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Apr 10, 2020

Recent Developments—International Arbitration in Asia

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RECENT DEVELOPMENTS—INTERNATIONAL ARBITRATION IN ASIA

Despite the impact of COVID-19 on business activity around the world, the international arbitration jurisprudence in Singapore has continued to grow consistently with the country’s reputation as a leading hub for international dispute resolution.

We have selected the most consequential Singapore court decisions on international arbitration issued in the first quarter of 2020, and explain how they may affect your approach to arbitrations seated in Singapore.

A Tribunal’s Exclusion of Witness Evidence for Reasons of Efficiency Could Expose the Arbitral Award to Challenge

  • In CBP v CBS [2020] SGHC 23, the High Court set aside an arbitral award because the tribunal’s refusal to hear a party’s witness evidence (also known as “witness gating”) amounted to a breach of the rules of natural justice
  • The Court held that it was doubtful a tribunal had the power to gate witnesses in the absence of an express provision in the applicable arbitral rules
  • Even if the tribunal did have the power to gate witnesses, it could not gate witnesses solely in the interests of efficiency, or because a party had been uncooperative or unclear in relation to the witness evidence that it intended to present
  • When contemplating whether to gate witnesses or exclude witness evidence, counsel and arbitrators should consider the scope of the tribunal’s express powers in the arbitral rules, the reasons for excluding the witness evidence, and whether there is a defensible basis to conclude that the witness evidence would be irrelevant or unnecessary for the determination of the merits of the dispute

A Procedural Objection May Be Ineffective Unless the Objecting Party Takes Concrete Steps to Demand That It Be Remedied

  • In China Machine New Energy Corp v January Energy Guatemala LLC [2020] SGCA 12, the Court of Appeal rejected a challenge to an arbitral award brought on the basis that a tribunal’s case management decisions cumulatively impeded the challenging party from presenting its case
  • The Court observed that the objecting party’s conduct at the time of the purported due process violation was at odds with the challenge that it had brought after the award was issued
  • If a party intended to contend that there had been a due process violation, that party had to intimate to the tribunal its intention to take the point at the appropriate time, and must ordinarily seek to suspend arbitral proceedings until the breach had been remedied
  • When presented with circumstances that give rise to a legitimate due process complaint, counsel and arbitrators must bear in mind that a simple reservation of the objecting party’s rights, without more, may not be sufficient to preserve a subsequent potential challenge to the award on that ground after the award has been issued

The Time to Apply to Set Aside an Arbitral Award Is Strict, and Cannot Be Extended, Even in Circumstances of Fraud or Dishonesty

  • In Bloomberry Resorts and Hotels Inc v Global Gaming Philippines LLC [2020] SGHC 01, the High Court held that it could not extend the three month time limit for a party to apply to set aside arbitral awards under Art 34 of the Model Law, even in circumstances where material evidence of the other party’s fraud only came to light after that period had expired 
  • Unlike the arbitration legislation of other Model Law jurisdictions (including Malaysia, New Zealand and Ireland), the Singapore legislation expressed a preference for finality and did not provide for any express exceptions to the three month time limit
  • However, subsequently discovered evidence of fraud may entitle a party to extend time to apply to resist enforcement of the award against it
  • When considering a challenge to an arbitral award, counsel should bear in mind that a series of recent Singapore cases culminating in Bloomberry Resorts has adhered strictly to the time limits for setting aside applications 
  • Even if investigations into potential fraud or dishonesty are ongoing, it may be prudent to file a protective setting aside application, failing which, the objecting party may be limited to pursuing passive remedies of resisting enforcement of the award
 

Authors and Contributors

Daryl Chew

Partner

International Arbitration

+65 6230 3801

+65 6230 3801

Singapore

Shaun Pereira

Associate

International Arbitration

+65 6230 3851

+65 6230 3851

Singapore

Regional Experience