Daimler South East Asia Pte Ltd v Front Row Investment Holdings (Singapore) Pte Ltd

• Jurisdiction: Singapore
• Judge: Woo Bih Li J
• Judgment Date: 31 July 2012
• Neutral Citation: [2012] SGHC 157
• Court: High Court (Singapore)
• Docket Number: Originating Summons No 312 of 2012 (Summons No 1927 of 2012)
• Published date: 02 August 2012
• Year: 2012
• Hearing Date: 27 June 2012
• Plaintiff Counsel: Jimmy Yim SC and Mahesh Rai (Drew & Napier LLC)
• Defendant Counsel: Chong Yee Leong, Michelle Chiam and Ng Si Ming (Rajah & Tann LLP)
• Subject Matter: Arbitration,Award,Recourse against award
• Citation: [2012] SGHC 157

Woo Bih Li J: Introduction

The issue between the parties was whether they had agreed to exclude the right of appeal to the High Court under s 49(1) of the Arbitration Act (Cap 10, 2002 Rev Ed) (“the AA”) when they agreed to submit any dispute under a joint venture agreement to arbitration to be conducted under the Rules of Arbitration of the International Chamber of Commerce (“the ICC”). It was common ground that under s 49(2) of the AA, the parties could exclude the right of appeal under s 49(1) of the AA and that the reference to the ICC rules was to the ICC Rules of Arbitration in force as from 1 January 1998. I will refer to such rules as “the ICC Rules 1998” for convenience.

After hearing arguments, I made a declaration that the parties had excluded the right of appeal. As I was informed that this was the first time that the High Court had decided the point, I set out my reasons below.

Background

On 15 September 2005, the parties had entered into a joint venture agreement in which they agreed “to work together in order to carry on the business of AMG Experience/lifestyle in the territory of South East Asia”. I will refer to the plaintiff as “DSEA” and the defendant as “FR” and to their joint venture agreement as “JVA”.

The JVA provided, inter alia, that:

...

This Agreement shall be governed by the laws of Singapore.

All disputes arising out of or in connection with the present agreement shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce by one arbitrator in accordance with the said Rules. Place of arbitration will be Singapore.

Disputes arose between the parties. DSEA brought a claim against FR for the payment of the salary of an employee. FR counterclaimed for contractual breach and misrepresentation.

DSEA’s claim and FR’s counterclaim were dismissed by an arbitrator in an award dated 3 July 2009 (“the 1st Award”).

FR then applied in Originating Summons 1126 of 2009 to the High Court to set aside the findings in the 1st Award in respect of its counterclaim and for the part set aside to be tried afresh before a newly appointed arbitrator. On 20 November 2009, Justice Andrew Ang set aside the parts of the 1st Award dealing with FR’s counterclaim and costs of the arbitration as a whole and directed that the parts so set aside be tried afresh by a newly appointed arbitrator.

Pursuant to Justice Ang’s decision, FR commenced fresh arbitration proceedings against DSEA on 20 September 2010 to recover damages for contractual breach and misrepresentation (“the 2nd Arbitration”). For the present purposes, the material provisions of the terms of reference for the 2nd Arbitration were paras 44(a) to 44(d) which stated: [44]a) Whether the previous arbitration award established the findings of breach of the Agreement alleged by [FR]. [44]b) If so, whether the alleged findings of breach in the award remains final and binding in spite of the High Court order and whether [DSEA] is estopped from making any assertion contrary to the alleged findings due to res judicata or issue estoppel. [44]c) Whether the High Court order rendered nugatory all findings in the award concerning the counterclaim based on misrepresentation and whether [FR] has to prove all aspects of both liability and damages in this second arbitration with respect to its misrepresentation claim. [44]d) Whether [FR] is precluded from pleading its claim for breach of contract in this second arbitration by reason of the previous arbitration award and the subsequent setting aside proceedings as alleged by [DSEA].

The new arbitrator issued a partial award dated 29 February 2012 (“the Partial Award”) which stated, inter alia, that FR was not precluded from pleading its claim for breach of contract in the 2nd Arbitration.

DSEA then filed the present Originating Summons (“the OS”) to seek leave of the High Court to appeal against the Partial Award on a question of law, which DSEA framed as follows: a. Is [FR] precluded from pleading breach of contract in the 2nd arbitration proceedings? i. Whether it is correct for the Arbitrator to answer in the negative by drawing a distinction in law between a withdrawal of a claim before an Arbitral Tribunal as being a procedural matter and a waiver of the same claim as a substantive matter such that the claim can be revived in the former situation but not in the latter; and/or ii. Whether a party before an Arbitral Tribunal, by not proceeding with a claim at the opening submissions stage, closing submissions stage and subsequent setting-aside stage, would preclude that party from resurrecting that same claim in later arbitration proceedings, when the former arbitration proceedings were set aside.

In turn, FR filed Summons 1927 of 2012 to set aside the OS on the ground that the parties had agreed to exclude their right of appeal to the High Court under s 49(1) of the AA when they had agreed to submit any dispute under the JVA to arbitration under the ICC Rules 1998.

Both Summons 1927 of 2012 and the OS were fixed for hearing on 27 June 2012 before me. Parties proceeded on the basis that if I was able to and did decide FR’s summons in its favour, then there was no need to hear the OS itself.

The court’s reasons

As intimated above at [2], I decided in favour of FR. Consequently, I struck out the OS with costs.

As mentioned above, the relevant provisions were ss 49(1) and 49(2) of the AA, which stated:

49.—(1) A party to arbitration proceedings may (upon notice to the other parties and to the arbitral tribunal) appeal to the Court on a question of law arising out of an award made in the proceedings.

(2) Notwithstanding subsection (1), the parties may agree to exclude the jurisdiction of the Court under this section and an agreement to dispense with reasons for the arbitral tribunal’s award shall be treated as an agreement to exclude the jurisdiction of the Court under this section.

It was undisputed that the parties could exclude the right of appeal by adopting rules of arbitration. For example, Halbury’s Laws of Singapore vol 1(2) (LexisNexis, 2011 Reissue) states at para 20.126, that the “adoption of the institutional...