

Downing v Al Tameer Establishment [2002] EWCA Civ 721 (refd)

Government of the Lao People's Democratic Republic v Sanum Investments Ltd [2015] 2 SLR 322 (not folld)

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

Rederi Kommanditselskaabet Merc-Scandia IV v Couniniotis SA (The “Mercanaut”) [1980] 2 Lloyd's Rep 183 (refd)

Sanum Investments Ltd v Government of the Lao People's Democratic Republic [2016] 5 SLR 536 (refd)

Tomolugen Holdings Ltd v Silica Investors Ltd [2016] 1 SLR 373 (refd)

Facts

The plaintiff was the Government of Ruritania (“the Government”). The Government, through its finance minister, entered into a joint venture agreement (“the JVA”) with the defendant, a developer incorporated in the British Virgin Islands and based in Ruritania (“the Developer”). The JVA was for the development of a site in Ruritania, and the leasing of that site over a 50-year period under a master lease agreement (“the MLA”). The JVA provided that the MLA was to be entered into between the Government and a joint venture company (“the JVC”) that was to be incorporated under the laws of Ruritania. The Developer and the Government were to be the sole shareholders of the JVC. The JVA was governed by English law and contained a clause stating that disputes arising out of the JVA were to be referred to mediation and thereafter arbitration (“the Arbitration Agreement”).

After signing the JVA, the Developer attempted to register the JVC with the Ruritanian regulator (“the MOC”), but its application to register the JVC was sent back by the MOC without explanation. The MOC issued a letter explaining that it required a letter of approval from Ruritania's President's Office, but the Developer never had sight of this letter.

In September 2013, the Developer commenced proceedings in the Ruritanian courts (“the Ruritanian Proceedings”), seeking the registration of the JVC and the signing of the MLA. The Ruritanian Proceedings were commenced by a “plaint form” (“the Plaint”), which named three respondents: the MOC, Ruritania's finance ministry, and Ruritania's tourism ministry. Several other documents were subsequently filed by both the Developer and the Government in the Ruritanian Proceedings.

By a judgment dated 25 July 2014 (“the Ruritanian Judgment”), the Ruritanian court ordered the Government to incorporate the JVC and sign the MLA. The JVC was eventually incorporated, but the MLA was never signed. Consequently, the Developer commenced arbitration against the Government. The Government, as a preliminary plea, argued that the Arbitration Agreement had been repudiated by the Developer when it commenced the Ruritanian Proceedings, and the Government had accepted this by participating in the proceedings. Accordingly, the Government argued that the arbitral tribunal which had been appointed had no jurisdiction.

The arbitral tribunal did not agree and found that there was no repudiation of the Arbitration Agreement by the Developer when it commenced the Ruritanian Proceedings. Accordingly, it found that it had jurisdiction. The Government challenged this decision under s 10(3) of the International Arbitration Act (Cap 143A, 2002 Rev Ed) by filing the present application.

Before the court, the Government argued that the Ruritanian Proceedings were over a contractual dispute that fell within the Arbitration Agreement, and thus, the Developer's commencement of the Ruritanian Proceedings constituted a repudiatory breach. The Developer denied this, arguing that the Ruritanian Proceedings were of a limited nature being an application for an...