I. Introduction

The ease with which arbitral awards can be enforced across jurisdictions is often cited as a key selling point to the resolution of disputes through arbitration. It is therefore of little surprise that Singapore, as a leading regional and global international dispute resolution hub, has a robust legislative framework (the International Arbitration Act 1994 (IAA 1994)) dealing with the enforcement of arbitration awards for both locally and foreign-seated arbitrations. Notwithstanding this and the rich jurisprudence the Singapore courts have on the enforcement of arbitral awards, there remained an ambiguity whether a foreign seated emergency award was capable of enforcement in Singapore.

This ambiguity was resolved in a recent decision of the General Division of the High Court: CVG v CVH [2022] SGHC 249 (CVG v CVH), where we were Singapore counsel.

II. Background

The Defendant was the Claimant’s franchisee in Singapore. Disputes arose between the Claimant and Defendant. These were referred to arbitration under the auspices of the International Centre for Dispute Resolution (ICDR) (the international division of the American Arbitration Association) seated in Pennsylvania, US, and governed by Pennsylvanian law.

The Claimant filed a Demand for Arbitration and Application for Emergency Measures of Protection Including Injunctive Relief (Emergency Demand) with the ICDR, invoking emergency arbitration procedures under the ICDR International Arbitration Rules (ICDR Rules). An Emergency Arbitrator was appointed to hear the Emergency Demand.

In the Emergency Demand, the Claimant sought interim relief including to enforce certain post-termination provisions in the agreements between the parties. At the oral hearing, the Claimant’s arbitration counsel confirmed the Claimant was not seeking for the termination of the agreements to be enjoined and was seeking for the application of the post-termination provisions. At the same hearing, the Emergency Arbitrator asked the Claimant’s arbitration counsel whether the Claimant wanted “the distribution channel to continue” (i.e., for the parties to perform the agreements as per normal) if the Claimant did not get the relief it was seeking. The Claimant’s arbitration counsel stated that he would talk to the Claimant about this.

The day after the oral hearing, the Emergency Arbitrator sent a list of issues via email to the parties. One of the issues, directed at the Claimant, was whether the Claimant had considered the agreements had been terminated. Pursuant to the Emergency Arbitrator’s directions, parties filed post-hearing submissions one day later. In these post-hearing submissions, the Claimant took the position that it did “not consider the agreements to have been terminated at this time”.

One week after receipt of the post-hearing submissions, the Emergency Arbitrator issued his Emergency Interim Award (Emergency Award). In the Emergency Award, the Emergency Arbitrator ordered a restoration of the status quo of the parties to the position before the Defendant had terminated the agreements.

The Claimant later filed its application for and obtained permission to enforce the Emergency Award in Singapore. The Defendant then filed an application to set it aside.

III. Does the IAA 1994 permit the enforcement of foreign arbitral awards?

Following amendments in 2012, the definition of “arbitral tribunal” in section 2(1) of the IAA 1994 “includes an emergency arbitrator appointed pursuant to the rules of arbitration agreed to”.

Prior to CVG v CVH, there was, however, still ambiguity on whether foreign seated emergency arbitrators were recognised under the IAA 1994. This ambiguity owed to the fact that section 2(1) specifically applied “[i]n this Part”, i.e., Part 2 of the IAA 1994. Part 3 of the IAA 1994 (which explicitly applied to “Foreign Awards”, i.e., awards made in a 1958 New York Convention country outside of Singapore), did not, on the face of its provisions, contain this express definition or any definition of “arbitral tribunal”.

The Defendant sought to rely on this ambiguity to argue that the term “arbitral award” in Part 3 of the IAA 1994 (i.e., on “Foreign Awards” under section 27(1)) was meant to exclude the awards of emergency arbitrators.

The Honourable Justice Chua Lee Ming (Justice Chua) rejected this submission. Justice Chua held that, on a purposive interpretation of section 27(1), “arbitral award” in Part 3 of the IAA 1994 was meant to include awards of emergency arbitrators and thus the foreign awards of emergency arbitrators was capable of enforcement under section 29 of the IAA 1004. Specifically:

• Justice Chua noted that “arbitral tribunal” is not defined in Part 3 of the IAA 1994; thus, in Justice Chua’s view, the term was capable of being interpreted to include emergency arbitrators (not least, for consistency with the amended definition in section 2(1)).
• In terms of the legislative purpose of the 2012 amendments to the IAA 1994, Justice Chua was of the view that parliamentary intention was to make the IAA 1994 applicable to all awards (including foreign interim awards by emergency arbitrators). In coming to this view, Justice Chua relied on a 2012 statement by the Ministry of Law explaining that, among other things: “The amendments accord emergency arbitrators with the same legal status and powers as that of any other arbitral tribunal and ensure that orders made by such emergency arbitrators (whether appointed under the SIAC rules or the rules of any other arbitral institution, in both foreign and local arbitrations) are enforceable under our IAA regime”.
• Thus, Justice Chua found that the interpretation of “arbitral award” in Part 3, Section 27(1) of the IAA 1994 to include the foreign awards of emergency arbitrators was consistent with legislative intent. This conclusion was fortified by academic commentary on the IAA 1994.

IV. Was the Emergency Award "binding"?

The Defendant also contended that the Emergency Award was not final and binding as between the parties because it was subject to review by the full arbitral tribunal under the ICDR Rules. This challenge was also rejected by Justice Chua.

Justice Chua found that Article 7(4) of the ICDR Rules made it unarguably clear that the Emergency Award was binding on the parties – in particular, from the fact that it states in relevant part: “Any interim award or order shall have the same effect as an interim measure made pursuant to Article 27 and shall be binding on the parties when rendered.”

Relying on decisions of the US District Court, the Defendant attempted to argue that the fact that an emergency award was subject by later review by a full to-be-constituted arbitral tribunal meant that emergency awards ought not to be enforced. Justice Chua took the view that reliance on these cases were misplaced since it appeared from those cases that the court’s jurisdiction to deal with the emergency awards depended on whether those awards were final. By contrast, section 29(2) of the IAA 1994 (which is the provision under which foreign awards may be enforced in Singapore) only required that the award in question be binding. The Emergency Award, in Justice Chua’s view, was binding.

V. Emergency Award ultimately refused enforcement

Other than the preliminary grounds already discussed, the Defendant also alleged that:

• The Emergency Arbitrator had exceeded his jurisdiction by granting relief on the basis of the Claimant’s case that the agreements had not been terminated (referred to in the judgment as the Claimant’s New Case), which, according to the Defendant, was different from the Claimant’s original case, i.e., that the Claimant was entitled to enforce the post-termination provisions in the agreements (Excess of Jurisdiction Ground);
• The Emergency Award was rendered in breach of natural justice because the circumstances it was made did not give an opportunity for the Defendant to present its case with respect to the Claimant’s New Case (Breach of Natural Justice Ground); and
• The Emergency Arbitrator had failed to deal with essential issues submitted to arbitration (i.e., whether the Claimant had materially breached the agreements and whether the Defendant was entitled to terminate the agreements for these alleged breaches) (Infra Petita Ground).

For the Excess of Jurisdiction Ground, Justice Chua reiterated the principles articulated in CDM and another v CDP [2021] 2 SLR 235 (CDM v CDP), i.e., that the Court must first identify what matters were within the scope of submission to the arbitral tribunal and, second, determine if the arbitral award involved matters outside the scope of the submission. Citing CDM v CDP, Justice Chua alluded to the five sources of parties’ submission to arbitration, i.e.: (a) the pleadings; (b) the list of issues; (c) the opening statements; (d) the evidence adduced; and (e) closing submissions at the arbitration.

Justice Chua ultimately rejected the Defendant’s argument on the Excess of Jurisdiction Ground. In brief, Justice Chua held that although the Claimant’s New Case “came about late in the day”, it had specifically been raised for the Claimant’s consideration by the Emergency Arbitrator during the oral hearing and in the post-hearing list of issues. The Claimant also made its case by the time of the post-hearing submissions. Thus, Justice Chua was of the view that the Claimant’s New Case was a live issue to be determined in the arbitration and did not fall outside the scope of submission to arbitration.

For the Breach of Natural Justice Ground, Justice Chua found that the Defendant was not given an opportunity to present its case to the Claimant’s New Case. This finding was premised on:

• The fact that Claimant’s New Case was raised for the first time in its post-hearing submissions (as an alternative), and further that the Emergency Arbitrator made the Emergency Award without hearing any further submissions after the post-hearing submissions.
• Crucially, Justice Chua also found that the Defendant had been prejudiced from the fact that it was not given an opportunity to make legal arguments on why the Claimant should not be entitled to adopt its New Case, adduce factual evidence of the Claimant’s conduct in purportedly accepting the termination of the agreements and address the Emergency Arbitrator on what orders were appropriate in light of the Claimant’s New Case.
• This alone thus resulted in enforcement of the Emergency Award being refused.

As Justice Chua found for the Defendant on the Breach of Natural Justice Ground, his Honour saw no need to deal definitively with the Infra Petita Ground (save that Justice Chua expressed he did not think the Defendant established its case on this ground).

VI. Key takeaways and Concluding Remarks

• Enforceability of foreign emergency awards: Parties are now assured that the emergency arbitral awards obtained in foreign-seated arbitrations are capable of enforcement in Singapore. This is a positive development which gives parties another effective tool in their arsenal to obtain emergency interim relief within the arbitration (and without having to resort to the court process) regardless of whether the arbitration is seated in Singapore or elsewhere. This decision is also consistent with the recognition of the growing utility of emergency arbitration generally (which had underpinned the 2012 amendments to the IAA 1994).
• Timing of presentation of cases in arbitration: Although the Court’s findings on the enforceability of emergency arbitral awards generally represent a significant boon for Singapore as an enforcement jurisdiction, the Emergency Award was ultimately refused enforcement for breaching rules of natural justice. This was due mainly to the timing at which the Claimant’s ultimate case was presented (i.e., during post-hearing submissions). Parties should take care to present their case at an appropriate juncture in the arbitration to ensure any arbitral award therefrom is capable of enforcement. The Court’s decision also signals that rules of natural justice may not be laxed even when dealing with an emergency arbitration (which involves inherently compressed timelines).

Senior Partner Melvin See and Senior Associate Alexander Kamsany Lee (along with Senior Associate Lavan Vickneson) were Singapore counsel for the Claimant in CVG v CVH. Dentons is a global law firm operating in over 200 locations in more than 80 countries, and we will be able to assist you on all aspects of arbitration-related court proceedings in Singapore or elsewhere. Dentons recently launched its International Commercial Arbitration Toolkit, an easy-to-use online platform for clients to access details of a potential place/seat of arbitration and enforcement laws across jurisdictions. If you would like to discuss how we may assist you, please reach out to us.