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Arbitral Award, Recognition & Enforcement and Annulment

Note role of national cts here:

Ensure enforcement in territory where losing party has assets: without national cts having power to R+E, foreignarbitral awards not enforceable given that they are not judgments of any national territorys courts. W/o

enforcement, all the benefits of arb (autonomy, expert adjudication etc) nullified. Also, though in some cases still can enforce a foreign judgment, very limited = e.g. Sgp RECJA s3(1) and (5)- J

debtor of UK, GB, North Ireland, commonwealth countries with reciprocal legislation may within 12 months of j

have j registered and enf in Sgp HC

Thus, national cts i) ensure enf X none + ii) by giving effect to NYC which has 147 parties, ensures moreenforceabilitythan litigation, where some enforceability pre-exists

o Illustration of enforcement: See procedures below Exercise limited supervisory jurisdiction, balance with pro-arbitration:

o Examples: allows for certain grounds for refusal of enforcement, but keeps the grounds narrow toprevent losing party from resisting award (e.g. for financial reasons)

Non-arbitrability (s.31(4)(a) IAA):

Rationale: Not strictly private matters but public interest in having the State adjudicateo E.g. many 3P/other stakeholders involved and directly affected: insolvency and winding up (Petropad Ltd

v Larsen Oil and Gas PL (2010) SGHC 1854)

o Wider public may be affected (though not as directly as insolvency) IP rights (validity of patents, trademarks) Contracts contrary to public policy (involving money laundering, bribery etc) Anti-trust/competition (though Australia ok- Trade Practices Act) Consumer protection Environmental protection and planning

o Matters of public status: e.g. citizenship, legitimacy of marriage

Public policy(s.31(4)(b) IAA):

Policy behind this exception:o Necessary due to cultural and socio-economic differenceso But interpreted narrowly due to

Comity of nations reciprocity if Sgp keeps refusing to enforce, other countries may retaliatesimilarly (Prakash J in Hainan Import)

Commercial policy to make Singapore a hub for international comm. Arb Objectives of ML framework to which State has subscribed generally to promote allow

international enforcement of otherwise unenforceable foreign judgments (Chew)

Comparison: Similar definition as for setting aside (because public policy considerations same, not wider forsetting aside since legislative purpose of IAA is to treat all IAA awards as having an international focus)

So what is the definition?o Galsworthy Ltd of Republic of Liberia v Glory Wealth Shipping [2011] 1 SLR 727

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Involves either exceptional circumstances which would justify refusal of enforcement, orviolation of the most basic notions of morality and justice

o Interpreted narrowly: Act which offends the most basic notions of morality and justice, shocksconscience of court (CA in PT Asuransi v Dexia Bank, also Sui Southern Gas Co Ltd v Habibullah Coastal

Power[2010])

Fundamental notions of PP X political stance or international policies of a State Tried to argue Arb T made error of law, therefore against PP to enforce

o On facts: Appellant (unsuccessfully) argued that s 19B of IAA mirrors publicpolicy of finality in litigation and that any breach of s 19B is contrary to Sgp PP

o Prakashs policy considerations: Cannot be that any finding in award whichbreaches any law would have to be set aside on PP groundwould prove

fertile basis for attacking arbitral awards which would completely negate the

general rule thatawards cannot be set aside by reason of mistakes of law

made by the tribunal

In contrast to Oil & Natural Gas Corporation Ltd v SAW Pipes Ltd (2003): Indian case which tooka BROAD view of pp reused to give effect to award for being inconsistent with provisions of

the Indian Arbitration and Conciliation Act and therefore wrong in law, therefore liable to being

set aside as being in conflict with public policy of India

Falls within contrary to public policy: NOT contrary to public policy:o Fraud, illegality (obiter in Hainan Import)o Indonesian approach (too paternalistic + anti-

arbitration?)

ED & F Man (Sugar) v Yani Haryanto Importation of sugar into Indonesia

without required licence from

Government Logistics Bureau ,

therefore making contract of purchase

illegal (and therefore contrary to PP toenforce)

o Refusal of enf bcosarbitration had not decided

real issue between parties

(Re An Arbitration Between

Hainan Import and Export

Machinery Corp and Donald

& McCarthy PL (1996))

Anyway wrong ground should be 31(2)(2)

Arb T decided issues not within scope ofjurisdiction

o Mistakes of law(see PT Asuransi above)

AlsoAloe Vera of America v Asianic Food

(2006): unsuccessful argument that it was an

error of law on part of arbitrator to pierce

corporate veil without evidence and include

manager who was non-party to be agreemen

as bound to Arb Agmt

SHC Held: Would not offend basic notions of

justice by any stretch of imagination (2nd def

did not proceed with a ppeal)

But egregious errors of law?

E.g. Arb T getting the law wrong as far as the

law of the enforcing jurisdiction is

concerned?

Pinsler notes: possible that certain errors

made by a tribunal are so egregious that

against PP to allow award to stand.

Obiter in AJT: Where Tribunal makes an error

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of law as to what the public policy of

Singapore is: e.g. tribunal makes a finding

that 1) contract is illegal under Thai law and

2) Not contrary to Sgp pp to enforce such a kt

can be set aside (i.e. pp more directly

engaged in this case bcos Tribunal has made

explicit ref to it in deciding a legal issue X

merely applying the law wrongly)

Error of fact?No, Tribunals finding binding

on parties and not correctable (AJT)

Issue: Whether contrary to public policy to enforce award where ILLEGALITY OF UNDERLYING CONTRACT IS ATISSUE (i.e. where underlying kt is illegal)

o AJT v AJU [2011] SGCA On facts: HC set aside award upholding agreement in which party agrd to withdraw criminal

charges for offence (AJU: if I remove complaint, you (AJT) agree to terminate arbitration)

Held: Reversing HC, Tribunals finding of fact did not suggest that agmt was for illegal purpose Rule: Court will not re-open arbitral tribunals finding of fact on whether underlying contract is

illegal unless new cogent evidenced has surface which was not and could not reasonably have

been produced before the tribunal

Rationale: Give effect to parties intention that Tribunal is to be adjudicator on facts +finality of arbitration + limited curial intervention

Applied also in Westacre Investments Inc v Jugoimport-SPDR Holding Co [1999]: Ctenforced ICC award where Tribunals findings did not suggest illegality although there

were allegations of buying influence in arms trade transactions. Reasoned that it was

the award and not the contract that was being enforced.

Cf exception: Where Tribunal ignores a palpable and indisputable illegality, e.g. inSoleimany vSoleimany(1999) Award acknowledged contract was an illegal smuggling operation (illegal

export of carpets from Iran) (English court thus refused to enforce)