Sanum Investments Ltd v Government of the Lao People's Democratic Republic
| Judge | Philip Jeyaretnam J,Sir Vivian Ramsey IJ,Douglas Jones IJ |
| Judgment Date | 01 June 2022 |
| Court | High Court (Singapore) |
| Docket Number | Originating Summons No 6 of 2022 (Summons No 5882 of 2021) and Originating Summons No 7 of 2022 |
[2022] SGHC(I) 9
Philip Jeyaretnam J, Sir Vivian Ramsey IJ and Douglas Jones IJ
Originating Summons No 6 of 2022 (Summons No 5882 of 2021) and Originating Summons No 7 of 2022
Singapore International Commercial Court
Arbitration — Award — Recourse against award — Setting aside — Tribunal dismissing claims on basis that they were barred by defence of collateral estoppel under New York law — Whether there was breach of natural justice in that those estopped claims were not heard on their merits — Whether arbitral award was in conflict with Singapore's public policy of access to justice given that estopped claims were not heard on their merits — Section 24(b) International Arbitration Act (Cap 143A, 2002 Rev Ed) — Articles 34(2)(a)(ii) and 34(2)(b)(ii) UNCITRAL Model Law on International Commercial Arbitration
Arbitration — Enforcement — Government making allegedly new assertion in reply costs submissions — Whether there was breach of natural justice arising from tribunal's reliance on that assertion in issuing costs order in favour of Government — Article 36(1)(a)(ii) UNCITRAL Model Law on International Commercial Arbitration
Arbitration — Enforcement — Tribunal making costs order in favour of Government pursuant to fee arrangement between Government and its counsel — Whether enforcement of that costs order would be contrary to Singapore's public policy against maintenance and champerty — Article 36(1)(b)(ii) UNCITRAL Model Law on International Commercial Arbitration
Arbitration — Enforcement — Tribunal making costs order in favour of Government which allegedly obliged investors to bear fees which had not been incurred by Government — Whether that costs order exceeded scope of parties' submission to arbitration — Whether that costs order was contrary to parties' agreed arbitral procedure — Articles 36(1)(a)(iii) and 36(1)(a)(iv) UNCITRAL Model Law on International Commercial Arbitration — Rule 37 Arbitration Rules of the Singapore International Arbitration Centre (6th Ed, 1 August 2016)
Held, dismissing the applications:
(1) The Investors' respective rights to be heard were not breached. The Tribunal did not examine the merits of the Investors' Estopped Claims because it held that those claims were precluded by the doctrine of collateral estoppel under New York law, a holding which was underpinned by determinations of law and fact. This situation was different from a tribunal mistaking its procedural powers or the scope of issues in play before it, and on the basis of such a mistake either proceeding to an award without hearing one party or excluding evidence. It was instead the Tribunal doing what it was tasked to do, namely, to determine the dispute referred to it, including determining the application of any preclusionary or exclusionary doctrines raised by a party before it. Whether the Tribunal made an error of law or fact in its decision that the doctrine of collateral estoppel applied went only to the merits, and could not found a challenge to the Award: at [33], [34], [38] and [39].
(2) When dealing with an allegation of a breach of natural justice of the type in question, the court should inquire into the Tribunal's reasons for not addressing a pleaded issue which was at play. However, where those reasons were premised on certain determinations of fact and law made by the tribunal, those determinations had to be taken as they were unless they had been tainted by process failures. It was not open to the court to examine the correctness of those determinations. Here, the Investors were not alleging that they had not been heard on the issue concerning the doctrine of collateral estoppel. The applicability of this doctrine therefore supplied a proper and reasonable basis for the Tribunal to not address the merits of the Estopped Claims: at [41].
(3) The mere fact that the Estopped Claims were precluded by the collateral estoppel doctrine could not found a natural justice challenge. The invocation of any preclusionary doctrine meant that a party would not be heard on the aspects of the case that it was precluded from re-opening. Such doctrines served the cause of justice by promoting finality in litigation, and their existence not only in Singapore law but in many if not most legal systems demonstrated that they were not in and of themselves objectionable: at [42] and [43].
(4) An award made based on res judicata principles was not for that reason contrary to public policy. Even an erroneous ruling of res judicata would not found a challenge to the award on the basis of public policy. Such errors were not to be treated any differently from other errors that a tribunal might make on the merits: at [46] and [47].
(5) The collateral estoppel that the Tribunal accepted concerned issues common to the Prior SIAC Arbitration and to the dispute before it. The Investors had had the opportunity to run their case regarding those common issues in the Prior SIAC Arbitration. Thus, the Investors did argue those common issues, but only once. There was nothing repugnant about their not being allowed to argue the same issues a second time. The Award was therefore not in conflict with Singapore's public policy of access to justice: at [50].
(6) There was no breach of natural justice arising from the Tribunal's reliance on the clarification of GOL's Fee Arrangement in the GOL Parties' reply costs submissions. The issues of how much costs should be awarded and whether any award was to be limited by reason of funding arrangements were in play. There were two rounds of costs submissions. It was not unexpected for reply submissions to clarify or refine a party's position. Upon receipt of the GOL Parties' reply costs submissions, the Investors did not raise any issue about this allegedly belated assertion or seek a further round of submissions. In any event, the alleged breach of natural justice would not have prejudiced the Investors: at [52] and [53].
(7) The enforcement of the GOL Costs Order would not be contrary to Singapore's laws and public policy, as GOL's Fee Arrangement did not engage the concepts of champerty or maintenance. Champerty and maintenance concerned intermeddling that encouraged lawsuits by financing them, and were not engaged where defence of a lawsuit was concerned. Moreover, GOL's Fee Arrangement with its counsel was akin to a conditional fee arrangement, which was permissible for Singapore lawyers representing parties in international arbitrations. Parliament had also recognised the policy benefits of such arrangements: at [54] and [55].
(8) The GOL Costs Order was not contrary to parties' agreed arbitral procedure. The parties agreed on the application of the Arbitration Rules of the Singapore International Arbitration Centre (6th Ed, 1 August 2016). GOL engaged lawyers who incurred time in its defence. The value of that time spent formed part of GOL's costs and so came within r 37, which vested arbitrators with a broad discretion to allocate and award costs. For the same reason, the Tribunal also did not exceed the scope of parties' submission to arbitration by making the GOL Costs Order: at [59] and [60].
AJU v AJT [2011] 4 SLR 739 (folld)
AKN v ALC [2015] 3 SLR 488 (folld)
Beijing Sinozonto Mining Investment Co Ltd v Goldenray Consortium (Singapore) Pte Ltd [2014] 1 SLR 814 (folld)
BLC v BLB [2014] 4 SLR 79 (folld)
BTN v BTP [2021] 1 SLR 276 (folld)
China Machine New Energy Corp v Jaguar Energy Guatemala LLC [2020] 1 SLR 695 (folld)
Government of the Lao People's Democratic Republic v Sanum Investments Ltd [2015] 2 SLR 322 (refd)
Henderson v Henderson (1843) 3 Hare 100 (refd)
Lao Holdings NV v Government of the Lao People's Democratic Republic [2021] 5 SLR 228 (refd)
Sanum Investments Ltd v Government of the Lao People's Democratic Republic [2016] 5 SLR 536 (refd)
Sanum Investments Ltd v ST Group Co, Ltd [2020] 3 SLR 225 (refd)
Soh Beng Tee & Co Pte Ltd v Fairmount Development Pte Ltd [2007] 3 SLR(R) 86; [2007] 3 SLR 86 (folld)
ST Group Co Ltd v Sanum Investments Ltd [2020] 1 SLR 1 (refd)
These proceedings were the continuation of a long-running dispute relating to investments, in the form of gaming assets (“Gaming Assets”), made by Lao Holdings NV (“LH”) and Sanum Investments Ltd (“Sanum”) (collectively, the “Investors”) in the Lao People's Democratic Republic.
Disputes arose between the Investors on the one hand and the Government of the Lao People's Democratic Republic (“GOL”) on the other. To put an end to their disputes, parties entered into a settlement deed (“Settlement Deed”) on 15 June 2014, pursuant to which the Investors agreed to sell the Gaming Assets to a third party by 15 April 2015. Failing which, a third-party gaming operator could be appointed. The Investors failed to do so by the stipulated date. GOL then entered into a contract with San Marco Capital Partners LLC (“SM”) for the management, sale and marketing of the Gaming Assets. That contract was signed by Kelly Gass (“Gass”), who was the President of SM.
Protracted legal battles ensued between parties in multiple forums. In SIAC Arbitration Case No ARB 143/14/MV (“Prior SIAC Arbitration”), GOL and the Investors accused each other of breaching the Settlement Deed. Notably, SM and Gass were not parties to this arbitral proceeding. A final award was rendered on 29 June 2017 and enforced as a judgment of the Singapore court on 2 August 2019.
In 2017, the Investors commenced SIAC Arbitration Case No ARB 414/17/QW against SM and Gass for breach of fiduciary duty, breach of contract and conversion of property. GOL was joined as the third respondent in 2018. Against these claims, the defence of collateral estoppel under New York law was raised, and the applicability of this defence was contested. Following the merits hearing, two rounds of costs submissions were...
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