Quanzhou Sanhong Trading Limited Liability Co Ltd v ADM Asia-Pacific Trading Pte Ltd

• Jurisdiction: Singapore
• Judge: Chua Lee Ming J
• Judgment Date: 14 August 2017
• Neutral Citation: [2017] SGHC 199
• Court: High Court (Singapore)
• Docket Number: Originating Summons No 1057 of 2016 (Registrar’s Appeal No 78 of 2017)
• Published date: 28 March 2018
• Year: 2017
• Hearing Date: 14 July 2017
• Plaintiff Counsel: Kirpalani Rakesh Gopal and Tan Yi Yin Amy (Drew & Napier LLC)
• Defendant Counsel: Gurbani Prem Kumar (Gurbani & Co LLC)
• Citation: [2017] SGHC 199

Chua Lee Ming J: Introduction

This was an appeal by the defendant, ADM Asia-Pacific Trading Pte Ltd, against the decision of the assistant registrar (“AR”) dismissing its application to set aside an order granting leave to the plaintiff, Quanzhou Sanhong Trading Limited Liability Co Ltd, to enforce a foreign arbitral award. The main issue was whether the arbitral tribunal exceeded its jurisdiction if it made an error as to the governing law of the contract. I concluded that the tribunal did not. Accordingly, I dismissed the appeal. The defendant has appealed against my decision.

Background

On 4 July 2013, the plaintiff and the defendant entered into a contract to purchase corn from the defendant (“the Contract”). Subsequently, a dispute arose between the parties in relation to the quality of the corn. This dispute was referred to arbitration in Beijing, People’s Republic of China, under the China International Economic and Trade Arbitration Commission Arbitration Rules.

On 6 May 2016, the arbitral tribunal rendered its award requiring the defendant to pay to the plaintiff US$772,957.41 and RMB4,223,702.69 together with interest (“the Award”).

On 17 October 2016, the plaintiff obtained an order of court granting it leave to enforce the Award against the defendant (“the Enforcement Order”). The Enforcement Order was served on the defendant on 24 October 2016.

On 7 November 2016, the defendant filed Summons No 5409 of 2016 (“SUM 5409/2016”) seeking, among other things, to set aside the Enforcement Order.

On 5 January 2017, the Beijing Intermediate People’s Court dismissed the defendant’s application to set aside the Award.

On 7 March 2017, the AR dismissed the defendant’s application to set aside the Enforcement Order. The AR also ordered a stay of execution of the Enforcement Order pending appeal on condition that the defendant provided security (by way of a banker’s guarantee or payment into court) in the sum of US$772,957.41 and RMB4,223,702.69.

On 17 March 2017, the defendant filed a notice of appeal against the whole of the AR’s decision in SUM 5409/2016. The defendant also furnished the requisite security.

Whether the Enforcement Order should be set aside

Before me, the defendant submitted that the Enforcement Order should be set aside on the following grounds: That the Award contained a decision on a matter beyond the scope of the submission to arbitration (s 31(2)(d) of the International Arbitration Act (Cap 143A, 2002 Rev Ed) (“the Act”)); and/or That enforcing the Award would be contrary to the public policy of Singapore (s 31(4)(b) of the Act).

Whether the tribunal acted in excess of its jurisdiction

Section 31(2)(d) of the Act provides that the court may refuse enforcement of a foreign award if “the award deals with a difference not contemplated by, or not falling within the terms of, the submission to arbitration or contains a decision on the matter beyond the scope of the submission to arbitration”.

Section 31(2)(d) of the Act is similar to Art 34(2)(a)(iii) of the UNCITRAL Model Law on International Commercial Arbitration (“Model Law”), which has the force of law in Singapore by virtue of s 3 of the Act. Art 34(2)(a)(iii) applies where the arbitral tribunal improperly decided matters that had not been submitted to it or failed to decide matters that had been submitted to it. Errors of law or fact are not sufficient to warrant setting aside an arbitral award under Art 34(2)(a)(iii) of the Model Law. See CRW Joint Operation v PT Perusahaan Gas Negara (Persero) TBK [2011] 4 SLR 305 at [31] and [33]. If an issue is firmly within the scope of submission to arbitration, it cannot be taken outside the scope of submission to arbitration simply because the arbitral tribunal came to a wrong, or even manifestly wrong, conclusion on it: Sui Southern Gas Co Ltd v Habibullah Coastal Power Co (Pte) Ltd [2010] 3 SLR 1 at [37]. These principles are equally applicable to s 31(2)(d) of the Act.

In the present case, it was undisputed that the governing law of the Contract was an issue that was firmly within the scope of...