Lessons on set aside applications in Singapore from recent cases

Throwing “the kitchen sink” and a “scattershot approach” – these are some of the colourful phrases that the Singapore courts have recently used to describe ill-founded attempts by award debtors seeking to set aside arbitral awards.

The Singapore courts are known for their pro-arbitration stance, and this position has been manifest in a series of recent decisions on applications to set-aside awards. We take a short look at what may be learnt from these.

Setting a high bar

Two decisions illustrate, in particular, that, generally speaking, set-aside proceedings may get short shrift where they are simply an attempt to air general grievances, or to otherwise obfuscate the process, because the applicant is unsatisfied with the result. For example:

• In Haide Building Materials Co Ltd v Ship Recycling Investments Inc [2024] SGHC 222, arising from an aborted sale of a vessel, the applicant applied to set the award aside on the basis of breach of natural justice, fraudulent evidence, departure from agreed procedure, and bias [26]. The application was dismissed on all fronts, and the Court took the opportunity to “register a concern at what has increasingly become a prevalent practice in setting aside applications”, which was to “adopt a blunderbuss approach to their grounds of challenge, throwing everything but the kitchen sink (and often the kitchen sink itself) at the award and the tribunal” [3]. The court echoed the frustration expressed by the English courts in the recent decision in MEX Group Worldwide Ltd v Stewart Owen Ford and others [2024] EWCA Civ 959 at applicants presenting “a long shopping list” of unmeritorious complaints, warning that this could lead to the applicant being perceived as “the proverbial boy who cried wolf” [4].  In this case, the Court found, amongst others, that it was entirely proper for the Tribunal to have decided the case on certain arguments which it considered dispositive, and that there was no irregularity in not going on to consider other arguments that had been rendered academic [38].

• Swire Shipping Pte Ltd v Ace Exim Pte Ltd [2024] SGHC 211 also concerned a shipping dispute. Here, the complaints by the applicant centered around allegations concerned with the tribunal’s treatment of evidence and submissions. The Court, in dismissing the application, emphasized the principle of “minimal curial intervention” in arbitral awards [1], arising from the fact that the parties have, in choosing arbitration, “made a considered and informed choice in their contracts to limit the role of the courts when it comes to resolving their disputes” [4]. Interestingly, this conclusion was reached despite issues with the way in which the award was expressed (variously described as “convoluted and tortuous”, and “a labyrinthine tome that would test even the most stout-hearted” [132]).

A nuanced approach?    

In the cases outlined above, the Court found no basis to set aside the awards.  However, where there is a genuine issue, it might be that there is flexibility to avoid the drastic option of entirely setting aside the award. Vietnam Oil and Gas Group v Joint Stock Company (Power Machines – ZTL, LMZ, Electrosila Energomachexport) [2024] SGHC 244, is an example. The dispute concerned whether an EPC contract had been validly terminated under Vietnamese law. The tribunal found that the contractor had done so by way of a second, valid, notice of termination which overrode a first, invalid notice, notwithstanding its express observation that neither of the parties’ Vietnamese law experts had specifically dealt with this particular scenario [30].  The employer then applied to set aside the findings on liability and damages on the basis of breach of natural justice and excess of jurisdiction. The Court agreed that the Tribunal’s decision on termination constituted a breach of natural justice and had “no nexus” to the parties’ pleaded cases. However, it declined to set aside the finding or the award, because the tribunal had made many other findings of which there was no reason to set aside.  Instead, the Court exercised its discretion under Article 34(4) of the UNCITRAL Model Law (incorporated into Singapore law) to suspend the setting aside proceedings and remit the termination question to the tribunal [48].

Comment

Both Haide and Swire Shipping in particular underscore the high threshold for setting aside an award in the Singapore courts. In the latter case, the result might be thought to seem a little hard-edged given the concerns which the court expressed with the drafting of the award. That is, however, a manifestation of the fact that set aside proceedings must, to an extent, reflect the overall policy of finality and efficiency behind arbitration, or otherwise risk simply becoming a second bite at the cherry. The court also took the opportunity to warn tribunals away from undue “due process paranoia” in the drafting of their awards. 

The Court’s approach in Vietnam Oil is also interesting for different reasons. Remission is a power which, generally, is less commonly invoked. The Singapore courts have previously indicated that remission would be  appropriate where the relevant defect  pertained to “a single isolated or stand-alone point” (BZW and another v BZV [2022] 1 SLR 1080 at [66(c)]), and/or “one amongst other severable issues”  the latter of which were not impugned, such that it would “not be sensible, appropriate, or proportionate to set aside the entire award” (CKG v CKH [2021] 5 SLR 84 at [65]). There is also the issue of whether the relevant defect was indicative of the Tribunal’s unfitness to continue the hearing, in which case the matter should not be remitted (BZW at [67], citing the English case of Secretary of State for the Home Department v Raytheon Systems Ltd [2015] 159 ConLR 168 at [11], where remission was considered inappropriate and the award set aside, because of a risk in that case of the same Tribunal reaching a similarly irregular result). It will be interesting to see the extent to which, in set-aside applications in Singapore, the power to remit awards is, in future, used to avert the more drastic measure of setting aside of the entire award in appropriate cases.

With thanks to Amber Heron for her assistance in the preparation of this article.