In BVU v BVX  SGHC 69 the High Court of Singapore refused to set-aside an arbitral award on the basis that BVX, the successful party in the arbitration, did not call certain witnesses to give evidence and disclose certain internal documents. BVU’s attempt to secure these documents by way of subpoena in the context of the set-aside proceedings also failed. The decision highlights that parties to an international arbitration are normally subject to less stringent requirements for the disclosure of documentary and other evidence. The decision also emphasises that belated attempts to revisit the merits of a case by procuring additional evidence in the context of set-aside proceedings are unlikely to be successful.
Category: Arbitration proceedings
On February 14, 2019, in considering cross applications to vacate and confirm an arbitration award, the United States District Court, S.D. New York decided to grant the same deference to a decision made by an appellate arbitration panel as is given to an arbitral award under the Federal Arbitration Act (“FAA”) (Hamilton v. Navient Solutions, LLC., No. 18 Civ. 5432 (PAC) (S.D.N.Y. February 14, 2019).
In the highly complex and contentious case of Filatona Trading Ltd and another v Navigator Equities Ltd and others  EWHC 173 (Comm), the English High Court dismissed an attempted challenge to an LCIA award brought on the grounds of jurisdiction (s.67 Arbitration Act 1996) and serious irregularity (s.68 Arbitration Act 1996).
In particular, the Court held that an LCIA arbitral tribunal did not exceed the scope of its powers in ordering relief that was not available to an English court.
In Koshigi Ltd and another company v Donna Union Foundation and another  EWHC 122 (Comm) the English High Court considered an application for costs arising from discontinued proceedings under s.68 Arbitration Act 1996 to challenge two arbitral awards. The claimant in the underlying arbitration had successfully obtained two awards in its favour from the tribunal, which the respondents then sought to challenge in the English courts through two related sets of proceedings for serious irregularity under s.68, alleging bias on the part of the chairman of the tribunal. The respondents then discontinued the s.68 proceedings before they reached a hearing, asserting that the awards which they were seeking to challenge had become unenforceable.
In considering the claimant’s application for costs in relation to the discontinued proceedings, the Court decided that the liability for the costs rested with the applicants (the respondents in the arbitration) and that the costs should be assessed on an indemnity basis rather than the usual – and typically lower – standard basis. The Court’s approach, which disincentivizes the pursuit of s.68 applications without a strong substantive basis, is consistent with other attempts by the English courts to block applicants who bring weak s.68 appeals.
The Tribunal in Gabriel Resources v Romania recently issued an order (the Order) in response to an application (the Application) made by three Romanian NGOs, as non-disputing parties, for participation and an amicus submission (the Submission) in an ICSID arbitration under the Canada-Romania BIT (the BIT). Gabriel Resources’ allegations of breach of the BIT arise in relation to a proposed open pit mining development in Roşia Montană, Romania (the Project) which was not implemented.
The Tribunal granted the Application in part, admitting only certain sections of the Submission to the extent that they referred to factual issues within the specific knowledge of the Applicants and in relation to the interests which the Applicants claim to be protected. However, the Tribunal denied admission to arguments on the law, as well as references to or reliance on testimonies which could not be tested by cross-examination. The Tribunal also rejected the NGOs’ request to attend and participate in the oral hearing.
The Tribunal’s analysis of the conditions relevant to an application by non-disputing parties – and its approach of considering each section of the Submission in relation to those conditions (rather than the Submission as a whole) – provides a significant contribution to jurisprudence in this area. The application in Gabriel Resources is also consistent with a general increase in such third party interventions, particularly in disputes which touch on issues of public interest, such as environmental protection, public health measures, labour standards, cultural rights and/or human rights. Such a trend is likely to continue with civil society becoming more active in this context.
Third party funding is a hot topic in Asia.
As noted on this blog, Singapore introduced legislation in 2017 to allow third-party funding in international arbitration and associated proceedings, including enforcement and mediation. Hong Kong’s funding legislation takes effect today.
Our Singapore team is already representing clients in two significant Singapore-seated arbitrations in which the claimants are third-party funded. It is understood that these are amongst the first funded arbitrations in Singapore. We expect Hong Kong arbitrations to generate high levels of interest in funding once the law is in force.
In the light of these exciting developments, Herbert Smith Freehills has contributed the Hong Kong and Singapore chapters of Getting the Deal Through: Litigation Funding 2019. The chapters discuss the trends and legal landscape for funding in both Hong Kong and Singapore.
In the recent landmark decision of Marty Ltd v Hualon Corp (Malaysia) Sdn Bhd  SGCA 63, the Singapore Court of Appeal held that the commencement of court proceedings notwithstanding the existence of a binding arbitration agreement and without any explanation or qualification is in and of itself sufficient to constitute a prima facie repudiation of the arbitration agreement. Counterparties who have accepted the court’s jurisdiction would correspondingly be deemed to have accepted the repudiatory breach, and will also no longer be entitled to insist on adherence with the arbitration agreement.
The Singapore Court of Appeal’s decision is noteworthy as it departs from longstanding authority that the mere commencement of litigation proceedings would not constitute repudiation of the arbitration agreement. The Court also provides important guidance to parties to Singapore seated arbitrations on whether (and when) it is appropriate to commence litigation in circumstances where an arbitration agreement exists, and how to react if a counterparty does so. We analyse the decision below.
At the Chartered Institute of Arbitrators (Malaysia Branch) International Arbitration Conference 2018, Peter Godwin, the Managing Partner of Herbert Smith Freehills’ Kuala Lumpur office gave a keynote address. The topic of the address was “Evolving Asia, New Frontiers in Dispute Resolution”.
The text of Peter’s keynote is set out below.
After reluctantly issuing an initial stay of enforcement in July 2018, the Hong Kong Court of First Instance recently dismissed an application by China Zenith Chemical Group Ltd (CZ) to further delay the enforcement of an arbitral award in favour of Baosteel Engineering & Technology Group Co Ltd (BS).
The U.S. Supreme Court’s first opinion of 2019, written by recently appointed Justice Brett Kavanaugh, confirms the long-standing support of the Court for arbitrators to decide the issues of arbitrability of a dispute submitted to arbitration. The unanimous ruling defends the provisions of the Federal Arbitration Act, confirming that a contract’s terms control who decides, in the first instance, whether a dispute is subject to arbitration.