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What’s in a name? A great deal if you wish to enforce a favourable award. National Oilwell Varco Norway AS (formerly known as Hydralift AS) v. Keppel FELS Ltd (formerly known as Far East Levingston Shipbuilding Ltd) [2021] SGHC 124 chronicles a cautionary tale about proper and correct party identification in arbitration proceedings to avoid losing the ability to enforce a favourable award.

The Singapore High Court set aside leave to enforce an arbitration award because the party named in the award had ceased to exist following a merger, and its successor in whom the relevant contractual rights now vested was not identified as a respondent. The court set aside leave despite recognising that 12 years of legal proceedings would be rendered fruitless and the parties were time barred from bringing fresh claims.

What happened between the parties?

In 1996, the defendant, Keppel FELS Ltd (Keppel), and A/S Hydralift (Hydralift) entered into a contract (the Contract) governed by Singapore law. The Contract provided for disputes to be resolved by arbitration in Singapore. In 1999, a dispute arose between Keppel and Hydralift which they attempted to resolve without arbitration until 2007.

Meanwhile, as a result of a series of corporate actions, Hydralift ceased to exist.

(a) In 2002, Hydralift became a wholly owned subsidiary of National Oilwell-Hydralift AS (NOH).

(b) In 2004, following its merger with NOH, Hydralift was struck off the Norwegian companies register and ceased to exist in accordance with Norwegian law. NOH then merged with the plaintiff, then called National Oilwell Norway AS.

(c) In 2010, the plaintiff changed its name to National Oilwell Varco Norway AS (NOV).

In 2007, Keppel commenced arbitration proceedings against Hydralift claiming damages for breach of contract. NOV defended the claims and counterclaimed for damages, in the name of Hydralift.

A tribunal was appointed in 2008 and following an evidentiary hearing in 2018, it issued an award dismissing Keppel’s claim and allowing the counterclaim. The award named Hydralift as the respondent and awarded it $3.8 million plus interest.

NOV obtained leave to enforce the award under section 19 of the International Arbitration Act (Cap. 143A, 2002 Rev. Ed.) (IAA) read with Order 69A, rule 6 of the Rules of Court (Cap. 322, R 5, 2014 Rev. Ed.).

Keppel applied to set aside that leave in accordance with the procedural rules.

What did the High Court decide and why?

The court made three preliminary observations on the effect of the mergers under Norwegian law:

(a) Hydralift ceased to exist the moment it was struck off the Norwegian companies register.

(b) There was no evidence that Norwegian law deemed Hydralift’s name to be a reference to NOH, and subsequently to NOV, after the relevant mergers.

(c) NOV was never known as NOH despite absorbing Hydralift’s entire business via NOH.

Having made the above observations, the court set aside leave to enforce the award for the following reasons.

1. The tribunal intended to and issued an award in favour of Hydralift and not NOV

The court held that the award was issued in favour of Hydralift and not NOV because:

(a) The award described the respondent in the arbitration as the legal person who entered into the Contract. As a matter of historical fact that was Hydralift. The mergers did not operate to bring NOV under this description.

(b) The award identified Hydralift as “the Respondents” and NOV by its full name or as the respondent’s parent thereby distinguishing the legal persons.

The court clarified that section 19 of the IAA did not empower it to vary or deviate from the dispositive terms of an award without party consent or statutory basis. This ‘mechanical’ approach to enforcement was dictated by twin policy imperatives of party autonomy and minimal curial intervention.

Applying this approach, the leave granted to NOV to enforce an award in favour of Hydralift went beyond allowing NOV to enforce the award “in the same manner as a judgment … to the same effect”. Only Hydralift (regardless of its existence) had standing to apply for leave under section 19 of the IAA.