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International Arbitration Newsletter September 2019

Date and time :2019-09-24
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International Arbitration Forum Successfully Held in London

On September 6, 2019, the city of London hosted an International Forum titled “International Arbitration: A Win-Win Strategy for Participation and Cooperation under the Current International Situation”. The keynote speakers included Bao Ling, the Counsellor of the Economic and Commercial Office of the Chinese Embassy in the U.K., Stephen Perry, the China Reform Friendship Medal Winner, the Chairman of the 48 Group Club of the U.K., the Executive Director of the London Export Corporation and Li Hu, the Secretary of the Party Committee/Deputy Secretary of the CIETAC.

The forum was aimed for Chinese and British corporate executives, legal counsel, arbitration law practitioners and academics, to enhance their understanding of various industries on international arbitration as a means of trade and investment dispute resolution, and promote the CIETAC arbitration rules in international trade, especially its wide application in the “Belt and Road” cooperation. Nearly 120 people from the above-mentioned areas attended the meeting.


The US Department of Justice Submits Antitrust Dispute to Arbitration for the First Time

On September 4, 2019, the Antitrust Division of the US Department of Justice officially filed an antitrust civil suit against Novelis for their acquisition of Aleris in the US District Court for the Northern District of Ohio. On the same day, the US Department of Justice Antitrust Division disclosed that it had agreed to submit the antitrust dispute to arbitration, this will be the first time that the US Department of Justice Antitrust Division will resolve an antitrust dispute through an arbitration institution.

This is also a first for the US Department of Justice Antitrust Division, as the administrative department, to have reached an agreement with a private company and agreed to submit the core disputes of the anti-monopoly dispute to arbitration. In other words, it will be the first case to resolve vertical antitrust disputes through arbitration procedures in the United States.


ICSID Might Amend Its Current Arbitration Rules Soon

According to the latest report of the International Centre for Settlement of Investment Disputes (“ICSID”), ICSID is working on amending its current arbitration rules. More specifically amendments will target the transparency of the arbitration, guarantee on arbitration fees, third-party funding, and time limit in the arbitration process. 

Compared with the current arbitration rules, the new rules will allow the arbitral tribunal to disclose the ICSID awards or the decision of setting aside the award if parties fail to object to the disclosure within 60 days from the date of the issuance; third-party funding may be considered by the arbitral tribunal as a factor, but it will not be a sufficient condition to allow the arbitral tribunal to order the parties to provide a guarantee for the cost; the deadline for the parties to reach an agreement on the arbitral tribunal’s composition has been shortened from 60 days to 45 days.


The Maldives Accedes to the New York Convention 

On 17 September 2019, the Maldives submitted its instruments for accession to the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (“New York Convention”). Maldives becomes the 161st State Party to the New York Convention, and the New York Convention will enter into force for Maldives on December 16, 2019.


Singapore International Commercial Court: 

Arbitral Tribunal has Jurisdiction to Hear and Determine the Defendant’s Claim during the Arbitration Proceedings

Relevant Provision:

Section 18(2) of the Supreme Court of Judicature Act provides, “The High Court has the power to enlarge or abridge the time prescribed by any written law for doing any act or thing or taking any proceeding, whether the application therefor is made before or after the expiration of the time prescribed, but this provision shall be without prejudice to any written law relating to limitation.” 

Article 10(3) of the International Arbitration Act provides, “An arbitral tribunal may rule on a plea that it has no jurisdiction at any stage of the arbitral proceedings, any party may, within 30 days after having received notice of that ruling, apply to the High Court to decide the matter.” 

In the case of BXY and others v BXX and others [2019] SGHC(I) 11 (“BXY”), the core issue was whether the 1st defendant was qualified to file a arbitration request , whether the application was submitted in timely fashion; and whether the Tribunal had jurisdiction to hear and determine the first defendant’s claims.

Court’s View:

The court dismissed the plaintiff's application for the following reasons:

a)The purpose of the appointment of the power of attorney is to appoint the 2nd defendant as the transferee of the shares. Nothing in the Share Sale Agreement requires to assign the 1st defendant’s rights as a purchaser under the Share Sale Agreement. This means that 1st defendant still retains the right to be the Purchaser, thus giving it the right to have an arbitration clause in the Share Sale Agreement, and therefore the SIAC has jurisdiction over the case.; 

b)Although the plaintiff alleges that it has not received the notification from the arbitral tribunal, the time limit for filing a request for setting aside the award has not been exceeded, and the court has the right to extend the time limit even if it exceeds the time limit. However, the court held that the plaintiff successfully received the notice from the arbitral tribunal on January 8, 2019 based on the email history, and therefore the time limit for the plaintiff to file the petition for revocation was exceeded. As to the issue that the court has the right to extend the time limit for the plaintiff to apply for vacating an arbitral award, the court deems that the filing of the plaintiff's application shall be subject to the time limit specified in relevant laws and regulations..


The High Court of the Republic of Singapore:

The Mistake of Fact or Law Made by the Arbitral Tribunal Is Not A Ground to Set Aside an Award

Relevant Provision:

Article 24(b) of the International Arbitration Act provides, “Notwithstanding Article 34(1) of the Model Law, the High Court may, in addition to the grounds set out in Article 34(2) of the Model Law, set aside the award of the arbitral tribunal if a breach of the rules of natural justice occurred in connection with the making of the award by which the rights of any party have been prejudiced.” 

Article 34(4) of the Model Law provides, “The court, when asked to set aside an award, may, where appropriate and so requested by a party, suspend the setting aside proceedings for a period of time determined by it in order to give the arbitral tribunal an opportunity to resume the arbitral proceedings or to take such other action as in the arbitral tribunal’s opinion will eliminate the grounds for setting aside.” 

In the case of BSM v BSN and another matter [2019] SGHC 185, the core issue was whether there was a breach of natural justice in the arbitration and whether there was available recourse.

Court’s View:

The court dismissed the plaintiff's application for the following reasons:

a)BSM’s concerns on the Wasted Costs Issue had been remedied by the Tribunal in the Additional Awards; 

b)On the question of whether natural justice requires the arbitral tribunal to attempt to understand the submissions, the inquiry is whether the award in question reflects the fact that the arbitral tribunal had applied its mind to the critical issues and arguments. If the arbitral tribunal had done that but got it wrong on the factual findings and/or law, there is no recourse available; 

The court will not review the merits since mistake of fact or law made by the Tribunal is not a ground to set aside an award. There is therefore no recourse for BSM even if this court disagrees with the Tribunal’s reasoning.